patrick.net

The market has priced a pause in rate cuts at 96% probability for weeks. So no, I don't think the Fed has anything to do with the selloff.

What I am lookng for is the de-leveraging.

Interesting article that noted that banks are lending money to people to help them afford to buy the banks' troubled assets.

When those banks pop there is going to be a very loud kaboom.

As I look at asset re-pricing I do not see the rest of the world absorbing the current market cap of US stocks, so net loss will be real and large. Best I can guess is $2t to $5t of contraction.

When cheap money was everywhere, if you were positioned close to the spigot known as the Wall Street, you didn't need to be that smart to make 7 or 8 figures a year. I know a few real-life examples like that. One of them is particularly "smart" to have bought a $4.xM house in 06 thinking that his 7-figure bonus could grow and last forever. I will check back with him to see if he still holds on to his depreciating asset in 12 months.

To be honest, I really enjoy watching how they will crawl out of their highly leveraged lifestyle as the great de-leveraging unfolds.

The weak snobs who never had the true courage, insight and smarts to make their fortune last will get wiped out in this financial tsunami, bring it on, let's have some redistribution of wealth from the paper-pushers to people who create real values.

Thanks OO, you made my day.

How is everyone? It's been a while. I hope you all are well.

If Hilary concedes now, I would be very disappointed. :(

I heard that she would be open to a vice-pres. nomination to "keep the party together". This is gonna be fun to watch.

I heard that she would be open to a vice-pres. nomination to “keep the party together”. This is gonna be fun to watch.

Fun indeed. I thought it will drag all the way to August. :roll:

I like Obama as a person but somehow I am still afraid of him.

Peter,

Is it because you, like many West Virginians think he is Muslim?

Or is it that he supports high speed rail like this!

http://www.youtube.com/watch?v=Dw4zn-qw1oM

Is it because you, like many West Virginians think he is Muslim?

No. I am more worried about tax and welfare. But I guess he is much better than Clinton in these areas.

High speed rail is NOT for America. Fancy trains cannot change who we are.

Do we really want to become France?

Peter P,

Maybe we should not have made any rail roads and stuck to horses until we could invent the airplane.

High speed rail is not just an economic issue. It is a National Security issue. People can deny the peak oil theory and it will not change the fact that oil is getting more expensive to dig out of the ground. It will not change the fact that big oil fields all over are suffering from declining production. National security is one of the major reasons for making the interstate system. If you had had your way throughout history, we would have NOTHING.

"High speed rail is NOT for America."

WOW!!!

FYI - The ACELA is sold out on the east coast and it really isn't even high speed.

Good luck in CA if you don't vote for it this fall. Your grid lock is just starting!!!

http://www.youtube.com/watch?v=zD1QGNsRg74

Invest 10 minutes in this video

"High speed rail is NOT for America."

Also not for America - Banking regulations that are reasonable and ask that borrowers be able to pay the mortgage!

“High speed rail is NOT for America.”

Also not for America - Wall street bankers that do not lend money to people with jobs or assets!

meant - "NO" jobs or assets

A bit off topic but funny-

My wife called me at work on Monday and said she came across a bike traffic jam a few blocks from home the likes of which she had never seen. Clearly there are more people using mass transit and riding bikes these days!

If it makes me a bad person or un Amerikan for saying so TOUGH!

High speed rail isn't for California. That is for sure. You would have gridlock trying to get to the train station and land prices prevent reasonable cost. The government subsidies would have to be so huge the net gain would be negative. Not to mention that they have to run hub to hub and every town would want a hub. Given the likelyhood that it wouldn't be able to stretch its legs, efficiency based on speed would be lost. I think that what is left is called BART. I love BART. BART kicks ass.

Funny Richmand,

When I arrived at the LA train station last fall, I was struck with how little was going on in the area in terms of traffic and property development!

I think in the end the debate will not matter as the reality will take over just like we are seeing in the mortgage market market!

Paul,

True enough. Things will happen when they have to happen. I just keep thinking about the 6 billion + bucks for half darn bridge over here and I can't imagine what hundreds of miles of track would cost. Heck, for six billion dollars I could drain the Bay and build a friggin road. Oh well. Time will tell.

Eh, so the trains have to run hub to hub. This is not a problem. It would be possible to have a handful of major hubs--those hubs could then serve the surrounding area via high speed or other public transit.

Yes, people would prefer to have the train come to their doors. But trains can't be everywhere. And a good network of public transit is quite possibly inevitable. Already, the buses around here are getting full. And just last year there were tumbleweeds rolling down the aisles.

The United States invariably does the right thing, after having exhausted every other alternative. -Winston Churchill

... cribbed from a guy on greencarcongress.com commenting on GM shuttering SUV/truck plants and vowing to build more small cars.

BART was supposed to go to San Jose in the mid 1960's. I was a child then. I'm now old and retired and still no BART to San Jose, even though it's now the largest city in the Bay Area. I doubt BART will really make it to San Jose in the next 100 years. By that I mean REAL BART, not some cockamamie link to light rail/bus services. And it will have to come down the Peninsula, NOT the East Bay, to make it worth people's time.

I have been thinking about the article from yesterday 6/3/08.
http://www.latimes.com/business/la-fi-laquinta2-2008jun02,0,1250917.story?ref=patrick.net

At the very end it states that the Magsams kids are grown now and they can alwasy start again.

One of the best/worst kind of scams with housing has been equity withdrawal to finance college expenses. If you build up, say, $100k of debt to get a 4 year degree then can't find a job and decide to declare bankruptcy on your creedit cards - the college debt is not discharged. However, if a HELOC pays those college expneses and you bankrupt - voila - college for free.

Assuming the Magsams put 0 to 20% down on the first $140k home they may have financed two college degrees for as little as nothing or as much as $28k.

Of course, this is all a what-if scenario. I have no idea about any detals of the Magsams, but it is certainly plausible. Competing against these kids going forwards is every other family or kids who actually had to PAY for college. In an article where we are asked to feel sympathy I find myself feeling suspicious. Something has to change.

Can someone recomend a 401k safe haven? Bonds are bad, TIPS are worse, and the market itself is the worst.

Will Money market funds hold par?

Back when BART was on the drawing board and methods of finance were being worked out, it was decided that a 1/2 cent sales tax increase would fill the coffer. San Jose and County didn't want it. It was voted down. That is why there is no BART in San Jose. San Jose is only recently a wealthy area. At that time, it was still ag and industry for the most part. The population felt that there was no need for BART and at that time they were right. Had they only known.

Ed McMahon fighting foreclosure on his Beverly Hills home
2 hours ago

LOS ANGELES (AP) — Ed McMahon, who for decades appeared as Johnny Carson's sidekick on "The Tonight Show," is fighting to avoid foreclosure on his multimillion-dollar Beverly Hills home, according to published reports.

The former "Star Search" host was $644,000 behind on payments on $4.8 million in mortgage loans when a unit of Countrywide Financial Corp. filed a default notice Feb. 28 with the Los Angeles County Recorder's Office, The Wall Street Journal first reported late Tuesday.

McMahon, 85, has been unable to work as a pitchman for various products since he broke his neck 18 months ago, said his spokesman, Howard Bragman.

"There are plenty of people affected by the weak economy, bad housing market or bad health," Bragman said.

McMahon has been in "very fruitful discussions" with the lender to resolve the situation, Bragman said. But it's unclear whether McMahon and his wife, Pamela, will remain in the home.

A spokesman for Countrywide declined comment to the Los Angeles Times.

The six-bedroom, five-bath house is in a hilltop gated community overlooking Mulholland Drive called The Summit and is listed for sale at $6.25 million. It has been on the market two years, according to real estate agent Alex Davis, who has the listing.

The house is near that of pop star Britney Spears, which doesn't always work in its favor.

"When we were trying to sell the house one time, there were about 100 paparazzi there," Davis said.

Richmond,

The point is made in the video but maybe without specifics that the cost needs to be compared against building more runways at airports and adding lanes of traffic on the highways. If you compare all three you will find that the train is the least costly.

Public transportation is feasible only if it can be expected to make a profit on its own.

Just look at the light rail system in Santa Clara county. Few people are using it. Whose great idea was that?

America's airports has more runways than those of any other country. This is because we pioneered general aviation. Private plane ownership is the highest in the world.

America is the only country in which regular folks can realistically own and fly small planes wherever they want whenever they want. (Even my worker-bee co-worker has a plane, which costs less than an SUV when bought used.)

Back when BART was on the drawing board and methods of finance were being worked out, it was decided that a 1/2 cent sales tax increase would fill the coffer. San Jose and County didn’t want it. It was voted down.

Actually this is not correct. Santa Clara county DID approve the BART tax back in the 1960's, as did SF county. It was San Mateo county who pissed in the punchbowl and prevented BART going down the peninsula. Santa Clara county ended up spending the 1/2 cent sales tax on a bus line since they couldn't spend it on BART.

I hate 1/2 cent sales tax increases. Before long, it will become 19% like Paris!

I wonder why counties don't talk about sale tax cuts.

Then why didn't they shoot down the East Shore out of Alameda Co.? Hell, you can throw a rock from the Alameda County line to San Jose city center. It would look ridiculous on a map for a south bay commute until you look at todays commute times and population, then it doesn't look so bad.
Although, given the demographics of the day, busses were probably more economically viable.
I do appreciate the correction. I knew that some municipality had their BVD's in a bunch. I thought it was Santa Clara. Ooooops.

It would look ridiculous on a map for a south bay commute until you look at todays commute times and population, then it doesn’t look so bad.

But in a train, you are potentially stuck with criminals or other threatening individuals.

Unless there is a point-to-point mode of public transportation, I think driving still makes more sense for most people.

Peter,

Look where I live. Thugs on a train are a step up. :)

But, you are right. When I worked in downtown S.F., I could drive it in twenty five minutes where BART took forty five to fifty. However, BART was cheaper when I took into account fuel, parking and wear and tear.
It was about even with the wage offset for travel time unpaid.

Even with thugs, traveling by train is probably still statistically safer than driving.