Volcker...Chicken Little???

"This bright new system, this practice in the United States, this practice in the United Kingdom and elsewhere, has broken down. Growth in the economy in this decade will be the slowest of any decade since the Great Depression, right in the middle of all this financial innovation. It is the most complicated financial crisis I have ever experienced, and I have experienced a few...Changes are going to have to be made'' to the global financial system."

-Paul Volcker, former Federal Reserve Chair, 1979-87

If you won't listen to crazy guys like me and some of the other doomsday bloggers...I think Volcker has a pretty good resume. The bandwagon continues to grow. The comparisons to the Great Depression will grow as well.

WOW

Bloody Summer In City: 125 Dead In Chicago, Double Number Killed In Iraq...

All I can say is WOW! That is a telling statistic. This country really has no stomach for conflicts regardless of whether the initial reasons were just. We cry for our soldiers who are paid and trained to fight and ignore our countrymen who die at home helplessly. Not a knock on our soldiers (bless them all), just a knock on the intestinal fortitude of the whiners in this country. There is a cost to the freedom's we've come to know and love and embrace. Will we stand up when needed? Those who cry about the human cost of war, may do better to focus their attention right here at home.

From foreclosure to zoo

Bobcats claim foreclosed house

Atleast somebody is making use of all these empty homes...

What's wrong with this picture

What's it gonna take for bulltard investors to finally realize that we are in a recession and it will be massively bad for company earnings. This market will eventually collapse, but there is a serious disconnect between equity valuations and reality at this point. Pretty telling picture of headlines next to an index value.

U.S. House Price Decline Could Be Worse than Great Depression

U.S. House Price Decline Could Be Worse than Great Depression, Economist Shiller Says

Shiller's been more right than he has been wrong in recent years. He understands the fundmentals and the fundamentals are horrible. Here are some highlights:

• Home price declines are already approaching those in the Great Depression, when they plunged 30% during the 1930s. With prices already down almost 20%, it's not a stretch to think we might exceed that drop this time around.

• There are about 10 million homeowners whose debt is higher than their home value, which has broad implications for how Americans feel about their wealth and spending habits (read: more pressure on consumer spending).

• The current hopeful consensus -- that house prices will bottom soon and then begin to recover -- is most likely a dream. Housing markets don't usually have "V-shaped" recoveries. And even if house prices stabilize in nominal terms, after adjusting for inflation, most homeowners will continue to lose money.

Babes and Bailouts

It seems that everywhere I look today, all I see are articles about Palin and bailouts. Now I don't mind change and I certainly don't mind Palin strutting her stuff on the Republican ticket, but the increasing talk about bailouts across the board is completely unacceptable. My vote is still going independent unless I can get clear direction from one of the candidates that they WILL not under any circumstances bailout industry after industry. I've written before about the looming bailouts.

Long and distinguished

Now today I see the auto industry asking again for $50 billion in government loans (bailout) to convert to alternative fuel cars. Gross from Pimco is again asking for the Treasury to backstop the housing market. The GSEs have essentially been bailed out or atleast the facility is in place. The airline industry is on the ropes and will be asking soon. Banks are teetering and the FDIC is going to be under water. We already bailed out BS. Who the fuck is next? When does the madness stop. As my momma used to say, "you can't get a little bit pregnant." Once you dip your toe into socialist waters, it get's harder and harder to stay dry. The more bailout talks that circulate, the longer this crisis will take as the price discovery mechanism in the free market becomes even more broken.

Wells Fargo says "Ooooooops!"

In July I wrote about my confusion regarding Wells Fargo raising their dividend. It just didn't seem right to me.

Wells Fargo raises dividend...hmmmm

I now know why it rubbed me the wrong way. They are fing idiots.

Yesterday Wells Fargo (WFC) raised $2 billion in a bond offering. The cost of the capital? 9.75%. When the top rate it can lend at is 6% the only way it can make money on this capital is to lever it.... increase the risk.

It stunk to me at the time they did it and it's rotten now...what in the world is a company doing raising their dividend when 2 months later they have to go to the bond market at 9.75%.

It's beyond comprehension what these financial companies think they are doing. It doesn't take a rocket scientist to know that you need to preserve your capital in this market. These companies will not survive if they keep trying to put lipstick on the pig. Eventually they will have to write down losses and the longer they wait, the more expensive and difficult it will become for them to access capital.

Raising their dividend was a complete sham and it will end up backfiring (already has it seems).