Once again I say hello to all the loyal readers and any that just swing by by chance! It has been a while once again. I FINALLY finished the new Den/Library room and I must say I am a bit impressed. I have not done real work for some time and I have not done construction/carpentry in a LONG time but the results were better than hoped for. I have pictures at the end of the post.
Summer is fading away up here. The mornings are dark and the sun is setting earlier. The temps are getting cool at night. It is enough to make me cry, as you all know how much I dearly LOVE the cold weather! The only good thing is that NFL football season starts tomorrow night and I am extremely excited for some games.
Palin Vice President Pick By McCain
As usual I try to keep political crap out of this blog, but I have a few observations on the current campaigns. John McCain's pick of Sarah Palin seemed a bit strange to me, and as new events unfolded seemed very strange indeed. Obviously facing the rough economic times to come a solid financial pick was preferred by me (hello, Mitt Romney PLEASE!) but whatever. Please note how when a Republican woman is running for Vice president with a large family and some daughter issues the news media asks whether she should be running at all. Compare and contrast this with a Democrat candidate where the only stories would be of the amazing perseverance of the woman running and how tough she must be. Again, no horse in this race but biased media reporting should always be noted as it extends to all facets of news.
Lehman Brothers - Just Go Away Already!
The drama involved in the Lehman Brothers (LEH) saga is almost too much. There are crazy reports every day. The latest news has a Korean banking consortium led by Korea Development Bank (KDP) buying up to a 25% stake in the firm. Some stories have a Korean Military Pension Fund also getting onboard. While the CNBC types get to cream their pants at the idea that LEH is not a ZERO, there are some real issues that need to be thought about before flailing away at a deal like this.
For one thing the selling of a major stake of a large investment bank to a foreign company has to be more clearly annotated. If (when) LEH fails, will the KDP get made whole no matter what? I certainly can imagine this kind of rider on any deal. If so, does the FED and Treasury backstop such a deal with tax money? We don't know. In the scheme of things any bailout of any firm in the US ( be it FNM, FRE, BSC, etc) is really saving the foreign debt holders ass anyway, I guess this point is not that big a deal. Just seems like a little caution should be exercised before selling off huge chunks of US firms to foreign countries. My 2 cents.
The second problem with this is that how in the world does anyone really think they can make out on this deal. LEH is stuffed full of some of the worst toxic mortgage crap there is. Alt-A is just getting going baby, and if KDP thinks they are getting a deal they are, just a raw one. Never mind the commercial paper mess on the way for 2009 and what havoc that will play on firms like LEH. I am not one to stop a fool from losing his money, but you know we the people are going to get fleeced to pay Korea back when this goes bad. Again, perhaps a little public debate on this issue by the presidential candidates would be more useful that the usual "I think creationism should be taught in schools" debate that gets 20 minutes every time.
Gold and Silver Armageddon
Wow, gold and silver have been getting beaten like a red headed step child! There are many smarter watchers of the metals than me with good analysis on this, but again it seems too much leverage was the culprit. Leverage is bad no matter the asset class being chased. Sadly the fundamentals of gold are great but is seems the "evil speculators" have cause great technical damage. Where is the gold price bailout I wonder? I still have an inkling to buy miners and or gold ETF's is the $750 area is breached, but then again I am a total chicken so we shall see!
Conflicting Headlines, Conflicting Data, Overall Confliction
Check out these headlines, all on Yahoo Finance today:
Domestic auto makers post steep August U.S. sales drops
Oil prices down slightly as stronger dollar, falling fuel demand outweigh Gulf oil shutdown
Homebuilder Hovnanian Enterprises reports wider 3Q loss on declining home sales, land values
GMAC Financial cutting 5,000 jobs, ceasing wholesale mortgage originations
Compare the above with the fantasy 3% plus GDP reading last week and the following headline also from today:
Factory orders see wide gains led by aircraft
So which is it? We are in the midst of the worst housing bust ever which has facilitated all kinds of FED lending and bailouts, or everything is running smooth at3% growth? The auto makers are seeing sales fall by staggering 20-50% but aircraft sales are making up the difference in this high fuel cost environment? Brokers are being indicted left and right for ARS sales that were lies, but foreign banks want to step up and buy huge stakes in these same firms? None of this stuff gels together and thus i call bullshit.
We can debate the GDP, or any government data point, based on how it is calculated by funny math and the like. Instead just try to focus on the clear baloney being bandied about by news sources, talking heads and our officials. Everything is great except for this huge debt unraveling and once in a lifetime credit crunch but there will be no effect on the overall economy? Ok.
Something has to give. This kind of debt collapse cannot exist in a vacuum. While figures don't lie, liars can figure and the time is coming when the clear reality of lost jobs, lost home values, lost companies to overseas countries and lost standard of living will not be able to be glossed over by funny stats. Strap in for that ride.
I have always wanted a den type room, basically a library to house my substantial book collection (over 250 strong) and to serve as a NO TELEVISION exclusion zone for reading and writing my fantastic blog, Economic Disconnect. After about 4 full weekends and some afternoons of hard work, I finally have such a room.
The room sits opposite the main living room with a nice gas fireplace centrally located. The issue was this atrocious wood paneling that adorned the walls. The wood paneling sucked up all the light and made the room very dark. To take off the paneling i had to gingerly remove it without ripping to much of the drywall off due to the adhesive that was used. After that I had to repair and make smooth the damaged walls, then prime the plain drywall, then paint. I also had to make all new wood trim for the room as I destroyed the old stuff during demolition. I just love cutting miter joints by hand! Anyways, here are some pictures of the before and after.
This picture is of a corner with the window visible. Note the repaired walls and missing wood trim:
Now witness the completed section with new stained and sealed wood trim around the window:
Here is the wall where the computer was to be placed all patched up:
And here is the finished wall with the computer in place. This is the spot where the magical writing abilities of the author are put to use:
Now I am no pro, but I am pleased with the results. Only about 6 other rooms that need some kind of work left to go! Who says there is a home improvement spending collapse?
Have a good night.