Bush unveils sub-prime assistance

[Uraniun235]

I couldn't careless about American homeowners. They're living beyond their means and quite soon they're going to find the single-family home on a big lawn in a nowhere suburb" is not an efficient model of development. We'd all be better off in North America learning, even if well-off, to live in towns and cities in spacious apartments and to be good neighbors and tenants. More like Europe. Learn to actually need and interact with our communities. As opposed to deluding that we're still homestead farmers with all the ra ra American bullshit that comes with these cultural self-delusions.

It's always ironic to hear people complaining about how stupid everyone is and then turn around and tell us that we all need to live right next to each other and pack in on the public transit and get to know one another better. That's not going to produce "better people" (since I'm told on this very forum that housing retardation has struck Europe as well), that just ensures everyone gets their 'fair share' of having to put up with other people.

(That said, I concur that development has spread out too much and I believe that more people should take public transit.)

[Xisiqomelir]

I couldn't careless about American homeowners. They're living beyond their means and quite soon they're going to find the single-family home on a big lawn in a nowhere suburb" is not an efficient model of development. We'd all be better off in North America learning, even if well-off, to live in towns and cities in spacious apartments and to be good neighbors and tenants. More like Europe. Learn to actually need and interact with our communities. As opposed to deluding that we're still homestead farmers with all the ra ra American bullshit that comes with these cultural self-delusions.

It's always ironic to hear people complaining about how stupid everyone is and then turn around and tell us that we all need to live right next to each other and pack in on the public transit and get to know one another better.

As someone who grew up in a very densely populated country, and lived in several apartments, let me attest that enforced proximity is no guarantee of neighbourly spirit and cooperation.

[Darth Wong]

I couldn't careless about American homeowners. They're living beyond their means and quite soon they're going to find the single-family home on a big lawn in a nowhere suburb" is not an efficient model of development. We'd all be better off in North America learning, even if well-off, to live in towns and cities in spacious apartments and to be good neighbors and tenants. More like Europe. Learn to actually need and interact with our communities. As opposed to deluding that we're still homestead farmers with all the ra ra American bullshit that comes with these cultural self-delusions.

It's always ironic to hear people complaining about how stupid everyone is and then turn around and tell us that we all need to live right next to each other and pack in on the public transit and get to know one another better.

As someone who grew up in a very densely populated country, and lived in several apartments, let me attest that enforced proximity is no guarantee of neighbourly spirit and cooperation.

Who gives a fuck if it is? It's certainly a much more materially efficient way to organize urban living space.

[Admiral Valdemar]

Russia's big oil and gas companies are ditching the dollar now as well. I guess this is the mass exodus that screws the pooch. And by "pooch", I mean Statesiders and their Ameri-can't currency.

[brianeyci]

I couldn't careless about American homeowners. They're living beyond their means and quite soon they're going to find the single-family home on a big lawn in a nowhere suburb" is not an efficient model of development. We'd all be better off in North America learning, even if well-off, to live in towns and cities in spacious apartments and to be good neighbors and tenants. More like Europe. Learn to actually need and interact with our communities. As opposed to deluding that we're still homestead farmers with all the ra ra American bullshit that comes with these cultural self-delusions.

It's always ironic to hear people complaining about how stupid everyone is and then turn around and tell us that we all need to live right next to each other and pack in on the public transit and get to know one another better. That's not going to produce "better people" (since I'm told on this very forum that housing retardation has struck Europe as well), that just ensures everyone gets their 'fair share' of having to put up with other people.

(That said, I concur that development has spread out too much and I believe that more people should take public transit.)

I don't know Bill, I see a huge difference between getting to know someone and making friends with them. Maybe I'm a loner that way, but I can get to know a culture without making friends with them. Keep your friends close and your enemies closer kind of thing.

There's still the idea if you're really good friends with a black man, you're less likely to hate blacks, and if there's people of every culture and walk of life around you, you're less likely to hate them and disconnect. I'm a big fan of mixed housing, and if it means forcing certain types of people to live with others then so be it. I am not a big fan of the housing whiners who complain every time there's a mental hospital or a homeless shelter built in their community (some are legitimate complaints like not being informed but others are just I dont' want property value going down bullshit.)

[Adrian Laguna]

Who gives a fuck if it is? It's certainly a much more materially efficient way to organize urban living space.

"After analysing the statistics, the answer was clear: Cities are like elephants. They get more economical with size. It doesn't matter whether the city is located in China, Europe, or the American Midwest; every city is simply a scaled version of the same city. In metropolis after metropolis, the indicators of urban 'metabolism' - like per-capita consumption of gasoline or the surfacer area of roads or the total length electrical cables - scaled to an exponent of (population)^.8, which is very similar to the biological equivalent of (mass)^.75 . This means that a city can double its population without doubling its resource consumption."

-Lehrer, Johnah. "The Living City." Seeds Aug. 2007: 54-60.

It gets better, the article goes on to say that, unlike biological organisms which slow down as they get bigger, cities speed-up as their size increases. People move faster, exchange more information, do more, and produce more. For economic factors, the exponent is greater then one, which means a city that doubles its population gets more than double the productivity.

[Illuminatus Primus]

I couldn't careless about American homeowners. They're living beyond their means and quite soon they're going to find the single-family home on a big lawn in a nowhere suburb" is not an efficient model of development. We'd all be better off in North America learning, even if well-off, to live in towns and cities in spacious apartments and to be good neighbors and tenants. More like Europe. Learn to actually need and interact with our communities. As opposed to deluding that we're still homestead farmers with all the ra ra American bullshit that comes with these cultural self-delusions.

It's always ironic to hear people complaining about how stupid everyone is and then turn around and tell us that we all need to live right next to each other and pack in on the public transit and get to know one another better. That's not going to produce "better people" (since I'm told on this very forum that housing retardation has struck Europe as well), that just ensures everyone gets their 'fair share' of having to put up with other people.

(That said, I concur that development has spread out too much and I believe that more people should take public transit.)

Wow. What an information-based retort. Should I mention the comparatively high levels of public investment by citizens who must face the issues of their urban community compared to the U.S.? How about Canada and suburban annexation vis-a-vis their major cities? Should I go on? All the above has tended to avoid the inner city decay endemic to U.S. major cities.

[Illuminatus Primus]

Who gives a fuck if it is? It's certainly a much more materially efficient way to organize urban living space.

"After analysing the statistics, the answer was clear: Cities are like elephants. They get more economical with size. It doesn't matter whether the city is located in China, Europe, or the American Midwest; every city is simply a scaled version of the same city. In metropolis after metropolis, the indicators of urban 'metabolism' - like per-capita consumption of gasoline or the surfacer area of roads or the total length electrical cables - scaled to an exponent of (population)^.8, which is very similar to the biological equivalent of (mass)^.75 . This means that a city can double its population without doubling its resource consumption."

-Lehrer, Johnah. "The Living City." Seeds Aug. 2007: 54-60.

It gets better, the article goes on to say that, unlike biological organisms which slow down as they get bigger, cities speed-up as their size increases. People move faster, exchange more information, do more, and produce more. For economic factors, the exponent is greater then one, which means a city that doubles its population gets more than double the productivity.

You expect me to believe this is actually wise in an era of continually less-economically-available energy and obvious rampant consumption and geometric growth issues.

[Adrian Laguna]

You expect me to believe this is actually wise in an era of continually less-economically-available energy and obvious rampant consumption and geometric growth issues.

I have no idea what you're talking about. The way I'm reading this, you're saying that moving away from the suburbs, with their McMansions and utter dependency on private automobiles, and into the city is a unwise. However given your posting history I doubt that's what you mean.

[Illuminatus Primus]

You expect me to believe this is actually wise in an era of continually less-economically-available energy and obvious rampant consumption and geometric growth issues.

I have no idea what you're talking about. The way I'm reading this, you're saying that moving away from the suburbs, with their McMansions and utter dependency on private automobiles, and into the city is a unwise. However given your posting history I doubt that's what you mean.

I thought you were saying LARGER (as in less dense, more spread-out/suburbanized) cities were BETTER.

[Adrian Laguna]

I thought you were saying LARGER (as in less dense, more spread-out/suburbanized) cities were BETTER.

You didn't read carefully. It's pretty clear on the excerpt I quoted that I mean "larger" in the sense of population not physical size. Spreading out the population into suburbs gives you smaller cities, concentrating them in conurbations gives you larger cities.

[The Yosemite Bear]

mmm, metropolis, goody can I commute in a zepplin or vacume tube too?

[J]

All the central banks are trying to rectify this problem by opening the printing presses up globally to max.

Kind've funny. Like how we consider the fact that we got into this mess because of a lot of liquid credit, and the only way out is to produce more and help keep things ticking as they are. Because carrying on regardless is a sure fire way to win!

Bloomberg link

Excerpt:

Money Market Rates Tumble; Central Banks Inject Funds (Update7)

By Gavin Finch

Dec. 18 (Bloomberg) -- The cost to borrow in euros plunged after the European Central Bank added an unprecedented $500 billion to the banking system as part of a global effort to ease credit-market gridlock through year-end.

It seems they've moved beyond helicopters, and are now using cargo planes to dump money into the system. $500 billion is more money than the US military budget. That's a lot of money.

[Xisiqomelir]

It seems they've moved beyond helicopters, and are now using cargo planes to dump money into the system. $500 billion is more money than the US military budget. That's a lot of money.

So it's going to be hyperinflation instead of deflation? Time to buy more NTDOY.

[Admiral Valdemar]

If this keeps up, hyperinflation before Q3FY08. The way the Bank Of Ingerlund is also throwing cash at Northern Rock is disturbing too. What if Llyods TSB, Barclays or HSBC develop symptoms too? You can't shore them all up.

[J]

Another day, another helicopter drop of money, this time to the tune of $20 billion. And there will be more as this is only the first of four giveaways.

CNN Link

Excerpts:

Fed to lend $20 billion to banks
Central bank, in a bid to ease credit crunch, gets strong demand for short-term funding. Wall Street shrugs.

By Paul R. La Monica, CNNMoney.com editor at large
December 19 2007: 2:48 PM EST

NEW YORK (CNNMoney.com) -- The Federal Reserve announced Wednesday that it was lending $20 billion to banks in the first of four special auctions designed to help alleviate the credit crunch on Wall Street.

The Fed said that it received requests for $61.6 billion in loans from 93 bidders - illustrating strong demand by banks that need short-term funds. The winning bidders will receive their loans, which will mature in 28 days, on Thursday.

The results of the Fed auction come a day after the European Central Bank announced it would lend an unlimited amount of money to banks bidding at least 4.2 percent for loans.

Federal Reserve Chairman Ben Bernanke and other central bankers across the globe have been attempting to inject more liquidity into the financial system in order to make sure that banks don't run into even more difficulties resulting from the supbrime mortgage meltdown.

Many large banks in the United States and Europe have been forced to write down billions in assets because of bad bets on mortgage loans. And the concern is that without access to more capital, banks may tighten lending standards.

In turn, this could accelerate a slowdown in the economy and possibly even send the U.S. into a recession if banks are no longer interested in loaning as much money at attractive rates to consumers and businesses.

[Illuminatus Primus]

Here comes stagflation.

[J]

CNN link
Excerpt:

WASHINGTON (AP) -- The Federal Reserve announced Friday that it is increasing the amount of money available to banks through the new auction process it created to ease the nation's severe credit squeeze. The Fed again pledged to continue the auctions "for as long as necessary."

The Fed said that it will increase the amount offered at each of the next two auctions from $20 billion to $30 billion, a 50 percent jump. Those two auctions will be Jan. 14 and Jan. 28.

The Fed announcement indicated that the auction process it began last month has been successful in providing a source of loans for cash-strapped banks.

The first two auctions offered $20 billion each and attracted bids for about three times that amount.

Federal Reserve Chairman Ben Bernanke and his colleagues decided to try the auction approach because their efforts to inject funds into the banking system through direct loans to banks had not been as successful as hoped.

Also, signs are pointing towards yet another rate cut.
Linky
Excerpt:

NEW YORK (CNNMoney.com) -- With unemployment rising to 5 percent in December and jobs growth coming in well below forecasts, economists said the Federal Reserve may be forced to slash interest rates when it meets later this month in order to stave off a recession.

In another step to combat the slowing economy, the Fed also announced Friday that it was going to lend up to $60 billion more to banks in two auctions later this month and that it would decide by Feb. 1 if it will conduct more auctions. The auctions are part of a plan the Fed announced in December to to try and restore order to the distressed financial markets.

But worries about a recession trumped the Fed's willingness to lend more money on Wall Street Friday. The Dow plummeted nearly 260 points, or 2 percent. The S&P 500 finished the day about 2.5 percent lower while the Nasdaq plunged 3.8 percent.

Bonds continued to rally, sending the yield on the benchmark 10-Year U.S. Treasury down to 3.86 percent. Bond prices and yields move in opposite directions and lower yields are typical during a sluggish economic environment.

The government reported December employment figures on Friday. Only 18,000 jobs were added to the nation's payrolls while economists were predicting job growth of 70,000. What's more, the unemployment rate was expected to come in at 4.8 percent, up from 4.7 percent in November.

As a result of these gloomy numbers, expectations for a half-point rate cut grew Friday morning. According to futures listed on the Chicago Board of Trade, investors are pricing in a 84 percent chance that the Fed will lower the federal funds rates by 50 basis points, to 3.75 percent, at the conclusion of its two-day meeting on January 30.

<snip>

John Lynch, chief market analyst for Evergreen Investments in Charlotte said that he thinks the Fed will now lower rates to at least 3.5 percent by mid-year. He said that despite the spike in oil and other commodities such as gold, the Fed would probably be more comfortable with inflation picking up a bit if it meant that the economy did not go into recession.

With the economy showing so many signs of sluggishness, it's going to be tough for the Fed to argue that inflation is the bigger bugaboo.

"There is no debate with the latest round of numbers. Everything points to a significantly slower economy," said Joe Balestrino, fixed income market strategist with Federated Investors in Pittsburgh.

Still, more rate cuts have the potential to lift oil and other commodity prices further since lower rates likely would further weaken the dollar. With that in mind, there are concerns that the Fed may not be as aggressive as Wall Street wants it to be.

"$100 oil is an unusual factor," Hembre said. "While it doesn't completely change inflation expectations it does complicate things a bit."

Nonetheless, investors are also worried that more rate cuts from the Fed may be too late to save the economy from dipping into a recession.

Wonderful wonderful news.

[Adrian Laguna]

Why the hell is the Fed so intent on preventing a recession at all possible costs? Aren't recessions part of the natural cycle? Aren't they supposed to happen every now and then? Shouldn't the Fed be taking the long view and trying to ensure long term stability and growth instead of desperately trying to stop the inevitable?

Dear God, I can't decide what explanation for the Fed's behaviour is worse, stupidity, or election year.

[Winston Blake]

So much for preventing a recession.

Link.

US stocks plunge on economic fears

From correspondents in New York

January 05, 2008 08:35am
Article from: Reuters

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US stocks tumbled overnight, with the Nasdaq logging its sharpest decline in nearly a year, after data showing rising unemployment stoked worries of a recession.

Declines were broad-based, but technology shares were the top drag on the three major indexes. Investors fear businesses will be less likely to upgrade equipment and software in the face of an economic slowdown.

The Nasdaq Composite Index was down 98.03 points, or 3.77 per cent, at 2504.65. The Dow Jones industrial average was down 256.54 points, or 1.96 per cent, at 12,800.18. The Standard & Poor's 500 Index was down 35.54 points, or 2.46 per cent, at 1411.62.

Consumer-related shares were also deep in the red after the jobs and unemployment figures.

"The payroll number are showing that we don't have the jobs, and if you don't have job income, you don't have consumers doing any spending," said Gary Shilling, president, A. Gary Shilling & Co investment research firm. "I don't think there's much question we're in a recession now."

The US Labor Department reported a much smaller-than-expected rise in December non-farm payrolls and a jump in the unemployment rate to 5 per cent, a more than two-year high.

Analysts said the data indicated the economic slowdown may be worse than feared, even though it could likely support the argument for further US Federal Reserve interest-rate cuts.

If the Nasdaq closes lower, it would match a similar losing streak set back in August. The index is now off more than 10 percent from its 52-week closing high set on October 31.

[Durandal]

Where exactly is all this money coming from? Are these loans being credited toward existing US debt to private banks?

[Gerald Tarrant]

Why the hell is the Fed so intent on preventing a recession at all possible costs? Aren't recessions part of the natural cycle? Aren't they supposed to happen every now and then? Shouldn't the Fed be taking the long view and trying to ensure long term stability and growth instead of desperately trying to stop the inevitable?

Dear God, I can't decide what explanation for the Fed's behaviour is worse, stupidity, or election year.

The goal is to try and minimize the damage from what's being called the Credit Crunch or a liquidity crisis. The losses from the mortgage and housing bubbles are concentrated in the banking industry, if they were spread out over the whole economy it might not be such a worry. But since they were concentrated in the financial sector many banks find themselves short on cash for the short term. This means that financial institutions won't be as capabable of making loans to otherwise safe investments. Some of these would have come in the form of re-financing, some would be credit lines to business, some would be one or two month loans to businesses. Whatever the form, these normal procedures give businesses and individuals more flexibility when situations change. Without these financial options more businesses will fail, or else be forced to use layoffs to smooth out operating costs. New startup businesses will decrease in number since there's less cash to finance even the best startups. The hope is that with a little more liquidity (read: "Cash infusion") banks will be able to loan at a level only slightly reduced from the pre-bubble time period.

This may not prevent a recession (there are other factors which suggest one is coming), but there are at least two maybe three recessionary pressures:

1) higher energy prices (due to weakened dollar),
2) less credit for capital formation (capital growth is one of the drivers of economic growth)
3) High public debt (not sure how much of a drag this is, but Japan had similar problems during the 90's, and the thinking was it's huge public sector growth lead to its anemic growth).

The fed can only do something about #2, but it will hopefully shorten any recession that does crop up, or make the recovery to normal growth swifter.

[aerius]

So basically everything will be better once the Fed throws a few trillion dollars down the hole. I mean hey, the European central bank has already tossed over half a trillion Euros at the problem and they're still having liquidity issues. Clearly, throwing free money around is the solution to all financial problems.

[Gerald Tarrant]

So basically everything will be better once the Fed throws a few trillion dollars down the hole. I mean hey, the European central bank has already tossed over half a trillion Euros at the problem and they're still having liquidity issues. Clearly, throwing free money around is the solution to all financial problems.

My understanding was that so far $80B had been injected, nothing to sniff at certainly but no where near what EU central banks had injected. I don't think the Fed is going to dump more than $200B or so, since there's already some core inflation. Personally I think the Fed is going to be a lot less spendthrift than EU banks. Also I'd guess that the Fed will be a little more skeptical of banks claims of losses. Too much liquidity lets banks get off relatively scott free, as well as exasperating inflation. I.E. banks have an incentive to overstate their exposure so they can get more easy money. So there might be a few more of these auctions, but probably not as many as in the EU. If the Fed hasn't panicked and dumped as much money as the EU yet, I don't see them doing that in the long term. If the financial meltdown was worse than advertised -unlikely considering the bleating on the financial pages- then there might be more auctioned off later.

So basically everything will be better once the Fed throws a few trillion dollars down the hole.

Nope, there's probably still going to be a recession, see #1, and #3 above.