September 2009
64 posts
More Bogus Bailout Reporting: “As Big Banks Repay... →
[I]f you subscribe to the world according to the New York Times, you’d think we the long suffering taxpayer got a really good deal. By extension, we should be really happy if financial firms throw themselves off the cliff again en masse, since that will give us all the opportunity to make even more money by rescuing them!
I love Yves.
August 2009
78 posts
No Use Crying: Independent Dairy Farmers Fight Big... →
I mentioned this to my father last night and couldn’t remember the specifics. I have a personal interest because my aunt and uncle raise dairy cattle.
1 tag
At Least They're Consistent
In December, a lot of articles will be printed up telling people to sell some of their loser stocks for tax purposes. This is actually pretty good advice, subject to some caveats that I don’t particularly want to discuss right now. The point is, the US government assesses taxes based on realized gains. Let’s say you bought Citigroup at $1.86 a share and decide to sell now at $5.23 a...
The Five Stages of Panic Buying →
This is quite entertaining.
(Found via naked capitalism)
2 tags
“This recession has had a severe impact on employment in various ways: jobs,...”
– Dennis P. Lockhart, President and Chief Executive Officer, Federal Reserve Bank of Atlanta, Speech - August 26, 2009
1 tag
Unemployment Dips
The Unemployment Insurance Weekly Claims Report has been released. Initial claims fell to 570K, which was at the high end of the Bloomberg consensus range (560K to 570K). Last week’s number was revised up 4,000 to 580K, so it is only a partial victory. From the report:
In the week ending Aug. 22, the advance figure for seasonally adjusted initial claims was 570,000, a decrease of 10,000...
That Wacky Market
I was discussing the market with my buddy (yes, alcohol was involved). He was wondering if I could peer into my crystal ball and tell him when the market would have a pullback he could invest into.
I could not.
I told him that while I thought the market needed a significant drop, I could not predict whether it would happen tomorrow, in seven weeks, or seven years. I walked through the...
Bankrupt Auto Parts Suppliers Seek $100 Million In... →
You may have become numb to such headlines. All I can say is, “No. Never become numb. Outrage has a place. This is an appropriate place for such outrage.”
I also post this because I hope that those on the left out there don’t think that those on the right approve of such things. I’m hoping we all agree here: Bonus not warranted.
Report: 10,000 stores could close by year-end →
America is still over-stored. This is going to weigh on commercial real estate.
Labor Leader Chosen to Head of New York Fed Board... →
Woah. How’d I miss that?
… (checks) …
Doh! I saw the headline, “Denis M. Hughes Named Chairman of the New York Fed Board of Directors, Lee C. Bollinger Named Deputy Chairman” in Google Reader and checked wikipedia to make sure that wasn’t the same Bollinger of Bollinger Bands fame (it’s not). I never looked at the other guy.
Wow, the president of the...
Toyota reportedly to slash production by 10% →
This is the rational thing to do.
Cash for Clunkers moved demand forward, so some of the sales these last few weeks will cut into future sales.
The baseline sales rate should pick up a bit naturally just because sales collapsed so far below the historical replacement rate for vehicles. But,
Unemployment will act as a bit of a drag on sales, so everyone may have to wait a bit longer for the...
OMB Says, "OMG!"
Today the Office of Management and Budget Director, Peter Orszag, formally announced the $2 Trillion dollar increase to the 10 year deficit forecast. From the official OMB blog:
The MSR shows a smaller 2009 deficit but larger out-year deficits than previously projected. Overall, it underscores the dire fiscal situation that we inherited and the need for serious steps to put our nation back on...
Bernanke to Be Nominated for Second Fed Term by... →
1 tag
Chase Illustrates Opportunity Cost
Have you seen the new Chase Sapphire credit card ad on television? A woman walks out in a stunning dress to surprise her husband. Her husband, obviously aroused, suggests that they drop everything and go on an extravagant vacation. The cut scenes show fancy restaurants and powerboats. The woman says that they can’t, and the husband responds with all of the distinct rewards benefits of the...
“I’m a Democrat, and have long been concerned about America’s lack of a health...”
– David Goldhill in How American Health Care Killed My Father
This was pointed out to me in response to my recent rant. If you read the (excellent) article, two things should be obvious:
The author is definitely a Democrat, and therefore has a different proposed solution than I would come up...
FiveThirtyEight: Politics Done Right: Obama Has... →
robot-heart-politics:squashed:
I wonder why this hasn’t gotten any more press.
Actually, they probably didn’t want more press. Obama’s economic team belongs to a school of economic thought that believes tax cuts work best if they are stealth cuts. This makes sense: If people get more money as a one-time bonus, they are less likely to go out and spend than if they don’t know...
The Framing is All Wrong
Is insurance even an appropriate business model for paying for health care?
This is a serious question that is almost entirely ignored in the current health insurance reform debate. The current debate has been largely concerned with answering a different question:
Can government do a better job at health insurance than private health insurance companies?
It’s possible that answering...
3 tags
Bank Failure Friday
Some new additions to the FDIC Failed Bank List:
ebank, Atlanta, GA — Deposits of approximately $130 million and an estimated hit to the FDIC fund of $63 million. This also involves on of those nice loss-share agreements, this time between the FDIC and Stearns Bank on $111 million of ebank’s assets. But with loss estimates that high, I don’t see how the FDIC can be...
“The worst shame of Bush – worse than the spending, the new agencies, the...”
– Doug Casey in “Baby Bush: The Worst President in History?”
(via zero hedge)
Wow, I think I’ve found a quotation to make everyone angry.
Really? Worse than torture?
1 tag
Things Very Rich People and Very Poor People Have... →
“I wish there was a way to show support for the Libertarian Party without...”
– Casey, my coworker
$262 billion
southpol:
August Surprise: A Lower Deficit
On August 25, the Office of Management and Budget will release its latest estimate of the federal budget deficit. In May, the administration projected a deficit of $1.84 trillion. That’s now down to about $1.58 trillion, according to an administration official. The basic reason: the financial sector didn’t hit rock bottom, and so a lot of the money...
The Rational Contrarian
master-of-none:
Another area where I found that I differed from others is investment strategy. When the Asian markets crashed in 1997-98, I lost a lot of money in my 401k. So what did I do? The only thing that seemed logical, I sold all of my non-Asian stocks and went 100% into Asia. After all, I thought, Asian stocks were now “cheap.” Over time, however, I found that many people don’t look at...
2 tags
Unemployment Moves Up Again
The Unemployment Insurance Weekly Claims Report has been released. We continue our move in the wrong direction. New claims rose to 576,000, which was above the Bloomberg consensus range of 545K to 559K. From the report:
In the week ending Aug. 15, the advance figure for seasonally adjusted initial claims was 576,000, an increase of 15,000 from the previous week’s revised figure of...
2 tags
Bank Balance Sheets
We have been reassured that our large banks are well capitalized. That implies that they are carrying enough cash to pay depositors and cover losses. Losses in banks are a funny thing, though. If a bank has a 30 year mortgage as an asset, it has some value on the books. If the homeowner stops paying that mortgage, the loan is a nonperforming asset. At that point, the bank can declare a certain...
BBVA Said to Win FDIC Bidding for Guaranty... →
Banco Bilbao Vizcaya Argentaria SA won the bidding to take over ailing Texas lender Guaranty Financial Group Inc., people familiar with the matter said, becoming the second Spanish bank to buy a U.S. lender this year.
Yay, now Guaranty can finally fail!
If regulators were to seize Guaranty, it would be the ninth biggest lender to fail in U.S. history, based on its assets and data...
2 tags
WatchNassim Taleb: A Crazier Future
Note: you have to click the “Watch Full Program” button
(via zero hedge)
Rose Director Friedman, c.1910-2009 →
The FDIC is Broke →
I was actually pretty confident that the loss estimates were a little low on some of the previous failures. While that didn’t mean that the money had all been spent, it effectively meant the same thing (the money had been allocated). With Colonial last week, some people are betting on a broke FDIC now. I’ve also seen some estimates that give the FDIC a little more money, but the...
Some More Optimism
jeffmiller:
crazynutjob:
[snipped my late night rant … trust me, you weren’t reading what I was reading]
So you want something that has been solved. Well, I’m not sure I believe this, but I think it might be possible …
Suppose the major problem in the economy was the erosion of the personal savings rate, which had collapsed over the last few years. The bailout crisis last...
Some More Optimism
Someone forwarded the notion that things are generally not as bad or as good as they seem. I think things really can be as bad as they seem, but we must keep in mind that not every problem must be solved before we can move on. I’ll wax philosophical and say that applies to society, but I actually just mean it for the economy. All I can really say is that something must be solved before a...
Discerning a real from a fake, technical,... →
More optimism.
I like the thought that Edward Harrison puts into his posts. I frequently haven’t agreed with his conclusions, but in this case, I do, at least in spirit. I think the scenario will play out slightly differently. We’ll have some decent numbers for GDP and manufacturing. But I think there will be another shock to the system before this crazy ride is over. I don’t...
CIT Second-Quarter Loss Narrows to $1.62 Billion →
This was considered good news for the day. It made me think, though. If CIT actually does manage to avoid going bankrupt (odds are still against it for April), it will have to do so by reducing lending. The consequences for small businesses are likely the same. I’m taking the over on a double dip.
Loss Rates for FDIC higher than during S&L Crisis →
With Corus and Guarantee banks still in the fail queue, this is not news we want to be hearing.
The Economic Risk of Excess Capacity →
dismaltrader:
From Naked Capitalism. Regardless of how persuasive the views of Ambrose Evans-Pritchard are, Japan once had a serious problem on excess capacity in the late 1990s. At that time, many Japanese corporates had trio structural problems, excess debt, excess workers and excess capacity. I understand these problems are closely tied together, and closely related to expected demand in the...
“Anyone who cannot cope with mathematics is not fully human. At best he is a...”
– Robert Heinlein, Time Enough for Love
Stolen from the introduction to Michael Sigman: Innumeracy: Today’s Illiteracy.
My mother was a math teacher. My grandmother was a math teacher. Apparently the nutjob males have a thing for math teachers. Oh, my girlfriend is a math teacher…
In Ventura County, an increase in the mobile... →
continuum:abbyjean:
Ventura County’s newest and most reluctant vagabonds are hidden in plain sight. They pass the night inside aging recreational vehicles at busy shopping mall parking lots. For privacy, they hang bedsheets in windows. They rumble away in the morning.
A knock on the door brings a round of barking or a wary face. They’re embarrassed — and tired of being told to move along. More...
Unemployed Workers Starting to Exhaust Extended... →
This is when things get really bad for the unemployed.
3 tags
Link Analysis
I was looking for a brief introduction on the subject for someone. Since I cannot find one, I’m going to give it my best shot. It’s unfortunate, if you search for Link Analysis today, you’ll mostly find references on search engines and the internet. This is one application of link analysis, but really doesn’t do justice to how broadly applicable the technique is. For...
3 tags
Bank Failure Friday
Just when I was about to call it a double feature, three more banks were added to the FDIC Failed Bank List:
Colonial Bank, Montgomery AL — This was announced this morning, so it was no surprise when it finally was shut down. This is currently the largest failure this year, with total assets of $25 billion and total deposits of approximately $20 billion. The estimated hit to the Deposit...
Do you think the IRS would cash a check made out...
squashed:
CrazyNutJob, dedicated in his search for truth, answered:
I called 1-800-829-1040 and pressed 1,4 on the menu. Mark at the IRS strongly recommended against it, but told me that they probably would.
I guess that answers that. Please don’t get yourself arrested on my account.
You provided us with a little educational amusement at the end of the workday. To elaborate beyond the...
For Many Americans, Nowhere to Go but Down →
An incredibly depressing story. I’ve had this open in a tab since the 3rd, and finally got around to reading it. If you suffer from chronic happiness, this article can help. It follows a family with two unemployed parents as they are faced with daily life.
3 tags
Unemployment Ticks Up
The Unemployment Insurance Weekly Claims Report has been released. We are moving in the wrong direction again. New claims rose to 558,000, which was above the Bloomberg consensus range of 535K to 550K. From the report:
In the week ending Aug. 8, the advance figure for seasonally adjusted initial claims was 558,000, an increase of 4,000 from the previous week’s revised figure of 554,000....
Guns and Butter ... and a LOT of Hard Work
After reading that short bit on Detroit, I got to thinking, “What’s my Plan B?” Fortunately, I had an open tab to The Oil Drum (which is only a little bit on the paranoid side of things). Today it has a post titled A Realistic Plan and Time Line for Your Survival Homestead. From the post:
My guess is that almost all city people underestimate what goes into establishing a...
Hunger hits Detroit →
I have stopped believing that Detroit actually exists. In the same vein, I hope that all of you outside California recognize that it is also a made-up bogeyman intended to scare state governments into making feasible budgets. Remember Kaiser Soze? Same kind of thing… wait, didn’t he end up being real?
(found via HuffPo)
WatchMy buddy is a fan of Taleb, so this is for him. I’ve seen this posted in many places, but none of the embedded versions worked for me (edit: including this one). Here’s the link in case it’s bad embed code and not just my machine: The Black Swan Squawks - CNBC.com
The Federal Reserve is Immoral →
This is actually one of the more enjoyable reads from today. Is there such a thing as paying too little interest on deposits? In particular, there’s a large chunk of the population that learned to expect 5% interest rates on deposits. We call them the elderly, and our current policies are doing quite a bit of damage to them. Is there something analogous to usury (charging too much interest...