Links to important economic news

evnyc and riversider, i agree long term. not short term. but the powers that be will do everything they can to postpone any pain, so medium term and long term are two side of the same ugly coin.

"My $.02: with the Boomers retiring, spending will not be going down. This is an extremely sticky wicket."

spending in the old will be high, but only to the point that financing that deficit allows for. young people will not stay in the country if "discretionary" spending is cut to the bone to allow for more spending to the old. that extra spending on the old will have to be financed, if nobody wants to finance it, it will just not happen.

admin, postponing the pain is like giving an alcoholic another drink to postpone the hangover. More than a few people have commented that we got into this problem partly by institutions borrowing a lot of money to buy assets of dubious quality and the solution is buying a lot of assets with gov't money to buy assets of dubious quality

"Admin, telling us to worry about deflation is a gimmick designed not to worry about inflation... "

both deflation and inflation need to be redefined. mishkin and friends need to include assets into the inflation calculation and curve their growth. they have the guts to tell first time home buyers that inflation was low during the last decade when buying a house cost them 3 times as much and house payments eat more than the 30% consider the maximum for sanity.

trying to tell the whole society that deflation is evil is a gimmick, i agree. what they are saying is "many of those with tons of debt need inflation to help them pay". meaning, "we need savers to pony up and help pay implicitly part of that debt".

we're broke. on many levels.

Salient point, cpi is garbage for so many reasons. Rent being included and home prices not is one big example. The gov't assumes a substitution effect so if beef goes up they claim i eat chicken. and i thnk they assume we are all electronics junkies, so WOOHOO TV prices are down. and if the cost of a car goes up because i'm rquired to buy heated seats they call say its no price increase..

but regardless if they print money, the currency will debase. Only reason it's not tanking short term is that europe is more screwed up than us... go figure?

"Brief summary: From a financial standpoint America is beginning to resemble Britain as it declined from power."

All empires eventually crumble, but can't it wait til I've left the room?

Mishkin really called it!!
In 2006, Mishkin co-authored a report called "Financial Stability in Iceland".[2] The report maintained that Iceland's economic fundamentals were strong. The report was commissioned by the Icelandic Chamber of Commerce in response to critical coverage of the Icelandic economy and certain Icelandic companies in the international business media.[1]

mishkin didn't call a thing in usa, i know cause i've worked with him back then. he thought there wasn't a housing bubble in usa, go figure! calling iceland in 2006 is the equivalent of "the floor is gonna get wet" after it started raining.

anyway, it just go to show the degree of complacency of economists in usa. they hurry to tell others what to do and what's gonna happen to them. but only a selected few were good enough to see what was brewing in their own country.

anyway, imagine the japanese telling the americans what to do right now to the extent that the american economists were doing it to them. omg, that would be fun to watch.

admin, my husband got a new case today from a japanese client. we were visualizing the same thing. sadly, their laughter must be a bit weak as they are getting pounded by our actions now.

and chile, and argentina, and....

about ready, i'm not so sure the u.s. caused this. England had the same lax lending standards. BASEL accord were global and the FT ran a story today saying that european banks have a different probelm than the u.s. We invested in bad assets, Europe was plain over-leveraged (worse than us) and contrary to what the media might have you believe they weren't loaded up on u.s. subprime, they had their own garbage as well( leveraged loans and real estate i believe)

http://money.cnn.com/2008/10/06/news/europe.leverage.fortune/index.htm

the us has by far the largest GDP. whatever England did pales in comparison in absolute terms, although yes their percentages are worse. most of Europe (spain, ireland, austria not included) did not behave the same way as England.

they did indeed have a huge real estate bubble, in many countries. but in terms of global impact, something like 3/4s of the magically disappearing wealth comes from us. i read something interesting on this the other day, i'll see if i can find it.

I watched one of the CNBC pieces... AR might be right.

We sold a lot (don't want to say most, but it sounded that way) to foreigners. Ireland is a mess. We killed Iceland. We destroyed some town in Norway.

We exported a lot of this.

Good for us, but...

Admin's the economist I don't have the info handy but my recolleciton is Euroe's big banks are loaded up on over-valued european cmbs and leveraged loans and their banks operated on a great deal more leverage than the u.s. ones. It's incredible to think that the European banks are worse off than the U.S. ones. While the story about the Norwegian municipalities loaded up on cdo's backed by american subprime are the now famous. the problem is more complex. We jsut got sick first and the Europeans reacted as if this was a uniquely American problem.

Yes the American consumer was the most over-leveraged in the world, but the banking crises is yet a problem of another magnitude. If it were just a housing issue we would not be in the situation we are in..

Lots of deja-vu vibes here from the 80s. All is doom and gloom. We might as well pack it all up.

Okay, so those of you with children - how are you preparing them for our increasing apocalyptic future?

stock up on spaghetios and buy a shotgun of course

Personally, I hope I'm teaching our kids that our future isn't going to be English-centric, Western-centric. Ideally, I would like to take them to live for a few years in E. Asia. Nothing teaches a kid flexibility like moving countries.

canned goods it is. learn to embrace Spam.

Europe has an enormous storm about to hit it, Eastern Europe. It's all just bad. I, however, think that all that exuberance generated here, with some very bright people using some very wrong assumptions in some very flawed models. There are all sorts of things that can be exported. Misinformation might have been our forte.

Asia is just as prone to speculation as the Americas or Europe. don't kid yourself. this is basic human nature. There has been tremendous speculation on the Chinese exchanges.

> It's incredible to think that the European banks are worse off than the U.S. ones

Not for me.

Remember that whole thing 1-2 years ago about how NYC was "losing" to London, and that London was picking up bigger shares, and all that.

A friend in the IPO business told be back then that most of the stuff they were taking public in the UK (from Russia, China, etc.) wouldn't have passed muster in NYC (now THAT says a lot).

Europe's roll was partially based on them taking more risk than us.

So hearing that they own even more of the toxic stuff doesn't surprise me at all.

Asia's a different beast. Pent-up speculation desire. I'm just talking about this disaster. That's another one possibly happening now, almost certainly happening in the future. Would be concurrent, but not the same.

And Russia. you don't want to get me started on the Russians.

Hypo Real estate is German!
UBS is swiss

sO MUCH FOR STEREOTYPES....

"Yes the American consumer was the most over-leveraged in the world"

nope, UK's households have that prize. you can find not wealthy retirees from uk that speculated on second homes in spain taking a mortgage. go figure!, who in their right mind would lend to these people? then you have a bunch of eastern european households that got mortgages in foreign currencies (Swiss francs). that's as toxic as it can get during a credit crash and the effects will be felt in austria, sweeden and italy the most. hey, but i doubt these losses can be estimated with any accuracy by now, it's too early to tell.

usa's gov used the home ownership mantra more than any other and the "be patriotic, go spend!". chile, for example, profited thanks to relying on copper exports (highly correlated with construction) while accumulating part of that gift from heaven in an anti-cycle fund. not too shabby! argentina is wishing they had done the same by now.

"Okay, so those of you with children - how are you preparing them for our increasing apocalyptic future?"

lol, from trying to time housing, to trying to define an exit strategy?

Thanks admin, I knew the u.k. was hosed, but thought the consumer was little behind the u.s. I had first hand experience with a representative of a Brittish bank who said they only did conservative loans(well we know know they had loans with teasers, etc). With the North Sea running out of oil don't short the dollar and buy Sterling.

Yeah, I'm all about the exit strategy. Multiple passports, languages, identities :)

Venezuela has no extradition treaty with the u.s.

I've done nothing (so far :)) to be extradited for. Paid all taxes, no criminal stench. Just want to get far away from the madding crowd when the real sh*t hits the fan. We have nowhere near the social cohesion of Iceland (though they could all starve to death as no natural resources, at least they won't freeze!) or Scandinavia. Don't know if the traditional Brit. fortitude has survived its multi-culti transformation.

admin, it's about time Chile got something from us. 10023, i'll just travel the world as aboutready, my husband will be spouseofaboutready, and our daughter will become spawnofaboutready.

but where to travel? it might be time to find opportunity in a third-worldish type country. i've heard that investors have been eyeing, and more than eyeing, Africa a lot more recently.

I like my creature comforts and have some modicum of morality left - I feel like there's always something left to exploit in Africa. Won't be me though.

what about a boat with it's own flag, the flag of aboutready?

i like it. and if someone gave birth on the boat, they could be a citizen of aboutready. we'll just stay away from the Somalians.

10023, yes, but sadly i think there are many ready to pounce on Africa. money seeking opportunity and all that.

the baby, that is. although ar would extend citizenship rather generously. note to self, get a very big boat.

"nope, UK's households have that prize. you can find not wealthy retirees from uk that speculated on second homes in spain taking a mortgage. go figure!, who in their right mind would lend to these people? then you have a bunch of eastern european households that got mortgages in foreign currencies (Swiss francs). that's as toxic as it can get during a credit crash and the effects will be felt in austria, sweeden and italy the most. hey, but i doubt these losses can be estimated with any accuracy by now, it's too early to tell."

Don't forget the irish carpenters!

any of you who have felt compelled to drag the tots around Disneyworld during the last four years will be amazed. Just saw a banner ad, Disney is offering the dining plan for FREE on 5 night/6 day packages, a $654 value. but they announced higher yoy attendance for march just the other day.

Urgh, I hate Disney. Would rather (and have) suffered transatlantic flights with kids.

Australia might be an option. English language plus Economic growth from neighboring China. well almost neighboring.

Plus commodities...

10023, i've done both. but i'm the sucker who buys pets.

John Bogle made a great point on why things are so screwed up. The board of managers overseeing our big companies are not responsive to the shareholder, protecting his interest. Here is why..

INDEED, while many still believe that the American way of investing makes ours an ownership society, Mr. Bogle says we live in an agency society, one in which we rely on agents — mutual fund managers, pension fund managers — to make our investment choices for us.

An ownership society was an accurate depiction of where this country was 50 years ago, Mr. Bogle says. Not today.

And he says that the trust we have placed in these agents is undeserved. In his view, the agents have failed to serve their clients — mutual fund shareholders, pension beneficiaries and long-term investors; instead, the agents have served themselves.

Consider fees. Charges levied on mutual fund investors are much higher than those that the identical firms exact on pension clients, for example. The three largest money managers, Mr. Bogle pointed out, charged an average fee rate of 0.08 percent to pension customers. This compares with 0.61 percent charged to fund shareholders.

Money managers also haven’t done the kind of due diligence that might have protected their investors from titanic losses. “How could so many highly skilled, highly paid securities analysts and researchers have failed to question the toxic-filled, leveraged balance sheets of Citigroup and other leading banks and investment banks?” Mr. Bogle asked.

Yikes!

I just realized that http://www.nytimes.com/2009/05/14/opinion/14Roubini.html was written by Roubini; I glanced it too fast.

So, please riddle me this:
The US's problems are systemic. The powers that be are not listening to Roubini & the handwriting's on the wall.

So, if I (or you) feel this way, then, why buy a NYC apt? Why lock into a declining market? Why not just rent forever, stay liquid & keep the passport ready?

"So, if I (or you) feel this way, then, why buy a NYC apt? Why lock into a declining market? Why not just rent forever, stay liquid & keep the passport ready?"

that's what we are doing. like marc faber says, one needs to diversify country risk too. being fully liquid and mobile knowledge worker is not a bad position to be in.

yes, us too. my husband works for an international firm, and does so across many practice areas. one of those doesn't require bar admission (at the place of practice). won't buy until 2012, at the earliest, if ever.

wow. saw reference to this on Calculated Risk. a story for our times.

http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html

Housing decline has more to go. Too many people have made the decision to sell, but think they can time it.....Bet they panic and sell soon.

http://www.calculatedriskblog.com/2009/05/zillow-high-percentage-of-homeowners.html

Noah Rosenblatt vs Ilan Bracha.
Sorry Ilan housing is seasonal.

Manhattan Sales Trends: The Bigger Picture
Posted by Noah Rosenblatt on May 14, 2009 at 11.30 AM

A: I really don't get the fascination with month to month increases in activity as a foundation for making an argument that a bottom is in or that we are on the road to recovery. For housing sales numbers, especially Manhattan, there is a STRONG SEASONAL PATTERN! So, either you seasonally adjust the numbers OR you compare year-over-year to get the bigger picture! If you choose to ignore this, and instead focus on month to month trends or quarter to quarter trends, you are getting a very misleading picture! This is the exact type of spin that the NAR, and specifically David Lereah, used to argue against a falling housing market in 2006, 2007, and for most of 2008. And now, they lost all credibility. You want to see Manhattan sales trends, look at the bigger picture and understand that this is a seasonal market that must be analyzed year over year!

I can see the Bracha Blog did a whole piece how, 'Contract Out: There Is Something In The Air', focusing only on Manhattan sales trends from February, March and April 2009. This information should be interpreted as anecdotal and not used to establish and meaningful trend or to build an argument that we have turned the corner.

Nobody denies the pickup, but to cherry pick data and focus only on the near term bottom and where we came from since in order to build a bullish argument, is an exercise in futility. Let me show you why.

Here is the past 10 years of Manhattan sales activity for co-ops and condos, courtesy of MillerSamuel:

nyc-manhattan-real-estate-sales.jpg

Looking at month to month pickups, without rationalizing why this pickup may be happening, gives you a very narrow window into what is happening. Doing so means you ignore the seasonality of this market and usually leads to a false interpretation of a trend. Ask yourself:

1. Why ignore the seasonal nature of this market, and where we just came from after the Lehman collapse?
2. Why ignore a 38% stock market rally and that short term effect on buyer confidence after a sharp move down in prices?
3. Why ignore macro economics and simply interpret the pickup as evidence things are on the road to recovery from now on?
4. Why ignore year over year trends which clearly show Q1 as being the most sluggish in the past 10 years!

Why ignore all of these things? It was like ignoring alt-a when subprime collapsed and everyone stated that it was 'contained'. Remember that? They chose to ignore the bigger picture of this crisis. That didn't work out too well. Well, looking at a quarter to quarter pickup in activity and ignoring all of the above is outright silly! Either you do so and drink the kool-aid, or you analyze the right way and understand where this market is in the grand scheme of things.

Why not tell it like it is? What's the problem here? Why can't I say, yes, there is a pickup in activity but I strongly believe it is simply a counter trend pickup in activity embedded in a longer term correction - comparing y-o-y will show a slowing market. When you look at the graph above, its clear that is what this is!

When Q2 sales data comes in, it will show a tick up from the Q1 data and be interpreted by media, brokers, and brokerage executives as a sure sign this market has finally turned the corner! YAYYYYYY - champagne for everyone!

As I noted above and stated many times here, YES, there is a pickup in activity and YES, it will show up in the Q2 data when comparing it to Q1 - the trend that hope is being built on. I learned long ago to ignore such trends and focus instead on the seasonal nature of markets, trending macro fundamentals, the state of the consumer, the state of the credit/banking system, and the state of buy side confidence for the asset class.

I am estimating that Q2 sales, released July 1st or so and reflecting April-June, comes in around 1,700-1,800 or so - a significant pickup from Q1 but well below Q2 from 2007 and 2008 and either at or below trend for the past 10 years. Putting both together, it will seem that the first two quarters of 2009 will prove to be the most sluggish in the past 10 years. That's the bigger picture. Comparing month to month or quarter to quarter non seasonally adjusted data is quite misleading; so interpret at your own risk.

i saw that. some, of course, won't sell for years, if ever. but i suspect that there are enough who are stretched thin and/or who will suffer from unemployment to keep this thing depressed for a good long time.

Re: http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html

Yes, AR, a helluvah story. Comments were also good, especially this: http://citypaper.com/digest.asp?id=18067

bottom line: Dude had $2777 after alimony & mtg payment started at $2500. And he's an economics writer for the NYTs. Oy. Someone commented that this story is really about society's loss of values & ethics.

As you've previously mentioned, AR, these bad mtgs will readjust in the coming 1-3 years & the sh*t will just keep hitting. I can't envision how bad it will be.

In general, I find myself waffling back & forth between "it'll be Armageddon" to "things will get better". Also: thinking of buying an apt in 2010-2011 vs. renting forever. My thinking changes weekly, so it's hard to plan long term.

never underestimate the value of flexible thinking. a foolish consistency and all that.

i would love to think things are getting better. truly better, not just getting worse more slowly or flatlining. i'm glad that my child has at least 10 years before she has to consider employment.

maybe this will, at least for a while, remove the value judgments that have been given to renting vs. buying. they both have their positives, they're just different options. and as 30yrs pointed out in another thread, opportunity arises from the ashes. we may have some decent rental options here, for a change.

stay nimble.

Hey dwell, check this out, the RE industry is doomed! The tidal wave is coming!

http://seekingalpha.com/article/137554-government-grossly-underestimates-fannie-and-freddie-s-capital-needs?ref=patrick.net

mbia sues merrill, a whole slew of banks sue mbia, and now this.

http://www.housingwire.com/2009/05/15/lawsuit-links-bad-underwriting-investor-loss-at-indymac/

Interesting piece on TARP:

http://zerohedge.blogspot.com/2009/05/mark-patterson-its-sham-banks-are.html

http://seekingalpha.com/article/137554-government-grossly-underestimates-fannie-and-freddie-s-capital-needs?ref=patrick.net

Wowzer, sledge! Having one of those 'stay liquid & grab the passport' moments.

"As reported in “U.S. Mortgage Crisis to get MUCH worse in 2010-11”, the housing market is nowhere near a peak in foreclosures (with another new, all-time record just set in April)
By the time 2010 begins, the U.S. housing market will have fallen in aggregate, by an average of 40%, and will still be plummeting downwards due to massive over-supply and a continuing deluge of “short-sales” and foreclosure sales (see “A Revealing Look at U.S. Housing Propaganda”). Few, if any of those with mortgages reseting in 2010 will have any equity in their homes. By this time, most of these “chumps” will have realized how utterly foolish it is to continue making large payments on a home which they don't own at all – when they could buy or rent elsewhere, much cheaper, simply by walking away.
Those who would consider making payments, just to help bail-out “fat cat” bankers, may not have any choice when they lose their jobs. In the real world, the U.S. is on track to lose an additional 20 million jobs this year, as demonstrated by the weekly lay-offs, combined with last year's monthly numbers (see “U.S. Economy to lose 20 MILLION jobs this year”)............

Continuing with the fraudulent analysis, the U.S. government has vowed that it can keep interest rates at historic lows. This is deceit of the worst kind. With foreigners rapidly losing their appetite for any kind of U.S. paper (see the monthly TIC reports), the U.S. government is now dumping the largest glut of U.S. Treasuries on an already-saturated market which has clearly topped.

Is the U.S. government prepared to “buy up” more than $1 TRILLION of its own Treasuries (this year, alone), and pay the huge price of a collapse in the U.S. dollar (from “monetizing” all that debt)? If not, U.S. interest rates must soar much higher to attract tight-fisted foreign investors.
To summarize, with insanely optimistic projections for home prices, employment, and interest rates guiding it, the Office of Management and Budget has grossly underestimated the capital requirements for Fannie Mae and Freddie Mac – and the only way to come up with the hundreds of billions needed by these bankrupt behemoths is to send “Helicopter” Ben back to his printing-press."

This is the gov't being brutally honest. And these are the good loans

http://www.occ.treas.gov/ftp/release/2009-37.htm

This is Canadian. Don't know the source.

http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=430:us-mortgage-crisis-to-get-much-worse-in-2010-11&catid=51:commentary&Itemid=99

U.S. mortgage-crisis to get MUCH worse in 2010-11

Written by Jeff Nielson Friday, 03 April 2009 12:18

Bullion Bulls Canada - Commentary

The shameless liars at CNN and other so-called, U.S. news outlets are again talking about a “bottom” in the U.S. housing market – and trying to entice more victims to jump in. However, the reality is that mortgage statistics show that it has been obvious all along that the collapse in the U.S. real estate market will continue to get worse until at least 2011.

With more than one in ten U.S. mortgages (of all categories) already in default, the biggest wave of “adjustable-rate mortgage” re-sets does not begin until next year – and then will remain at that peak level for at least one full year.

Keep in mind that while the U.S. government, and their media-parrots originally tried to deceive people into believing this was a “subprime crisis”, the reality is that all categories of U.S. mortgages (including “prime”) are at the highest default rates in history.

And it is over the next two years that defaults are guaranteed to get really bad.

Do not confuse what I'm saying as meaning that the U.S. housing market will “bottom” in 2011. That is NOT what these numbers say at all. What the numbers say is that the U.S. real estate collapse will stop accelerating some time around, or a little before.

After that, the U.S. market will have to slowly chew-through the largest inventory of unsold homes in history – ANYWHERE! Currently, there are over 20 million empty homes in the U.S. Many of these homes have been severely vandalized (or even burned to the ground), but these “assets” sit on the balance sheets of U.S. banksters – at valuations far above what they could ever possibly hope to receive.

Millions of these homes will simply have to be bulldozed to the ground, because there will never be enough buyers for all of them.

So, after the U.S. housing collapse stops accelerating downward, some time around 2011, at that point the collapse will gradually slow down (over a period of several additional years). At that point, after the U.S. economy has lost over $30 TRILLION of “paper wealth”, and at least 30 MILLION jobs, the U.S. housing market will almost certainly remain depressed for several additional years.

In other words, buying a U.S. house today – after the market has already declined roughly 30% - would still be one of the worst investments in history. Think about that the next time a U.S. propagandist spouts the word “bottom”!

Like we didn't know they're be idiots calling "up!" all the way to the bottom.

hey just a word of thanks... I've actually stopped reading other papers for relevant Econ/Financial news... .if I get busy... I just come back to this thread to see what's "up" or "down" w/ our econ....

Gotta go get a haircut :)

Alan Greyson is a moron
plays to the camera, bullies and asks simplistic questions for the tv audience..

http://www.youtube.com/watch?v=QzRJ-5hLGx0

http://www.youtube.com/watch?v=PXlxBeAvsB8

http://www.youtube.com/watch?v=6HYq6kdseV8

I thought he was great here, no?:

http://www.youtube.com/watch?v=PXlxBeAvsB8&feature=related

I thought he was great here, no?:

http://www.youtube.com/watch?v=PXlxBeAvsB8&feature=related

Panem Et Circenses.
Dwell, Let's solve the problem , not ask dumb questions. I listened to the SEC testimony about the Nationally recognized rating agencies. Handled in a totally professional manner.
In http://www.youtube.com/watch?v=QzRJ-5hLGx0 he as provided with good answers like risk ratios being different for Life Insurance and Earth quake insurance, but that wasn't a good sound bite.

Not a fan of fox but Cavuto raises good points. The law was dumb.

http://www.youtube.com/watch?v=ITq19ezj_Xg&eurl=http%3A%2F%2Fbucknakedpolitics.typepad.com%2Fbuck_naked_politics%2F2009%2F04%2Falan-grayson-versus-foxs-neil-cavuto.html&feature=player_embedded

http://finance.yahoo.com/tech-ticker/article/248398/%22The-Worst-Is-Yet-to-Come%22%3A-If-Youre-Not-Petrified%2C-Youre-Not-Paying-Attention

ok...i thought i was negative before...this guy is quite something.

cc.. just saw the 30yrs post on yahoo.... yes but this guy is laughing while he is gutting you :)

taleb has been rather unremittingly morose recently as well. i'm not quite at Dwell's mood fluctuation levels, but i was feeling a bit as though this financial charade might have worked just well enough to float them through some of the worst, now i've abruptly reversed course again. this all just sucks.

nyc10023

Okay, so those of you with children - how are you preparing them for our increasing apocalyptic future?

We are moving (renting) to Chinatown where our kids can hopefully learn Mandarin. The way I see it, the Chinese will be holding all the trump cards by the time this all plays out...

don't be so sure...they have enormous problems....not the least of which is that we've stopped buying from them. i certainly do not know the answer or any answer but i have a strong feeling that it is not the chinese.

Consider it a hedge....:)

Maybe we can teach them German too (that is the biggest Euro economy, right?)

better to teach them how to fend for themselves...fix things...and not spend money instead of living.

that is a given. The language skills will provide them extra options!

touche

be agile. and not physically (although that could be useful as well).

http://zerohedge.blogspot.com/2009/05/deep-thoughts-from-bob-janjuah.html

two things here.

one, i often cite zerohedge, becoming very popular to do so. but still have seen some horribly sourced shit on that site so be careful.

two, i agree, but would extend the inflation anticipation period out a bit. not saying it won't come, and with a nastiness usueally reservered for a thwarted 14 year old girl, but it will take a bit longer to appear. initially due to wage deflation i believe you'll see commodity deflation, and then due to agricultural players not being able to get the money they need, we'll see a huge food commodity problem. but the Fed needs to stand upside down and over the top and under the bottom to keep rates as low as possible to deal with the reset/recast problem coming up in the next couple of years. if they can't deal with that, well, the krugerands may not have been such a bad bet, if could wheelbarrow them to the bank for liquidation.

"Dwell, Let's solve the problem , not ask dumb questions"

Riverside:
Gov officials won't discuss/acknowledge the true cause of our financial probs. So, when officials obfuscate the truth, the questions asked of them do sound dumb because they refuse to give meaningful answers, as they CYA.
Example: I saw some of the House members questioning SEC officials about Madoff. The more the SEC officials dodged the questions & gave BS answers, the dumber the questions sounded. These hearings are getting more & more surreal, theatre of the absurd.

Of course we must find a solution, but how can a solution be found if the truth won't be admitted?

Most pols are damn stupid. I turned off the TV very quickly when Maxine Waters (?) was haranguing some IBer. They are just, really stupid. One of the downfalls of democracy.

30yrs: Thank you for Davidowitz, love his candor.

"i was feeling a bit as though this financial charade might have worked just well enough to float them through some of the worst, now i've abruptly reversed course again. this all just sucks."

AR: I'm with you sister. I had hope, but now I see it's all gonna suck.

More Davidowitz: The Worst is yet to come; the US will never be the same; US borrows to pay interest on debt

http://www.youtube.com/watch?v=apLPw_O33YU&NR=1

Enjoy!

Did anyone post this yet
http://www.businessinsider.com/henry-blodget-new-york-city-real-estate-prices-to-fall-at-least-another-35-2009-5

New York City Real Estate Prices To Fall At Least Another 35%

Deutsche Bank runs the real-estate numbers and concludes that nationwide prices will fall another 17%, for a total peak-to-trough collapse of 40%.

In New York City, meanwhile, where prices started falling later than the rest of the country (and from a higher peak) prices have another 35% to fall. And that's just to get back to fair value. If prices stop at fair value after a bubble this big, it will be the first time in history in which this happened.

Deutsche Bank's outlook for New York, by the way, is positively bullish compared to Goldman Sachs'. In January, Goldman estimated that NYC real estate prices could fall as much as 58%.

Here's DB's outlook for some of the major cities in the country. The lefthand column shows the amount DB expects prices will still fall. The righthand columns show the fall from the peak.

continued at link
http://www.businessinsider.com/henry-blodget-new-york-city-real-estate-prices-to-fall-at-least-another-35-2009-5

ar: people here talk about how much 6's and 7's will cost $x/sqf few years from now. i think the real question is how many krugers it'll take.

as to ZH, he constantly posts about things he has no clue about. i was mainly linking for the guy he was quoting, google him to see credentials (horrible spelling notwithstanding)

Of course we must find a solution, but how can a solution be found if the truth won't be admitted?

ok say,
you are the CEO of AIG and some camera eager congressman asks you to name to the whole world the names of your AIGFP employees. You have genuine concerns that releasing the names is dangerous, could expose them to threats & harm and could have legal implications. You need to consult counsel. What do you do? Answer: You stall and say , I need to check with AIG lawyers. A totally reasonable response. Too bad Alan Grayson doesn't get it.

Now Contrast the youtubes of Alan Grayson with Mary Schapiro. You get honest throught provoking discussion. Putting someone on the stand and grilling them for a tv audience is not constructive. Below is the SEC roundtable discussion(night & day):

http://www.youtube.com/watch?v=-CAKrhdz0nA

se, he comes up with some very good stuff, as well as bad. credible people do link to him. i did the same as you the other days. he had pasted some stuff from the Telegraph, which I don't subscribe to.

was just a general warning to people to be cautious.

Riverside, agree naming people was dumb. I was referring to the Federal Reserve Inspector General video.

So, how do I buy gold? I fear that this admin will do a 'bank holiday'.

Here are a few interesting link for Monday morning:

The first will be met with much derision, quite possibly:
http://www.marketwatch.com/story/the-happiest-places-on-earth-are-heavily-taxed?siteid=rss

The second discusses international, and particularly Chinese, purchase of Treasuries, and why they need to do so when they don't particularly think it's a good investment:
http://blogs.cfr.org/setser/2009/05/17/we-hate-you-guys-but-there-is-nothing-much-we-can-do/

This piece discusses the different regional issues of the NYT, each discussing foreclosures in its particular region. Interesting.
http://www.ritholtz.com/blog/2009/05/foreclosures-rising-in-ny-region/

Great AIG piece Times of London. Again Bernie was a piker....

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6281953.ece?token=null&offset=0&page=1

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6281953.ece?token=null&offset=0&page=1

Here's an interesting interactive map on job creation/loss in the US over the last 2 years. Particularly interesting for anyone thinking of a relo:

http://www.slate.com/id/2216238/

Europe may be going to hell as we speak, but some are quite bullish on the pound:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqpCntv40ato&refer=home

Interesting article on private equity and the role they could play in reviving the economy.

http://www.businessweek.com/magazine/content/09_20/b4131028553342.htm?chan=rss_topEmailedStories_ssi_5

Some really sobering charts on p/e and corporate profitability.

http://www.ritholtz.com/blog/2009/05/normalizing-earnings/

as the old man said, in the long run, it's all about demographics and labor productivity. here's a bit about how a long and deep recession is already reshaping demographics

http://parenting.blogs.nytimes.com/2009/02/09/postponing-a-baby-in-this-recession/

"To become pregnant now would add exponentially to that fear. “I’m afraid medically we won’t be able to cover the extra insurance cost, or the hospital fees we would be left with, formula, clothing, car seats and the day-to-day expense of having another child,” she says. “I worry about the never ending bailout the government is leaving behind for us as future retirees and our now four-year-old as an adult.” "

i'm also in this camp of worried parent when it comes to deficits and entitlements. so i'll wait till congress/AARP and friends mend the entitlement issue before adding any new taxpayer.

admin, yes. here's a discussion of the US's long-term growth potential.

http://www.economist.com/finance/displaystory.cfm?story_id=13648998

as usual, TE, vague and not very illuminating. sorry don't subscribe to econ's ability to measure long-term growth potential given that they cannot even measure the short-term one. but on parker's (author of the paper that calculates debt/gdp effect on rates) behalf, he had the guts to add entitlements to the federal debt (which otherwise seems to be less than half of what it really is). bravo for him!

http://spectator.org/archives/2009/05/15/secretary-loophole/1

Two good reads. First about how banks and geithner are twisting the new cds regulation to work for them. and second about secretary loophole and the story about not paying taxes(i never heard the full account). Geithner's penchant for loopholes is fascinating..

http://us1.institutionalriskanalytics.com/pub/IRAMain.asp

http://spectator.org/archives/2009/05/15/secretary-loophole/1

Elizabeth Warren has a future in standup....

http://www.youtube.com/watch?v=uUawHDU5QPY