patrick.net

The best rebuttal, "I'm not putting my signature on that."

Roughly speaking, yes the book value of the company is the assets minus liabilities. Income streams also get factored in different valuation methods. A company like that factors an allowance for bad debts into its books as a liability. I don't have an opinion as to what their book value really is, I just thought the analysis was interesting but since the company was rumored to be on the verge of bankruptcy I'm skeptical. Then again it might have been BofA that leaked the rumor. Believe it or not it happens.

Malcom,

check back with you on nuclear vs. solar in 3 years, and on gold as well. Time will tell.

Hope this site will still be around by then.

Claire :

Use Trulia to show him th e foreclosures and NODs happening in whatever area he is interested in. It will take a long time.

OO :

Coming back to our discussion on the short side. This is the reason I don't like to short stocks. It's so easy to manipulate. The market makers have far more insight into how much is the short interest at what stops and they can start a squeeze. Or some plain low tech device like a rumor can do the job as well.

When you are short on the indexes (or indices) you only have to worry about surprise moves by Fed. Even then the downside for shorts is nowhere near what happened for CFC.

:)

The site will still be around.

RangyH said:
Things will get much worse before they get better, I’m afraid.

welcome back, and could you clarify what "things" you refer to? i.e. from what perspective will things get worse? Recession? Unemployment? Inflation? Bank-failures?

this site generates A TON of replies now.

PATRICK: I recommend you consider the news links on main page each have its own comments link/thread for that story. Just what Drudge.com and others do. There IS enough traffic now to support this. take the site to next level.

those links are really good stories and even though i see them elsewhere sometimes rarely does a site allow comments on them ( try commenting on cnn.com)

who else thinks this would be great? thus the 'cfc bankruptcy rumor' comments would be contained to its own thread automatically since patrick is sure to not miss that story. and this thread can remain of course its own glory.

Hey Randy H.,

I never really understood the answer you gave before your hiatus so I've got to ask one more time.

SHOULD I BE WORRIED ABOUT INFLATION (NOW)?

(just kiddin')

Happy New Year.....

OO says: Nuclear is undervalued while Solar is way overvalued. The only alternative for oil in the next 20-30 years is nuclear.

Are you kidding? Have you actually looked at uranium prices over the last 4-6 years? The price has skyrocketed! Much like gold, traders are pricing in the anticipated value you just mentioned. Thus a spectacular expected upside is built into the price, but any disruption could result in a serious downside. I am personally treading with caution.

In contrast, photovoltaics are getting more efficient all the time. There's a firm in Silly Con Valley manufacturing them using semiconductor processes. And while that's expensive now, I anticipate a Moore's Law style march towards improved efficiency/geometry and greater economies of scale (acknowledging that from a physics standpoint, the efficiency is probably approaching an asymptote and thus decreasing ROI). And we're probably going to have a lot of 8-inch and lower fab capacity in the U.S. within a few years... why not compete with depreciated assets (yeah, yeah, I know that the manufacturing technology isn't 100% the same, but most of the infrastructure is reusable).

NOT INVESTMENT ADVICE.

By all means, we should have more nuclear power.

The National Academy of Science has declared that there is no safe level of radiation.

The carbon-generating process of mining uranium is very intensive.

Nuclear power is so uneconomic that without huge government subsidies and insurance exemptions, it never would have survived in the "free market."

Throw this idea in the trashcan where it belongs.

Brand-

PVs have generally been crystalline silicon based, and hence utilized traditional semiconductor fab technology. The recent-ish boom about using waste chip material for cheap PVs (nice concept, but as I understand a monumentally bad idea) was eclipsed by NREL work on CIGS and CdTe thin films. Wiki away...

OO has it right, solar money has gone silly. Question is; are we talking 2000 tech silly or '98? Looking out over acres of useless flat land interspersed with grid-borne wind generators has my attention.

-Brent

To Claire:

There's some interesting data here: http://rereport.com/scc/mountain_view.html

But it will require some interpretation.

There's far more thorium in the earth than uranium, and it's harder to make weapons grade byproduct materials from thorium. Avoiding exposure and disposing of nuclear waste is always going to be a problem, given its 10,000 year half-life or whatever...

Randy H Says:
Some “genius” on CNBC earlier this morning — one which was supposedly so wise that everyone was fawning over him — stated “Absolutely nobody anywhere saw this credit crisis coming or had any clue it would be this bad”.

Make sure you have a nice backup of all these archives stored somewhere safe. If for no other reason than perhaps you can submit them to some economic historian in 25 years for research.

They just want to let idiots off the hook with a nice folksy message, and lots of ego esteem massaging. An 'expert' told all these underwater debtors they're not to blame for believing in fairies, so it's OK. There, there, we'll put the picket fence back up, and you're not an idiot, the big bad credit market did this to you. The nice bankers didn't even see it coming, how could you be expected to.

Steve Keen told me he started his site so it would be there for the record once this was all over also -- www.debtflation.com (with an uncanny resemblance to patrick.net :) )

er, never mind, this will have to do:
http://www.debtdeflation.com/blog

if not http://www.debtdeflation.com/blogs - i'm a bit over WP :(

How economical is solar at scale without subsidization? No cheating, you don't get to treat maintenance cycles as external. I spent long enough launching a "greentech" to have had the pleasure of becoming familiar with the underbelly of the solar industry. It's nowhere in the same realm of efficiency offered by the current generation of nuclear reactors; the greater the scale the greater the efficiency. The yield curve of advancements in solar has been underwhelming--especially when compared to the yield curve of competing clean techs like wind or nuclear.

The carbon footprint of energy production does not include extraction or fabrication. Not in CDM, not in JD, and not in most voluntary schemes. If it did then solar wouldn't fare well either, given the processes involved in fabricating silicon.

*No* level of radiation is safe? Does that mean that cosmic rays and background radiation present everywhere on Earth and in the Universe is a dire problem? I assume you avoid the sun, walking on concrete sidewalks, and entering brick buildings then.

In fact, if *no level of radiation is safe*, then solar power must be of the devil. Those lil' electrons don't get excited just because they want to be green, after all.

That's right, no level of radiation is safe, not dental x-rays, nor any other kind. Certainly not CT scans, which are tens of times more intense.

So we want to set up radiating power plants that generate waste that no one has ever figured out what to do with?

Except the Defense Dept., which came up with a brilliant plan to sell it to manufacturers who proposed to make silverware out of it!!

This is a major reason why Iraq is destroyed forever; our use of depleted uranium in munitions. As well as Iraqis, our service people, etc.

Throw this idiotic conventional wisdom out with the other trash.

Peter P,

Please step forward and accept your CBA (Certified Bubble Analyst) (TM) Award!

Moments ago Steve Leesman on CNBC cited a Dallas FRB Study that showed it was the lack of price appreciation in homes (not the reset) they attribute accelerating defaults to!

What would you like us to engrave on it?

Near as I can figure (CFC's 2007 Annual Report not out just yet) their "book value" is $ 26.36. (Marketwatch) So I guess that must mean BAC is getting a steal!

I'll agree w/ Thomas P (Paine?) this is anything but a done deal.

monkframe,

I had thought that depleted uranium was only typically used in the Phalynx type system (6K rounds per minute) to "flatten out" in trajectory and assure destruction of incoming missles etc. A 50 Cal. HB (Heavy Barrel) machine gun is armed w/ conventional rounds, no?

Either way it isn't good, but I didn't think there were that many A-10 "Tank-Busters" in country and thus far the Navy hasn't fired a round?

gmail is not working for me -- I get blank white screen ....

About the Megan Meier story,

This is a real tragedy, but did she not commit suicide after having a quarrel with her mother about the foul language that she was using to respond to the taunts, rather than after receiving some particular taunt?

I do not want in any way to defend the despicable taunters, but has this incident not been somewhat misrepresented in the media?

Here's the latest email from "my" realtor:

Here are 10 solid reasons why you should invest in one of the best areas around the world:
The San Francisco Peninsula.

1. We are an international market place, there are buyers coming from all over the world investing here.

2. We have an ongoing growing high tech, bio tech development industry.

3. This brings us high income levels for buyers and sellers.

4. We have the transportation to handle the traffic.

5. We have good schools so your children can get a high level education.

6. We have a multicultural environment welcoming all nationalities to our area.

7. The weather is great.

8. The crime rate is low.

9. The development is limited so the prices will hold.

10. Investment in rental property is good due to limited rentals available.

Please contact me directly for specific information on the areas you are interested in.

See, times ain't changin' after all!! (LOL)

This past week I got 3 phone calls asking for people with same last name as me but different first name. I wondered if it's the credit card companies stepping up their effort to find delinquent. They just searched the phone book calling people with the matching last name and first initial.

HelloKitty Says:

> yes the ‘cfc going under’ really did seem to not
> pass the ‘too good to be true rule’.
> i have dreams of them going under laying off
> 100% of staff

There will be a ton of Countrywide layoffs in California just like there were at BofA when NationsBank bought the bank and took the name (then called the purchase a “merger of equals”)…

BofA wanted to buy Countrywide for about $40 Billion for the last couple years but the orange guy wouldn’t sell. Since they got it for $4 Billion today they can still have some big losses and do OK…

There will be a ton of Countrywide layoffs in California just like there were at BofA when NationsBank bought the bank and took the name (then called the purchase a “merger of equals”)…

I'll concur w/ FAB. When BofA bought Fleet Bank Boston, there were significant layoffs, as well as transfers to Charlotte, NC.

goober Says:

> Here’s the latest email from “my” realtor:
> Here are 10 solid reasons why you should invest in
> one of the best areas around the world…
> The San Francisco Peninsula.
> 9. The development is limited so the prices will hold.

We didn’t have much new development from 1990 – 1995 when most Peninsula homes dropped more than 25% in value (and many Hillsborough and Atherton homes dropped over 50%). Ask the Realtor how sure he is that “prices will hold” and if he says he is sure see if he will agree to refund his commission if prices drop…

P.S. A friend that I talked out of buying a $2mm Burlingame piece of crap in early 2005 called last week to tell me that his wife doesn’t hate me anymore and that the talk at the Burlingame Mom play groups today is about people in trouble that need to sell (not people making tons of money owning real estate like 2005)…

The home we bought in Redwood City in 96 had dropped over 15% from the price the sellers paid in 1989. More if you add in inflation. I'm sure if I went and found any of those realtors involved back then they'd all tell you that prices never go down in the Bay Area.

It's not a hard concept to grasp: realtors lie. Some just do it artfully. Hell, we can all appreciate a good con, so long as we're not the one who's the mark.

The statement "no amount of X is safe" is vapid and pointless. Everything involves a certain degree of risk because nothing is deterministic.

Try this: "no amount of air is safe". After all, a single bubble of it well placed in your bloodstream can turn you into Schrodinger's pet much faster than a couple millirads.

But hey, we're much better off playing the science ignorance card and whipping up boomer-style fear tactics on the sheeple populace. Oh how I can't wait for the election season to really heat up so we can really get on with this circus show...

"When BofA bought Fleet Bank Boston there were significant layoffs"

Well... I "heard" about this ONE guy... :(

Rather than have the chutzpah to to fire us outright we were subjected to endless rounds of salary reductions and reduced payouts etc. By the time I "left" I'd heard they were going to make us pay for parking.

"his wife doesn't hate me any more"

This is good! (Certainly a step in the right direction?)

What's sad is there aren't enough people that DID listen to fill a VW Bug (let alone a book of business)

Please step forward and accept your CBA (Certified Bubble Analyst) (TM) Award!

If we don't do something about the bubble, we will just end up like Tesla. :(

This is just a classic asset bubble. Perhaps we should expect a new book from Soros talking about that.

Anyone who says that nobody could have seen it coming is either a liar or an idiot or both.

DinOR,

Man, sorry to hear you were part of that heinousness. I was living in Boston at the time. If it's any consolation, customer service went to pot after the takeover, and it still sucks. BofA is pretty lame, unless I guess you're a Spanish speaking customer:

http://money.cnn.com/2008/01/11/news/companies/tully_countrywide.fortune/index.htm?postversion=2008011112

Gold Hits Record $900 an Ounce
Gold Futures Surge to Record $900 an Ounce on Weak Dollar, Fears of U.S. Recession

NEW YORK (AP) -- Gold futures briefly rose above $900 an ounce Friday for the first time as high oil prices, a weak dollar and fears of a U.S. recession led uneasy investors to keep buying the precious metal.

An ounce of gold for February delivery on the New York Mercantile Exchange jumped $6.50 to $900.10 in morning trading, an all-time high and a psychologically important milestone. Gold later slipped to $898.70 an ounce on profit-taking but remained in record territory.

"It's a reflection of market sentiment: Gold is a hedge against uncertainty and right now it's the best bet," said Carlos Sanchez, a precious metals analyst at CPM Group in New York. "None of the other investment options look that great and gold does."

@skibum,

Thanks. It sucked at the time but... in the end it all worked out for the best. There was a lot of "carrot and stick" (but in the end, more stick than carrot) but I'm over it, after we RUINED our scumbag branch and regional managers careers that is! (Freaking scumbags) He-he.

My scumbag BM was "transferred" to HELL and racked up an all-expense-paid move! He was being demoted to just another Rep. and I'll never forget "just walking past" the interim mgrs. door and "over hearing" him tell the schmuck the classic line; "Oh... didn't you get that e-mail?"

Left him on the hook for the entire 10K move! (Freaking scumbag) Our Regional guy, well last I heard he was in the park throwing bread crumbs at himself. But I'm... over it.

boomer-style fear tactics
Well, I do have to admire some of the pro-nuke websites; they point out that some of the waste byproducts (heavy metals) from burning coal never lose their toxicity (kinda makes uranium's half life look good :-) Seriously, though, isn't the future about "decentralized" energy. I like the recycling plans of some of the producers of thin film solar panels, though I have to admit that maintenance (and oops, I need a new inverter) don't seem to get factored into the "solar calculators".

Was watching an E(squared) special on PBS last night that featured some of Grameen's energy initiatives in Bangladesh. They showed a tea vendor had reduced his fuel costs (previously using kerosene) by over 75% once he got plumbed for a biogas line from a local chicken farmer.

Anyone who says that nobody could have seen it coming is either a liar or an idiot or both.

I've been called both on numerous occasions, but....

I quit a good paying (1 HAHA) job in 2005 so I could prep and sell my Cambrian Park house. I saw the bubble for what it was, and yet I have no background in finance (physics and law for me). It still amazes me when people claim they couldn't see it coming. There have been numerous times in the BA's past when housing prices zoomed up for 4-5 years, dropped somewhat, and lay in a plateau for 5-7 years. That's the long-term pattern.