Tuesday, December 04, 2007
Morning Topic and Schedule
No recession in my neck of the woods. Yet. Sorry the topics have been measly and slow. I have another busy few day. There is often a "flurry" of year-end j-o-b-s for me to attend. While I said no recession yet I am seeing a few unusual things. Lots of traffic on the roads and ongoing commercial and high end construction. High dollar home improvement is also strong. That's why I think 410 Avocado will actually sell within 4 months. I don't see a lot of buying except for videogame boxes. All told it looks like the economy is spending money with the prospect of it being a last gasp. We shall see.
Jim The Realtor raises a good topic at bubbleinfo. He was commenting on the movement to boycott Countrywide to "force" them to grant relief to FBs. An amoral hazard if ever I saw one. CalculatedRisk has cover the mechanics quite throughly. Here I thought a meta discussion would be appropos.
Concerning the Countrywide Bank actions I wrote: I'm all in favor of economic pressure; voting with your dollars . It is a fundamental lever in a capitalist economy. What if the City of Carlsbad managed to ram through a citywide Mello-Roos district assessing every property a few thousand per year? Would you vote with you feet and dollars and ballot? You bet. That said I don't see how to protect the good uses of boycott without being forced to accept the dumb, stupid, dangerous ones like a Countrywide boycott.
On a related note CFC is still in deep trouble. By funding its own loans with its related bank it has been going to the Fed window and the commercial paper markets for the cash AND is stuck with a hefty portfolio overly concentrated in the bubble zones and the more exposed products. Bubble zone because that's where CFC gas located. Concentrated because it has been forced to sell the better loans to keep capitalization margins and operating costs. It might be a good idea not to bank on the deposit side with Countrywide for those reasons. And before you raise deposit insurance, remember that is all it is, deposit insurance. Your $100k 5.7% 3 yr CD might just come back to you in 4 years as a FDIC check for $100k not $120k. $100k 2007 dollars versus $100k 2011 dollars anyone?
• Parts 2.0 and 2,1 of Density real soon now.
• Westwinds auction later today, I have to confirm some things with the City of Oxnard about a rumor.
• Be sure to read the BMIT follow up to the Union-Tribune story about Michael and Suzanne Hornbeek.
• Be sure to read Stag Marks Illusions of Prosperity observations on pennies and I-Bonds.
• Coming later in the week; "An Obituary for Global Warming, We hardly Knew Ye."
• And yes, another rant on immigration, migration, Westwinds and just about all the subjects mentioned above tying together. Note I said "immigration and migration" not illegal immigration. We take the difference here seriously.