My mom is a big bunny person – owning lots herself. Last Christmas I got her a Bunnie Suicides book as a prank gift. It was good for a chuckle or two – nothing too stupendous or earth-shattering really. Or so I thought. Apparently, however, this Oregon mom doesn’t see the humor:
http://www.oregonlive.com/news/index.ssf/2008/10/ore_mom_wont_return_bunny_suic.html
After a bad week of destroyed bathrooms, cars getting hit and just general crunch time at work – things are beginning to sort themselves out.
1. Shower is fixed – and I got a entire apartment cleaning free out of it due to the dust, destruction, and whatnot. That was nice and I can shower at home again.
2. The broken bathroom really lit my workout schedule – Since I had to shower at work, I decided to go running 5k on the treadmill every day before getting the requisite hosing down. I went running every night for 2 solid weeks now – and it feels great!
3. Car is getting fixed – dropped off my car this morning for the requisite repair work. Got a mid-sized pickup as a rental (!?). I’m using a repair place out here by work (Hillsboro) because they were cheaper and got good recommendations. I guess you know you’re renting out in farm country when the only cars they had available were minivans and mid-size pickups. At least it wasn’t an SUV. I would have revolted on that one…
But, got the floor pulled out from under our project at work so there is a huge re-scrambling of priorities and WTF’s kind of blowing around. I was actually looking forward to this bit of coding, but now it appears it is not to be. Now to scramble around for another project to work on…
There is a funny (and not always SFW) site called bash.org that you can submit bits of quotes from instant message sessions and people vote for their funniness quotient. Well, one of my dreams was lived when my joke hit 1000 votes – which is considered quite high. Top 200 of all time is at about 5000 votes. It was part of a real conversation I was having. Enjoy it here (sfw)
or just read it here…
#715525 +(1044)- [X]
Matt-0375> hear about the people getting sore from playing the wii controllers?
thx-1192> Yeah, fatasses should get up and move more often
Matt-0375> I’m just waiting for the headlines: “why does it burn when you wii?”
What a week so far:
-Last Saturday: landlady reports the bathroom in the apartment below me just had her ceiling bow, then collapse. There’s a leak of some sort. No using shower until Monday when the plumber arrives and confirms the pipes are ok. Tiler comes on Tuesday and confirms that the tiling was leaking. Proceeds to rip the wall out and then put a dehumidifier in my bathroom. So, I get to shower at work every morning. 1 week later – still drying the wall out – at least 2 more days before I get a shower at home. Sigh.
-Tuesday: electric shaver dies, get to go to work looking shabby AND stinky
-Thursday: battery in car dies – need to get a jump from cab company in the middle of the night. Get up super-early next morning to go get another battery and old one is confirmed dead.
-Saturday: while parked outside a cafe – a lady mashes the front of my car. I wasn’t there, but she did leave a note with a policy number. Car is still drivable, but now I need to get at least my whole front bumper replaced and one headlight. more sigh.
So, how did all your week go?
I personally couldn’t care what party you’re part of – as long as you show me that you have a real plan grounded in research/facts, that has a priority appropriate to the funding/time it will take, and is fiscally responsible.
While I didn’t necessarily agree with the ways he suggested to fixed things (but I bet it would have worked just fine – way better than the current proposal anyway), Earl nailed the problem right on the head. Here’s one congressman who I’ll vote for in the next election because he actually gets it and voted against the current plan both times – calling for more options to be explored.
While the markets are still in freefall (which I predicted), and I do bet that the bailout package did help stabilize things a lot – I still don’t think it’s the right or best long-term solution we can be pursuing.
Anyway, I got a few responses back from my emailing capaigns that I went nuts with during the voting proceedings. Here’s the response I got from OR congressman Earl Blumenauer(D)
Dear Mr. Fife,
Thank you for contacting me regarding H.R. 1424, the Emergency Economic Stabilization Act. During the past two weeks, I have received comments from thousands of constituents deeply concerned about the ‘fiscal fitness’ of our country. Like you, I opposed this legislation, voting against it at every opportunity. My opposition was grounded on a simple concept: that Congress should work to protect American homeowners, not to save Wall Street from a crisis of their own making. As Congress deliberated on the legislation, I worked to include improved bankruptcy protections for homeowners and to include a small fee on financial transactions, so that Wall Street could help finance the bailout. Because the final version of the legislation failed to include these common sense proposals, I voted against the bill.
This was difficult because the final bill included several important provisions that I’ve championed for many years. The bill reauthorizes the Secure Rural Schools and Roads funding which is critical for rural communities in Oregon and it prevents the Alternative Minimum Tax from hurting millions of hard-working middle class families. It extends the production tax credit for wind energy and the investment tax credit for solar energy. It includes legislation I drafted to provide a tax credit for the purchase of small wind turbines. These programs will create jobs in Oregon. The legislation also provides tax fairness so employers can offer the same transportation fringe benefits for bicyclists that they offer to employees who commute by car and public transit.
Even with these additions, I could not support the final bill. While I’m frustrated that this legislation did not deal with the underlying cause – housing values in free-fall and homeowners in distress, I hope that it is successful. As a member of the Committee on Ways and Means, I will work very hard to oversee the implementation of this legislation. I will closely scrutinize the Treasury Department and will work to contain the consequences of billions of dollars of added debt which our children and grandchildren can ill afford.
As a country, we will be dealing with these issues for months to come. Again, I appreciate your advice and counsel. I look forward to working with you to improve America’s fiscal fitness to strengthen our financial systems and economic security.
Sincerely,
Earl Blumenauer
Member of Congress
Folks – you should be pissed off – we just got shafted in the largest hosing you will see in your lifetime – and it isn’t even at the worst yet.
So, the House votes down the no accountability, no court oversight giving of 700 billion dollars to an acting fed chairman (who’s really just a Goldman-Sacks executive) – the bill goes to the senate who keeps it roughly the same, fills it with pork, passes it, then gives it to congress to pass – and they do. They claim they had no other options. I call complete bullsh*t. There was never a proposal for a different plan. It was Fed chairman’s way or the highway. There were plenty of other economists who said there were way better bailout plans out there, ones that would keep the burden on these companies, and not cost us taxpayers even 1/2 the money. Ones that might actually work. Yet the fear mongering that went on in the house left most of them saying, “We don’t have any other options”. Yes. You. Did. You just choose not to explore them. You did a 9/11 all over again congress. You knee-jerk reacted to a war in Iraq when the people screamed to slow down and figure out what happened. We just got our financial Iraq, because it will do NOTHING to stop the very things they were afraid of such as:
Predictions:
1. Stock market will just keep declining. Nothing in the bailout will stop stocks from deflating. Companies are looking to re-entrench, and hunker down for tough times. That means folks will not be putting money into the markets since no company is looking at growth for the next year or so. That means the markets at best would be flat. And with stocks driven by speculation so much right now – everyone is running for security. Not that congress probably should have done anything anyway. It was probably time for a good market correction.
Prediction: markets will continue a steep decline for the next month or so, with slower flat to down trends for the rest of the year (at least). The markets won’t recover in any meaningful way for a year or two.
Because of this, you’re going to find that more people were in more risky ventures with your pension funds than should have. Pensions and other retirement accounts are going to go bankrupt because of poor management and over-investment in declining stocks. Our financial ‘experts’ have been playing fast and loose for years – and seem to have forgotten all the rules of exposure they were supposed to be following. Wait for it.
2. The downward housing spiral is going to continue. The debt holders to these bad loans likely have not been forthcoming with how bad these debts really are. One of these managers said that if they just got liquidity, they’d be all able to all sell at face value. So, those loans for $300,000 homes that are now worth $150,000 will just magically go back up to double (or more) in value? If this is the extent of the lying they are telling congress – and congress believed them – then we’re all f*cked.
Here’s a graph of housing prices adjusted for inflation over time. Does it look natural to you? What level would you guess is more natural? Guess what the market will do? (yes, this is simplistic, but it shows the extent we have been stretching and inflating the housing market lately)
As home prices continue their declines, more owners will continue to default since it’s better for the average person to take the default and 8 years of bad credit than pay $150,000 in value you’ll never see again . The BEST we could hope for is that folks stay in ridiculous upside-down loans – which I just find hard to believe. Even if we could do this, folks will be paying for years and years on homes that are not worth what they are paying. Everything will grind to a halt for years while we just pour money down holes and sit saddle with debt. Debt and greed that WE, my fellow Americans, signed with our own hands. This time the corporations just let us be stupid. Yep, they hold 50% of the blame because they were supposed to be doing the right things – but we hold solidly the other 50% for not doing OUR homework. None of this was rocket-science. It’s been in self-help books and homebuying guides for years.
Prediction: The value of houses in most places will continue to decline by 1-5% every month for the rest of the year and will stay flat for years. Here’s the data for the current situation from S&P or already charted for you. Obviously some locations will be more than others. But they will all continue to keep declining – which will continue to encourage people to default and walk away from $100,000s worth of bad debt. And there is absolutely no reason for folks to buy a house right now outside of moving. Yes, you can’t guess the bottom – but I can also just wait till it starts going back up and it’ll be safer that trying to catch a falling knife.
3. Job losses will continue. Nothing in the bill will address the coming job losses – nothing can. Again, companies are looking at contracting markets – not expanding. They’re not hiring and won’t until a broader turnaround happens. Yes, immediate operating loans will become available again, but that’s just a small comfort. When times get tough – you have to cover your loans much more heavily – tying up cash. This will probably be the case for a year or two in the broad economy, but some sectors will be slower/faster. Expect job markets to shrink, and lots more layoffs in the immediate future.
4. Depression is a real word – and we may just get one. I for one am still very convinced we’re in a 50/50 shot for a depression – we’re already clearly recessing. Maybe not quite like the 1920’s, but it will be very bad times. Likely the worst any of us have seen in our lifetimes. Jobs are already starting to declining by 100,000’s per month (159,000 last month alone) for the next few months at least. The question is where it stops – and I’m not hopeful at all. There is no immediate positives to turn things around. I predict an unemployment rate of about 9-10% by mid-next year.
I sure hope you’ve saved up some living cash. I feel exposed with just 9 months of living expenses saved right now. I wish I’d saved up 2 years worth personally. I’m cutting 90% of my discretionary spending and working towards that goal of 12-24 months of living expenses.
5. The days of easy credit and easy ownership are OVER (and SHOULD be) Some car dealer was complaining on the radio the other day that folks that could get loans before couldn’t get them now. After giving the sob story, he revealed that folks used to get loans with a score of 625, but now need 640’s or higher. What?! That’s cause of us to run screaming for the doors? Scores below 640 *are* traditionally considered risky bets. Lending bars are going to go up. This isn’t harsh – this is the way it always was until the free-wheeling of these last 10 years when we thought we could just throw this stuff out the doors and give loans to anyone. And look where that got us. There are good reasons folks have bad credit scores – and for the most part the law of averages always catches up to you.
So – we just paid 700 billion for something that will help slow the decline, but probably cannot stop any meaningful adjustments that need to happen. Meanwhile folks will keep blaming government and corporate greed when they’re really not understanding the problem. Congress will continue to oblige with things that look like their helping on the surface to appease the masses – when the truth is NEITHER party will be able to stop the coming slides – just mitigate it.
We’ve been in unhealthy waters for a long time, and it takes a long time to get out of them. Don’t believe me on any of this? This guy has a pretty good commentary: http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=aMaWyNFImi4o
My plan of action:
-Conserve and save cash: rare eating out, going to concerts/plays/events, stay at home and watch more movies/play video games. Read more books – anything entertainment that doesn’t cost money.
-Reduce all market exposure: I’ve sold all my stock – and did so about 6 months ago. I’ve never been happier. I’m not putting anything in the market until the knife sticks in the ground and stops falling.
-Save up as much living cash as possible. If you get laid off now, you better be prepared for a long, hard job search. Better save up a year’s worth of living expenses with a good bit of extra for job hunting costs.
-Don’t bother with any large purchases – unless they’re commodities – and fight for a good deal. I bought my car a few months ago because I expected inflation. With inflation – it’s better to buy *necessary* commodities such as cars, appliances, furniture. Because they’ll all be going up in price.
Look around for deals – take advantage of places that are in terrible shape. This economy is beating the midwest hard. I got a dealer in Indiana to drive my car 200 miles to a shipping place for no charge and gave me a 2-year bumper-to-bumper warranty for free. I didn’t even need to haggle. He also sold me the car at $3000 less than any dealer around here was asking. The $700 in shipping was more than worth buying it somewhere else.
I’ve never had more thanks and faith in this mostly useless congress than yesterday. It was a day that Democrats and Republicans alike revolted against their party leadership to look out for and listen to the people (who voters were rejecting this bailout at a rate of 100 to 1). And because a bailout didn’t happen – are the stock markets collapsing today? NO – we’re up by big margins in fact. The sky didn’t fall (as I predicted) because in its heart of hearts – Wall Street knows a bailout is coming eventually. I still predict more down days (which NEEDS to happen) but Wall Street certainly hasn’t died by a long shot – and won’t. I was proud of our Oregon Rep Peter DeFazio – who called it just as it was (OPB interview of his vote – and worth the 5 minutes to hear) – and stood for his principles. He just earned my vote next go around.
Yes, government intervention needs to happen (see below for why), and I almost half think this attempt was just show to make Wall Street’s immediate fears stop so they could get a breather for a real bill. Still this was a really BAD plan that we should all be hugely thankful for it not passing. There was growing evidence this bailout would just be a stop-gap, and in the end would have just deflated our currency and raised inflation (I agree) – and still wouldn’t have worked (did nothing to stop the downward spiral of house prices). There are other financial experts weighing in on this matter in rapid order as DeFazio points out. Many of those plans keep the burden on the financial institutes and Wall Street where it belongs – and many nearly or do pay for themselves without giving an acting Fed Chairman complete cart-blanc with absolute freedom without penalty of the courts. Many of those methods were lessons learned from the 80’s hedge fund bailouts.
So keep writing your senators and reps daily – encourage them to do the *right things* – and not let something get ram-rodded through for the sake of doing something. The last time that happened we ended up in an unjust war in Iraq. When crisis’ hit – you don’t knee-jerk react – or you get a knee-jerk solution. Tell your senators and congressmen to take a breath – because the markets will allow it – and get a correct fix.
Let it all fail!
Still, it’s amazing how many folks on forums and around the web are dead set against the bailout for the wrong reasons – “Let the banks fail!”, “F* Wall Street!”, “Stop Corporate Greed!” – and other idiotic statements. “I don’t want to pay for Wall Street’s fat cats” – well neither do I. But guess what – you’re wrong that we can just let this all collapse now. Its gotten too big now. Go read about the collapse of 1929 if you need a little primer on how and why an entire market collapses and what happens to you at home when that occurs.
But another point I want to make my fellow Americans – before we love to start pointing fingers around – this time it was clearly not 100% corporate/Wall Street misbehavior like Enron was – this is different. Yes, you did have financial institutes lending way too much money on too little capital (estimates were that some firms were leveraged to $5 trillion for every $100 billion in actual assets to back it). I’ve said it several times, and I’ll say it again – the people not paying their debts this time are US. WE are the ones not paying our housing mortgages because we got in over our heads. WE are the ones that did not do our basic financial homework when making the biggest purchases in our lives. WE are the ones running up record debts that some cannot pay in our own life times. OUR INDIVIDUAL POOR DECISION MAKING has been feeding into this for years – and now the piper has come due. Oh yes, banks and financial institutes stupidly let us – and they should have known better. They did have a job to do and blew it royally. But we are the other half of the equation – and everyone chose to ignore the many financial planners that had been urging restraint and caution all along. As one blogger put it:
This road to destruction was paved with the best of intentions – that everyone should be able to own a home. Unfortunately, that reality is much more difficult than just opening the doors of loaning to everyone.
The rules of good personal and loan management have been known for years – and we chose to disregard them. And lest you think you have some right to talk, I now, because of my GOOD planning and reading the signs – may get to pay back $2000 for each of your bad decisions. I think that gives me more right than anyone losing their home to b*tch. Next time you don’t think that actions have a consequence, every man woman AND *every child* in this country also just inherited $2000 worth of debt due to this actions. That 6 year old just got saddled with $2000 in debt. Nice legacy folks – well done.
My Aliens Pulse Rifle project continues. In the process of gathering the parts I wanted, I’ve ended up with enough spares to make a second, much cheaper one using Airsoft parts. Airsoft makes toy guns that shoot the little plastic yellow balls and have replicas of just about ever gun ever made. Not only that, they usually have cheap, medium, and realistic versions of each – with the realistic ones being made of actual metal and often costing almost as much as the real thing. However, the airsoft versions used by folks that build the Airsoft-based pulse rifles are very hard to find. Especially the Maruzen M870 which hasn’t been made in years and is impossible to find in the US anymore. Harder to find than the SPAS cages – which are real gun parts – if you can believe it. In the end, the Maruzen toy version actually cost just a little more than a real 870 express – if you can find it. Crazy.
Anyway – enter Japan. In Japan, the gun laws are so strict that there is just about no way for the average person to own a gun. Consequently, the toy gun market is huge over there. Just a little digging around on Yahoo Japan’s auction site turned one up – and I bought it through a marshalling service that I often bought cels through. In Japan, Yahoo’s auction site is king – not eBay. And you can find all kinds of stuff that you can’t in the US. The prices turn out to be about the same – plus about 10% for the marshalling services and mailing. So all-in-all not bad. Tricky part is that everything is in Japanese – so one has to wade through a bit of confusion. Still – something you might want to keep in mind.
I like most of you, heard Pres Bush’s 15-minute address on Wednesday. If you missed it, the text is here and along with the audio/video as well. The most surprising part – he described the situation very accurately, succinctly, and – quite honestly – surprised me with how well he did with it.
He spent the first half of the speech describing how we got where we are now at (and his summary was as good and accurate a summary as I’ve yet heard). He acknowledged the anger and frustration of folks that did do their homework and pay their bills on time, as well as assure that the Wall Street would be given a stimulus package in order to stabilize the market. He ended on an inspiring note – which I urge you to read – because I think it’s true.
While I’ve not been a big fan of George over the years on various things (I’m registered as independent as they come) – this is by far the best address I’ve ever heard him make. If you want a good summary of what happened on wall street and why we now are stuck bailing it out (or facing near depression era market/economy collapse), I now will be pointing folks to George’s speech. And that’s a first.
I listened to some of the Fed Chairman Ben Bernanke’s address to congress about the bailout. It was stunning. The man seemed to have only one solution on the table – complete bailout without questions or accountability now. No questions, no alternatives, just dump the money on me and we’ll figure it out. Not only that, it was only two pages. Here’s the text. Want scary – read these parts:
Sec 8 – Review:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.Sec 10 – Increase in statutory Limit on the Public Debt:
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000
WHAT?!?!?!?
So, if I’m reading right, he’s saying they must give him the money to dispense with in any way he pleases WITHOUT any oversight or review by courts or congress – even after the fact. Get out of jail free cards were never so easy to get!
And if you think that the $750 billion is what it’ll cost, he just tipped his hand. Sec 10 says that the national debt may be raised to $11 TRILLION dollars. Our national debt currently stands at 9.7 trillion. So in other words, Bernanke is giving us a guess of what this bailout will cost: 11.3 – 9.7 = 1.6 Trillion dollars. That jives – most projected numbers for government projects are about half of the reality.
Even worse, there is a staring match going on between the Fed and the embattered loan companies who aren’t keen to reveal the extent of their bad loans just yet. I kid you not, one of these mortgage brokers was quoted saying:
“If we can just get liquidity back (aka – money given to us), we’ll be able to move all this debt at current or better market value.”
You must be kidding me? With home prices dropping anywhere from 5%-50% depending on region – exactly where does this guy plan to sell this debt? In other words, these guys are flat lying through their teeth in order to cover up the extent of how bad it is (likely – since once a bailout starts -aka foot in the door – they can just keep shoveling since you wouldn’t want to stop now would you?), or they’re completely incompetent (even worse).
I’m emailing all my congressmen/senators today about this – and I highly recommend you do to. Here’s what I sent (sans the swearing):
1. A step-by-step bailout with regular re-evaluation. The markets are mostly stabilized right now (Wall Street). They believe a bailout will be coming and are now just sitting still. Ensure the markets that targeted support will be given by the government on a case by case basis. Just as we have been doing so far. Congress, if you bail these jokers out and give them a blank check – I’ll seriously be pissed off at every one of you.
2. If you are getting bailed out – you’re upfront and honest about the debt situation or you GO TO JAIL. What the f*ck! These guys running this thing can sit and lie to you while putting their hands out for wads of cash – cash they f*cked up the first time??? Only an idiot gives a fool money. Their either fools or criminals – they should be treated as such.
3. If you get bought out – you lose your company. If the government buys you – then they get to set the rules of lending, they get all your perks, they get all your bonuses, they get everything until you’re paid back in full with interest (or all your assets are sold). Maybe at the end they give it back to you – much poorer and hopefully wiser.
4. Something very shady is happening – somebody likely needs to be going to jail. Bernanke didn’t offer one alternative than pass me the loot with no strings, oversight, or jailtime attached. That’s NOT open and honest government. Something very fishy is going on – and has been. There’s NO WAY these experts didn’t know what was going on. My single personal finance class told me that even before the housing crash were were headed for big trouble. How did they not?
5. The market needs to experience some SERIOUS pain. Unless folks lose some serious money. Unless some lose houses. Unless some go bankrupt, unless some folks go to JAIL – we will be in this situation again in 10-20 years. The problem was half lack of oversight, but as any behavioral psychologist will tell you – unless *core behaviors* change – we will do this again (like many other countries: Argentina’s a great example) every 10-20 years. Only a fool keeps lending money to relatives that can’t manage money. We simply have all been living beyond our means for too long. We all need to experience some personal ass kicking and loss or we will not change the core behavior of the people who did this. Instead, it will reinforce bad loaning behavior, it’ll reinforce bad consumer behavior (aka running up huge debts they can’t afford), and will ruin the value of our markets.
The US is taken the first big step into becoming a second-world economy. The US dollar and markets are now no longer considered bullet-proof – so now folks are going to start take their money elsewhere.