patrick.net

NVR,

Re: Bush bailout plan.

Looks like the biggest anti-regulatory scam ever. As we can see, they had the plan drawn up long ago (Apr 2007). And now is the perfect time to start the economic war, following the plan.

What does remind me of, again? Oh, yes, the war on Iraq was similarly pre-planned and ready to go, waiting for any excuse.

Wow.
The UBS thing is just scary! Money market funds going iliquid and below par. Woah.
Reports last week on bond funds blowing up.
Scams like the accumulator.
It looks like, once again, Warren Buffett was correct.
People had unreasable expectations of return and chased some very riskey investments, or allowed financial institutions to offer products claimed to not be riskey but that were, in fact riskey.
Greed was is the market.
And now. Fear.
For any of you long time-in-the-market guys. Is this as bad as you have seen? I know we have had Enron and WorldCom and LTCM before. But this seems a much broader based run of malfeasance. I can't seem to find a segement of the market where risk was priced properly.

Right now, many Asian multi-millionaires and even billionaires are being screwed real hard by a financial product called “accumulator”. It is only available to private banking clients.

Isn't it very similar to selling naked puts.

Even billionaires can be suckers too.

Not very logical to suddenly be FOR farm subsidies when the price of farm products are way up.

Oil is a big factor. Farmers are not suddenly more profitable.

I really kick myself for not tying my cash up in CDs last fall when rates were more reasonable.

I really kick myself for not buying BSC puts. Mish had a very good analysis almost one week before the meltdown and I already had the quotes pulled up.

It was not meant to be. :(

If nothing else, I should have bought BSC at $3 and sold a week later at $10. Even longs could make money in this market.

Shorenstein isn't exactly calling a bottom yet but I believe he's saying it's close.
www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/30/BUUAVQQDJ.DTL

"There aren't a lot of people in the market with capital and there's no debt. That's a good time to be a buyer and in fact, when you look at the down cycles we've been in, the best time to be a buyer was in the early 1990s, when there was a deep recession plus a lot of oversupply of office buildings and the S&L crisis.

Then again in 1998, when there was a credit crunch, that was another great time for us. And then in 2001, when there was a recession and a terrorist event, (that) froze the capital.

Those were historically the best times to buy. I think this period - we have a recession, a very significant credit crunch - and like other down cycles, I think there should surface some pretty good buying opportunities."

So Peter, are you going to buy UBS puts Monday? ;)

Mercury News: "Startups Lose Their Sizzle"

http://www.mercurynews.com/business/ci_8747756?nclick_check=1

Lost Cause Says:
March 29th, 2008 at 9:33 pm
"I hear that you can even deduct interest on a second home, for which an RV could even qulify, which explains why there are so many of the gas guzzlers around."

Yep, even a boat if it has a toilet, qualifies as a second home.

Duke,

riskey or risky?

Depends upon whether it's Irish or Scots.

I have been saying that this country is the next Argentina, but now maybe I should embrace the coming disaster, since it will rid of the the ruling class.

So Peter, are you going to buy UBS puts Monday?

I will take a look. ;)

From San Jose Merc

http://www.mercurynews.com/ci_8748487?nclick_check=1

Couple's fuel bills nearing $1,200 a month

This is what happens when you commute from Los Banos. To everyone willing to commute - gas prices will not go down over long term. If the couple adds the 1200 to their mortgage, they could afford a house 200K more expensive.

Houses in East Bay have to be cheaper with the gas cost factored in. If your monthly commute cost is 250, you are just breaking even if you purchase a house that is 50K less.

Doesn't Baño mean bathroom in Spanish?

Lost Cause is so naive. :lol:

Human civilization is always characterized by people exploiting people, or the other way around.

I have no sympathy for that couple, did you notice they have a THIRD car? Also, why can't one of them quit his/her job and move to the city where the spouse works?

"Coffee at Starbucks is out," said Arleen. "And no stopping for Mexican takeout food on the way back home anymore."

She used to get her nails done regularly. Not anymore. Hair appointments are far less frequent.

The trips they used to take to Monterey, Santa Cruz or Reno are now memories. So too are Rick's golf outings to courses along the coast.

"There's 20 bucks for gas, $40 for green fees, 10 bucks for lunch," he said. "It adds up so fast. Pretty soon, it's near $100."

Yeah right, like I really feel bad for anyone who cannot do these things regularly any more...

I have no sympathy for anyone, but that couple is just comical.

UBS, FNM, FRE, NCC, WM, maybe LEH depending upon action.

A serious shit storm is coming.

Every cloud has a silver lining - even a mushroom-shaped one. ;)

At least your "shit storm" may mitigate the high prices farmers pay for fertilizer.

The best case scenario for the US to get out of the shit storm is:

1) more destruction of worldwide supply of food due to weather changes, epidemic, loss of land to industrialization, pollution etc. which is already happening.

2) A total collapse of fiat followed by a brief return to gold standard

We own the most agricultural land in the world, and the US government holds more gold than the next 9 central banks combined.

That will be a very possible way of the re-emergence of USD as the world's reserve currency. But before that, we must inflate away all our debt - particularly the debt obligation owed to foreign parties.

Good article, that one from The Economist.

OO, are you using the Perth Mint Certificate Program or are you doing something different? Do you deal through Euro Pacific?

In the long run, the US is infallible. It has vast agricultural resources and a strong military.

For now, we need to worry about the US Dinar.

Do you guys see the re-emergence of higher denomination FRN's? $100,000 or even $100,000,000,000?

due to weather changes

Thanks for not using the term *climate* change. ;)

Another decent one.

There is 1 guy on Zillow who posts some very useful links. I'll start trying to cross post those here when I can.

Peter P,

I am using PMDS and deal directly with Perth Mint, there is no reason to go through Euro Pacific. When I opened the PMDS account, the minimum entrance fee for non-Aussies was only $100K but now they jacked up the amount by 2.5x and I was luckily grandfathered in.

I have subscribed to John Mauldin's newsletter for a few years now. In general, he is more of an optimistic bear, and he tends to overestimate the pace of recovery, strength of the economy etc.

Expect worse.

He does seem optimistic. But I like to read reasonable optimists (because I am one) as a counter to the worst of the reasonable doom. The truth always lies in the middle.

The truth always lies in the middle.

Between Nirvana and Armageddon.

Speaking of the worst of the reasonable doom...

This post from HousingPanic is just too much. :lol:

http://housingpanic.blogspot.com/2008/03/vegas-home-for-sale-includes-hot-22.html#links

just me,
Um, yeah, the condo-owner's definition of break-even was...unusual. My personal understanding of "break-even" would involve being able to pay off the note when I decided to move out--plus maybe a coffee at Starbucks.

But here is her numbers breakdown for "break-even":
Appraisal at time of purchase: $370K that no one was willing to pay
Purchase price: $350K
Current, personal appraisal of condo: $370K
Expected "equity" after 4 years with no extra payments: $370K+

I know it doesn't make sense. But this is a sensible woman, otherwise, I tend to think that she was processed so quickly and efficiently that she never had an opportunity to think about it. And now she has so much at stake that thinking about it would be dangerous.

I am guessing there is a lot of that going around.

and a strong military.

good jobs program for "Bush Country", some tech diffusion into aerospace and comms, but otherwise what a colossal dead loss to the economy in terms of capital investment.

Eg: PV is running $5/W at the moment. For half the cost of the DOD budgets of the Bush years we could have purchased -- at retail, assuming the producion lines existed -- 480 Gigawatts worth of PV panels, a productive capacity (1TW/yr) capable of replacing HALF of our coal-fired electric generation (saving the coal for more productive industrial uses rather than powering the swamp coolers of the American SE).

But that would be an intelligent use of capital and not what this country is about, anymore.

(sorry, 1 TkWhr/yr in my above)

Without a strong military, our enemies will just come in and take the fruits of whatever "intelligent use of capital" we have.

Without a strong military, our enemies will just come in and take the fruits of whatever “intelligent use of capital” we have.

$250B/yr would still buy us a "strong" military. Outspending the rest of the world combined on "defense" is fiscally insane.

tachikaze,

Good point, although undoubtedly the Bushies would have found a way of giving away the 480GW to some rich friends and then make us pay for it.

Note: With 300M inhabitants, the above is ~1.5kW continuously for every man/woman/child in the country. Not bad, although it couldn't cover the energy wasted in transportation.

Eliza,

So what she meant was break-even on nominal price, when not taking the expense of the payments into account. New math, indeed.

Randy H,

How about posting occasionally also some links to the most fun threads at Zillow? I don't follow them much because it is too much work to find the relevant ones.

I just read an older thread with a nice shootout between you and "dnesemeier". Good work.

Without a strong military, our enemies will just come in and take the fruits of whatever “intelligent use of capital” we have.

The same reason we need a Fed and a central bank. Because "they" have one. Without a central bank actually run by people (as opposed to a programmatic central banking function), our "allies" and enemies alike can just take the fruits of our economy by manipulating global real interest rates. Imagine a future where every commodity export country exports the full weight of their petrodollar inflation right back to us.