What a Difference a Year Makes!

From HeraldNet a year ago: Snohomish County Business Journal Executive of the Year.

In today's chaotic banking world, where crashing waves of economic change have swept away dozens of famous-name banks and restructured much of the nation's financial community, First Heritage Bank is stabilizing and creating a positive new image as “The Greatest Small Business Bank.”

With $215 million in assets in September 2009, the bank noted that more than 90 percent of its $174.6 million loan portfolio was in real estate. The bank lost $5.9 million in the first nine months of 2009, compared to a profit of $992,000 in the same period in 2008.

First Heritage Bank's President and CEO, Cathy Reines, has loved banks — particularly community banks — for many years, and it shows.

From TheStreet.com: Washington Bank Fails; 2011 Tally Now 44.

State regulators Friday shut down First Heritage Bank of Snohomish, Wash., bringing this year's total number of U.S. bank failures to 43.

The Washington State Department of Financial institutions took over First Heritage Bank and then appointed the Federal Deposit Insurance Corp. receiver. The FDIC then sold all of the failed bank's deposits (approximately $163.3 million) for a 0.75% premium to Columbia State Bank of Tacoma, Wash. Columbia State Bank also agreed to assume the failed bank's assets, which total roughly $173.5 million.

Rock on, Cathy! Your "love" of banking is shining through and through!!!

Where's my "Rapture", Dude?

Feel vaguely miffed about it all.

Bubble Watch

There's a new bubble in town - agricultural property.

Prime agricultural land in the US is going for $10K per acre.

Do the math. After all the equipment, seeds, fertilizer, at current yields, and current prices, you're not going to make up that up in 100 years.

And before you scream "inflation", please note that the afore-mentioned "inflation" affects equipment (metals, energy, manpower), seeds, and fertilizer (energy) at the same rate. There is no "magic" here that allows you to get out.

Also, there's a super-secret, sizzling sauce that is gonna crush the above with deflationary forces. (Hint: it's called Africa.)

GAH! This is getting boringly predictable.

On the Poor Use of Statistics

Newsmax.com reports: FBI: 100 Percent Chance of WMD Attack.

The probability that the U.S. will be hit with a weapons of mass destruction attack at some point is 100 percent, Dr. Vahid Majidi, the FBI’s assistant director in charge of the FBI’s Weapons of Mass Destruction Directorate, tells Newsmax.

Sorry, this is bollocky pseudo-science amd bogus statistics at its very best.

The probability that all us will be dead "at some point" is also 100%, and hence it's not a very interesting statistic.

What matters is what is the probability of you, the reader, dying within one year, five years, ten years, etc. is.

This is a totally lame effort to sound scientific when in fact there is absolutely no reasoning or science involved.

One should stick a fork in the eye of the bitch just on general principle. All he's doing is justifying his job at the taxpayer's expense.

Now, that you can be sure of has 100% probability!

The Law of Mechanical Theorems

Yeah, yeah, yeah, the Portuguese are gonna get raped quickly. We all know that.

What we want to know is who's gonna get mauled a year ahead of time.

Irish per capita debt: $550K

Dutch per capita debt: $226K

Expect a mauling same time next year!

BORINNNNNGGGGGGGGGGGGGGGGGG!!!

The Irish Curse

A year ago, we visited the Irish saga: link.

Here's the recap:

Ireland

Population: 6.1 million

Debt: $1.8 trillion

That's trillion with a T. And the population is half of that of Mumbai.

Quick long division later, that's $448K for each man, woman and child.

That's a fuckload of Riverdance tickets they are going to have to sell. Or they could just institute a penny-tax per pint, and they'll pay it back in a year.

What would the EE advise the Irish?

Get drunk!

About the only option you've had for millenia. You think you can beat that by borrowing a crapload of money?

Octopussy

The OC Register reports: Attorney: Octuplet mom is considering welfare.

Nadya Suleman and her 14 children may be kicked out of their La Habra home, and Suleman is considering applying for welfare.

Haddadin, who holds the deed to Suleman's La Habra home, said he plans to start foreclosure proceedings Monday.

Haddadin said Suleman failed to make her $4,060 house payment Sept. 1.

Czech also said his client is considering welfare.

"We've discussed it," he said. "The last thing she wants to do is go on public aid. But she doesn't have any future income. A few things fell through for her."

When the news broke today that the mom of 14 was in trouble, Vivid Entertainment put out the word that it was offering her $500,000 to do an adult movie — "one scene for one hour," TMZ is reporting.

Let's see some Octopussy!!!

In Which Blog Readers Mail in Total Awesomeness!

Blog Reader's comment: "Short Gucci!"

The EE's response: "Surely, my dear, you mean PPR!"

Heck, just short the CAC-40 and be done with it. Why piss around?

Beware of Greeks Bearing Horses!

Let's see - markets freaking over Greece when they should logically be freaking over Ireland. (Note: markets are NEVER rational - Univ. of Chicago morons not withstanding.)

Executive Summary:

Ireland

Population: 6.1 million (source.)

Debt: $1.8 trillion (source.)

That's trillion with a T. And the population is half of that of Mumbai.

Quick long division later, that's $448K for each man, woman and child.

That's a fuckload of Riverdance tickets they are going to have to sell. Or they could just institute a penny-tax per pint, and they'll pay it back in a year.

Either way they are fucked, and the lenders are equally fucked.

If Greece is Bear Stearns then Ireland is Lehman Brothers. Good luck! You'll need it.

In Which the EE Teaches Remedial Math

Obama: Premiums Will Decrease 3000%



Yo, poindexter! The most that prices can fall is by 100%.

They can rise by any percentage whatsoever but the most they can fall by is 100%. That's called free, son!

Did youse or did youse not take remedial math at Columbia?

Hooray for Iceland!

Bloomberg reports: Iceland Rejects Icesave Depositors Bill in Referendum (Update2).

Icelanders rejected by a massive majority a bill that would saddle each citizen with $16,400 of debt in protest at U.K. and Dutch demands that they cover losses triggered by the failure of a private bank.

Ninety-three percent voted against the so-called Icesave bill, according to preliminary results on national broadcaster RUV.

Best. Decision. Ever.

Icelanders should insist on whatever it is that is in their own self-interest.

They won't starve. They got excess energy - more than they need - so they won't freeze either. They got tourist dollars coming in. What more do they need?

The British and Dutch taxpayers are fucked! They should be.

Hooray for Iceland!

And it's been a fuckload of time since someone said that!

Nostalgia

It's a glorious Satuday morning and it can only be improved by a blast from the past.

In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.

"South Florida," he said, "is working off of a totally new economic model than any of us have ever experienced in the past."

Giggle!!!!!!

Food, Glorious Food!

The New York Times reports: Living on Nothing but Food Stamps.

After an improbable rise from the Bronx projects to a job selling Gulf Coast homes, Isabel Bermudez lost it all to an epic housing bust — the six-figure income, the house with the pool and the investment property.

Now, as she papers the county with résumés and girds herself for rejection, she is supporting two daughters on an income that inspires a double take: zero dollars in monthly cash and a few hundred dollars in food stamps.

With food-stamp use at a record high and surging by the day, Ms. Bermudez belongs to an overlooked subgroup that is growing especially fast: recipients with no cash income.

About six million Americans receiving food stamps report they have no other income, according to an analysis of state data collected by The New York Times. In declarations that states verify and the federal government audits, they described themselves as unemployed and receiving no cash aid — no welfare, no unemployment insurance, and no pensions, child support or disability pay.

Ms. Bermudez, by contrast, tells what until the recession seemed a storybook tale. Raised in the Bronx by a drug-addicted mother, she landed a clerical job at a Manhattan real estate firm and heard that Fort Myers was booming. On a quick scouting trip in 2002, she got a mortgage on easy terms for a $120,000 home with three bedrooms and a two-car garage. The developer called the floor plan Camelot.

“I screamed, I cried,” she said. “I took so much pride in that house.”

Jobs were as plentiful as credit. Working for two large builders, she quickly moved from clerical jobs to sales and bought an investment home. Her income soared to $180,000, and she kept the pay stubs to prove it. By the time the glut set in and she lost her job, the teaser rates on her mortgages had expired and her monthly payments soared.

She landed a few short-lived jobs as the industry imploded, exhausted her unemployment insurance and spent all her savings. But without steady work in nearly three years, she could not stay afloat. In January, the bank foreclosed on Camelot.

One morning as the eviction deadline approached, Ms. Bermudez woke up without enough food to get through the day. She got emergency supplies at a food pantry for her daughters, Tiffany, now 17, and Ashley, 4, and signed up for food stamps. “My mother lived off the government,” she said. “It wasn’t something as a proud working woman I wanted to do.”

“I went from making $180,000 to relying on food stamps,” she said. “Without that government program, I wouldn’t be able to feed my children.”

So why exactly didn't she use some of that $180K salary to pay off a $120K house?

Oh wait, that kinda questioning requires journalists to have brains!

Brains, glorious brains, how could we expect that?

What is Deflation?

USPS (post office) used to charge $1 if you wanted your mail held (if you did it online.)

Why? Because they could. Credit boom years $1 meant little to most people.

Today, they do it for free online.

Why? Because they should. Face time is very expensive for most businesses. (Always was, just was hidden during the boom.)

Logical? Don't be absurd!

O Mark Twain, Why Hast Thou Forsaken Me?

Peak unemployment during GD1 = 22%
Unemployment in Detroit today = 29% (and rising!)

Need one say more?

Dubai

This blog has already bored the livin' crap out of you on Dubai: read here.

Let's focus on the important lessons. The noise of them going bankrupt is irrelevant. That was expected, what, three years ago?

Dubai does not have oil.

Ponder that statement for a while. Ponder it, fuckers, ponder it. Don't just sit there. Think about it!

So what do they produce that the world considers "useful" or "valuable"?

The answer, as all such answers tend to be, is rather subtle.

They provided tax-arbitrage and wealth-arbitrage strategies for clueless nations. Just like Singapore.

In the 80's or early-90's, rich Indians could mosey their way to Dubai to buy the crap that their governments didn't allow them to buy internally. Ditto for Singapore.

Free ports? CHECK.
Duty free? CHECK.
Liberal-ish? CHECK.

But the governments wised up sooner or later. Why send the cream to Dubai when you can have it yourself?

Liberalize they did - India, China, Brazil, Russia, Israel, etc., etc., etc.

So remind me again what Dubai's business model is?

Isn't the bankruptcy bloody-fuckin' obvious?!?

Fools, fools, fools!

The Sydney Herald reports: Reserve Bank unfazed as housing prices keep rising.

Worried that $500,000 is too much to pay for a Melbourne house? The Reserve Bank isn't worried and it expects prices to climb higher still.

In a speech that amounted to a defence of Australia's historically high house prices, Reserve Bank deputy governor Ric Battellino told a Melbourne housing conference yesterday to expect worse and to recognise that buyers were getting value for money.

Prices would climb further because the global economy was growing again and because Australia had entered ''a new upswing'' that would extend its record 18 years of continuous economic expansion.

This man is a complete and utter fool!

To see this, first read this article yet more time again.

Yeah, they are "inflating" but the price momentum has shifted to commodities. Anybody who can't eat will dump the house to get food in the craw! Heck, they will take just about anything in the craw just to break even.

In all fairness, the EE is willing to buy the fact that Australia and Canada will be a non-proportionate beneficiary of a commodities boom. Assuming there is one. Which there won't be because we're in a deflationary collapse.

Lawd, what fools these mortals be!

Any Questions?

"Let them eat cake!"

(Source: USDA.)

The Economy and the Golden Child™

(Source: Max Ernst.)