One Guy Who Didn't Get It

"The investment bank, whose loss was far worse than what the firm forecast less than three weeks ago, said it had to write down its collection of mortgage-backed assets by $7.9 billion, up from its earlier estimate of $4.5 billion. Some investors saw the Merrill loss as a sign that the financial industry still might not have a full grip on problems related to risky, subprime loans."

"The shortfall calls into question how one of the biggest names in finance could be so off the mark, just three weeks after telling Wall Street its losses would be significantly less."

RIP "Stan the Man".

Google for sources.

The Rock of Ages

"I don’t know if we bring ‘harmony’ to the space station, but we sure bring fun!"
-Female NASA Commander, on duty

As for my people, children are their oppressors, and women rule over them. O my people, they which lead thee cause thee to err, and destroy the way of thy paths.

The LORD standeth up to plead, and standeth to judge the people.

The LORD will enter into judgment with the ancients of his people, and the princes thereof: for ye have eaten up the vineyard; the spoil of the poor is in your houses.

-Isaiah 3

We have eaten up the vineyard. Well put Isaiah.

Real Estate Wealth

The New York Times:

"The loss in total real estate wealth is expected to range from $2 trillion to $4 trillion, depending on how far home prices fall, according to several economists."

http://www.nytimes.com/2007/10/25/business/25mortgage.html?ei=5090&en=f636df0dc020edd9&ex=1350964800&partner=rssuserland&emc=rss&pagewanted=print

I think it may be worse than the ‘several economists’ estimate. At the peak, there was around $9 trillion in home equity and $10 trillion in mortgages. Entry level homes are now starting to move in a place I know at a ~35% discount relative to the peak. Most of that 35% comes out of home equity, not mortgage debt.

Extrapolating the 35% data point, around 70% of American home equity has gone away. That’s $7 trillion, not 2 to 4. Keeping in mind:

(1) The market I know was bonkers at the peak, and the 35% may be high relative to the national average.

(2) Between foreclosures, new construction, and homeowners waiting it out, supply is still spiking as demand falls. Prices will fall further and 35% may be seen as low when the smoke clears.

Noted without Comment

"What started out merely as a subprime problem has expanded more broadly in the mortgage space and problems are getting worse at a faster pace than many had expected," said Michael Mayo, Deutsche Bank analyst.

http://www.ft.com/cms/s/0/7c453090-7ff7-11dc-b075-0000779fd2ac.html?nclick_check=1

Let's Ask Peggy

The find was made up of 41,000 lbs of ammonium nitrate and 35 mortar bombs. U.S. forces destroyed the cache.

"It's a crippling blow against the enemy, it's really huge," said Peggy Kageleiry, a spokeswoman for U.S. forces in northern Iraq.

http://www.reuters.com/article/topNews/idUSL2026497320071020?feedType=RSS&feedName=topNews&rpc=22&sp=true

Ummm, 41,000 pounds of ammonium nitrate means less than a truckload of fertilizer. Like, it’s a crippling blow, just ask Peggy. It's huge. She must have gone to college.

Universal Suffrage

"I know that sometimes a Palestinian state living side by side in peace with Israel must seem like a very distant dream. But I know too, as a student of international history, that there are so many things that once seemed impossible that, after they happened, simply seemed inevitable. I’ve read over the last summer the biographies of America’s Founding Fathers. By all rights, America, the United States of America, should never have come into being."
--Secretary of State Condoleezza Rice, 11OCT06

And my corollary:

"I know that sometimes the thought of losing things we take for granted must seem like a very distant dream. But I know too, as a student of international history, that there are so many things that once seemed impossible that, after they happened, simply seemed inevitable. I’ve read over the last summer the thought processes of those who hold positions of leadership in modern day America. By all rights, America, the United States of America, is facing historic times."
--Bill

Timeless

"A strong body makes the mind strong. As to the species of exercise, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise, and independence. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be the constant companion of your walk."
-- Thomas Jefferson, Aug 19th 1785

Hillary 44

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

"The average age of the worlds greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

1. From bondage to spiritual faith;
2. From spiritual faith to great courage;
3. From courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence;
8. From dependence back into bondage "

-Attributed to Alexander Tyler, 1787

Jerome Finnegan, Bad Guys, and Mexican Justice

Passing through O’Hare and the Sun Times headline is ‘Good Riddance’, referring to a Mr. Jerome Finnegan. Jerome was a Special Operations Section cop, assigned to undercover beats in bad Chicago neighborhoods. I can’t pass judgment on Mr. Finnegan, but he did get in trouble for putting a hit out on a fellow cop who turned government witness. My gut tells me he probably was a net positive for the average family in his jurisdiction. But the headline is ‘Good Riddance’ and Mr. Finnegan is now officially Mr. Bad Guy.

The road through Mexico to Central America used to be dangerous, with roadside hold-ups common. As Americans started moving to the Mexican Coast and the Mexican government realized the value of American pensions to their economy, the decision was made to end the hold-ups. A trusted acquaintance explained that the Mexican security folks knew some of the robbers and took them away, shot them, and dumped the bodies. Those who weren’t killed got the message. Voila! Safe roadways.

Essay question:
Which justice system is more stable?
More likely to endure?
Would provide the best "Law and Order" material?

Airstrip One

Swiss bank UBS warns of big losses, blames US housing crisis

These people still won’t mention the real threat. The real threat is the tens of millions of highly leveraged investment properties. When the investor goes upside down, he walks away from the mortgage, with the bank holding the bag. As prices continue to drop, the cycle spirals.

Hello Airstrip One banking issue.

http://www.breitbart.com/article.php?id=071001094010.howvcgf6&show_article=1