Sunday, October 12, 2008

Great Depression 2.0

So... how's this Bubble Bursting working out for everyone?

I guess I finally got the answer to my question, "How is the stock market going to discount a disastrous economic event that'll take years to play out?"

Answer? Slowly at first, then all at once.
DJIA, 5yr

Or for a longer term view of The Pain:
DJIA, 10 yr

So this weeks little meltdown has put us on a negative 10 year return on the DJIA.

And I don't want to say much this week, cuz I figure events are speaking for themselves, but on the hyper-long term basis, this week, is the first time in a long, long time that the DJIA has fallen to PARITY with its L/T trend.
DJIA, 80 yr

Here's a 80 YEAR chart of the DJIA, with a best-fit logarithmic estimate. Those 2 big humps on the right are of course, the 2 great bubbles of our lifetimes, The NASDAQ & RE Bubbles.

You'll also notice that when NASDAQ cracked, it never really returned to trend.

And it has been above trend every single day since Mar 24, 1995. Until Wednesday.

The regression estimate for Wednesday is 9,390, and we closed at 9,258.

This may be easier to see in a log chart:
DJIA, 80 yr logarithmic

That far right convergence of actual vs estimate doesn't appear to quite meet, but believe me, it does.

Note that this time period includes all sorts of crazy things, from nuking the Japs, to putting man on the moon, WWII, WWI, and essentially the entire modern transportation & electronics era.

It is tough to put some sort of parallel on today's events given the past. But it does look like we are experiencing a Super Wave correction similar to The Great Depression or The Great Malaise of the 1970's.

Strating with the less wrenching meltdown of the 1970's, we see that after a Super Wave up that essentially began in the decades after The Great Depression

I guess we can say The Official Start of The Great Malaise began on July 10, 1969. The DJIA crossed below the L/T least squares estimate of 856.18, and closed at 847.79.

This put to an end an unbroken string of above-trend closes which began on Sept 13, 1954 at DJIA 351.10.

So when did the prior below-trend string start? On May 10, 1940 at DJIA 144.77.

I guess the point here is that what we've seen the past 30 years actually HAS happened, in some measure, before. Calamity following euphoria following calamity... The beat rolls on.

The other point is that this is NOT a short term phenomenon. These long waves take an adult lifetime.

The post Great Depression low of 41.22 was hit on Jul 8, 1932.

A monster rally ended on Mar 10, 1937 at 194.40, or +372%.

New lows were set on Apr 28, 1942 at 92.92, or down 52.2%.

The coming mega-wave carried through to Jan 18, 1966, when the Dow settled at 994.20, or stunning +970%.

But we then paid for it with a pounding that carried us to 577.60 on the Dow, on Dec 6, 1974.

Here begins our modern comparison of the Super Wave Modern Age DJIA Bull Market.

And if you look close and IGNORE the huge, but relatively short live burst from 1932 to 1937, and use the Great Depression low of 41.22 as a starting point, and the near 1,000 top in 1966 as a top, you see this mega wave had a bottom-to-top gain of exactly +2,300%.

A Super Wave up that took 34 years.

Then we had possibly the worst bear market in modern history that took us down 42%, ending 8 years after it started. This is the Dec 6, 1974 low.

Here is the interesting part: We had a super wave higher from Depression lows of +2,300% which took 34 years, right? Extrapolate the 1974 lows forward +2,300% and 34 years and you get...

Yes. Highs in the 13,862 area in 2008. Not perfect. But eery as hell.

Our long wave recent (post 2000) "Opportunity Cost" top was hit July 19, 2007 at 14,000 even.

We have subsequently fallen 40% from this Super Wave Mega-Top.

So where do we go from here? Well, the mathematical nature of a least-squares regression is that the L/T machinations of the market, both positive & negative, will net to zero. And the subsequent negatives will cancel out the prior positives.

On this count, we are in dire straights. Look at the 90th percentile confidence limits:
80 yr DJIA, +/- 1.5 STD's

In point of fact, we have NEVER been as overvalued as we were on Jan 14, 2000 at DJIA 11,722.98 on an opportunity cost basis (excepting the brief Euphoria of pre Great Depression). THAT was the maximum CASH OUT selling point. The only time we've been close to that overvalued was when the DJIA was crashing towards Great Depression lows.

DO NOT believe the banter that we can't go incredibly lower from here. We can, we will. Here is a view of only the difference between actual DJIA closes & least squares estimates:
DJIA, 80 yr Diff

A short explanation: This is the log of the DJIA close minus the log of the least squares expected value. So at 0, the market is at "fair value" based on long term regression. "+.5" is actually e^.5 - 1, or 64%, above fair value. "-.5" is similarly 39% below fair value. It's no coincidence that (1 + .64) * (1 -.39) = 1.0. Both are equidistant from fair value logarithmically.

You can see that the 2000 top was a selling opportunity of a lifetime comparable to the 1982 bottom was a buying opportunity. Unfortunately these Long Wave moves are just that: Long. They have staying power. This won't end soon.

The Good News? We will probably hit nominal lows soon. That lower band stands at DJIA 5,190 today. I will state right now, that I would go all in at that point. That would mark an almost incomparable nominal low buying point in our lifetimes.

The Bad News? Although nominal lows were hit in late 1974, REAL LOWS were not left behind until late 1982, about 8 years later. There were severe rallies in the meantime, and subsequent falls. Note: REAL LOWS rarely coincide with NOMINAL LOWS. Same for HIGHS. Our recent REAL HIGH was in 2000, the nominal high was late last year. The REAL LOW of The 1970's Malaise was set in 1982, while the NOMINAL low was set in late 1974.

That said, if you do get the chance to buy stocks in the 5,000's, I would DO IT. But I would also consider the next decade a trading range market, and you should sell after significant rallies. That's doubles off the bottom.

If you buy at mid 5,000's, I would consider a run to 11,000 a good sale.

These gut-wrenching falls bring us closer to The End. Buy stocks in the 5,000's. These will be some of the best values of our lifetimes. They ARE coming. We are closer to a bottom than the top. It is too late to sell. Just hold, and buy on severe downdrafts. Scale in on The Horror.

We are simply at fair value now. We might tread water here, we might implode, who knows. But buying stocks at mid 5,000's is a Dead Lock for the trade of a lifetime. Just make sure you sell near +80-100%. Because REAL LOWS will not occur until 2016. Probably in the 6,000's.

THAT will be the Buy-And-Hold point of a lifetime.

352 comments:

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LavaBear said...

Taleb making scary talk.

Anonymous said...

Tim,

YOU THINK BUFFET is just a lucky guy, and TWATS like you support him cuz you have some BRK-B, and you think your on with his ride. Every fucking thing wrong with risk-based insurance today that is causing the problems, was pulled out of Buffet's ASS. Sure he has the grand-father sweet old persistent, out of bed methodology, lives in a small house. But the fact is HE is the guy that runs ALL from behind the CURTAIN, yes he cultivates POLITICIAN's, most recently REZKO owned OR-BOMB-EO, today BUFFET owns OR-BOMB-EO.

BUFFET is the richest man in the world, and he didn't get their by getting out of bed every AM, and doing the same fucking thing.

Buster,

Buffett just plays the game. And he's damn good at it. I don't see that he's doing anything wrong. He's playing the cards he gets dealt, and that includes constantly increasing his home-court advantage by influencing politicians.
He is what he is, and he's damn good at it. What he has over other people with his brainpower is his incredibly persistent drive at doing stuff the rest of us think of as boring. This guy jumps out of bed every day because he CAN'T WAIT to do the same fucking thing he's done every working day of his life.

Most people would have gone on to something else after making 1/100th of his wealth or less (the Paul Allen/Steve Wozniak model of living wealthy).

He's an anomaly, not particularly good or evil. But funny, smart, determined that his wealth should be run my smart people like Gates and not by the gov't. Is that so bad? There's plenty of worse people.

But yeah, why would anyone treat his public pronouncements as some kind of useful information I'll never know. You want to ask a rich person about tax policy and how it affects them, ask some "normally" rich people.

He's just naturally going to give advice to politicians that helps himself. Not because he's bad, just because it's in line with how he sees the world. His world is how BRKA does.

IHateToBurstYourBubble said...

I guess this recent market action validates one of my theories: One of the most sure things in buying stocks is KNOWING there WILL BE A COLLAPSE after a bubble.

Sounds stupid as hell... but how many people did you talk to 2-3 years ago who thought we were in a new era that would last forever? Almost everyone.

Conversely, when NO ONE ever wants to touch stocks again in their lives, we will see the bottom of our adult lives.

I was too young for the last MEGA BOTTOM (1982). The Good News is that COLLAPSE ALWAYS FOLLOWS BUBBLE, we've seen the top, and are in the mind-numbing process of setting a NOMINAL BOTTOM in the next few years... followed by The Real Bottom 7-8 years after that.

THAT will be my ALL-IN BUY OF A LIFETIME ON LEVERAGE point, probably in the 6,000's in 2016. I think we'll have good trading buys for (relatively) quick doubles between then & now. But DJIA 6,000's about 8 years from now will be when you buy & put that stuff in your will, cuz you should NEVER sell that stock in your life.

Anonymous said...

Taleb,

Is talking about the same bullshit risk based models with toy math that homer is using today.

Whether its risk-based insurance pools, where BUFFET writes the premiums, or stock-market wave theory, which is highly discredited, its all fucking smoke and mirrors.

Yes, the bitch is going down.

BUFFET is the titanic, and soon he'll hit the fucking iceberg.

Anonymous said...

IS BUFFET a criminal?? - TIM

Well TIM, buffet has the BEST lawyers and CPA's that money can buy, in spite of the fact that he says he doesn't have an accountant.

Most of his buddy's at the insurance companys that he owns have gone to jail, and to date because of his political power he hasn't been indicted.

Just wait until you TWATS start losing your BRK.n money, and then he'll lose his political support, and he'll go to jail also.

Anonymous said...

There's a BIG difference on the depression-one recovery and today.

In the 1920's the USA had the world's known oil reserves, and was a young country. Post WWII we secured the industrial machinery, all else having been wasted.

Homer's ENTIRE premise that the USA will bounce back on this one is completely irrelevant, this is MORE like the collapse of RUSSIA.

Trouble is today what will they privatize? Today everything is worthless paper.

We have the largest coal deposit in the world, but who wants coal? Our coal is also the dirtiest coal in the world. Our OIL is gone. NOBODY is going to invest in our manufacturing base.

The USA will once again become the worlds largest agrarian prison colony, mark my fucking words.

Anonymous said...

Sounds stupid as hell... but how many people did you talk to 2-3 years ago who thought we were in a new era that would last forever? Almost everyone.

*

HOMER are you talking about REAL-ESTATE?? The problem here is that your a stock broker, so its in your bones that the stock-market ALWAYS does a dead-cat bounce, trouble is so many people have been fucked so bad 'investing' in wall-street, that like housing it will take a generation for folks to tip back in.

401k's gone, ... baby-boom retirees pension gone, what the fuck do you think about todays gm,ford,chrysler all going down is all about?? Pensions gone, ...

It took 20+ fucking years after 1929 for folks to tip back in, sure the day-traders of the day tipped back in 1937 and got sheared.

WRT to your argument given that 97% of any given society are always 100% wrong 100% of the time, and 97% of most people never acquire real wealth, stupidity has always been the common denominator.

We all knew BEND bubble housing would recede. I don't give a fuck about the stock-market, I have always known it was a racket. Your obviously a CPA/investment-advisor, and your life-style depends on the stock-market biz returning, ... TOO MANY PEOPLE HAVE BEEN FUCKED.

NO AMOUNT OF PAULSON/BUSH 'CONFIDENCE' SCHEMES is going to fix this one.

Also the notion of international investors now, as USA doesn't save. That foreigners are sick of our shit. You had none of this shit in the 1930's.

We're NOT in kansas anymore HOMER, we're the most despised country on the face of the earth.

Anonymous said...

I hope everyone here watched the TALEB interview right??

YES, were just at the fucking beginning.

For instance just the insurance loss from LEHMAN is almost $500B, that must be paid soon, ... in the coming weeks people will simply default on all these Credit-Swap's they sold, as there is nothing left to sell to raise cash. When that happens there will be NOTHING on the books, because these insurance policy's sold by BUFFET will be worthless.

Anonymous said...

The USA will once again become the worlds largest agrarian prison colony, mark my fucking words.

*

Prison stocks homer, anything that has to do with the 'prison industrial complex' that will be YOUR NEXT BUBBLE.

IHateToBurstYourBubble said...

I don't give a fuck about the stock-market, I have always known it was a racket.

Hmmm... when all others think similarly, I will be able to buy.

Spread the word.

Anonymous said...

Conversely, when NO ONE ever wants to touch stocks again in their lives, we will see the bottom of our adult lives.

*

The old saying from the depression.

At least with homes, people need a place to live, ditto for food.

What the FUCK are you going to do with stock-cert's that only have value based on derivative based paper???

I'm NOT sure how long it will take folks to figure out they have been fucked, the people in this forum ( in spite of the pussy ) know what is going on, but the average AmeriKKKan, has no fucking idea that this country has lost 99.99% of its GOOD-WILL, and the assets were cleared out years ago.

Housing will be safe as I have said from day one here 4X of income, but what will income be? In inflated dollars? Or will we see people in Bend working for $2/hr??

Baby-Boomers are going to be telling their grand-children how they lost their pension. They'll be living with the 'kids', the kids will not trust wall-street.

Homer YOUR SO DEEP into wall-street you can't see the trees, your the type that bought into the stock market in 1937.

Like GRAHAM said in his day ( 1940's ), we're going back to value, and once again value will work. Your investing in the DJIA will not mean shit.

Some say this is political, NO this is about BEND, the blog here is about debating the survival in BEND.

Anonymous said...

But DJIA 6,000's about 8 years from now will be when you buy & put that stuff in your will, cuz you should NEVER sell that stock in your life.

*

There will always be shit that goes up, and other shit that goes down. Companys will get back to business.

Trouble today is they were ALL doing the same thing as BUFFET, e.g. running holding-company's, where GE no longer made product, but sold credit.

Just watch good companys like Proctor, and 3M, ... there are ton's of good companys, that can be bought on a bargain.

The real issue is the next bubble? There will be an ENERGY-BUBBLE, its being engineered right now. Tax incentives is all it needs.

DOW will go to 4,000, and osciallate there for a long time. If they want the DOW to go to 8,000 they'll have to remove the financial stocks, and replace them all with 'neo-energy' stocks.

tim said...

>>YOU THINK BUFFET is just a lucky guy

I did not say he was lucky. I said he uses his influence with politians to tilt the board in his favor.

Anonymous said...

Hmmm... when all others think similarly, I will be able to buy.

Spread the word.

*

There's a big difference between those than can buy, but don't want to buy, and those who want to buy, but cannot buy.

Too bad HBM isn't here, did you read his monkey story yesterday about the stock market???

That was right-on, virtually every village in the world has now been hood-winked by wall-st, its going to take a long time before CON-MEN like BUFFET can come into town and buy/sell monkeys.

Anonymous said...

I did not say he was lucky. I said he uses his influence with politians to tilt the board in his favor.

*

The richest man in the WORLD, has endorsed a new face in US politics, an OREO, at a perfect time.

Place your bets, and vote for OR-BOMB-EO, and everyone will get rich.

Yes, TT but today the board has been tilted to a 89% degree angle towards BUFFET.

Perhaps at the eve of his life, BUFFET having all the money in the world, will try to do some good for the USA?? Like invest in our manufacturing? For real? To date he seems to prefer the insurance racket, e.g. collect premiums, deny-claims, and invest the premiums in the stock-market.

He's going down and HARD no matter, how much BRK-A/B that the OREO buys with US taxpayer dollars.

Anonymous said...

"I don't GIVE A fuck About the stock market"

This is for quim, and TT, ... and other 'entrepreneurs'.

Your best investment is always yourself, forever the stock-market has been a rigged game, the house lets a few suckers win some of the time, but most of the time, the house collects all the chips.

In the 1940's there was a book called "where are the customers yachts"?? There weren't any.

You want to get rich? Invest in yourself, start a real business, minimize debt, and make money; and I'm not talking about fucking comic books.

Anonymous said...

Most people would have gone on to something else after making 1/100th of his wealth or less (the Paul Allen/Steve Wozniak model of living wealthy).

*

Bad FUCKING example TT,

The WOZ was pushed out by KUNT steve-jobs, the woz loved apple, but hated jobs.

Allen was senior to gates by many years, and it was Gates company, Allen moved on, Allen was always a senior assistant to the young Gates, and wanted to make a name for himself.

Most great tycoons, stuck around with their empire until their end. Its the brood that leaves young.

I agree, that IF you were ONLY doing this shit FOR MONEY, then yes, 'most' would have left, but 'most' of what??? First of all you don't even get into the game unless your part of the 3% of humanity.

Gates WANTED to rule an industry since he was 12, he never wanted to sell software. BUFFET too wanted to rule an industry, he just happened to BUY an insurance company, and the rest is history.

97% of all civilization are NOT entrepreneurs, the 3% that are, rarely do it for money, they would fail.

It's like HOMER and his stock-market, these are the 97% that give their money to someone else. 99% of the time, they lose their money.

With entrepreneurs, they watch their money like a hawk.

Tycoons like BUFFET don't do this shit for money.

I think the reason GATES is out, is because software is finished, nobody buys it anymore, and they (MS) have a commodity to license now, its not fun anymore. Software was really HOT from 1975 to 2000, that's 25 years, if you were there, it was a great time to make money.

Anonymous said...

You folks saw from the end of the last week post sequence that open market today sunday the arab world went down, even abu-dubai, home of cheney.

The fact that the Arab's are dumping their stock to raise cash to cover their margins, ....

Anonymous said...

But yeah, why would anyone treat his public pronouncements as some kind of useful information I'll never know. You want to ask a rich person about tax policy and how it affects them, ask some "normally" rich people.

He's just naturally going to give advice to politicians that helps himself. Not because he's bad, just because it's in line with how he sees the world. His world is how BRKA does.

*

I would agree 100%, I think the only person here that doesn't see this is BP. Who seems to take BUFFET for his word.

Anonymous said...

Any fucking NEWS about BEND-CALIF today??

I read the BULL and this AM, and not a word about the economy.

Sorry about so much BUFFET, but the reason is that he is tail wagging the USA dog these days.

Anonymous said...

OK, another dead-horse education of credit-default-swaps, for months now I have on this, and now the reckoning, and this is JUST ONE FUCKING company, due and that is LEHMAN.

The NY-TIME's has an excellent story, about what is to come, and its fucking ugly, mainly cuz AIG has been promising to pay most of the insurance pay-outs, and is now 'nationalized' with NO MONEY, which means uncle same MUST make good on the insurance of ten's of trillions of dollars of loss.

Anonymous said...

Insurance on Lehman Debt

By MARY WILLIAMS WALSH
Published: October 10, 2008
NY TIMES

First the house of Lehman fell. Now the insurance bill is coming due.

Gov. David A. Paterson of New York, left, and Eric R. Dinallo, the insurance regulator, want credit-default swaps regulated.
Related
Times Topics: Credit Crisis — The Essentials

Nearly three weeks after the Wall Street bank sank into bankruptcy, financial companies and investment funds that wrote what are effectively insurance policies on Lehman Brothers’ debts are being called on to pay hundreds of billions of dollars in claims.

Whether those claims can or will be paid, and the financial repercussions that could follow if they are not, will signify the biggest test yet for the vast, unregulated market in credit-default swaps.

The danger is that the claims on the Lehman default are so large — they are estimated at $400 billion to $600 billion — that settling them could leave some companies with large, perhaps even crippling, losses and heighten the turmoil in the financial markets.

The magnitude of the exposure came into focus on Friday, when the price of Lehman’s bonds was set via a closely watched auction on Wall Street. The debt was priced at a little above 8 cents on the dollar, leaving companies and funds that insured these debts against default on the hook for the remainder.

The price determined the amount that sellers of bond-default protection would have to pay those who bought their protection, called counterparties. The lower the bonds’ price fell, the higher the payouts were going to be.

But even now, the total amount coming due is unknown because the market for credit-default swaps is not regulated or tracked through any clearinghouse of data. “The huge value of credit-default swaps on Lehman Brothers, and the low price obtained in this auction, mean there are billions of dollars in obligations,” said Eric R. Dinallo, the New York State insurance superintendent. “No one knows who owes this money, how much each counterparty owes, or whether any of these counterparties will now be in trouble themselves, with further potential problems for the financial markets.”

Some of those on the hook will quietly settle their trades as they come due, mostly within the next two weeks, and keep doing business as usual. To the extent there are problems, the world may find out about it only when another financial services company discloses its exposure or perhaps even collapses.

Mr. Dinallo and Gov. David A. Paterson have said that New York State should regulate credit-default swaps to some extent, because they are similar to insurance, which is regulated at the state level. The regulators pay attention to how much coverage insurers write and how much they charge, to make sure they do not get in over their heads and collapse.

Swaps, on the other hand, are private contracts between two counterparties, so no regulator keeps track of who is promising coverage to whom, or whether the swap seller can really afford the coverage being promised.

Complicating things further, it is possible to buy and sell credit-default swaps without owning the underlying bonds. One trader can both buy and sell protection on the same bonds, too. These complexities make it hard to know exactly how much risk lies in the Lehman Brothers default.

Separately on Friday, the Federal Reserve Bank of New York met with representatives of the derivatives industry to review proposals for the creation of a credit-default swaps clearinghouse. The Fed asked for more information about how competing proposals would work, and had not made any decisions as of Friday.

Officials say they believe that if the swaps were traded through a central body, the volume of trading could be tracked and prices would become clear. Investors would stand a better chance of noticing when a company was taking on too much risk, and could dump its stock before disaster struck. That kind of market discipline might force traders to manage their risks more carefully.

But the clearinghouse will only help the swaps market in the future. In the meantime, the financial markets do not know where the next disaster might be.

Market participants were expressing particular concern about the amount of money that the American International Group, the insurance giant that was effectively nationalized, would have to pay as it settled its swap positions on Lehman Brothers’ debt. A.I.G.’s financial products unit was a major issuer of credit-default swaps.

A spokesman for A.I.G., Nicholas J. Ashooh, said on Friday that the big insurer was not able to provide a figure. It was billion-dollar obligations falling due under the terms of A.I.G.’s swaps contracts on other issuers’ debt that led to the company’s collapse in mid-September.

Julie A. Grandstaff, a managing director of StanCorp Investment Advisers, said the outcome of Friday’s auction was “really extraordinary, in that it’s a large bankruptcy and a small recovery value.”

She was concerned that some counterparties might have to make payments big enough to deplete their capital, which could lead to possible ratings downgrades. Capital depletion is a serious problem at the moment because the capital markets are largely frozen and companies cannot easily raise new money if they need it.

“If you exhaust it all in one event, that will cause the ratings agencies to think about whether to downgrade you,” Ms. Grandstaff said.

bruce said...

Re:
Perhaps at the eve of his life, BUFFET having all the money in the world, will try to do some good for the USA?? Like invest in our manufacturing? For real? To date he seems to prefer the insurance racket, e.g. collect premiums, deny-claims, and invest the premiums in the stock-market.

Dumbfuck, here is a link to BH's holdings: http://www.berkshirehathaway.com/subs/sublinks.html

From Acme Brick to Dairy Queen to RC Willey Home Furnishings.

Re:
Allen was senior to gates by many years, and it was Gates company, Allen moved on,

Dumbfuck, Allen got Hodgkins. Allen was born Jan '53, Gates Oct '55, a mere 2 1/2 years apart. They met in the same high school, where their first project together was a traffic measuring program. With over 200 million shares of Microsoft, Allen could do whatever the fuck he wanted after being cured.

All Dumbfuck, all the time around here right now. The Palin Method.

But I do agree about the entrepreneur stuff. Even if I still think you are a Dumbfuck.

bruce said...

Re: I read the BULL and this AM, and not a word about the economy.

Dumbfuck--you're right. The BULL is about the worst waste of paper I have ever seen.

Anonymous said...

This need to sell stock, to raise cash to pay for all these bad insurance bets, which the same thing that happened on black-friday in 1987.

Perhaps we'll even see a DOW of 2000, where 4,000 will look fucking astronomical.

Like TT mentioned early today, on the prior blog, all OUR modern funds were 'AAA' cuz of these policy's, $80TRillion estimated. All at once, when it becomes clear that people will not cover their bet on selling these policy's, it means that everyones rating goes to the floor.

To quote our beloved HOMER, its going to be much worse than anything you thought possible. Or as TALEB said on todays first post by lava, you ain't seen NOTHING YET!

Anonymous said...

Dumbfuck, Allen got Hodgkins. Allen was born Jan '53, Gates Oct '55, a mere 2 1/2 years apart.

*

Gates started at Harvard at 14, BP, he's was hanging out with 16 yr-old ALLEN when he was 12.

Anonymous said...

Since when does a 16yr old hangout with a 12 yr old?? Strange?

bruce said...

That Mary Walsh article at the Times is great. It's about what both Dumbfuck and myself have been railing about. The CDS's are so fucking huge they are going to take down virtually everyone.

It's a brave new world.

Anonymous said...

Like invest in our manufacturing? For real? To date he seems to prefer the insurance racket, e.g. collect premiums, deny-claims, and invest the premiums in the stock-market.

Dumbfuck, here is a link to BH's holdings: http://www.berkshirehathaway.com/subs/sublinks.html

From Acme Brick to Dairy Queen to RC Willey Home Furnishings

*

BP BUFFET is a fucking HOLDING-COMPANY, I said INVEST from scratch in US manufacturing, take all that CASH, and build the best high-tech energy company in the world.

BUFFET doesn't create anew, or entrepreneur, he just buys shit in deals that normal mortals could never get a piece of.

What I said was that BUFFET needs to take his fucking money, and INVEST in US MANUFACTURING, something that NOBODY has done in the USA since the 1970's or earlier, if you ignore chip-plants, where are all done outside of USA now.

The fact that BUFFET owns dairy-queen doesn't impress me pussy, but I know it impresses you, thinking he might give you an ice cream before bed.

bruce said...

Re: Gates started at Harvard at 14, BP, he's was hanging out with 16 yr-old ALLEN when he was 12.

You are truly a Dumbfuck. From Wiki: "William Henry "Bill" Gates III, KBE (born October 28, 1955)...Gates graduated from Lakeside School in 1973. He scored 1590 out of 1600 on the Scholastic Aptitude Test[17] and subsequently enrolled at Harvard College in the fall of 1973."

Try to at least look things up before spouting such total bullshit, Dumbfuck.

I've been in the software biz since 1979, I actually know a little about Gates.

bruce said...

Re: The fact that BUFFET owns dairy-queen doesn't impress me pussy, but I know it impresses you, thinking he might give you an ice cream before bed.

Dumbfuck, I agree with you on Buffett's needing to pony up.

But I prefer a BJ before bed. Ice cream makes me fat.

Anonymous said...

The CDS's are so fucking huge they are going to take down virtually everyone.

*

Yes, and just LEHMAN is over $600B, just one fucking BK is bigger than the bailout, there will be 100's of BK's like LEHMAN, this is why the known CDS paper floating around is estimated to be $80 trillion.

If you look at the auction on friday for LEHMAN they got 8 cents on the dollar, which was a 92% loss, apply that to the $80 TRillion in outstand CDS paper, and you get about $70 TRillion, gives you some idea of how much folks will owe.

The LUV-GUV will probably just NULL&VOID these 'illegal insurance' policy's, trouble is the ENTIRE 'AAA' ratings system that HOLDS up all paper assets in the world is riding on these ratings, if this falls, then the 'derivative' paper which is over $300 TRiLLion goes south.

The losses exceed the worlds GDP by what 10X??

FUCKING MIND BOGGLING INCOMPETENCE.

Anonymous said...

Ice cream makes me fat.

*

I thought ice cream made you bald?

ALway's about bruce ewert 24/7, welcome to bend-bubbble-2.

bruce said...

Re: I thought ice cream made you bald?

Someone who has actually seen me ;)

Anonymous said...

BP, Gates did start at Harvard when he was 14 I'll look it up some day, right now I'm not interested.

FYI I started college when I was 14, its not that big of a fucking deal.

My point was that Allen was MUCH older than gates, but ALLEN brought senority to this group of children.

Hell when they were in Albuquerque ALLEN was the only one who could legally buy beer.

I was involved with these people in 1975 bp, but lets stay with CDS, & BUFFET, and your oreo.

Anonymous said...

Someone who has actually seen me ;)
*

I go to all the city-council meetings bp,

bruce said...

Re:
If you look at the auction on friday for LEHMAN they got 8 cents on the dollar, which was a 92% loss, apply that to the $80 TRillion in outstand CDS paper, and you get about $70 TRillion, gives you some idea of how much folks will owe.

The LUV-GUV will probably just NULL&VOID these 'illegal insurance' policy's, trouble is the ENTIRE 'AAA' ratings system that HOLDS up all paper assets in the world is riding on these ratings, if this falls, then the 'derivative' paper which is over $300 TRiLLion goes south.

The losses exceed the worlds GDP by what 10X??

FUCKING MIND BOGGLING INCOMPETENCE.

That is truth. The numbers are fucking mind boggling, and far, far bigger than the actual production of goods by the world.

Yep, it's a Brave New World out there today. It's hard to even imagine what is coming. Marge's answer is sounding better and better. It's time to seriously think about going to ground in a place you know your neighbors and can grow tomatos and kill deer.

The part that really worries me is that it's still getting scarier around the world's financial markets. And the other shoe isn't even close to dropping yet.

bruce said...

RE: I go to all the city-council meetings bp,

Mike?

bruce said...

In this country, justice can be won against the greatest of odds; hope can find its way back to the darkest of corners; and when we are told that we cannot bring about the change that we seek, we answer with one voice - yes, we can.
- Barack Obama, Raleigh, North Carolina, May 6, 2008

It's way better than hate bewert

bruce said...

So Mike, you think the council pays any attention to me? Or is my quest more like Don Quixote's?

Anonymous said...

Snuggle's is that you?

What about your wife? What about my wife? What about my children?

You promised you would never 'out' me :<

Anonymous said...

Crisis may set back poorest: World Bank panel - sez chairman BUSH of da world

*

Who would have guessed?

Anonymous said...

Homer,

The goal here is NOT to fuck with you, you are the man.

You spent way too much time today on the post. It was elegant, it was mathematical, it was insightful.

What does it mean to those of us who are renter's in Bend? What are we to do now master??

Anonymous said...

What does it mean to those of us who are renter's in Bend? What are we to do now master??

*

"LEAVE"

( I have been hearing this all over town lately )

Anonymous said...

Homer,

Today's post is brilliant. Much thanks from all of us at Bend City Hall.

You just saved the city from Bankruptcy, tomorrow we'll be cashing out of all our stock market holdings and going to cash.

Sincerely,

Johnson, Clinton, Abernethy, Telfer,

IHateToBurstYourBubble said...

What does it mean to those of us who are renter's in Bend? What are we to do now master??

"LEAVE"

( I have been hearing this all over town lately )


Ditto, I am also starting to hear this. I honestly think talking about Bend v3.0 is fairly futile for 75-80% of this blog's audience. I honestly don't think I will be here at the bottom. This place will have so thoroughly gone the hell in a handbasket, that people will start leaving in droves pretty soon.

The one thing that'll bring 'em back? Rock bottom home prices ($120K medians), and a city NOT on the verge of BK, so we can have cops & firefighters, and patched roads & such. We are about to see the WISDOM of squandering our lotto winnings on bullshit (ie Hollern STD welfare).

We had a Once In A Lifetime thing happen here, and we wasted it. Look how fast we went from Top-O-The-World, to 100% Dead Ass Broke. And have no illusions, this town is technically insolvent.

Stocks bottom in 2016, real economy 1-2 yrs after, and Bend, as usual, about 3-4 years after that, and we will drag ass-bottom for a few years. You'll be able to make good RE money in Bend again, circa 2020.

If you actually need a job to exist though, The Way Is Clear: Get The Fuck Out Of This Town. The rest of the country is about 1/2 way through the wringer, which means we are 1/4th. You ain't seen nut'n yet.

tim said...

One reason you're hearing so much talk about leaving is that people are stuck and can't leave.

Normally people who want to go just do it and you don't hear so much whining about it.

Anonymous said...

What a fucking Nightmare "Stranded in Bend, Calif" without any drinking money.

Anonymous said...

So Mike, you think the council pays any attention to me? Or is my quest more like Don Quixote's?

I don't know about Don Quixote, but I know that Bruce Abernethy is in love with you, and wants to jump on you. Linda doesn't like men. You don't have enough cash for Tefler's taste. It's just me & you bruce, like always. Forever, yours.

Anonymous said...

In this country, justice can be won against the greatest of odds;
- Barack Obama,

It's way better than hate bewert

*

The odd's for Obama bringing 'Justus' to the USA is about 1M to 1, let's stick with bewert.

Anonymous said...

Tim how can anybody be stuck in bend california?This is bend remember? We are different aren't we?Oh just wait I forgot this is Oregon I grew up here, so did dad and grandad and greatgrandad. People you outastaters brucepussy included we did not ask you here and the fact that you cum here and bitch nonstop mabe you should just packup and get the fuck out.

tim said...

Meh don't try to pull rank. I'm not impressed by that. I live where I want to live.

My wife is Oregon Trail on both sides. Beat that.

I haven't tried to leave yet because I ain't broke yet. :-)

Anonymous said...

Tom mcall and Mark hatfield were true statesmen who looked out for the best interests of the (people). Toms statement it's ok to visit but don't stay says it best. Spend your money here and get the fuck out.Don't ruin oregon with corruption but here we are with so much. Depressions are painful but cleansing.

IHateToBurstYourBubble said...

Yoinks Shaggy!

The outlined time periods DO NOT include WWI! AHHHHH! NOOOOO!

Anonymous said...

If mike & bruce can wuv each other, that means the everyone here is just a click away from bestiality.

Can't we all just get along??

Anonymous said...

It's way better than hate bewert

*

Nobody hates bewert, pleeeeeeze people can't we all just for a week say nice things about BP???

Sheeeeeet IMHO 'BP' is in itself the nicest compliment, its way better to be a pussy, than a KUNT.

'Hate', this ain't a pug/dem convention bp, nobody hates anybody,

The rhetorical question was shall we ...

1.) Embrace the OREO for what he says ( which is general feel good non-specific crap )

2.) Hate bewert

Not much of a a choice, me suspects the premise here is that all who don't let OR-BOMB-EO fuck their daughters are bewert haters, but not so it is possible to love bewert, and know that OR-BOMB-EO is a bought and paid for political WHORE.

I call that option 3.

3.) Love bewert, & know that OR-BOMB-EO is just a low-life politician.

Anonymous said...

Yoinks Shaggy...

#
Gold Rush: Yoinks
Seriously, the Shaggy defense? The child pornography trial of Grammy-winning Trapped in a Courtroom Raunch & Blues singer R. Kelly opened today, ...
reporter.blogs.com/goldrush/2008/05/seriously-the-s.html - 25k - Cached - Similar pages
#
What is the real name of Shaggy on 'Scooby Doo'?
What is the real name of Shaggy on 'Scooby Doo'? - trivia question answer. ... Shaggy's real name is Norville Rogers. http://www.yoinks.com/shaggy.asp ...
www.funtrivia.com/askft/Question25734.html - 21k - Cached - Similar pages
#
Scooby Doo and Shaggy

hbm said...

Embrace the OREO for what he says ( which is general feel good non-specific crap )

Actually Obama has been far more specific about his plans than McClown has. What's McClown's plan for the economy? Cut taxes for billionaires. (Same plan the Republicans have been pushing for 100 years.)

BTW in case you haven't heard, Paul Krugman of the NYT has won the Nobel in economics.

Anonymous said...

How the world’s largest default was unravelled

Natasha de Terán
13 Oct 2008
Roger Liddell, LCH.Clearnet

Not being able to nail the data down was frustrating, especially with the markets moving so wildly
Chris Jones, LCH.Clearnet

We were very happy with the way the swaps side worked and with the commitment we had from member firms
Roger Liddell, chief executive of LCH.Clearnet, looked remarkably perky for a man who had just managed the biggest and most complex default in clearing house history. Just two years ago he stepped away from a banking career at Goldman Sachs to join LCH.Clearnet – giving up the glamour of the former investment bank to take up his position as head of the dusty utility, then presumed by some in the industry to be something of a poisoned chalice.

But at 09:15 London time on Monday, September 15, he found a multi-trillion dollar trading book in his in-tray containing huge futures and options, swap, repo, equity and bond positions. Clearing houses are in the business of avoiding risk – from that point onward, Liddell’s team would be managing it.

The collapse during the previous night of Lehman Brothers had thrown the financial world into a storm the likes of which it had never seen and which, four weeks later, has yet to abate. Lehman touched every part of LCH.Clearnet’s business – it was in the eye of the hurricane.

Since then, neither Liddell nor many LCH.Clearnet staff have seen the light of day, several of them putting in 17-hour shifts and subsisting on takeaway pizzas.

That Monday morning, outside the company’s headquarters the pavement was being dug up. Inside, construction work was taking place, causing a flood and two power outages. On the computer screens, the markets were gyrating wildly and the negative newsflow on the strength of some of LCH.Clearnet’s large clearing members was unrelenting.

Amid this chaos, order emerged. In conjunction with members, exchanges, dealers and clearing firms, LCH.Clearnet has since successfully hedged out, wound down, transferred or auctioned off the risk pool. As of the end of last week there was virtually nothing left of Lehman’s legacy. If evidence were needed of the value of clearing, LCH.Clearnet has provided it in successfully managing the largest clean-up in clearing house history. But the process was a fraught one.

It had started the weekend before the unfolding of Monday’s events. Because of Lehman-related worries, extra staff were called in to work on the Saturday and Sunday prior to Lehman’s collapse, but as it happened a good many of the clearer’s staff were scheduled to work, since the transfer of positions to the European arm of the IntercontinentalExchange had been scheduled to complete that weekend.

Contingency plans for this process had been put in place well before Lehman’s problems began to escalate. It had been agreed that up until 18:00 on Sunday, systems would be restored to where they were on the Friday night – but from that point the positions would remain with LCH.Clearnet, while ICE’s engines would run the clearing process.

Calls had been scheduled throughout the weekend to manage the transfer process and, each time, Lehman became an agenda item. But it was not until 18.30 on the Sunday, that the Financial Services Authority, ICE and LCH.Clearnet jointly agreed to “roll back”.

Liddell said: “This decision was not based on anything specific. The transfer had worked well that far, it just seemed appropriate to remove any unnecessary strains from the system, even though we didn’t know Lehman’s eventual position at that point.”

Staff, including Liddell, left LCH.Clearnet’s offices about midnight, to return early the next morning. Chris Jones, head of LCH.Clearnet’s 34-strong risk group, was back at his desk by 05:30 on the Monday. He spent the first few hours monitoring the newswires and taking in developments in Asia, as well as talking to officials from the Finanacial Services Authority, in preparation for what might lie ahead.

Jones and his group had spent a good portion of the weekend examining Lehman’s positions and working out how they would macro-hedge the portfolio, were the worst to occur. The previous week they had also double-checked contact numbers, ensuring they had details for everyone from Lehman’s futures head, traders and back office staff, to the officials at the Payment Protection System bank used by the US investment house.

“This is the sort of stuff that kills you – if you don’t have that information you can’t start any of the other processes,” said Jones, who has been at the clearing house since 1993, and who has worked through two other defaults, Barings and Griffin Trading, as well as three near-misses, Enron Metals, Yamaichi International and Refco.

At 07:30 the London Stock Exchange suspended Lehman Brothers from trading, and it was clear action would need to be taken. But there were confusing messages. Lehman had met margin calls at Clearnet SA, LCH.Clearnet’s Paris arm, at 07:00 central European Time. Would it be able to do so in London? It rapidly became clear that Lehman would be unlikely to meet its obligations and LCH.Clearnet acted accordingly.

At 09:15 LCH.Clearnet declared Lehman Brothers International Europe and Lehman Brothers Special Financing Inc in default. Access to trading for Lehman and its customers was immediately cut off and its payment systems shut down. The six SwapClear traders who were on duty were called into LCH.Clearnet’s back-up facilities and by 09:40 had begun hedging the $9 trillion (€6.6 trillion) swap portfolio.

In declaring Lehman in default, the clearing house had assumed all the bank’s risk – including its client positions. It therefore needed to find a means of managing the risk swiftly. Part of Jones’ team guided the swaps traders who started on their hedging programme, while others tried to get in touch with the appointed administrators, PwC, as well as with Lehman’s traders.

Daniel Gisler, managing director, risk and operations, took a team to Lehman’s Canary Wharf offices to collect client records, while the sales and relationship staff remained at LCH.Clearnet offices answering calls from members.

At this point, trouble escalated. Normally the risk managers would expect to look at the portfolios of futures positions market by market, isolating the client positions ready for transfer to a new clearing member, and hedging the house positions before preparing to liquidate them. There was, however, a problem.

Jones said: “We had noticed from some information relating to positions on the London Metal Exchange that at least some client positions were mingled with Lehman’s house risk. This meant we could only hedge out the directional risk and had to take a step back to access the books and records to see what was what.”

Unable to contact the Lehman traders who were not answering calls, and unable to gain access to Lehman’s offices, LCH.Clearnet had no way of establishing which positions were which. Liddell pressed for, and eventually secured, a meeting with PwC early on the Monday afternoon and was able to explain to the auditors what he needed to do and what assistance was required.

Things seemed to be looking up, but what LCH.Clearnet actually gained access to on Monday night was reams of coded print-outs when what it really needed was digital records that it could use, as well as the information necessary to decode the data. Instead, the computer ports in Lehman offices had been blocked.

Liddell said: “We knew what we needed and we knew where it was, but we couldn’t actually get our hands on it. Not being able to nail the data down and move on was hugely frustrating, especially with the markets moving so wildly.”

LCH.Clearnet staff worked late into Monday night in the hope that the required information would be forthcoming and they could start transferring client positions.

By Tuesday afternoon, Mark Huglin, LCH.Clearnet’s head of listed derivatives, managed to get a view on the data from New York, thanks to a call he had put through to the Lehman broker dealer still operating under Chapter 11.

Together with the bank’s back office staff in London, Jones’ team was able to start identifying the customer positions, confirming earlier suspicions of the extent to which these had been mingled with Lehman’s own.

Jones said: “We had lost about 36 hours, but on the Wednesday we started to make real inroads, transferring customer positions across to new clearing members. By this stage, the swaps team had also reduced the VaR significantly – and we were just beginning to breathe.”

The reallocation of customer positions is more complex than it might seem at first glance. All positions for transfer requests have to be approved by the risk group, since the collateral cover held by the clearing house is calculated on a net basis.

The group therefore had to assess the impact of each portfolio’s movement on the residual risk portfolio and in some cases had to schedule multiple movements to ensure that the net position remained covered.

Throughout the process LCH.Clearnet’s diversified spread of business was a help to the clearing house. The margin headroom could be actively managed across the various asset classes, giving comfort from a risk management perspective, and enabling LCH.Clearnet to hold on to the portfolios and take the time required to transfer out client positions.

Liddell said: “Without this degree of diversification it is doubtful whether we would have had the time to identify and transfer the client positions. Instead we would have had no option but to close out all the positions in the house account, leaving many clients unhedged.”

While this work continued, others in the risk group began to package Lehman’s house positions into portfolios prior to sending them out to clearing members ahead of an auction process scheduled for Thursday.

The clearing firms, most of which are banks, were required to sign non-disclosure agreements before they could be sent the portfolio details. They then had just a few hours to assess the portfolios before deciding which suited their book and which they wished to bid on. When the auction process was completed, the winning dealers would be notified and would assume the positions with immediate effect.

Liddell said: “We decided to go straight into that process as soon as we could rather than put on more complicated hedges. The alternative was to go into the markets and start liquidating the positions ourselves, or to pay a dealer to wind down the book on an agency basis for us. These were valid alternatives, but we believed the auction process would be the lowest-impact solution – not least because we knew there was quite a lot of interest from firms.”

LCH.Clearnet ran the Liffe equity product auction first, followed by ICE’s energy book and finally the LME book. Jones said: “As the auction process began, we had more headroom and were able to reallocate the notional collateral cover to other markets. We had collateral cover throughout, but things eased considerably once the auctions had begun and by the end of the week we had very little risk.”

At the same time open cash equity positions were settled through a buy-in process and Jones’ risk group closed out the repo positions held in RepoClear. The hedged swap portfolios were then auctioned – a process that was completed by the swaps traders, on schedule 14 days later.

The entire Lehman clean-up process will become required study material for all clearing houses worldwide, but the swaps clean-up will attract the most attention. The $133 trillion portfolio of interest-rate swap risk in SwapClear has built rapidly since it was established in 2005 as a form of joint-venture between the OTCDerivNet consortium of dealers and LCH.Clearnet.

Qualifying dealers can novate bilaterally negotiated swaps trades to the clearing house, considerably reducing their counterparty credit risk exposure, gaining balance sheet efficiencies and substantial capital charge reductions.

On joining the group, dealers have to commit to participate in any default management process, to allocate staff to the hedging and auctioning process, and to take on defaulting members’ risk. Although routinely rehearsed, the default management process had never been tested.

Jones said: “We were very happy with the way the swaps side worked – and what was comforting was the commitment we had from member firms, not only from the traders that came into work with us, but also from desk heads who would eventually get their calls seeking to put on the hedges and run the auction process.”

Frits Vogels, head of interest rates at interdealer-broker Icap added: “The entire marketplace is pleased with the way this has worked – it is a great success story in a time of unprecedented turmoil. The swaps market has had the least amount of headaches and has continued to function extremely well throughout.”

Although several individuals have been privately critical of the administrators, as well as of the FSA, for not having taken a more authoritative stance toward them, there has been an almost total absence of criticism for LCH.Clearnet. Not only did it not have to tap the default fund, it never even came close to using up the initial margin that had been collected on the Friday morning prior to Lehman’s demise.

Plaudits for the clearinghouse have come in from all over. Nick Carew Hunt, market secretary of Liffe, said: “We have absolutely no criticisms – the battles they had in getting the information were substantial and while they could just have closed everything out on the spot, they took full consideration of the whole picture and did the best thing for the market.

"What is more, they managed the process over what had to be a protracted period of time, but remained within the margin cover.”

The highest praise came from Anthony Belchambers, head of the Futures and Options Association. Cognisant of the need to draw lessons from the events, he has put together a list of to-dos for the industry. LCHClearnet, notably, is not an item on this agenda.

He said: “As you might expect, unravelling the largest default in financial history has thrown up a few issues, but the feeling from member firms is that LCH.Clearnet did a very good job in difficult conditions and under a lot of pressure. LCH.Clearnet has been subject to a lot of criticism in the past, but they have come back in spades.”

Anonymous said...

Actually Obama has been far more specific about his plans than McClown has.

*

Mc$ain & OREO are in DEAD heat for saying ZERO. I saw all the debates, and neither answered a direct question, and agreed on most orwellian proposals.

Both are OWNED by Fascist USA.

This argument that OREO is good be because CAIN is the lesser of two evils is BULLSHIT. Evil is EVIL, and they're both OWNED by wall-street.

Anonymous said...

Embrace the OREO for what he says ( which is general feel good non-specific crap )

*

Change

Hope

...

feel good, non-specific crap

DEM&PUG are the same, both party's owned by the same people

Anonymous said...

WTF "G7 to offer unlimited USD to BUY US stocks" WTF?

The Wall Street Journal


Oct. 13, 2008

The Bank of England, the European Central Bank and the Swiss National Bank said they will offer unlimited U.S. dollar funds to banks in the latest coordinated central bank action to counter the financial crisis. In a joint statement, the central banks said the terms of their respective currency swap arrangements with the U.S. Federal Reserve had been altered to
"accommodate whatever quantity of U.S. dollar funding is demanded." In the statement, the Bank of Japan said it is considering the introduction of similar measures.

Anonymous said...

Russia & China and all the other non-G7 powerhouses must be laughing their ass off, while G-7 nations toss all their taxpayer treasure in Buffet's toilet.

Anonymous said...

PAULSON DEMANDS G-7 BANKERS to SUCK his dick at 3pm EST today, let's see if they jump? Will they bail-out Goldman-Sachs?? Can he force G-7, and mainly US bankers to BUY US BUFFET holding companys??

***

The Wall Street Journal


Oct. 13, 2008

Treasury Secretary Henry Paulson has called the top U.S. banking heads to a meeting today in Washington, people familiar with the matter said. The 3 p.m. meeting is being called while most of the banking chiefs are in Washington D.C. for meetings of the World Bank and the International Monetary Fund.

Invited to attend were banking executives including Ken Lewis, CEO of Bank of America, Jamie Dimon, CEO of J.P. Morgan Chase, Lloyd Blankfein, CEO of Goldman Sachs Group; John Mack, CEO of Morgan Stanley; and Vikram Pandit, CEO of Citigroup.

Anonymous said...

Not much of a a choice, me suspects the premise here is that all who don't let OR-BOMB-EO fuck their daughters are bewert haters, but not so it is possible to love bewert, and know that OR-BOMB-EO is a bought and paid for political WHORE.

I call that option 3.

3.) Love bewert, & know that OR-BOMB-EO is just a low-life politician.

Anonymous said...

FUCK the 3pm paulson meeting today, the REAL meeting is going to be at CHENEY's office in DUBAI today, and CHENEY is now going to RULE the world.

***

Buyout bosses gather in Dubai as crisis continues
Sun Oct 12, 2008 11:02pm EDT

DUBAI (Reuters) - Private equity executives from the United States and across the Middle East descend on Dubai this week to seek out investment partners and deals during one of the most tumultuous periods in the industry's history.

The three-day annual Super Return Middle East conference coincides with extreme volatility in the financial markets and a credit freeze that has only exacerbated the inability of the firms to access financing for leveraged buyouts.

Attendees will be watching addresses from Wall Street moguls such as KKR's Henry Kravis, Carlyle's David Rubenstein and Blackstone Group's LP (BX.N: Quote, Profile, Research, Stock Buzz) Steve Schwarzman for signs of how U.S. private equity will ride out the storm and the investment opportunities they see emerging.

From the Middle East, the focus will be on private equity and sovereign wealth funds, with speakers including some from Dubai government investment agency Istithmar World Capital, which owns fashion retailer Barneys New York; and Saudi-based private equity firm Swicorp, which recently bought a stake in leasing company Jordan Aviation.

Behind closed doors, a flurry of meetings are expected as U.S. private equity executives test for any appetite for further ventures, fund raising and deals from a region that has been burned by investing in the United States.

Some sovereign wealth fund investors have taken stakes in companies whose shares have dived dramatically, as well as faced a hostile reception from critics questioning their political motives. That has caused concern among U.S. buyout bosses about continued investment in the country.

TOUGH INVESTMENTS

"Imagine a private meeting in a room far from the US; a decision is quietly made and billions of dollars that were invested here find a new and more hospitable home," wrote Schwarzman in a recent column in the Financial Times. "Or billions of dollars that could have been invested here are reallocated to other more benign markets."

foz said...

coming to bend for a couple weeks to help another Westside friend move out of Oregon...should I bring my gun to fend off the roving mobs of tweakers? :-)

tim said...

GM and F have large bounces today. Paulson going to use some taxpayer money to buy their stocks, too?

foz said...

I think it is the consensus that GM and F will finally get access to the funds that have already been approved.

I just bought some CAL this morning. Third trip on it. Probably won't get that big of a move on it this time though.

Anonymous said...

Recall for Cunt's CHENEY moved all op's for HALLIBURTON to DUBAI, and from now on all serious deals will be done there.

Through intimidation of the US war machine, CHENEY has made himself KING-of-DUBAI, which makes him king of the war.

Right now I would watch closely the war between BUFFET & CHENEY for world dominion.

Anonymous said...

yes auto was promised $25B a while ago, but is it enough for what?

Also if you start adding up all these promises, they already exceed the budget and authority to pay.

Something is going to give, but for now promise all.

Did you all see that 'authority' above from EUROPE giving their banks UNLIMITED authority to hand-out dollars, I wonder who is covering that promise??????????

So yes boyz, go ahead and buy your F & GM, but be very, very careful, cuz at some point this charade is going to be seen for what it is, there isn't enough money for everyone, and the US is just a large bag of hot-air.

Anonymous said...

With fuel costs dropping airlines should go up, and there is plenty of demand, those with money have it, and those who drive auto's don't, ...

Anonymous said...

should I bring my gun to fend off the roving mobs of tweakers? :-)

*

Not that bad yet, but bring your own trailer, as UHAUL is charging a 10X premium to get out of dodge, get uhauls to BEND is now a cottage industry.

This is Bend, Calif, why go back to CALIF, when your already here? Why doens't CALI just annex BEND for real, I'm sure all those who RUN BEND would approve, and end this charade that Bend is part of ORYGUN.

Anonymous said...

PAULSON & LOVER ( KASHKARI) to ONLY USE US-FUNDS to INVEST IN GOLDMAN - "WHO WOULD HAVE GUESSED".

***

Treasury to Invest in `Healthy' Banks, Kashkari Says (Update3)

By Rebecca Christie and Robert Schmidt

Oct. 13 (Bloomberg) -- Neel Kashkari, the U.S. Treasury official overseeing the $700 billion rescue of the financial system, said government equity injections will be aimed at ``healthy'' firms.

``We are designing a standardized program to purchase equity in a broad array of financial institutions,'' Kashkari, who heads the department's Troubled Asset Relief Program, said in a speech in Washington. ``The equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions.''

U.S. officials are hurrying to address frozen credit markets that led France, Germany and Spain to agree yesterday to commit $1.3 trillion to guarantee interbank loans and take equity stakes in banks. Buying shares of financial institutions has become the latest focus of Treasury Secretary Henry Paulson's rescue plan.

hbm said...

I saw all the debates, and neither answered a direct question, and agreed on most orwellian proposals.

Debates of this kind are not a good forum for laying out detailed plans. It takes too long, and the other side is going to take whatever you say and twist it to make you look bad and/or stupid. So candidates stick to safe, simple slogans and sound bites. If you want details about Obama's plans you need to look at his Website.

BTW Homer, excellent and informative post this week. I was able to understand most of it even though I am a mathematical ignoramus.

Anonymous said...

"Mc$ain & OREO are in DEAD heat for saying ZERO."

Yes, there are few specifics in the debates, but go to their websites. There are LOTS of details -- particularly Obama.

McCain is little more than a continuation of Bush (if a tax cut can't solve it, the problem doesn't exist, or we'll just pretend that tax cuts will solve it).

*

By the way, how about that part-nationalization [equity injection] by the UK?

They're out in front because Britain's economy depends so much on London, which is essentially Wall Street writ large.

They know that if London's economy goes down the whole country is fucked.

England beat us into the housing bubble, and they're likely to beat us out.

Anonymous said...

Yes, there are few specifics in the debates, but go to their websites. There are LOTS of details -- particularly Obama.

*

HBM this is the same rhetoric as the PUSSY, I don't give a fuck about OREO's website, yes I have seen, here is the issue SHOW SOME FUCKING BALLS ANSWER THE FUCKING QUESTION IN PUBLIC.

I know its all a fucking game, but remember this is a fucking job interview, and he can't answer fucking questions this week, he'll do the same next week. FACT!

"Mr OREO do you think the economy will get worse" ... "I DON'T KNOW..."

FUCK YOU, and FUCK anybody who tolerates this kind of response from a presidential candidate.

Anonymous said...

They know that if London's economy goes down the whole country is fucked.

*

London is fucked, anybody ever go there? Ride the fucking TUBE? They're about 15 yrs ahead of the US when it comes to economic malaise.

Sad fucking place, and sad fucking people.

Outside of London in the country is quite nice, yes LONDON is just one big wall-street. They don't have the good-will to support the market, they're tethered to the USA. The malaise is slow.

Think again on today, where 'G7' has promised "UNLIMITED DOLLARS TO BANKS", what the fuck does that mean??

Anonymous said...

BTW Homer, excellent and informative post this week. I was able to understand most of it even though I am a mathematical ignoramus.

*

Chart analysis is a guaranteed method to make you insolvent, jump in with both feet hbm.

You don't need to be a 'math genius', you just need to be an ignoramus to believe in the 'chart fairy'.

Anonymous said...

If you want details about Obama's plans you need to look at his Website.


*

I want OREO to answer questions in public when asked, I don't want him to emulate McCain.

Anonymous said...

The MEDIA is finally starting to get it, albeit slowly.

***

ECONOMIC ANALYSIS:
Not Enough Money in the World: The Real Monster in the Meltdown Closet
by Chris Floyd
Monday, 13 October 2008
This is the beast in the dark that is haunting the feckless leaders of the developed world: $55 trillion of unaccountable debt, and no way of knowing how much of it is even now being flushed down the toilet, taking the global economy with it.
The myth has quickly taken hold that the global financial crash was caused by bad mortgages. This has allowed rightwing hatemongers to blame the meltdown on the "liberal" programs that encouraged home ownership among a small percentage of lower-income people (a poisonous canard that parts of the mainstream media have actually done a fairly good job of knocking down), while "progressives" of various stripes have denounced banks and other financial institutions for pushing over-easy credit on people who couldn't really afford it.

Unsustainable mortgages are a key factor in the global crash, of course. And many people (most of them white, by the way) did take out mortgages they would not be able to afford if the housing bubble ever burst, which it has, most spectacularly. And yes, it is undeniable that the financial services industry has been tempting people with easy credit like schoolyard pushers flashing reefers.

All of this was bound to end badly, and did. But this alone would not have been enough to threaten the destruction of the entire global financial system, nor cause the blind, screaming panic that has strangulated the financial markets, seized up the vital flow of money between banks, and caused the "free" market-worshipping governments of the Western world to carry out nationalizations and interventions that, in sheer numbers, dwarf anything ever seen following a Communist revolution. (As John Lancaster notes in the London Review of Books, the Bush Administration's takeover of Fannie Mae and Fannie Mac alone was "was, by cash value, the biggest nationalisation in the history of the world." And that was just the beginning.)

What has struck mortal fear in the heart of markets and governments is not bad mortgages, but the almost incomprehensibly huge and complex market for "derivatives," based in part on mortgage debt -- but also on a vast array of other sources that were "securitized," turned into tradable if ghostly commodities then sold off in a bewildering variety of increasingly arcane forms. This was accompanied by the expansion of yet another vast market in insurance mechanisms designed to protect these derivatives -- mechanisms which themselves became "securitized."

At the same time, the financial services industry used its paid bagmen in governments around the world to loosen almost all restrictions not only on securitization and the trading of derivatives, but also on the amount of debt that institutions could take on in order to play around in these vastly expanded and deregulated markets. For example, as Lancaster points out, UK's Barclays Bank had a debt-to-equity ratio of 63 to 1:

Imagine that for a moment translated to your own finances, so that you could stretch what you actually, unequivocally own to borrow more than sixty times the amount. (I’d have an island. What about you?)

The result of all this has been the construction of a gargantuan house of cards, based on next to nothing, and left alone in the shadow of building "perfect storm" of greed, deregulation and political corruption.

That storm has now struck. The house of cards has fallen down, and revealed a hole of derivatives-based debt that could not be filled, literally, by all the money in the world, much less by the mere trillions that national governments are frantically throwing at it today.

Yes, "mere" trillions. As Will Hutton explains in the Observer:

...the dark heart of the global financial system [is] the $55 trillion market in credit derivatives and, in particular, credit default swaps, the mechanisms routinely used to insure banks against losses on risky investments. This is a market more than twice the size of the combined GDP of the US, Japan and the EU. Until it is cleaned up and the toxic threat it poses is removed, the pandemic will continue. Even nationalised banks, and the countries standing behind them, could be overwhelmed by the scale of the losses now emerging.

Try to imagine that: a $55 trillion market now at risk of complete destruction. Even the derivative debt owed by individual institutions stands at nation-wrecking levels. For example, a single bank in Britain, Barclays again, holds more than $2.4 trillion in credit default swaps, the tradable "insurance" mechanism against securities default. This is more than the entire GDP of Great Britain. If all this paper goes bad, there are not enough assets in the entire country to pay it off. And that's just one bank, in one country.

Hutton gives the details:

This market in credit derivatives has grown explosively over the last decade largely in response to the $10 trillion market in securitised assets - the packaging up of income from a huge variety of sources (office rents, port charges, mortgage payments, sport stadiums) and its subsequent sale as a 'security' to be traded between banks.

Plainly, these securities are risky, so the markets invented a system of insurance. A buyer of a securitised bond can purchase what is in effect an insurance contract that will protect him or her against default - a credit default swap (CDS). But unlike the comprehensive insurance contract on your car which you have with one insurance company, these credit default contracts can be freely bought and sold. Complex mathematical models are continually assessing the risk and comparing it to market prices. If the risk falls, the CDSs are cheap; if the risk rises - because, say, a credit rating agency declares the issuing company is less solid - the price rises. Hedge funds speculate in them wildly.

Their purpose was a market solution to make securitisation less risky; in fact, they make it more risky, as we are now witnessing. The collapse of Lehman Brothers - the refusal to bail it out has had cataclysmic consequences - means that it can no longer honour $110bn of bonds, nor $440bn of CDSs it had written. On Friday, the dud contracts were auctioned, with buyers paying a paltry eight cents for every dollar. Put another way, there is now a $414bn hole which somebody holding these contracts has to honour. And if your head is spinning now, add the three bust Icelandic banks. They can no longer honour more than $50bn of bonds, nor a mind-boggling $200bn of CDSs....

While every bank tries to pass the toxic parcel on to somebody else, the system has to find the money. So will compensation for the near valueless contracts and thus now uninsured debt ultimately be made - and by whom? And because nobody knows - not the regulators, banks or governments - who owns the swaps and whether they are credit-worthy, nobody can answer the question. Maybe holders of insurance policies will get the cash due to them, but will that weaken somebody else? The result - panic.

This is the ultra-dangerous downward vortex in which the system is locked. It is why share prices are plummeting. As recession deepens, there will be defaults on securitised bonds and the potential collapse of more banks outside the G7 ring-fence. Nobody knows what proportion of the $55 trillion of credit default contracts that have actually been written will be honoured and who might bear losses running into trillions of dollars.

This is the beast in the dark that is haunting the feckless leaders of the developed world: $55 trillion of unaccountable debt, and no way of knowing how much of it is even now being flushed down the toilet, taking the global economy with it.

The massive interventions were are seeing might stabilize the markets temporarily, or at least arrest their free fall long enough to come up with some kind of massive restructuring of the global financial system. Or they might not. For it is by no means certain that the wisdom, and the political courage, to come up with a more viable system can be found among the world's political leaders -- all of whom, as we noted here the other day, have risen within the present system and, to one degree or another, owe their own power and privilege to the "malefactors of great wealth" and the extremist cult of market fundamentalism. There is no indication anywhere that the circle of collusion and corruption between governments and Big Money has even lessened, much less been broken, by the economic catastrophe. All of the various bailout plans and "coordinated actions" still have as their chief aim the preservation of the malefactors in their current state of wealth, privilege and domination. As Jonathan Schwarz notes:

Still, U.S. elites will try to impose as much of a structural adjustment as they can get away with, in order to make the bottom 80% of America pay the price for the elites' spectacular screw-ups. The Washington Post has already started writing about how the current crisis demonstrates that we must cut Social Security. Look for much more of this to come.

The only slim hope we have for any genuine reform -- even an imperfect, conflicted, compromised reform, which is the only kind we will ever have in this world, until the lion lies down with the lamb -- is that the sheer scale of the real problem -- the $55 trillion beast, the very real potential for the complete destruction of the global economy, and the state power that depends upon it -- might force some politicians to turn apostate, renounce the market cult, and bite the hands that have fed them for so long.

Absent this near-miraculous possibility, we will be left with yet another rickety house of cards, slapped together on the fly -- largely at the malefactors' direction and for their benefit -- while the beast gapes wide his ponderous jaws, and prepares to swallow us whole.

Anonymous said...

YEP, a few people get it, that its NOT about 'housing' as HOMER likes to say, ... Pug's like to say this is all about nigger's getting a house, but the truth is the PUG-PARTY has fucked the world.

***

The myth has quickly taken hold that the global financial crash was caused by bad mortgages. This has allowed rightwing hatemongers to blame the meltdown on the "liberal" programs that encouraged home ownership among a small percentage of lower-income people (a poisonous canard that parts of the mainstream media have actually done a fairly good job of knocking down), while "progressives" of various stripes have denounced banks and other financial institutions for pushing over-easy credit on people who couldn't really afford it.

Anonymous said...

The next shoe to drop is WAMU 'credit default swap', each of these bitches @ $500B, a process of slow bleeding. How many fucking weeks of PAULSON buying stock really matters?? If you know when Paulson is buying stock you can long/short the rally's and make money, but when this is over, there will be NO MONEY.

***

Strategist: The Next Swap Shoe to Drop

Last week, it was the Lehman Brothers credit default swaps at the heart of the market's palpatations. The next thing will be Washington Mutual swaps, says Craig Columbus, Advanced Equities Asset Management chief market strategist.

"A lot of what happened last week was the settlement of the Lehman credit default swaps. I mean that was $400 billion of cash that sellers had to come up with to pay claims, basically insurance claims. Now by my count there are six more of those trigger events out there. So the next one would be the Washington Mutual settlement in about two weeks. ... Please get these swaps onto an exchange because this is a big risk to the marketplace."

Anonymous said...

Paying LIFE INSURANCE? CAR INSURANCE?? Those payments will soon be throwing good money into the sewer. Thanks BUFFET.

***

Fitch: Mortgage Holdings Could Imperil Life Insurance Firms

Brad Finkelstein


CHICAGO-Fitch Ratings here has downgraded its outlook on the life insurance industry to "negative" from "stable" in large part because of their mortgage and mortgage-related investments.

"The dramatic downturn in the U.S. housing market, which has led to significant losses to mortgage-related investments, has prompted a financial crisis among major U.S. financial institutions, market illiquidity, and a wholesale repricing of credit risk. While less exposed to these market issues than many investment banks, commercial banks, or financial guarantors, life insurers are experiencing a significant deterioration in investment results, which has negatively impacted industry earnings and capital," the report from Fitch said.

Life insurers who are most likely to see downward ratings pressure in the next 12 to 18 months include firms with above-average exposure to mortgage-related investments.

On the other hand, Fitch said life companies are "relatively well-positioned to weather an environment of capital markets volatility and market illiquidity."

Furthermore, the rating agency said "a vast majority of life insurers avoided investments in collateralized debt obligations backed by residential mortgage-backed securities, and most have little or no activity in the credit default swap market."

Meanwhile more firms are disclosing their investments in one of the many companies impacted in recent weeks by the financial crisis. Both Standard & Poor's and Moody's downgraded Primus Guaranty Ltd., Hamilton, Bermuda.

"Unprecedented credit market volatility and the resulting failure of such firms as Fannie Mae, Freddie Mac, Lehman Brothers and Washington Mutual have clearly impacted Primus Financial," said Thomas W. Jasper, chief executive of Primus Guaranty. "However, at the end of September, Primus Financial had $820 million in long-term debt and equity capital to meet commitments under its credit default swaps contracts. Additionally, $75 million of capital is held at Primus Guaranty."

The company has $16.1 million in credit default swaps exposure to Washington Mutual. It has $80 million in CDS exposure to Lehman Brothers and $215 million in CDS exposure to Fannie Mae and Freddie Mac.

Swedbank, Stockholm, has a secured exposure to Lehman Brothers of $1.35 million. But it is not taking any provisions because the underlying commercial mortgage loans are performing and the collateral is of good quality, the company said.





Aegon, The Hague, The Netherlands, has total general account fixed-income exposure to Washington Mutual of 125 million euros ($170.2 million) during this year. The company said it reduced its exposure to WaMu by 47%.

A.M. Best Co., Oldwick, N.J., has downgraded the financial strength rating of Shenandoah Life Insurance Co., Roanoke, Va., to B++ from A-.

It said the downgrade is because of the "significant exposure Shenandoah Life has to Freddie Mac and Fannie Mae perpetual preferred stock and the expected reduction in the company's capital and surplus reflecting anticipated writedowns based on current low valuations. Furthermore, A.M. Best notes that Shenandoah Life continues to maintain a relatively high exposure to commercial mortgages, collateralized debt obligations, other structured securities and borrowing under the Federal Home Loan Bank program."

FPIC Insurance Group Inc., Jacksonville, Fla., had exposure of $4.1 million to Lehman Brothers ($2.5 million senior debt, $1.1 million subordinated notes and $500,000 in preferred stock); $2.1 million of senior debt of American General, a subsidiary of American International Group; $300,000 in Fannie Mae preferred stock; $2.1 million in WaMu senior debt; and $2.5 million in Morgan Stanley senior debt.

Zenith National Insurance Corp., Woodland Hills, Calif., said it had $100.7 million in investments (based on their fair value) in a number of companies, including AIG (both fixed income and equity), plus fixed-income investments in Citigroup, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley and Wachovia. The decrease in the value of these assets between June 30 and Sept. 19 was $24.3 million.

Axis Capital Holdings Ltd., Pembroke, Bermuda, said it expects to realize a loss of $60 million associated with Fannie Mae and Freddie Mac preferred equity.

Anonymous said...

The MEDIA is really getting it today, ... yep, once a few dozen of these 'credit default swaps' make all the banks, insurance and investment houses insolvent, then the BIG-ONE the derivative paper 10X of world GDP comes DUE!!!!


Beans, Gold, Bullets, and time folks. All paper will be worthless, all paper will be declared null&void, got gold? They'll be collecting that gold once again.


***

Financial Weapons of Mass Destruction: A $516 Trillion Derivatives 'Time-Bomb'

by Margareta Pagano and Simon Evans

Global Research, October 13, 2008
The Independent - 2008-10-

Not for nothing did US billionaire Warren Buffett call them the real 'weapons of mass destruction'

The market is worth more than $516 trillion, (£303 trillion), roughly 10 times the value of the entire world's output: it's been called the "ticking time-bomb".

It's a market in which the lead protagonists – typically aggressive, highly educated, and now wealthy young men – have flourished in the derivatives boom. But it's a market that is set to come to a crashing halt – the Great Unwind has begun.

Last week the beginning of the end started for many hedge funds with the combination of diving market values and worried investors pulling out their cash for safer climes.

Some of the world's biggest hedge funds – SAC Capital, Lone Pine and Tiger Global – all revealed they were sitting on double-digit losses this year. September's falls wiped out any profits made in the rest of the year. Polygon, once a darling of the London hedge fund circuit, last week said it was capping the basic salaries of its managers to £100,000 each. Not bad for the average punter but some way off the tens of millions plundered by these hotshots during the good times. But few will be shedding any tears.

The complex and opaque derivatives markets in which these hedge funds played has been dubbed the world's biggest black hole because they operate outside of the grasp of governments, tax inspectors and regulators. They operate in a parallel, shadow world to the rest of the banking system. They are private contracts between two companies or institutions which can't be controlled or properly assessed. In themselves derivative contracts are not dangerous, but if one of them should go wrong – the bad 2 per cent as it's been called – then it is the domino effect which could be so enormous and scary.

Most markets have something behind them. Central banks require reserves – something that backs up the transaction. But derivatives don't have anything – because they are not real money, but paper money. It is also impossible to establish their worth – the $516 trillion number is actually only a notional one. In the mid-Nineties, Nick Leeson lost Barings £1.3bn trading in derivatives, and the bank went bust. In 1998 hedge fund LTCM's $5bn loss nearly brought down the entire system. In fragile times like this, another LTCM could have catastrophic results.

That is why everyone is now so frightened, even the traders, who are desperately trying to unwind their positions but finding it impossible because trading is so volatile and it's difficult to find counterparties. Nor have the hedge funds been in the slightest bit interested in succumbing to normal rules: of the world's thousands of hedge funds only 24 have volunteered to sign up to a code of conduct.

Few understand how this world operates. The US Federal Reserve chairman, Ben Bernanke, tapped up some of Wall Street's best for a primer on their workings when he took the job a few years ago. Britain's financial regulator, the Financial Services Authority, has long talked about the problems the markets could face on the back of derivative complexity. Unfortunately it did little to curb the products' growth.

In America the naysayers have been rather more vocal for longer. Famously, Warren Buffett, the billionaire who made his money the old-fashioned way, called them "weapons of mass destruction". In the late 1990s when confidence was roaring in the midst of the dotcom boom, a small band of politicians, uncomfortable with the ease with which banks would be allowed to play in these burgeoning markets, were painted as Luddites failing to move with the times.

Little-known Democratic senator Byron Dorgan from North Dakota was one of the most vociferous refuseniks, telling his supposedly more savvy New York peers of the dangers. "If you want to gamble, go to Las Vegas. If you want to trade in derivatives, God bless you," he said. He was ignored.

Anonymous said...

Famously, Warren Buffett, the billionaire who made his money the old-fashioned way, called them "weapons of mass destruction". In the late 1990s when confidence was roaring in the midst of the dotcom boom, a small band of politicians, uncomfortable with the ease with which banks would be allowed to play in these burgeoning markets, were painted as Luddites failing to move with the times.

*

NOT TRUE, yes BUFFET called them 'weapons', but he is a major player of the WHOLE insurance racket, he's a master at writing these insurance policy's.

Making his money the old fashion way? Destroying the insurance industry?? BUFFET didn't become the richest man in the world but 'old fashion hard work'.

The so called 'mentor' of BUFFET, Graham called stock-holding companys the 'CANCER' of his times, and that is HOW BUFFET made is BILLIONS, and got the seed money by robbing insurance companys.

foz said...

FOR RENT.....

How fast things change in Bend. So my friend who had a good job at St Charles decided she was sick of Bend and wanted out fast. So she found a renter for her house on the Westside and took a lease on a place up here North of Seattle. Turns out her renter was actually in foreclosure on her place in Bend and wanted to get into something before her credit was completely wrecked. Anyway for some other reasons she has decided she has also had it with Bend and backed out on the rental agreement. And now my friend is trying to figure out how to get this mess resolved.

So anyone know anyone who would like to rent a real nice (but small) house on knoll Ave? Must have a job, meth users need not apply.

Anonymous said...

BUSH to spend $250B on 'stock purchase', "WHO WOULD HAVE GUESSED" that the bail-out was a rescue of goldman-sachs.

***

The Wall Street Journal

Oct. 13, 2008

The Bush administration is expected Tuesday to roll out a wide-ranging effort to restore confidence to the battered banking system, following similar moves by European governments that sent global stock markets soaring. The initiatives will likely supersede many of the government's previous efforts. One central plank of these new efforts is a plan for the Treasury to take approximately $250 billion in equity stakes in potentially thousands of banks, according to people familiar with the matter, using funds approved by Congress through the $700 billion bailout bill. In addition, the FDIC is expected to temporarily extend its backstop from bank deposits to new senior preferred debt issued by banks and thrifts for three years.

bruce said...

Foz, email me with details. bewert over at gmail

Anonymous said...

>Not that bad yet, but bring your own trailer, as UHAUL is charging a 10X premium to get out of dodge, get uhauls to BEND is now a cottage industry.

Hey Fuckhead, do you actually say anything that is factual and researched?

It's cheaper to get a UHaul outta bend now then back in May:

Costs for a 26" truck:

Bend to Portland: $223 (down from $287)
Portland to Bend: $109 (down from $148)

Bend to Seattle: $315 (down from $327)
Seattle to Bend: $263 (down from $359)

Bend to Boise: $239 (down from $327)
Boise to Bend: $257 (up from $249)

Bend to Denver: $722 (down from $1075)
Dever to Bend: $1163 (up from $701)

Bend to SF: $307 (down from $656)
SF to Bend:$1076 (up from $865)

Bend to LA: $329 (down from $532)
LA to Bend: $2,347 - same

Bend to Phoenix: $583 (down from $1,068)
Phoenix to Bend: $1,148 - same

Bend to Vegas: $512 (down from $855)
Vegas to Bend: $1,427 -same


Fuckhead.

foz said...

yeah the uhaul rates didn't seem that bad to me. I'm finally emptying out my westside storage and moving it north and a 12ft trailer was 173 and my friend booked the biggest truck for 360.

Bruce email on the way.

Anonymous said...

Grrrr. Dumbfuck not like people question him. Make dumbfuck MAAAAD. Me call you KUNT!

Anonymous said...

Only Goldman-Sachs likes the Forced-Nationalized of ALL US banks, who would have guessed.

***

The Wall Street Journal

Oct. 13, 2008
The U.S. government is set to buy preferred equity stakes in nine top financial institutions as part of its new comprehensive plan to tackle the credit crisis, according to people familiar with the situation. It's unclear how much would be invested in each institution. The move is designed to remove any stigma that might come with a government investment. Not all of the banks involved are happy with the move but agreed under pressure from the government.

Anonymous said...

Bend to Portland: $223 (down from $287)
Portland to Bend: $109 (down from $148)


*

This is the one that counts, most 'evacuees' of BEND,CALIF are PDX bound.

10X, where X=(1/5)x, you do the math.

Anonymous said...

I love it, we talk for weeks about Credit-Swap-Default, and arcane economics, and its ignored, but mention a u-haul, or the cost of female elk piss by the ounce, and everybody in Bend,CALIF has an opinion.

I love Bend.

Anonymous said...

Bend to SF: $307 (down from $656)
SF to Bend:$1076 (up from $865)

Bend to LA: $329 (down from $532)
LA to Bend: $2,347 - same

*

This here is SOME scary shit if 'true', can someone take the time to go to uhaul.com and do a phony reserv, and verify.

If this be true, it means folks are leaving CALI and going somewhere, lets hope its to the midwest and not here.

Anonymous said...

>This here is SOME scary shit if 'true', can someone take the time to go to uhaul.com and do a phony reserv, and verify.

How fucking lazy are you?

"I can't take the 48 seconds to verify it myself. Please... someone... do my work for me"

Anonymous said...

Anonymous poster 1 gives you information. You don't believe it. You want some other anonymous poster to confirm.

If you don't believe #1, why would you believe #2?

And, it's true. I got off my lazy ass.

Anonymous said...

WHO WOULD HAVE GUESSED?


NY Gov: Goldman wants to be full-service NY bank

Reuters - 3 hours ago
NEW YORK, Oct 13 (Reuters) - Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) on Monday applied to New York state's banking department to become a "full service state-chartered bank," Gov David Patterson said, saying this helps cement New ... Campaign Contributors ...

Anonymous said...

Bend to LA: $329 (down from $532)
LA to Bend: $2,347 - same


*

This must be an escape from LA tax. Has anybody verified that this exit from LA is true for all exit's??


Sounds like LA wants trucks real bad.

Also what I said was 'trailers', but trucks are fine, but when #1 has a chance, please do this research for trailers.

thanks, mike

Anonymous said...

#2 this #1, we have found #3, but #4 is pissed, what are we going to about #5?

Anonymous said...

It's all Sue Hollern's fault!

Anonymous said...

Treasury to Invest in `Healthy Indian Cock' Banks, Kashkari Says

Bloomberg - 6 hours ago

By Rebecca Christie and Robert Schmidt

Oct. 13 (Bloomberg) -- Neel Kashkari, the US Treasury official overseeing the $700 billion rescue of the financial system, said government equity injections will be aimed at ``healthy cock'' firms with the young and well endowed.

Paulson lover Kashari, world connoisseur in the finest young cock on wall street expressed interest in special firms who are 'healthy' to bring forth their studs.

Paulson indicates that the best, hardest, and most 'healthy' may meet the President BUSH.

Anonymous said...

NY Gov: Goldman wants to be full-service NY bank

*

We're 'blind' to about any kind of sexual persuasion you might want, so long as you invest over $100k.

'Full Service', all roads lead to Goldman Sachs for a reason. Service, is our aim, and we guarantee the most 'healthy' service.

Anonymous said...

It's all Trudi Ewert's Fault!

Anonymous said...

PLAN 'B', Bush fucks paulson, who fucks USA.

***

Stop the Bleeding, Hank
By Luigi Zingales
Posted October 2008
It’s time for the Treasury to roll out Plan B.

Brendan Smialowski/Getty Images

After pointing a gun to the head of Congress and threatening a financial meltdown in case his plan was not approved, U.S. Treasury Secretary Hank Paulson has finally arrived at the only logical conclusion: His original plan to buy distressed assets will not work.

Desperate for a Plan B, Paulson is embracing the suggestion of many economists: Inject some equity into the financial system by directly buying shares in banks. Unfortunately, the secretary’s move is too little, too late. The confidence crisis is so severe that only a massive infusion of equity capital can reassure the markets that the major banks will not fail, re-creating the confidence for banks to lend to each other.

The piecemeal approach of $100 billion today, $100 billion tomorrow used with insurer AIG will not work. It will only eat up tens of billions in taxpayer money without achieving the desired effect—reassuring the markets that the worst is over.

Simply stated, nothing short of a 5 percent increase in the equity capital of the banking system will do the trick. We are talking about $600 billion. But even if the government is willing to spend this kind of money, three problems remain.

First, to restore the necessary confidence, a capital infusion needs to reduce financial institutions’ risk of default to trivial levels. This implies transforming their existing, outstanding debt (roughly $2 trillion if we just count the long-term bonds) into safe debt. A large fraction of the equity injected will not go to generate new loans, but to provide this insurance to existing debt holders. How much? We can estimate it by looking at the credit default swaps, a form of contract insurance that provides us with the cost of insuring the debt against default. At current prices, the cost of insuring the $2 trillion of outstanding long-term bonds would be more than $300 billion. Consequently, at least half the capital the government will invest in banks will not go to increase new loans, but to bail out Wall Street investors.

Second, a capital infusion does not address the root of the problem: the housing market. If homeowners continue to default and walk away from their houses, the banking sector will continue to bleed. Meanwhile, the animosity the bailout plan generates will induce more homeowners to walk away from their mortgages. Many of them will think, “Why do I have to play by the rules when Wall Street does not?”

This leads us to the third and most important problem. If we bail out Wall Street, why not bail out Detroit (probably another $150 billion) and Main Street? In fact, presidential candidate Sen. John McCain has already talked about buying out the defaulted mortgages to keep people in their homes. Even if we limit ourselves to subprime mortgages, that’s $1.3 trillion. Where does it stop?

We need a different solution: a Plan B. A plan that minimizes the money the government uses in bailing out Wall Street and Main Street to save our precious dollars for a stimulus package, which will be essential to restarting the economy.

Rescuing Main Street

Suppose you bought a house in California in 2006. You paid $400,000 with only 5 percent down. Unfortunately, during the last two years the value of your house dropped 30 percent. So, you now find yourself with a mortgage worth $380,000 and a house worth $280,000. Even if you can afford your monthly payment (and you probably cannot), why should you struggle to pay the mortgage when walking away will save you $100,000, more than most people can save in a lifetime?

However, when the homeowner walks away, the mortgage holder does not recover $280,000. The foreclosure process takes some time, during which the house is not properly maintained and further deteriorates in value. The recovery rate in standard mortgage foreclosures is 50 cents per dollar of the mortgage. Given today’s conditions, 37 percent is probably a safer estimate, meaning that a house with a $380,000 mortgage is worth only $140,000 to its holder.

Foreclosure, in other words, is costly for both borrower and lender. In the old days, when the mortgage was granted by your local bank, there was a simple solution to this tremendous inefficiency: The bank forgave part of your mortgage, say, 30 percent. This creates a small positive equity value—an incentive—for you to stay. Because you stay and maintain the house, the bank gets its $266,000 dollars of the new debt back, which beats the $140,000 it would get through foreclosure.

Unfortunately, this win-win solution is not possible today. Your mortgage has been sold and repackaged in an asset-backed security pool and sold in tranches with different priorities. There is disagreement on who has the right to renegotiate, and renegotiation might require the agreement of at least 60 percent of the debt holders, spread throughout the globe. Furthermore, unlike your local bank, distant debt holders have little idea whether you are a good borrower who has been unlucky or somebody just trying to take advantage of the lender.

Anonymous said...

The prior brings up an interesting question. Now that ALL the money is gone, how do we 'bailout' Detroit?? Given that ALL Michigan factory's are closing and moving to China, what does it mean to Fund GM? Only to employee more Chinese.

Anonymous said...

Even if we limit ourselves to subprime mortgages, that’s $1.3 trillion. Where does it stop?

*

It never stops, lets say $10 TRILLION national debt today, let's make it $100 Trillion in a year, who cares? Certainly not the USA public, they don't have a clue.

Anonymous said...

There's a guy (or gal?) who keeps writing "Fuckhead" all over the place.

It kind of reminds me when Duncan was writing "hypocrites" all over the place.

Now, Duncan may have had a point, and this "fuckhead" writer might have a point, but honestly, you guys are too repititious for my taste.

Let's get some variety in vocabulary.

Feel free to spell things differently.

Some genius here has discovered that cunt can be spelled kunt.

By the way, that's not a term the ladies on this site like to hear.

Can you find something else?

Anonymous said...

Lady's on this site!!! That's a PussyMoron.

There was once a lady name marge, who said guy that shoved barn-wood up his committed suicide, she was wrong, and admitted thus, and since is gone.

In many a year, there is has been many a call for 'ladys' on this site. Where pray tell is BP Tonight?

Anonymous said...

Pussy: An effectionate term for bambist liberals ( think BP & HBM ). Dream of being raped by OREO.

Cunt: Old curmudgeon who hang out by this rock.

Kunt: Pug's, baby-fuckers who voted for BUSH, and support Paulson. Dream of being raped by Cheney/Bush/McCain.

That's it the three breeds of Bend.

Anonymous said...

9 out of 10 Bend Pug's agree that GW-BUSH is the sexiest man alive.

***

Ted Haggard, pastor of the 14,000-member New Life Church in Colorado Springs and head of the 30-million strong National Association of Evangelicals, after being outed as a crystal meth snorting sodomite guilty of paying male prostitutes for sex and drugs, reluctantly admitted, "I am a deceiver and a liar."

Now, isn't it way past time that yet another high profile sodomite, a cocaine abuser shamelessly guilty of hiring male prostitutes to service him, also finally step forward and admit, "I too, am a deceiver and a liar?"

I'm referring, of course, to George W. Bush, current occupant of the nation's #1 political job, the presidency. This may be quite a shock to some readers, but most folks in the Washington, D.C. beltway already know what I'm going to reveal here. Yes, they know that George W. is a bisexual and a procurer of male prostitutes.

Many insiders snicker and laugh ha, ha, ha, at brain-dead Christian evangelicals who actually believe that George W. is a God-fearing heterosexual, born again Christian. As David Kuo, former top White House adviser in the Bush Administration, reveals in his new book, Tempting Fate, the Bush White House team sneers and jokes about the evangelicals so easily deceived by the President. Kuo presents evidence that the Bush people view Christian evangelical leaders and their flocks as ridiculous, silly, nuts, even insane. To the Bush people, Christianity is a farce and Christians are easily duped idiots.

George W. Bush's Tarnished Reputation

George W. Bush, as many Texas politicos could easily tell you, had quite a reputation back in the Lone Star State for both his sexual misconduct and for his snorting of loads of white powder (cocaine) up his nose. The man never held a real job; he shirked his Air National Guard duties, having joined the Guard in the first place only to evade serving in Vietnam. Bill Clinton dodged military service, too, by running off and hiding in England, but Bush hid in plain sight, in an Air National Guard uniform. It's great to have friends in high places to help out in time of need, isn't it?

Bush and Clinton are alike in one other aspect as well. Both used the White House as a Whore House. Bill did sexual things with cigars with a young intern, while George had his muscular, boy-man homosexual lover, Jeff Gannon, stay over many a night in the White House. He and young Jeff Gannon weren't discussing foreign policy and affairs of state all those times in the wee hours of the morning in the presidential bedrooms, I assure you.
President Bush raised eyebrows at a White House press conference by kissing homosexual prostitute Jeff Gannon on top of his head. Gannon was issued press credentials by Karl Rove at Bush’s request and attended the sessions.
This photo shows George Bush affectionately embracing male prostitute Jeff Gannon at the White House right after a presidential press conference. Other photos picture Bush winking at and actually kissing Gannon. (For more info, go on the internet to google.com and search for Jeff Gannon, Talon.com.) Gannon quickly disappeared after these photos came out.

Fabulous, Gorgeous, Queer

Since assuming the presidency, George W. has surrounded himself with gay men. The White House is jokingly referred to as the "Pink House" by the Gay Community. First, there's Karl Rove, Bush's campaign chief. Rove's father was gay, and Rove himself is a queer. According to Fox-TV News, Karl Rove smiled knowingly when a Fox-TV reporter asked him about the special nickname his pal, the President, lovingly has for him.

President Bush calls me "Turdblossom," Rove said. Why "Turdblossom?"—Please, let's not go there.

George W. Bush often commends male visitors to the White House for their "fabulous" clothing. He told the Canadian Prime Minister that his young, male press advisor was "gorgeous." Bush appointed Ken Mehlman, a Jewish homosexual, as the Chairman of the Republican National Committee. Think of it—a homo as titular head of the entire Republican Party!
At Yale University, student George W. Bush roomed with his homosexual pal, Victor Ashe. Later, as President of the United States, Bush appointed his old friend Ashe Ambassador to Poland.
Bush also named his gay roommate at Yale University, Tennessee's Victor Ashe, Ambassador to Poland. As Global AIDS Coordinator, another Ambassador-rank position, Bush chose homosexual activist Mark R. Dybul. Secretary of State Condi Rice administered the oath of office to the new appointee, recognizing Dybul's gay lover and live-in partner, Jason. Condi, a reputed lesbian dominatrix, even permitted the Ambassador's homo partner, Jason, to hold the Bible upon which Dybul laid his hand while taking the oath of office.

President Bush has more homosexuals in his Administration than Bill Clinton, and he's more than accommodated their "special needs." For example, Bush appointed a queer to be the new Ambassador to Romania, then approved the man's sodomite lover to fly off with him in a U.S. aircraft to Bucharest, the capital of that nation, where the gay Ambassador
Secretary of State Condi Rice swears in sodomite Mark R. Dybul as Bush’s Global AIDS Coordinator. First Lady Laura Bush looks on and Dybul’s gay partner, Jason, holds the Bible.
and his lover now contently shack-up together in an embassy-leased mansion, at U.S. taxpayers' expense. The two sodomites even attend official functions together. I wonder what the leaders and citizens of Romania think about that?

Homosexuals Love Bush's Supreme Court Nominees

Bush's biggest coup was his choice to be the new Chief Justice of the U.S. Supreme Court. John Roberts, a gay judge, is not only queer himself, but he's the infamous attorney who represented the entire homosexual community of America in the notorious, landmark court case, Romer v Evans (1996), in which all state laws forbidding acts of sodomy were declared unconstitutional.

The depraved Judge Roberts is so fanatical in his support of sodomy and gay rights he even fought the case for his limp-wristed buddies on a pro bono basis—he didn't even charge the queer groups a dime for his services. Now that's real devotion to a cause, however corrupt.

So, thanks to our "born again Christian President," George W. Bush, we have sitting at the helm of the U.S. Supreme Court one of the most highly acclaimed gay rights attorneys in the world. Whoop-te-do!

What's more, so enamored of Bush and slavish to his every need are evangelical leaders like Pastor Ted Haggard, James Dobson, Pat Robertson, and Jerry Falwell that they ended up enthusiastically throwing their full support for John Roberts' confirmation by the Senate. So, gays owe a great debt of gratitude to the Dobson-Falwell crowd, as well as to George W. Bush, for this generous favor.

When just a few, old-line conservatives complained about Judge Roberts' devoted, pro bono work on behalf of the gay rights movement, Jerry Falwell, always a boot kisser to Republican presidents, jumped in to defend Bush's pro-gay choice. Gay rights, said Falwell, "is not a liberal or conservative value. It's an American value that I would think that we pretty much all agree on." Uh, hold on there, Jerry. Not "all" of us agree on that. In fact, I suspect there are at least several thousand readers of Power of Prophecy newsletter who believe sodomy and its cousin, pedophilia, are both a sin and a crime.

Steamy Lesbian Sex and the Infamous Bear Novel

And there's more. George W. Bush was the first President to have formal public meetings in the Oval Office with the Log Cabin Republicans group—a merry band of GOP queers into politics. He chose for his running mate Vice President Dick Cheney, whose wife, Lynn, authored several novels with what have been called "steamy lesbian sex scenes." Fitting since, as it turns out in real life, the Cheneys' daughter is a full-scale lesbian political activist.

Cheney for four years was served by his Chief of Staff, an odd fella named Lewis "Scooter" Libby. Libby, who has been indicted by a federal grand jury for intelligence crimes, is reputed to be an Israeli secret agent. Libby, or "Scooter" as Cheney and neocon friends so lovingly call him, also is a novelist. In one of his fiction books, he has an account of a caged bear being sexually tormented by human sex fiends with sticks. (Incredible? Yes, but also sickeningly true).

Israel's President Rapes Ten Aides

Bush and Cheney are, as we all know, huge backers of Israel and are extremely supportive of Israeli politicians. Is it not significant, then, that Israel's President, Moshe Katsov, is now under investigation in that country for raping and sexually molesting ten young staffers? The crimes of Katsov, the sex-fiend President of Israel, are perhaps exceeded only by those of Bush and his homoerotic cohorts.

Consider the sexual sadism practiced at Abu Ghraib prison. Video films of Iraqi male, nude prisoners showed many being victimized in acts of brutal sodomy. Naked Iraqi males—many whom later were found to be innocent—were stacked in pyramids, their sexual organs revealed.

Evidence shows that top Bush White House and Pentagon officials, including Secretary of State Rumsfeld, privately viewed these obscene, monstrous movies, no doubt for their own, wicked pleasures. Apparently, Bush, Cheney, Rumsfeld, and all the other Bush Administration perverts get a real rise out of viewing young men screaming in agony as they are ritualistically tortured and sexually abused by sodomite creeps. Shades of the abominable activities of France's notorious sadist, the Marquis de Sade.

Seymour Hersh, acclaimed New York writer who uncovered the My Lai, Vietnam atrocities decades ago, reports that inside the Pentagon's inner sanctum, kept hidden by Bush people from view by ordinary Americans, are horrific videos that beggar the imagination. They include grim scenes of U.S. CIA and military interrogators raping and sodomizing Iraqi children. Hersh has seen them and says the "soundtrack of the shrieking boys" and hearing their mothers, forced to watch, crying out for mercy, made him sick to his stomach.

Bush is a sick, sick man, indeed. Lenin, Trotsky, Stalin, and Beria don't have a thing on this man. Bush and his coterie of homoerotic thugs are craftier and more sinister than anything the brutal Soviet system ever produced. And coincidentally, Lenin and the boys in Russia were all Jews, and they were all homosexuals to boot. Just like Bush and his neocons.

Crushing the Testicles of Little Boys

Once we peer within, we find worse and worse elitist Bush perversion down deep inside the White House rabbit hole. In a debate in Chicago with Notre Dame professor and scholar Doug Cassel, Bush Justice Department attorney John Yoo argued that President George Bush has the full legal authority to sexually torture anyone suspected of being a terrorist. According to Yoo, if Bush desires, he can even order the sexual torture of infants. He can, for example, order interrogators to crush the testicles of a person's child, to get the parent to "confess." It was Yoo who authored Bush's misnamed Patriot Act legislation, authorizing the torture, the suspension of constitutional rights for suspects, and the imprisoning of "potential" criminals at U.S.-run gulag camps.

Extending outside the White House, we find even more evidence of the sicko regime: GOP Congressmen Mark Foley, Danny Hastert, Jim Kolbe, and a slew of others, including Governors, Senators, and Judges. Homoerotic thugs all, and not a few pedophile predators among them. The evil goes back all the way to the Lyndon B. Johnson and the Reagan Administrations. Many of President Ronald "Hollywood" Reagan's White House pals were also sodomites.
Defrocked Congressman Mark Foley, poster boy for rampant homosexuality of Republicans and Democrats alike in Washington, DC.

Jewish Talmud Approves Pedophilia

That most of the Bush queer battalion are Jews is not a surprise. The Jewish Talmud, the rabbis' most holy book, officially endorses pedophile acts by homosexual fiends. The Talmud says that sex with a girl under three years of age, or a minor boy under nine, is permissible. It's not even a "sexual connection," say the rabbis.

Evidently, evangelicals like TBN's Paul Crouch (who gave $425,000 to hush-up his homosexual lover from writing a tell-all exposé of he and Paul's sodomite affair) and the NAE's gay deceiver, Ted Haggard, for years either winked at the White House Bordello, or just avoided the issue.

So, apparently, did Dobson, Falwell, Hagee, Graham, Warren, Hybels, Schuller and all the other evangelical fakesters. For this crowd, it's the old monkey's routine of "see, hear, say nothing."
During the Reagan presidency, with the Senior George H. W. Bush as Vice President, young boys were molested by a ring of high-ranking Congressmen and bureaucrats. To view a full page image click on this article. (See the book, The Franklin Coverup, offered through Power of Prophecy.)

Laura Bush's Revealing Choice

First Lady Laura Bush has surely known about her hubby, George's, sexual infatuation with male prostitute Jeff Gannon. And she must at least suspect the grotesque goings-on of the strange men who carry on their sick and sordid behavior inside the secure work areas of the White House Bordello. A hint of her sure knowledge came a couple of years ago when officials of the Texas Library Association asked Mrs. Bush to identify a single play or book that the First Lady personally enjoyed and was representative of what Laura considered "the best that Texas authors and playwrights had to offer." Madam Bush's revealing choice: "The Best Little Whorehouse in Texas."

Could it be that the best little whorehouse in Texas is actually a bordello, an exclusive yet seedy establishment located not in Texas but in Washington, D.C., a giant, white Greco-Roman mansion sitting behind a handsome wrought iron-fence at 1600 Pennsylvania Avenue?

Anonymous said...

"Consumer's will be helped" if PAULSON buys $750Billion US dollars of Goldan-Sachs stock. Who would have guessed?

Trickle down theory is alive and well in the OR-BOMB-EO white-house. The OREO has expended all his political capital supporting PAULSON and his plan.

***

The Wall Street Journal

Oct. 14, 2008

Treasury Secretary Henry Paulson, flanked by Fed Chairman Bernanke and FDIC Chairman Bair, said that "government owning a stake in any private U.S. company is objectionable to most Americans," but said the alternative "of leaving businesses and consumers without access to financing is totally unacceptable" in remarks made as he unveiled details of the revised financial rescue plan. The U.S., as previously reported, plans to take stakes in large financial institutions as part of a $250 billion effort to inject cash into financial institutions. Also, the FDIC will temporarily guarantee most new debt issued by insured banks.

Earlier, in brief remarks from the Rose Garden, President Bush said the new measures "are not intended to take over the free market, but to preserve it."

Anonymous said...

BUFFET is investing in tomorrows jobs in AmeriKKKa.
*
Berkshire Hathaway unit buys into Chinese carmaker
Associated Press 10/14/2008
HONG KONG -

MidAmerican Energy Holdings Co., a unit of Warren Buffett's Berkshire Hathaway Inc., will invest in Chinese car maker BYD Co

Anonymous said...

Here's an honest take on econ, and some graphs that homer might like ... http://www.financialsense.com/Market/allison/2008/1013.html

***

The World Is Not Ending
But Jim Rogers may be right
BY TONY ALLISON

After one of the most tumultuous weeks in stock market history, it may be best for most of us to take a breather and gain some perspective. The best advice is to get outside and away from the ubiquitous computer screens. Take a walk along a lake, play with your children, savor the changing leaves of fall. Life continues. The world at large is not imploding, although the hedge fund industry may be.

It is certainly understandable that the majority of Americans are frustrated and worried. For decades the purchasing power of the middle class has been shrinking as the dollar continually loses value. In the last decade the costs of life’s essentials have taken off (food, energy, insurance, transportation, medical care, etc.). Now Americans must deal with imploding 401-k’s to go along with imploding housing values. The great era of easy money is ending. The transition back to more traditional ways will be difficult, but not catastrophic. America is resilient and flexible, and most citizens will be willing to make sacrifices if they are equally shared and there is a plan to move forward.

Shared sacrifice?

The issue of shared sacrifice is certainly one that will continue to rage on beyond the next election. Many average citizens feel that Wall Street caused the current crisis and is now first in line to get bailed out. It is laughable when an insider like Jim Cramer suggests to his viewers that they sell enough to cover purchases for 5 years. Most Americans couldn’t liquidate enough to cover the next 5 months! And why would they sell everything after the S&P 500 is already down 40% for the year?

The “experts” are feeling confident about inflation as well. Former Federal Reserve Governor Wayne Angell opined that inflation will not be a problem in 2009 on CNBC last Friday, and was optimistic about a much stronger dollar ahead. Of course inflation is never a problem for the wealthy Wall Street elite who don’t have to raid their IRA’s and 401k’s to make ends meet. The dramatic rise in the cost of living means very little to them.

Let them eat cake

It smacks of the usual “let them eat cake” attitude from Wall Street. The credit crisis will eventually work itself out, but at a cost. That cost will fall on the struggling middle class as its purchasing power is hit yet again. Strong dollar? Not for the middle class. All the government bailouts, and those in the future must come from borrowed or printed money. The US is the world’s largest debtor nation. “Who cares?” screams Wall Street. “Just get it done!” As is true throughout history, the burden will be borne by the innocent rabble that will see retirement dreams and quality of life head south. The decades-long era of easy money is coming unwound.

Easy money - a warning to future generations (unheeded)

One of the few economists to question the Federal Reserve’s actions during the 1920’s was Benjamin Anderson, Senior Economist for Chase National Bank. Immediately following the crash of October, 1929 Anderson summed up the situation and left an explicit warning for future generations. “Basically, our present troubles grow out of the excessively cheap money and unlimited bank credit available for capital uses and speculation from early 1922 until 1928. There is no intoxicant more dangerous than cheap money and excessive credit.” (emphasis added)

Inflation Holocaust

Wall Street “outsider” Jim Rogers is much less sanguine about future prospects for inflation than the mainstream crowd. Rogers created headlines last week in a CNBC interview when he stated, “We’re setting the stage for when we come out of this for a massive inflation holocaust.” Rogers argued that markets do not trust governments’ plans to keep struggling banks alive and markets will only calm down when the companies with bad assets are allowed to go bankrupt. Rogers warned that the current plans, which will force governments to issue more debt, print money and flood the markets with liquidity will flare up inflation after the crisis is over and create worse problems.

“What about all the people in countries that minded their manners, saved their money, didn’t get overextended and now all of a sudden they’re being asked to bail out a bunch of guys on Wall Street who were incompetent at best and some of them crooks? I thought it outrageous that anybody has to step in and bail out a bunch of 29 year olds driving Maseratis.”

“We had the worst excesses in credit markets in world history. We’re going to have to take some pain,” said Rogers.

Safe Haven?

Gold has been known throughout history as a safe haven during troubled times. Sure enough, there is now unprecedented demand world-wide for physical gold and silver. There are shortages and high premiums from the US to Europe, from the Middle East to Asia. In some areas, delivery times are running into the two month range or longer. Other dealers are simply not selling, as they are unsure of obtaining any supply.

At the same time the paper gold price, set on the Globex world-wide trading system (dominated by the NY Comex) has gyrated wildly. It moved sharply lower during last Friday’s chaos on Wall Street, causing analysts to dismiss gold’s value in a crisis atmosphere. It is logical that the world’s central banks would want a lower gold price to calm the jittery markets. Paper gold traded on the Comex appears to be dancing like a puppet to a tune emanating from Washington. That tune may continue until the crisis has calmed. But sooner or later the global rush to physical gold and silver will reconnect precious metals prices to the reality of supply and demand.

William Fleckenstein of Fleckenstein Capital had some interesting thoughts on this “disconnect” recently.

“What I haven’t talked about is gold lease rates have gone through the roof. That appears to be because central banks are becoming credit-adverse and not lending out their gold as they once did. I’ve also heard rumblings about some large holders of gold futures deciding to take delivery, since they’re having trouble buying physical gold in sufficient size. If that’s the case, it could cause a mad scramble at the Comex, because there’s not enough gold to meet the open interest. It looks like physical gold, as compared to paper gold, is rapidly becoming the flavor of the day; meaning that a huge price move may lie just in front of us.”

Inflate or Die

As fall turns to winter and the credit crisis continues to roil the global markets, it may be wise to take a break from all the fear and loathing. Take a longer perspective and turn your focus elsewhere. The Federal Reserve and the other major central banks will not let the global financial system fail without a fight. They will flood the earth with liquidity first, printing money until the presses explode rather than see iconic firms continue to fail. Even now the Fed has already ramped up its balance sheet in historic fashion and it’s far from finished.

1013.1

1013.2

1013.3

Eventually, the situation will stabilize and banks will begin to function again. But the massive injections of capital will ultimately have severe consequences. Monetary inflation will eventually gain strength and become a significant global issue. The precious metals and metals stocks will likely anticipate this wall of inflation well before the traditional statistical indicators.

Over the next few months, the de-leveraging of the financial system will continue apace, as the weak-hand hedge funds finish exiting from the commodity sector, setting up the next dramatic advance driven by stronger hands. The hedge fund sector collapse will continue to be painful to valuations short-term however, as excellent companies are dumped overboard in a wave of forced selling and redemptions.

China will keep spending

As to oil and other commodities, the story is far from over. The great industrial revolutions in China and India are just getting underway. Their young and growing populations (40% of world population) are rapidly moving up the protein and energy chains, demanding (and able to afford) more of each. Rapid infrastructure development will also continue in China, as the government races to pull hundreds of millions into middle class status ahead of rising expectations and political unrest. And sitting on trillions of dollars of trade reserves, China can afford to keep spending.

The global slowdown may put a pause in the prices of commodities, but massive and growing demand from the developing world still lies ahead. The quality natural resource companies with access to energy, metals and food in stable geographic areas should do exceedingly well in future years. Energy stocks are trading at P/E ratios suggesting oil will drop to $30 a barrel or less. The fundamentals looking beyond this crisis scream much higher prices.

The world is most definitely not ending, unless you are a hedge fund leveraged 50-1. The end of their world may be in sight. For investors, just sit tight and enjoy the fading light of fall. For the patient, better days lie ahead.

Anonymous said...

Are ALL Repuglican's "FAGGOTS???" - We report you decide.

*

Ted Haggard, pastor of the 14,000-member New Life Church in Colorado Springs and head of the 30-million strong National Association of Evangelicals, after being outed as a crystal meth snorting sodomite guilty of paying male prostitutes for sex and drugs, reluctantly admitted, "I am a deceiver and a liar."

Now, isn't it way past time that yet another high profile sodomite, a cocaine abuser shamelessly guilty of hiring male prostitutes to service him, also finally step forward and admit, "I too, am a deceiver and a liar?"

I'm referring, of course, to George W. Bush, current occupant of the nation's #1 political job, the presidency. This may be quite a shock to some readers, but most folks in the Washington, D.C. beltway already know what I'm going to reveal here. Yes, they know that George W. is a bisexual and a procurer of male prostitutes.

Many insiders snicker and laugh ha, ha, ha, at brain-dead Christian evangelicals who actually believe that George W. is a God-fearing heterosexual, born again Christian. As David Kuo, former top White House adviser in the Bush Administration, reveals in his new book, Tempting Fate, the Bush White House team sneers and jokes about the evangelicals so easily deceived by the President. Kuo presents evidence that the Bush people view Christian evangelical leaders and their flocks as ridiculous, silly, nuts, even insane. To the Bush people, Christianity is a farce and Christians are easily duped idiots.

George W. Bush's Tarnished Reputation

George W. Bush, as many Texas politicos could easily tell you, had quite a reputation back in the Lone Star State for both his sexual misconduct and for his snorting of loads of white powder (cocaine) up his nose. The man never held a real job; he shirked his Air National Guard duties, having joined the Guard in the first place only to evade serving in Vietnam. Bill Clinton dodged military service, too, by running off and hiding in England, but Bush hid in plain sight, in an Air National Guard uniform. It's great to have friends in high places to help out in time of need, isn't it?

Bush and Clinton are alike in one other aspect as well. Both used the White House as a Whore House. Bill did sexual things with cigars with a young intern, while George had his muscular, boy-man homosexual lover, Jeff Gannon, stay over many a night in the White House. He and young Jeff Gannon weren't discussing foreign policy and affairs of state all those times in the wee hours of the morning in the presidential bedrooms, I assure you.
President Bush raised eyebrows at a White House press conference by kissing homosexual prostitute Jeff Gannon on top of his head. Gannon was issued press credentials by Karl Rove at Bush’s request and attended the sessions.
This photo shows George Bush affectionately embracing male prostitute Jeff Gannon at the White House right after a presidential press conference. Other photos picture Bush winking at and actually kissing Gannon. (For more info, go on the internet to google.com and search for Jeff Gannon, Talon.com.) Gannon quickly disappeared after these photos came out.

Fabulous, Gorgeous, Queer

Since assuming the presidency, George W. has surrounded himself with gay men. The White House is jokingly referred to as the "Pink House" by the Gay Community. First, there's Karl Rove, Bush's campaign chief. Rove's father was gay, and Rove himself is a queer. According to Fox-TV News, Karl Rove smiled knowingly when a Fox-TV reporter asked him about the special nickname his pal, the President, lovingly has for him.

President Bush calls me "Turdblossom," Rove said. Why "Turdblossom?"—Please, let's not go there.

George W. Bush often commends male visitors to the White House for their "fabulous" clothing. He told the Canadian Prime Minister that his young, male press advisor was "gorgeous." Bush appointed Ken Mehlman, a Jewish homosexual, as the Chairman of the Republican National Committee. Think of it—a homo as titular head of the entire Republican Party!
At Yale University, student George W. Bush roomed with his homosexual pal, Victor Ashe. Later, as President of the United States, Bush appointed his old friend Ashe Ambassador to Poland.
Bush also named his gay roommate at Yale University, Tennessee's Victor Ashe, Ambassador to Poland. As Global AIDS Coordinator, another Ambassador-rank position, Bush chose homosexual activist Mark R. Dybul. Secretary of State Condi Rice administered the oath of office to the new appointee, recognizing Dybul's gay lover and live-in partner, Jason. Condi, a reputed lesbian dominatrix, even permitted the Ambassador's homo partner, Jason, to hold the Bible upon which Dybul laid his hand while taking the oath of office.

President Bush has more homosexuals in his Administration than Bill Clinton, and he's more than accommodated their "special needs." For example, Bush appointed a queer to be the new Ambassador to Romania, then approved the man's sodomite lover to fly off with him in a U.S. aircraft to Bucharest, the capital of that nation, where the gay Ambassador
Secretary of State Condi Rice swears in sodomite Mark R. Dybul as Bush’s Global AIDS Coordinator. First Lady Laura Bush looks on and Dybul’s gay partner, Jason, holds the Bible.
and his lover now contently shack-up together in an embassy-leased mansion, at U.S. taxpayers' expense. The two sodomites even attend official functions together. I wonder what the leaders and citizens of Romania think about that?

Homosexuals Love Bush's Supreme Court Nominees

Bush's biggest coup was his choice to be the new Chief Justice of the U.S. Supreme Court. John Roberts, a gay judge, is not only queer himself, but he's the infamous attorney who represented the entire homosexual community of America in the notorious, landmark court case, Romer v Evans (1996), in which all state laws forbidding acts of sodomy were declared unconstitutional.

The depraved Judge Roberts is so fanatical in his support of sodomy and gay rights he even fought the case for his limp-wristed buddies on a pro bono basis—he didn't even charge the queer groups a dime for his services. Now that's real devotion to a cause, however corrupt.

So, thanks to our "born again Christian President," George W. Bush, we have sitting at the helm of the U.S. Supreme Court one of the most highly acclaimed gay rights attorneys in the world. Whoop-te-do!

What's more, so enamored of Bush and slavish to his every need are evangelical leaders like Pastor Ted Haggard, James Dobson, Pat Robertson, and Jerry Falwell that they ended up enthusiastically throwing their full support for John Roberts' confirmation by the Senate. So, gays owe a great debt of gratitude to the Dobson-Falwell crowd, as well as to George W. Bush, for this generous favor.

When just a few, old-line conservatives complained about Judge Roberts' devoted, pro bono work on behalf of the gay rights movement, Jerry Falwell, always a boot kisser to Republican presidents, jumped in to defend Bush's pro-gay choice. Gay rights, said Falwell, "is not a liberal or conservative value. It's an American value that I would think that we pretty much all agree on." Uh, hold on there, Jerry. Not "all" of us agree on that. In fact, I suspect there are at least several thousand readers of Power of Prophecy newsletter who believe sodomy and its cousin, pedophilia, are both a sin and a crime.

Steamy Lesbian Sex and the Infamous Bear Novel

And there's more. George W. Bush was the first President to have formal public meetings in the Oval Office with the Log Cabin Republicans group—a merry band of GOP queers into politics. He chose for his running mate Vice President Dick Cheney, whose wife, Lynn, authored several novels with what have been called "steamy lesbian sex scenes." Fitting since, as it turns out in real life, the Cheneys' daughter is a full-scale lesbian political activist.

Cheney for four years was served by his Chief of Staff, an odd fella named Lewis "Scooter" Libby. Libby, who has been indicted by a federal grand jury for intelligence crimes, is reputed to be an Israeli secret agent. Libby, or "Scooter" as Cheney and neocon friends so lovingly call him, also is a novelist. In one of his fiction books, he has an account of a caged bear being sexually tormented by human sex fiends with sticks. (Incredible? Yes, but also sickeningly true).

Israel's President Rapes Ten Aides

Bush and Cheney are, as we all know, huge backers of Israel and are extremely supportive of Israeli politicians. Is it not significant, then, that Israel's President, Moshe Katsov, is now under investigation in that country for raping and sexually molesting ten young staffers? The crimes of Katsov, the sex-fiend President of Israel, are perhaps exceeded only by those of Bush and his homoerotic cohorts.

Consider the sexual sadism practiced at Abu Ghraib prison. Video films of Iraqi male, nude prisoners showed many being victimized in acts of brutal sodomy. Naked Iraqi males—many whom later were found to be innocent—were stacked in pyramids, their sexual organs revealed.

Evidence shows that top Bush White House and Pentagon officials, including Secretary of State Rumsfeld, privately viewed these obscene, monstrous movies, no doubt for their own, wicked pleasures. Apparently, Bush, Cheney, Rumsfeld, and all the other Bush Administration perverts get a real rise out of viewing young men screaming in agony as they are ritualistically tortured and sexually abused by sodomite creeps. Shades of the abominable activities of France's notorious sadist, the Marquis de Sade.

Seymour Hersh, acclaimed New York writer who uncovered the My Lai, Vietnam atrocities decades ago, reports that inside the Pentagon's inner sanctum, kept hidden by Bush people from view by ordinary Americans, are horrific videos that beggar the imagination. They include grim scenes of U.S. CIA and military interrogators raping and sodomizing Iraqi children. Hersh has seen them and says the "soundtrack of the shrieking boys" and hearing their mothers, forced to watch, crying out for mercy, made him sick to his stomach.

Bush is a sick, sick man, indeed. Lenin, Trotsky, Stalin, and Beria don't have a thing on this man. Bush and his coterie of homoerotic thugs are craftier and more sinister than anything the brutal Soviet system ever produced. And coincidentally, Lenin and the boys in Russia were all Jews, and they were all homosexuals to boot. Just like Bush and his neocons.

Crushing the Testicles of Little Boys

Once we peer within, we find worse and worse elitist Bush perversion down deep inside the White House rabbit hole. In a debate in Chicago with Notre Dame professor and scholar Doug Cassel, Bush Justice Department attorney John Yoo argued that President George Bush has the full legal authority to sexually torture anyone suspected of being a terrorist. According to Yoo, if Bush desires, he can even order the sexual torture of infants. He can, for example, order interrogators to crush the testicles of a person's child, to get the parent to "confess." It was Yoo who authored Bush's misnamed Patriot Act legislation, authorizing the torture, the suspension of constitutional rights for suspects, and the imprisoning of "potential" criminals at U.S.-run gulag camps.

Extending outside the White House, we find even more evidence of the sicko regime: GOP Congressmen Mark Foley, Danny Hastert, Jim Kolbe, and a slew of others, including Governors, Senators, and Judges. Homoerotic thugs all, and not a few pedophile predators among them. The evil goes back all the way to the Lyndon B. Johnson and the Reagan Administrations. Many of President Ronald "Hollywood" Reagan's White House pals were also sodomites.
Defrocked Congressman Mark Foley, poster boy for rampant homosexuality of Republicans and Democrats alike in Washington, DC.

Jewish Talmud Approves Pedophilia

That most of the Bush queer battalion are Jews is not a surprise. The Jewish Talmud, the rabbis' most holy book, officially endorses pedophile acts by homosexual fiends. The Talmud says that sex with a girl under three years of age, or a minor boy under nine, is permissible. It's not even a "sexual connection," say the rabbis.

Evidently, evangelicals like TBN's Paul Crouch (who gave $425,000 to hush-up his homosexual lover from writing a tell-all exposé of he and Paul's sodomite affair) and the NAE's gay deceiver, Ted Haggard, for years either winked at the White House Bordello, or just avoided the issue.

So, apparently, did Dobson, Falwell, Hagee, Graham, Warren, Hybels, Schuller and all the other evangelical fakesters. For this crowd, it's the old monkey's routine of "see, hear, say nothing."
During the Reagan presidency, with the Senior George H. W. Bush as Vice President, young boys were molested by a ring of high-ranking Congressmen and bureaucrats. To view a full page image click on this article. (See the book, The Franklin Coverup, offered through Power of Prophecy.)

Laura Bush's Revealing Choice

First Lady Laura Bush has surely known about her hubby, George's, sexual infatuation with male prostitute Jeff Gannon. And she must at least suspect the grotesque goings-on of the strange men who carry on their sick and sordid behavior inside the secure work areas of the White House Bordello. A hint of her sure knowledge came a couple of years ago when officials of the Texas Library Association asked Mrs. Bush to identify a single play or book that the First Lady personally enjoyed and was representative of what Laura considered "the best that Texas authors and playwrights had to offer." Madam Bush's revealing choice: "The Best Little Whorehouse in Texas."

Could it be that the best little whorehouse in Texas is actually a bordello, an exclusive yet seedy establishment located not in Texas but in Washington, D.C., a giant, white Greco-Roman mansion sitting behind a handsome wrought iron-fence at 1600 Pennsylvania Avenue?

Anonymous said...

have a credit-score of under 700? forget about buying a car. who would have guessed?

**

GMAC's Lending Limits May Add to GM's U.S. Sales Woes (Update1)

By Greg Bensinger and Alex Ortolani

Oct. 14 (Bloomberg) -- GMAC LLC, the lender once owned by General Motors Corp., may deepen the automaker's 18 percent U.S. sales slide this year by limiting car and truck loans to people with the best credit scores.

GMAC said yesterday it's granting financing only to buyers with scores of at least 700, who represent about 58 percent of U.S. consumers. The Detroit-based company, now controlled by Cerberus Capital Management LP, provided 43 percent of GM's second-quarter auto loans.

tim said...

So 42% of people can't buy a car with GMAC financing anymore? Wow.

bruce said...

New polls:

Colorado Quinnipiac/WSJ/WP Obama 52, McCain 43 Obama +9

Ohio SurveyUSA Obama 50, McCain 45 Obama +5

Pennsylvania SurveyUSA Obama 55, McCain 40 Obama +15

Michigan Quinnipiac/WSJ/WP Obama 54, McCain 38 Obama +16

Colorado Quinnipiac/WSJ/WP Obama 52, McCain 43 Obama +9

Minnesota Quinnipiac/WSJ/WP Obama 51, McCain 40 Obama +11

Wisconsin Quinnipiac/WSJ/WP Obama 54, McCain 37 Obama +17

RCP is giving Obama 313 electoral votes. Unless the neocons can produce Osama from his cave, this thing is going to be a route.

Back to work for Merkely lster. One more Dem to help implement Obama's plans, if there is any money left.

Anonymous said...

All the national stuff is interesting and all, but what about local? Who should we be looking at for City Council?

Anonymous said...

City Council?? None of the above.

The entire slate is ALL pro-developers trying to secure permanent non-payment of building permits.

Anonymous said...

Think Global, Act Local.

National understanding is critical, all local action will be dependent.

I noticed last night at monday cheap beer at Deschutes that the ONLY conversation by ALL is the economy.

Everyone is very, very, very worried.

Expect to see a complete contraction in local spending.

Anonymous said...

So 42% of people can't buy a car with GMAC financing anymore? Wow.

*

TT I still find this BULLSHIT, that 58% have a 700, sheeesh, IMHO 80% are below 700. Note, there are a dozen credit reporting firms, and I'm not sure which this is but transworld, and equitec are tough with these numbers. A 700 is somebody that pays his bills, and is never late, ... A rare bird deez days.

Anonymous said...

The pussy don't care about local, cuz local ain't bring no 'cargo' to pussy.

Pussy think OR-BOMB-EO bring big cargo to pussy cult in Bend, Calif.

Pussy going to be very unhappy camper.

No more cargo coming to Bend, CALIF, no matter who is prez. This desert ISL, is not going to see cargo-containers for long time.

bruce said...

Re: Who should we be looking at for City Council?

Not Tom Greene, President of Central Oregon Association of Realtors.

Here is a BULL article on their funding sources:
http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20081001/NEWS0107/810010394/-1/rss

Virtually all are tied to development interests with the exception of JR advocate Jim Clinton.

It's a depressing list of choices. I'll probably go for Gramlich over Greene in Position 1, Clinton over Leonard for Position 4, and the other two are problematic at best.

Especially Position 3, with Kathie Eckman and Linda Johnson, neither of whom I find appealing in any way. I'll probably write myself in.

For Position 2 I'm leaning towards Jodie Barram, although I haven't been real impressed with her leadership of the Planning Commission (can you spell "UGB") over business and insurance lawyer Jeff Eager and virtually unknown recent college grad Dallas Brown. Eager's biggest contributor is COAR, followed by the rather misnamed Central Oregonians for Affordable Housing. COAH has also given at least $2000 to Don Leonard, Tom Greene, and Kathie Eckman. COAR has given these four at least $4000 each.

COAR contribution listing here.

COAH contribution listing here.

They are supposed to show up at a neighborhood meeting Thursday, which should be interesting

A couple more sites with their posiitions on various issues:
http://www.ktvz.com/Global/story.asp?s=9070565

http://kohd.com/page/51479

Candidates contribution and expenditure listings:

Position 1:
Pete Gramlich

Tom Greene

Position 2:
Jeff Eager

Jodie Barram

Position 3:
Kathie Eckman

Linda Johnson

Position 4:
Jim Clinton

Don Leonard

Anonymous said...

Just tell me which candidates are not Realtors, Mortgage Brokers, Bankers, or Builders. That's all I need to know.

Anonymous said...

The Birth Pains of a NEW US DOLLAR.

We are experiencing the most severe financial crisis since 1929. It hurts. There appears to be no relief in site. What began with mortgage defaults has now spread to the derivative markets.

You will hear the term “credit default swaps” by the hour as this mess deepens and worsens. What are credit default swaps?

A credit default swap (CDS) is the most common type of derivative. A credit default swap is similar to an insurance contract protecting the owner against certain financial risks. Are you confused? These types of derivative are very complicated and not even totally understood by those who create them and profit from them. Of course right now these derivatives are failing and no one is profiting. And because of the volume of these derivatives is the reason our banking system and financial institutions are falling apart.

“If Congress is actually going to take steps like freezing foreclosures (which it won't, but which it has no Constitutional authority to do in any case), it may as well take the step actually required here, - to declare all credit default swaps retroactively unenforceable. The CDS's are the real problem, and the only solution is to void them (they were all constructed in secret, without regulatory oversight of any kind, and apparently threaten the world economy.)” bloggingstocks.com, 9-29-2008

For the past half a decade this type of poker has become very popular with folks wanting to “speculate” with the possibility of above average and high returns. And with every risky speculation there is a tremendous downside if the bet fails. We are definitely seeing failure. It is estimated there may be 530 plus trillion US dollars of these types of derivatives on the market. And with this quantity of money turning into losses can you understand now why the financial world as we know it is collapsing?

Do you really want to understand what the heck these 530 trillion plus “credit default swaps” are? Vanity Fair did a great on site interview asking financial types in New York just what these types of derivatives are. Go to the following link below and fill yourself with wisdom by hearing an audio presentation of what a credit default swap is. Good humor. http://www.vanityfair.com/..

What our government is attempting to do now is to prop up insolvent institutions that have bet on these failing derivatives. Insufficient monetary reserves and zero regulations. Credit default swaps are an untamed and unregulated market.

“Don't understand credit default swaps? Don't worry—neither does Congress.” “No one loses—as long as no one tries to cash in on the insurance.” motherjones.com/news/feature

The key to the problem seems to be in the following sentence below.

“No one loses—as long as no one tries to cash in…”

Evidently, everyone now is attempting to cash in.

“Uncle Sam, for all his righteous indignation, is, in fact, the father of all deceptive accounting. The government has arranged its budgeting to keep the great bulk of its liabilities off the books and out of sight. The real liability facing our government is $70 trillion.” Forbes, 9-29-2008

One of the major concerns now is whether the US government might find itself in a position soon where it will not be able to make payments on its large debt. This crisis began about a year ago as professional investors began to lose confidence in large financial institutions and began pulling their money out and calling in loans. Confidence has evaporated gradually and now stepped up to a climax. Many of these credit default swaps were written against mortgage defaults and the owners of these derivatives were therefore liable for the financial loss. To comprehend a number like 530 trillion worth of derivatives is staggering. And as more and more companies and bonds default the money to pay off these debts just isn't there.

What is happening today? Where are we going? Well, for sure we are witnessing the nationalization of the US banking system as one of the answers to this problem. How convenient that these circumstances are occurring now for those wanting to see greater governmental control over our nation.

We are going to witness the ultimate collapse of the US dollar as a result of this crisis expanding. And if I am wrong? Come on folks. The US government has just stated they are going to begin injecting government money into the US banking system and pump whatever money is necessary to sustain the US economy. Where do you think this money is going to come from? Already the US pays 4 billion dollars a day toward foreign debt. You know and I know that when personal debt reaches a certain level it just is not sustainable any more. Try running your household with half your income going to debt. It just doesn't work.

CNBC 2 years ago laughed at the speculation of a new currency called the amero, the New North American Union Currency. Two years ago CNBC laughed heartedly at this idea but now no one is laughing as the United States desperately looks for a solution to the present growing financial bust. The introduction of a new currency in times of a financial crisis is not a new idea, but has occurred before in history when an economic failure called for the elimination of massive accrued debt. Listen to the video below on CNBC. Listen to the laughter. I don't believe anyone is laughing now.

Already, the US dollar is becoming more and more unpopular with every passing day. As the text below states George Soros makes the statement that the dollar was losing its prominence even back in April this year.

“The U.S. Federal Reserve's efforts to encourage bank lending by cutting interest rates has been “impaired by the unwillingness of the rest of the world to accept dollars,” Soros said.” International Herald Tribune, 4-17-2008

What one simple solution is going to bring this disaster to an end? Any sensible person knows that the creation of more and more debt piled on top of itself as the US government is presently doing is only going to make the situation worse. And when the US dollar eventually crashes? What better time then will there be to introduce a new currency. The people will demand it. The laughter back at CNBC is still absent.

In a nutshell, what would be the advantage of creating a new American currency? When the dollar crashes that will be the best time for the introduction of a new currency. The people will demand it because the new currency will be a solution to dealing with and paying off all the huge amassed debt. Government debt and individual personal debt. The new currency will be weaker than the present US dollar and will be used to pay off US debt all around the world. When you think about it the national debt has got to be addressed soon because of its growing size. There is no way it can ever be paid off even partially without a major change in the US currency system. And what do you think will happen to your 401K and personal savings with the introduction of an even weaker currency than the dollar? Are these normal times? Of course not. Another major US institution right now is hanging in the balance. Who would have ever believed even five years ago that General Motors would be on the edge of extinction?

“…GM's spending $3b a year on interest payments, burning through a reported $1b per month…” “After six to nine months, GM as we know it will be dead.”

thetruthaboutcars.com/general-motors-death-watch-181-bankruptcy/

Even the International Monetary Fund is predicting the financial meltdown to persist.

“IMF Predicts Major Global Slowdown Amid Financial Crisis” “The world economy is decelerating quickly—buffeted by an extraordinary financial shock… the IMF says in its latest World Economic Outlook (WEO).” imf.org/external/pubs, 10-8-2008

And here is where the new US currency steps in. The American people will be demanding it in a few months after this financial crisis has grown to the point where it has wiped out 90% of US savings and 401K portfolios.

“The world economy is entering a major downturn in the face of the most dangerous financial shock in mature financial markets since the 1930s, according to the WEO…” “…financial conditions are expected to remain very difficult, even assuming that actions by the U.S. and European authorities succeed in stabilizing financial conditions and in avoiding further systemic events.” “…persistent financial stress and the credit constraints from deleveraging, which could be deeper and more protracted than in the baseline scenario; and the U.S. housing market deterioration, which could be deeper than forecast…” imf.org/external/pubs, 10-8-2008

When the powerful IMF starts predicting economic failure its time to start paying attention. Your response can begin by getting out of debt and buying gold. We are talking about asset preservation here. How many people know that many states are running out of money even as we speak and can no longer even borrow short term debt to keep their governments running? California is desperately in need of a cash infusion. If California were a country it would be the 7th largest country in the world. California needs 7 billion dollars ASAP. Another 7 billion dollars created out of thin air? This debt growth is quickly reaching its climax.

“California is running out of money” “Arnold Schwarzenegger, California governor, says the state may need to turn to US government for financing” “Arnold Schwarzenegger, the California governor, has told US Treasury Secretary Henry Paulson that the most populous state may need to turn to the federal government for short-term financing as a $7 billion sale of notes may be foiled by weak credit markets.” “Mr Schwarzenegger has warned that California might have to delay payments to teachers and other workers, and in the letter he added that California is not alone.” business.timesonline.co.uk, 10-3-2008

On Sunday George Soros was interviewed on CNN for his opinion on the present financial crisis. George Soros said that the days of the United States borrowing from China were over. The position of the United States as financial leader of the world is now compromised. The US debt load is going to dramatically increase in the coming months. Just too much growing leverage. The middle class will be squeezed out and down. The era of the past 30 years are over. A new world order is now being established.

“U.S. May Take Ownership Stake in Banks” “Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials. “ “In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.” nytimes.com, 10-8-2008

The Bank of England has just nationalized the British banking system. Now it is time for the United States to nationalize its banks. How about that. A US government to guarantee all lending between US banks.

“America Is Not Too Big to Fail” "The earthquake will come via a collapse in the market for U.S. government bonds as domestic and foreign investors realize that the only way Uncle Sam can meet his future spending obligations is to print massive quantities of money…”

“Scared yet?” Fortune

It's important now to speak a little on the gold mining equities. As most of you know they cratered this past summer. But now may be a good time to start once again keeping an eye on this market. Because of our financial crisis I am seeing more commentators appear on Fox, CNN and NBC talking about gold. And in addition to recommending gold they are also stating that eventually dollars will begin to pour into this sector as this market will represent one of the very few promising equities left. And of course we are living in the last days of cheap resources and cheap commodities.

Anonymous said...

The only 'fix' is to NULL&VOID all insurance sold in last 5-10 years, ...

The 'game' only works when nobody ever trys to collect on his insurance claim.

Sounds so much like BUFFET's rack to date.

Eventually if you write policy's you have to pay, it should be interesting if GOVERNMENT has the power to NULL&VOID the enforcement of the $500 TRILLION worth of insurance sold.

Either way we're fucked, cuz the entire premise of 'AAA' rating's was on the payment of default, of which case now it looks like the payment can't be made, because its 10X of the worlds GDP.

Anonymous said...

Just tell me which candidates are not Realtors, Mortgage Brokers, Bankers, or Builders. That's all I need to know.

*

NONE, ZILCH, ... ZERO.

Why in the fuck would ANYONE run for orifice in this town, unless you were working for HOLLERN?

The HOA people ( 50% of city hall ) have their racket. The builder's are begging for FREE building permits.

That's it, there is nobody else in the game. The Realtors?? Not much of a lobby, when there aren't any commissions.

Builder's get loans, there's plenty of land, they just need work. The building permit is a 'real' upfront expense, take that away and the bank draws are a life-preserver.

MTG Brokers? Nah, they ain't making any money. HOA is big in this town, Friedman & HO, control most, and they can pull any number out of their ass. The HOA is the backbone of the entire RE fraud, expect 'builders' interest aka HOLLERN to cover that one. If HOA's implode, then the 'good-will' of Bend, CALIF is gone.

With about 4-6 more years of darkness, the powers of Bend, CALIF just need to have politicians stay focussed on priority's.

Priority #1 right now is urban renewal zones, so that hand-laid out areas of HOLLERN owned land pay no property tax.

There are NO candidates who aren't in the pocket of HOLLERN or Knife-River(HT, ...).

Why bother? A liberal fighting this machine? They all left years ago, the old guard like Bruckner put in their time, and all the other old mayors are too busy hiking and xc-country skiing, they paid their dues.

The money will come back, in 6+ years, 'Bend as Aspen' will return, right now its keep Knife-River projects going, make HOLLERN property tax exempt, and PAY no SDC building permits. If you can do this then you can win office, and get all the campaign finance you desire.

bruce said...

Panic in the Repug ranks:

Worst Case Scenario
What an Obama administration and a heavily Democratic Congress would accomplish.
by Fred Barnes
10/14/2008 12:00:00 AM
"


John McCain trails Barack Obama and shows no signs, at the moment anyway, of propelling himself into the lead. Democrats lead in eight Senate seats currently held by Republicans and are close in three others. In the House, Republicans once thought they'd lose only 5 to 10 seats. Now things look worse.

Thanks particularly to the month-long financial crisis, Republicans are in extremely poor shape with the election three weeks away. This means the worst case scenario is now a distinct possibility: a Democrat in the White House, a Democratic Senate with a filibuster-proof majority, and a Democratic House with a bolstered majority.

If this scenario unfolds, Washington would become a solidly liberal town again for the first time in decades. And the prospects of passing the liberal agenda--nearly all of it--would be bright. Enacting major parts of it would be even brighter. You can forget about bipartisanship.

Start with "card check." It would permit organized labor to unionize the private sector without winning a certification election by secret ballot. It's easy to get workers to sign cards saying they want a union, but it's hard to get them to vote that way when labor organizers aren't hounding them. Card check is labor's last hope for more dues-paying union members.

Unions simply aren't popular and neither is card check. But it passed the House last year, only to be blocked in the Senate by a Republican filibuster. In 2009, with Washington controlled by Democrats, it would sail through Congress and President Obama would sign it. After all, neither Obama nor congressional Democrats have bucked organized labor even once.

Then Democrats might go after a longstanding target of big labor, section 14(b) of the Taft-Hartley Act. It allows states to enact right-to-work laws, which bar workers from being forced to join a union. Twenty-two states have right-to-work laws.

The liberal scheme for killing conservative talk radio--the so-called fairness doctrine--would stand an excellent chance of becoming law. It would require radio stations to offer equal time, for free, to anyone seeking to reply to broadcasts featuring political opinion. To remain profitable, many stations would have to drop conservative talk shows, a major medium for communicating conservative ideas, rather than give up hours of free time. Obama has said he opposes the fairness doctrine. But would he veto it? Not likely.

Obama would nominate liberals to fill Supreme Court vacancies--no doubt about that--with the strong likelihood they'd be confirmed. As a senator, he voted against John Roberts and Sam Alito. And free trade agreements would become a thing of the past, given liberal and labor opposition.

What about Obama's health care plan? He's described it as step or two away from a single payer, government-run health system like Canada's. While expensive, its chances of passage would be quite good.

A bad economy, however, might keep Obama and his allies in Congress from passing his entire package of tax increases and his "cap and trade" proposal for curbing the emission of greenhouse gases. Obama has called for increasing the tax rate on capital gains, dividends, and the income of top earners, and raising the cap on payroll taxes.
But tax hikes would worsen, not stimulate, a weak economy. So that might make Democrats balk--except they might not. For liberals, requiring the well-to-do to pay higher taxes is a matter of ideology.

So is cap and trade. It would drive up the cost of energy, another downer for the economy, but Democrats believe it's necessary to save the planet. Besides, the environmental lobby would demand cap and trade's enactment. And environmentalists have as tight a grip on Democrats as labor does. Obama has never crossed environmentalists.

As for foreign and national security policy, there'd be nothing stopping President Obama from doing what he wanted in a liberal-dominated Washington, including a quick troop exit from Iraq and presidential-level talks with anti-American dictators. Congress would go along. The media would cheer.

But who knows? Maybe McCain and Republicans will rally their forces and keep the worst from happening--the worst, that is, from a conservative standpoint. The campaign has changed direction twice in less than two months, first when McCain picked Sarah Palin as his running mate, then when the financial panic hit. There could be a third game changer.

If not, we face the liberal deluge.

Fred Barnes is executive editor of THE WEEKLY STANDARD.


Reality sets in on the neocon experiment--that it's a piece of flaming shit all around.

I like this part: Unions simply aren't popular and neither is card check. But it passed the House last year, only to be blocked in the Senate by a Republican filibuster.

Um, isn't something that took a filibuster to block by definition "popular"?

And that horrible, horrible Canadian socialized healthcare system, with better outcomes for less money--how awful to even think about something like that! I love paying $700/month and still getting to pay 20% of inflated bills for anything I actually do!

The definition of insanity is doing the same thing over again expecting a different outcome. The Repug cons have tried piss on the poor, unregulated market economics during both Reagan and W administrations, with utter disaster as the result. Why would we want that crap to continue?

While, I guess their preferred term is trickle-down, but from the view of the bottom 80% it's more like getting pissed on.

Anonymous said...

“Uncle Sam, for all his righteous indignation, is, in fact, the father of all deceptive accounting. The government has arranged its budgeting to keep the great bulk of its liabilities off the books and out of sight. The real liability facing our government is $70 trillion.” Forbes, 9-29-2008

*

SO true, like the IRAQ war, all 'emergency spending'.

All that Wall-Street is doing, is just what uncle-sam ( congress ) has been doing.

Trickle-Down, the corruption of the USA has trickled down to the banks, insurance, and wall-street. Soon it will trickle down to the city's.

Deception is as AmeriKKKan as apple pie.

Anonymous said...

What an Obama administration and a heavily Democratic Congress would accomplish.

*

Never going to fucking happen, if the OREO wins, then the DEM's will lose the senate.

The amerkiKKKan people have enough sense to not let the DEM's control everything, cuz they'll steal it all.

This economy shit ain't over, and the DEM's are masters of economic 'deception' as mentioned above.

Like the above say's "CHINA AINT GOING TO PAY OUR BILLS NO MORE".

Fred Barnes is just another Pussy.

Anonymous said...

This means the worst case scenario is now a distinct possibility: a Democrat in the White House, a Democratic Senate with a filibuster-proof majority, and a Democratic House with a bolstered majority.

*

It's an ESTABLISHED fact, that people spend TOO MUCH FUCKING TIME ON THE PREZ PUSSY.

The senate & house is what counts, and if the OREO wins, ... the economy will be much worse in the coming weeks, the DEM's will get blamed for this fucking bail-out.

Spend more time on the senate/house races pussy, forget about the prez, that's not where the action is.

Anonymous said...

Merkeley is a terrible candidate, but the DEM party forced him on ORYGUN.

They refused to finance anybody but MERKELY during the primary.

bruce said...

Re: Just tell me which candidates are not Realtors, Mortgage Brokers, Bankers, or Builders. That's all I need to know.

Jim Clinton.

Greene, Eager, Leonard, and Eckman are fully funded by dev interests. Johnson is in the HOA managment business with Friedman. Gramlich is an architect.

Barram isn't directly involved or funded by builders, except for the local union, the Central Oregon Building and Construction Trades Council, and is employed as a substitute teacher. She is heavily involved in the Planning Commission, the Metropolitan Planning Organization (Garzini's pet project for development), Bend 2030, etc. One of her biggest contributors is the League of Conservation Voters.

She has also been on the Boyd Acres Neighborhood Association since 2003. The BANA has strongly opposed using the majority of Juniper Ridge for jobs development, preferring the mixed use development that JR has morphed into.

foz said...

I'm not sure I buy the "get out of debt and buy gold" theory. It might be more prudent right now to get into debt and move those funds into a safer haven (currency). I'm betting that within a month or two you won't be able to tap your line of credit. The dollar will collapse at some point and interest rates will have to go higher just to get anyone to buy our junk bonds. By maxing out your dept now while you still can (just like the government is doing) and moving it into a safer currency you can pay the dept off down the road for pennies on the dollar. If there is still a dollar.

bruce said...

Re:
They refused to finance anybody but MERKELY during the primary.

Duh. He is the establishment candidate. I was for Novick in the primary, but since then I've had a chance to meet and spend some time talking to Merkely and was quite impressed. Smart guy, decent values, and a damn site better than El Gordo.

I met with Gordo and Wyden last year at the Senior Center and while Wyden was helpful and thoughtful, El Gordo was one of the most arrogant asshole politicians I've ever met. Especially on the Iraq war.

bruce said...

Taleb's `Black Swan' Investors Post Gains as Markets Take Dive

By Stephanie Baker

ct. 14 (Bloomberg) -- Investors advised by ``Black Swan'' author Nassim Taleb have gained 50 percent or more this year as his strategies for navigating big swings in share prices paid off amid the worst stock market in seven decades.

Universa Investments LP, the Santa Monica, California-based firm where Taleb is an adviser, has about $1 billion in accounts managed to hedge clients against big moves in financial markets. Returns for the year through Oct. 10 ranged as high as 110 percent, according to investor documents. The Standard & Poor's 500 Index lost 39 percent in the same period.

``I am very sad to be vindicated,'' Taleb said today in an interview in London. ``I don't care about the money. We're proud we protected our investors.''

Taleb's book argues that history is littered with high- impact rare events known in quantitative finance as ``fat tails.'' As the founder of New York-based Empirica LLC, a hedge- fund firm he ran for six years before closing it in 2004, Taleb built a strategy based on options trading to bullet-proof investors from market blowups while profiting from big rallies.

Mark Spitznagel, Taleb's former trading partner, opened Universa last year using some of the same strategies they'd run since 1999. Pallop Angsupun manages the Black Swan Protection Protocol for clients and is overseen by Taleb and Spitznagel, Universa's chief investment officer.

``The Black Swan Protection Protocol is designed to break even 90 to 95 percent of the time,'' Spitznagel said. ``We happen to be in that other 5 to 10 percent environment.''

Options Strategy

The S&P 500 dropped 18 percent last week, its worst week since 1933, on concern that the credit crunch would cripple the financial system and trigger a global recession.

``We got a lot of giggles when we said we're targeting 20 percent moves,'' Spitznagel said. He and Taleb declined to confirm the investment returns listed in the documents, which were reviewed by Bloomberg News.

Taleb's strategy is based on buying out-of-the-money options -- puts and calls whose strike price is either lower or higher than the market price of the underlying security. A put option gives the buyer the right, though not the obligation, to sell a specific quantity of a particular security by a set date. A call option gives the right to buy a security.

The Black Swan Protection Protocol bought puts and calls on a portfolio of stocks and S&P 500 Index futures, along with some European shares. The Black Swan Protocol doesn't rely on commodities, currencies or insurance on bonds known as credit default swaps, Taleb said.

``We refused to touch credit default swaps,'' Taleb said. ``It would be like buying insurance on the Titanic from someone on the Titanic.''

White Swan

The Black Swan strategies are designed to limit losses to a few percentage points. Some investors did better than others depending on when they decided to lock in profits, Taleb said. The returns have enabled Universa to line up more money from investors in the next month, Taleb said.

As a trader turned philosopher, Taleb has railed against Wall Street risk managers who attempt to predict market movements. Even so, Taleb said he saw the banking crisis coming.

``The financial ecology is swelling into gigantic, incestuous, bureaucratic banks -- when one fails, they all fall,'' Taleb wrote in ``The Black Swan: The Impact of the Highly Improbable,'' which was published in 2007. ``The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup.''

Taleb said the current crisis is a ``White Swan'', not a Black Swan, because it was something bound to happen.

``I was expecting the crisis, I was worried about it,'' Taleb said. ``I put my neck and money on the line seeking protection from it.''

Taleb is angry that Wall Street is continuing to use traditional tools such as value at risk, which banks use to decide how much to wager in the markets.

``We would like society to lock up quantitative risk managers before they cause more damage,'' Taleb said.

Anonymous said...

IHTBYB:

Very nice post this week. Especially liked the chart of DJIA over the last 80 years, with trendline built in.

Keep it up.

Anonymous said...

PUSSY this is why the DEM's are toast. NOVICK had to spend & raise his own money.

'Establishment'?? I don't think so, just petty power of the Chairman of the DEM Party of Oregon who decided that ALL the money would go to MERKELEY, like HILLARY-BITCH DEM party cronys decided that MERKELEY was the ONLY CANDIDATE, trouble is he's a loser.

DEM Party are retards, and PUG party of OREGON are faggots.

Yes, I worked on the NOVICK campaign, because all the beer drinkers I knew put their support for him.

NOVICK is smart as hell, and has tons of degrees and is a Rhodes Scholar. He would have made a great Senator for ORYGUN and could have kicked SMITHS ass. I honestly feel the DEM party is afraid of NOVICE, he would have made the lot of them look bad.

Anonymous said...

foz said...

I'm not sure I buy the "get out of debt and buy gold" theory.
[ real gold, not paper gold, buy yes a little silver is better, who can make change on a $2,000 gold coin ?? ]

It might be more prudent right now to get into debt and move those funds into a safer haven (currency).

[ you go against your own argument later ]

I'm betting that within a month or two you won't be able to tap your line of credit.

[ yes, we have been saying that here for years ]

The dollar will collapse at some point and interest rates will have to go higher just to get anyone to buy our junk bonds.

[ This is the problem with debt, eventually OREO will bring in VOLCKER who will rescue the USD with 20% interest rates. This is why DEBT is bad. ]

By maxing out your dept now while you still can (just like the government is doing) and moving it into a safer currency you can pay the dept off down the road for pennies on the dollar. If there is still a dollar.

[ That's a risky bet, because you'll be paying 20% for that money down the road. You specifically said 'line of credit' and they all float, and they're going to float to 20%. Just like 1979, its the ONLY TOOL we have to get foreign investors back to the USA. ]

Anonymous said...

Pussy,

When the rubber met the road, you know why the DEM party didn't give money to NOVICK?? Cuz he's short, they didn't think a 4'11'' candidate for senate is credible, they think that senators have to be over 6' tall, anyways that the best theory we got why the DEM party fucked NOVICK.

Anonymous said...

Imagine that, a few weeks ago McCain was populist, and now Wall-ST hates him. This explains why he's only doing Akyers rhetoric or Rezko. No money in throwing rocks at the boyz who robbed the USA, as they're still the 99% campaign-finance force of USA. That said OREO knows who butters his bread.

***

WALL ST is REFUSING TO GIVE MC-CAIN MONEY.
* OCTOBER 14, 2008

NEW YORK -- Sen. John McCain badly needs the cash infusion and momentum from a Tuesday night fund-raiser in New York. But the senator's recent demonizing of Wall Street made it tough to lure contributors, with Wall Street and corporate executives balancing their aggravation with the Republican presidential hopeful against their rising unease about his Democratic opponent.

The McCain campaign hopes to raise $7 million at the event at a midtown Manhattan hotel. For $25,000, guests get a sit-down dinner and a photo with the Arizona lawmaker and his running mate, Alaska Gov. Sarah Palin. Guests who pay $1,000 can attend a reception.
The Money Race

Compare Obama's and McCain's performances in monthly finance reports.

View Interactive
Reuters

And though a flurry of pledges in recent days reached the event's fund-raising goal, organizers in recent weeks had struggled to fill the ballroom.

The Republican presidential candidate's "populist stuff sounds good on the campaign trail, but it's caused a lot of trepidation," says John Faso, onetime Republican candidate for New York governor and one of the event organizers. Sen. McCain's relationship with corporate America "has hit a bump in the road," says Mr. Faso, who is an attorney.

Even big business names are advising Sen. McCain to quit looking to assign blame for the economic crisis and instead offer more-detailed solutions. "I told the campaign that McCain must do a better job talking about ways to make corporations -- their executives and directors -- more accountable," activist investor Carl Icahn, a McCain supporter who doesn't plan to attend Tuesday's fund-raiser, said in an interview. "Frankly, Obama is doing a better job, and it's resonating for him."

Tonight's fund-raiser, at a time when Sen. McCain has fallen further behind Illinois Sen. Barack Obama in polls and spending, follows a tense month between the Republican candidate and the financial executives and advisers who back him.

During one recent weekend, when the federal government grappled with the looming collapses of financial giants American International Group Inc. and Lehman Brothers, the Arizona lawmaker held a conference call with Merrill Lynch Chief Executive John Thain, J.P. Morgan Chase Vice Chairman James B. Lee Jr. and Blackstone Group CEO Stephen Schwarzman. The men urged a calm reaction to the crisis, to help reassure roiling global markets.

Sen. McCain later declared on the stump: "In short order, we're going to put an end to the reckless conduct, corruption and unbridled greed that have caused the crisis on Wall Street."

At a Sept. 22 town-hall event in Scranton, Pa., Sen. McCain was more specific. "We can't have taxpayers footing the bill for bloated golden parachutes like we see in the Lehman Brothers bankruptcy," the Republican senator said to huge applause. "My friends, the top executives are asking for $2.5 billion in bonuses after they ran the company into the ground."

Shortly after these remarks were carried in news reports, Lehman Brothers CEO Richard Fuld advised a McCain backer that the senator was "inaccurate" in his attack, a Lehman spokesman said. "Dick Fuld did not receive a golden parachute or any severance, and he received no bonus for 2008," he said.

Two days later, on Sept. 24, tensions heightened when Sen. McCain, who had come to New York for the United Nations session, met with key business supporters, including Cisco Systems' CEO John Chambers, retired E-Bay CEO Meg Whitman and private-equity guru Henry Kravis. The campaign invited these executives just the night before to show up at the Manhattan hotel for an emergency meeting.

After the media left a photo op with the group, the financiers gave Sen. McCain an earful. Some of them warned him against getting personal and making Wall Street the scapegoat for the nation's troubles.

Sen. McCain's continuing broadsides against business have damped his ability to raise money for the Republican Party.

The McCain campaign responds that the candidate's latest attacks on corporate America show he is a maverick ready to take on special interests. "It has never hurt John McCain to tell the truth," says policy adviser Doug Holtz-Eakin. "He's running for president to help Main Street, not to be popular on Wall Street."

Sen. McCain has now stopped raising money directly for his campaign, having chosen to take federal funds for the general election. But he has been actively seeking donations to the Republican National Committee, and the New York fund-raiser is aimed at gathering money the RNC can spend on behalf of him and other Republicans. RNC spending has been critical to Sen. McCain's ability to try to compete with Sen. Obama, whose prodigious fund raising led him to opt out of the public-financing system, allowing him to raise and spend unlimited amounts.

To help offset that gap, McCain campaign chairman Rick Davis set a goal of $7 million for Tuesday night's event immediately after the Republican national convention in early September.

When the goal looked difficult to attain, Robert Wood "Woody" Johnson IV, heir to the Johnson & Johnson family fortune and owner of the New York Jets, called for a Sept. 24 dinner meeting at 21, a posh Manhattan restaurant. Mr. Davis attended on behalf of the campaign, and urged the backers to push harder to ensure the fund-raiser was a "huge success."

"No one brought up the elephant in the room -- all of us were losing money as we sat there," one executive says.

Over the next week, as the Treasury's proposed bailout package struggled in Congress, Sen. McCain often talked to some of his Wall Street supporters for their input on how he should respond. The outreach was coordinated by Patrick Durkin, who worked for 22 years at investment bank Donaldson, Lufkin & Jenrette -- since acquired by Credit Suisse -- and recently joined the campaign as a business adviser.

Yet, the McCain campaign seemed to ignore their advice, two executives say. Instead, Sen. McCain last week launched attacks on Sen. Obama's character. "Instead of addressing the economy, John is throwing up a '60s radical at Obama," one supporter said, referring to the Democrat's association with one-time Weather Underground member William Ayers. By week's end, though, Sen. McCain did also give a speech including one suggestion from financial executives: freezing certain 401(k) withdrawals while underlying stock prices were depressed.

Some campaign officials began to worry about the ambitious goals of the New York City fund-raiser, which the campaign decided to hold in the vast ballroom of the Grand Hyatt hotel near Grand Central Station. These officials said McCain national finance chairman Lew Eisenberg, the former chairman of the New York-New Jersey Port Authority, increased participation by reaching out to business leaders around the region in New Jersey, Connecticut and Massachusetts.

In recent days, McCain officials say, interest picked up. By Monday, pledges totaled $7 million. About 1,000 people paid $1,000 each for the reception. The more exclusive dinner with the Republican ticket drew about 200 contributors.

"Reality set in," one fund-raiser said. "Donors realized they could face an Obama administration next month." They are petrified they will face steep increases in personal and corporate tax rates, this person said.

Several executives resisted the fund-raiser because of their own financial pain. But Mr. Fasso didn't let up, telling them, "Obama will be a disaster for you."

Anonymous said...

Wall St Urinal sez "McCain doesn't have a hope in Hell".

Why No Traction for McCain?
He can't win unless economic anxiety calms.
By JAY COST

A week ago last Friday, the House passed the financial bailout bill. At the end of that day, the RealClearPolitics.com polling average stood at Barack Obama 49.2% to John McCain 43.4%. A week later, the RCP average was essentially unchanged: Mr. Obama 49.2%, Mr. McCain 42.9%.
[RealClearPolitics]

Why has the Republican gotten no traction? After all, the congressional spectacle was supposed to be damaging his prospects because (as the story went) Mr. Obama looked so cool and Mr. McCain too hot. Now that it's over, shouldn't his numbers be on the rise?

No. That was never Mr. McCain's problem. Mr. McCain's problem before the bailout is the same as his problem today, enhanced anxiety about the economy. The deal failed to soothe any nerves, so Mr. McCain is still in a weakened position.

We can see this with crystal clarity by looking at what average voters are looking at. Here is a selection of above-the-fold headlines from my hometown newspaper, the Pittsburgh Post-Gazette, from last week:

* "Worried Consumers Are Closing Their Wallets
* "Dow Below 10,000 for First Time in 4 Years"
* "Obama, McCain Fight Over Economy"
* "Stocks Sputter Despite Cuts in Interest Rates"
* "Britain, U.S. Near Fiscal Plan

Jennifer Rubin had a very thoughtful take on what Mr. McCain should do to get himself out of his current polling slump. I'd suggest, however, that so long as headlines like these persist, there is nothing he can do. This race will become close again only if these headlines disappear.

For such a big and diverse country, the essence of America can be summarized fairly simply: It's all about development. Bigger and better, that might as well be our motto. Most of us are probably not just worried about the economy, we're also a little angry about it. This contraction seems vaguely un-American, doesn't it? We don't contract, we grow!

That is what is harming Mr. McCain right now.

So long as the newspapers and the televisions are full of stories about contraction, which dominated every day last week here in Pittsburgh, John McCain's poll position will be weak. That's all there is to it. Conservatives can criticize Mr. McCain for not doing this, that or the other; liberals can praise Mr. Obama for doing this, that or the other. But the fact remains that, as of today, the state of the race is pretty simple: This was an even-steven contest until the markets started to sputter and people started really worrying about the economy. Now Mr. Obama's up six points.

This is infuriating conservatives. If you peruse the conservative blogs or listen to talk radio, you can almost feel their anger. There's plenty of blame to go around, they argue. And of course they're right. Both parties are to blame--but it doesn't matter.

The average voter doesn't understand the intricacies of economic policy. Heck, when you think about it, nobody really understands the economy. So, voters often rely on simple yet sensible metrics to make political decisions about the economy. One of them has been more or less operative since the election of 1840: If the economy tanks during a Republican administration, vote Democrat. If it tanks during a Democratic administration, vote Republican. Applying this rule to 2008, we get the following. Mr. McCain, because he is of the incumbent party, gets the political harm. Mr. Obama, because he is of the out party, gets the political benefit. That's all there is to it.

This rule might not be just, but remember justice is a matter of law. This is a matter of politics, a space where the law does not exist. This rule may not make for the best choice every time, but in the long run it does have some beneficial effects. Above all, it makes the party in charge work hard for growth, which is what the country really wants.

Does that mean this race is over? No. If the bad news dissipates and some good news manages to creep back into the papers and onto the television, Mr. McCain's position should improve at least a bit. But that means that his fortunes are out of his control (the same goes for Mr. Obama). A retooled message might help him at the margin, but to change things he's first going to need some better headlines.

Anonymous said...

The Obama campaign is now distancing itself from Acorn, claiming Mr. Obama never organized with it and has nothing to do with illegal voter registration. Yet it's disingenuous to channel cash into an operation with a history of fraud and then claim you're shocked to discover reports of fraud. As with Rev. Jeremiah Wright and William Ayers, Mr. Obama was happy to associate with Acorn when it suited his purposes. But now that he's on the brink of the Presidency, he wants to disavow his ties.

Anonymous said...

Smith is a LIB, and Merkel's is a RIGHT ... Only in ORYGUN

In Oregon, Rival Candidate Rides Democratic Wave
By WILLIAM YARDLEY

At a time when many Republicans are distancing themselves from their party, Senator Gordon Smith is a study in the extreme, running ads linking himself with prominent Democrats.

Anonymous said...

I sent Steve Novick $25 early on. I'm sure we haven't seen the last of Steve.

bruce said...

Re: As with Rev. Jeremiah Wright and William Ayers, Mr. Obama was happy to associate with Acorn when it suited his purposes.

And McCain just hired a guy who lobbied for Saddam Hussein.

If you actually read about ACORN, you would know they separate questionable registration forms, hand them in in a separate packet and tell the registrars to check them.

Repugs: Only rich white people deserve to vote.

Dems: Any citizen can vote. Whether homeless or owns 12 homes.

You just can't vote more than once. And that rankles Pugs with winter and summer homes.

I think the Constitution leans towards the Dem position.

bruce said...

Re: I'm sure we haven't seen the last of Steve

I sure hope not.

Merk has been building towards this for some time. Steve is more of a "maverick" (a term I've come to despise). I think we need both of them around.

bruce said...

Re: Smith is a LIB, and Merkel's is a RIGHT ... Only in ORYGUN

Gordo likes to turn lib a few months before his campaign starts. Safe votes with no chance of Dems overturning a threatened Pug filibuster.

The thing that kills me is the tactics of Harry Reid. Rather than forcing the Pugs to filibuster an unpopular position, like a timeline to fund the troops or an OK to implement wide warrantless wiretaps, he bends over like a good boy and let's them have what they want.

Fucking maddening. The tactics of a Mo mole.

Anonymous said...

BUFFET soon to be worlds first 'trillionaire'.

***

FDIC program covers $1.9 trillion in debt, deposits
Tue Oct 14, 2008 2:54pm EDT
By Karey Wutkowski

WASHINGTON (Reuters) - The U.S. government's guarantee program unveiled on Tuesday is expected to cover about $1.9 trillion in U.S. banks' new debt and additional deposits, a top banking regulator said on Tuesday.

Federal Deposit Insurance Corp Chairman Sheila Bair called the temporary liquidity guarantee program a "profound and unprecedented action" that will significantly boost confidence in credit markets.

"This action is one of the biggest things the FDIC has ever done, and I think it's just a sign of the times," Bair said during a conference call with reporters.

The guarantees cover a pool of about $1.4 trillion in senior unsecured debt and about an extra $400 billion to $500 billion in transaction deposit accounts, which businesses typically use to meet payroll and pay vendors.

The FDIC guarantees are part of a package of actions the U.S. Treasury Department unveiled on Tuesday in which it will also inject $250 billion of capital into U.S. banks.

bruce said...

Neel Kashkari: A Portrait of the $700 Billion Man as a Young Banker
Posted by Heidi N. Moore

Who is Neel Kashkari?

We’ll get to that in a second. Here is who he is not: Neel Kashkari is not a wunderkind. He’s not an evil genius. He’s not a mastermind.

Kashkari, the 35-year-old interim head of the Office of Financial Stability, has been the source of great worry. Many fear he’s too young and too inexperienced to handle the task of rebuilding the nation’s financial system.

Of course, Kashkari may just have the job for a few months. Paulson made clear he will appoint somebody and try to get the new person confirmed in November, and that person would transition into the next administration.

Forty-five days isn’t a long period in normal times, but in this crisis it’s an age. To get a better understanding of him, Deal Journal spoke to people who knew Kashkari well in his childhood and during his time at Goldman Sachs to find out the character and working style of the man who is managing the nation’s bailout.

Here’s the portrait that emerged: Kashkari is smart, dutiful, detail-oriented, and takes orders well. In the parlance of investment banking, he is a good “execution guy”: He leaves strategy to the bigwigs. But if you give him a project, he will prioritize, delegate and finish it.

These people report he has an amiable manner and is a good, intent listener. He doesn’t make waves and never dominates a discussion; he thinks before he speaks and he lets people express themselves. He is particularly good at presenting complicated ideas and leading team projects that depend on gaining cooperation from others. Those include the Sunrayce project to build a solar car as well as his work on the space telescope. “Neel is just plain good, with a high standard of ethics,” said Dr. Surinder Bhardwaj, a Hindu community priest who is a close family friend to the Kashkaris in Ohio. “This is a responsibility that requires the interest of the nation as a whole, and requires a very strong base of morality, which he has.”

Kashkari comes from a small, tight-knit community of Indian Hindus in Ohio, where his parents had a high profile in the local community. His mother, a pathologist, was known as a community resource. “She’s a good listener and helps guide people out of stressful situations,” said Dr. Bhardwaj. “They are very compassionate people, his parents, and maybe that’s where he’s getting his value system from.” Kashkari’s father is a retired engineer with a bent to public service, particularly in West Africa, where he spearheaded efforts to bring electricity and clean water to poor villages. Kashkari met his wife, Minal, in college at the University of Illinois Urbana-Champaign. They were married in a traditional Indian ceremony in Chicago where participants remember the bride being carried in on a festive palanquin and Kashkari, busy even then, taking the time to put each guest at ease.

Kashkari first worked at Goldman Sachs during the summer between his two years at Wharton, and impressed well enough to get a full time job after graduation. Academically, Kashkari was not outstanding, said a person familiar with the matter, but he appealed to Goldman’s recruiters because, as a former engineer, he was different than the usual aspiring investment banker. Kashkari’s head – shaved bald even then – also differentiated him from the reigning Goldman aesthetic, sometimes mockingly referred to as “The Borg” by rivals. “Everyone at Goldman has a full head of hair and went to prep school and Dartmouth and played lacrosse. That’s not Neel,” said an investment banker who knew him.

Goldman’s investment bankers were most impressed by Kashkari’s science background. His experience working on the James Webb Space Telescope for NASA contractor TRW gave him a comfort with technological jargon that would help Kashkari communicate with technology-company executives. Kashkari also spoke passionately of his entry in a car competition, the 1997 Sunrayce event in which Kashkari’s team built and raced a solar-powered car. His team didn’t win, but it did earn kudos. While other bankers at Goldman would often discuss their project du jour or details of a presentation even in their off-time, Kashkari often discussed cars and the Sunrayce experience.

When Kashkari returned to Goldman Sachs after business school, he worked with senior bankers advising companies in the software sector. As a junior banker, he did not have many responsibilities of his own; it was his job to prioritize and execute on the tasks given to him by others. (In many ways, that has also been Kashkari’s job at Treasury, where the strategy has been set by Hank Paulson.)

Kashkari did well enough that his bosses gave him an obscure sector to research and cover : information technology software, which included antivirus-program makers. The sector included many tiny companies that rarely hired or needed investment bankers, and Goldman Sachs did not have meaningful relationships with the leading companies. Kashkari impressed colleagues with his technical skill. Much of his job, however, was building relationships, a task that, in the world of investment banking, takes years. Although a few mergers and financings emerged from his work, many were not publicly disclosed because of their small size.

After Kashkari had spent only a couple of years covering IT software, the head of Goldman Sachs’s technology group, George Lee, recommended him to Paulson, who had then moved to Treasury.

“I never thought I’d see him in government,” said one banker who knew him. “He enjoyed being a banker and the respect that was conferred on him as being a Goldman banker.”

The rest, as they say, is history.


The comments are quite interesting...

bruce said...

Just a taste of the comments on that article:

"Why are there so many commies posting on the WSJ? Go back to the New York Slimes
Comment by Ted - October 11, 2008 at 11:14 am"

Got to love the Internet and how it brings such disparate folks into contact.

bruce said...

Re: The U.S. government's guarantee program unveiled on Tuesday is expected to cover about $1.9 trillion in U.S. banks' new debt and additional deposits, a top banking regulator said on Tuesday

It's absolutely unfucking-believable how much BushCo has managed to rip out of the US taxpayer in the last few months of a lame duck presidency.

We are going down. The winners are Carlyle and others who don't really give a shit about the US. They operate globally. They left the dollar long ago.

Anonymous said...

After Kashkari had spent only a couple of years covering IT software, the head of Goldman Sachs’s technology group, George Lee, recommended him to Paulson, who had then moved to Treasury.

*

It's all SO DOT-COM, where anybody could get rich, now anybody can run a bank, or rule the world, hell look at sabar, this is truly the age of the possible.

The above, and fucking your boss, and anything is possible in ameriKKKa.

Anonymous said...

Bruce,

My I broke my frame today on my 25+ yr old hardtail mtn bike, I want to buy a full-suspen for the hell.

I note a lot of desperate shit on craigs for bend, any suggestions out there by others??

There are no sales right now, maybe somebody knows??

I think I'm looking around a $2200 budget for a new bike.

I think I want a spec-stump-jump/fsr, or trek fuel ex-8 or equiv, ... something in that world.

mike

bruce said...

Gordo is about to be offed:

Hello Bruce -

Right now, Jeff Merkley’s race for the Senate is the hottest in the country. If he wins, it could mean the difference between President Obama passing his priorities through the Senate or having the Republicans filibuster legislation.

The great part about Oregon is a little help can make a REAL impact -

VOLUNTEER NOW FOR JEFF MERKLEY

Democracy for America endorsed Jeff and made him a DFA-LIST candidate. This means we are supporting Jeff in every way possible. But we need your help.

We are actually so committed to Jeff’s race; I am coming to Oregon to personally help for the last two weeks of the election.

The POWER of DFA is not me coming to Oregon and helping, but the POWER of our local community to come together and pitch in when it really counts. I’ll be there to help organize and manage volunteers but it will be up to YOU make an impact by volunteering!

VOLUNTEER TO CALL OTHER DFA MEMBERS

As y ou know, voting starts next week. Volunteer today!

Thank you for all that you do. Without you there is no Democracy for America.
-AQ

Adam Quinn
Field Director, Democracy for America

:::::

Couldn't happen to a better guy.

Seriously, seeing his BS that he kept loudly and blatantly feeding to skeptical seniors at that meeting last spring was enough to permanently turn me off.

Anyone who tells me he knows something I don't, but he can't tell me about it, is on the blacklist.

Flame away--but Gordo has to go.

He is a Repug Mo moron.

bruce said...

mike--you serious?

NWA is blowing out bikes right now. This years and earlier are gone. For $2200 you can get a fine ride.

Question: uphill or downhill? 6 inches or 4 inches? Light or ...

There are some Teocali's that live to go down, while still rideable up.

bruce said...

Or my choice, a GT Marathon that I can really climb on.

Or could of, 15 years and many pounds ago.

I'm not sure about what's left, though. Trudy knows better than me.

Anonymous said...

The only party in Oregon is DEM, and the only bike shop in Bend is NWA, I think I get the picture.

Anonymous said...

Question: uphill or downhill? 6 inches or 4 inches? Light or ...


Uphill, and then Downhill. 5" of travel ( 120 mm ). Well built.

Anonymous said...

It's all Trudi Ewert's Fault.

IHateToBurstYourBubble said...

Bye bye, Tetherow:

Without financing, Tetherow on hold indefinitely

Hotel won’t open in spring 2009 as planned

October 15, 2008 4:00 am

Stagnant sales and frozen credit markets have indefinitely delayed hotel construction at Tetherow,....MORE

IHateToBurstYourBubble said...

Auctioneer steps in to help move homes
By Andrew Moore / The Bulletin
Published: October 15. 2008 4:00AM PST

After a year trying to sell a residential lot in Bend on his own, attorney Erwin Lawrence is turning to a professional, but not the one you might think. Lawrence chose an auctioneer.

This evening at the Tower Theatre, Bend-based Premier Real Estate Auctioneers Inc. will hold its first auction of local residential and commercial properties in what company owner Cole Davis hopes will become a bimonthly event. None of the properties is distressed, meaning none of the approximately 25 properties featured is a short sale or lender-owned, Davis said.

Instead, they’re properties whose owners are motivated to sell....


Yeah. Good idea. Anywhere but here.

This guy doesn't understand the meaning of the words: THIS IS BEND.

People DO NOT WANT THE TRUTH. And a REAL AUCTION is about TRUTH.

FAKE AUCTIONS WITH RESERVES (ie SALES WHERE THE OWNER IS DELUDED) have happened here before & FAILED MISERABLY.

Remember Pollock? Yeah, FAKE AUCTION, not a single property sold.

Do it NO RESERVE, and we'll get some TRUTH here. But you won't. I'll bet every single seller has a reserve price. Why?

THIS IS BEND

IHateToBurstYourBubble said...

John Rosenthal, president of Realty Marketing Northwest, a Portland-based auction house that has been selling residential and commercial property for 20 years, also expects property auctions to grow in scope as more potential sellers enter the market because of the economy.

Rosenthal’s company has a Crooked River Ranch office building listed for an upcoming November auction. It was previously on the market for $250,000 but is being listed in his auction catalog for $189,000.


"LISTED IN HIS AUCTION"

ie FAKE.

Yawn. Nothing to see here. Same old bullshit.

IHateToBurstYourBubble said...

Greene said auctions aren’t always easy, as it can be emotionally hard for a homeowner to set a reserve price that’s in line with current market values but lower than the amount owed. But given the current climate, he said he’s interested in seeing the auction’s results.

TRANSLATION: This is Bend.

We let the Kool-Aid flow, and now NO ONE can DEAL WITH REALITY.

Nowhere else on EARTH, is it THIS "HARD" to deal with MARKET VALUES (ie REALITY), because NO WHERE ELSE ON EARTH were people dealing with such UNREALITY at Bubble's Top.

We're STILL the 2nd MOST OVERVALUED CITY IN THE USA... and people CANNOT & WILL NOT lower their asking prices.

Every auction a FAKE AUCTION, every titty a FAKE TITTY, every hole a GLORY HOLE.

THIS IS BEND, AND WE DO NOT WANT REALITY.

IHateToBurstYourBubble said...

“It’s fun,” he said. “It brings the fun back. In traditional real estate transactions, it’s stressful. Not always, but it’s a big deal and the only reason it’s so stressful is because so much is unknown. Who knows if the seller will accept the offer, “It’s fun,” he said. “It brings the fun back. In traditional real estate transactions, it’s stressful. Not always, but it’s a big deal and the only reason it’s so stressful is because so much is unknown. Who knows if the seller will accept the offer, if there are other bidders, if I qualify for a loan? Who knows?”

yeah, dealing with REALITY is all sorts of stressful if you've been smokin' the motherfuckin' cracker for 5 solid years.

Not the SAME OLD SHIT:

"Who knows if the seller will accept the OFFER".

"if there are other bidders..."

"if I qualify for a loan?"

ACCEPT THE OFFER? OTHER BIDDERS? WHAT?

Yeah. This IS NOT AN AUCTION. This is a process whereby GIMPY McDUMBFUCK gets all worked up by FAKE TITTIES & CHEAP CHAMPAGNE to make FAKE OFFERS on CRAPTACULAR STD's. This guy is spanking BUYERS & SELLERS in the process. He probably gets paid even if there is no transaction due to "buyer" inability to get a loan.

This is WORSE than selling thru a REALTOR. AT least they ONLY GET PAID if YOU SELL. This guy is spanking people for $5K no matter what. Probably spanking buyers for some sort of ENTRY FEE just to watch this 100% SHAM.

IHateToBurstYourBubble said...

Not the SAME OLD SHIT:

Now the SAME OLD SHIT:

IHateToBurstYourBubble said...

Because of the current economic situation, Davis said he is allowing people to set a reserve price for their properties — a minimum price the seller will accept. If the reserve price is not met, no sale occurs.

“In the past, we were absolute auctions and sold to the highest bidder no matter what, but because of the media coverage of the economy and (people’s concerns), we went ahead and allowed reserves so everyone feels comfortable,” Davis said. “We’re trying to protect people, buyers and sellers, and to do it transparently and honestly.”


Gat Damn It! It's that GOTCHA MEDIA again! FUCKERS!

“I see black people say, ‘It’s not us, it’s the media that makes us look bad.’ Cut the fucking shit. When I go to the money machine tonight, I ain’t looking over my back for the media. I am looking for niggers. Shit. Ted Koppel never took shit from me. Niggers have. You think I got 3 guns in my house ’cause the media is out? ‘Oh shit, Mike Wallace, run!’ Get the fuck out of here, man!”

Chris Rock

IHateToBurstYourBubble said...

Because of the current economic situation, Davis said he is allowing people to set a reserve price for their properties — a minimum price the seller will accept. If the reserve price is not met, no sale occurs.

“With a traditional real estate sale, you put a number on it and negotiate downward,” Davis said. “At an auction, you put a value and negotiate upward, and that’s why it’s successful. It’s the fair market value.”


TRANSLATION: We could not find a SINGLE MOTHERFUCKER in this town ready to deal with REALITY, so we hadda start MAKING SHIT UP! But unlike a REALTOR, where they MAKE SHIT UP & THEN GO LOWER, we gonna MAKE SHIT UP & GO HIGHER! We makes sure EVERY SINGLE BUYER GETS FUCKED! It make me feel like a LAWYER again!

tim said...

Arrowood not even paying its bills for the Tetherow hotel design work. No money.

Anonymous said...

That auction smells like crap to me. Like an indoor Realtor instead of an outdoor Realtor.

Anonymous said...

Do it NO RESERVE, and we'll get some TRUTH here. But you won't. I'll bet every single seller has a reserve price. Why?

THIS IS BEND

*

Truth in Bend, Calif?? I don't think so, We have seen developers, builders, Dealers, committing suicide over RE in Bend, Calif, now lawyers, ... Its about time.

Anonymous said...

Arrowood not even paying its bills for the Tetherow hotel design work. No money.

*

PAPE took over the financing about six months ago, they got to be cash strapped, got a good controlling interest on terms.

But now, not even PAPE can find OPM, its game-over.

Tetherow went through over 1/2 dozen private lenders in the last 3-5 years. Now even deep local pockets can't put Humpty back on the wall.

Property Taxes are coming due on the bitch, that's public record online, watch that and see if they're be paid, and by whom.

Anonymous said...

"now lawyers"

What do you mean by that?

Anonymous said...

I think they have to auction reserve. They can set reserve to the banks short sale limit.

What would be the point of no reserve and selling below bank?

The bank could do that themselves and doesn't want to.

Everybody is waiting for the housing bail-out, that isn't coming.

RE paralysis, its will be years before the US government puts together a new lending organization.

You can now get real McMansions in Broken-Top for around $350k, that be about 1/3 of high, and still not selling.

Anonymous said...

Tetherow is looking for CASH investors. Yeah right. They admit they are sitting on their hands waiting for money (but oddly say they are till "spending money").

Insist that a hotel will happen and it'll be wildly successful.

Meanwhile, other resort hotels remain unbuilt. Will those be wildly successful too?

Anonymous said...

Brokeback Top houses are not going for $350 yet. In the Parks, you can get a 2200sqft for that. In Skyliner Summit, you can get a 3000sqft for that. But Brokeback Top is still stuck up at $500 for houses. Duplexes, yeah, but not McMansions by a long shot.

Sellers are not yet willing, although I think you're right that that's what they are WORTH, and where they will go.

Anonymous said...

Tetherow needs to be added to the RIP list. It is dead on arrival.

Anonymous said...

I knew Tetherow was dead when I saw that Heidi left.

LavaBear said...

I'm wondering if all of the law firms that get to fight over this clusterfuck will do the work for free golf? Not much else left.

Anonymous said...

I wonder if Heidi ever got paid?? She's the hottest MILF in Bend, Calif.

Did she bail? Is she even still here doing her service?

Anonymous said...

It's all Hollern's Lawyers fault.

Anonymous said...

We makes sure EVERY SINGLE BUYER GETS FUCKED! It make me feel like a LAWYER again!

*

What do you mean by that? Attorney Disparagement is a crime in Bend, Calif.

Anonymous said...

Hope she got paid. Heidi's got her own business. Saw her a month or so ago running some event downtown.

Anonymous said...

Dominoes are falling, Iceland, now Hungary, soon HollernVille.

***

Hungarian Stocks, Currency Drop on Icelandic Concern (Update1)
Bloomberg - 2 hours ago
By Zoltan Simon Oct. 15 (Bloomberg) -- Hungary's benchmark stock index and currency plunged as investors pulled out on concern the eastern European country may be the next to be engulfed by the financial crisis that has battered the Icelandic economy

Anonymous said...

Excellent article in the WashPost, "What Went Wrong."

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/14/AR2008101403343_pf.html

bruce said...

Military deployed inside US borders:

Brigade homeland tours start Oct. 1

3rd Infantry’s 1st BCT trains for a new dwell-time mission. Helping ‘people at home’ may become a permanent part of the active Army
By Gina Cavallaro - Staff writer
Posted : Tuesday Sep 30, 2008 16:16:12 EDT

The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys.

Now they’re training for the same mission — with a twist — at home.

Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.

It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.

But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.

After 1st BCT finishes its dwell-time mission, expectations are that another, as yet unnamed, active-duty brigade will take over and that the mission will be a permanent one.

“Right now, the response force requirement will be an enduring mission. How the [Defense Department] chooses to source that and whether or not they continue to assign them to NorthCom, that could change in the future,” said Army Col. Louis Vogler, chief of NorthCom future operations. “Now, the plan is to assign a force every year.”

The command is at Peterson Air Force Base in Colorado Springs, Colo., but the soldiers with 1st BCT, who returned in April after 15 months in Iraq, will operate out of their home post at Fort Stewart, Ga., where they’ll be able to go to school, spend time with their families and train for their new homeland mission as well as the counterinsurgency mission in the war zones.

Stop-loss will not be in effect, so soldiers will be able to leave the Army or move to new assignments during the mission, and the operational tempo will be variable.

Don’t look for any extra time off, though. The at-home mission does not take the place of scheduled combat-zone deployments and will take place during the so-called dwell time a unit gets to reset and regenerate after a deployment.

The 1st of the 3rd is still scheduled to deploy to either Iraq or Afghanistan in early 2010, which means the soldiers will have been home a minimum of 20 months by the time they ship out.

In the meantime, they’ll learn new skills, use some of the ones they acquired in the war zone and more than likely will not be shot at while doing any of it.

They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.

Training for homeland scenarios has already begun at Fort Stewart and includes specialty tasks such as knowing how to use the “jaws of life” to extract a person from a mangled vehicle; extra medical training for a CBRNE incident; and working with U.S. Forestry Service experts on how to go in with chainsaws and cut and clear trees to clear a road or area.

The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.

The package is for use only in war-zone operations, not for any domestic purpose.

“It’s a new modular package of nonlethal capabilities that they’re fielding. They’ve been using pieces of it in Iraq, but this is the first time that these modules were consolidated and this package fielded, and because of this mission we’re undertaking we were the first to get it.”

The package includes equipment to stand up a hasty road block; spike strips for slowing, stopping or controlling traffic; shields and batons; and, beanbag bullets.

“I was the first guy in the brigade to get Tasered,” said Cloutier, describing the experience as “your worst muscle cramp ever — times 10 throughout your whole body.

“I’m not a small guy, I weigh 230 pounds ... it put me on my knees in seconds.”

The brigade will not change its name, but the force will be known for the next year as a CBRNE Consequence Management Response Force, or CCMRF (pronounced “sea-smurf”).

“I can’t think of a more noble mission than this,” said Cloutier, who took command in July. “We’ve been all over the world during this time of conflict, but now our mission is to take care of citizens at home ... and depending on where an event occurred, you’re going home to take care of your home town, your loved ones.”

While soldiers’ combat training is applicable, he said, some nuances don’t apply.

“If we go in, we’re going in to help American citizens on American soil, to save lives, provide critical life support, help clear debris, restore normalcy and support whatever local agencies need us to do, so it’s kind of a different role,” said Cloutier, who, as the division operations officer on the last rotation, learned of the homeland mission a few months ago while they were still in Iraq.

Some brigade elements will be on call around the clock, during which time they’ll do their regular marksmanship, gunnery and other deployment training. That’s because the unit will continue to train and reset for the next deployment, even as it serves in its CCMRF mission.

Should personnel be needed at an earthquake in California, for example, all or part of the brigade could be scrambled there, depending on the extent of the need and the specialties involved.
Other branches included

The active Army’s new dwell-time mission is part of a NorthCom and DOD response package.

Active-duty soldiers will be part of a force that includes elements from other military branches and dedicated National Guard Weapons of Mass Destruction-Civil Support Teams.

A final mission rehearsal exercise is scheduled for mid-September at Fort Stewart and will be run by Joint Task Force Civil Support, a unit based out of Fort Monroe, Va., that will coordinate and evaluate the interservice event.

In addition to 1st BCT, other Army units will take part in the two-week training exercise, including elements of the 1st Medical Brigade out of Fort Hood, Texas, and the 82nd Combat Aviation Brigade from Fort Bragg, N.C.

There also will be Air Force engineer and medical units, the Marine Corps Chemical, Biological Initial Reaction Force, a Navy weather team and members of the Defense Logistics Agency and the Defense Threat Reduction Agency.

One of the things Vogler said they’ll be looking at is communications capabilities between the services.

“It is a concern, and we’re trying to check that and one of the ways we do that is by having these sorts of exercises. Leading up to this, we are going to rehearse and set up some of the communications systems to make sure we have interoperability,” he said.

“I don’t know what America’s overall plan is — I just know that 24 hours a day, seven days a week, there are soldiers, sailors, airmen and Marines that are standing by to come and help if they’re called,” Cloutier said. “It makes me feel good as an American to know that my country has dedicated a force to come in and help the people at home.”

———
Correction:

A non-lethal crowd control package fielded to 1st Brigade Combat Team, 3rd Infantry Division, described in the original version of this story, is intended for use on deployments to the war zone, not in the U.S., as previously stated.

Anonymous said...

WTF Bruce, too much discussion on Bend?

Anonymous said...

Bruces POST may have relevance, the below Canadian Economist is predicting RIOTS in American streets, when the depth of job-loss, and retirement accounts become commonly known, and that OUR government orchestrated the fraud.

***

Expect violence as depth of corruption becomes known
Posted By BERT HIELEMA
Posted 3 hours ago


Even though the cause of the 1929 crash is still shrouded in a cloud of mystery, and still fathers many opinions, there are some very pointed indications what caused the End the Great Boom of the first decade in the year 2000.

In all deep slumps -- those in 1929 and subsequent ones -- human foolishness, bordering on downright dishonesty is close to the real reason. This one is no exception. After all the love of money is the root of many evils.

It is beyond argument that our society generated the largest leveraged asset and credit bubble in the history of humanity.

Bubbles abounded: there were a housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, and hedge funds bubbles.

Now they all are exploding like a cluster time-bomb in every corner of the globe, each bomb setting off an avalanche, every one growing in size as it thunders downhill: falling real estate values causing greater unemployment, resulting in fewer sales, feeding more lay-offs, multiplying store closures, throwing more people out of work, which .....

In the United States, there are 17 square feet of retail space for each person there. In Canada, we have a mere 10 square feet per capita. The U. S. depends for 70 per cent on people buying stuff. Europe and Canada has a 55 per cent ratio there.

In this new economy, a major adjustment in the U. S. will take place with plummeting property values, vacant malls and empty office towers, thanks to bank mergers. GM and Chrysler combine for only one reason: eliminate jobs and use less factory space.

So who is to blame for this obese bloatedness? AIG, the American International Group, is one culprit.

Here's how it played out. Banks must have reserves for the loans they make: the riskier the loans the more capital they must keep in reserve.

Normally risky liars' loans -- no down payment, no job or income verification

--

Continued After Advertisement Below

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would

never have been

approved. However the smart people at AIG invented a way to get around the rules, via unregulated insurance contracts,

known as credit default swaps or CDSs.

It became as simple as a call to your friendly AIG broker, who used incredibly sophisticated computer models to sell the sub-prime securities as Triple AAA investments, with five year terms at a premium of two per cent of face value.

Thus on a $100,000 loan, a bank would create a profitable mortgage out of thin air, earning it six per cent or a minimum of $30,000 less $2,000 to AIG = $28,000 in pure profit.

Although AIG's credit default swaps were really insurance contracts, AIG didn't put up any capital as collateral on its swaps, so there was no real capital cost to selling these: it simply was a license to print money.

AIG could book the profit from a five-year credit default swap as soon as the contract was sold, based on the expected default rate, which was supposed to be zero per cent.

The broker who sold the swap was paid a bonus at the end of the first year -- long before the actual profit on the contract was made.

With this false facade in place, all banks were able to assure their regulators they were holding fully insured, triple-A credits, and so the bank could lend to the full extent allowable, while the broker could book hundreds of millions in "profit" without having to pony up billions in collateral.

It was pure fraud. The default rate on mortgage securities underwritten in 2005, 2006, and 2007 turned out to be multiples higher than expected. And they continue to increase. Now these mortgages are worth less than $0.15 on the dollar.

The result was that enormous amounts of capital were created out of thin air and tossed into global real estate markets, on which the Wall Street people collected million dollar commissions. Paulson in Washington -- himself a Wall Street veteran -- bailed his buddies out with trillions of dollars of taxpayers' money.

While the rich benefit, the poor middle class pays the bill, which, I think, will result in a revolt of the small guy, because there is a tremendous amount of anger out there, fed by John McCain and Sarah Palin.

I would not be surprised if there be violent clashes, even before the next U. S. election, when the full extent of these manipulations become plain to all and the market melt-down sinks in.

We live in different times. The adjustment from the old to the new always creates friction. Let's hope that the transition is gradual and not abrupt.

bruce said...

RE: Uphill, and then Downhill. 5" of travel ( 120 mm ). Well built.

Teocali Elite. They have a small and medium left. Retail $1800, blowout price $1250 fro Tru personally.

http://www.mongoose.com/mtn/ProductDetails.html?id=2608&enc=mtn|

http://www.mtbr.com/cat/bikes/allmtn-full-suspension/mongoose/teocali-elite/PRD_365065_1547crx.aspx

bruce said...

Re: WTF Bruce

It's striking--this is the first ever military deployment within our borders. Interesting timing.

I'm trying to get the reserve prices for that auction tonight. They don't liet them on their website or in the emails they send you.

Anonymous said...

"What Went Wrong."

*

"AmeriKKKa What went wrong" barlette&steele 1988, credit-swap then, credit-swap now.

S&L (McCain) then, MTG (McCain) now.

Anonymous said...

Americas won't riot until their cable TV is cut off.

Anonymous said...

The 'cable TV' will be one of the first non-essentials to go, after comic book purchases.

Anonymous said...

The average cable bill is what? $80/mo??

Nobody is going to able to do that during the depression, I still use rabbit ears for signal. That said I don't watch TV, but I'll pull ol krusty out of da closet tonight and plug in rabby for da debate of OREOvsCAIN.

TV is the problem, forget about cable, folks are not going to be able to pay their electric bill.

Like Marge sez, beans, bullets, and booze. Those are the three essentials.

We'll not see riots in 'bend,calif' say like they'll see in detroit, but we already know that theft here will sky-rocket.

Un-employment? 30%, then you have the retirement problem where so many 401k's have been wiped out we brought in the dead&dying for years, to suck them dry, now we'll have to have tent housing to house all the homeless old-farts.

Anonymous said...

>>The 'cable TV' will be one of the first non-essentials to go, after comic book purchases.

Are you kidding? TV will be the last to go. You ever see a kid try to give up a pacifier?

bruce said...

Re: ...now we'll have to have tent housing to house all the homeless old-farts


Our City Council is already waay ahead of the curve, tonight we have this on the agenda:

7. An Ordinance Amending the City of Bend Development Code by Changing the Text of Chapters 1.2, 2.2, & 3.6 to Allow Temporary Housing as a Conditional Use in the CB, CL, & CG Zones; Declaring an Emergency and Prescribing an Effective Date of November 5, 2008 (Issue Summary) (Ordinance) (Planning Commission Recommendation) (Correspondence)

A. Hold a Public Hearing

B. Consider the first reading of Proposed Ordinance

In 2003, the City Council established a definition for Temporary Housing, added Temporary Housing as a permitted and/or conditional use in various zoning districts, and established a list of Special Use Standards for Temporary Housing. In 2006, the City Council replaced the Zoning Ordinance with the Development Code. Although the list of Special Use Standards for Temporary Housing was carried forward into the Development Code, it was placed in the wrong subsection of the Development Code, and the definition for Temporary Housing was inadvertently omitted. Furthermore, Temporary Housing was inadvertently omitted from of the table of permitted uses in the CB, CL, and CG zones. In order to correct these errors, the Planning Division initiated a package of text amendments to Chapters 1.2, 2.2, and 3.6 of the Development Code. Based on the Planning Division's research on regulations for homeless shelters in other Oregon cities, as well as feedback from affected property owners and other interested parties, several options were discussed at the initial Planning Commission public hearing. Ultimately, the Planning Commission recommended amending the code to make Temporary Housing a conditional use in the CB, CL, and CG zones.

bruce said...

Interesting remarks during a conference call with Janie Dimon, who is rumored to the the Treas Sec in an Obama administration:

http://calculatedrisk.blogspot.com/2008/10/jamie-dimon-if-you-are-not-fearful.html

Jamie Dimon: The origination business, and I think it's true for a lot of people in the industry, Meredith, people have gone back to old fashioned 80% LTV, real verified income, more disciplined appraisals, and then in some areas they won't even go to 85% LTV because of expected home decreases so we are not at 85% in California, Nevada, or Florida we're at 65. So that's why it's down. I think it's true for us and everybody else. Almost everything being originated is eligible for Fannie Mae, Freddie Mac, or FHA. So therefore you have this great reduction. Obviously the quality of that stuff is going to be much higher.

Marge said...

It striking--this is the first ever military deployment within our borders. Interesting timing.

This is called Martial Law getting ready to strike an Amerikkan town near you.

I am still out of town and unable to use the internet much. I haven't left, just haven't felt like talking politics.
I am still feeling the sting of the rumor. I have still not had confirmation either way though.

Store food, PM and bullets. Better have a gun for all those bullets.

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