Retail Sales Surprise on the Upside

pitbull just take your degree off your resume and it's totally fair.

Posted by: joe_the_bummer at February 12, 2009 10:11 AM

thanks dibs - the end gets cut off. what's after "2009/"?

Posted by: joe_the_bummer at February 12, 2009 10:22 AM

Suze Orman scares the jesus out of me. Sometimes I wonder what I would do if she "slipped into something a little more comfortable". and then the whole sordid scenario plays out in my head.

Snark, that was cool -- how'd you do that? I thought I was going to get a porn bomb or something.

Posted by: joe_the_bummer at February 12, 2009 10:53 AM

thanks BHO. Brownstoner is so much better than work. you know what bums me out, about suze orman? that we have allowed the press to relentlessly pump stock ownership to the point that a huge number of people have bet their standard of living on it, and somehow the conventional wisdom is still that stocks always go up in the long term. they don't. (relevance: asset deflation means all assets, not just RE, and stocks are the other biggie for families) But thanks to suze, half of the knitting clubs have morphed into investment clubs. I get kind of a sick feeling about a lot of families, far away from "prime brooklyn" that could end up living far worse than they thought. I can't stand watching her squirm and tell people to clip coupons now.

Posted by: joe_the_bummer at February 12, 2009 11:51 AM

It's wierd how well suze orman ties into this thread. She was on TV telling people that their best option may be to walk away from their mortgages. My first read of pitbull's comment was as sort of a sarcastic quote of all the people thinking that way. but it's totally interesting -- the outrageous moral hazard looming over the world the mass of people who borrowed money that they're not going to pay back. They are the WINNERS in that deal. but try to find a politician that will blame a crisis on "nearly everyone"...

Posted by: joe_the_bummer at February 12, 2009 12:41 PM

hey snark is there a http://tinyWhat.com?

Posted by: joe_the_bummer at February 12, 2009 1:04 PM

hey chiff. thanks for the color on your obsession. The TARP program is one of the things that have kind of mis-fired in the press: the treasury is not giving banks money. it's buying newly issued shares, which means existing shareholders are getting diluted (hosed, because they now own a smaller fraction of the company). in some cases the govt is lending, like to AIG, which was a solvent company with a liquidity crisis. they'll get that back along with some fat interest. The shares the govt is buying are a darn good deal, when you consider that the govt will be able to control the banks' growth and solvency. the govt could very well sell the shares at a profit.

On the other hand, the govt IS giving money to people. the tax cuts are not a loan, they're a gift.

I know everyone's mad at the banks, but let's be fair. the banks didn't make money, they lost money, tons of it. all of the execs were shareholders and have lost more in their shares than they were paid in bonuses last year. Millions of regular people got pretty new houses, and most of them are about to get a whopping discount on their mortgage. Nice deal for them, I think. If the prices had gone up, would they be sharing that profit with the banks? doubt it.

Posted by: joe_the_bummer at February 12, 2009 1:24 PM

sorry chiff I didn't get that you were the editor. funny. so my last thing was to the what I guess.

Posted by: joe_the_bummer at February 12, 2009 1:30 PM

gemini, vikram pandit has so much money I honestly don't think he cares if he's using citi's jet or his own. I thought it was ordered 2 years ago, with cancellation penalties. they have a fleet that they replenish from time to time -- it was probabaly an oversight. they did take their eye off the ball in the last couple of years, trying to manage their financial super-stores, but they're not THAT dumb.

Besides, put yourself in his shoes. imagine yourself going to visit prince alaweed in saudi arabia to try to get him to invest 5 billion of his own money. you'd kind of look like a chump walking in there all wrinkled up from your all-nighter in coach, don't you think? ("sorry prince, do you have an iron I can borrow before we discuss the deal?")

Posted by: joe_the_bummer at February 12, 2009 1:43 PM

hey gemini -- I'm a little over my skiis on the fat mortgage discount thing. There is a lot talk about govt support for writing down mortgages (sheila bair etc) to levels that are affordable based on people's incomes. Also they could try to force down the mortgage rates by intervening in the markets, and that gives everyone a refi opportunity, if they're not underwater. I don't know if any of these are in the new legislation or not honestly, but I think there is a very good chance that there will be direct homeowner aid. Unfortunately, you probably have to have a low income to qualify. I think there is some kind of token tax credit for new home buyers in the bill.

Posted by: joe_the_bummer at February 12, 2009 1:55 PM

gemeni, ok fine. I was just trying that on. you're right. and the carbon footprint is totally out of line too. I don't know -- these guys have won an unbelievably competetive game to be where they are, and half of me understands why they believe there should be a prize. but, yeah, they live too large. that kind of crap is bad for the world.

Posted by: joe_the_bummer at February 12, 2009 2:05 PM

mopar -- I think you get to the heart of the blame argument -- it's really hard to ever know who was tricked and who was willfully blind. I'm not saying people knew they would default. Everyone, from their own perspective, looked at two kinds of houses, crappy and awesome. if you take a 30yr fixed rate mortgage you get the crappy one; take the weird mortgage and get the awesome one. as long as prices are going up you can refinance anyway. so who cares, prices always go up. worst that can happen, you move out. Take the awesome one. To me this is clear as day. It's not a fraud, it's just the natural mentality in a speculative boom.

ALL of the sub-prime borrowers had failed to pay bills in the past, or they wouldn't be labelled sub-prime in the first place. Plus, the downpayments were usually very close to zero, and often the buyer actually got cash at closing.

Admittedly there were some fraudulent re-fis, but I think they're way out of proportion in the news.

Posted by: joe_the_bummer at February 12, 2009 2:58 PM

let me add one more thing to my last post. how many home buyers at any income level do you think didn't consider the potential for profiting from the price of their home? everyone else was. there were TV shows about it. as long as they were willing to accept that upside, why do we cry for them when they mail in the keys, move across the street, and rent a similar place for half the monthly cost?

if I lend you 1000 bucks to buy a used car, and you give me back the car instead of the money, aren't you screwing me?

Posted by: joe_the_bummer at February 12, 2009 3:07 PM

and finally (now it's a rant I guess), "losing your home" does not mean "becoming homeless". the media seems to forget this distinction. rentals are so cheap now in foreclosure areas that people can actually trade up.

Posted by: joe_the_bummer at February 12, 2009 3:10 PM

mo, they already had bad credit. they're sub-prime borrowers. there's no downside for them to walk away.

I am not contesting what you say, and it's tragic. but I think the true broker fraud was a smaller part of the picture than the press would have you believe. it makes such a good story.

back in 2004 by brother was making 150K and went to get approval for a 400K mortgage. he got back a pre-approval for 850K. I was thinking "this will not end well". I will admit that 2 years later I believed that the market had proven me wrong. no one's perfect.

Posted by: joe_the_bummer at February 12, 2009 3:53 PM

JUST HIT THE TAPE -- US to subdize mortgages.

Posted by: joe_the_bummer at February 12, 2009 4:03 PM

JUST HIT THE TAPE -- US to subsidize mortgages.

Posted by: joe_the_bummer at February 12, 2009 4:03 PM

JUST HIT THE TAPE -- US to Subsidize Mortgage Payments After Borrower Means Test.

Posted by: joe_the_bummer at February 12, 2009 4:04 PM

sorry, I thought my [escape] button would cancel my typos.

Posted by: joe_the_bummer at February 12, 2009 4:05 PM

I think it means if you're broke enough they're going to write a check for part of your mortgage every month.

I might take you up on that gemini. I have a hard time with what brittany spears makes. it should be illegal, or at least taxed. all of our scientists are going to want to be whores now.

Posted by: joe_the_bummer at February 12, 2009 4:11 PM

seriously, how many people are going to start knocking off work early now when they hear that? This is BAD!!!

careful what you wish for putnam, I think we are really going to get it: a big turn toward a more european-style system. more people working for the state, more earnings equality and a bigger safety net. everyone's gonna mail it in. hear comes european style chronic under-employment.... what do you think? maybe then everyone will get fed up with the left's version of incompetence and excess, and we'll switch back.

Posted by: joe_the_bummer at February 12, 2009 4:37 PM