Not the good kind. It's copper as predicted in Scorched Earth Policy.
From WCCO in Minnesota, we have Lawmakers Working To Cut Down Copper Stripping.
State legislators in both houses are working on new laws to cut down on copper stripping. It is the epidemic of thieves stealing industrial metal from vacant homes. Law enforcement says it is a public safety issue and needs help from the Capitol.
With 400 vacant houses in Minneapolis, police want to stop thieves who are stripping out copper wiring and piping. There have already been 115 that have been stripped. And at least four houses blew up when gas from a stripped pipe ignited. Police want lawmakers to fight back.
And from sunny San Diego, we have Copper thieves preying on schools.
Copper thieves are hitting East County schools – hard.
At least 10 schools and district facilities have been struck, some repeatedly, since December, officials said.
“Any copper is what they're looking for,” said Bob Kiesling, director of facilities for the Grossmont Union High School District, where five campuses have been vandalized.
From Las Vegas, we have 'Scrapping' for copper, other metals, helps feed meth habit.
Rising prices for copper are making the once lowly metal a target for thieves, who hit construction sites and abandoned buildings for the element, often to feed methamphetamine habits.
"Scrapping," as meth addicts call it, involves stripping copper and other metals from utility poles, pipes in empty buildings and materials at construction sites.
"It's such quick money, and there are so many places to steal from," Reno police Lt. Jon Catalano said. "They just cut it in pieces and stuff it in their backpacks."
From Arizona: Copper, metal thieves targeted in Mesa campaign.
A recent spree in theft of copper, brass and aluminum from construction sites, farms and businesses around the Valley.
The solution: Paint metal to reduce its value or cage and lock metal units.
These are the suggestions by Mesa's newly implemented "Stop the Metal-ing In Mesa" campaign, raising awareness of the crime.
From Tennessee: Copper theft causes fire.
It appears to be easy to steal and easy to sell and thieves stripping copper from air conditioning units are costing area businesses big time. Thursday fire fighters responded to a fire at the Winchester Office Plaza after someone turned on an air conditioning unit that had been vandalized.
In the last two months the Winchester Office Plaza has been hit three times by thieves stripping air condition units for copper and yesterday their handy work led to a fire in a beauty shop in the complex. Managers of the complex say thieves who vandalized one unit clipped the wires to another. They say Thursday when someone turned on the air conditioning loose wires in the wall sparked a fire.
"We had went to lunch and we had just finished up lunch and started smelling some smoke thru the air vents," said Tina Chism, who works in the plaza.
And just so we are clear, this is global. From Leeds in the UK: Thieves in the night target copper.
THIEVES are stealing copper gas pipes from homes while residents are asleep.
The criminals have targeted dozens of houses on a Leeds estate, leaving families without heating or the means to cook.
Victims have included a 77-year-old woman who is now terrified the thieves will return, and a mum of two-year-old twins who was left without central heating.
"We woke up in the morning and the house was freezing," said the mother, who did not want to be named.
"At first we thought the pilot light was out but when I went outside I realised all the piping had gone overnight.
Tuesday, April 24, 2007
The First Ka-boom!
Literally!!!
From KSL TV: Homeowner Arrested for Arson Following House Explosion.
A home explodes in Salt Lake City, leaving nothing but a pile of rubble. Now the homeowner is being charged with arson.
The blast was enormous, completely wiping out the home near 600 East Wilmington Avenue (2200 South) and igniting two neighboring houses.
The owner of the home that exploded is a man in his 30s.
Heitkemper said he had talked with the homeowner in the past. "He was talking about trying to take a mortgage out of his house, trying to do something to gain some money," Heitkemper told us.
The homeowner's wife is totally distraught. Apparently she was not living in the house with her husband at the time of the fire. This morning she told us she does not know why the homeowner may have set the house on fire. But she indicated there were financial and emotional issues.
What fun the Federal Reserve hath wrought!
From KSL TV: Homeowner Arrested for Arson Following House Explosion.
A home explodes in Salt Lake City, leaving nothing but a pile of rubble. Now the homeowner is being charged with arson.
The blast was enormous, completely wiping out the home near 600 East Wilmington Avenue (2200 South) and igniting two neighboring houses.
The owner of the home that exploded is a man in his 30s.
Heitkemper said he had talked with the homeowner in the past. "He was talking about trying to take a mortgage out of his house, trying to do something to gain some money," Heitkemper told us.
The homeowner's wife is totally distraught. Apparently she was not living in the house with her husband at the time of the fire. This morning she told us she does not know why the homeowner may have set the house on fire. But she indicated there were financial and emotional issues.
What fun the Federal Reserve hath wrought!
Wednesday, April 11, 2007
Tuesday, April 10, 2007
Why bother with knowledge?
From the New York Times editorial: Challenging China.
The administration announced yesterday that it was filing two cases against China at the World Trade Organization. The first is over China’s failure to crack down on pirated goods like movies and books. It will also challenge Chinese restrictions on the distribution of foreign films, music and more.
A trade war would do more harm to American business than to China’s subsidies. What would happen to Boeing if the steel used in its jets became more expensive?
What fuckin' steel?
Steel is way too heavy to make airplanes out of. Everyone knows that they are made out of aluminum, titanium, and other composite materials (which are both lightweight and strong.)
Secondly, the vast majority of that is manufactured right here in America (even if the companies are global, or the raw materials sourced from elsewhere.)
Have the editors heard of Kaiser Aluminum? or Toray?
The irony of ironies is that while a trade war is definitely a bad thing, the one beneficiary of a "weak-dollar policy" would be Boeing (in the short term.) They actually make a product that the world wants, and have the capacity to build it.
Quelle grande surprise!
Lastly, cracking down on subsidies is exactly the right thing to do from an economic standpoint. Subsidized industries hardly constitute "free trade".
But why bother checking facts when you can fulminate inanely on the pulpit?
Man! Even toilet paper is more useful than the "paper of record"!
The administration announced yesterday that it was filing two cases against China at the World Trade Organization. The first is over China’s failure to crack down on pirated goods like movies and books. It will also challenge Chinese restrictions on the distribution of foreign films, music and more.
A trade war would do more harm to American business than to China’s subsidies. What would happen to Boeing if the steel used in its jets became more expensive?
What fuckin' steel?
Steel is way too heavy to make airplanes out of. Everyone knows that they are made out of aluminum, titanium, and other composite materials (which are both lightweight and strong.)
Secondly, the vast majority of that is manufactured right here in America (even if the companies are global, or the raw materials sourced from elsewhere.)
Have the editors heard of Kaiser Aluminum? or Toray?
The irony of ironies is that while a trade war is definitely a bad thing, the one beneficiary of a "weak-dollar policy" would be Boeing (in the short term.) They actually make a product that the world wants, and have the capacity to build it.
Quelle grande surprise!
Lastly, cracking down on subsidies is exactly the right thing to do from an economic standpoint. Subsidized industries hardly constitute "free trade".
But why bother checking facts when you can fulminate inanely on the pulpit?
Man! Even toilet paper is more useful than the "paper of record"!
The Stages of Truth
From CBS Marketwatch, we have No surprise : End of housing bubble should have been obvious to everyone.
In response, policymakers and lenders devised ways to make borrowing easier, since interest expense is the biggest cost of owning a home. These helped a bit - but they really didn't kick in until the Federal Reserve began cutting interest rates in early 2000, eventually pushing them to 45-year lows by 2003.
Since short-term rates were well below long-term rates, many people borrowed at adjustable rates, believing that rates would stay low indefinitely, or that housing prices would continue to rise indefinitely, thus enabling them to refinance at a fixed rate at some future date.
Needless to say, home prices rose even faster than before, as these lower rates (along with new types of loans and creative sales tactics) increased the effective demand for housing faster than supply.
Rising rates reduced the demand for housing, causing prices in some areas to top out and start falling. Readers of this column were informed that the party was over and that some homeowners would soon have difficulty paying off their loans.
Others missed this sign until it was too late. Now they are trying to shut the barn door after the horse has escaped.
"All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."
Schopenhauer would be proud!
In response, policymakers and lenders devised ways to make borrowing easier, since interest expense is the biggest cost of owning a home. These helped a bit - but they really didn't kick in until the Federal Reserve began cutting interest rates in early 2000, eventually pushing them to 45-year lows by 2003.
Since short-term rates were well below long-term rates, many people borrowed at adjustable rates, believing that rates would stay low indefinitely, or that housing prices would continue to rise indefinitely, thus enabling them to refinance at a fixed rate at some future date.
Needless to say, home prices rose even faster than before, as these lower rates (along with new types of loans and creative sales tactics) increased the effective demand for housing faster than supply.
Rising rates reduced the demand for housing, causing prices in some areas to top out and start falling. Readers of this column were informed that the party was over and that some homeowners would soon have difficulty paying off their loans.
Others missed this sign until it was too late. Now they are trying to shut the barn door after the horse has escaped.
"All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."
Schopenhauer would be proud!
When will people get the freakin' point?
From the New York Times, we have Vikas Bajaj talking about Defaults Rise in Next Level of Mortgages.
Some of the problems afflicting mortgages sold to borrowers with weak, or subprime, credit increasingly appear to be cropping up in loans made to homeowners who were thought to be less risky.
Until recently, Alt-A loans were considered by many investors to be only slightly more risky than prime mortgages, and losses in bonds backed by the mortgages were small and rare, said Zach Gast, an analyst at the Center for Financial Research and Analysis.
When will people learn that credit scores don't matter? What matters is how much debt you borrowed compared to your income! How hard can it be to figure out this basic point?
“The credit markets were showering the mortgage market with capital, and now that’s just evaporating,” said Mark Zandi, chief economist at Moody’s Economy.com. “The capital markets are going to exacerbate the problem, seemingly"
The capital markets are going to exarcebate the problem? That's the job of the capital markets, you fuckin' idiot! And he's the "chief economist" of Economy.com?
What dope are all these people smoking?
Some of the problems afflicting mortgages sold to borrowers with weak, or subprime, credit increasingly appear to be cropping up in loans made to homeowners who were thought to be less risky.
Until recently, Alt-A loans were considered by many investors to be only slightly more risky than prime mortgages, and losses in bonds backed by the mortgages were small and rare, said Zach Gast, an analyst at the Center for Financial Research and Analysis.
When will people learn that credit scores don't matter? What matters is how much debt you borrowed compared to your income! How hard can it be to figure out this basic point?
“The credit markets were showering the mortgage market with capital, and now that’s just evaporating,” said Mark Zandi, chief economist at Moody’s Economy.com. “The capital markets are going to exacerbate the problem, seemingly"
The capital markets are going to exarcebate the problem? That's the job of the capital markets, you fuckin' idiot! And he's the "chief economist" of Economy.com?
What dope are all these people smoking?
Thursday, April 05, 2007
Here comes the choo-choo train...
And from the BBC right on time, we have World growth to 'resist US blip'.
The global economy should be able to withstand a slowdown in the US and wobbles in its housing market, the International Monetary Fund (IMF) says.
However, the IMF said that the problems were US specific and should not spread.
"Most countries should be in a position to decouple from the US economy and sustain strong growth if the US slowdown remains moderate as expected," the IMF said in its World Economic Outlook report.
Ah, yes! The "decoupling" hypothesis.
Let's review the progression of events:
There is no problem.
There is a problem but it will be contained within subprime.
There is a problem but the US slowdown will be moderate.
There will be a 'US blip' but the world will decouple.
So when the US is rockin' and rollin', the global economy is the beneficiary, but when the shit hits the fan, they will decouple?
Chuffa, Puffa, Chuffa, Puffa! The bullshit train's right on time.
The global economy should be able to withstand a slowdown in the US and wobbles in its housing market, the International Monetary Fund (IMF) says.
However, the IMF said that the problems were US specific and should not spread.
"Most countries should be in a position to decouple from the US economy and sustain strong growth if the US slowdown remains moderate as expected," the IMF said in its World Economic Outlook report.
Ah, yes! The "decoupling" hypothesis.
Let's review the progression of events:
So when the US is rockin' and rollin', the global economy is the beneficiary, but when the shit hits the fan, they will decouple?
Chuffa, Puffa, Chuffa, Puffa! The bullshit train's right on time.
Tuesday, April 03, 2007
Accounting and Mathematics
If you ever find yourself having to analyze the financial statements, you will need to learn how to read it.
There is a lot of mumbo-jumbo in the accounting world (for historical and legal reasons,) but there is a very powerful way of thinking about it.
If you have even a slighly mathematical bent, there is great advantage to looking at it from the viewpoint of calculus. (In fact, I am ashamed to admit how many years it took me to grasp this basic point.)
There are two components to the financial statement:
Firstly, the balance sheet which is the snapshot about the financial entity (say, a company) at a particular moment of time.
Secondly, there is the income statement which is about the flow of money through time.
On the balance sheet, there are two things -- assets and liabilities.
assets - liabilities = equity (net worth)
Traditionally, this is always written as:
assets = liabilities + equity
Similarly, on the income statement, you have two things: income and expenses. Traditionally, this is always written as (similar to above):
income = expenses + earnings (net income)
Here's the key point:
The income statement is the derivative of the balance sheet with respect to time.
Or equivalently, the balance sheet is the integral over time of all the income statements from the beginning to the instance of the balance sheet.
If you integrate the second equation:
∑ income = ∑ expenses + ∑ earnings
you will end up at the balance sheet:
assets = liabilities + equity
After this, the big bad bold world of accounting will hold no horrors for you!
Depreciation? Pah! nothing but a delta of writedown, etc. etc.
Now, both of these are complicated (for a real company) but if you think in the language of calculus, you will grasp the mumbo-jumbo far faster than if you think in strictly accounting notation (which uses the language of law not mathematics!)
In fact, the mumbo-jumbo originates because accounting is a subject far older than calculus.
The elegant part about all of this is that because we're talking about money (M), there are only two things: M and ∂M (although the second derivative (∂²M) does show up from time to time -- earnings growth, for example.)
So you can use the old physics trick of using dimensional analysis to see if both sides of the equation match.
Nifty, eh?
(In fact, you can use all the calculus tricks you learnt, and the results are powerful and amazing!)
I just use calculus notation but nobody understands me so I have had to learn to translate it back into "accountant speak", and "trader speak", and ...
There is a lot of mumbo-jumbo in the accounting world (for historical and legal reasons,) but there is a very powerful way of thinking about it.
If you have even a slighly mathematical bent, there is great advantage to looking at it from the viewpoint of calculus. (In fact, I am ashamed to admit how many years it took me to grasp this basic point.)
There are two components to the financial statement:
Firstly, the balance sheet which is the snapshot about the financial entity (say, a company) at a particular moment of time.
Secondly, there is the income statement which is about the flow of money through time.
On the balance sheet, there are two things -- assets and liabilities.
assets - liabilities = equity (net worth)
Traditionally, this is always written as:
assets = liabilities + equity
Similarly, on the income statement, you have two things: income and expenses. Traditionally, this is always written as (similar to above):
income = expenses + earnings (net income)
Here's the key point:
The income statement is the derivative of the balance sheet with respect to time.
Or equivalently, the balance sheet is the integral over time of all the income statements from the beginning to the instance of the balance sheet.
If you integrate the second equation:
∑ income = ∑ expenses + ∑ earnings
you will end up at the balance sheet:
assets = liabilities + equity
After this, the big bad bold world of accounting will hold no horrors for you!
Depreciation? Pah! nothing but a delta of writedown, etc. etc.
Now, both of these are complicated (for a real company) but if you think in the language of calculus, you will grasp the mumbo-jumbo far faster than if you think in strictly accounting notation (which uses the language of law not mathematics!)
In fact, the mumbo-jumbo originates because accounting is a subject far older than calculus.
The elegant part about all of this is that because we're talking about money (M), there are only two things: M and ∂M (although the second derivative (∂²M) does show up from time to time -- earnings growth, for example.)
So you can use the old physics trick of using dimensional analysis to see if both sides of the equation match.
Nifty, eh?
(In fact, you can use all the calculus tricks you learnt, and the results are powerful and amazing!)
I just use calculus notation but nobody understands me so I have had to learn to translate it back into "accountant speak", and "trader speak", and ...
Indian Rope Trick
From Bloomberg, we have news about India: India's Mortgage Borrowers Face the Big Squeeze.
The Indian central bank's monetary shock therapy has left the country's newly leveraged middle class gasping for breath.
Last weekend, ICICI Bank Ltd., which commands a 30 percent share of retail lending in India, raised the benchmark interest rate on all floating-rate loans, including mortgages, by 1 percentage point to 12.75 percent.
This move came on top of a similar increase in February, and a half-percentage-point one in December.
A new homeowner who took out a 2 million-rupee ($46,200), 15-year variable-rate mortgage, say, two months ago was better off as a tenant. His loan's maturity, according to ICICI Bank's ``impact calculator,'' has increased by about eight years.
A 200-basis-point increase in a mortgage rate in less than two months is unbearable even in a high-wage-growth country such as India. It translates into a 20 percent jump in what a family has to pay the bank every month, according to Credit Suisse Group research.
A 20% jump in payment is a disaster. The impact on retail has to be breathtaking.
Where are all the analysts who were predicting that Indian consumers would take over where the US left off?
Of course, this blog had already predicted this in: Hello, Deflation!, and The Goldilocks Economy.
The Indian central bank's monetary shock therapy has left the country's newly leveraged middle class gasping for breath.
Last weekend, ICICI Bank Ltd., which commands a 30 percent share of retail lending in India, raised the benchmark interest rate on all floating-rate loans, including mortgages, by 1 percentage point to 12.75 percent.
This move came on top of a similar increase in February, and a half-percentage-point one in December.
A new homeowner who took out a 2 million-rupee ($46,200), 15-year variable-rate mortgage, say, two months ago was better off as a tenant. His loan's maturity, according to ICICI Bank's ``impact calculator,'' has increased by about eight years.
A 200-basis-point increase in a mortgage rate in less than two months is unbearable even in a high-wage-growth country such as India. It translates into a 20 percent jump in what a family has to pay the bank every month, according to Credit Suisse Group research.
A 20% jump in payment is a disaster. The impact on retail has to be breathtaking.
Where are all the analysts who were predicting that Indian consumers would take over where the US left off?
Of course, this blog had already predicted this in: Hello, Deflation!, and The Goldilocks Economy.
That Creaking Sound
From Forbes, we have the first reporting of a "teensy-weensy" problem: M&T Filing Highlights Mortgage Squeeze.
Last week, Federal Reserve Chairman Ben Bernanke marched up to Capitol Hill where he said he didin't see any significant indications that the headline-grabbing problems in the subprime sector had leaked into the prime loan market, mortgages made to creditworthty borrowers.
But recent news from Buffalo-based M&T Bank (nyse: MTB) could cause the Fed chief to reconsider his opinion.
The bank reported in a Securities and Exchange Commission filing that its first quarter financial results will be impacted by what it said were "current adverse market conditions."
What's the reason for the bad news?
M&T told investors that problems in the subprime residential mortgage lending market have had a negative effect on the rest of the residential mortgage marketplace, specifically with regard to alternative, or Alt-A, residential mortgage loans that M&T originates for sale in the secondary market.
"Unfavorable market conditions and lack of market liquidity impacted M&T's willingness to sell Alt-A loans in the first quarter," the company said in the filing. "At a recent auction of such loans fewer bids than normal were received and the pricing of those bids was lower than expected."
Alt-A loans are the highest of the below-prime category, generally comprising mortgages made to creditworthy borrowers but with limited documentation. M&T's filing means that the bank thinks the loans it has recently originated are worth more than investors in mortgage-backed debt are willing to pay for them, another way of saying that the ocean of money that floated the U.S. housing market for the past few years is evaporating.
M&T said that, in accordance with generally accepted accounting principles, loans held for sale must be recorded at the lower of cost or market value. The result: the carrying value of M&T's Alt-A portfolio that had been held for sale was reduced by $12 million in the first quarter, which M&T estimates will result in an after-tax reduction of net income of $7 million in the quarter, or 7 cents per diluted share.
Investors didn't like what they heard. On Monday morning, the bank's shares nose-dived 8.1%, or $9.41, to $106.42.
Houston, we have a problem!
Last week, Federal Reserve Chairman Ben Bernanke marched up to Capitol Hill where he said he didin't see any significant indications that the headline-grabbing problems in the subprime sector had leaked into the prime loan market, mortgages made to creditworthty borrowers.
But recent news from Buffalo-based M&T Bank (nyse: MTB) could cause the Fed chief to reconsider his opinion.
The bank reported in a Securities and Exchange Commission filing that its first quarter financial results will be impacted by what it said were "current adverse market conditions."
What's the reason for the bad news?
M&T told investors that problems in the subprime residential mortgage lending market have had a negative effect on the rest of the residential mortgage marketplace, specifically with regard to alternative, or Alt-A, residential mortgage loans that M&T originates for sale in the secondary market.
"Unfavorable market conditions and lack of market liquidity impacted M&T's willingness to sell Alt-A loans in the first quarter," the company said in the filing. "At a recent auction of such loans fewer bids than normal were received and the pricing of those bids was lower than expected."
Alt-A loans are the highest of the below-prime category, generally comprising mortgages made to creditworthy borrowers but with limited documentation. M&T's filing means that the bank thinks the loans it has recently originated are worth more than investors in mortgage-backed debt are willing to pay for them, another way of saying that the ocean of money that floated the U.S. housing market for the past few years is evaporating.
M&T said that, in accordance with generally accepted accounting principles, loans held for sale must be recorded at the lower of cost or market value. The result: the carrying value of M&T's Alt-A portfolio that had been held for sale was reduced by $12 million in the first quarter, which M&T estimates will result in an after-tax reduction of net income of $7 million in the quarter, or 7 cents per diluted share.
Investors didn't like what they heard. On Monday morning, the bank's shares nose-dived 8.1%, or $9.41, to $106.42.
Houston, we have a problem!
Monday, April 02, 2007
St. Joseph spotted at Walmart
What's $2.93 (+ tax) if St. Joseph will sell your house for you?
Looks like Walmart is getting in on fleecing the last sheep for their last few pennies (which they will charge to a credit card, of course!)
Needless to say, it's made of plastic, and imported from China (which the US will charge to its even larger credit card, of course!)
Sweet!!!
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