markg

Wall Street Breakfast: Must-Know News

Sure Obama and company can whine belatedly about TARP money going for bonuses, but where was the oversight before this happened? What can they do now? Same thing they did before, nothing!

The money is gone and it is going to stay gone.

A Sign That Housing Is Approaching Bottom

"This is important.

At the bottom, banks blow out the inventory of foreclosed homes at almost any price just to get rid of properties on their books. When prices are low enough, demand comes back into the market, setting a floor at which prices can stabilize.

Such behavior is a sign that the bottoming process in housing has begun. This specific data point does not necessarily mean the bottom is in. Prices may still go lower. However, it signifies that the bottom in home prices in the United States is in sight, and most of the decline is over."

I would seriously question the validity of this statement. The reason? If you are sitting on property that has bottomed in value, and you are sure it will rise in price, wouldn't you sit on it a little longer?

Cause of Department Stores' Decline: Changing Spending Habits

Barely touched on here are internet sales. Hugely convenient, great variety of products, it's much quicker, and quite alot less expensive. As long as you buy from a company in a different state than you live in, there is no sales tax, which is am immediate 7-1/2% (approx) savings if you live in California, and even more if you live in LA.

Environmentalism May Face Major Setback in 2009

A couple thoughts here; perhaps Obama was hasty in his declaration to put all the coal miners out of work, you can not legislate political or environmental correctness.

Green technology should pay it's own way, or in the very least not add overhead. It can be done, but not by simply throwing money at the problem.

Lastly, raising taxes would be another show of cowardice by our government. The same federal government that looked the other way when the finanical instituitions we are now bailing out were digging a gigantic hole. And don't say there was no way to know, anyone with 1/2 a brain could see that no-doc mortgages were and are a horrendous error in judgement, and that real estate going up far faster than incomes would be a bubble.

Commodities Are Not Stocks

Good points, more than crop insurance, which is a seperate purchase, you lock in a price for your crop. This is a definite plus when there are bumper crop years, as was the case until recently. Look at monthly commodity charts for grains, you will see weakness until 2007 in the last ten years.

Most savvy farmers will also use options to deal with volatility. If $5.00 for corn is a target, you buy put options that have a $5.00 strike price, or slightly higher. That way if the price does go higher than $5.00, you still make out. If it drops below $5.00, you still have your $5.00 crop price and little loss, relatively speaking on the option.

Any Homeowners Bailout Will Be Unfair

Once again we see that once the idea of publicly funded bailouts start, every business puts their hand out. Would all the columnists get over the bailout idea.

What happened to capitalism?

Alt-A Loans Spiraling Downward

MrBuzz, I'm not challenging your data on the loan amounts, but I would like to know where you got it...

Irrational Housing Market Exuberance

The house prices most of southern california are still well above the cost of rentals, even with an after tax correction. At least another 10% is needed for mid to upper mid areas.

And rental demand is relatively soft. Given that I rent an ocean view condo for 60% what the payment would be if I purchased with 20% down, I'm ok with waiting a while longer......

Solve the Housing Crisis by Rewarding the Prudent

I like the idea of rewarding the savvy and prudent, but there is one question, who picks up the tab for the $7200 per family per year? Or did I miss something?

The Foreclosure States: Referendum for Obama, or Scapegoating the Party in Charge?

long_on_oil....well said. I believe that the saying, "we get the government we deserve" is depressingly true. Politicians in general make a living from taking credit for anything good, and pointing fingers for anything bad. The current situation certainly has plenty of room for the latter. The only good thing to come from the current federal government, the Democrats can't blame the Republicans anymore, except in retrospect. On second thought, can't you hear the "boy, we inherited an even bigger mess from the Bush than we thought"

I wrote in a vote for Ron Paul.

A Capitalist Reformation

"and if they continue to rise I will drop them in favor of carrying catastrophic coverage and self-insuring the large deductible to retain disposable income. 20th century capitalism’s greed precluded any meaningful tort reform because it tried to balance both high-quality healthcare and the option to spin the malpractice wheel of fortune. "

I work in the medical device industry, and while I agree with most of what you said, I would add this:

Two problems with this approach, the self insured pay more than the insurers do. If you doubt this stay a couple days in a hospital, and compare the checks you write with the ones Blue Cross would write. Of course the reason for this is the layers of insurers and health management are what is driving medical care upwards. There is a horrendous layer of money management, and the socialization will only add to it.

The costs of equipment, consumables, and direct labor are flat to lower. It's not the cost of healthcare increasing, it's healthcare management.

Happy-Sad News: Foreclosure Sales Climb

One small detail left out of the numbers on the number of houses sold, which is the ones the banks buy back at auction.

Moving the Deck Chairs on the Economic Titanic

"If you're so convinced that the House has cleverly figured this all out, ask yourself this: Where were these same newly smart people when the credit crisis was building?"

A very good question, to which I would counter, why did Ben and Hank not figure out until 2 weeks ago that we needed their magic touch and $700B to avert catastophy. One of the main obstacles is that no one believes them about the severity of the problem. We keep hearing their is a liquidity crisis, and maybe so, maybe not. But the solution is not preceived by the majority to place more money in the hands of those who p!$$ed it away the first time.

What the President Didn't Say

The purchase of MBS's is a very long term proposition. In OC California distressed properties are going up at an increasing rate. In August there were approx. 1400 foreclosures, but over 2400 default notices served. And the high end of the market, previously believed to be rock solid, is leading the charge.

Apparently people with larger incomes make poor decisions too. As part of the bailout let's make sure they can live in their houses for free for several months and forestall foreclosure

That should certainly stimulate the economy because they can spend the money they would normally use for a house payment. This sounds just as rational as the rest of the dynamic duo's bailout plan. Or maybe this is part of the plan

What the President Didn't Say

You really think so Johndough? Do you remember last summer when Bernanke said the problem would be contained? When Paulson said it was a suubprime issue, and would not have wider repercussions?

Do you remember when Bernanke was in confirmation hearings he said housing was not in a bubble?

These two have consistently been wrong. And negligent. Do we really want these yahoos with $700 billion in their hands?

We do need liquidity, that is not the same as buying up distressed assets.