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News Briefs 14-07-2008

What’s sputtering, bedraggled, disorganized, and confused? My computer, me and a lot of other people, the economy, the world, and today’s weird and very late news. Regarding the latter, you’ll just have to make do, because if I try to load even one more webpage, I’ll end up throwing this disfunctional machine out the window.

Thanks, Rick.

Quote of the Day:

The credit crunch is starting to become a really big issue — especially for the moneyed classes. Once you can’t ‘act out’ with money you start fighting.

It’s like drinking, or gambling, or sexing your way out of feelings, but with a fabulous family vacation or great clothes or wonderful meals — money can become an addiction that masks the reality. When that goes, reality has to be faced and accusations start flying.

From Credit crunch raises divorce rate for America’s superwealthy, The Times, July 11, 2008.

Don’t like that one? Fine – here’s another:

Predictions are hard, especially when they’re about the future.

Yogi Berra

  1. Thank you
    Sorry to hear you’re having issues with your misbehaving computer. Even when slapping the CPU case is not very scientific and might not even help to solve the problem, it is nevertheless a cathartic treatment 😉

    Thank you for putting out such a great news briefs.

    —–
    It’s not the depth of the rabbit hole that bugs me…
    It’s all the rabbit SH*T you stumble over on your way down!!!

    Red Pill Junkie

    1. computer repair
      Here is an easy fix. Lay the computer on its side, so it will hold some water. Add some water, 1/2 liter or so. Then turn on the power. Call your warranty repair service.

      Oh before you do that, check if you have warranty.

      —-
      The large print giveth,
      The small print taketh away.

    1. You think so? :^)
      I thought it was Rick the one that was being reprimended 😛

      —–
      It’s not the depth of the rabbit hole that bugs me…
      It’s all the rabbit SH*T you stumble over on your way down!!!

      Red Pill Junkie

      1. Not a rebuke
        That article on water cars was part of my personal research into the matter several days before Rick posted his comment. And, essentially, the title is the author’s.

        Speaking of whom… Here’s a brief bio of him:

        Robert Rapier, Engineering Director, Accsys Technologies PLC

        Robert is responsible for global engineering activities. His experience includes engineering roles in R&D, design, process, and production with Celanese, Hoechst, and ConocoPhillips. Robert holds an MSc in Chemical Engineering from Texas A&M University, BSc degrees in Chemistry and Mathematics, and was a recipient of the 1996 Presidential Green Chemistry Challenge award for his graduate school research on biomass chemistry. His previous experience includes cellulosic ethanol, butanol production, oil refining, natural gas production, and gas-to-liquids (GTL) production, and he has been a technical consultant for a number of biofuel projects. Robert holds several US and international patents pertaining to these roles, and has worked in the US, Germany, the UK, and the Netherlands. In his spare time he enjoys writing about energy and the environment for The Oil Drum.

        Addendum:
        It’s difficult to find reliable info on water cars. What little skepticism I found in news articles didn’t include enough actual science to be of any use; and almost all of the articles I found via web & blog searches were posted by people who are selling something related to water cars.

        It took me a whole day of wandering the web to find this blog post by Robert Rapier. I recommend you also read the comments under it — to give you an idea of the kind of (mis)information that you’ll find via a web search.

        K

  2. This is a cheery list of news!
    But there’s nothing about the dying honeybees, California burning down or the massive crop and property losses as a consequence of our Midwestern flooding. Maybe tomorrow.

    There was just a bit on the evening news about the failure of the Indy Mac back in the States, and how those whose deposits exceed the FDIC Insurance limit are looking at 50 cents on the dollar at best. I don’t think there have been these sorts of economic problems since the 30’s. The good news is, if you’re in the market for a house, you can buy one cheap. Bring cash.

    Two things are for sure. I wouldn’t want to be the next President of the States, and I’m glad we’re all immortal.

    Sigh. I think I need to crash one of the secret clinics.

    1. housing
      The housing market in California has been terrible for many years. If you wanted a little 1-bedroom house, on 1/2 acre of land, close to shopping, and you didn’t care about the leaky roof, you could get that. For a measely half million dollars. And Connecticut was (and is) more expensive.

      Now prices are dropping, and it is not good either. What do people want?

      —-
      The large print giveth,
      The small print taketh away.

      1. This is true
        [quote=earthling]Now prices are dropping, and it is not good either. What do people want?[/quote]

        The sliding market does create opportunities for many to buy, but financing can be tough. And people who want to sell often owe more than they can sell the house for.

        The California situation could become dire – many people there were buying on interest-only mortgages, expecting prices to continue to rise indefinitely. They’re now in a situation where they might be better off mailing the keys to the bank, which will only depress prices further. There was an article in Slate a couple months back that considered that possibility. Same thing has happened in Florida, too.

        The fuel costs are killing people who commute also, but they might not be able to sell if they do want to move closer to their employment.

        I also read a piece in the Wall Street Journal that said it could take six years to get the existing national housing inventory down to a normal level. Finally, I read somewhere else that the collective losses in personal wealth as a consequence of the housing slide are already into the trillions. And it looks like the slide will continue for awhile.

        1. Good news on some CA loans
          IndyMac Reopens, Halts Foreclosures on Its Loans
          July 15, 2008

          ‘IndyMac Bancorp Inc, the failed thrift, reopened its doors under federal control Monday and promptly moved to toss ailing homeowners a lifeline by halting all foreclosures on the mortgages it owns.

          ‘Federal Deposit Insurance Corp. Chairman Sheila Bair, who has been one of the most outspoken officials calling for banks to ease up on struggling homeowners, said that the agency is “really focused” on keeping borrowers in their homes for both their sakes and to maximize IndyMac’s value for taxpayers. “We will very aggressively pursue loan-modification strategies for unaffordable loans to make them affordable on a long-term, sustainable basis,” Ms. Bair said in an interview Monday.’

    2. Not since the 1930s…
      >>I don’t think there have been these sorts of economic problems since the 30’s.

      You’re not the only one…

      Article on Fannie & Freddie’s troubles

      There are those who believe it is only a mild exaggeration to suggest that the very future of capitalism hangs on the now-precarious health of Fannie Mae and Freddie Mac.

      Talk has turned to whether the current crisis will be as bad as the Great Depression of the 1930s, with the chief strategist at Bank of Scotland Treasury saying, ‘The high level of leverage extended to both consumers and investors against a now depreciating asset alongside lax lending standards make a rise in default rates beyond all previous experience likely in most major Anglo-Saxon economies.’

      Heart attack at the core of the US credit system

      ‘US analysts estimate that Fannie Mae and Freddie Mac would need to lose a further $77bn to fall below the “critical capital level”, but the markets are already starting to anticipate even greater losses as US housing defaults soar.

      ‘Under the US stimulus plan the pair have been deployed as lenders of last resort to the housing market, carrying out a quasi-official rescue mission on behalf of Congress since March. Now the rescuers themselves need rescuing.

      ‘If Washington does take on the liabilities of the two, this would double the US Treasury’s outstanding debt load at a stroke and raise serious concerns about the triple-A sovereign rating of the US itself.

      ‘”America’s ‘AAA’ rating has become a joke,” said Peter Schiff, head of EuroPacific Capital.

      ‘”I believe the losses from Fannie and Freddie alone could reach $500bn to $1 trillion dollars.

      ‘”The US government will not be able to meet repayments on its debt once interest rates rise,” he said.”‘

      Scramble led to rescue plan on mortgages

      The Bush administration hastily arranged the dramatic Sunday evening rescue of Fannie Mae and Freddie Mac after Wall Street executives and foreign central bankers told Washington that any further erosion of confidence could have a cascading effect around the world, officials said on Monday.

      Treasury Secretary Henry M. Paulson Jr. and other top officials were warned, after Fannie and Freddie lost nearly half their stock market value on Friday morning, that any more turmoil threatened to reduce the value of trillions of dollars of the companies’ debt and other obligations, which are held by thousands of domestic and foreign banks, pension funds, mutual funds and other investors, government officials said.

      The warnings of a potential systemic failure led to the resulting rescue package, and one of the most striking — though unspoken — regulatory shifts in modern times. For decades, Treasury secretaries and Federal Reserve chairmen have insisted that the government did not stand behind the debt of Fannie and Freddie. But the safety net Mr. Paulson announced on Sunday sends the opposite message: that the government is determined not to let either one fail.

      Fannie and Freddie have combined debts of $1.5 trillion. They own or guarantee $5 trillion in mortgages. They have contracts with other institutions worth $2 trillion more to hedge the risks behind those mortgages.
      more…

      1. Thanks for the links, Kat
        It’s pretty dire. Wall Street is continuing its free fall this morning, too. Here’s a couple tidbit’s from MSN’s market update page:

        Stocks fell Monday, as news about a federal bailout for mortgage giants Fannie Mae (FNM, news, msgs) and Freddie Mac (FRE, news, msgs) failed to lift sentiment. Shares of the mortgage giants were down again, amid further anxiety about their future. Fannie shares were down $1.80, or 18.5%, to $7.93 this morning, while Freddie was down $1.67, or 23.5%, to $5.44.”

        I think both the GSE’s have lost 80-90% of their stock value since last fall. Bernanke is testifying at to the Senate Banking Committee today:

        Bernanke is expected to discuss how the credit mess plaguing the financials is weighing on the broader economy. “The markets are reacting negatively to the renewed credit crisis in the U.S. and that’s hurting the dollar across the board,” Roberto Mialich, currency strategist at Unicredit Markets & Investment Banking, told Bloomberg News. “The market is speculating that Bernanke will offer a gloomy outlook for the U.S. economy.”

        More than $13 trillion has been erased from the global equity markets since Oct. 31, according to data from Bloomberg. Financial-services companies have been slammed by more than $400 billion in credit-related losses.

        Then there’s this:

        Merrill Lynch economists David Rosenberg and Sheryl King wrote in a note to clients late Monday that the crisis enveloping the financials is still “far from over.”

        “That is the nature of financial crisis; the problems roll out one after another,” the pair wrote. “There are likely more phases to go and we believe this keeps the Fed on the sidelines for some time to come.”

        Don’t forget the fuel costs, which have not only slammed consumers here, but raised serious questions whether US automakers will survive. They’ve been caught flat-footed by relying on truck and SUV sales that have tanked. GM announced more major restructuring this morning. Airlines are struggling, too.

        The global economic situation, combined with the natural disasters this year (Fires, flooding, strong tornadoes in the States, the Burma cyclone disaster, China’s earthquake) – I’d think we’ll soon see people on street corners heralding the arrival of the end times.

  3. Credit Cards
    So if WaMu (Washington Mutual) goes under. Do I still have to pay my credit card bill? Because somewhere, somehow their debt will be written off. So why pay up? Anyone have any ideas?

    1. I’m sure you do.
      You’re a consumer, not a bank. Bear Stearns was able to get the Feds to guarantee their debt, but you and I probably wouldn’t be able to pull that off. (The Bear Stearns stockholders took a serious bath anyway).

      1. Now you know…
        With all these economic hurdles, now you know why Iran is not shy about testing them rockets! 🙁
        —–
        It’s not the depth of the rabbit hole that bugs me…
        It’s all the rabbit SH*T you stumble over on your way down!!!

        Red Pill Junkie

        1. quality vs quantity
          Iran needs to test these rockets, because apparently some of them don’t work. They get stuck on the ground for some reason,

          You know, many lawyers and medical doctors practice law and medicine for decades. I suppose they do that with the hope that they will get it right some day.

          —-
          The large print giveth,
          The small print taketh away.

          1. What I meant was
            What I meant was that the Iranians are becoming bolder with their tests nowadays, because they are aware of the economic hurdles of the US. They might think that since the Americans can’t afford to enter into ANOTHER military incursion, that they can do what they please.

            And yes, many of their rockets are duds, that’s why they needto keep practicing.

            —–
            It’s not the depth of the rabbit hole that bugs me…
            It’s all the rabbit SH*T you stumble over on your way down!!!

            Red Pill Junkie

          2. being bold
            Let us not forget that the Iranians are basically Persians. They have been bold before the Romans built Rome. They have an attitude. Persia is older, as an empire, than Greece. Probably older than China. And the people there, Muslim or not, are aware of that.

            This is why they are bold – other empires come and go. But Persia is still there, all through history. I think that is how they feel.

            —-
            The large print giveth,
            The small print taketh away.

          3. Yes
            That would certainly be their mentality, although of course what we now know as Persia has been inhabited by many different ethnic groups during all these millenia. What we call the Persian empire was actually a succesion of different empires, all inhabiting the same area.

            —–
            It’s not the depth of the rabbit hole that bugs me…
            It’s all the rabbit SH*T you stumble over on your way down!!!

            Red Pill Junkie

    1. Overload? Humph
      >> I think the number of news items might have overloaded your computer. 😉

      Naugh – I lost all my news so many times from my computer crashing, I finally just went through stuff I’d sent in emails over the past couple of days to find enough news items to post — hence the odd emphasis on the financial crisis.

      And I still haven’t re-found that 3-page Bigfoot article I lost.

      K

      1. Aha!
        There’s your answer: the e-mails you sent provoked a deliberate attack on your computer.

        If you were like me, and only send e-mails about porn, the Man would leave you alone 😉

        —–
        It’s not the depth of the rabbit hole that bugs me…
        It’s all the rabbit SH*T you stumble over on your way down!!!

        Red Pill Junkie

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