By Wallace Witkowski
Last Update: 4:54 PM ET Oct 23, 2007
Centex Corporation said late Tuesday it swung to a fiscal second-quarter loss of $643.8 million, or $5.26 a share, from a profit of $137 million, or $1.11 a share, in the year-ago period. Revenue fell to $2.22 billion from $2.82 billion a year ago. Analysts surveyed by Thomson Financial estimated a quarterly loss of $3.26 a share on revenue of $2.08 billion.
By Greg Robb
Last Update: 12:30 PM ET Oct 24, 2007
- A Billion seconds is 31 years
- A Billion centimeters is about the distance from Chicago, IL to Tokyo, Japan
Still does not really make an impression. In an effort to make the 8 Billion Dollars tangible and real, lets try to equate that sum with something one can wrap their hands around. I am going to try puppies. Lets assume that the average price for a pure breed dog is $1000. I know it varies wildly, but for this case we will use that number. Assume that our society uses puppies as currency. The Merrill Lynch loss reported today would equal 8 million (8,000,000) puppies lynched by Merrill Lynch! That's 8 million golden retrievers, poodles, newfoundlands, or pugs (full disclosure, my wife and I own a pug).
I can see it now on CNBC:
CNBC hard-hitting reporter: "We have the Merrill Lynch CEO here on set to discuss his company's quarterly loss of 8 million puppies. Mr. CEO what would you like to say to start us off?"
Merrill CEO: "Well, first off I want everyone to know that we never saw any of this coming. Nobody did. Second off, in light of the pets lost, we are dropping the name "Lynch" from our title due to the obvious discomfort it can cause some people."
CNBC hard-hitting reporter: "Mr. CEO, do you think the loss of all these living, breathing, loving animals could have been avoided had you used time tested mortgage lending practices, and not the new cutting edge products that led to all the foreclosures and loan losses?"
Merrill CEO: "You see, we had all this liquidity staring us in the face, so we had to put it to use. If those loans were not made, home prices would not have gone parabolic, and CNBC may not have had much to talk about after the Dot.com blowup. Besides, I'm a cat person myself."
CNBC hard-hitting reporter: "You make some excellent points. I like cats better too."
The above is supposed to be funny, but I think it is precisely because the shear size of the numbers of dollars that are being lost by the major lenders and banks that the average person on the street does not make any noise. In a Fiat based currency, the numbers continue to swell until they do not matter anymore. If 8 million dogs were killed by some kind of strange virus over the next 3 months, do you think it would be major news? Do you think people would be upset? If money had any real attachment to people, like 8 million dogs would, perhaps all these bank losses and mortgage defaults would cause some kind of stir. I imagine Michael Vick would not care, but that's just one guy. What if 8 million faces like this one was lost (taken from the Wikipedia "Pug" entry):
The losses are going to continue piling up. The housing market is no where near a bottom, as the Existing home sales number shows another "historic, never before, first time ever"magnitude drop. At what point will the losses make any difference? 80 Billion? 100? 200? or is that just the proverbial "drop in the bucket" for the US economy? I will be working on another poll question along this line.
The purpose of Economic Disconnect is to try and spread some understanding about what is happening right now to our economy. If you are reading this and taking anything away from it, good. If you think this blog stinks, that's fine too. Either way, please drop a comment on what you have read here so I can improve future posts. Topic suggestions are always welcome as well. Feedback is always a good thing.
Have a good night.