Headlines...

NEW -> Contingent Buyer Assistance Program
Oops... Sorry but we aren't the only <a href="http://www.economist.com/daily/news/displaystory.cfm?story_id=10214630">daft wankers in the world</a>.
 
<p>Heavy rain? I grew up in Florida. Heavy rain is when the raindrops <strong>hurt</strong> when they hit you.</p>

<p>I've seen this maybe three times in my eight years in CA. In FL, it happens almost every summer day around 2PM. </p>
 
<p>Heavy rain is when non-Floridians actually pull off the side of the road on I-95 because they can't see. Floridians keep on trucking. Sometimes they slow down to 45 even.</p>

<p>As to the failing(?) Florida pool. this can hit in odd ways.</p>

<p>I am doing a quiet title on a large vacant lot in a desirable area. It is a tax deed sale. The prior owner did everything but actually hide, and now claims that he should keep the property. Even though he didn't pay taxes for years, and didn't bother to make sure the deed was in his correct name.</p>

<p>In the meantime my client bid $399,000 in extremely vigorous bidding plus another 12 grand or so of clerk's fees. The county paid itself the past due taxes, some rather large liens and is now holding about $360,000 of somebody's money. If we win, we don't care, we get the property, which my developer client intends to build a house on for his brother.</p>

<p>But, I worried, where is this money? Is it in this pool? I called the clerk's office, and the people I talked to in the county offices clearly thought I was crazy. It's in the clerk's account I was told. Yes, I said, but where? It's not in a vault with stacks of hundreds, so where is it? One said it was in an account and named a bank I never heard of. So I have no confidence of where this money is.</p>

<p>I asked my client, this is his big chance to get his money back, if he wants. Fla law sez he gets the amount paid and all expenses, including my atty fees. They said no. I said maybe they could buy 2 huge lots for the money now. They said no. Oh, well.</p>

<p>The tax deed loser should thank his lucky stars this happened. He quintupled his money. My client bid at nearly the top of the market. Everybody's nuts.</p>

<p>So when the financial systems goes bust and I said when, not if, it will strike in all kinds of odd and unexpected ways.</p>

<p> </p>
 
<p>Video: <a href="http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vSZn84rvBkQA.asf">Thornberg of Beacon calls subprime loan plan 'Too Late"</a></p>
 
Ben Stein's <a href="http://www.nytimes.com/2007/12/02/business/02every.html?ref=business">take on Goldman Sachs</a>.





He makes some good points, but he still irritates me.
 
<strong>The End Of Consumer Credit As We Know It</strong>

<img height="12" width="1" border="0" alt="" src="http://www.gold-eagle.com/images/clear.gif" />

<strong>Peter Schiff</strong>



<p>http://www.gold-eagle.com/editorials_05/schiff113007.html</p>
 
<p>The head of Goldman Sachs which sold this toxic brew and then shorted against it is Treasury Secretary? I did not realize this. Suppose some plan existed to get us out of this mess and it hurt Goldman? Would the Treas Secy go along with it??</p>

<p>Or, in true conspiracy theory mode, was he placed as Treas Secy just so he would avert any such bad thing from biting Goldman.</p>

<p>I don't know about conspiracies, but I suspect that a view from the very top of the money world would reveal a much different, more bitter truth than we in the bottom 99.44% of the financial world apprehend.</p>
 
It will be very difficult to discover GS involved in some type of conspiracy. The easiest way to think about GS is to realize they are in business to make money; first, inbetween, and last. If they can <b>LEGALLY</b> make money by selling CMOs and by shorting CMOs, they will.<p>


Ben Stein's article reminds me of a question lendingmaestro asked must a few posts ago on this thread, <i>"And this is not seen as unethical???</i> Oh my gosh, I am still laughing.<p>


liz - Because Ben Stein likes making money?<p>


One last thing. Not that anybody remembers my posts, but previously I have repeatedly said in response to folks asking about shorting financial stocks, including GS, I will never, and I mean never, short GS.
 
<a href="http://www.nytimes.com/2007/12/02/realestate/commercial/02sqft.html?ref=business">A cloudy forecast for commercial</a>.





<em>The 29th annual survey, which was released last month, reflected the confusion that engulfed the industry as problems with mortgages were unfolding. Even though the commercial sector was faring better than housing, the biggest concerns for the respondents were economic: job growth, construction costs, interest rate changes, income and wage growth, and inflation. And not surprisingly, 78 percent said they expected underwriting standards for commercial and multifamily mortgages to be more stringent in 2008, compared with 70 percent surveyed last year and just 37 percent in 2005.





</em>I remember during the tech bubble, SF office space was going for over $5 a sqft, and when it bust, they couldn't give away office space for $2 a sqft. I am not saying that will happen again, but it shows how quickly people forget.
 
Geez.... <a href="http://www.nytimes.com/2007/12/02/world/europe/02norway.html?ref=business">Didn't anyone learn from us, and our CDO debacle</a>?
 
<p>Tho I am fully aware that legal doesn't mean ethical, the 2 should at least be within shouting distance of each other.</p>

<p>As my grandparents used to say, put your money where your mouth is, that is to say, if you want to take the position IN PRINT that somebody else is doing something very wrong, you should not take part in it.</p>

<p>This is simple, this is naive, this makes me look a little stupid. And I want to stay that way.</p>

<p>I try never to invest in something that I do not understand. I am aware that I probably don't understand most things about what's going on with the companies I have some partial understanding of, while I'm in the mkt (and now I'm nearly out.) I do think that the rough overall trend is upward. So, for most of my life, I've bet on that, and I've not gotten rich, but done reasonably ok.</p>

<p>but that can change. Anybody who has studied history knows that empires fall.</p>

<p>When the big guns are repeatedly and continuously doing evil, for a very long period of time the damage done to the whole of society can be immense, and occasionally fatal. That is what is happening now. Making money is fine, I really like money, but making it any way you can is not fine.</p>

<p>Somebody on some post used the words "fin de siecle", in the sense of the 1890s decadence.</p>

<p>We are at the end of that now, and I hope we will come out reasonably ok on the other side. I think that the diamond covered skull that was sold to some idiot is sort of symbolic of that decadence.</p>

<p>That being said, awgee, I certainly agree that shorting GS is a stupid thing to do. Because they will do ANYTHING to win. And they are powerful. I have no desire to commit financial suicide.</p>

<p>As a result of what they've done (as well as other companies of course), much suffering will result. Losing a house is a stress similar to losing a spouse or child. It makes you sick. Some unknowable number of people will become sick as a result of this. Some equally unknowable number of those people will die earlier than they would have. And no one at GS will have a single pang of conscience about this.</p>
 
Ben Stein has been consistently wrong on this decline from the beginning. He correctly saw the decline in the early 80s and wrote about it extensively. The only thing I can imagine is that he must be heavily positioned in real estate and is either deluding himself or intentionally downplaying the problem in hopes of saving his own skin. In either case, he continues to be wrong on just about every point concerning this bubble and its collapse.
 
liz - Yeah, you're right. After thinking about it further, I had to edit the "I would" portion of my post.<p>


But, I do think that losing a house, although painful, will be in the best interest of many who overreached their ability to afford and will loosen a ball and chain from them.
 
<p><a href="http://www.npr.org/templates/story/story.php?storyId=16748091">White House Lowers Economic Forecast</a></p>

<p>"The White House revised its rosy economic forecast downward...citing a more significant housing slump than was previously predicted..."</p>

<p><strong>[They would have known better if they had been reading IHB]. Anyway...</strong></p>

<p>"The new forecast comes despite a report from the Commerce Department that the economy climbed at a 4.9 percent growth rate from July to September, the strongest showing in four years. However, that growth is not expected to last through the current quarter because of the strains of the housing slump and credit crunch.</p>

<p>Under the administration's new forecast, the gross domestic product, or GDP, will grow by 2.7 percent next year. Its old projection called for a stronger, 3.1 percent increase. </p>

<p>"The housing market decline has been more significant than we expected," said Edward Lazear, chairman of the White House Council of Economic Advisers. </p>

<p>The more pronounced housing slump – along with the expectation that problems will persist into next year – was a big factor in the administration's decision to downgrade its economic growth forecast for 2008. "</p>

<p><a href="http://www.whitehouse.gov/news/releases/2007/10/images/20071011-2_p101107cg-0031jpg-515h.html"><img alt="President George W. Bush meets with his economic advisors Thursday, Oct. 11, 2007, in the New Executive Office Building in Washington, D.C. "The deficit today is at 1.2 percent of GDP, which is lower than the average of the last 40 years. In other words, we have told the American people that by keeping taxes low we can grow the economy, and by working with Congress to set priorities we can be fiscally responsible and we can head toward balance," said President Bush in a statement to the press. "And that's exactly where we're headed." White House photo by Chris Greenberg" border="0" src="http://www.whitehouse.gov/news/releases/2007/10/images/20071011-2_p101107cg-0031jpg-384h.jpg" /></a></p>
 
<a href="http://tinyurl.com/3yzkxb">Mr. Containment is optimistic he can save the day</a>.


<em>


Paulson reiterated that the downturn in the housing market is "the biggest challenge to our economy," but said that the Treasury's plan to help out subprime borrowers doesn't include spending taxpayer money on funding or subsidies for either the industry or homeowners.</em>
 
WASHINGTON (MarketWatch) -- San Francisco Fed Bank president Janet Yellen said that economic growth in the next six months is going to be weaker than she expected only recently, and said there are serious risks that it may be still lower. Yellen raised a red flag about consumer spending, suggesting that the long-awaited never-arrived slowdown in shopping may have arrived. "It is far too early to tell if we are in for a sustained period of sluggish growth in consumption spending, but recent developments do raise the possibility as a serious risk to the outlook," Yellen said in a speech prepared for delivery to a business group in Seattle. Yellen is not a voting FOMC member, but is considered one of the most influential officials at the central bank. Yellen's remarks dovetail closely to recent speeches by Fed Chairman Ben Bernanke and his top deputy Donald Kohn, which were taken by many Fed watchers as a signal for third straight rate cut on Dec. 11.
 
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