Miami Real Estate Crash: Properties Sell for Half Price at Auction
October 21st, 2007Trying to catch a falling knife too soon…
It’s going to get so much worse.
Vultures Are Circling Over Distressed Properties
October 21st, 2007Via: Washington Post:
Call them grave dancers, vulture funds, turnaround specialists or the more euphemistic “opportunity investors.” However you identify them, the deal is the same: When hyperactive real estate markets lose their sizzle, or property owners no longer can afford to hang on to their houses, well-capitalized investors smell blood and move in.
That’s happening in most of the “bubble” areas of the country that saw heavy speculative activity and razzle-dazzle financing from 2001 through 2005. But it’s also happening in less volatile markets where unaffordable mortgages and economic distress are producing record numbers of panic sales to investors at fractions of former values.
In Miami Beach and elsewhere in South Florida, for example, real estate consultant Jack McCabe said he is advising “hedge funds, high-net-worth individuals, Wall Street investment banks, and groups of doctors and lawyers” who all want a piece of the area’s tottering condominium and townhouse sector, where some properties are selling for 50 cents on the dollar.
…
“The owner might be offended at the low-ball offer, but then again, in some situations that might be the only offer they get,” Hayes said.
Zimbabwe’s Millionaires Worth Only $1
October 20th, 2007Via: Times Online:
Zimbabwe’s currency has fallen to record levels, with one million Zimbabwean dollars buying a single US dollar (48p) and inflation reaching 8,000 per cent.
The bleak data was announced as people in the capital Harare struggled to cope without electricity for the third day. “We closed our business today,†said a woman who helps to run a major petrol supplier. “We just can’t operate like this.â€
The National Blood Transfusion Services said that it had been unable to test blood since Tuesday. “We are in serious trouble,†said a doctor.
At independence in 1980, the Zimbabwean dollar held parity with the US dollar but the currency has suffered from the recent economic policies of President Mugabe; at the beginning of this year it was $Z2,800 to one US dollar and ten days ago $Z500,000.
President Mugabe has struggled to keep inflation under control and in July ordered businesses to halve their prices to alleviate the country’s woes. The order resulted in the arrest of about 10,000 business people as thousands of police officers raided companies, shopping malls and markets to take goods marked above price control levels. Now the supermarkets are bare and it is almost impossible to buy food.
Related: The Failed State and You
Wall Street Caught in a Perfect Storm, or Not
October 20th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
When you start a fire, be to windward of it. Do not attack from the leeward.
—Sun Tzu, The Art of War
Look, 367 points is fly fart antics at these levels. On a percentage basis, the Dow only lost 2.64%. I don’t know what these reporters are up to by making 1987 crash analogies here, but what they’ve written is misleading. Short squeeze setup, maybe???
On October 19, 1987, the Dow Jones Industrial Average lost 22.6%! Now that was a crash.
Friday’s move: Fly fart. Also, re: options expiration, see Insider Crimes, Funny Money and Options Rackets. Options expiration is always a time of BIG MONEY ripoffs. Forget about the losses that the media is talking about. The question is: Who had the deep out-of-the-money Dow Diamond Puts that were going to expire worthless, but didn’t? That’s the real story here. And, of course, that’s not a topic for polite conversation.
So, who had those puts? I don’t know, but it would be the same people who sold the Dow futures, taking the whole show down.
That was no crash. That was business as usual, options expiration style.
Besides, we’ve got the Plunge Protection Team on the job.
What could possibly go wrong? 😉
For now, I’m calling simple sell program manipulation to get the juice on the Diamond put options.
Via: Telegraph:
The Dow Jones plunged almost 370 points in a perfect storm of surging oil costs, a sliding dollar, and fresh fears of paralysis in the credit markets.
Twenty years to the day since Black Monday, when the Dow slumped 508 points in a day, Wall Street was rocked by rumours of defaults and heightened fears that the US economy may be heading for a recession.
There were frantic scenes in the last hour of trading on Wall Street yesterday, as traders on the floor of the New York Stock Exchange fell over one another to place sell orders in all of America’s biggest companies.
The Dow finally closed down 366.94 points at 13522.02 recording its biggest one-day loss since August 9, the start of this summer’s credit crisis.
In total, 1.75bn shares changed hands on the NYSE, 1.65bn were sell orders. The panic selling was compounded by the unwinding of options.
Research Credit: PD
Debtor Nation: The Rising Risks of the American Dream, on a Borrowed Dime
October 20th, 2007Via: Harvard Magazine:
Consumerism is as American as cherry pie. Plasma TVs, iPods, granite countertops: you name it, we’ll buy it. To finance the national pastime, Americans have been borrowing from abroad on an increasingly stunning scale. In 2006, the infusion of foreign cash required to close the gap between American incomes and consumption reached nearly 7 percent of gross domestic product (GDP), leaving the United States with a deficit in its current account (an annual measure of capital flows to and from the rest of the world) of more than $850 billion. In other words, the quantity of goods and services that Americans consumed last year in excess of what we produced was close to the entire annual output of Brazil. “Brazil is the tenth largest economy on the planet,†points out Laura Alfaro, an associate professor of business administration who teaches a class on the current account deficit at Harvard Business School (HBS). “That is what the U.S. is eating up every year—a Brazil or a Mexico.â€
Whether this practice is sustainable—and if not, how it might end—are questions that divide scholars and investors alike. We have borrowed so much from abroad—between half a trillion and a trillion dollars a year for the past six or seven years—that in 2006, our investment balance with the rest of the world (what we pay foreign investors on their U.S. assets versus their payments to us on our investments abroad, historically nearly equal) tipped to became an outflow for the first time in more than 50 years. We are a debtor nation swiftly heading deeper into debt.
Research Credit: PD
Goldman Sachs: Traitors and Con Artists
October 20th, 2007Good one.
Via: 321Gold:
Goldman Sachs controls our Treasury and quite a few aspects of the banking system and has a huge influence on more than one country’s central banks. A Goldman Sachs man took over the banking system of Canada this week, for example. Just last month, Bernanke had a lunch with Paulson, the Goldman Sachs head of the Treasury. This meeting was all about Goldman Sachs screaming at Bernanke, ‘There is BLOOD in the streets!’ Bernanke, impressed by the tearful wails that the world was coming unglued, assented to a huge interest rate cut via selling securities to itself, thus causing inflation to rise and the dollar to fall against the euro. Paulson’s further meetings and phone calls that day are not known yet but before anyone supposedly knew of the big rate cut/inflation creation announcement, Goldman Sachs drove up the stock market from minus 400 pts to above 100 pts in only one hour.
Goldman Sachs has always irritated me because they are the ultimate insider traders. This is why they spend so much bribing politicians as well as gaining access to the very innermost workings of the machinery of the banking and financial systems. They are not geniuses, they are conspirators.
When Goldman Sachs announced they had an amazingly profitable summer, I was astounded. Of course, their blasted stocks shot up in value upon this amazing announcement. How could there be blood in the streets if Goldman Sachs was doing just wonderfully? I was quite puzzled when they announced this so smugly. I decided, to cut to the chase, that they were lying. After all, these criminals lie all the time. They are such habitual liars that even if blood WAS running down Wall Street’s gutters and they were standing in in their rubbers and umbrellas, I still won’t believe them.
Misleading people about the true value of paper assets is a crime. We call this ‘fraud’ and people who do this, ‘confidence men.’ Confidence men take people into their confidence and then lie. Our entire economic system has been taken over by such people. Half of their system is self-delusional and half, plots to conceal and lie. They, themselves, can no longer see the difference and are now in the process of destroying themselves along with us all in the US/EU/UK empire.
Research Credit: PD
Wavebob Works
October 20th, 2007And they’re in a partnership with Chevron. That’s right, that Chevron.
Via: AFP:
A prototype wave energy converter has begun harnessing electricity from Atlantic waves off the west coast of Ireland, the Wavebob company said on Tuesday.
A “Wavebob” floating buoy device that automatically adjusts to the size of the waves to maximise the amount of power it produces is undergoing trials off Spiddal, County Galway.
“This is a giant leap forward for renewable energy production in Ireland,” said Wavebob chief executive Andrew Parish.
“As an island in the middle of the energetic Atlantic Ocean, Ireland can be to wave-energy what Saudi Arabia is to oil.
“The more we exploit this unlimited natural resource, the better it will be, not just for the global environment, but also for the Irish consumer’s pocket,” he said.
The quarter-scale prototype device involved in the trials is not connected to the national grid.
At full scale, each Wavebob device will be capable of producing in excess of a megawatt — enough electricity for 1,000 homes.
Part of the strategy of Ireland’s Energy Minister, Eamon Ryan, a member of the Green Party, is to have 500 megawatts of ocean energy installed by 2020.
Wavebob has invested more than 4.0 million euros (5.7 million dollars) in research and development over the past six years.
The company’s partners include Chevron, Georgia Tech Research Institute, University College Cork and National University of Ireland, Maynooth.
Related: Chevron Plans to Build Wave Power Farm Off California Coast
Cryptogon Reader Contributes $1.82
October 20th, 2007Thanks MH.
Breathtaking Abuse of the Constitution
October 20th, 2007Via: Phoenix New Times:
This newspaper and its editorial staff — both current and former — are the targets of unprecedented grand jury subpoenas dated August 24.
The authorities are also using the grand jury subpoenas in an attempt to research the identity, purchasing habits, and browsing proclivities of our online readership.
It is, we fear, the authorities’ belief that what you are about to read here is against the law to publish. But there are moments when civil disobedience is merely the last option. We pray that our judgment is free of arrogance.
More: Case Dropped
U.S. Armaments Industry Backing Hillary Clinton
October 19th, 2007In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.
—From the farewell speech of U.S. President Dwight D. Eisenhower, 1961
Paying attention to U.S. presidential elections is probably the most egregious waste of time imaginable, and I promise not to do it much, but for those of you who still don’t get it, even now…
Hillary Clinton is Cheney in drag.
Via: Independent:
An analysis of campaign contributions shows senior defence industry employees are pouring money into her war chest in the belief that their generosity will be repaid many times over with future defence contracts.
…
“The contributions clearly suggest the arms industry has reached the conclusion that Democratic prospects for 2008 are very good indeed,” said Thomas Edsall, an academic at Columbia University in New York.
Republican administrations are by tradition much stronger supporters of US armaments programmes and Pentagon spending plans than Democratic governments. Relations between the arms industry and Bill Clinton soured when he slimmed down the military after the end of the Cold War. His wife, however, has been careful not to make the same mistake.
After her election to the Senate, she became the first New York senator on the armed services committee, where she revealed her hawkish tendencies by supporting the invasion of Iraq. Although she now favours a withdrawal of US troops, her position on Iran is among the most warlike of all the candidates – Democrat or Republican.
This week, she said that, if elected president, she would not rule out military strikes to destroy Tehran’s nuclear weapons facilities. While on the armed services committee, Mrs Clinton has befriended key generals and has won the endorsement of General Wesley Clarke, who ran Nato’s war in Kosovo. A former presidential candidate himself, he is spoken of as a potential vice-presidential running mate.
Mrs Clinton has been a regular visitor to Iraq and Afghanistan and is careful to focus her criticisms of the Iraq war on President Bush, rather than the military. The arms industry has duly taken note.
