Is that right? No wonder some of you guys have to have three jobs (when you can get them).

In that case, when I move from here, it will be to the Gold Coast not LA :)

Beautiful as long as you're not in Newburgh proper. It would be a tough call as to whether Newburgh, Bridgeport or El Paso was shittier.

very true...very true. i neglected to point that out. but man if you could get a house that was somewhat secluded out there...nice piece of land...mmm...it's gorgeous

In the evil, liberal District of Columbia I pay $1800 in taxes on a house assessed around 3000000

Video - CNBC.com

Is this Bernanke somewhat agreeing with me?

At least at 10:20 or so, where he talks about putting AIG into a conservatorship and unwindingly it slowly imposing losses as needed while protecting policy holders (and presumably other assets).

All in hindsight of course. I'm telling you... I've had people disagree with me tooth and nail because I wasn't saying the same things the media and people in control were saying during the crisis, but I'm collecting so many 'in hindsight' agreements I don't know whether to be more pissed off, or thankful that I'm at least in the ballpark of coming up with decent strategies.

I too have a lot of those however I believe, with interpretation, all sides will be claiming that they were right with such clips in droves.

In Wisconsin, I pay $3K for 150K. Wisconsin is horrible on property tax. Although the house we have the offer in on is a little over $3K for $250K so, go figure.

Treasury sale just now is screaming that this rally is a bear market bounce and a lot of the pundits are hanging their hats on the 800 S&P as a threshold for a signal. Fine if you say so. I continue to believe that this is a bear market bounce and intend on buying into an average when it hurts in the next 2 months or so.

I cant believe I was right in calling this rally though.

Is that the right number of zeroes?

Yow. I need to move. :(

I have to ask does a $3m house come with its own butler? :D

(and there I was thinking the 'lord' was just your user name ;) )

Gold :D

SI

S&P at 800 is a signal for what? A downturn?

If so it is at 820 so shouldn't you be prepping to load up on SDS?

I dunno, I dislike the pundits (excluding myself, ha!) as I'm on the record of being against them too numerous times to count. I think this was a bit of an irrational bounce, but its caused by the treasury plan. That was reflected in how the financial sector moved much more than anywhere else on Monday (at least according to my bots and the way I was graphing out the market).

We'll see some nervousness, like we are today, about whether the prices all jumped too fast and too early, but I think the overall news is a bonus for the banks (at taxpayer's expense mind you).

I certainly am not shorting, as for buying, strong ones I'm buying if they have not spiked up too much, because I figure they'll be up over this next year anyway... others that are not so strong, ya I too am waiting for some of this bounce to be shed off. Whether we will revisit say March 9th, I am doubting it. Recall of course my general expectation is for this quarter to have different news than the first quarter (which was everyone taking a loss).

Well, exactly. This is the problem with all the morons who say "Dow is up 300, Obama's idea is good", "Dow is down 300, Obama's idea is bad". I'll contend that yesterday's news will be one we deeply regret in 20 years. But the market loved it because we're dumping $1T into the market, mostly into the banks- it was definitely in their best short term interest so they loved it.

SI

yes, people are talking about 800+- being some sort of demarcation or 'hold' line so if it finishes south of there the market will be heading south (what I think anyways). as long as the markets are north of there the markets will have some upward pressure.

as for SDS, yes, Im looking to average into it starting probably end of the week for a short term play to finally put my money where my mouth is but look at GE...wish I was selling it today :) coulda, shoulda, woulda.

From CNNMoney


:banghead:

A few minutes ago, Citi just borrowed 10 trillion dollars from the Chinese secured by that mortgage and will be able to pay it back when the Senichs' house decemmillenuples in value, which they expect will happen in the next 18 months.

THE ECONOMY IS SAVED!

Talk about bear market bounces....my house in FL jumped 5% in value since last month according to Zillow!!

OK...enthusiasm must be tempered since it is only Zillow...but still.

Not completely crazy.

Not at all.

Two weeks ago I was invited to the home of a schoolfriend of my daughter. It was a very nice home on the canals - not spectacular (4 beds, 2 baths, 2500 sq ft) the sort of house a third time buyer might aspire to. The owner, a motor mechanic, bought it for $400,000 in 1995 (being on the canals with it's own small jetty inflates the price).

By the middle of 2008 it was valued at an insane $2.5 million.

And no butler.

It illustrates precisely why we're now in the worst economic condition for more than half a century - asset values just went ape! The only way a normal person could buy even a modest house was to take out a crappy loan - and eventually, inevitably, default :rolleyes:

Dow up this past week 6+% and has been up for the third consecutive week for a Dow 17+% gain. Not too shabby.

But lest we forget
Strong week on Wall Street ends with a thud - Stocks & economy- msnbc.com
Spent money on a family dinner, Bolt dvd and felt that was a splurge.

im hoping to buy into SDS at the 70 or below range early next week. Had the market gone up on Friday I probably wouldve gotten some.

It sounds like the lifeline has been pulled for Chrysler and GM. Their requests for bailout funds were denied, and both firms were given enough cash to do restructuring. Chrysler is now again talking merger with Fiat.

Feds declare GM, Chrysler not viable, refuses more aid - Politics Wire - News & Observer

Wouldn't it make sense to file for Chapter 11 to get the protection and be able to re-structure costs (such as labor deals) much easier?

This was the idea a lot of people pushed around many months ago. GM was unsavable and the money we gave them was basically flushed down the toilet. They have refused to restructure and either sell/close down unprofitible lines (Hummer).

oh shit....SDS time.

Here's an interesting article from one of the guys who wrote a program for Wall Street firms that helped convert mortgages into more attractive securities.

How Michael Osinski Helped Build the Bomb That Blew Up Wall Street -- New York Magazine

I really hate the precedent we are seeing here. Granted I shorted GM after it bounced up last week (because I think it is no better than 2 dollars until it fixes its balance sheet), but I hate the power we are giving the government to basically send companies to boom or bust status over a weekend. Bailouts are going to kill us slowly if this continues.

I also think the banks pretty much own the government entirely.

I think the government might meddle so much that a recovery is going to be delayed.

Anyways, I guess I'll stick to my plan of reloading longs I offloaded last week and building up more of a portfolio. No doubt this news is going to send things downward across the economy even if it is supposed to be autospecific news.

we will retest l;ows.

I dunno, seems like the hype changes direction every few weeks, I know someone out there is loving this volatility (maybe even causing it).

Some indicators point to the start of a recovery, but you start off another panic and wham goes the markets, and you might encourage companies to start cutting past the amount they can truly sustain. If you truly think we are going to retest lows you should already be sitting on some SDS, at the low it was what, 110 to 115? That is a 38% gain if you buy this minute.

Personally I'm just going to delay some purchases I was intending to make anyway, since the price will probably drop, but who is to say what crap they will drag out next?

It appears that the Chrysler-Fiat partnership is now official.

Chrysler, Fiat agree on global linkup - Autos- msnbc.com

I've already seen signs of this. I have a lot of friends that work for EDS, who was purchased by HP last spring. HP has been cutting EDS like mad across the board, but at least in our local market, there is lots of work and they are still winning contracts. So things look good for the bottom line as all these cuts happen, but what happens when they have to actually deliver projects and there aren't enough people left to do it?

The other sick thing is that HP made something like 13 billion dollars last year and yet have put out a 5% salary reduction across the company worldwide (and actually 10% in the US). Talk about squeezing people just because you can. :(

The really bad parts of stock markets and public companies is that if your profit isn't as much as the stockholders think it should be, you have to lay people off to make them happy. Too many profitably companies have been doing layoffs lately...

You cease to have any control of who your owners are and what their demands are. Easy access to capital, but a lot of douchebags may become owners of the company too. I don't find that a good place to be.

Not recession driven, but our company was just acquired by another company today so, great fun. Management is flitting about talking how this is such a great thing... blah blah blah. How about I ask you in 6 months how great it is when they cut your position. Hearing all the usual propaganda about how this is a 'merger' and not an acquisition.

Time to update the ole' resume.

OK...When?

next few months, I think the Bank #'s are going to be worse than expected the jobs number worse than expected and the overall picture worse than expected over the next few and we will retest the lows set a few months back. I actually put my money where my mouth is and bought some of the short and plan on buying a little bit on average over the next week(s) if the market tries to push higher. I just dont see anything that would push things higher at this point outside of this 'bear market rally' (which I actually got right, for once). It hought we'd get a spat of positive news...we did. Now I see nothing good coming over the next few weeks...even the MtM talk is getting watered down.

David Brooks goes after the financial system oligarchy:

I'm with DB :D

I think I've even suggested all of those things - nationalize banks, break them up, spin them off as pieces, don't let them get back together. I'm all for this plan.

SI

I've advocated the same (break the banks up). Big banks actually fuel the sort of malinvestment we do not want in our economy. The naive economicists might mention 'efficiency of scale' but that argument actually breaks down in multiple ways (either using common sense logic and emprical observation, or mathematics to demonstrate how fewer, larger banks skews the incentive structures towards higher amounts of risk in portfolios).

We don't need big banks, it actually doesn't make sense for the original purpose of banks, connecting loans between pools of capital and individual purposes (be it homes, creating business, or what not). Encouraging the growth of a bank oligarchy (ignore the political corruption factor for a moment) also reduces the points of entry for new entrants into the market. In fact, you can see it as DB pointed out the amount of profit funneling through banks increased dramatically over the past few decades... its because they 'logically' concentrated the money in themselves as opposed to other investments. Imagine if all that money, even if leveraged to all hell, was put into production economy growth.... we'd have our frickin flying cars already! (okay maybe not, but certainly that pile of money could build a lot more than just a housing glut super bubble).

Big business is bad for business, at least in its modern incarnation. We need viciously competitive young companies to develop the new products and processes to get the country back on top. And for them to get the attention and scrutiny they need, we have to have small active banks as opposed to large banks passively chasing 'easy money'.

Woo hoo. Checked my 401(k) and my YTD is in the black! (with the help of company contributions). Market is feeling better for the past 4 weeks. On a project at least till July. Feeling a little good right now. The 8000 level is a relief ... pretty sad on how low our expectations have dropped.

Bah, another epic rant....

SHORT VERSION: DOW is pointless as a metric, and has been way over-valued previous to now. And barring auto/bank induced catastrophe we will probably have a net positive quarter two (note, the run-up to where we are right now might be the extent of that positive growth).

The 14,000 DOW was a bit of an optical illusion. Stocks are only worth what their dividend yields, and whatever growth is possible in the price. Irrational investors were bidding up prices WAY beyond the theoretical capacity of the company to raise dividends, and faster than revenue/profit growth in many cases.

In my opinion they were even bidding it up higher than it would take for a theoretical company to pay the price in order to acquire the company in a merger. Granted, those mergers still happened, but the vast majority of them were terrible ideas (massive increases in corporate debt with supposed revenue growth as the target, but profit growth was very limited if any).

I'm pretty sure once this thing is all sorted out, if you adjust the DOW for inflation it will probably end up a number that is some small multiple of the average growth rate of those businesses (in terms of profit).

I would argue if the debt balances were not so scary that some stocks are actually under priced at the moment, sort of the overcorrections the market is fond of (yay psychology investing!). My own indices pegged for so many companies early this month that I went on a buying spree despite the possibility of continued slide (helps that I've accumulated capital to lose of course). I still don't agree with investors who think just because GM sales are -35% instead of -40% that it is a great thing (made up numbers, but in the ballpark)... I hate how people react to beating an analyst estimate is somehow a good thing. The autos are still in a bad shape from a cashflow perspective (even foreign automakers are not so rosy although they are generally in better shape IMO)... so granted there is no giant fallout if those auto share prices go down again, I think it will be a good quarter two. Not necessarilly gangbusters, but a solid month that will hopefully get people's heads out of the gutter and back to spending (I'm talking businesses, fuck the consumer confidence crowd, people buy shit when they have jobs or credit, businesses are the only source of both).

and hence Ive begun to average into the SDS (while keeping on all of my long positions) since I think the S&P/DOW has run up too far, too fast. I still hurt when I see the market run on me as Im putting on my short but thats the price you pay. It hurt to buy GE when I did too (below 6 at one point) and that worked out. {shrug}

sounds like the minutes from the last FED meeting had a bunch of the governors ringing the deflation bell and that downside risks had actually worsened. I still think that we're right near the top of a Bear market rally.

The bottom is going to fall out pretty soon, there is no reason to be optimistic at this point in my view. So I guess I agree with Flasch.

Banks are not going to be profitable for a while, doesn't mean the economy has to sit around collecting dust though. Another case where trying to keep these dumps afloat is a drag on the economy, where controlled execution of the worst parts of the banking industry would let the economy be forward looking again.

My hope is the overall economy improves, and people wise up and leave their expectations of banking in the gutter and not force any economic recovery to go through the banks as a bottleneck. Unfortunately, the banks are WAY too powerful, will probably insist that they are the gods of the universe,and consquently keep us in a garbage shape for the year or two it takes for them to turn their bad decisions into government debt (doing it all at once would piss people off too much).

If you could somehow take away the black cloud that the banks bring over everything, some indicators are ready for a recovery. The problem is everyone is nervous as all hell and not willing to be the sucker who creates jobs during a depression (although those early moving companies tend to be the biggest winners in the next boom....). They are encouraging a downward cycle, instead of resetting their outlooks and taking their lumps so they can move on. They need to realize they already lost 80%-95% of their billion dollar fortunes trying to manipulate things, maybe they should get back to growing that last 5%-15% the old fashioned way instead of scheming how to magically make billions of dollars appear out of no where (ahem... government).

Out of curiosity as much as anything I guess, what sort of "small" are you thinking about here?

I suspect it's just phrasing, but when I think of "small" banks, I think of community banks basically (the kind that keep going under here in Georgia). I imagine that you're thinking more in terms of 100 locations chains not 2500 locations chains.

But I was curious if that was right, so I'm asking.

Out of interest why do you say that? - I know its whats promoted by the media but as I understand things many of the larger remaining banks have only actually posted relatively minor losses despite huge their write off's ...

For instance Wells Fargo and Bank of America (BAC) have only posted a loss in one quarter so far (the most recent one), JP Mogan Chase & Co have yet to post a loss despite write offs etc.

Yes they might not be as profitable as in the past and some may take a LONG time to come right side up again (if ever) - however unless I'm missing something there are some which are still in a relatively strong financial state.

(personally I was kind of expecting at some stage (post paying the goverment back its cash) for at least some of the banks to turn around and indicate they'd written off more money than required in their provisions - cue larger than expected profits and bonus's all around for the people in charge etc. ... not that I'm cynical or anything ;) )

I am thinking smaller community level banks. Obviously we need a mix, but certainly no 'too big to fail' banks should be allowed. We need low level investments, that is where your small businesses that end up growing the economy tend to come from. Big business has been very sluggish at innovating in my opinion, it becomes so concerned with its own weight (or stock manipulation) that the strategies tend towards either blandness or outright stupidity.

A small bank would need to watch its loans, and if it fails in its oversight (like so many have recently) needs to be exterminated as a bank. I would argue that many of the failing banks have been poorly run, and are likely to close to the mortgage silliness (or stored their money in supposedly safe big business investments). Banks that are lending to a community that they understand, with sane contracts and expectations, have been weathering the storm fairly well in my opinion (granted I don't know the inner workings of all that many, I have one person I know who works at a mid-sized bank chain, you might even consider it small).

They talk about Main sTreet and Wall Street in the media, and are completely talking out their ass. They don't even know what a main street economy would look like, and if they did they would know there hasn't been a main street for years now. All of the money is funneling through the big corporate created machine (maybe for fun we should locate a particular bank and try to break down its portfolio, even good ones have a lot less in direct loan service than I would expect/hope).

I mostly want banks to have more of their portfolio in direct people or businesses. This loan = that building, that loan = X business with Y prospects. I want them to stop pooling it into giant collections of paper labeled Derivative D, X% rate of return, entirely fictional risk rate. Giant paper does not really drive business in my opinion, yes I know we could start a giant argument over how modern companies work...

Essentially, the further we abstract away our investments from real things, the worst off I think our economy is getting. Right now we have a generation of finance people who couldn't take apart a company balance sheet if their life depended on it... the best of them are ex-physicists with complex math that can create an abstract piece of paper, but don't really understand how to assign numbers to the variables in the equation! We need good bean counters more than we need rockstar model makers or hotshot cocky daytraders (what I would argue many think of when they think of someone on Wall Street, including those on Wall Street).

I think the bank's are just starting to take their medicine. Hell, the problems have been there for well over a year and they post their first losing quarter just now?!

Think about it for half a second, the finance community is great at shuffling money through time in so many ways that they can pretty much wizard their profits and losses into any magical shape they can get away with. They are just starting to post those losses, and they have plenty more to post (Bank of America certainly does on my own tally). They can only shape that money so much, so they are either going to take losses or spread those out over a longer period of time and show quarters of reduced profit.

In terms of long term health, I would love for them to just take their next quarter as two with losses (yes that will play hell with short term stock prices that they are all apeshit over, but they already killed so much share price so far what really is the point?).

If you think banks are going to have three good quarters, I've got a shiny nickel I'll bet you. Are they going to weather them? I think so, the government has shown that they are not going to let them all die. Hell, the gov has given them trillions of dollars so they might even be able to hide their losses even better. But their cash flows are in serious trouble still, anyone who says anything else hasn't done anything except parrot CNBC to you.