New mansions for everybody! Its the least they can do to help out the lending crunch! :eyebrow:

srsly, though? You all know you are liking my guillotine idea better and better.

Ok, well, whateva

I want in.......

[Devil'sAdvocate] OK, so AIG executive went through with a planned corporate outing even though they were going through financially tough times. Has anybody asked the question about when the outing was booked, how much of a deposit was already paid, and what the penalty would be for canceling at the last minute? In my law firm, we book entire floors of hotels when we go off to trial in other cities. The amount of money you have to deposit to hold entire floors, including conference rooms, is pretty astronomical. If the case settles at the last minute and the trial is canceled, the hotels never refund our deposit. So if this spa outing was already substantially paid for and couldn't be canceled, why not go forward with it? [/Devil'sAdvocate]

It was probably like, their swan song!

Actually, Kitsune's post shows that they had paid a deposit of about $400,000 of the $440,000 total. So this thing was already 91% paid for in advance. I haven't seen anywhere what the cancellation policy was, but if that 91% payment was non-refundable, I'd go through with it too.

I like how that invoice looks like it was done on an old manual typewriter: I can't tell if it's Pica or Elite, though.

In my industry, we are told to avoid even the appearance of impropriety at all costs.
They would have been better off eating the (possible) loss, if only for the image of belt-tightening it sends.

Oh, good point, Pie. We are told the same thing. No matter how ethical or unselfish are intentions are, if others even have an inkling of impropriety, then we're doin' it wrong!

Oh, yeah, it's a horrible image for sure. Maybe they should have sent the mailroom staff on the outing instead. Or orphans or something.

lol

How about some needy Dwellers?

I doubt this was appropriate use of company funds even before the crash. $1488 at the Salon Vogue?

Remember how whats-his-name was slaughtered for his expensive haircut?

Where's the liquor bill? Eh, they suck at partyin'

Well, they did spend over $5,000 at the Stone Hill Tavern. :rolleyes:

If they're doing it up right, $5,000 wouldn't even cover the first round.

The deposit issue depends on how long ago it was booked and paid.
It has been clear for a while that things were getting tight. Exactly how long ago it was booked affects the ethics of this.

But think the appearance point trumps it anyway. Even if they could only save 10%, they damn well should have.

[wistful] I'll never forget what's-his-name[/wistful]

Master 3 total:
9,982.02

Probably drinking well booze.

Back on topic ....


I'm all for helping those that need help, but why did they have to bilk us out of $115,000,000,000 first? Why couldn't this have just been part of the original bill? Too many questions? This doesn't seem right.

That looks a lot more like the Democratic view.

Insight on Government Rescue Plan
By Dirk Hofschire, CFA Fidelity
October 03, 2008

That Fidelity article discusses some aspects of this financial market meltdown in terms of what the government is doing and hopes to accomplish.

It's not going to stop at $0.7trillion. Expect government to borrow massively to apply something under $2trillion.

Now a larger picture that is concerning many. Recessions are necessary to fix (remove) the reasons for economic mismanagement. That means top management. Unfortunately, this 'emergency' bailout programs will intentionally ignore that need and in many cases will protect the reasons for such problems.

Recessions and bankruptcies, if left to do what is necessary, eliminates bad management while saving employees and stockholders. After all, that is what happened to Ford in 1981, Chrysler in 1979, etc. But if the problem gets protection using spread sheet games (no SEC prosecution, Arthur Andersen fraud, etc), then basic economics mean even the employees and stockholders get punished (Enron, Lehman Bros, AT&T, S&L Crisis, Long Term Capital Management).

This government bailout all but guarantees inflation. Government has no choice because we used easy money to fix the recession rather than what was creating the recession. Years ago, it was obvious that interest rates needed to rise. Instead we dropped interest rates to further inflame a housing market no justified by the productivity in America. And now we are further stuffing the economy with more money without going after the fundamental reasons for this meltdown.

When government throws money at the economy to 'fix' it, then economic forces take revenge years later. We have no doubt that the revenge will be coming. We just don't know exactly when, how severe, or in what form. But we do know what happened last time government threw money at problems. It was never supposed to be possible - massive inflation and recession - called stagflation. Economic forces took revenge on Americans throughout the 1970s because of fiscal irresponsibility especially in Vietnam.

Expect more government welfare checks to big business. And then expect this nation to sell itself to the world to pay for fixing a recession using massive tax cuts, silly tax rebate schemes, ridiculously low interest rates, and legalizing fiscal irresponsibility.

The damage was done years ago even as the president was declaring "Mission Accomplished". Now we pay for government's overt fiscal mismanagement. Cheney said, "Regan proved that deficits don't matter." Wrong again.

Some numbers to put all this into perspective.

The world has about something just over $70trillion - all currencies combined. This US financial market meltdown has destroyed about $2trillion. The US will spend another $1trillion on "Mission Accomplished". Government has already spent $0.7trillion on a bailout - expect that number to double. The Defense Dept budget under George Jr has ballooned to $0.7trillion per year. US Federal government debt (treasury bonds et al to pay for our fiscal mismanagement) is somewhere between $5trillion and $8trillion depending on with game is used to measure it. A number that is guaranteed to increase massively and that was quickly approaching zero during Clinton's time.

For twenty years, America had seen a fairly constant growth rate. With 2000, and once we eliminate the distortions of inflation and economic wealth fueled by debts not yet paid, America has seen little if any economic growth. For all these GNP increases, we also have incurred massive debts that have still to be paid - such as most of the $trillion for "Mission Accomplished".

Get yourself financially stable. The numbers have long suggested that things could be getting much nastier. We still don’t know how many more ponzi schemes will collapse. Too many unknowns still remain.


We know this. The average American income has dropped 2% while welfare to the rich has significantly widened the difference between rich and poor. This occurred once previously in American history – just before 1929. Get out now from under credit cards and car payments.

1920 to date.

Fascinating link, Bruce.

Although I notice they say the stock market fell by exactly 22.6% on October 28, 1929 AND October 19, 1987. If that is correct, it is a most curious coincidence.

1929 dropped 22.6% of the total market value.
1987 dropped 22.6% of the Dow Jones Index.
Coincidence? Conspiracy? Clusterfuck! :eyebrow:

Not coincidence according to research on this subject identifying factors such as weather. A topic not relevant to a far more serious problem.

For any American - living well this past eight years? Do you measure your well being based upon daily consumption? Or realize your real net worth?

Bruce's citation notes a 15% increase in credit card debt. So what happens when credit card interest rates exceed 22% and 25% - as lessons from the 1970s suggest?

When George Jr took office, the average American owed the equivalent to 80% of disposible income. Today that number is between 120% and 140%. Debt increased that dangerously high. Meantime (with inflation) the average American income dropped 2%. Finance markets suggest a probability of the worst recession since WWII.

Did I get your attention? You may still have a few years to protect yourself.
From the Washington Post of 23 Oct 2008: Job loses are currently defensive in nature. The inevitable inflation has not yet appeared. You may have two years to get secure.

Secure? As in reducing debt?

Absolutely. I was surprised how many don't get this. First pay off the debt with highest interest rates - ie credit card. Pay that off even if at the expense of savings - the lowest interest rate. Then pay off car loans (the next highest interest rate) which a fiscally responsible person does not have anyway.

Some people foolishly refuse to use savings to eliminate high interest rate debt. They don't get it. Money for an emergency is a credit card with no outstanding debt. Money in a savings account at 1% or 2% while the credit card is demanding a 12% interest rate payment? That is a no brainer. Move that 1% saving to eliminate a 12% expense. Do it now. Stop using credit (debit) cards until those balances are zero. Get secure.

This is not an economy to be exposed. If others go bankrupt, then your income or risk gets even worse. Economics does this by many methods – inflation, dropping dollar, corporate downsizing, higher rents and a deadlocked housing market, loss of benefits, or the worst – stagflation.

We also know the more that government does to alleviate this (corporate welfare, tax cuts, increased tariffs, special benefits to domestic industries), then the worse economics takes revenge later.

How bad will it be? Automakers were given $25billion. (GM is only worth $5billion because GM products are so bad and GM has no solution in the innovation pipeline.) Automakers are already going back to government for more money. That means your financial security is at even greater risk.

Ive been working on it since....forever, it seems. I pay out $1000 a month on average to pay off our credit card debt. The good news is that the bulk of it is at 0% interest . I still am putting money away into my savings though and have built up a really nice cushion. If and when G loses his job, I dont want to use credit cards to pay bills, because I wont be able to count on more 0% interest in the future. I'm struggling because we have been hit with major car repairs and a vacation that costs us way more than I wanted. I know I'm not doing this in the most sensible way, but I am working on it.

Pico, I don't know you, and have no real knowledge of your circumstances. But the silliness of that sentence there just boggles me.

Oh I know.

It was suppose to be a cheap vacation that my husband decided to do at the last minute...a camping trip at a lake with boating and skiing. I thought we were going to rough it by picnicking and cooking out. Instead we ate out for nearly every lunch and dinner. And we helped pay the gas for the boat, which averaged us a $100 per day. This was my husbands family and I just had to go along with the flow, but I was really irked afterwards. Anyway, it all went on the card. That and nearly $3000 in car repairs. So it seems like Im never getting ahead.

It's one of those things that should go in the rule book they should give you when you get married.

Never take vacation with others or dine out with others when you're trying to save money. You just don't have control of the outcome.

Oh yes. Absolutely. When my wife and I were first married, I was struggling to make a living as a musician, bringing in like $12k a year while my wife finished her teaching credential and masters degree. Sushi had just become the hot new thing, and all of our friends would go out to "do sushi", order a bunch of food, and then split the tab.

We figured out very quickly that we couldn't afford to do that.

Back on topic -
Greenspan Admits Flaw in Regulation Stance

This holds with the greed comments earlier posted by someone here on the cellar - Hmm hey tw, do you remember who that was?

Hmm this sounds rather familiar too.

I believe thats a hat trick for the, as of late, rather unpopular dwellar.

"Swish"

Sets the timeline also previously mentioned.

Sounds like the "good & noble intentions that were based upon a poor plan" posted earlier.

Yep, good post classic.

Who was also calling for lower interest rates, rebate checks, deregulation for people who routinely need most regulation such as stock brokers and equity traders? The White House lawmakers and many members of Congress who are no longer there instead were demanding easier money as if the economy needed fixing.

If reading old quotes, tw called for higher interest rates in and before Nov 2006 as the administration was pushing for lower interest rates to 'stimulate' the economy. Fed’s primary task is inflation - integrity of the money - not to stimulate an economy.

Much of this problem is due to government 'stimulus' even back on 2001. Every year, George Jr is talking about more stimulus - even privatizing social security which to any informed person was total lunacy.

Remember, rather than let airlines fix themselves by suffering economically and therefore eliminating bad management, instead this administration gave the airlines $8billion with no strings attached. Rather than fix the completely defective American steel industry, George Jr put up illegal tariffs. Those tariffs protected the anti-American steel industry and harmed the so productive steel reprocessing industry. Rather than let drug prices in America fall 40% to the same prices all over the world, George Jr pushed through the Medicaid prescription plan that keeps drug prices 40% higher in American AND makes it a crime to buy those exact same drugs from the exact same company in Mexico or Canada. Just another $1trillion over ten years of corporate welfare provided by this administration that is very good at mortgaging massive debts.

In every case, the solution should have been to let recession and market losses force the companies to fix their bad management.

When do we reap what we sow? Now is typically when such money games result in economic revenge. And still to be seen are the losses if we are not the innovators in global warming solutions, stem cell research, pushing space exploration, quantum physics, and a long list of other fundamental new products and markets stifled by our wacko extremists.

classicman could also requote post after post where tw says economics takes revenge years later when government 'fixes' the economy using easy money, tax cuts, rebate checks, and corporate welfare. Warren Buffet was also quoted. The only tax cut is one that also cuts spending. Instead, extremist Republicans (who even angered moderate and more patriotic Republicans) went on a spending spree well beyond what any Democrat ever did. A spree that promotes money games and not product innovation. Economics must now take revenge on us for not seeing through Karl Rove propaganda.

Also find the many posts where tw discusses requiring everyone to replant their lawn every year to stimulate the economy. Just like so many George Jr’s economic stimulus plans. Now we have reaped economics taking revenge.

Requote posts about General Motors who stifled product innovation for decades. Who used money games even with its pension funds in the 1990 rather than face bankruptcy that would have saved GM. Find those posts where the foolish actually praised the Chevy Cobalt and other GM crap. Last year, others were falling for the ‘every five year’ GM spin, "We were making bad cars but now we are making good cars."

GM is still making crap cars as GM was doing (and noted here) even in the early 1990s. As a result, GM is now burning through $1billion per month. GM will not even have a new product model until 2010. How many more $billion months can GM survive without being bankrupt - without fixing their only problem - Rick Waggoner? Government provides $25billion and not demand management change? Economics will have to take even more revenge. But on who?

Let’s see. GM was given $100million to build a hybrid in 1994. A new deal between government and industry where government would help only if industry innovated. Well GM took the money and still has no hybrids 15 years later. When the hybrid was supposed to come to market and did not, when did George Jr punish them accordingly? Oh. We must lavish more money on our most needy industries? Just another example of extremists in action who justify the worst kind of socialism. Economics must take more revenge.

Yes, government in the latest decade did everything it could to even cause houses to be 20% and 40% overpriced. George Jr’s reelection was at risk. We borrowed massively to make houses overpriced. When do those debts come due? Borrowed by playing money games such as massive tax cuts to the rich. Deregulation so that loans could be obtained with NINJA and other "we don't care because we are rich" attitudes. When that did not work, 0% financing. Did anybody notice how 0% financing was just another money game to mortgage the future?

Economics is only taking revenge for America's (and government) economic policies mostly from the last decade. In housing, the most egregious policies were promoted by the George Jr administration including overt stifling SEC regulations and all but encouraging Enron style accounting even in Fannie and Freddie. What was AIG doing just before their crash hit? They were creating another off-balance vehicle. AIG was about to move more debt off their spread sheets - Enron style accounting that is now acceptable with deregulations. The Economist of 18 Sept 2008: Why was AIG so carefully writing contracts so as to not be regulated by state insurance commissioners? Under a recently defanged SEC, AIG has about $1trillion contracted but equity now believed to have been only $67billion. A ponzi scheme made possible significantly due to new SEC regulation standards. This company was provided $85billion in government welfare.

From The Economist of 11 Oct 2008: Learn from where financial innovation actually works. Venture capitalism funnels money through people who understood the product - come from where the work gets done. Venture capitalism is how productive financing works.

Well economics will take revenge. But economics does not target the offender. Economics takes revenge on the innocent who, for example, ceated this prolem by not speaking out against the wacko extremists who created this mess and actually promoted socialism. No Democrat ever spent money like a drunken sailor - as government has done through the entire 2000 to make the economy look better - to mortgage the future and even completely wipe out every good financial accomplishment by Clinton.

Economics is taking revenge because our right wing extremists all but wanted this meltdown AND are now some of the most egregious socialists - but only for the rich and big corporations.

I have tw on ignore, but I am soooooo tempted to read that post. I think I'll guess instead. I imagine it says all sorts of " i predicted this followed by quoting himself and then a sprinkling of "mental midget" , "wacko extremists" a "George jr." or two and possibly something about emotional posters.... Oh and how the rest of us are stupid and ignorant. How'd I do?

Oh I forgot "vietnam", GM and "mission accomplished." No quote of his is complete without them.

classicman, in this post, tw was actually saying nice things about you.

Or maybe he just posted "I hate his posts. His posts suck. He sucks. He always sucks. Whine whine whine."

Actually, I'm impressed by how long tw's post is. Even for him, it's a long post.

HA HA HA HA HA Shit the sky really is falling! HA HA HA HA HA

Part of the Manifesto.

The original $85billion to AIG was provided on a theory that it was an investment to be returned maybe with a profit. This Washington Post article of 24 Oct 2008 describes progress of a company that may have contained only $67billion of equity. US government has already channeled 7% of this nation GNP into the bailout. This first progreess report is distressing:

Okay, so someone explain this to me. We just got a quarterly 401K statement in the mail. It's down, no shocker there. But on the last page, for comparison, they list a performance summary of all the funds available in the plan, not just the ones that you are actually invested in.

Of the 30 or so listed, exactly two of them show a positive number under "Actual Periodic Return" (period of 7/1/08 through 9/30/08):

Cohen & Steers Realty Income
Virtus Real Estate Securities


WTF?

Cohen and Steers

Top 10 Holdings as of 9/30/08

Name Sector % of Net Assets
Simon Property Group Inc. Regional Mall 8.5
Public Storage Self Storage 6.2
Vornado Realty Trust Diversified 5.7
Macerich Co. Regional Mall 5.0
Boston Properties Office 4.8
Equity Residential Apartment 4.4
Regency Centers Corp. Shopping Center 3.8
ProLogis Industrial 3.5
Host Hotels & Resorts Hotel 3.4
AvalonBay Communities Apartment 3.3

Malls, storage units, and hotels are still making their rent payments. Those rent payments happen to equal more than the expense of owning those buildings.

VirtusDoesn't actually invest in the Real Estate, rather they own REIT's (real estate investment trusts) meaning they are buying and selling closed end funds that specialize in the various areas of real estate.

non-publicly traded REIT's are some of the most consistently profitable investments around. They are certainly not appropriate for everyone though.

Okay, so in theory Cohen and Steers wouldn't see a hit until businesses actually start closing, and/or people significantly cut back on their general travel expenses (hotels.)

But then again, when we all start living in storage units, that part of their holdings will soar.

They would suffer if the mall didn't have stores paying them monthly rent.

They would continue to make money on hotels, regardless of occupancy, unless the hotels actually go out of business.

Ford Prodigy
GM Unveils Concept Car That Gets 108 Miles A Gallon
Dodge ESX3
Well of course. Clinton in the mid 1990s suggested (with investment) that the automakers innovate - an event that is nearly impossible when MBAs dominate a company and industry. Why must these automakers be driven to bankruptcy? As soon as George Jr took over and began stifling innovation (even White House lawyers rewrite science papers), then domestic automakers did not have to innovate. No longer was the product important. The purpose of their companies was profits - the lie taught in business schools. George Jr promoted corporate welfare. No wonder George Jr and his extremists advocated another $25billion of corporate welfare to domestic car companies.

Even Gerald Ford refused to give these automakers corporate welfare in the 1970s. So automakers removed the only reasons for their failures. For example, people more destructive to America than Nikita Khrushchev (Townsend and Richardo) were replaced by a car guy - Lee Iacocca. In only four years, Chrysler went from record losses to record profits. 85% of all problems are directly traceable to top management.

When your leaders are overt socialist - also known as extremists who work for a party agenda rather than America - then your tax money is given to airlines ($8billion), auto companies ($25billion), durg companies (Medicaid perscription drug laws), and insurance companies ($138billion). These policies are also supported even by the Cellar's extremists - who can only respond by attacking others.

Was the American economy investing in innovations - or the money games of finance? Fifteen years after promising to market hybrids and paid by government to do so - the domestic automakers did what? Nothing. Put 1968 technology low performance engines into MBA designed SUVs. Just another example of why patriotic people who believe in the free market buy innovative (and therefore foreign) products. This last decade was about innovation in finance rather than innovation in products. Expected when your president is also an MBA (and a mental midget).

Appreciate why an almost inevitable recession will occur as economics takes revenge on us for voting in wacko extremists. You don't just vote in the polls. You also vote by what you buy. We saved 1970s Ford Motor by stop buying their crappy products - and therefore removed another anti-American - Henry Ford. Welcome to Deja vue. Will you save America by buying the best - or love it when George Jr's solution is more corporate welfare.

In our family that isn't usually a problem. We all just itemize what we've had and pay that portion. Those who have less, pay less. Those who have more pay more.

It works well for us, and no one has to feel like they can't join in a family outing.

These were very good:

http://www.cbsnews.com/stories/2008/...e4546199.shtml

http://www.cbsnews.com/stories/2008/...e4502454.shtml

http://www.cbsnews.com/sections/60mi...main3415.shtml

From Mercs third link above

I've been reading the Derivatives implosion will make the trillion dollar Savings & Loan bailout, and the more recent trillion dollar Wall Street bailout debacle, look like kid's stuff.
Off with their heads!:mad:

I printed out the print versions of the interviews to study later. The show was very good.

From Link 2

Noble idea as previously posted, but really bad as we are all learning...and paying for.

And those "bets" were made on what? GREED!

Isn't that special?

That is so wrong on so many levels.

something important to understand is that no lender was holding their paper much past the first payment. When that is the case, likelihood of repayment is no longer the primary concern. When a bank holds it's paper it will make profit from the interest over a period of years. When a bank sells it's paper it makes profit on the fees charged to close the loan. Sub-prime loans charged much higher upfront fees, therefore were much more profitable to the loan origination company. Repayment? That's someone else's problem.

I will tell you this, though, ACORN and others like them shoulder a lot of the responsibility for this. The tactics and pressure they applied to companies to approve loans for lower income and lower credit quality applicants was obscene. It got to the point that underwriters often joked that the applications should just be sent to ACORN since they seemed to want anyone with a pulse approved.

Oh lookout - stop it with the facts again.

Socialism may end this year. So GM is running to George Jr for more money. In but a month, that $25billion is already gone. GM now wants the government to pay for a GM Chrysler merger.

As any good MBA would do. Fix a defective company by merging it with another losing company. No problem. A merger means a stock swap - no cost. But a merger is also an excuse for more corporate welfare.

Well, GM may not get that money. So GM today ran to George Jr to get money through its finance arm - GMAC. George Jr just announced that he approves of the request. Remember that $700billion bailout called TARP? George Jr now said GM may be able to tap that $700 billion as soon as the Treasury approves. GM will do anything to protect its problem - top management - especially Rick Waggoner.

Louis Hughes was running GM's $36billion international division - making a small profit. At least it was worth that much back then. The Buick in China was Louis Hughes' biggest success. Louis Hughes was a car guy - actually worked with cars. Rick Waggoner: a bean counter who as the head of GM's North American division. Under Waggoner, North American division was losing money. Who did GM select for the top job?

GM is so dominated by bean counters as to select Rick Waggoner. Therefore GM is losing money everywhere - even in its international group. Louis Hughes immediately left to run Lockheed Martin. Now the entire GM is only worth $5billion. International division alone was once worth $36?

When extremists advocate corporate socialism, GM will hurry for free money. Next year, the new president may demand fiscal responsibility - which the current administration never did to encourage this market meltdown. With $700billion in easy money sitting on the table, George Jr is again doing what extremist conservatives do best - spend with reckless abandon. As Cheney said, "Reagan proved that deficits don't matter". Using its financial arm - GMAC - GM intends to tap the $700billion TARP bailout money. GM will do anything to protect their only problem - top management. Easy to do when government is run by ‘spend excessively’ extremist conservatives who advocate corporate socialism. Easy to do when those extremists may lose power and want to spend even more recklessly. Easy to do when Rush Limbaugh tells extremists that this is good and blames it on Clinton.