July 2009
40 posts
“On Good Friday 1930, a BBC reporter signed onto the radio broadcast for the...”
– here (via robosheep) (via johnburke) (via thebob)
This will end well, I promise
I take back everything I’ve ever said about the previous bubble being caused by lenders making loans without real possibility of being paid back. I was clearly too harsh. Sears is going to try boosting retail sales by advertising that they don’t care if they get paid back. Bloomberg reports Sears to Let Jobless Stop Payments, Still Keep Fridge:
Sears Holdings Corp., the largest...
June 2009
88 posts
Calculated Risk: Hard Core Porno-graph-y →
If it had the corn futures graph (there was a limit down event, so it was featured various places today), I would have titled it “Hard Corn Porno-graph-y.”
Zero Hedge: May San Diego Home Sales Increase... →
Warning: the commentary from Tyler Durden is a bit of a rant. I’m not really sure I’d blame California Association of Realtors data on the Obama Administration. Nobody really puts their full faith behind the CAR numbers anyway (it’s possible that Realtors are biased). Still, 89% to 6.5% is a bit ridiculous.
Unemployment Rates, by Metro Area →
I linked to this last month too. This WSJ blog post is much nicer than the actual report. Have fun sorting the columns. Apparently I live in the best part of California. Both our rate and our year over year change are the best in the state. El Centro is still up top with a 26.8% unemployment rate.
Wednesday could be interesting
Two interesting things may happen tomorrow. First, Russia may decide to immediately cause 400,000 people to lose their jobs. Technically, it was decided a while ago, but July 1st will see the shutdown of their casino industry. I don’t know how concentrated Russia’s gambling industry is, but I’ve got visions of entire cities thrown out of work, rioting in the streets. And...
“The marketplace provides the best health care ever! Hooray for free...”
– Robot Heart: Sex, Religion, and Politics: Health Care stories from the United States
I can’t think of an area with more convoluted regulation than the intersection of the health-care and insurance industries in the US. Is there really someone out there arguing that the current system is...
“I was so willing to go to jail for catching water on my roof and watering my...”
– It’s Now Legal to Catch a Raindrop in Colorado - NYTimes.com
i was just thinking about this earlier this morning, how irrational (or maybe supremely overbearing) it was that the state owned the water in my gutters. water rights are one of the biggest issues facing colorado and the states to whom...
150 Years
Madoff’s sentence has been decided.
Dallas-Fort Worth's 'modern survivalists' are... →
continuum, quoting the article:
Jack Spirko owns a media company, is married to a nurse and has a son in college. He has two dogs and lives in a nice house with a pool in a diversified neighborhood in Arlington.
Spirko, 36, considers himself an average guy with a normal life.
But for the past few years, Spirko has been stockpiling food, water, gas, guns and ammunition. He also has a load of...
Mortgage defaults in America: Can pay, won't pay |... →
There are consequences when you default on a mortgage. You lose your home, your credit takes a hit for a long time, and you may have tax consequences. However, I firmly believe that families and individuals need to make the best decisions for themselves. For many with underwater mortgages, ruthless default is probably the best option. The real estate market in some areas (particularly new...
Bank Failure Friday Continued
I said that California was doing its best to catch up to Georgia in the failed bank race. Mirae Bank of Los Angeles, CA was added to the list. That’s six California banks this year. Mirae had total deposits of $362 million and will have an estimated cost to the FDIC fund of $50 million. It looks like the FDIC did a much better job with this bank than with the other failures this year.
Five...
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Bank Failure Friday
It looks like 4 banks were added to the FDIC Failed Bank List today:
Metro Pacific Bank, Irvine, CA - Total deposits of $73 million and an estimated cost to the FDIC fund of $29 million.
Horizon Bank, Pine City, MN - Total deposits of $69.4 million and an estimated cost to the FDIC fund of $33.5 million. However, the acquiring institution, Stearns Bank, entered into a loss sharing agreement...
“Record credit card losses are pushing big US banks to come to the rescue of...”
– Saskia Scholtes and Francesco Guerrera in New York - Financial Times - Banks rush to rescue of credit card trusts
This one sentence has everything:
Record Losses? - Check
Off Balance Sheet Vehicles? - Check
Securitized Garbage? - Check
I was just discussing this last night with a friend. He...
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Unemployment Still Bad
The Unemployment Insurance Weekly Claims Report surprised some people today with more jobless than expected. The major headlines did a decent job of backpedaling after last week’s unwarranted celebration. Bloomberg reports U.S. Jobless Claims Rise, Total Benefit Rolls Climb:
The number of Americans filing claims for unemployment benefits unexpectedly rose last week and the total number...
The Prudent Investor: Newsletter: US Embassies Are... →
Don your tinfoil hats for a moment.
I’ve now seen this commented on everywhere, though nobody has confirmed anything. The question is whether or not we are going to get an FDR-style bank holiday. You may be interested in a Fed Research Paper on the subject. The FDIC should make such a holiday unnecessary, though not for big accounts. One outcome of the holiday was the restoration in trust...
Disease prevention often costs more than it saves →
Food for thought. The article isn’t nearly as damning as the headline indicates. Really, it should be viewed as a request for research funding to determine which prevention efforts are actually cost effective. I did find this tidbit interesting:
No one really knows how much of the U.S. health care dollar goes toward prevention. The most commonly cited number - 3 cents of every health...
“The quick ratio is (cash + cash equivalents + accounts receivables)/current...”
– investorglossary
I call shenanigans. The denominator should be “current liabilities.” I point it out only because I’ve posted their charts before.
naked capitalism: Japanese Trade Implosion... →
That’s a year over year figure. This counts as bad news.
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Bank Failure Friday
It has turned out to be a Friday true to form, and three banks have been added to the FDIC Failed Bank List:
First National Bank of Anthony, Anthony, KS — Total deposits of $142.5 million and an estimated hit to the FDIC fund of $32.2 million.
Cooperative Bank, Wilmington, NC — Total deposits of approximately $774 million and an estimated cost to the Deposit Insurance Fund of $217...
“Why are you picking on the Post Office? For 44 cents, someone comes to your...”
– Jon Stewart, pointing out to House minority leader John Boehner that perhaps the United States Postal Service is a bad example of government mismanagement, on The Daily Show (via inothernews) (via radarchive)
Also, USPS is completely self-sustaining. That is to say, they receive ZERO tax dollars...
Madoff Victim Statements →
I found this through a Huffington Post article that I no longer can find. If you want to work on your empathy skills, or if your day is too cheery, this is a collection of statements by Madoff victims sent for consideration during sentencing. Here’s the one I’m currently reading:
I am 86, a widow, and a victim of Madoff. My husband was a school teacher and I worked as a school...
Unemployment Bad, Benefits Expiring
You might not know it from today’s headlines, but unemployment continues strong with this week’s Unemployment Insurance Weekly Claims Report. The headline from Yahoo Finance was Jobless benefit rolls drop sharply to nearly 6.7M. It sounds good, but the article gives an explanation that is less than copacetic:
The total number of people on the unemployment insurance rolls dropped...
naked capitalism: Germans to Install Gold Vending... →
I have two thoughts on this:
I can’t think of a better target for property damage/theft. I expect to find a bumper attached by chain to at least one of these machines.
A 30% markup? That’s quite a margin.
I hope this works, though. I want more things in vending machines. They’ve got booze, used panties, and gold. What will they think of next?
Eddie Bauer files for bankruptcy protection →
Others are already bidding on their assets. Another one bites the dust.
Go Fish
I was watching TV the other day when I saw an interview with a California fisherman. He was discussing the impacts of the cancellation of Salmon fishing season on his livelihood. First off, I didn’t actually know that Salmon season was canceled. Apparently this has been an ongoing thing (nobody tells me these things).
The SFGate reported U.S. to ban commercial salmon season:
Lovers of...
Green Green Shoots of Home →
However, even central bankers and policy makers turn out to be capable of learning, even across generations. The lessons of the 1930s appear to have been learnt. New mistakes are being made all over the place, especially as regards moral hazard, the too-big-to-fail problem and other incentives for excessive risk taking in the financial sector, but that won’t become a serious problem until the...
Auto Supplier Aid Request Rejected By Obama... →
This is a little surprising to me. A respectable amount of money has been spent with the explicit purpose of keeping the supply chain alive. It’s not that a line doesn’t need to be drawn somewhere, and it’s not that I didn’t think Obama’s team realized this, I just didn’t expect them to draw the line now. Are they already giving up on a smooth bankruptcy for...
Obama Administration Releases Details of Proposed... →
There’s a link to the 85 page “Near Final Draft” as well as some commentary. I think the idea of giving the Fed more power is a terrible idea. It’s as if the Fed, under the direction of Greenspan, whose PhD research (note, he never actually wrote a thesis) was on housing bubbles, had no way of knowing that they were blowing a housing bubble.
Nest Eggs Demolished, Older Americans Go Back To... →
I find it frightening that people are quite literally competing for jobs with their grandchildren.
I know of a number of people who thought they were going to start up some kind of retirement job of the self-employed variety. A large portion of those were based on monetizing some leisure activity. The demand for such leisure activities has not yet materialized. Soon, right?
A New Foreclosure Moratorium?
When the last wave of foreclosure moratoria (some regulatory, some self-imposed by the lenders) ended, there was a spike in notices of default. The conclusion was that the moratoria were an ineffective way at dealing with the problems in housing. It shouldn’t surprise anyone, then, that California legislators decided to give it another round.
Central Valley Business Times reports Mortgage...
Bank Failure Friday?
If it’s a Friday true to form, this will update. However, I’m leaving right now on a motorcycle camping trip for the weekend. I’ll get to watch my cousin get her degree in Aerospace Engineering. Have a great weekend.
“Who can we trust and bank on? The President wants to give us confidence but...”
– Danny Schechter: Who Can we Bank on as Crisis Gets Worse?
This was in the Huffington Post.
Unemployment Mixed
Thursday’s Unemployment Insurance Weekly Claims Report is out. This is an exercise in having memory greater than one week. From the report (emphasis mine):
In the week ending June 6, the advance figure for seasonally adjusted initial claims was 601,000, a decrease of 24,000 from the previous week’s revised figure of 625,000. The 4-week moving average was 621,750, a decrease of 10,500...
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Money
A key component to understanding the inflation/deflation debate is to understand the money supply, and whether it is increasing or decreasing. Unfortunately, there are many ways to measure the money supply (M0, M1, M2, M3, MZM are the most common, but there are others), and very little consensus on which definitions are the best. What they have in common is that they seek to define money and seek...
3.99%
The 10 yr auction results were just announced. Fortunately, there were a lot of bidders. The rate is less than desirable. 46.85% were allotted at the high yield of 3.99% (median yield of 3.915%). While not as bad as it could have been, this isn’t particularly good news. Tomorrow’s 30 yr auction will be watched, but it won’t be as important as today’s.
Brazil’s Economy Contracts 1.8%, Less Than... →
The headline says it all.
It wasn’t that long ago that people thought Brazil would emerge from this crisis unscathed. Two quarters of contraction later, it should be clear that there’s no such thing as “unscathed” in this economy.
Supreme Court lifts stay on Chrysler sale to Fiat →
I think the strategy is to wear us down so that we just get sick and tired of seeing Chrysler in the headlines. It looks like this thing is actually going to happen.
“Here’s why this confirms your worst fears and what it means for U.S. finance...”
– Edward Harrison: Ten big banks receive approval to repay TARP funds, Naked Capitalism
The Best Selling Car In The U.S. →
Outsold and uses less gas than a Prius or an Insight, and is made in the USA.
Ford Says Government Backed Debt For GMAC Is... →
Ford has been learning the danger of being a relatively successful company in the age of bailouts: higher borrowing costs.
13 vs 2.25 percent. Ouch.