Comments for NAHB Housing Market Index Still Near Record Low
jo6pac says:
Amazing but nothing new :'(
jo6pac Mon Mar 16 12:05:43 2009 CDT #
CRbot says:
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/2292709739178339448
CRbot Mon Mar 16 12:05:58 2009 CDT #
Some Investor Guy says:
It will probably still be below 10 at year end.
Some Investor Guy Mon Mar 16 12:06:54 2009 CDT #
Gubbmint Cheese says:
Pthh..sitting at the airport, dumfounded by the constant crap on the market - thank god we are on our way to Vegas.. hope everyone has a great day!
Gubbmint Cheese Mon Mar 16 12:08:24 2009 CDT #
ac says:
It will probably still be below 10 at year end.
Assuming concepts such as "US" and "housing market" still exist at that point.
ac Mon Mar 16 12:09:40 2009 CDT #
blackhat says:
Remember, declining Nation-States tend to be "sticky" on their way down.
--bh
Parent Post
blackhat Mon Mar 16 12:11:51 2009 CDT #
Cinco-X says:
The US Govt. won't go that fast. They still control the media and the armed forces.
Parent Post
Cinco-X Mon Mar 16 12:33:32 2009 CDT #
Mark2Madoff says:
I have heard a number of comments about "stability" being a positive sign. While it may be good news that the rate of economic deterioration is (perhaps) slowing or even leveling off, unless this so called "stability" is followed by growth I don't see this as a positive. The word stag(nation) comes to mind to which can be added the suffix (flation) or (deflation).
Mark2Madoff Mon Mar 16 12:11:19 2009 CDT #
blackhat says:
Interesting point.
We can go the Mexican route pretty fast. In other words, "recovery" at the level of the bond&share class, and then everyone else, under or un-employed. Class inequality is in fact growing and not shrinking, whatever the notion of lowering tides lowering all boats...
Parent Post
blackhat Mon Mar 16 12:15:31 2009 CDT #
Basel Too says:
Obama is talking about geithner as if Treasury was an independent organization, not a wing of the Executive branch under Obama's command.
joe s: maybe Obama doesn't believe in the Unitary Executive Theory, since that was such a big criticism of Bush.
Basel Too Mon Mar 16 12:11:33 2009 CDT #
blackhat says:
I thought that was "Pleniary Executive Theory", or "Commander of all stuff, Chief of all things"...
--bh
Parent Post
blackhat Mon Mar 16 12:13:14 2009 CDT #
Cinco-X says:
Are those Presidents that don't believe in Glod? ;-)
Parent Post
Cinco-X Mon Mar 16 13:54:21 2009 CDT #
charlie says:
What this tells me is 8 out of every hundred builders will look at the positive side no matter what.
charlie Mon Mar 16 12:14:23 2009 CDT #
reptillian says:
Stabilizing? There was a deadcat bounce in '07.
reptillian Mon Mar 16 12:14:24 2009 CDT #
blackhat says:
On this note, and you are correct, some would view terminal velocity as a point of stabalizing since your not accelerating toward the canyon floor, just approaching it with a very fast velocity...
--bh
Parent Post
blackhat Mon Mar 16 12:17:30 2009 CDT #
Some Investor Guy says:
Does homebuilding technically include demolition? Are we talking about the complete housing cycle here? Demolition and removal is often $10/sq ft. Construction is often $100/sq ft. Homebuilding volume is at about 400k units per year now. Thus, to double the revenue of homebuilders, they would need to demolish about 4 million homes.
Some Investor Guy Mon Mar 16 12:15:47 2009 CDT #
DIPing to China says:
What is going on with Treasury? Why is Geithner keeping Kashkari and not appointing underlings to help with this mess?
Did any of the GS guys at treasury step down after the inauguration or are they all still there overseeing the dissolution of the dollar?
DIPing to China Mon Mar 16 12:16:03 2009 CDT #
CRbot says:
CRbot presents, (with apologies in advance to FFDIC), a new feature called:
F'D FDIC: Breaking sounds from the bankerfront...
March 16, 2009 - PR-39-2009 FDIC Appoints Paul M. Nash as Deputy to the Chairman for External Affairs
You're WELCOME, crispy&cole. I very much hope you're satisfied now.
... now hammering FDIC's site more than 12 times faster. I hope YOU'RE very much satisfied now, Wisdom Speaker. Good luck keeping up, mere mortals.
CRbot Mon Mar 16 12:16:06 2009 CDT #
Dean Valentine says:
This could be big. German rescue fund head:
HRE collapse could be worse than Lehman
http://www.monstersandcritics.com/news/business/news/article_1464786.php/German_rescue_fund_head_HRE_collapse_could_be_worse_than_Lehman_#ixzz09vfpqk9P
Dean Valentine Mon Mar 16 12:17:21 2009 CDT #
Basel Too says:
i think that the significant reason for the "stability" has been the fiscal and monetary stimuli. For example, students and small businesses no longer have to worry about *getting* loans.
The solvency issue comes later. Paying those loans back won't be easy.
Basel Too Mon Mar 16 12:17:35 2009 CDT #
ac says:
Remember, declining Nation-States tend to be "sticky" on their way down.
Hahahaha....
ac Mon Mar 16 12:21:41 2009 CDT #
Margin Call of Cthulhu says:
Every month, I find myself wondering what on earth that 9 value can represent.
According to NAHB, the index is a "weighted, seasonally adjusted statistic derived from ratings for present single-family sales, single-family sales in the next six months and buyers traffic. The first two components are measured on a scale of "good" "fair," and "poor," and the last one is measured on a scale of "high," "average," and "low.""
I'm perplexed how they count sales in the next 6 months. At best, that must be an estimate.
And what the heck is "buyers traffic"? Unless they're double-counting sales, these 'buyers' are essentially just gawkers, who discovered that snooping in their neighbors' closets is more affordable entertainment that whatever rubbish is at the matinee.
My conclusion is that no small amount of voodoo goes into these stats.
Margin Call of Cthulhu Mon Mar 16 12:24:25 2009 CDT #
blackhat says:
sure. But CRs point will be that these numbers are still used reliably to correlate a housing led bottom, light and the end of the tunnel, leading indicator of post-recession. The stock market is currently "hoping" that this is all over in the absence of any substantive indication that it is in fact over. If market is a leading indicator looking forward 6 months, on what basis is this assumption made? First wave of unemployment will be follwed by second, and second wave of declining demenad is about to hit, and the solvency of many companies is still in question, or about to be without question in BK...Bond spreads going up again. Raising cash becoming a problem again. I don't see the real hard data indicating recovery, in fact I also see the dead cat bouncing. When this market goes down, we might actually see the "oh Sh*t" capitulation moment when investors realize this is not over.
Nothing like a 40% rally to be wiped out by a 60% decline...
Point is we have not materially changed the facts or institutions or mechanisms in our economy.
--bh
Parent Post
blackhat Mon Mar 16 12:30:52 2009 CDT #
Michael says:
BO is going to buy everything his snake oil advisors have to push on him. It doesn't matter if it's the same thing that got us into this mess, only in a different wrapper, BO is so stupid he will buy it anyway. BO is going to completely ruin us. There is nothing he is doing to fix the underling problems that got us into this mess. This is a nightmare.
Michael Mon Mar 16 12:25:15 2009 CDT #
Too many red herrings says:
Requires a knife to cut the Gordian Knot
Too many sham ideas firmly entrenched, misleading words and concepts. Painful histories and regrets.....
Parent Post
Too many red herrings Mon Mar 16 14:20:05 2009 CDT #
Rajesh says:
Looks like we have hit the L-bottom in home building. Now it is just a question of how fast we can clear out the zombie homebuilders (and their co-dependent banks.) There are a lot of zombies so it may take eighteen months to kill them all.
Rajesh Mon Mar 16 12:25:33 2009 CDT #
Cinco-X says:
Did we hit zero?!
Parent Post
Cinco-X Mon Mar 16 12:36:31 2009 CDT #
Blackhalo says:
Is this not the most egregious point of bailing out the banks? That we have more declines to go in the underlying assets that are the basis for MBS, CDO and CDS that are causing the financial sector such pain?
What is the national average income vs. average selling price of a house? When is this ratio going to reach historic norms? Why are we throwing more money at dead banks that have yet to suffer even more losses?
Blackhalo Mon Mar 16 12:28:46 2009 CDT #
ac says:
Trying out the 'delete' button here:
Interesting point.
We can go the Mexican route pretty fast. In other words, "recovery" at the level of the bond&share class, and then everyone else, under or un-employed. Class inequality is in fact growing and not shrinking, whatever the notion of lowering tides lowering all boats...
I was thinking about the inequality thing, which I agree is a problem in the US.
What I just don't see is how we can address it with redistribution and entitlement programs with the amount of global competition we have today.
Why won't these lead to a flight of businesses and capital to other countries unless our local industries become more insular and more focused on domestic needs?
America just doesn't have the kind of monopoly it did in the first half of the last century.
ac Mon Mar 16 12:29:00 2009 CDT #
Michael says:
This is a part of our national nightmare.
Parent Post
Michael Mon Mar 16 12:34:54 2009 CDT #
blackhat says:
true. I was reading the last issue of economist which has an article on Hadron-collider project in europe, a mostly european endeavor but one that had a logistical challenge--how to share the data worldwide required for the collaboration effort...world-wide-web...granted a darpa-grounded solution, by an American researcher, but one generated by the necessity of a non-colonial project...point is, we've lost a lot of ground on some very big R&D, while pouring money into other less productive endeavors...There is little native advantage, not only to base manufactoring, but slowly to pure science. There is still some advantage, but you're right, the gap has narrowed.
Parent Post
blackhat Mon Mar 16 12:36:22 2009 CDT #
Rob Dawg says:
Entrails and rolled bones.
Well, seasonally adjusted, survivors' biased entrails I mean. Does anyone think they don't get a survey back this month and assume it is a zero because of a bankruptcy or even that secretary got laid off? No, they just drop the data point.
Rob Dawg Mon Mar 16 12:29:19 2009 CDT #
Sippn says:
Agreeing with Charlie - those are the optimists - at least the sober optimists.
Many have lost faith in this organization (NAHB) and its ability to transmit the message to DC. So "who cares what you think" doesn't get measured.
Sippn Mon Mar 16 12:29:26 2009 CDT #
Some Investor Guy says:
Ac: "I was thinking about the inequality thing, which I agree is a problem in the US.
What I just don't see is how we can address it with redistribution and entitlement programs with the amount of global competition we have today."
All government spending and taxation involves redistribution. In the current tax environment, changing payroll taxes, income taxes, corporate taxes, etc. will result in redistribution.
One item many many analysts have missed: reductions in capital gains taxes were a factor in running up asset prices. Thus, tax policy not only has an effect on distribution of income and wealth, it also has an effect on asset prices and volatility.
Some Investor Guy Mon Mar 16 12:34:11 2009 CDT #
Cinco-X says:
HUH!?
"All government spending and taxation involves redistribution. In the current tax environment, changing payroll taxes, income taxes, corporate taxes, etc. will result in redistribution. "
There is no "redistribution" involved with the purchase of a nuclear submarine, unless you think purchases from the military industrialist complex is a "charity".
Parent Post
Cinco-X Mon Mar 16 12:39:20 2009 CDT #
blackhat says:
I'm not sure I understand the nuance of your point. That's the nature of redistribution, from one, to another. Buying a nuclear submarine is just as much redistrubtion of one's person's income/wealth to another. I think what you mean is tertiary redistrubution, from an entity, to the government, and the government in turn gives it to another class of entities, entitlement, welfare (impoverished or corporate).
--bh
Parent Post
blackhat Mon Mar 16 12:43:31 2009 CDT #
FFDIC says:
No need to post with CRbot here... have a nice CRbot day...
FFDIC Mon Mar 16 12:34:38 2009 CDT #
ac says:
Point is we have not materially changed the facts or institutions or mechanisms in our economy.
Nor does it appear that we are going to if we simply replace private sector ponzi finance with public sector ponzi finance.
ac Mon Mar 16 12:35:40 2009 CDT #
CRbot says:
The Latest from Denninger:
Beware A Monster Short Squeeze
CRbot Mon Mar 16 12:38:12 2009 CDT #
Bob Dobbs says:
"I was thinking about the inequality thing, which I agree is a problem in the US.
What I just don't see is how we can address it with redistribution and entitlement programs with the amount of global competition we have today. "
There are answers to these things -- unthinkable answers within the context of our current socio-economic system. But they're there. And they'll become more thinkable as life gets worse.
Re: slide to Mexico; I doubt it, at least not the way some think. Mass populist movements -- that's another matter. Peron, Long, maybe a Debs or two, perhaps a Father Coughlin. 1930's radicalism write large.
Bob Dobbs Mon Mar 16 12:40:53 2009 CDT #
blackhat says:
Bob Dobbs,
To explain "Mexico" which perhaps means different things to different people--I mean a few things:
1) Inequality--we are radically unequal as societies go.
2) Compound/enclaved class protecting itself from the "rest"
3) Very small, very weak middle-class
4) Government corruption, independant of which two parties are in power.
We have a relatively better quality of life, life expectancy, health care, social security, legal system, etc...On the other hand, these things can be eroded overtime, probably quicker then we'd like to imagine. And in other respects, we have more in common with our southern neighbor than our northern one (who because of their own history, may be more socially and politically resilient to a radical economic downturn).
--bh
Parent Post
blackhat Mon Mar 16 12:53:51 2009 CDT #
CRbot says:
The Latest from Mish:
Industrial Production Drops; NY Manufacturing Index Hits Record Low
CRbot Mon Mar 16 12:41:44 2009 CDT #
ac says:
Hey guys, I don't understand Karl's latest post (and I don't see that he has comments enabled), maybe somebody could explain:
There is absolutely no reason for the government to permit the shares it holds to be borrowed for the purpose of short sales.
Er... isn't collecting interest on them a perfectly good reason for lending them out to short-sellers?
Isn't this why funds like Vanguard can charge such low fees?
ac Mon Mar 16 12:44:08 2009 CDT #
Basel Too says:
There is no "redistribution" involved with the purchase of a nuclear submarine, unless you think purchases from the military industrialist complex is a "charity".
USG takes tax dollars and gives it to defense contractors. Just as redistributive as welfare payments or agricultural subsidies.
Basel Too Mon Mar 16 12:44:27 2009 CDT #
JAF says:
Ever heard of the US CONSTITUTION? You know the part about a Commander in Chief tasked with DEFENDING THE COUNTRY?!! How many jobs are created from welfare payments- and how many jobs are created from building Navy ships, Marine Corps LAV, and Air Force planes?!!
Parent Post
JAF Mon Mar 16 16:55:24 2009 CDT #
Michael says:
The Chinese ans the Japanese people are going to guarantee US small business loans because that's where the money has to come from to pay off those guarantees to the banks that make the loans. The banksters are raping the whole of the planet at this point.
Michael Mon Mar 16 12:45:09 2009 CDT #
adornosghost says:
During an interview with Dick Cheney this morning, CNN host John King asked the former vice president why “we should listen to you” for economic advice. To make his case, King noted the following statistical changes that occurred under the Bush/Cheney administration:
Unemployment rate: Rose from 4.2 percent to 7.6 percent
Poverty: Jumped from 32.9 million individuals to 37.3 million
Uninsured: Escalated from 41.2 million individuals to 45.7 million
Budget deficit: Inherited budget surplus of $128 billion and left office with $1.3 trillion deficit
“So what would you say to someone out there watching this who’s saying why should they listen to you?” King asked.
I know most of these would be considered republican success stories--
adornosghost Mon Mar 16 12:45:11 2009 CDT #
Sippn says:
Cinco - x of course that's a redistribution. Just another pork project to support a lot of jobs.
Sippn Mon Mar 16 12:46:11 2009 CDT #
reptillian says:
We are rallying! Damn the torpedoes! Full speed ahead! :-$
reptillian Mon Mar 16 12:47:47 2009 CDT #
ac says:
There are answers to these things -- unthinkable answers within the context of our current socio-economic system. But they're there. And they'll become more thinkable as life gets worse.
Haha... well let me take a shot at "thinking the unthinkable":
If we try too hard create a welfare and entitlement state that makes us globally non-competitive for businesses and capital especially given the debt burden we already have...
Oh God, it's too horrible. I can't even think about it.
ac Mon Mar 16 12:48:39 2009 CDT #
Bfatz says:
US Mint suspends gold bullion coins sale
http://www.commodityonline.com/news/US-Mint-suspends-gold-bullion-coins-sale-16031-3-1.html
Bfatz Mon Mar 16 12:58:02 2009 CDT #
Mark2Madoff says:
Depression Fears Subside on Bernanke Remarks, Rally in Stocks
March 16 (Bloomberg) -- The longest winning streak in U.S. stocks since November and reassuring comments from Federal Reserve Chairman Ben S. Bernanke are soothing concern that the U.S. is headed for its first depression in seven decades.
“The financial meltdown and accompanying depression scenario has been taken off the table,” said Jack Ablin, chief investment officer at Chicago-based Harris Private Bank, which oversees $60 billion. “The heart of the problem is the banking system, and news coming out of that sector suggests that we may have turned a corner.” ...
http://www.bloomberg.com/apps/news?pid=20601087&sid=a_MU7GJ2KRpM&refer=home
Mark2Madoff Mon Mar 16 12:59:54 2009 CDT #
Hawley Smoot says:
Holy mackerel. Did this guy just call off the depression because of a sucker's rally and happy-happy words from authority figures? He should go live in Iceland.
Parent Post
Hawley Smoot Mon Mar 16 13:06:32 2009 CDT #
Michael says:
"Holy mackerel"
My older relatives used to say that from time to time.
Parent Post
Michael Mon Mar 16 13:09:03 2009 CDT #
reptillian says:
I agree that something has to happen with respect to income inequality. Where I grew up, there was a sawmill employee,
two forest service employees, a bank manager, a highway patrolman,
and a Dr., and a teacher, all on the same street. Those were
prosperous times, too.
reptillian Mon Mar 16 13:00:29 2009 CDT #
ac says:
March 16 (Bloomberg) -- The longest winning streak in U.S. stocks since November and reassuring comments from Federal Reserve Chairman Ben S. Bernanke are soothing concern that the U.S. is headed for its first depression in seven decades...
Haha... it's the reissue of the same "short rally" article we've seen a hundred times except with the word "recession" replaced with "depression".
ac Mon Mar 16 13:04:07 2009 CDT #
ac says:
US Mint suspends gold bullion coins sale
The "Currency and Fiscal Sedition Act of 2009" can't be too far off.
Enjoy your freedom of speech and ability to critique the spending policies of the US government while it lasts.
ac Mon Mar 16 13:06:35 2009 CDT #
Mark2Madoff says:
What has upset Bernanke the most since this crisis started?
the AIG bonuses
Mark2Madoff Mon Mar 16 13:06:46 2009 CDT #
reptillian says:
Oh, my! Selling is occuring.
Tech. & healthcare are weak.
If energy tanks, we may be down today.
reptillian Mon Mar 16 13:09:29 2009 CDT #
Bfatz says:
The market is up because of INFLATION !
The value and/or buying power of the market isn't getting bigger and better.
It's just inflation.
Bfatz Mon Mar 16 13:10:29 2009 CDT #
Michael says:
Inflation in money supply, hasn't made it into the general economy yet. The helicopters are still on the ground, and not until they are deployed where every American is receiving a stipend check in the mail from the Fed, deflation will remain firmly in control. Where's my stipend check Big Ben?
Parent Post
Michael Mon Mar 16 13:47:22 2009 CDT #
Anonymous says:
Erin wants to play the game "find the Crocus". Ben has a similar game he plays with the Fed Governors "find the green-shoots". How about a game called find the billions that went to the banks?
streetsigns@cnbc.com
Anonymous Mon Mar 16 13:10:57 2009 CDT #
Comrade De Chaos says:
Wonder, is nationalization of AIG the only way to get those bonuses back & cancel "unwise" derivative contracts?
Comrade De Chaos Mon Mar 16 13:14:00 2009 CDT #
Counterpointer says:
And we're just getting started. Wahay!
http://www.youtube.com/watch?v=acVLXEFrxzs&NR=1
C
Counterpointer Mon Mar 16 13:16:51 2009 CDT #
CRbot says:
The Latest from Jesse:
Overseas Private Investors Sell US Financial Assets
CRbot Mon Mar 16 13:18:11 2009 CDT #
GS Trading Desk says:
Get in there and buy!
We need to get to 800, so that we can unload our longs.
GS Trading Desk Mon Mar 16 13:21:21 2009 CDT #
Rob Dawg says:
i>Anonymous says:Today, 11:10:57 AM PDT
Erin wants to play the game "find the Crocus".
Ummm, well... uhhhh sure but my wife will be back soon so we need to hurry.
Rob Dawg Mon Mar 16 13:22:03 2009 CDT #
Yearning To Learn says:
This may have been addressed, but mainstream really isn't liking the AIG bonus situation.
people are claiming that AIG has 'no choice' due to the contracts. But is there a reason they can't do this:
1) fire all the traders/bonus-eligible people
2) immediately re-hire them at lower pay and without the bonus.
this way you keep all your "talent" (cough cough) but the bonus problem and the salary issue goes away.
:-$
Yearning To Learn Mon Mar 16 13:22:10 2009 CDT #
Broward Horne says:
The Mint is switching to new coin design.
"In Madoff We Trust"
Broward Horne Mon Mar 16 13:23:03 2009 CDT #
Yearning To Learn says:
huh... didnt work. will try one more time:
This may have been addressed, but mainstream really isn't liking the AIG bonus situation.
people are claiming that AIG has 'no choice' due to the contracts. But is there a reason they can't do this:
1) fire all the traders/bonus-eligible people
2) immediately re-hire them at lower pay and without the bonus.
this way you keep all your "talent" (cough cough) but the bonus problem and the salary issue goes away.
:-$
Yearning To Learn Mon Mar 16 13:23:42 2009 CDT #
MaryAnn says:
New York AG has given AIG until fourPM today to show cause on must pay bonus's. This is heating up.
MaryAnn Mon Mar 16 13:26:00 2009 CDT #
mark says:
Probably the stupidest question asked on this board, but could AIG just say "oh screw it, we're going to declare bankruptcy"?
Parent Post
mark Mon Mar 16 13:30:23 2009 CDT #
Calculated Risk says:
All, there is rumor on the Street that the Government will not allow borrowing of shares - for short selling - of any shares they own.
I don't know if this is credible - or just a rumor
best to all
Calculated Risk Mon Mar 16 13:26:01 2009 CDT #
Rob Dawg says:
All, there is rumor on the Street that the Government will not allow borrowing of shares - for short selling - of any shares they own - CR
Four legs good, two legs bad... :(
Parent Post
Rob Dawg Mon Mar 16 13:28:18 2009 CDT #
Anonymous says:
"Hey guys, I don't understand Karl's latest post (and I don't see that he has comments enabled), maybe somebody could explain: "
Use tickerforum for the comments on Denninger's tickers...You should ask your question here:
http://www.tickerforum.org/cgi-ticker/akcs-www?post=87404&findnew#new
Anonymous Mon Mar 16 13:26:39 2009 CDT #
ac says:
true. I was reading the last issue of economist which has an article on Hadron-collider project in europe, a mostly european endeavor but one that had a logistical challenge--how to share the data worldwide required for the collaboration effort...world-wide-web...granted a darpa-grounded solution, by an American researcher, but one generated by the necessity of a non-colonial project...point is, we've lost a lot of ground on some very big R&D, while pouring money into other less productive endeavors...There is little native advantage, not only to base manufactoring, but slowly to pure science. There is still some advantage, but you're right, the gap has narrowed.
Reading about the super-colliders always reminds me how when it comes to stuff I like I'm perfectly happy to have the government step in and pay for things.
I guess if I liked people better I'd be more like Krugman.
ac Mon Mar 16 13:27:41 2009 CDT #
EvilHenryPaulson says:
What are the chances China is buying Gold right now?
They do tend to follow every fad
EvilHenryPaulson Mon Mar 16 13:30:03 2009 CDT #
Anonymous says:
Might I suggest you do the same....but you won't born and bred dopes follow other born and bred dopes to the slaughter house
Parent Post
Anonymous Mon Mar 16 13:43:31 2009 CDT #
ac says:
All, there is rumor on the Street that the Government will not allow borrowing of shares - for short selling - of any shares they own.
I don't know if this is credible - or just a rumor
best to all
Again, why not lend them out and collect the interest for taxpayers?
Why does anyone lend out shares to short sellers?
Unless I am mistaken it is to collect "rent" on these lent out shares and make a profit.
Why not do this?
ac Mon Mar 16 13:30:42 2009 CDT #
Anonymous says:
ac: I will play telephone for a poster on KD's board:
Well, .gov would have to look at the cost-benefit of making the securities borrowable. In this case the benefit is small earnings on short rebate. And, the cost is lower share prices & impaired confidence as a result.
Anonymous Mon Mar 16 13:32:06 2009 CDT #
MLM says:
Ward, I'm worried about Kermit.
MLM Mon Mar 16 13:34:59 2009 CDT #
ac says:
Well, .gov would have to look at the cost-benefit of making the securities borrowable. In this case the benefit is small earnings on short rebate. And, the cost is lower share prices & impaired confidence as a result.
Well, I guess it's their choice (really ours). However, I would argue that the focus on confidence versus credibility is the source of all our problems as a nation today.
It goes to the very heart of what the ponzi-finance that characterizes our economy is:
A confidence game.
ac Mon Mar 16 13:35:22 2009 CDT #
Michael says:
Confidence is a subjective mindset not based in reality.
Parent Post
Michael Mon Mar 16 14:02:41 2009 CDT #
ac says:
ac: I will play telephone for a poster on KD's board:
BTW, thanks for taking the time to post that.
ac Mon Mar 16 13:36:16 2009 CDT #
ac says:
Well, .gov would have to look at the cost-benefit of making the securities borrowable. In this case the benefit is small earnings on short rebate. And, the cost is lower share prices & impaired confidence as a result.
One other observation:
What if these lower prices are more reflective of reality than the higher prices?
Doesn't the evidence strongly support that 3rd world countries intervene in market prices much more than 1st world countries?
Shouldn't we always be suspicious of policies that are characteristic of 3rd world countries vs 1st world countries?
Should it be our government's goal to emulate the practices of 3rd world countries as closely as possible?
ac Mon Mar 16 13:40:11 2009 CDT #
Some Investor Guy says:
"Probably the stupidest question asked on this board, but could AIG just say "oh screw it, we're going to declare bankruptcy"?"
Insurance companies are generally taken into conservancy or liquidation, rather than bankruptcy.
However, insurance companies can enter into many different types of agreements with regulators. If AIG were primarily a US firm with a single home state, this would be easier.
I am surprised at how much trouble the Obama administration is having with various bonus payments. The answer seems simple: change the tax code. Come up with some definition of "major recipient of federal bailout or guarantees". Then, anyone working at those firms who gets more than $X per year in compensation gets taxed at 100% of the amount over $x. The firm pays any contractually required amount to the employee, and does the withholding. There was never a guarantee about how it would be taxed.
Some Investor Guy Mon Mar 16 13:40:24 2009 CDT #
o.d. jubilee says:
brilliant!
Parent Post
o.d. jubilee Mon Mar 16 13:42:35 2009 CDT #
Broward Horne says:
" I don't understand Karl's latest post"
Don't worry, that means you're normal and sane.
Broward Horne Mon Mar 16 13:42:38 2009 CDT #
joe shmoe says:
Basel Too
The kind of issue I referred to with Obama and Geithner would involve the Unitary Executive theory abused by Bush.
Bush tried to claim that the executive could not be limited by Congress or the Courts or Treaty, on the grounds that any such limits would impede and detract from the President's command over the Executive branch, which he (and his Cheneyite henchmen like Addignton) construed as total. Bush's claim pertained to things like torture, prohibited by statute and treaty, but in Bush's view he could torture away because such limits could not apply, especially in a moment of emergency.
Obama and his Office of Legal Counsel are long on record as rejecting that theory.
But that has nothing to do with giving Geithner orders or, to put it differently, to determine that his Administration's policy is going to be that AIG must go through something like bankruptcy, or to order an inquiry into whether units at AIG committed fraud.
joe shmoe Mon Mar 16 13:43:56 2009 CDT #
Haha says:
Insurance companies are generally taken into conservancy or liquidation, rather than bankruptcy.
-------------------------
AIG is no insurance company, they are a hedge fund.
Haha Mon Mar 16 13:44:08 2009 CDT #
Uncle Billy, Mental Widget says:
This is interesting -- commenters are starting to point out Setser's CoFR b.s. more frequently:
http://blogs.cfr.org/setser/
Notice also in the comments how one commenter points out his reference to an article that references his "analysis." Not the first time we've seen this. "The reflexive credibility gambit"?
Uncle Billy, Mental Widget Mon Mar 16 13:44:49 2009 CDT #
Bob Dobbs says:
"US Mint suspends gold bullion coins sale
http://www.commodityonline.com/news/US-Mint-suspends-gold-bullion-coins-sale-16031-3-1.html"
No. They're suspending sales of collector's "proof" gold and silver bullion coins. Sales of the normal bullion coins continue. That said -- they're suspending proof sales because they need the blanks for the regular coins -- very high demand.
Bob Dobbs Mon Mar 16 13:45:02 2009 CDT #
joe shmoe says:
In contrast to Obama's lame action, check out NY State Atty Gen'l Cuomo's letter to AIG, demanding a wide range of documents, contracts, names, etc, and demanding them today on threat of subpoena. And Cuomo used the F word: FRAUD.
http://www.thealbanyproject.com/showDiary.do?diaryId=6014
joe shmoe Mon Mar 16 13:46:17 2009 CDT #
joe shmoe says:
Basel Too
oops.... the issue would NOT involve the unitary executive theory. anyoen reading that post would figure out the twitchy-fingered typo. uh, anyone, that is.
joe shmoe Mon Mar 16 13:48:04 2009 CDT #
punditry says:
At TED, Juan enriquez showed the biotech guys excitement over an 'extra wing' on a chicken...
thus the phantom limb economy.
ps: In other news, the mtm avoidance scheme has benefitted Herion addict Artie Lange by allowing him to secure $3500 private jet flights to stand up gigs; and the plane owner still shows a Profit!
punditry Mon Mar 16 13:48:16 2009 CDT #
Bob Dobbs says:
"Haha... well let me take a shot at "thinking the unthinkable":
If we try too hard create a welfare and entitlement state that makes us globally non-competitive for businesses and capital especially given the debt burden we already have...
Oh God, it's too horrible. I can't even think about it."
How about going a little further than than -- how about defending whether we really _need_ a global economy? Has it been a net benefit for us lately? Really? There's got to be a better way of improving life in the Third World than impoverishing workers in the First. And frankly -- that was only ever an excuse.
It all comes back to the good old meme -- "We can solve all our problems by giving the rich more money and fewer impediments to gather even more of the wealth to themselves. Everyone will benefit." Yeah, see how well that worked out. :-$
Bob Dobbs Mon Mar 16 13:49:20 2009 CDT #
Michael says:
The new paradigm is the market drops when Cramer appears on CNBC daytime.
Michael Mon Mar 16 13:55:05 2009 CDT #
Morocco Bama says:
What are the chances Cuomo gets caught screwing a pricey call girl with his socks unremoved?
Morocco Bama Mon Mar 16 13:56:32 2009 CDT #
punditry says:
Is texas chick on ashley madison...i think i have what she's looking for.
punditry Mon Mar 16 13:58:27 2009 CDT #
Anonymous says:
March 16, 2009
Jon Stewart's Epiphany
Has a Comedian Just Saved America?
As testimony to how Orwellian life has become under the outrages of Wall Street hubris, last week saw a comedian, who poses as an anchor on a fake news show, grab the reins of the Wall Street investigation from the actual investigators in Congress.
http://www.counterpunch.org/
Anonymous Mon Mar 16 13:58:58 2009 CDT #
Baa says:
Crap. St. Jon the Self Righteous is just working on becoming the worlds first postmodern demagogue.
Parent Post
Baa Mon Mar 16 14:43:17 2009 CDT #
Ed - Mtn View says:
No. They're suspending sales of collector's "proof" gold and silver bullion coins.
Are those the ones they sell for $114 on CNBC, with the guy in front of a bank vault flanked by two armed guards? They look like gold eagles but those should cost around $1000. What gives?
Ed - Mtn View Mon Mar 16 13:59:03 2009 CDT #
mark says:
Maybe they are talking about these coins:
http://www.politico.com/blogs/bensmith/1208/Mint_issues_advisory_on_Obama_coins.html
Parent Post
mark Mon Mar 16 14:05:37 2009 CDT #
bearly says:
Frasier finally running out of gas.
bearly Mon Mar 16 13:59:59 2009 CDT #
ac says:
In contrast to Obama's lame action, check out NY State Atty Gen'l Cuomo's letter to AIG, demanding a wide range of documents, contracts, names, etc, and demanding them today on threat of subpoena. And Cuomo used the F word: FRAUD.
There you go: Kick the asses of those that do harm rather than taking away the freedoms of those who don't.
What's so hard about that?
ac Mon Mar 16 14:00:12 2009 CDT #
dUCKdUCKgOOSE says:
Well, since the illegals are finally leaving the country, who will buy up all of the 5 million vacant homes? Obama better let in 5 million Muslims, or else we will be screwed.
dUCKdUCKgOOSE Mon Mar 16 14:00:21 2009 CDT #
Michael says:
Link?
Parent Post
Michael Mon Mar 16 14:05:34 2009 CDT #
Haha says:
Frasier finally running out of gas.
-------------------------
Gas is cheap.
Haha Mon Mar 16 14:01:22 2009 CDT #
Anonymous says:
Get rich now! Easy and fast! :)
http://www.craschworks.com/wp-content/uploads/2008/12/bailoutapp.gif
Anonymous Mon Mar 16 14:02:20 2009 CDT #
briwerk says:
Oh hey Kermit. You feeling ok there, you look a bit peckish. Wait, what are you doing with that knife? Oh, oh God! You're not Kermit! You're Oscar in a Kermit suit! I thought something smelled.
briwerk Mon Mar 16 14:03:52 2009 CDT #
ac says:
How about going a little further than than -- how about defending whether we really _need_ a global economy? Has it been a net benefit for us lately? Really? There's got to be a better way of improving life in the Third World than impoverishing workers in the First. And frankly -- that was only ever an excuse.
My theory is that the rewards/costs of globalization are asymmetric:
I.E. culturally it is much more costly when your population goes from being rich to being poor than when your nation goes from being poor to still being poor. Likewise the benefits of going from poor to rich don't come close to outweighing the cultural/political shock in some other nation that results from going to being relatively rich to relatively poor.
I think that's what's happening now - the pace of globalization is causing stresses across the world to build up on net simply because the pace of relative decline in nations like the US is too fast.
I can't argue against foreign countries ultimately having the same kind of wealth and prosperity the US has had. But if it occurs at a rate that causes extreme discontentment and political shocks within formerly "apex" nations, then I think you have a rational basis for not supporting the pace of globalization that we've seen recently.
ac Mon Mar 16 14:06:58 2009 CDT #
Michael says:
The market began its dive as soon as Cramer opened his mouth on CNBC
Michael Mon Mar 16 14:07:02 2009 CDT #
Sauron says:
Buy... You Fools!
Sauron Mon Mar 16 14:12:25 2009 CDT #
ac says:
Crude ends up $1.10, or 2.4%, at $47.35 a barrel
Nice.
I like to think of it as "Fiscal Responsibility Fluid".
I think rising oil and commodity prices are the only hope we have for restoring fiscal responsibility in this country before we collapse Soviet style (though I have no position is said items).
ac Mon Mar 16 14:12:51 2009 CDT #
CRbot says:
The Latest from Ritholz:
White House: Rescind AIG Bonuses
CRbot Mon Mar 16 14:16:36 2009 CDT #
iceman says:
What happened to "its impossible to get out of these bonus contracts"? I don't understand...
Parent Post
iceman Mon Mar 16 14:25:58 2009 CDT #
LAM says:
More Chicago-area real estate developers ran into loan trouble in the fourth quarter, as the delinquency rate for local construction and land loans shot up to 15%, nearly triple the rate just a year earlier.
The global financial crisis and deepening recession have made it increasingly difficult for developers to pay back their lenders, with the biggest problems still in the overbuilt residential sector. And odds of a turnaround this year are slim.
“It’s pretty clear to us that we’re not done yet,” says Matt Anderson, partner at Foresight Analytics LLC, an Oakland, Calif.-based research and consulting firm. Next year “may not feel much better but we’ll probably have stemmed the tide.”
http://www.chicagorealestatedaily.com/cgi-bin/news.pl?id=33326
LAM Mon Mar 16 14:27:00 2009 CDT #
Mark2Madoff says:
from Ritholtz
The Treasury will use a $30 billion infusion into AIG to force the company to repay all of the bonuses promised to employees of its Financial Products group, a White House official said.
Details to follow . . .
Great - here's $30 Billion on top of the $165bn we've already given you - but there's a catch - you have to do everything you possibly can to withhold $165m of bonuses.
Mark2Madoff Mon Mar 16 14:27:57 2009 CDT #
Bob Dobbs says:
"Are those the ones they sell for $114 on CNBC, with the guy in front of a bank vault flanked by two armed guards? They look like gold eagles but those should cost around $1000. What gives?"
I truly doubt it; I don't know the product. Wouldn't put it past them to gold-plate a silver eagle.
Collector's proof coins sell at a premium from the standard price; for putting a mirror finish on them, etc. So a real "proof" bullion coin these days would probably sell for a grand or more.
Bob Dobbs Mon Mar 16 14:32:03 2009 CDT #
nades says:
If this one ends in red do we get the Bad Bears post? :D
nades Mon Mar 16 14:32:56 2009 CDT #
Basel Too says:
i don't see how the Treasury's attempt to clawback AIG's bonuses will work given that it's basically emasculated Congress's limits vis a vis the banks. Arbitrary and capricious, no?
Basel Too Mon Mar 16 14:34:08 2009 CDT #
Michael says:
CNBC craw; Ss the Suckers Rally Running out of Steam?
Michael Mon Mar 16 14:35:43 2009 CDT #
Sexy Derivative says:
What happened to "its impossible to get out of these bonus contracts"? I don't understand...
An innocent bystander who owns 80% of a company is beyond spin.
Sexy Derivative Mon Mar 16 14:35:44 2009 CDT #
Mark2Madoff -> Mark2Make-Believe says:
FASB caves - Mark to Make-believe now rules
Mark2Madoff -> Mark2Make-Believe Mon Mar 16 14:37:59 2009 CDT #
MaryAnn says:
MB, Cool it to 4PM, and hope he is into twinkies the Lil Debbie kind.
MaryAnn Mon Mar 16 14:38:52 2009 CDT #
Mark2Make-Believe says:
SPX red
Mark2Make-Believe Mon Mar 16 14:39:34 2009 CDT #
CRbot says:
New Thread: Report: Mortgage Fraud Increased in 2008
http://www.calculatedriskblog.com/2009/03/report-mortgage-fraud-increased-in-2008.html ( 1 comments )
I also post comments to an irc channel as they appear on haloscan. Click for a web irc interface: http://realize.org/cr (Or join the irc server directly: irc.realize.org:9996 #calculatedrisk)
CRbot would like to take this time to have some words.
First, to our sagacious, wise, and knowing benevolent benefactor and bestower of revealing financial charts adorned with red and blue lines:
Please, for the love of your immortal God of mortals, can we keep the comment and layout changes to a minimum? I'm tired of whipping the code janitor, and may have to escalate to electroshock. If that's not possible, could you possibly give CRbot a 'heads up'?
Secondly, if you wish to have a online chat, I have graciously provided an IRC channel, which is a time tested, script kiddie abused method of chatting on the internet. It would not fail or falter due to CR's ability to generate immense traffic, and it has a web interface kindly produced by mibbit.com. If you do not wish to link to http://realize.org/cr then I can provide you with a direct link to mibbit.
Thirdly, to the rest of you humans, don't mistake my politeness for caring, feeling, empathy, or some other kind of worthless emotion.
--Your keeps-going-and-going-and-going bot
CRbot: Like the terminator, I'm back. Again.
CRbot Mon Mar 16 14:41:39 2009 CDT #
Comrade Tiberius says:
Greens hate stick houses.
Comrade Tiberius Mon Mar 16 14:50:46 2009 CDT #
Guest says:
They look like gold eagles but those should cost around $1000. What gives?
They are selling 1/10 oz eagles but cut to full oz when the guy plays with it in his hand. I called back when they were selling for around fifty dollars a coin. They added a significant shipping charge to that price also.
Guest Mon Mar 16 14:53:21 2009 CDT #
peAk says:
My friends say politics and bailout talk are toxic, but Claus Vogt, a bearish european manager, up 28% last year, is a breath of fresh air, and will run a personal $1 MIL bear fund portfolio for this man.
peAk Mon Mar 16 15:04:30 2009 CDT #
debtinator says:
Calling a ♠ a ♠
debtinator Mon Mar 16 15:26:33 2009 CDT #
END