AvlGuy's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/174157/comments http://seekingalpha.com/article/93341-prime-foreclosures-now-greater-than-subprime?source=feed#comment-243290 243290 Many Wall Street Pig "lip stickers" know that casual readers mistakenly inter-change the 3 words, foreclosure, defaults, and delinquencies. The pig men play the word-game switcheroo in blogdom frequently to make sectors look better.


Beyond that, the absolute numbers definitely matter when assessing both the impact of delinquencies on families and foreclosures on communities, as well as the direction of the trend. An increase in absolute numbers in a big pool or a small pool is still an upward trend.
I downloaded the HopeNow July Press Release and Data Table (a pdf) b4 posting my previous reader comment. Here's the direct link.
www.hopenow.com/upload...

Go to page 4 of the pdf; top table titled "Borrower Loan Workout Plans"; the 5th column titled, ".2008 July", and it states that there were 57,822 Prime Repayment plans executed v. 54,171 SubPrime Repayment plans.

It also shows that in addition to repayment plans, there are modifications, where more work has been done by their staff on sub-prime than prime loans. There are also their definition of terms and plans.
]]> Mon, 01 Sep 2008 13:37:38 -0400 Many Wall Street Pig "lip stickers" know that casual readers mistakenly inter-change the 3 words, foreclosure, defaults, and delinquencies. The pig men play the word-game switcheroo in blogdom frequently to make sectors look better.


Beyond that, the absolute numbers definitely matter when assessing both the impact of delinquencies on families and foreclosures on communities, as well as the direction of the trend. An increase in absolute numbers in a big pool or a small pool is still an upward trend.
I downloaded the HopeNow July Press Release and Data Table (a pdf) b4 posting my previous reader comment. Here's the direct link.
www.hopenow.com/upload...

Go to page 4 of the pdf; top table titled "Borrower Loan Workout Plans"; the 5th column titled, ".2008 July", and it states that there were 57,822 Prime Repayment plans executed v. 54,171 SubPrime Repayment plans.

It also shows that in addition to repayment plans, there are modifications, where more work has been done by their staff on sub-prime than prime loans. There are also their definition of terms and plans.
]]> http://seekingalpha.com/article/93057-the-risk-of-a-run-on-the-banking-system?source=feed#comment-242897 242897 Though the number of institutions involved in the S&L crisis dwarfs today's bank seizures, the number of institutions in existence and the scale in size makes for apples-to-oranges comparisons due to massive consolidation in the industry since 1989, as well as the recent inflated size of bank assets (now being viciously ‘corrected’ directly and indirectly by wholesale asset valuation deflation).
]]> Sun, 31 Aug 2008 21:34:47 -0400 Though the number of institutions involved in the S&L crisis dwarfs today's bank seizures, the number of institutions in existence and the scale in size makes for apples-to-oranges comparisons due to massive consolidation in the industry since 1989, as well as the recent inflated size of bank assets (now being viciously ‘corrected’ directly and indirectly by wholesale asset valuation deflation).
]]> http://seekingalpha.com/article/93057-the-risk-of-a-run-on-the-banking-system?source=feed#comment-242895 242895 What does the original and revised legislation governing FDIC Insurance say about the TIMELINESS of making insured depositors whole?
I give Sheila Blair credit, she wisely cherry picks when to bring it up: only when she has 'good news' trumpeting FDIC’s ‘quick response’ in orchestrating the weekend/overnight movement of insured accounts to new bank ownership during a bank seizure. Journalists don’t ask and she doesn’t offer that FDIC has no legislated or regulatory timeline to make any insured account whole.
Don’t ya love ‘Don’t Ask, Don’t Tell?
Behind the scenes, Ms. Blair’s wisely beefing up FDIC staff and systems. I suspect she's also timing seizures around the capacity/workload of staff, and not on a strict interpretation of whether a bank has become insolvent. After all, only the FDIC decides insolvency.
That all said, bank runs are a sociological mass reaction that can’t be forecasted using quantified measurements. It’s not like forecasting bank insolvencies based on data on reserves, etc. And the steps to cure the bank insolvency have no causal relation to steps to influence behavior of masses of people (depositors and the media) who could cascade a bank run.
10% of banks could be insolvent but if it’s kept quite til the FDIC can address them in a methodical manner, there will be no bank runs.
Flipside, a tipping point in technology-fueled rumors (like, hypothetically, via CalculatedRisk, the widely read blog, coupled with mega U-Tubing of images of bank-runs in effect) could case multiple bank runs in a rapid cascade even if only 1/100th of banks were actually insolvent.
]]> Sun, 31 Aug 2008 21:30:29 -0400 What does the original and revised legislation governing FDIC Insurance say about the TIMELINESS of making insured depositors whole?
I give Sheila Blair credit, she wisely cherry picks when to bring it up: only when she has 'good news' trumpeting FDIC’s ‘quick response’ in orchestrating the weekend/overnight movement of insured accounts to new bank ownership during a bank seizure. Journalists don’t ask and she doesn’t offer that FDIC has no legislated or regulatory timeline to make any insured account whole.
Don’t ya love ‘Don’t Ask, Don’t Tell?
Behind the scenes, Ms. Blair’s wisely beefing up FDIC staff and systems. I suspect she's also timing seizures around the capacity/workload of staff, and not on a strict interpretation of whether a bank has become insolvent. After all, only the FDIC decides insolvency.
That all said, bank runs are a sociological mass reaction that can’t be forecasted using quantified measurements. It’s not like forecasting bank insolvencies based on data on reserves, etc. And the steps to cure the bank insolvency have no causal relation to steps to influence behavior of masses of people (depositors and the media) who could cascade a bank run.
10% of banks could be insolvent but if it’s kept quite til the FDIC can address them in a methodical manner, there will be no bank runs.
Flipside, a tipping point in technology-fueled rumors (like, hypothetically, via CalculatedRisk, the widely read blog, coupled with mega U-Tubing of images of bank-runs in effect) could case multiple bank runs in a rapid cascade even if only 1/100th of banks were actually insolvent.
]]> http://seekingalpha.com/article/93341-prime-foreclosures-now-greater-than-subprime?source=feed#comment-242868 242868 But many questioners are uninformed on the absolute numbers and dollars involved in prime and alt-mortgages, as well as the trend in prime. This is the case w/general news media journalists and their non-finance-savvy readership. Thus even today, they still mistakenly phrase the question exclusively around sub-prime. That ignorance allows for this response that is true yet deceptive: “No, the sub-prime problem is not expanding as fast as before and may be trending down”.

Let's tweak the original question beyond stress to just banking and the credit industry, and ask what most local elected officials and homeowners (voters) are now asking: “What's happening to my community? How is the overall financial stress trending with regards to delinquencies, foreclosures, REOs and likely vacant properties?”
To honestly answer their question, the response has to be expanded to include the direction and absolute numbers and dollars in distressed prime and alt-mortgages, as well as sub-prime. Deceitful replies, as well as misguided replies from folks lacking the spine to face the truth on current trends, could again focus only on subprime trends.
If we choose to keep tailoring the wording of questions to purposely yield falsely comforting answers, we can even ask: “Are a large % of prime loans distressed?” And we will get the falsely comforting yet ‘accurate’ answer of “No, the majority of prime loans are not distressed” with deceitful omission of what the trend is in prime delinquency and foreclosures.
A worthless Q and A, but a factually correct one as trumpeted by some reader comments above.
We are not a nation of children, we don’t need to exercise ‘Lies of Omissions’ in the lame name of ‘not scaring the adults and talking ourselves into a recession.’
We need an online, print and TV news culture that possesses cojones and backbone, and less of a need to Go Along to Get Along.
That said, I wish the blogger, Harrison, had indeed used 90-day delinquency data rather than 60-days which may be over-stating the problem in each of the snapshots provided in the table.
]]> Sun, 31 Aug 2008 20:10:22 -0400 But many questioners are uninformed on the absolute numbers and dollars involved in prime and alt-mortgages, as well as the trend in prime. This is the case w/general news media journalists and their non-finance-savvy readership. Thus even today, they still mistakenly phrase the question exclusively around sub-prime. That ignorance allows for this response that is true yet deceptive: “No, the sub-prime problem is not expanding as fast as before and may be trending down”.

Let's tweak the original question beyond stress to just banking and the credit industry, and ask what most local elected officials and homeowners (voters) are now asking: “What's happening to my community? How is the overall financial stress trending with regards to delinquencies, foreclosures, REOs and likely vacant properties?”
To honestly answer their question, the response has to be expanded to include the direction and absolute numbers and dollars in distressed prime and alt-mortgages, as well as sub-prime. Deceitful replies, as well as misguided replies from folks lacking the spine to face the truth on current trends, could again focus only on subprime trends.
If we choose to keep tailoring the wording of questions to purposely yield falsely comforting answers, we can even ask: “Are a large % of prime loans distressed?” And we will get the falsely comforting yet ‘accurate’ answer of “No, the majority of prime loans are not distressed” with deceitful omission of what the trend is in prime delinquency and foreclosures.
A worthless Q and A, but a factually correct one as trumpeted by some reader comments above.
We are not a nation of children, we don’t need to exercise ‘Lies of Omissions’ in the lame name of ‘not scaring the adults and talking ourselves into a recession.’
We need an online, print and TV news culture that possesses cojones and backbone, and less of a need to Go Along to Get Along.
That said, I wish the blogger, Harrison, had indeed used 90-day delinquency data rather than 60-days which may be over-stating the problem in each of the snapshots provided in the table.
]]> http://seekingalpha.com/article/92682-u-s-household-debt-a-frightening-picture?source=feed#comment-240586 240586 But it gets better. While all the liabilities are fixed and unfluctuating, the assets, including homes & securities, would lose much of their $55 trillion valuation if the HHs all tried to liquidate them simultaneously.
That $55 trillion 'ephemeral, floating paper number' wouldnt net much when push came to shove.
Oddly this same Q&A came up twice in readers comments on an article in today's UK Telegraph.]]> Wed, 27 Aug 2008 23:57:23 -0400 But it gets better. While all the liabilities are fixed and unfluctuating, the assets, including homes & securities, would lose much of their $55 trillion valuation if the HHs all tried to liquidate them simultaneously.
That $55 trillion 'ephemeral, floating paper number' wouldnt net much when push came to shove.
Oddly this same Q&A came up twice in readers comments on an article in today's UK Telegraph.]]> http://seekingalpha.com/article/92682-u-s-household-debt-a-frightening-picture?source=feed#comment-240584 240584
And with credit card debt, we need to stop using 'average' credit card balances for all HH. Instead, we need to break the data 'snapshot' into 2 groups, those that carried a balance during the time period in question, and those that did not.
We need to assess the size of each group (i heard up to 40% of our 166 million HH dont carry a balance). Then we need to focus on the group that carries a balance and see what that the 'median' balance is. It would be great to also see what the median i-rates were. I suspect that the median credit card balance for the perhaps 100 million HHs that carry a balance is so much higher than the average balance for all HH, that it's strangling them and rendering them irrelevant to a recovery.
Any economic recovery based on consumer spending may have to be built on the balance-free HH, and their numbers may simply not be enuff to do more than keep the recession in a steady-state of existance.]]> Wed, 27 Aug 2008 23:45:36 -0400
And with credit card debt, we need to stop using 'average' credit card balances for all HH. Instead, we need to break the data 'snapshot' into 2 groups, those that carried a balance during the time period in question, and those that did not.
We need to assess the size of each group (i heard up to 40% of our 166 million HH dont carry a balance). Then we need to focus on the group that carries a balance and see what that the 'median' balance is. It would be great to also see what the median i-rates were. I suspect that the median credit card balance for the perhaps 100 million HHs that carry a balance is so much higher than the average balance for all HH, that it's strangling them and rendering them irrelevant to a recovery.
Any economic recovery based on consumer spending may have to be built on the balance-free HH, and their numbers may simply not be enuff to do more than keep the recession in a steady-state of existance.]]> http://seekingalpha.com/article/92518-let-s-not-emulate-the-hoover-administration?source=feed#comment-239764 239764 Starting in earnest with the Reagan Budgets of the 80's, these folks born before 1960 were told we had too much debt, too much leverage, too much borrowing from the future.
But did they find the courage & fortitude to do the right thing? No.
The chose to let the siren call of 'don’t worry, some other generation will foot these bills' seduce them.

And when they saw their own assets balloon in value, they truly believed the lies & whispers that they would 'escape' with all their ass(ets) intact, into a golden-age of luxury or overly-comfortable retirement. Or at least into a comfortable dementia.
The good news is that as the unwinding and deleveraging continues, it keeps everyone’s ‘skin in the game’ and thus puts growing pressures on boomers & their elders (as business leaders, politicians, policymakers, as well as workers & consumers) to come to the ‘negotiating table’ and work on some long-avoided solutions to the problems of household debt, corporate debt, and public debt and unfunded long-term obligations.
It may unfold as one of the rare times that life does something that is ‘fair’.
]]> Tue, 26 Aug 2008 23:35:56 -0400 Starting in earnest with the Reagan Budgets of the 80's, these folks born before 1960 were told we had too much debt, too much leverage, too much borrowing from the future.
But did they find the courage & fortitude to do the right thing? No.
The chose to let the siren call of 'don’t worry, some other generation will foot these bills' seduce them.

And when they saw their own assets balloon in value, they truly believed the lies & whispers that they would 'escape' with all their ass(ets) intact, into a golden-age of luxury or overly-comfortable retirement. Or at least into a comfortable dementia.
The good news is that as the unwinding and deleveraging continues, it keeps everyone’s ‘skin in the game’ and thus puts growing pressures on boomers & their elders (as business leaders, politicians, policymakers, as well as workers & consumers) to come to the ‘negotiating table’ and work on some long-avoided solutions to the problems of household debt, corporate debt, and public debt and unfunded long-term obligations.
It may unfold as one of the rare times that life does something that is ‘fair’.
]]> http://seekingalpha.com/article/92518-let-s-not-emulate-the-hoover-administration?source=feed#comment-239758 239758 Bring on the new valuations and new owners of these assets!]]> Tue, 26 Aug 2008 23:30:48 -0400 Bring on the new valuations and new owners of these assets!]]> http://seekingalpha.com/article/83869-six-flags-is-no-bargain-even-at-a-buck?source=feed#comment-199943 199943 I saw a similar disconnect in other blog/posts about Steve & Barry's. Yes, they have great bargains and have saved many a family a lot of money. Yes, they have a failed business plan with 200+ exploding commercial leases to boot.

Are American workers/employees ...investors too?...not realizing that great customer service, value, smiling faces, etc, can not save a business plan built on yesterday’s over-leveraged assumptions?
]]> Mon, 07 Jul 2008 12:54:22 -0400 I saw a similar disconnect in other blog/posts about Steve & Barry's. Yes, they have great bargains and have saved many a family a lot of money. Yes, they have a failed business plan with 200+ exploding commercial leases to boot.

Are American workers/employees ...investors too?...not realizing that great customer service, value, smiling faces, etc, can not save a business plan built on yesterday’s over-leveraged assumptions?
]]> http://seekingalpha.com/article/83792-what-was-left-out-of-the-jobs-report?source=feed#comment-198611 198611 I find that biz people who know better and yet insist on citing these bogus labor and GDP and CPI numbers when conversing, to be 1) wanting in honesty and character; or 2) battling emotional denial about whats about to happen to their portfolios, family business, company, industry or locale.]]> Fri, 04 Jul 2008 12:59:11 -0400 I find that biz people who know better and yet insist on citing these bogus labor and GDP and CPI numbers when conversing, to be 1) wanting in honesty and character; or 2) battling emotional denial about whats about to happen to their portfolios, family business, company, industry or locale.]]> http://seekingalpha.com/article/83773-year-over-year-jobless-growth-falls-to-zero?source=feed#comment-198605 198605
I don’t think even Apple or the WSJ analysts tracking AAPL stock see those phones at current price points ever impacting the data representing 111 million households. I'd like to see the usage numbers on actual internet banking for 2007 as well, I know the techno-geeks love these rosy projections for "future usage"...but let’s look at what’s really happening today.

Back to BLS...the incredible job growth numbers spewing just from the birth-death model alone is a bigger joke than the ‘hedonic adjustments’ used in GDP data.
America gov't lies to the American public & biz community via statistics. What else is new?
Fortunately, many firms do their own analysis rather than be misled into the poorhouse by bogus 'feel-good' gov't ‘miss-info-stats’.

Grocery sales are up as much due to price inflation as anything else. Our local biggest chain also sales gas and admitted that accounted for a chunk of revenue growth.]]> Fri, 04 Jul 2008 12:47:40 -0400
I don’t think even Apple or the WSJ analysts tracking AAPL stock see those phones at current price points ever impacting the data representing 111 million households. I'd like to see the usage numbers on actual internet banking for 2007 as well, I know the techno-geeks love these rosy projections for "future usage"...but let’s look at what’s really happening today.

Back to BLS...the incredible job growth numbers spewing just from the birth-death model alone is a bigger joke than the ‘hedonic adjustments’ used in GDP data.
America gov't lies to the American public & biz community via statistics. What else is new?
Fortunately, many firms do their own analysis rather than be misled into the poorhouse by bogus 'feel-good' gov't ‘miss-info-stats’.

Grocery sales are up as much due to price inflation as anything else. Our local biggest chain also sales gas and admitted that accounted for a chunk of revenue growth.]]> http://seekingalpha.com/article/83264-bill-gross-to-president-obama-double-the-deficit?source=feed#comment-196524 196524 “Wasn’t this suppose to happen to not ours, but those generations coming behind us?”, they ask.
These two-plus generations articulate it in many ways but they still would rather postpone the roosting of their career chickens until they have consumed all the harvested fruits of their inflated assets in their golden years and have expired from the scene...or at least descended into a pain-numbing dementia.
Facing seemingly indisputable evidence that the roosting is occurring about 1-2 decades earlier than promised, they are piling atop bandwagons of mega-spending initiatives that simply postpone the inevitable (again, and again, as Shiller writes) until they are no longer around...so that they can escape from having every asset they’ve accumulated tossed in as ‘Skin in the Game” unfolding in 2008. Such a human response indeed.
]]> Tue, 01 Jul 2008 10:16:56 -0400 “Wasn’t this suppose to happen to not ours, but those generations coming behind us?”, they ask.
These two-plus generations articulate it in many ways but they still would rather postpone the roosting of their career chickens until they have consumed all the harvested fruits of their inflated assets in their golden years and have expired from the scene...or at least descended into a pain-numbing dementia.
Facing seemingly indisputable evidence that the roosting is occurring about 1-2 decades earlier than promised, they are piling atop bandwagons of mega-spending initiatives that simply postpone the inevitable (again, and again, as Shiller writes) until they are no longer around...so that they can escape from having every asset they’ve accumulated tossed in as ‘Skin in the Game” unfolding in 2008. Such a human response indeed.
]]> http://seekingalpha.com/article/83264-bill-gross-to-president-obama-double-the-deficit?source=feed#comment-196518 196518 He does not take risks when he has something BIG to lose, he only does it when there's nothing left to lose. And political compromising never leads to BOLD actions.

Did you notice that the Republican campaigning effort to recapture seats in the 2010 mid-term elections will begin a mere 12 months from today! In Summer 09. If elected, Obama is not doing anything big & drastic that will frighten democrats up for re-election in 2010, or that will piss off and further organize republicans & conservatives & blue-dog democrats.
He’s told yall in his books that people don’t see the real him, they “see in me what they want to see”. What more does he have to say or write?
]]> Tue, 01 Jul 2008 10:08:56 -0400 He does not take risks when he has something BIG to lose, he only does it when there's nothing left to lose. And political compromising never leads to BOLD actions.

Did you notice that the Republican campaigning effort to recapture seats in the 2010 mid-term elections will begin a mere 12 months from today! In Summer 09. If elected, Obama is not doing anything big & drastic that will frighten democrats up for re-election in 2010, or that will piss off and further organize republicans & conservatives & blue-dog democrats.
He’s told yall in his books that people don’t see the real him, they “see in me what they want to see”. What more does he have to say or write?
]]> http://seekingalpha.com/article/83287-listen-to-the-companies-not-the-government-reports?source=feed#comment-196446 196446 People waiting for this headline before acting will be quite disappointed...and unprepared.
You well describe the serious psychology and mind-games and uber-spinning being perfected, and how it affects the markets: lots of bouncing up as well as bigger bouncing down. It has been the classic saw-tooth pattern and it may likely continue that way. A chart of weekly movement after the peak of the “Bear Stearns bounce” reveals a glorious downward saw tooth pattern.
As you know, the so-called Crash of 1929 was really almost 3 years of falling containing 6 major upward “head-fakes” before the real bottoming in the summer of 1932. Most media pundits and the public still think it was a unified single-event crash located in the month of October ’29.
Those waiting for a Big Crash announcement may end up like the fabled stationary frog in the cooking pot of water which is creeping up in temp until it’s fatal to the frog.

Frog legs anyone? They’re quite a delicacy. I got the recipe on CNBC.
]]> Tue, 01 Jul 2008 08:45:52 -0400 People waiting for this headline before acting will be quite disappointed...and unprepared.
You well describe the serious psychology and mind-games and uber-spinning being perfected, and how it affects the markets: lots of bouncing up as well as bigger bouncing down. It has been the classic saw-tooth pattern and it may likely continue that way. A chart of weekly movement after the peak of the “Bear Stearns bounce” reveals a glorious downward saw tooth pattern.
As you know, the so-called Crash of 1929 was really almost 3 years of falling containing 6 major upward “head-fakes” before the real bottoming in the summer of 1932. Most media pundits and the public still think it was a unified single-event crash located in the month of October ’29.
Those waiting for a Big Crash announcement may end up like the fabled stationary frog in the cooking pot of water which is creeping up in temp until it’s fatal to the frog.

Frog legs anyone? They’re quite a delicacy. I got the recipe on CNBC.
]]> http://seekingalpha.com/article/83006-foreclosure-stimulus-to-boost-tech-s-four-horsemen?source=feed#comment-194829 194829 Rents have risen significantly in a many markets. Pre-2008 rent price data is worthless in some areas. When homeowners become involuntary renters, they typically also pay monthly to store tons & rooms of stuff, an expense that doesn’t show up as an apartment rental expense. Mentally, going thru the 4-6-12 months of stress and drama of losing a home just doesn’t equate to impulses to cheerily upgrade every dang gizmo gadget in response to the newest ad. Ice cream and DVDs and music downloads might be the more likely impulse buy to cheer-up sagging spirits.
And only gadget upgrades out of necessity are what they will do, these teeming thousands of stressed-out ‘new’ renters penned-up in crowded apts built of cheap materials that they aren't allowed to fix, repair or upgrade. They're also stressed because the only apt they could get is even FURTHER from the schools, jobs, services they need, and now they have to spend more on gas. Not really a marketer’s dream when peddling the next generation of a gadget people already own.
And finally, most sub-primes are not so savvy as to not make whatever pmts they can while vainly negotiating even after the NOD...many also move out far in advance of a sherriff’s arrival. Maybe more Alt-A foreclosures are savvy enuff to save while waiting out the process. Ditto for the primes, maybe. The house flippers and speculators usually are juggling so many financial mis-haps that i dont think they're accumulkating savings during the foreclosure period.

OK, I just described how human beings typically behave in a foreclosure. Who are u guys describing?
]]> Sat, 28 Jun 2008 14:55:33 -0400 Rents have risen significantly in a many markets. Pre-2008 rent price data is worthless in some areas. When homeowners become involuntary renters, they typically also pay monthly to store tons & rooms of stuff, an expense that doesn’t show up as an apartment rental expense. Mentally, going thru the 4-6-12 months of stress and drama of losing a home just doesn’t equate to impulses to cheerily upgrade every dang gizmo gadget in response to the newest ad. Ice cream and DVDs and music downloads might be the more likely impulse buy to cheer-up sagging spirits.
And only gadget upgrades out of necessity are what they will do, these teeming thousands of stressed-out ‘new’ renters penned-up in crowded apts built of cheap materials that they aren't allowed to fix, repair or upgrade. They're also stressed because the only apt they could get is even FURTHER from the schools, jobs, services they need, and now they have to spend more on gas. Not really a marketer’s dream when peddling the next generation of a gadget people already own.
And finally, most sub-primes are not so savvy as to not make whatever pmts they can while vainly negotiating even after the NOD...many also move out far in advance of a sherriff’s arrival. Maybe more Alt-A foreclosures are savvy enuff to save while waiting out the process. Ditto for the primes, maybe. The house flippers and speculators usually are juggling so many financial mis-haps that i dont think they're accumulkating savings during the foreclosure period.

OK, I just described how human beings typically behave in a foreclosure. Who are u guys describing?
]]> http://seekingalpha.com/article/83010-mass-transit-traffic-spikes?source=feed#comment-194819 194819
I expect whatever mass –transit trends that are documentable and verifiable (revenue, tickets sold, etc, as opposed to ‘number of empty seats’) to not move linearly. Humans adjust nonlinearly, and drivers will do so as the realities of mass-transit and post $3.50/gal gas become more familiar. Some folks will slide back to driving after simply getting a better handle on an alternative HH budget item to cut to free up some gas money. Transit newbies will behave one way under summer and pleasant temperatures, and a completely different way in winter & unpleasant weather (drive).

For some, the summer mass transit crowds of smelly riders and cell-phone gabbers will affect their numbers as well.

Also, many mass transit systems have never operated at 100%, let alone 110% or more of capacity...or for a sustained period of time. Management is probably ill-prepared for unexpected issues like1) equipment failures occurring earlier and more frequently, 2) normal repair lag times to now cause more disruption than was realized, 3) transit employee sick call-ins to carry far more weight than ever before, etc, etc.
]]> Sat, 28 Jun 2008 14:19:10 -0400
I expect whatever mass –transit trends that are documentable and verifiable (revenue, tickets sold, etc, as opposed to ‘number of empty seats’) to not move linearly. Humans adjust nonlinearly, and drivers will do so as the realities of mass-transit and post $3.50/gal gas become more familiar. Some folks will slide back to driving after simply getting a better handle on an alternative HH budget item to cut to free up some gas money. Transit newbies will behave one way under summer and pleasant temperatures, and a completely different way in winter & unpleasant weather (drive).

For some, the summer mass transit crowds of smelly riders and cell-phone gabbers will affect their numbers as well.

Also, many mass transit systems have never operated at 100%, let alone 110% or more of capacity...or for a sustained period of time. Management is probably ill-prepared for unexpected issues like1) equipment failures occurring earlier and more frequently, 2) normal repair lag times to now cause more disruption than was realized, 3) transit employee sick call-ins to carry far more weight than ever before, etc, etc.
]]> http://seekingalpha.com/article/81663-lies-damn-lies-and-median-house-prices?source=feed#comment-188145 188145 Wed, 18 Jun 2008 23:46:00 -0400 http://seekingalpha.com/article/81663-lies-damn-lies-and-median-house-prices?source=feed#comment-188141 188141 Now, exactly which markets are doing that is up for discussion, but the math is correct.
BTW, within 60-days any trend can end.]]> Wed, 18 Jun 2008 23:42:44 -0400 Now, exactly which markets are doing that is up for discussion, but the math is correct.
BTW, within 60-days any trend can end.]]> http://seekingalpha.com/article/80203-doo-doo-bank-drill-down-part-3-sun-trust-bank?source=feed#comment-187801 187801 Wed, 18 Jun 2008 13:00:46 -0400 http://seekingalpha.com/article/79388-subprime-losses-don-t-believe-everything-you-hear?source=feed#comment-178502 178502 However, GIGO counts when trying to correlate data on foreclosures (Sub prime, Alt-A, ARMs etc) to other economically-related items such bank stocks, housing market bottoms, construction & homebuilding, and consumer spending.
]]> Tue, 03 Jun 2008 10:33:40 -0400 However, GIGO counts when trying to correlate data on foreclosures (Sub prime, Alt-A, ARMs etc) to other economically-related items such bank stocks, housing market bottoms, construction & homebuilding, and consumer spending.
]]> http://seekingalpha.com/article/79682-finance-credit-cards-and-the-fed?source=feed#comment-178067 178067 Mon, 02 Jun 2008 13:41:58 -0400 http://seekingalpha.com/article/79604-sears-the-end-is-near?source=feed#comment-178040 178040 We'll see how plan b or plan c work.]]> Mon, 02 Jun 2008 13:09:46 -0400 We'll see how plan b or plan c work.]]> http://seekingalpha.com/article/78971-capital-one-credit-crisis-and-subprime-cardholders?source=feed#comment-177681 177681 Sun, 01 Jun 2008 20:53:30 -0400 http://seekingalpha.com/article/78316-oil-is-up-due-to-fundamentals-not-speculation?source=feed#comment-173178 173178
As much as people love to cite their history, past consumption models matter less because of the wildcard presented by China & India, whose growing demand will not be linearly immune to pricing, but will not so easily abate either.

My bet is that prices will stay high and will only be significantly dented if a deep & cascading recession circles the globe’s major economies. And that will only delay the inevitable re-rising of prices. Only an enduring “L”-shaped recession of close to 10 years will materially change our long-term circumstances, because we need ten years for the solutions re-stated below to kick in.

As alluring as the green-fantasy is of people returning to walking/bicycling in 2008, it is not just years away due to the inertia of human psychology; it is perhaps decades away due to the reality that access to medical services, high-wage service jobs, retail, and preferred entertainment, is beyond reasonable walking & biking distances thanks to the auto-oriented pattern of development in the US, the level of health of the American workforce, and the declining health of the aging boomers and also aging Generation Xers now entering their 40s and late 30s, an age when bad knees, bad feet, etc, really make their presence felt. These folks aint gonna be biking 5 miles or walking 2 miles for a very long time.

The current credit crunch and deleveraging will keep the brakes on any significant mass relocation of retail, jobs, medical centers, etc, off of interstate interchanges (as only one example) and back to within walking/biking distances of suburban cul-de-sacs and the residential neighborhoods of most mid-size cities. The infrastructure cost of implementing any decent scale of mass transit rail & light rail remains politically unpalatable, and the timelines involved are counted in decades, not years (see LA, Portland, Charlotte, much-delayed efforts).
And the current housing crisis prevents 10s of millions from selling their ‘isolated’ homes and buying closer to existing mass transit or closer to their jobs. More energy efficient bus fleets and autos are still aways off, at least 5-7 years.

Our generation will be stuck with prohibitively-high energy & transportation costs; the next generation, at best, will be in a position to use new smarter transit systems, wiser energy sources, and wiser and greener urban development patterns...circa 2018 and beyond.
]]> Sat, 24 May 2008 11:45:53 -0400
As much as people love to cite their history, past consumption models matter less because of the wildcard presented by China & India, whose growing demand will not be linearly immune to pricing, but will not so easily abate either.

My bet is that prices will stay high and will only be significantly dented if a deep & cascading recession circles the globe’s major economies. And that will only delay the inevitable re-rising of prices. Only an enduring “L”-shaped recession of close to 10 years will materially change our long-term circumstances, because we need ten years for the solutions re-stated below to kick in.

As alluring as the green-fantasy is of people returning to walking/bicycling in 2008, it is not just years away due to the inertia of human psychology; it is perhaps decades away due to the reality that access to medical services, high-wage service jobs, retail, and preferred entertainment, is beyond reasonable walking & biking distances thanks to the auto-oriented pattern of development in the US, the level of health of the American workforce, and the declining health of the aging boomers and also aging Generation Xers now entering their 40s and late 30s, an age when bad knees, bad feet, etc, really make their presence felt. These folks aint gonna be biking 5 miles or walking 2 miles for a very long time.

The current credit crunch and deleveraging will keep the brakes on any significant mass relocation of retail, jobs, medical centers, etc, off of interstate interchanges (as only one example) and back to within walking/biking distances of suburban cul-de-sacs and the residential neighborhoods of most mid-size cities. The infrastructure cost of implementing any decent scale of mass transit rail & light rail remains politically unpalatable, and the timelines involved are counted in decades, not years (see LA, Portland, Charlotte, much-delayed efforts).
And the current housing crisis prevents 10s of millions from selling their ‘isolated’ homes and buying closer to existing mass transit or closer to their jobs. More energy efficient bus fleets and autos are still aways off, at least 5-7 years.

Our generation will be stuck with prohibitively-high energy & transportation costs; the next generation, at best, will be in a position to use new smarter transit systems, wiser energy sources, and wiser and greener urban development patterns...circa 2018 and beyond.
]]> http://seekingalpha.com/article/78592-bill-gross-inflation-and-higher-food-prices-for-the-next-decade?source=feed#comment-172638 172638 Fri, 23 May 2008 11:13:27 -0400 http://seekingalpha.com/article/74824-from-housing-to-employment-we-re-in-big-trouble?source=feed#comment-161309 161309 Government economic statistics are co-enablers of such spin-doctors and deny-mavens. As pointed out in numerous blogs, the govt has "Goldilocked" these three much-cited economic measures: 1. CPI, which doesn’t include anything that’s inflating fast (food & energy, of course); 2. Unemployment rate, which doesn’t include people who are no longer receiving benefits, the chronically unemployed, people forced into SSI, the under-employed, and part-timers who search for full-time work in vain; and 3) GDP, which is plumped up to include all kinds of bizarre adjustments including the (jobs from the business) “Birth/Death” model and fictitious “hedonistic “adjustments (their word, not mine).

Bottom-line: This deleveraging is historically unique. I think it's pollyanish to dismiss such a wildcard and its effect on credit markets and solvency, and the shape of the “post-deleveraged” world. It’s really a matter of how easy or how hard will it be to deny what people are experiencing economically.
]]> Sat, 03 May 2008 23:23:48 -0400 Government economic statistics are co-enablers of such spin-doctors and deny-mavens. As pointed out in numerous blogs, the govt has "Goldilocked" these three much-cited economic measures: 1. CPI, which doesn’t include anything that’s inflating fast (food & energy, of course); 2. Unemployment rate, which doesn’t include people who are no longer receiving benefits, the chronically unemployed, people forced into SSI, the under-employed, and part-timers who search for full-time work in vain; and 3) GDP, which is plumped up to include all kinds of bizarre adjustments including the (jobs from the business) “Birth/Death” model and fictitious “hedonistic “adjustments (their word, not mine).

Bottom-line: This deleveraging is historically unique. I think it's pollyanish to dismiss such a wildcard and its effect on credit markets and solvency, and the shape of the “post-deleveraged” world. It’s really a matter of how easy or how hard will it be to deny what people are experiencing economically.
]]> http://seekingalpha.com/article/75050-what-about-the-pocket-recessions?source=feed#comment-160163 160163 Deleveraging is halting all the dollar turnovers, in some cases reversing the flow. Add in the fact that less than 20% of retail floor space under construction is pre-leased.
Then add in the recession.
It's quite a challenge to see how pocket recessions do not spread in daisy-chained fashion across geography and industries.
Any good news? Yes. San Diego media reports last week that much of the county’s housing is now affordable based on median salaries and median home price. I expect more ‘pocket affordability’ to occur. However, the recession/ deleveraging is a packaged deal that delivers unemployment, shrunken payrolls, and social strains. Especially if its an ‘L’ or ‘W’ recession.
.
]]> Thu, 01 May 2008 12:45:14 -0400 Deleveraging is halting all the dollar turnovers, in some cases reversing the flow. Add in the fact that less than 20% of retail floor space under construction is pre-leased.
Then add in the recession.
It's quite a challenge to see how pocket recessions do not spread in daisy-chained fashion across geography and industries.
Any good news? Yes. San Diego media reports last week that much of the county’s housing is now affordable based on median salaries and median home price. I expect more ‘pocket affordability’ to occur. However, the recession/ deleveraging is a packaged deal that delivers unemployment, shrunken payrolls, and social strains. Especially if its an ‘L’ or ‘W’ recession.
.
]]> http://seekingalpha.com/article/74403-don-t-be-distracted-by-greenspan-blaming?source=feed#comment-159271 159271 You strike me as being part of the minority who are emotionally disciplined, and as Dr. Phil would say, who just don’t get much of an emotional kick or benefit from venting, ranting, finger-pointing and pushing the envelope on the blame-game.
But lots of people do get both a high and a sense of relief by doing that.
But as you noted, at the end of the day, that behavior doesn’t fix any problem. In this case, it doesn’t make them better traders or investors. Nor does it prepare them better for the next challenge. But it sure is a relief/release for them, ain’t it?

I expect the emoting to continue...but, because I think the deleveraging is far far from over...and because there's evidence this recession may indeed be a long ‘L’ or a double ‘W’ (depending on geography & economic class & profession) ...there will be sufficient time for many people to travel the path of the 7 Stages of Grief over what was 'lost' as well as grief over what many feel they 'lost' but which they never actually 'owned'. The seven stages of grief for sufferers will ascend over time: Shock or Disbelief, Denial, Bargaining, Guilt, Anger, Depression, Acceptance and Hope. Not everyone is at the same stage..and different ones travel at different paces and sequence order for #2 thru #6.
By 2012, you will probably be tired of telling people to be disciplined and focused. Maybe even by 2009
]]> Wed, 30 Apr 2008 09:28:33 -0400 You strike me as being part of the minority who are emotionally disciplined, and as Dr. Phil would say, who just don’t get much of an emotional kick or benefit from venting, ranting, finger-pointing and pushing the envelope on the blame-game.
But lots of people do get both a high and a sense of relief by doing that.
But as you noted, at the end of the day, that behavior doesn’t fix any problem. In this case, it doesn’t make them better traders or investors. Nor does it prepare them better for the next challenge. But it sure is a relief/release for them, ain’t it?

I expect the emoting to continue...but, because I think the deleveraging is far far from over...and because there's evidence this recession may indeed be a long ‘L’ or a double ‘W’ (depending on geography & economic class & profession) ...there will be sufficient time for many people to travel the path of the 7 Stages of Grief over what was 'lost' as well as grief over what many feel they 'lost' but which they never actually 'owned'. The seven stages of grief for sufferers will ascend over time: Shock or Disbelief, Denial, Bargaining, Guilt, Anger, Depression, Acceptance and Hope. Not everyone is at the same stage..and different ones travel at different paces and sequence order for #2 thru #6.
By 2012, you will probably be tired of telling people to be disciplined and focused. Maybe even by 2009
]]> http://seekingalpha.com/article/74227-how-housing-finance-actually-works?source=feed#comment-157635 157635 The history Mr.Brown cites may be correct, but the $million-question is: is it still relevant to the credit situation in 2008? I do not think historic mortgage lifespans or those of the 2006 vintage will apply to the balance of vintage 2006 or to those beyond. And at this point, we know the issue no longer is exclusively subprimes, it's now Libor -pegged ARMs , Alt-A's, and ARM recasts.]]> Sun, 27 Apr 2008 19:54:37 -0400 The history Mr.Brown cites may be correct, but the $million-question is: is it still relevant to the credit situation in 2008? I do not think historic mortgage lifespans or those of the 2006 vintage will apply to the balance of vintage 2006 or to those beyond. And at this point, we know the issue no longer is exclusively subprimes, it's now Libor -pegged ARMs , Alt-A's, and ARM recasts.]]> http://seekingalpha.com/article/72534-what-s-ahead-for-real-estate-doing-the-math?source=feed#comment-152507 152507 I’d like to add something:
Neither the Feds, Congress nor Treasury wants to go down as the 21st Century equivalent of Herbert Hoover, so they broken old rules, norms, and traditions regarding Bears Stearns and the investment houses. Expect more of the same as they grapple/fumble for a real fix to the larger credit crisis of which the sub-prime and unfolding Alt-A problems are only a sub-set. The crisis extends to HELOCs, student loans, commercial loans and soon, consumer credit cards. It’s impacting each slightly different.
Fortunately, neither Treasury nor the Feds have claimed victory. I’m in the group that feels all they’ve done is allowed the crisis to unfold more slowly.
Uses of frightening words like “financial system meltdown” are paralyzing some people. Many experience practitioners of modern “high finance” have admitted in other blogs that the global finance system is unwinding (or deleveraging) and it’s so far unstoppable.

Rather than focus on paralyzing words like “meltdown”, I hope the Feds and high finance players are evaluating scenarios that entail recognizing the inevitable: the completion of the de-leveraging process which force massive write-downs of debt and the value of any underlying collateral, be it homes, strip malls, student undergraduate degrees, autos, office complexes or entire municipal infrastructures (e.g. sewage systems).

This seems destined to occur in the midst of a recession. On-going de-leveraging scenarios should include “L”-shaped recessions of significant lengths (think 1973-75). This opens the door for deleveraging to impact careers and occupations that were sustained by excessively leveraged firms and markets (Wall Street, homebuilding, trophy skyscrapers, Hollywood filmmaking, boutique hotels and mega-trendy restaurants, over-priced undergrad education programs, etc.
In all scenarios, the underlying hard assets (defined as anything that if kicked, will cause the kicker some toe pain) will still exists; it simply has a new valuation.
Yes, it will be ugly and psychologically painful, but the assets will still exist…most likely with new owners who paid a lot less for them. There will still be Visa, MasterCard, Toyota, banks, malls, universities, Google, sewers, farms, food and houses and apartments. Some or all with new valuations and new owners.
What’s not guaranteed is that all lessons will be learned and society will be wiser as a whole.
]]> Thu, 17 Apr 2008 18:17:01 -0400 I’d like to add something:
Neither the Feds, Congress nor Treasury wants to go down as the 21st Century equivalent of Herbert Hoover, so they broken old rules, norms, and traditions regarding Bears Stearns and the investment houses. Expect more of the same as they grapple/fumble for a real fix to the larger credit crisis of which the sub-prime and unfolding Alt-A problems are only a sub-set. The crisis extends to HELOCs, student loans, commercial loans and soon, consumer credit cards. It’s impacting each slightly different.
Fortunately, neither Treasury nor the Feds have claimed victory. I’m in the group that feels all they’ve done is allowed the crisis to unfold more slowly.
Uses of frightening words like “financial system meltdown” are paralyzing some people. Many experience practitioners of modern “high finance” have admitted in other blogs that the global finance system is unwinding (or deleveraging) and it’s so far unstoppable.

Rather than focus on paralyzing words like “meltdown”, I hope the Feds and high finance players are evaluating scenarios that entail recognizing the inevitable: the completion of the de-leveraging process which force massive write-downs of debt and the value of any underlying collateral, be it homes, strip malls, student undergraduate degrees, autos, office complexes or entire municipal infrastructures (e.g. sewage systems).

This seems destined to occur in the midst of a recession. On-going de-leveraging scenarios should include “L”-shaped recessions of significant lengths (think 1973-75). This opens the door for deleveraging to impact careers and occupations that were sustained by excessively leveraged firms and markets (Wall Street, homebuilding, trophy skyscrapers, Hollywood filmmaking, boutique hotels and mega-trendy restaurants, over-priced undergrad education programs, etc.
In all scenarios, the underlying hard assets (defined as anything that if kicked, will cause the kicker some toe pain) will still exists; it simply has a new valuation.
Yes, it will be ugly and psychologically painful, but the assets will still exist…most likely with new owners who paid a lot less for them. There will still be Visa, MasterCard, Toyota, banks, malls, universities, Google, sewers, farms, food and houses and apartments. Some or all with new valuations and new owners.
What’s not guaranteed is that all lessons will be learned and society will be wiser as a whole.
]]>