November 30, 2007

Ho-hum, another day, another run on a multi-billion dollar investment fund


Everyone just go read Manias, Panics and Crashes. Then when you see headlines like this, you'll look up, smile, and then go back to your popcorn.

Florida Freezes Its Fund as Governments Pull Out

Seeking to stem a multibillion-dollar run on an investment pool for local governments, top Florida officials voted yesterday to suspend withdrawals from the fund, leaving some towns and school districts worrying about how they would pay their bills.

Local governments in recent weeks have been withdrawing billions of dollars from the fund, fearing losses on investments in debt related to subprime mortgages. The rush to get out of the fund began even though a relatively small percentage of the fund is invested in subprime-related debt, and it is unclear what losses the fund may sustain.

46 comments:

Terrell Owens said...

This is just the beginning. There will be a lot more withdrawal freezes to come.

Get yo popcorn rdy!

Girl Guide said...

Report from SW Florida. The parking lots are empty. No one has any money to shop. There is house after house - never lived in - left vacant. What is strange, though, is that the prices on these houses is still astronomical. They haven't come down on the prices yet. They still want $350,000 for a plain, 1400 sq ft concrete block house with mold growing up the outside because they can't afford to keep the utilities on.

40 people a day are buying one way bus tickets to Mexico. Self-deportation because there are NO jobs here.

Anonymous said...

Is anyone participating in the sucker's rally today so the crooks on Wall Street can get their end of the year bonuses?

Sure, a rate drop will change the rotten American fundamentals...we believe, crooks.

Hey Bernanke, thanks for being such a secret society pal and allow your crook friends on Wall Street to have a merry xmas.

Oh, a message to the uninitiated: Don't be a sucker to get into this market because after the crooks on Wall Street get their bonuses, this market will sink into the center of earth...just like in the Rick Wakeman's saga. (decipher that)

Anonymous said...

Strange...the price of Chianti and Bordeaux are not going up at all at my wine store, even with the insane euro valuation. After drinking two bottles all night, I'm more available to chat than hookers on Sunset Boulevard.

Squeezably soft housing market expurt said...

It reminds me of the silly sitcom scene from the seventies where a store clerk just puts the last jar of dill pickles into a pyramid when suddenly some unsuspecting clown pulls the jar on the bottom row and then the whole pile of pickles comes crashing down.

Soon after, Mr. Whipple (with a nice tan) emerges from the stock room trailed by a buxom checkout woman wondering what just happened to his now destroyed stock.


Just remember to always trust the expurts and for those of you who need help figuring out what an expurt is, here is a definition:

An "ex" - a has been

A "spurt" - a little bit more than a drip!

I'm not an expurt but I have played on one TV.

Magon said...

Do not worry about the return on your money, worry about the return OF your money.

Anonymous said...

ho hum stocks will be up another 3% today after Ben Bernake's speech last night.

Face it morons, you are on the losing end once again.

Oh and about that gold, silver and oil prices....well you know.

Anonymous said...

Anonymous said...
Strange...the price of Chianti and Bordeaux are not going up at all at my wine store, even with the insane euro valuation


==========

Not strange at all. You see, inflation is low. Only people who don't see that are the Y2K conspiracy theoriss who have morphed into the inflation/PPT/CFR is running the world theorists.

For the other 99.99% of us, all is well.

Anonymous said...

BWA HA HA HA HA

Bailout is here suckers.

http://dailybriefing.blogs.fortune.
cnn.com/2007/11/30/paulsons-
mortgage-bailout-band-aid/

ARM interest rates are being frozen at the intro rate for everyone.

So let's recap:

Stocks are on fire.

Foreclosures will essentially stop next year.

Oil is falling off a cliff.

HP is wrong once again.

Anonymous said...

......NEW YORK (Reuters) - The Bush Administration is close to agreeing on a pact with major financial institutions that would temporarily freeze interest rates on certain subprime loans.......

another kick in the teeth to those who save - how is this fair? It helps the housing prices stay up too.

Anonymous said...

So what I want to know, is who is going to pay for this bailout? Does the taxpayer get stuck with it again increasing our deficit even more. I guess the Republicans are scared about losing it all next year if we go into a recession. So will they do anything to keep this from happening?

But the second question is will this actually help the situation or just delay the inevitable.

Band-aid or a real fix?

wc said...

"Foreclosures will essentially stop next year."
------------------------
So what? Credit standards are tightening, banks and investment companies are in a world of pain and people still can't afford to buy houses 10x their income. Many people that bought with ARMs are still stretched too tightly even if they're loans are frozen. Housing is going to crash anyway - these things work in cycles - this has just been a long cycle. It would be a nice touch if it doesn't take the rest of the economy down with it but you don't need to be a reader of HP to see the shifting tide.

Anonymous said...

"Strange...the price of Chianti and Bordeaux are not going up at all at my wine store, even with the insane euro valuation. "

Not strange, wine production in the EU is heavely subsidized.

smitty said...

"another kick in the teeth to those who save - how is this fair? It helps the housing prices stay up too."

that may not be the case since if homes are too expensive, they're still too expensive. it's not like this action is getting me excited about buying a house.

vegas crash watcher said...

Decent people have no need for government, anyway.
Taxation is extortion.

AnonymousII said...

Anon:

About Paulson's Band-Aid, you do realize they refer to it as a "Band-Aid" for a reason, correct?

And, if you read the entire article you would have noted that, "[t]he reality is that ... it will be impossible for any bailout plan to help many overstretched borrowers — especially if the economy heads into recession."

The reality.

Now, finish that d*ck you were eating.

Anonymous said...

How is this a bailout? The lenders are freezing rates so they will be the ones taking the hit.

Anonymous said...

Now, finish that d*ck you were eating.

November 30, 2007 3:27 PM


=======

With that kind of grace and manners you must be a Ron Paul supporter.

Anonymous said...


Anonymous said...
ho hum stocks will be up another 3% today after Ben Bernake's speech last night.

Face it morons, you are on the losing end once again.

Oh and about that gold, silver and oil prices....well you know.

November 30, 2007 12:14 PM


Ya know what you troll?

You ARE right!

We are on the losing end.

What you're too damn dumb to understand is SO ARE YOU!

No one that will actually benefit from the current cluster F###k posts here ding-dong.

Enjoy your paper 'wealth' while it lasts, 2-4 months is my guess.

Totally rigged said...

11/30/2007, 10:00 AM EST

PPT, Fed, and Tresury are in a full court press to save Wall Street's bonuses:

Markets up on bad news
Gold getting whacked
Oil down 7% with demand at record
USD is up 1%
Fed signals another rate cut
Paulson wants ARM resets postponed for 5 friggin' years! Contracts? FU_K YOUR CONTRACTS!

There is truly no honor among thieves.

Anonymous said...

Countrywide is off the hook and they keeping going with all their BS.

I never had an ARM or interest only loan and have paid my mortagage faithfully for 15 years. Can I have 2% teaser rate frozen?

BS

Anonymous said...

There is no helping Joe-Six Pack/NASCAR Champion. Many are in debt so deep that if imbecile Bush and Co. GAVE them their homes free and clear they STILL could not afford to live in it.

They will be fiscally dead by this time next year begging for food and shelter. Wait until the holiday credit card bill comes in and taxes are due..

In the words of the immortal Paulie Walnuts: "put their sh*t on the curb and let it rain on them'.

Screw YOU deadbeats and all politicians. Their is a special place in Hell waiting for all of you to arrive.

Anonymous said...

reminds me of the eagles song, hotel california.... you can deposit your money but you can never withdraw it..

Anonymous said...

BWA HA HA HA HA

Bailout is here suckers.

http://dailybriefing.blogs.fortune.
cnn.com/2007/11/30/paulsons-
mortgage-bailout-band-aid/

ARM interest rates are being frozen at the intro rate for everyone.
--------------------------------

I knew I should have gotten that 1.5% teaser arm

BillingsBubble said...

Keith,

It's happening in the Montana state fund, too! The run has begun, but no freezes just yet.

http://tinyurl.com/2zpk9b

Remember, RE is local. The bad stuff could never hit Montana.

Maybe this will be a wake-up call around here, a warning that loose credit consequences will hit everywhere.

listcraig said...

"How is this a bailout? The lenders are freezing rates so they will be the ones taking the hit."

It's a bail out because we all will pay for this through a tax called inflation. The banks make their vig from fees and interest, and this is the perfect setup to get them off the hook.

Paulson and Bernanke just gave us all the middle finger.

We are P-W-N-E-D

Anonymous said...

The alleged bailout will hit the bond investors and lenders. Taht means credit will tighten and rates will go up. It also means nobody will be willing to invest in bonds taht consist of ARMs anymore, since the introductory rate will last longer than what was stated in the contract. Rates will go up while "affordability" products will disappear. What will happen to home prices?

Ron said...

Only delaying the inevitable, this will just string us out longer. While the rest of the world looks at us like retarded monkeys with out a clue and then realizes the money from here is backed by morons and it is worthless. Then you can see inflation, then you can see the damage, only after you are standing in a line will you understand I think...those of us working to stop this or see it happening hopefully can divert our own demise. Anyone who thinks this is good, deserves everything coming to them on this.

FMW said...

bloomberg video: some Florida teachers may not get paid today:

http://tinyurl.com/29svey

Anonymous said...

re: the 'bailout'

People are totally underestimating how smart and evil Wall Street is here. Do you think they would go along with a plan that would completely screw them? Here's how it works...

The ARM freeze will only affect people who already have a mortgage, not new mortgages.

Therefore, home prices will still collapse, because home prices are relative to the cost of financing NOW, not the cost of financing when they were bought.

The best thing for the banks: how long do you think it will take to pay down a $500K mortgage with these tiny frozen payments? Many of these teaser rates or option ARMS are effectively interest-only or neg-am anyway, meaning these people will never, ever get out from under their debt.

Effectively they will become renters who can't move without declaring bankruptcy, because they are so far underwater in equity. Banks will become landlords -- but landlords who never fix or maintain anything and don't pay your property taxes. Oops!

The only people who this will help at all are the people with regular, vanilla ARMs...which didn't have the super-low teaser rates anyway. A vanilla ARM gets you, what, a couple percent under fixed? Even then, these people will still be upside down for many, many years as opposed to forever.

The people who get screwed are those who bought at inflated prices with a fixed-rate mortgage. Lesson: don't overpay for things, ever. You will regret it later in some way, though it may not be the way you expect.

re: the precious metal haters

Oh, no! Gold is down A WHOPPING 4% from its peak after returning well over 20% a year for six straight years! I think I'm going to jump off a building! Precious metals are dead, I'd better buy some home builder stocks! Jeez.

Eric said...

Even if you had your intro rate frozen why would you continue to pay on a house that's worth a fraction of what you bought it for? It's not going to be anywhere close to what you paid for it when the freeze is over and the rates reset.

Anonymous said...

How's life HPers?

Gold down

stocks up

foreclosures finished as soon as the bailout is finalized

oh and of course all those CFC puts you baboons bought

enjoy the weekend in your run down 1 bedroom hovel.

SuperFizzle said...

Ok, so the fed already lowered rates twice to no effect, seems the news keeps getting worse and the PPT is working overtime to keep the DOW above 13k.

Bernackie has to understand at this point plugging the holes in the damn is futile, a perfect storm has raised the water level and the damn is going to fail.

I can't imagine he would be happy to hyperinflate and destroy the dollar as US currency as well as destroying it as a global reserve currency, so I think there may be a limit to his intent to devalue the dollar. So much of monetary policy is political that I would be surprised to see him maniuplating the markets up to the election, then giving up the hard fight against natural market forces and letting the correction happen to save what's left of the dollar. Thoughts?

Anonymous said...

About this PPT you all keep refering to.

If it exists then why did they not keep the naz from crashing?

On a good day the PPT springs to action. Yet on a bad day it's the natural thing.

According to you nutjobs stocks should never go up.

Anonymous said...

Oh, no! Gold is down A WHOPPING 4% from its peak after returning well over 20% a year for six straight years! I think I'm going to jump off a building! Precious metals are dead, I'd better buy some home builder stocks! Jeez.

November 30, 2007 6:52 PM

---

Dude you just described housing. Up big for 5 years. Down 5% for 2 years.

For gold that is a wonderful return ? Yet for housing it's the end of the world?

Can't have it both ways.

keith said...

Typical gold purchase (no margin)

Buy at the peak for $850, drops to $800, unlucky buyer lost 5.8%, or $50. Oh well.

Typical house purchase (5% down or 20 to 1 leverage)

Buy at peak for $500,000 drops to $400,000. $100,000 loss on $25,000 investment. Financial ruin, bankruptcy, foreclosure.

Now do you understand why housing is different than other investments?

It's called leverage. MASSIVE leverage.

Glad I could help.

Anonymous said...

Oh and also...when one forecloses on a $0 down, interest only mortgage, one loses $0.

When you buy gold at $800 and 25years later it's worth $800, you lose 90% of your investment adjusted for inflation.

Glad I could help.

Anonymous said...


Dude you just described housing. Up big for 5 years. Down 5% for 2 years.


Housing was only up big in Clownifornia and parts of the east coast. Now it's down alot more than 5% in those areas. Florida is down nearly 20%. Clownifornia is down by 10%. Plus you don't have to pay incentives when you sell your gold. You don't have to sell your gold when you get a job in another city. There's no maintenance or property taxes with gold. You can take gold anywhere in the world and exchange it for currency. It doesn't take months or years to sell gold. You don't have to commit fraud to sell gold.

For those who claim that gold has no value, why do they keep it in vaults and transport it with armed guards?

Anonymous said...

11:08...whatever pal. People bought $250K houses with $5K and sold those houses for $750K 4 years later. OK so they spent $100 a month on maintenance. WOW!

And remeber when you sell gold you pay capital gains taxes. When you sell a house after 2 years you pay no taxes. Right there that makes up for all the taxes and maintenance you could dream of.

Face facts dude. Buying real estate in the early 00s and selling by 2006 was one of the the best investments ever. Most of you bloggers missed out and are pissed. Too bad. Next bubble get in early enough and you too will be celebrating.

Anonymous said...

According to you nutjobs stocks should never go up.

You must be one of those fools who still believe that free market still exists in America.

Geez, why is it that the Fed got rid if the M3 chart. Wake up, sheeple, be a man.

Anonymous said...

How's life HPers?

Gold down

stocks up

foreclosures finished as soon as the bailout is finalized

oh and of course all those CFC puts you baboons bought

enjoy the weekend in your run down 1 bedroom hovel.



Dow Jones Industrial Average and S&P 500 fell 4% and 4.4%, respectively, their worst month in five years. The tech-heavy Nasdaq plunged 6.9%, its worst month in over three years.

F*cked homedebtor in debt up to the eyeballs: Don't get sick, don't lose your job, don't get into accidents, don't get divorced, don't have expensive car problems.

Next week and 2008 will be very interesting for leveraged sheeple. Enjoy.

Anonymous said...

Ah ha ha ah ha ha ha!

Where did my property tax go? I want my pot holes filled.

The fat state bureaucrats take it up the a*s. No, not with a corn cob. This time its gonna be a cactus.

Anonymous said...

Can the holders of this debt seek an injunction?

vegas crash watcher said...

Gold doesn't pay interest. I'm not interested in it.
It has just started its decline in the great deflation. Suckers buy gold now like sucker bought real estate in 2005.

Anonymous said...

vegas crash watcher said...

Gold doesn't pay interest. I'm not interested in it.
It has just started its decline in the great deflation. Suckers buy gold now like sucker bought real estate in 2005.

December 01, 2007 6:21 AM

=========

finally one of you morons understands what's happening with gold.

you want a sure bet, short GLD. Gold will be below $300 by the end of the decade.

Anonymous said...

Regarding the teachers being unpaid. Teachers are used because of their connection to the "children" and the implication that the "children" will suffer. How do you pay one segment of municipal/state worker and not another? You don't.