My son, sit upon this lotus and prepare to be enveloped by the truth. First, we must chant "Ohmmmmmmmmmmmm!" Second, we must spit in a dishrag and bury it next to a stump, under a full moon. Third, and last but not least, we must pay homage to Alan "The Terminator" Greenspan and his bearded acolyte Ben "The Beneficent" Bernake.
Sometime in the foggy past "The Terminator" banished that nasty addition to borrowed money once known as,ugh, interest, thereby freeing the borrowing power of the good, bad and the ugly to purchase large and misshapen domiciles known as McMansions. The Terminator's magic, as practiced by the prestidigitators of Wall Street, allowed millions of people earning, oh say $2000 a month to buy a house worth $500,000 and to pay only $600 a month. Then a year or so later when the mortgage jumped to $1500 a month, thereby assuring the lucky family the choice of buying gas or food but not both, the Street cheered because in their cleverness they had bundled these magic mortgages into baskets of securities and sold them off to other practitioners of the dark art of FINANCE in all parts of the known world...and perhaps even some unknown parts.
The Terminator rested, and bathed in adulation by the Street, retired to the lecture circuit to make large sums of money speaking in tongues which nobody understood.
Part2
A few years pass...and as Warren Buffett is fond of saying, "When the tide goes out you find out who's swimming naked." Turns out most of Wall Street was buck nekked! It seems that all those queer and exotic securities made their way back to the very same banks and investment houses that had sold them. Unfortunately when the current owners demanded satisfaction the banks and investment houses, upon realizing that these demands would cause them severe depletion of capital, known in the parlance of the Street as "bankruptcy", begin to tear their garments and cry, "The end is near won't someone save us?" For a time, 2 days perhaps, it appeared that these money changers would in fact disappear from the face of the earth and if that were actually to happen, many believe the world would be a far better place.
But alas it was not to be, for as the new day dawned on the terrified CEOs, CFOs and general Wall Street denizens a shout was heard at the far end of the Street, "It's Him!, it's Him!, He's coming, He's coming!"
And so it was that Ben "The Beneficent" Bernake arrived to bestow his hundreds of billions of dollars in taxpayers money into the waiting arms of the now smiling money changers. And oh how they danced and whirled and rejoiced and begin to believe that perhaps their time was not over but simply at a new beginning.
So they begin to buy and sell, slowly at first and with some trepidation because, in fact their main indicator of success, the all holy Dow, was still 2000 points off its 52 week high. But as the sun begin to set on this amazing scene and it became apparent that "The Beneficent" along with his Sancho Panza like sidekick, Henry "The Bald" Paulson would continue to dole out many more billions of taxpayer's dollars far into the night, these Masters of the Universe knew that upon arising from a good nights' sleep they would go to their offices and buy, sell and trade once more. And so they did that next morning with such gusto and joy in their hearts as to cause the severely beaten down all holy Dow to rise a few hundred points.
So grasshopper, now you know how it was possible for a Bear to shit in the woods and Wall Street to come up smelling like a rose.
The End
Tuesday
Wall Street Needs You...Well, Actually Just Your Money.
Sunday
The Battle is Joined. Who to believe?
To build or not to build, that is the question. Activists say danger lurks on these steep slopes and they have pictures to prove it. Developers say OK...but cost trumps safety. Developers and their local political enablers say there have been few deaths and not that much property destruction and the cost of pre-construction site surveys to determine safety are not cost effective.
What is missing in this debate? The inclusion of argueably the most important party...the property owner. Has anybody who presumes to speak to the interests of the buyer actually asked any buyers how they feel about having to add 2 or 3 thousand dollars to the cost of building to insure that they can make an informed decision about safe building concerns.
Is it reasonable to believe that someone willing to spend $300,000 to a million or more dollars for a new home would chose to ignore the benefits of a site specific survey and steep slope ordinances that might well result in safer construction of the home? If this information could be had for a few thousand dollars are we to believe that developers and Realtors are working in the best interests of their clients when they suggest these these very same clients should be kept unaware of the dangers that could be avoided by a site specific geologic survey.
The truth of the matter is much simpler than any interest in the client's needs. The fact is that these steep slope ordinances would result in some property being deemed not safe to sell or develop. Imagine that...unsafe to develop. Do you think that this information might just be of interest to the prospective buyer? Outrageous is the only word that can be used to describe the self serving choice of developers, Realtors and numerous political hacks working in concert to keep this information as far away from the prospective buyer as possible. Why would they do this? Greed...plain and simple greed. That very same business model that is responsible for our current economic downhill slide.
Friday
Is Rep. Mitch Gillespie, R-McDowell out of his mind?
The cost of building a home on a mountain slope in WNC could cost you anywhere from a few hundred thousand dollars to however many million you might be prepared to spend. In any case you will spend thousands for site prep and sewer and water. A few hundred thousand to whatever you budget for in actual construction and many more thousands for flooring,cabinets and appliances for the kitchen and bath fixtures and furnishings and probably thousands more for landscaping.
Just for the sake of argument let's say the overall cost is going to be $350,000 to build your dream home, probably a slightly low figure for the average cost of construction in these mountains. How important would an additional $3000 expense play in your budgeting if that $3000, less than 1% of the total cost, could assure you that the $350,000 you were planning to spend would not be at risk either physically or financially?
Why don't we ask Mitch Gillespie? Mr.Gillespie, since you are on record as being opposed to any steep slope regulation because having to hire an engineer or presumably a geologist to evaluate slope stability and appropriate design would be too costly for developers and home buyers, can we assume that you would also counsel against buying insurance because it too adds thousands of dollars to the expense of home ownership?
Actually there is no insurance available to cover any loss caused by earth movement, man made or otherwise. Really the only protection you can buy is the initial site specific survey by a professional that tells you if construction is safe and your investment is likely secure. This one time cost of a few thousand dollars is arguably the most important money that you could spend and yet we have some lame-brain elected official from McDowell County telling us otherwise. All I can suggest is that it is a very good thing that Mr. Gillespie is in politics and not financial planning.
To argue against site specific surveys as protection for the home buyer is dumb and worse potentially dangerous for the eventual occupant of the home. To argue against a 1% or less expenditure for what is in effect the only insurance you will ever get for protection against landslide damage to your home or property is shortsighted and perhaps the worst advise ever uttered by an elected official in this state.
Tuesday
Be Good Little Consumers...Spend!
For many months now we have been inundated with the news of massive loses being sustained by the banks, mortgage lenders and Wall Street investment houses. You know the names, Citi, Bear, Fannie, Countrywide, Freddie, Merrill, BofA. These Masters of the Universe have managed to lose $100billion dollars so far, and some experts suggest perhaps another $200-$300 billion yet to come.
Of the many bad things to result from these asinine investments and there are many, the one to affect the average American the most is the drying up of available funds from the two sources most drawn on by American consumers for the last 5 years. The first is the unavailability of anymore borrowing on the equity from the ATM cash cow formally called home. The second is the tapping out of the lines of credit available from plastic. Along with these two pieces of bad news is the unarguable fact that Americans don't save for the inevitable rainy day, nothing to fall back on. Food costs are up, oil was around $100 dollars a barrel earlier this month, and most of the talking heads have stopped wondering about a recession and have now taken to betting on whether it will be short and shallow or not.
What we have is a slowing economy, a tightening of credit, rising food and energy costs, some serious signs of inflation on the horizon, falling home values and indications that it will be some time before things get back to normal. So what advice do we get from our leaders and elected officials...don't worry, be happy, borrow more if you can and spend, spend, spend. We're being told by the Fed, the Treasury, the Administration and both parties in Congress that we can save this faltering economy by personally spending more.
Now I ask you, does the admonition to keep digging when you are already in a hole seem like good advice? Granted, we will survive as a viable democracy and eventually see the economy get back on track. But almost all financial gurus agree that it might be a year or maybe two before this happens so wouldn't the prudent thing to do be to conserve your resources, cut back on all unnecessary purchases, pay on your debts but don't increase them and be as financially neutral as you can possibly be until you know how the economy seems to be going? How could "go spend more" possibly be anything but the worst advice you could get get considering the state of the current economy in the country?Think about it, why would your government want you to keep digging when common sense says you should stop?
Why are they sending you and your children perhaps a $1000 dollars or so in the next 3 months with the hopes that you will spend it on something that you really don't need. After all, even if it turns out to be a $1200 or $1500 rebate all it will get you is some more crap that you know you really don't have a use for, particularly during this unsettled economic period. Save it! That's right, save it. Cash the check and then put the money in your sock drawer for a rainy day. Better yet put it in a 5% savings account, you can find one in every town.
Why should you? Because your government wants you financially extended and worried. It makes you easier to control. This $150 billion giveaway is a bailout for Wall Street but not for you, all it is for you is a chance for the powers that be to prod you into one more shovel full. There is no better feeling than waking up in the morning and knowing you are a financially prudent and not overly extended consumer. All Americans should take this money, after all it's yours to start with, and use it if at all possible to start a nest egg. Old fashioned? Maybe...but you will feel good about it knowing that eventually Washington will get the message that Wall Street, the White House and Congress may be home to a bunch of short sighted, greedy morons but you aren't buying it anymore.
Save your rebate and use these trying times to send a message to our leaders that you don't intend to support their greedy, nasty little spending habits anymore... not Wall Street's and not Washington's. Trust me, you'll feel great if you do!
Sunday
Sunday, January 27, 2008
Western North Carolina's Hidden Hazards
On September 16, 2004 Macon County, North Carolina was in a state of emergency as were 14 other counties in the western region of the state. "The Hurricane Recovery Act of 2005" found that:
People lost their loved ones, their homes, sources of livelihood, and, in some instances, their communities. During Hurricane Ivan, the community of Peeks Creek was devastated by a debris flow triggered by the heavy rains. The debris flow traveled speeds as great as 33 miles per hour for two and a quarter miles from the top of Fishhawk mountain. Five persons were killed and 15 homes destroyed by the flow that was estimated to be several hundred feet wide and up to 40 feet high.... Further, people could not know the landslide risks associated with their housing location because such maps are not readily available. The State needs to...prepare landslide zone mapping for the region so that homes may be rebuilt in safe areas.
On October 3, 2004 Governor Mike Easley issued a press release to the residents of Western North Carolina advising that the first of the state landslide maps had been completed. The "Is it safe to build or buy here" maps for Macon County show historic landslide events, attempt to determine factors of slope instability, and how far a mountainside would move in the event of slope failure. The Governor said, "These maps will show which areas are prone to landslides, and that will help developers, county officials, and residents decide where to safely build homes, roads, and other structures."
As Governor Easley states: landslide mapping provides critical information to all parties involved in the regulation, development, and purchase of hazardous land.
Starting in the fall of 2004, residents and prospective buyers should have been apprised of the now identified high risk real estate designations within Macon county's jurisdiction.
J. W. Williamson, of Wataugawatch, asks a pertinent and worrisome question. "So far, what has Macon County government done with those (landslide) maps? Word is that they've essentially hidden them from the public. The Macon County Commission have evidently expressed fear that if they release the information of potential landslide hazards to the public, they might get sued...because, you know, information just gets people upset (the truth sets the fees, so to speak). Go to the official Macon County website and look for any evidence that its slopes have ever been mapped and evaluated according to the best scientific evidence for life-and home-destroying potential. Go on. I dare you. You won't find a word." Please see "Landslide Hazards in Watauga County." January 23, 2008
If you do visit the Macon County website you will find the following reassuring words from the Planning Department. "Our mission is to serve the people of Macon County by: "Applying land use regulations in a way that promotes the health and public safety of our citizens."
Who is right? The planning board who continues to permit the undisclosed development of hazardous slopes or state geologists who warn that the Macon County hazard maps show mountainous terrain at serious risk of future devastating landslides.
United States prepares to attack Wall Street!
It was widely reported today that the White House and Pentagon were completing plans to bomb Wall Street into submission as a final solution to bringing to an end the current year long string of economic problems fomented by the evildoers of high finance.
An unnamed but generally credible spokesperson close to the President said that Mr. Bush had decided that since bombing the Nazi death camps in Germany, some 60 years after the war had ended, would no longer be an effective tool to bring about the desired changes in Nazi behavior, but still feeling that since massive bombing somewhere in the world was always high on his list of personal diplomatic choices and having already set about bringing the US Air Force to Def Com One, its highest state of readiness, the President said he felt it would be a waste of the taxpayer's money not to make use of this opportune time to unleash the world's most lethal and effective fighting machine on the evil forces of Wall Street, which the President was quoted as saying, "now makes up the fourth corner of the triangle that is the axis of evil."
Flanked by Condi Rice and Hank Paulson and surrounded by the Joint Chiefs, the President when asked about the possibility of unacceptable civilian casualties, said he was assured that precision and laser guided bombing runs carried out after the dropping of propaganda leaflets advising any CEO's and CFO's not involved in the creation or marketing of SIV's or CDO's to evacuate the Street would preclude unnecessary deaths of innocent traders.
When pressed the President allowed that, "Yes, there would probably be some collateral damage but that it would amount to small numbers of dead innocent civilians." He went on to further explain that the Fed and Treasury had depleted or run out of any further useful methods of forcing the financial titans to their senses and besides the CIA had credible sources inside Citi, Merrill Lynch and Morgan Stanley that told of the further development of WFD's, which Ms Rice explained were "weapons of financial destruction."
She went on to also suggest that if the CEO's and CFO's that had, "instigated this frightful mess in the first place," would surrender within 24 hours of this announcement they would be allowed to resettle in southern Florida with their families, a reasonable size entourage and all vested stock remaining intact. Further they would be allowed the continued use of one private corporate jet and in a show of goodwill the Fed would cover all appropriate country club and golf fees for a period not to exceed 5 years beyond their resettlement dates.
At present it is not known whether the administration is willing to extend this offer to CEO's that had earlier fled into hiding after receiving "golden parachutes" on their way out.
Friday
Cheap credit makes you dumb!
Think not? This is the cheap credit part.
The past Fed and its Chairman Allen Greenspan keeps the target fund rate so low for such a long period that banks and mortgage originators decided to expand their offerings of cheap mortgage products to a segment of the home buying public that had never before been able to qualify for a loan. On June 30th. 2004 the Fed bumps the rate from one percent to one and a quarter. By Dec. 2005 it was up to four and a quarter but the damage had already been done. By then there were millions of subprime mortgages in the system waiting to go sour in a few years
This is the dumb part.
Apparently willing to overlook these borrowers miserable credit histories and proven inability to repay their debts, and willing to believe that home values would continue to rise at 10 to 20 percent a year indefinitely, from 2004 thru early 2007 the banks proceeded to gin up all sorts of innovative vehicles to lure these credit impaired clients to the closing table. The idea being that if these questionable mortgages could be packaged up with AAA rated paper or better yet be AAA rated themselves then sliced into small pieces(tranches)and then be packaged into a Securitized Investment Vehicle(SIV) and sold off to the unsuspecting investors, all would turn out well so long as home values rose unrealistically year after year.
Not to be outdone by the greed of the mortgage originators, the borrowers suspended reality and decided that if a mortgage they could never afford to pay off, even if they got it at zero percent interest, were offered to them at such an unbelievably low interest rate, say three or four percent for the first year or two, they could then afford it. Cheap credit makes you dumb.
How could this unlikely scenario come to pass in a presumably sophisticated 21st century financial market? Greed, plain and simple greed. It is the grease that keeps our society skidding ever faster toward more of the same type economic problems that we presently face. Ask any three economists what the immediate problems are and you are likely to get three answers...inflation, recession or, stagflation. Not a pretty future regardless of which turns out to be the correct answer.
Sunday
Can You Say Taxpayer Bailout?
Well the votes are in and most experts in the field of finance agree that the neither the Fed nor the US Treasury can find their collective fannies with both hands. Or is it all four hands?
The Treasury's plan to create a superSIVsaver fund tanked when it was revealed that not only couldn't they put together a $100 billion bailout fund, they couldn't even organize a $20 billion one.
The collapse of the plan to create a $100billion "superfund" was embarrassing to the US Treasury which backed the scheme. The idea - to create a fund to support liquidity in the market for housing-related securities - was killed off late on Friday when the banks behind the scheme abandoned it after little interest from other financial institutions.
The former dynamic duo from Goldman Sachs, Hank Paulson, the Treasury secretary, and Robert Steel, the undersecretary for domestic finance, helped to broker the original agreement to create a massive fund to buy housing-related securities. The obvious problem was that the Fund would have wanted to purchase no "bad" paper and that was exactly the kind that banks needed to get rid of and were going to attempt to sell to it. The Fund would have only agreed to purchase "good" paper, and that was exactly the kind the banks would want to keep. Duh...
As for the Fed, Ben Bernanke, facing his first major test as Fed chairman, is getting mixed reviews. The Fed was embarrassed when the credit crisis hit in August. That happened only two days after the central bank had decided to keep interest rates unchanged and declared that inflation was a bigger risk than weak economic growth...maybe, or not. They have no idea.
Circulating among all these embarrassed banking gurus is rumor of a scheme that's gaining some currency, here's where your money comes into play. The plan would let the government buy most of these bad mortgage based securities, as much as $200billion worth, or maybe more. They have no idea.
In any case the plan would have the government holding the "bad" paper for a few years and then when the housing market rises from the grave, lo and behold, the fed could sell it all for a profit. Just like the Resolution Trust Corp. of the S&L days, and we all know how well that worked out for taxpayers. Some estimates put the taxpayers bill for the S&L debacle at $500billion. In the early 1990's Congress was still debating which taxes to raise to pay for the 1980's mess. One can only imagine how much this current mess will cost.
Friday
The CBO says $9,000,000,000 a month for Bush's war! That is 9 billion dollars wasted monthly.
9 billion dollars this month, next month and next and next...apparently until we send this clueless, MBA back to Texas. Money that could be used to guarantee all Americans access to quality health care regardless of where you live or work. Money to better education. Money to repair roads and bridges. Money for America. Where are our priorities? Have we lost our collective minds? It is your tax dollar and our children's futures being squandered. Better use could lower the current cost of insurance for the family lucky enough to have it. That cost is $1200 a month for Mom, Dad and 2 children. 9 billion dollars a month could lower that amount substantially. All of our politicians have SOCIALIZED MEDICINE. That's right, the very same type of insurance that half of them would have you believe is bad and evil...for you, but not for them. Who do they think is paying for their families and themselves to have full coverage? The government is paying, that's you and me as taxpayers and that's socialized medicine and they are not inviting us to participate.
Think about it, your health care should not be a commodity bought, sold and traded on Wall St. like oil or gold. Medicines should not be treated like strawberries in the marketplace. Oh my, too expensive to afford this month. American families should never be in the position of having to forgo medicine because of cost.
Forget about being a Republican or a Democrat for a few minutes, we can argue about gun control, abortion, illegal immigration or whatever later. Right now we need to agree on something pretty basic, everybody gets older and everyone gets sick and everybody needs help with their health care costs. It should be apparent that even the very rich cannot afford to pay for their health costs when those costs rise into the millions of dollars in a year. It happens all the time. Ask the Vice President.
If you are lucky enough to have a good health insurance policy it is probably capped at around a million dollars. That amount is unchanged since the 60's and it puts your personal wealth at risk because hospital costs rise above that maximum limit of one million dollars regularly. Actually the capped amount should be about 6 million in today's dollars. Of course the insurance industry won't hear of it and since they are one of the biggest contributors to political campaigns it's not surprising that their desires are foremost in politician's minds.
So what does all this have to do with the VP's health insurance? If you think the Vice President of the United States or for that matter any other member of Congress or any government employee is more entitled to comprehensive health care than you are simply because they are employed by Uncle Sam, than you need to reappraise why you are apparently willing to accept second rate status in your own very rich country.
That's right you must believe that someone being wealthier or more important or simply having taken the taxpayers money as salary for 30 years entitles them to better health care than you. Would you sit still if the government built better and safer roads and bridges for the wealthy or only for the use of retired government employees? Suppose only the rich or current and retired government employees could use the elevators in all the tall buildings in America. Think of your health as your personal infrastructure. Health care, the roads and bridges and elevators to you and your family's safety and well being. Demand your fair share of the $9,000,000,000.
Tell your elected officials that you won't take the gravel road or cross the rickety bridge or climb the stairs anymore. Tell them you want what your tax money entitles you to. Health care not warfare!
Sunday
The mortgage zombies arise!
For the life of me I don't know what is keeping this market from totally swooning. It seems to keep wanting to rise from the grave like some kind of financial zombie.
It takes a licking and keeps on ticking. Could it be that the fundamentals are actually rooted in bedrock rather than sand? Could it be that the worst is over and the resurrection is only a Sunday away? Don't think so!
One reason for a pessimistic view is the cobbled together plan to keep the suckers paying for another year or so, (the Teaser Freezer plan) being touted by the administration's version of "Our Gang" Treasury Secretary "Spanky Paulson" who is pushing the idea that if we can just keep the suckers from defaulting this year who knows what might be possible next year. The mortgagee dead will arise and walk the earth once again, checkbooks in hand, clamoring to continue to pay their now inflated mortgages on their now deflated in value homes.
More specifically the the plan works like this. The doomed are divided into 3 groups. (1)Those that can pay their mortgage even after it resets at a higher rate. Tough luck suckers. (2)Those that can't pay their mortgage under any circumstances. Tough luck suckers! And (3)those that supposedly CAN pay their mortgage if it stays at the "Teaser rate" for the next few years. Uncle Sam wants you! This third group is now being touted as the saviors of the system. These unfortunate home owners are being singled out for special treatment by the system. They are going to be allowed to continue to pay their bogus mortgages with the idea that this will give the system time to recover from its deluded venture into the nether world of sub prime paper.
That's right, the plan is simple, just keep this group paying for a while longer while the financial pharisees dance around the stone idols of Ayn Rand and Gorden Gecko chanting "Greed is Good." Actually the whole purpose of the latest chapter in this monumental Ponzi scheme is to try to keep this economy afloat long enough for the morons in charge to retire to their respective homes in Texas and Wyoming next year.
Friday
How stupid DO they think we are? Part 2
It would appear that the 3rd, yes there have been three, Secretary of the Treasury has awakened from a long stupor and has come to the realization that there is a little problem with the economy, or more exactly with the ability of the financial markets to maintain the credit market circle jerk they have been orchestrating for the last 4 years. You know the one where they loaned money to people that had never successfully repaid a loan in their entire adult life and then were shocked, shocked to find out that these loans were defaulting by the hundreds of thousands and eventually perhaps 2 million or so. In just a few short years these money changers have managed to bring the US economy to the brink of disaster. But keep in mind that they made billions of dollars in fees doing it.
Now the latest apparition to appear as the Secretary of the Treasury, Henry Paulson has risen to the challenge of repairing the damage that was allowed to be done to this economy on his and Bush's watch. He has been touched by the spirit, he has found the faith...praise the Lord...we must save these poor wretches from the ravages of the resetting adjustable rate mortgage. Yes, that very same "mortgage mutt" that he and the rest of the financial "watchdogs" should have sent to the pound years ago. The ARM that will cause these deluded borrowers to see their monthly notes soar from $1000 to $1500 dollars in the worst case scenario.
With the colossal gall and temerity that has been the keystone of this Republican administration, they are now suggesting that the very same financial midgets that brought you this unmitigated disaster should be allowed to decide who of the unfortunate ones who bought into this scam should be allowed to suffer a little longer before the blade drops. "Freeze the Teaser Rates" as some wag on the Street suggested the bailout plan should be called tells you all you need to know about the quality of the "NINA" no income, no assets loans and the Liars loans,"make up any income figure you want cause we won't check."
One has to ask, why should they care now when they didn't give a wit a year or so ago. The whole industry knew that these loans were being pushed and sold to people who had no business being allowed to take on any mortgage much less one that would, in some cases, double in a year or two.
The legacy of this dysfunctional administration is on the line. If something is not done soon they will be flushed down the sewer line of history. Destined to disappear as perhaps the worst bunch of elected officials ever assembled to lead the Republic.
The sorry truth about this supposed bailout for troubled homeowners is that the actual result will be to buy time for a housing market that could hardly stand to have an additional 500,000 homes dropped into the already glutted market. In other words if they can continue to keep these over extended homeowners sending in their payments for a few more years then when these poor souls do start defaulting, and you can bet the farm that they will, the theory is that by then the market will have recovered and be able to absorb these new foreclosures.
You have to ask the question...Do you really believe this administration and the Wall Street crowd gives a bloody wit about the strapped home buyers or are they trying to salvage what they can of their own reputations and save what they can of this mortally wounded credit market. Make no mistake about it, this crowd would sell their grandmothers if it would turn a lousy profit. Nice work if you can get it.
Sunday
How stupid do they think we are? Let's ask!
Here we are on Wall Street surrounded by the imposing skyscrapers that house America's finest minds when it comes to finances. What better place to find out how these very well paid money changers feel about our ability to figure out what they do to earn 8 figure salaries. We won't mention any names but the newest hire just started at(rhymes with "feral finch")for 50 million dollars a year. "feral finch" just ran off its last CEO after admitting to an 8 billion dollar write down. Lucky fellow got 150 million dollars to go quietly. But we digress.
Let's stop this well dressed fellow coming out of the building that houses America's largest bank.
"Excuse me sir, but can we ask how you would rate the average American's intelligence about Wall Street finance?" "Is this a trick question?" "No" "OK you mean like on a scale of 1 to 10,with 1 being being real dumb and 10 being pretty smart?" "Right, that works." "Hmmmm, you're not with CNN or MSNBC are you?" "Nope, just curious." "Well let me put it this way, can my answer be a fraction?" "You mean less than 1???" "Just kidding, but seriously our latest scam, oops, scheme, errrr, plan is to repackage the same crappy paper we have been pushing for the last few years..." "Excuse me for interrupting but do you mean the same stuff that caused all the trouble before?" "Yeah, yeah that's right but here's where the fraction bit comes in. This time, unlike last time, we plan to say right up front that these new offerings are crap." "What!!!" "I know, it sounds really bold but we are confident in America's stupidity level, trust me there's one born every second. Are you sure you're not with the news media?" "Right"
"Then you're gonna love this. We got two more of the biggest investment banks on the Street and a slew of the smaller guys to sign on to this scheme, ummm plan with us. It's gonna work, I mean .5 or maybe .25, how can we miss?" "One last question, please." "Gotta run so make it short." "OK, so surely we can find a different opinion of America's intelligence level somewhere on Wall Street?" "You haven't been paying attention have you point two five? So long."
Saturday
The gift that keeps on giving...
Good news on the sub prime mortgage front. We are about to be rescued by "old Europe" you do remember "old Europe"? That was the crowd that Rummy denigrated for not choosing to follow us headlong into glorious conflict in Iraq. They lost their chance to be showered with flowers by the grateful Iraqi people. But it seems that they are about to make amends for that failure in post WWII gratitude by descending on our floundering housing market lugging large sacks of euros and overcome with a desire to become first time home owners in the US.
The theory goes that these well off European home purchasers will stimulate the current comatose first home market thereby allowing American sellers to move on to bigger and better homes. If we assume that this idea didn't originate with the aluminum foil hat wearing crowd, and that's a big assumption, is it possible that an influx of euros being used to buy homes in America by well off Europeans could actually affect this market to any appreciable extent?
According to one broker, he has already received 5 to 10 times as many requests for information about homes from interested Europeans as he did last year. Could this mean that there are at least 20 or 30 rich Europeans looking to invest in American property? Even if it were a few hundred buyers it seems unlikely that salvation is imminent.
The American banking and financial industry started this fiasco with the full consent of the current administration and congress and we are going to have to work through the results of this greed driven mess that has resulted from a confluence of Wall Street money grubbing and idiotic economic decisions.
Friday
Blame it on the New York Times!
Since last adding to this blog and while wading through the swamp of bad financial news on the web, the following bit of wisdom jumped out from amongst all the angst, rending of clothes and general flagellation taking place in the inner sanctums of Citigroup, Wachovia, Merrill Lynch, Bear Stearns, BofA, Morgan Stanley and numerous of other big time money changers. The CEO of Toll Brothers, possibly the largest of the high end home builders in the US, has come to the conclusion that the problems of the housing market could all be ended immediately if the news media would just stop reporting all the bad news.(Floyd Norris, NYTimes, Nov.9)
Robert I. Toll , the chief executive of Toll Brothers apparently is of the mind that his business model would best be served by the reporting of only good news, particularly as it involves the luxury home building industry. The audacity of this remark is matched only by its relevance to the general mind set that seems to be the norm among our financial industry titans, namely, reality should exist only as how they define it. Down is up, bad is good, poor is rich, less is more...is it just this blogger or does this not sound suspiciously like the same operating principles guiding the current administration?
But we digress. What is truly astounding is this fool no doubt received a round of applause from his peers in the industry. At last count, and this is far from accurate, the nine largest investment banks in this country have written down around 50 billion dollars in bad bets in the mortgage market. Keep in mind this is only what they have owned up to. It could well be twice this amount since they all have a well documented history of lying about the true extent of their recent poor risk management.
So what is one to do when Gisele Bundchen, the super model demands payment in euros rather than dollars while working in this country? Thankfully she didn't demand loonies, at least not yet. With the dollar in free fall and the head of the Fed, Bernanke suggesting that the economy will "slow noticeably" into next year it just might be time to dig a hole in the back yard, convert to gold, drop it in and hope for the best.
Thursday
Repent...the end is near..
Looks like reality bites comes to Wall St. Also looks like the Fed wasted a rate cut on this fool's quest. Mark my words, these short term injections of whoopie into this market are doomed in the long run.
These bankers, these money changers have been lying to each other for so long they have actually started to believe their own bullshit. Much like the Bush administration's run up to the war.
The damage is done and the results are playing out in the subprime mortgage market and the debt fiasco. What we really need to watch for next is the deterioration in the securitization of credit card debt. Since the home equity ATM has dried up, early figures are showing a marked increase in the use of credit cards to carry monthly debt.
There are signs of an increase in Americans paying their mortgages with credit cards, which is suicidal. Americans are carrying $907 billion dollars on their CC's and should this amount start to go bad in any appreciable percent it could make the subprime mess look like a cakewalk.
Unlike mortgages which have some collateral, even if it is an over valued home, CC's are unsecured, so any default is a total loss. Guess which banks are the most exposed in this market...the same ones that are shucking and jiving about their exposure to the subprime wreck
Oil at $100 or $125 a barrel...coming right up this week or next. The Chinese own us, and what they don't own is owned by Arabs, the Saudis, Kuwaits, anybody with oil. Hold on to your hats boys and girls.
Tuesday
Monday
WHAT YOU NEED TO KNOW!
The picture to the right, lovely Western NC fall color. The pictures below, same place...WNC.
Shocking pictures...perhaps, but no more so than what is happening in La Jolla, CA as you read this and what has happened all over the US in one form or another in recent memory.
Landslides, earthquakes, volcanoes, hurricanes, tornados all natural disasters from Washington State to Florida and all points in between and across this great country.
Where does one go to build their dream home with a guarantee and 100% certainty that mother nature won't intrude in an ugly and unpredictable manner? What does this have to do with the fact that all of Western North Carolina is classified as a natural disaster zone with a history of deadly landslides and earth movement? Nothing really, other than where we live is no more or no less prone to natural disasters than most anywhere else in America. Different kinds perhaps but natural disasters none the less.
What is different here is that the very agencies that should be dedicated to seeing to it that you, as a prospective resident of WNC, willing to spend your money building in these lovely mountains are provided with at least the minimum of warning of the natural and man made problems you might face. In fact they are not doing so.
Should you know that the area is prone to landslides and other earth movement under certain conditions? And perhaps more importantly, shouldn't you know that there is no insurance available to cover your losses if by chance, however slight, you are affected by earth movement of any type, natural or man made. Of course you should be told. You are advised by law of the dangers of lead paint, termites, radon, asbestos and other possible dangers to your health and financial well being. How is it that when you build or buy in WNC no one sees fit to advise you of these facts? Simple...NO ONE IS LEGALLY REQUIRED TO DO SO UNDER EXISTING LAW.
Shocking? Maybe even more so than the photos, is the lack of information provided to you.
Thursday
Newly discovered photo of Asheville city council meeting.
A well placed source has admitted to this blog that when not meeting in public the mayor and council members have been known to dress in drag and and practice tooting their own horns.
In this just newly discovered... but unauthorized photo... why not try and identify the cleverly disguised council members.
Give up? OK, left to right. Terry, Robin, Bryan, Holly, Jan, Brownie,and last but not least Carl
Wednesday
Pictures of statistical insignficance
"It remains that there have been no slides in Asheville City and the statistical significance of the number of slope issue incidents across WNC are so limited as to be statistically insignficant. It is my personal sense that government should be responding to the horses and not the zebras and that Asheville's draconian steep slope ordinances are a special interest indulgence."You didn't know, did you?...Things they don't teach in Real Estate 101
Here is some information that may be of interest to you as a property owner in a state designated High Risk Landslide Hazard Zone... that's right all of WNC has been declared as such. So the questions you ask are:
"Why wasn't this information revealed to me when I bought my home?" and further,
"What protection do I have if earth movement should affect my home?"
Insurance is designed to protect your home against damage or loss but in landslide prone Western North Carolina there is no insurance available... that's right NO insurance to cover ANY damage caused by earth movement for ANY reason.
Why didn't you know this? Because no one has any legal responsibility to tell you... the state of North Carolina does not require disclosure of these two important bits of information; one, that you are buying in a declared hazard zone and two, that there is no insurance available.
As you know, the law requires that, as a buyer, you must be told of all sorts of likely hazards: termites, asbestos, radon, lead paint, but not one word about what are arguably the most potentially dangerous possibilities to your safety and financial well-being... earth movement and the absence of insurance.
Tuesday
George W. Bush...the early years!
"The Shock and Awe of Music or The von Rummy Chronicles"
(The hills are alive with the sound of propaganda.)
George, a postulate in a Texas abby is distracted from his religious duties by the majestic Texas landscape and his restless, passionate spirit. The Mother Abbess Barbara, believing that George's buoyant personality may be incompatible with monastic life, wisely sends him away to discover his true calling in Washington.
George is to be the governess for the von Rummy family, a brood of seven neocon brats helmed by Captain von Rummy, a widowed Reaganite who educates his children with military discipline. While the children behave well before their father, once out of his sight they are incorrigible conservatives, determined to make their governess George miserable. George quickly learns that he is merely the latest in a long line of governesses scared away by the neocon brats antics.
"The Sound of Shock and Awe"
(A few months later in Ozraq)
As we once again look into the joyous life of George II, the now experienced Texas postulant, who has taken over the household helm of the ever rowdy 7 neocon children of Captain von Rummy, who has left for Vienna to further irritate the denizens of Old Europe.
After the Captain leaves, George conceives the idea of making playclothes for the children from the castoff robes of the soon-to-be replaced Supreme Court justices, and resumes joyously singing "A Few of My Favorite Thingamajigs."
Since Captain von Rummy has left for Vienna, George ignores his strict orders. Instead of keeping the neocons at home, he takes them on tours of the city and surrounding red states and green zones. The children accompany George to town, each wearing matching clothing from the judges robes. They cross a footbridge and visit the open market for shopping, where George juggles ripe Texas grapefruit. The happy group skips along the banks of the Tigris river, ride a train up into the Ozraq Alps, where they experience an air strike and bombardment picnic on the verdent grassy area of the Green Zone decorated with a colorful banner proclaiming,
"Mission Accomplished", draped in front of a magnificent panorama of beautiful peaks brightly lit up with napalm and burning palaces.
To prepare for the Baronness' arrival, he teaches the neocons how to sing, beginning by giving a name to the fundamental notes of the scale, "Do-Re-Mi." "Do" for dough, pallets full of dough. "Re" for re-elect me please. And "Mi" for military might makes right...
Captain von Rummy returns from Vienna with guests in tow: his glamorous love interest, Baroness NeoCondoleezza and enterprising family friend/chaperone, Karl "don't Plame me" Rove.
The Captain is far from amused when he arrives home to find his children and their governess soaked to the skin, having tumbled out of a canoe into the lake in their excitement to see him. After immediately ordering the children inside to clean up and get back into their uniforms of desert camos, he confronts fraulein George about the play clothes and the childrens' extra- curricular activities like climbing trees. George, in turn, proceeds to tell the Captain a few things about his children that he is never home long enough to notice. For instance, their developing taste for MRE's and cleverly planting IEDs about the castle garden areas, creating havoc among the Captain's garden staff and pet swans!
Angered at George's outspokenness, Captain von Rummy dismisses George and orders him to return to the Texas abbey. In the silence that follows his pronouncement, the Captain hears gunfire coming from the house and goes inside to investigate. Astounded to discover his children singing"The Sound of Shock and Awe" for the Baroness NeoCondi, the Captain is moved to join them, and over the course of the song, the estranged family reconnects through the music and by taking target practice at the already shocked and awed staff and swans.
Catching a glimpse of George in the doorway and aware that he has surely seen the Captain's hand up the back of the Baroness' dress and grateful to him for bringing music and gunplay back into his house, Captain von Rummy changes his mind about dismissing him and asks George to stay for another 4 years.
Unfortunately, upon hearing the rumor of George's sacking and imminent return, the Mother Abbess Barbara gathered all the abbey's heavy silver candlesticks, stone statues of saints and bundled up copies of The National Review that she could find; tied them around her neck, struggled to the banks of the Rio Grande and hurled herself into the river, sinking with barely a bubble to mark the spot.
Armed with a belt-fed light machine gun and a better understanding of Captain von Rummy's intentions toward the Baroness NeoCondi, George continues on with the family, redefining his governess role to include the task of preparing the children for writing a new constitution while field stripping and reassembling the light machine gun.
Under George's tutelage, the von Rummy children's musical talents expand to include puppeteering, as demonstrated by the marionette show they put on for Uncle Karl, the Baroness and their father. The children put their hands up the puppets' backsides and cause them to perform all manners of wonderous tricks, much like Uncle Karl was soon to do with George.
The children next add light rapping and break dancing to their repertoire as demonstrated when they sing goodnight to their father's guests at the grand and glorious party Captain von Rummy gives to introduce the Baroness to his beltway cronies: "So long, Farewell, Auf weidersehen, Yo mamma, Goodnight."
"There's a sad sort of clanging from the clock in the hall and bells in the steeple too.
And up in the nursery an absurd little bird is popping out to say cuckoo.
Regretfully they tell us, but firmly they compel us, to say goodby to you..."
And so the merry band of neocons and their fearless leader George cavorted for 4 more years in the land of Ozraq, while successfully continuing to convince their followers that..."Yes indeed Ozraq was the yellow brick road to untold riches for all and a Hummer in every pot."
Check back soon for further adventures...Dick Cheney as Jabba the Hut, Rummy as Chewbacca and George II as the young Luke Skywalker!
Sunday
Morning hike on Big Bald
A beautiful morning and a chance to hike the new and improved Big Bald portion of the Appalachian Trail. Just completed, this new route to the top is a bit longer but considerbly eaiser to hike and offers better views along the way than did the old trail.
