We all wish for more exciting markets and our wishes were granted this past week, except no one wants an earthquake or war to make it happen.
Here is Michael Lewis expanding upon his prescient article of 23 years ago:
Back in 1988, I left a job on Wall Street to write for a living. Amazed that magazine editors would pay me to travel anywhere in the world so long as I could convince them there was a story to be told about the place, I began casting around for stories about places I wanted to go. The first place I wanted to go was Japan.
Can we actually be seeing some sort of claw back from FDIC lawsuits accusing the executive's of gross negligence? Pass the popcorn.
WAMU Execs Sued By FDIC
A U.S. government regulator sued three former top executives at Washington Mutual Bank for their role in the biggest bank failure in the nation's history, accusing them of recklessly making billions of dollars in shoddy home loans.
WAMU Execs and Their Wives Sued by FDIC
The wives of Washington Mutual Inc.'s two top executives when the nation's largest thrift collapsed in 2008 were accused by the Federal Deposit Insurance Corp. of illegally moving cash and houses into trusts in an effort to shield the assets from legal claims.
Somewhere in the world someone cares about this:
Bootup: Facebook ‘likes’ worth more than Tweets, study finds
Today in technology: In its second analysis of how social media intersects with commerce, event management company Eventbrite finds a single ‘like’ on Facebook to be far more profitable than a mention on Twitter. Google Inc. launches a new service for non-profits on Wednesday, details of online retailer Amazon.com Inc.’s upcoming App Store for Android devices leaks and Apple Inc. chief executive Steve Jobs just may be the uncle of cartoon legend Homer Simpson.
"The FDIC's board has approved civil lawsuits against 158 bank executives, employees and directors, seeking to recoup about $2 billion in bank losses that the regulators say were the result of negligence or misconduct. FDIC attorneys have been in settlement talks with many of the executives."
ReplyDeleteThat Michael Lewis article was fantastic.
ReplyDeleteSo yesterday my wife went from AmeriCant to an AmeriCan citizen, this is something that I have been incouraging her for years to do, so I am happy it is a done deal now.
ReplyDeleteAt the age of 12(ish) her parents brought her over from Mexico and this is the only home she knows, so in her heart she has always been an American, but now it is official.
The ceremony only took about an hour, there were a mix of all types of nationalities and a lot of Ukrainians, some people were younger and a couple who were really old. Not everyone could speak English well and a couple even had interpretures.
After the cerimony my newly created American wanted to go get something to eat, so we choose a reasturant and start heading in that direction, but life being as unpredictable as it is, along the way I pull in behind a pickup truck that has a bumper sticker that says "The first requirement of being an American is to speak English" and this guys actually pulls into the same reasturant just ahead of me.
I wanted so badly to tell him I just came from an Oath Cerimony and I know for a fact that some of those new Americans could NOT speak English.
But my wife has more sense then I do so talked me out of it.
One of the things that I thought about during the ceremony is how do the Indians (American) feel about this whole process.
Anyway just thought I would share that with you and best of luck to all in your trading.
Mangy Mutt
India and China trying to control inflation:
ReplyDeleteIndia raises rates again -8th time - bloomberg.com
China raises reserve requirements -Businessinsider.com
Bank of Canada sold Yen as part of co-ordinated effort to lower the yen. -Bloomberg
TD bank warns food inlation to go up over 8% - GlobeandMail
All that printed Yen has to go somewhere - most likely food, fuel, medical supplies and later building supplies.
ICan
Correction ovah? Open my little NYTimes app and every article seems dire. Check the markets and it's rally time. I've heard of buying when there's blood in the streets, but.......
ReplyDeleteCould be a good time to dump my remaining few equity longs here into this rally.
ICan - Thank goodness we do not have to worry about inflation over here.
ReplyDeleteMutt
Mannwich - Predicting the long term future is easy and safe, anybody can say "This event or that Event will happen sometime between x year and y year"
ReplyDeleteBut predicting the short term, is insane, because the scope is too narrow and the time frame too short. But after reading, reflecting and getting a somewhat better (useing that word losely) grasp of things this is how I feel things may work out and am kind of playing it that way.
Ben BerStupidAnke is a student of the Great Depression and his school of thought is there was not enough money put into the system the last time. But what he truly fails to grasp is we as a society, country and world can not take on any more debt - We have literally hit our limits.
Recent world events have caused his weak foundation to start cracking, so he is doing ANOTHER quick repair job...Which is only making things worser.
I do not believe the correction is over, I do believe we are in a gamed system and we are in a snap back.
I expect this to last into next week, at least Monday, probably Tuesday and Maybe Wensday, but then the DSS/Manny indicator is in and we start seeing a lot more weakness and which point BerStupidAnke will gun the engine and we move up in a side ways pattern until we get to about 13000 DOW and 1387 S&P.
Then things start to slide back ward for real.
Anyway - All the above is to say I REALLY don't know anything, that is just my guess and even though I believe Monday will be another strong move up in the market, I fully plan to exit my position sometime today.
Mutt
Mutt - What a great story! Congratulations to you and your wife! Mexican eh? I mostly hang out with the Mexicans here at work, my best friend, guy I call my work husband (don't ask) is Mexican.
ReplyDeleteI would show you something funny about Mexican't but although I thought it was very funny, I wouldn't want to offend anyone!
Oh screw it - if you're easily offended don't google it. If not, google Mexicant and look at the pictures that come up.
ReplyDeleteThis takes buying on "bad news" to new levels........
ReplyDeleteWow, that Michael Lewis article is really something.
ReplyDeleteDXY still sinking. Who was it who was calling on that to go to 90 not long ago?
ReplyDeleteTLT green. Might we get a reversal before day's end?
ReplyDeleteThor - You should know by now I am not easily offened, to me if it is meant in good humor, to heck with offending a few (Although some people hide behind "humor" so they can be offensive)
ReplyDeleteI can not check right now, because I am at work.
The other day, my son and I were driving down the road he asked me some silly question and I told him "No, because you are a Mexicant" he looks at me and says "That's what you say cracker"
Anyway it was one of those things that you had to be there for, but it was funny.
But the saddest thing about my wife getting her citizenship is, now I can no longer threaten to all imigration on her if she does not agree with me :)
Mutt
Mutt,
ReplyDeleteCongrats to your wife! You must be so proud of her.
Good one by PK today. I think this is why politically the GOP's uber-focus on the deficit instead of jobs is going to really come back to bite them....
ReplyDeletehttp://www.nytimes.com/2011/03/18/opinion/18krugman.html?_r=2&hp
Mutt,
ReplyDeleteThat is a funny story about your son.
Thor,
ReplyDeleteI really do not remember, but who was it that was calling for the dollar to go to 90?
Manny,
ReplyDeleteHis first article, the one written in 1989 (in case you did not read it) was filled with such stupendous stupidities by the Japanese government I almost went and hid under my bed.
And remember, his first article was written during the Japan Inc. days, when Japan was thought to be the best country in the world due to their superior capabilities, planning, and foresight.
So to read about the earthquake preparedness (delusional, all of it) that the Japanese had put in place in a city that was leveled by earthquakes every 70-80 years about made my head explode. If the big one hits Tokyo it will make this one seem like a puff of smoke.
The financial ramifications of Tokyo being leveled by an earthquake are all most too terrible to fathom.
@Denise: In some ways, I'm beginning to think the human race is getting dumber. De-volution.
ReplyDeleteManny - You mean like Idiocracy? Sad how it's actually coming true isn't it?
ReplyDeleteAs I was listening to Obama this morning telling the nation and the world that we are safe from the radiation, I had a flash back to Christine Todd Whitman telling New York and the first responders (who are stricken and dying from being exposed to God knows what) that it was ok to go back to the pile and lower Manhattan.
ReplyDeleteWhat is Obama gonna say, "You've all been contaminated and you are gonna die?"
And how can anyone protect the entire western seaboard of the US from any radiation that does fall?
Then I got to thinking that in the Bush years they staffed crucial agencies with their cronies, and then gutted the agencies, deregulated them, deprived them of funding, would it be any different at the NRC?
ReplyDeleteExactly what I mean, Thor.
ReplyDelete@Denise: It's almost comical, isn't it?
Manny,
ReplyDeleteWe have met the enemy and he is us.
Pogo.
A just judge blocked WI's recent anti-union bill. Let the games continue!
ReplyDeletehttp://www.huffingtonpost.com/2011/03/18/wisconsin-union-law-lawsuit_n_837580.html
ReplyDeleteBingo Denise.
ReplyDeleteIgnorance + Stupidity + Narcissism + Rampant Indivudualism/Selfishness = Epic Fail
I also think that with technology today, nothing is a secret anymore, meaning everything eventually gets exposed, including the continual foibles of our so-called "betters". I wonder if this has at least partly led to loss of faith in our "leaders" more than anything, meaning prior to all this technology, these things were merely conveniently hidden, making it all basically a happy mirage back then.
ReplyDeleteI would pay money to see those WAMU wives in all of their finery testifying before congress, crying poor mouth and professing ignorance about how the $10 million Park Ave apartment, the $15 million Hampton's beach house, the $5 million chateau in the south of France, and the measly little Gulfstream V was put into her name without her knowing about it.
ReplyDeleteI am afraid to google at what happened during the Bush years to the NRC.
ReplyDeleteI had some crazy nightmares last night after reading that Michael Lewis article.
ReplyDeleteDenise - True to a point. My best friend has been OCDing over this nuclear mess since it began. Look at history as a guide.
ReplyDeleteFor one, the dozens and dozens of above ground nuclear tests done both in the Pacific Ocean and different parts of the deserts here in the West.
Then look at Chernobyl and look at both the radiation fallout across Europe as well as the long term affects of that radiation on the people living in places like Germany, Poland, and the Nordic countries.
I'm not saying there aren't radiation dangers, just that in this case, there's a lot more panic driven hyperbole than anything else. It's a very VERY long way across the Pacific to Japan. Airports are already catching low levels of radiation on planes and people coming back from the area and there are citizens all over the west coast setting up mobile geiger counters that you can access online.
Even in the extremely rare case where this reactor melts down, we would know instantly what was coming, whether the government chose to tell us or not.
@Denise: That's partly why I stopped reading "ECONNED" by Yves Smith before bedtime. I've doing lighter reading lately. Think it's better for my sleep.
ReplyDeleterare care where the reactors melt down and spew the kind of radiation that could travel all the way across the pacific in force I should say. Apparently much of it would fall out as rain along the way.
ReplyDeleteDenise (11:35) - Yes I am very proud of her, she is a great woman and helped to make me a better man.
ReplyDeleteShe is as inperfect as the rest of us, but she has come along way and wants to put our kids first.
She has a very intersting story, maybe if time permits she can share parts of it.
Anyway thank you for your kind words.
Mutt
http://radiationnetwork.com/
ReplyDeleteor
http://www.ustream.tv/channel/live-radiation-monitoring-from-west-la#utm_campaigne=synclickback&source=http://www.enviroreporter.com/2011/03/enviroreporter-coms-radiation-station/&medium=7558036
I'm on both of these all day ;-)
Yes, I agree, my point is that there is not much anyone or any government can do once it happens. Run for the hills!
ReplyDeleteAnd no one can be comforted to know that the two in CA are old and vulnerable.
Here's a cheery thought, there is a nuclear power plant located in Michigan on Lake Michigan not far from Chicago.
If that thing ever blows (or terrorists take it out) the largest fresh water lakes in America would die.
Thor,
ReplyDeleteSee, even you are brainwashed! :-)
And paranoid!
ReplyDeleteCome on guys. Bush knew what he was doing and Obama is following his footsteps, so everything will turn out great.
ReplyDeleteThey aren't going to let a little radiation hurt us Americans, our governement cares to much about us.
*Looks at the Jack Daniels Bottle* WOW this stuff will really mess with your head...So just ignore the above.
Mutt
Mutt,
ReplyDeleteWe would love to hear her story if she wants to share it with us. If she is interested some time just let us know.
Mutt,
ReplyDeleteThat's what I am saying, they have to say those things. Does anyone think Obama or any president is going to say anything differently? Create mass panic, give Fox News more material?
Denise - hahaha, I know I know. You must realize I'm having to keep myself in check living where I do, ESPECIALLY since I work less than a mile from the ocean!
ReplyDeleteWe're supposed to get rain all weekend here, so I'm hoping that might help. I haven't yet checked to see if rain would even help. Wouldn't want to ruin my false sense of security TOO soon now.
Our two nuclear plants . . . .no arguments from me there. Most of California isn't prone to tsunami's like they have in Japan, not only are the slip faults up near I-Man and Mutt, but if you've ever been here, you know our coast is known for those gorgeous cliffs. One of the plants is right on the coast, but it's above an 80 foot cliff. If we get a tsunami that large I think we'd have bigger problems :-)
I don't have much confidence that there wouldn't be problems in the event of a big one though. I know our building standards are very high, and after the 89 and 94 earthquakes, we spent billions retro-fitting every bridge and freeway overpass in the state. If you're ever in the state, pay attention to all the collumns supporting those things, most of them have been wrapped and then re-wrapped with steel supports and jackets.
Most of our historic buildings have been massively retrofitted with both SF and LA City halls literally being lifted off their foundations and put on rollers and stabilizers to stop shaking in a quake. These buildings are literally no longer sitting on the ground - pretty impressive if you google those two buildings, the one in LA is about 25 stories tall!
Goodness I'm long winded this morning!
ReplyDeleteI was actually petrified of nuclear war growing up.
ReplyDeleteRemember The Day After? That didn't scare me as much as an English one (can't remember what it was called) which was much more realistic. The was no nuclear winter in The Day After, and no long term radiation sickness. Scared the living daylights out of me!
These kids today don't have any idea what it was like growing up with that in the back of your mind.
I'm wound up because of the nightmares.
ReplyDeleteWe have to acknowledge I-Man's fabulous analysis of March 1 - Hope he doesn't mind it being reposted, but it was such an accurate call that I thought we all needed to see it again:
ReplyDeleteI-Man said...
Just wrapped up a nice chunk of technical work, and thought I'd share for those interested:
Until today, I expected us to form a top on March 6th and 9th, but when things change, so should your work.
Now it is becoming clearer to me that that moment in time should mark a low, not a high.
Given the damage we did today, I and I must say that the top is in.
If we take out 11690 on YM this week, then...
Look for some nasty shit on Monday, and a waterfall "crashy" type event on Wednesday.
We should make an intraday low on Wednesday, and it could be a doozy...
Watch 11000 on the YM. This 1000 pts could go really fast. There is a chance that we reverse at 11500, but I think this trend means business and wants to wipe out the whole move from last years November low in one pattern.
If that occurs, it should set up a decent bounce that takes us up to a lower high, to solidify the downtrend.
Watch Friday 3/25 for the "real" lower high... could be one heck of a reversal trade on that day. Reversal price, approx 12030, but could go as far as 12300 depending on how many folks want to fight over the last seat when the music stops.
Good luck all,
-I
March 1, 2011 8:04 PM
Thor,
ReplyDeleteWe had drills all the time where we had to hide under our desks in case of a nuclear attack. So silly in retrospect.
Nasdaq much weaker today than the DOW or S&P. Might be a rush to safety stocks rather than the riskier Naz.
ReplyDeleteAAPL is down in a strong market.
ReplyDeleteGreat call thus far, I! I think we ultimately get a lower high here and then another swoon downward. I'm in that camp as well.
ReplyDelete@Manny, 11:51am "@Denise: In some ways, I'm beginning to think the human race is getting dumber. De-volution."
ReplyDeleteI also like the De-generation word play. Like in "Watching this new degeneration grow towards adulthood, I can't help but feel clueless about where our nation is headed."
Half joking of course, there are pros and cons like for any generation.
@Mutt: congratulations to your American wife buddy!:)
ReplyDeleteMy 2 cents on the SPY, updated today
ReplyDelete--
I'm still confident in the continuation of this correction, towards the 1230 target. The "correction is not over" game is still totally relevant to me.
Yes - Kudos to I-man!
ReplyDeleteScenario 1 => correction round 2.
ReplyDeleteFirst support: 1280 is a meaningful support. Bulls don't want to close the week below that point.
Then more important in my mind is the support at 1261, which combined with the weekly Fibo 23.60% retracement from the top, at 1265.4, could give us bears a hard time.
Below that, I see 1247 as minor support, but this shalln't stop us from finally getting to the 1230 target.
Scenario 2 => towards invalidation of the correction
ReplyDeleteNext resistance: 1294. That one should give bulls a hard time, if we get there.
Final resistance: 1303. If this one is taken, I'll be out of the correction camp, back to the sidelines and to the drawing board.
After 1303, we'll meet resistance at the down trendline, which may stack with the 1313 line by the time we'd reach it.
Haven't studied behaviour beyond that point.
Either way, hope everyone enjoys, and profits from, our little technical adventure ahead.
ReplyDeleteThis is pretty damn cute...
ReplyDeletehttp://www.huffingtonpost.com/2011/03/17/cute-ridiculous-animal-thing_n_837292.html
Manny,
ReplyDeleteThat video is so funny!
The faces that dog makes are hilarious. What a character.
ReplyDeleteWolfie - I'll take door number two please! I think the correction is over :-0
ReplyDeleteThe Middle East continues to boil over. Market doesn't seem to think that or the Japan situation is an issue. This reminds me of early '08 in so many ways, just different things percolating at once.
ReplyDeleteHere's the link. 40 Yemeni's killed....
ReplyDeletehttp://www.nytimes.com/2011/03/19/world/middleeast/19yemen.html?hp?hp
But deaths fail to disperse the protesters......
ReplyDeletehttp://www.nytimes.com/2011/03/19/world/middleeast/19yemen.html?hp
Watch for the lower-high, Thor. The next move downward, when it happens, wil likely be vicious. Or not. LOL.
ReplyDeleteThe downward push will need to happen before first quarter reporting starts to trickle out.
ReplyDeleteIt may take some digging, but an increase in Capex should be there. At least in the leaders.
There has been restricted spending by companies in capex for the past two years. A sub replacement of working capital rate. That can only go on for so long.
Rocks advice on this is true, leaders are leaders for a reason.
@I Can, for your information, though somewhat irrelevant now: I've just found one of your comments that was stuck in the spams. I've published it, it's in Rock's thread from wednesday.
ReplyDeleteI thought this was an interesting post:
ReplyDeletehttp://www.nakedcapitalism.com/2011/03/why-american-officials-have-been-criticizing-the-japanese-nuclear-containment-efforts.html
Todd - very good points. Thanks for giving me more ammo for my position ;-)
ReplyDeleteTLT still slightly green.
ReplyDeleteIt's why I've been having a very busy 1st quarter. 4th quarter projects pushed off, but have to go now. 1st quarter projects, have to go now.
ReplyDeleteFood prices increased 3.9% last month alone. But there's no inflation here.
ReplyDeletehttp://www.businessweek.com/ap/financialnews/D9M0HOU00.htm
re Denise, 12:38PM:"We have to acknowledge I-Man's fabulous analysis of March 1".
ReplyDeleteGood move to bring up this analysis.
Thumbs up for the I, good work :D
@Todd:thks for insights, and welcome back, even if you've never been far.
ReplyDeleteTodd,
ReplyDeleteAlways good to hear from people in the trenches. Thanks!
re Manny1:47PM, inflation: Come on, don't be so grumpy. Look at the bright side! Many others things out there which are getting cheaper. Like... wages for example, IIRC yesterday's report shows a 0.5% decrease.
ReplyDeleteSee?
And, according to the Fed, there can be no inflation unles there's an increase in wages, so I guess everything's cool as long as we still have access to cheap credit to charge the shit up that we used to be able to afford with cash from wages.
ReplyDelete@WS(1:29)
ReplyDeleteThanks.
That info on Wed. night was good to have. MSM was overhyping the fear.
ICan
re my statement at 2:07PM:that's not exactly correct. In fact, wages didn't move in February. But since the CPI shows a 0.5 increase for the same period, that still means a 0.5 decrease in real wages.:p
ReplyDelete@Jeff,
ReplyDeleteNo inflation in Canada either - except if you don't eat or drive, or need clothing or insurance.
Atleast iPads are cheaper(according to the Fed).
ICan
Come on Mannwich take a swig of this and you will feel all better about this inflation stuff you are going on about.
ReplyDeleteBen BerStupidAnke has it all under control, he is working for us, to make sure we have a better future and he would NEVER allow inflation EVER!!!
Ok...That's enuff for you give me the bottle back now.
Mutt
ICan - there is a little left, have a swig and you too, will feel better about this non-event in inflation.
ReplyDeleteMutt
All is clearly not well...
ReplyDeletehttp://www.zerohedge.com/article/tepco-director-weeps-after-disclosing-truth-about-fukushima-disaster
Such a tragic situation.
ReplyDeleteHas anyone thought about the wider ramifications of the Japanese economy completely going in the tank on their ability to hang onto our Treasuries? Or am I thinking about this incorrectly?
ReplyDeleteHere we go again. Yet another military adventure for the U.S:
ReplyDeletehttp://www.zerohedge.com/article/obama-address-nation-over-imminent-libya-invasion-aka-operation-wealth-effect
Operation Wealth Effect - hah!
ReplyDeleteManny - It's my understanding that in order for the Japanese to sell their treasury holdings, they will have to find a buyer (ie:, it's their issue, not ours). If I have this correctly, they have been selling their US debt and buying Yen which is why the Yen keeps strengthening.
ReplyDeleteMoving forward though, I think that's an entirely different story.
We are getting the craziest weather this year. This is normally the time we enter our warm dry period, there are tornado warnings up in San Francisco, and we're expecting 2-4 inches of rain and 1-2 feet of snow in the mountains this weekend.
ReplyDeleteCrazy, rain this late always makes for horrible fires come summer and fall.
At Manny 2:26
ReplyDeleteThat is one of the reasons for my nightmares last night.
I've said this before, and I'll say it again. Al Jazeera is INFINITELY better than Fox, CNN, and MSNBC.
ReplyDeleteGreg and/or ICan - what is your opinion of the CBC for news? Good?
ReplyDeleteMy take on all of this is Japan has had a triple disaster, when even one event would be enough to send stocks much lower, there are war threats in Libya and over the ME, and yet our S&P has only corrected 6.03%, high to low, not counting the past rally.
ReplyDeleteI don't know whether the market is going from here but it is exhibiting extreme resiliency to these events so far.
Why isn't the market down 20% on this terrible news which will effect the world economies?
Not to mention the ongoing worldwide debt crisis.
ReplyDeleteDenise - QE and QE2?
ReplyDeletewow, almost 8 days of rain coming . . .that should wash the radiation out of the sky before it even gets here.
ReplyDeleteright? :-/
Thor,
ReplyDeleteI have no idea if they will continue with and QE programs, but the rebuilding and cleanup effort in Japan will definitely set Japan back, just imagine replacing all of those homes and cars, not to mention personal and business assets.
Also I have not read much about how Japan's industry will be affected, busy replacing stuff that was lost, but lost capacity more than out weighing the gains in business.
Thor,
ReplyDeleteThat's what they keep telling us. What else can you do anyway? What I want to know is the radiation neutralized by water, I don't remember that is how it worked. So how much of the sea will be contaminated?
Like Rock says, bring your glow meter and geiger counter to dinner if you are planning on eating seafood.
Is that right, Denise? Interesting. Is there anyone else out there that's worried about this? If not, shouldn't they be? At least a little?
ReplyDeleteIt seems to me that there's still way too much complacency in the markets. Is this due at least in part to the Bernank Put, the Put to End all Puts? I really thought we'd get a much bigger down draft than this, but it seems that the whole world is in delusional la-la land and if everyone is in that state, then can it go on for a lot longer than anyone thinks? Deny, deny, deny.....then BAM. Reality.
ReplyDeleteManny,
ReplyDeleteI like to use a "what should be happening now" mindset combined with market action. Always on the look out for divergences, or action that does not sync, i.e., index moves lower but there were more advances than declines or more up volume than down volume on this decline.
Right now it feels as if this is a very, very small correction given the situation in the world, so I start looking for signs that indicate underlying support.
Not sure complacency is the right word, exchange it with "confidence" and it makes more sense to me. We had a few days of action rooted in fear but not a great deal of follow through.
ReplyDeleteWhy no huge downside follow through?
Are the big players confident in the market?
ReplyDeleteThey must be, Denise. After all, it is they who move the markets, right?
ReplyDeleteManny & Denise - My best friend up in SF keeps telling me to calm down about the radiation so I think I might try to do just that. My biggest concern is more that the governments might not be giving everyone the whole story for fear of causing panic.
ReplyDeleteYes, as far as I know, rain would wash the radioactive particles out of the air. . . and wash them right into the watershed :-/
You could always move to MN. The worst things we seem to worry about is snow, cold and maybe a random tornado here and there. Looks like living in flyover land has some bene's. ;-)
ReplyDeleteIt just seems weird that there isn't more concern out there. Is everyone whistling past the graveyard Titanic-style? Again? And does anyone really believe that our leaders know what they're doing either?
ReplyDeleteWhere have Dan and I-Man been lately?
ReplyDeleteSpeaking of that, then there's this...
ReplyDeleteFlorida: 18 Percent of Homes are Vacant
http://www.calculatedriskblog.com/2011/03/florida-18-percent-of-homes-are-vacant.html
Canadian r/e bubble, no sign of slow down. Bidding wars going on even in Toronto suburbs. Food and fuel and no end to inflation.
ReplyDeleteDeflation? Try telling that to an average Canadian.
ICan
Manny - What are you referring to specifically? The nuclear mess in Japan? Or what's going on with the economy? Or both? :-P
ReplyDeleteI think some of our leaders know what they're doing, but only maybe 5% of them. The rest I don't think give a shit beyond their own self interests.
I was telling Denise earlier that I'm having a hard time just managing to keep up with everything that's going on right now. Libya, Japan, Yemen, Bahrain, the budget fight, the budget fight here in California, the economic mess. . . on and on and on. I need another brain just to process everything.
It's times like these I almost envy the ignorant masses.
Never been a better time to buy!
ReplyDeleteAll of it, Thor. All of it together makes for one nasty stew that's not going away overnight, IMO. But what do I know?
ReplyDeleteDan I think has been working a lot lately. No clue about I-Man, he usually comes and goes, I'm sure he's around.
ReplyDeleteAgreed Thor. It's like crisis whack a mole overload. Don't think we've ever seen a time quite like this in our lives. Sometimes it's better to turn it off and go down to your local with friends and enjoy the company of friends (and maybe some libations).
ReplyDelete"The Canadian bubble?"
ReplyDeletehttp;//www.zerohedge.com/article/canada-bubble
Also no more free 'Breakfast with Dave'. Pay up CAD 1000. He thinks there will be no QE3 - Zerohedge.com
But it's no just one CB doing QE, it's most of the major ones. So what an investor to do? 1% CD?
ICan
This is truly incredible. The small fry fry while the real culprits stay free.
ReplyDelete"The man who singlehandedly almost stole Goldman's algorithm that could "manipulate markets" (p 8, lines 4-7) is now the person with the biggest prison sentence to come out of the entire financial crisis".
http://www.zerohedge.com/article/sergey-aleynikov-gets-8-year-prison-sentence
Thor - When I was a kid, I use to have a watch that would glow in the dark, but now the only have watches with back lighting.
ReplyDeleteSo I was wondering, with all that potential radiation heading your way - If I sent you a watch would you set it on your roof for me, that way it might glow in the dark :)
Just kidding - You and yours will be fine, remeber Barak has our back.
Mutt
Sorry Thor, I don't watch CBC news, too much Canadian content.
ReplyDeleteGreg - got it.
ReplyDeleteMutt - I remember those watches!
Manny, yeah, good advice. There's so little we can do about what's going on anyways.
@greg,
ReplyDeleteWhat do you think of Canadian real estate. But you are in B.C. I think.
A family friend sold his home in Toronto because he wanted to move closer to work. Now he is crying because any new property he likes is overbid by others. This is crazy. I am telling to wait until the spring maddness passes and the market digests there is no QE3? Also new mortgage rules come in after Mar.30th.
Would appreciate your take. Thanks
ICan
@Mutt,
ReplyDeleteThings that glow in the dark -
What about uranium glass rosaries? Are they toxic? I know some old folks in India have them. May they are not so cool after all.
ICan
ICan - I was just about to ask you the same thing!
ReplyDeleteI've been of the opinion that once the Chinese economy finally tanks, both Australia and Canada will collapse - so much of their strength seems to be commodities.
@Thor,
ReplyDeleteFrom Canadian media:
The Globe and Mail is my main source. For financial news - bloomberg, marketwatch, Ft.com, the blogs.
ICan
ICan - That reminds me of all the other glow in the dark stuff they use to make for kids, to play with.
ReplyDeleteYIKES - But having your rosary glow in the dark.
Mutt
@Thor(6:36)
ReplyDeleteBut Chinese economy doesn't seem to go down. They have lost fiat U$Ds. Who know when they will go down?
People from India have never seen deflation. Atleast not my Parent's generation or mine.
Also lot of money laundered from Asia coming to Canada - safehaven.
@Mutt,
ReplyDeleteGoogle it. Even people in the U.S. are making their own. LOL
ICan
ICan - That's true, but I don't think the Chinese economy is going to go up forever, what I think is going on, is that because the country is so massive, it will take much longer for their bubble to pop. Plus, their government has far more control over the economy than ours does so when they tell banks to loan, they loan, no questions asked.
ReplyDeleteICan, I'm actually in Ontario. I think Canadian real estate presents no where near the problems suffered in the U.S. largely in part to stricter lending rules. I personally know of no one who purchased any property with no money down for instance, although you can come close by using a CMHC mortgage with as little as 5% down, I believe. The use of mortgage brokers in this country was and is far below the use in the U.S, with most people using either their Bank of Credit Union, which I also think makes a difference as our Banks hold on to their own mortgages. There are definite pockets of high prices like Toronto, Vancouver and Calgary for instance, but this has happened in the past and tends I think to ebb and flow depending on the economy. Calgary for instance went through this in the seventies, and then crashed, and has now gone crazy again with the economic surge in that province. Not sure the new mortgage changes will make much of a difference, as I understand them.
ReplyDeletetypo; that should read "Bank or Credit Union"
ReplyDelete@Greg(7:43)
ReplyDeleteThanks!
But what if there is no QE3 in the U.S.(no hot money flows in the Ems - no surge in Commodity prices) and higher interest rates, would that affect Canadian real estate?
ICan
The comments on this story tell both sides:
ReplyDeleteThe Canada bubble?
http://www.zerohedge.com/article/canada-bubble
Greg - I wonder though how wise it is to compare the Canadian housing market to America. I don't know that simply not having the same issues that we had here gets a free pass with regard to bubbles. Spain's real estate market didn't look like ours either, and it crashed worse than ours, same for Ireland, Iceland, and Japan 20 years ago.
ReplyDeletePrices in both Canada and Australia are extremely high and going higher while the real estate market in the rest of the world is still collapsing. The real estate markets that seem most similar to these two countries are all in China, which, I think, is no coincidence. Brazil is also booming now, and I would argue that all three countries are doing so on the back of China.
Anyhoo - all of these types of real estate and commodity bubbles always end in the same way I think, and that's with a crash.
Or at least that's the way I see it :-)
Oooh, that's the other thing - how many of the mortgages in Canada are variable interest rates these days? Rates can only be fixed in Canada for 10 years correct? What are some of these folks going to do if their variable rate 500K mortgage resets up 2%?
ReplyDeleteThor and ICan, I don't think for a minute that we are immune to some type of crash in the housing market, in certain areas which have experienced the greatest growth, however I do think with our somewhat tighter controls in lending, the crash would be more contained. You just don't seem to hear the same stories up here, like someone buying two or three properties, on an income of $60,000 per year, and I would be very surprised if the fraud that occurred in the U.S. mortgage industry happened here, and I'm referring to stated income loans and fudging of income and expense figures on loan applications. I'm not saying none of this occurred, but I would think if it did, it was on a much smaller scale. Again the mere fact that our financial institutions hold their own mortgages, makes their lending practices a lot more stringent. Any time I've got a mortgage I must provide proof of income, length of employment, proof of downpayment as well as have a certain credit score. The percentage of mortgage payment to income is also very tightly controlled. Do we have people who are probably in over their heads? Absolutely. The one danger area of course is that a lot of families obtain their mortgage based on two incomes, so if the economy starts to crash with high unemployment and job losses, then we certainly could see a housing crash. Thor, as to your question about a mortgage resetting up 2%, Im afraid my view is, if you can't afford another 2%, you probably shouldn't be in that house in the first place. That in itself I, think is part of the problem
ReplyDeleteGreg - I think I understand, what you're saying is that it's not so much that a crash can't happen in Canada, just that it wouldn't happen like it did in the US, it would be more gradual, and more of a reverting to norm, rather than a quick plunge like we've been going through.
ReplyDeleteHuh - I wonder if because the lending standards are so much higher, if when people get "stuck" in a house because real estate prices are going down, they were able to afford the house in the first place, and probably still can, only they wouldn't be able to sell so they would have to stay in the house. Maybe what you'd see then is a decline, followed by years of stagnation. . .
ReplyDeleteAlso, I shouldn't discount places just being expensive and staying expensive. San Francisco, NYC, Boston, and West LA, OC and San Diego, are still very expensive places to live. I see some of these homes in the real estate blog I follow and can't believe there are still people who can afford to buy them.
ReplyDelete@Greg,
ReplyDeleteFraud in mortgages lending in Canada:
In Calgary, there is an investigation going on. I think even one MP's name also surfaced several months ago( That person was a lawyer at the time). I don't know what's going on with that. But, perhaps banks have become vigilant since then.
At a certain level income will not sustain all that debt. Somewhere I read income to debt ratio is 1:1.46 or similar. Huge. That's why Carney is so afraid to raise rates savers be damned.
ICan