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Dancing around a Monolith

April 23, 2009

The tweak may be that australopithecines were able to move more rapidly than previously thought. Alternatively, it could be a more fluid group structure: small groups move more quickly, so it is possible that large bands of australopithecines split into smaller parties when on the move. A more radical suggestion is that australopithecines might have been able to reduce their foraging time by changing from a herbivorous diet to one containing meat, which is more calorific – a shift that is generally thought to have taken place later in human evolution. link

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15 Comments leave one →
  1. Stemella permalink*
    April 24, 2009 6:11 am

    Next shoe dropping : Commercial Real Estate

    The country’s second largest mall owner, General Growth Properties of Chicago, has filed Chapter 11 bankruptcy along with 158 of its 200 shopping centers/malls and subsidiaries.

    Though it came as no surprise to investors, the collapse of General Growth Properties, the nation’s second-largest mall owner, has stirred new fears about a coming debacle in commercial real estate. The company, which owns 200 shopping centers encompassing 200 million square feet and 24,000 tenants, filed for bankruptcy protection last week.

    With the credit markets virtually shut down, General Growth said it was unable to refinance the $3.3 billion in debt that had already matured or would be due this year. These included loans totaling $900 million on two malls in Las Vegas — Fashion Show and the Shoppes at the Palazzo — that were due to be repaid in November. An additional $6.4 billion in debt matures next year. link

    GGP says its reorganization shouldn’t affect regular operations of its malls, that renting businesses and consumers won’t even know its happening. We’ll see about that.

    It sounds like GGP and other giant mall property owners, while too big, weren’t too big to fail.

    • cometman permalink*
      April 24, 2009 6:39 am

      There is a mall having the same problem near me, can’t remember if it’s part of the same company or not, but I suspect it may be since I know they were one of the big ones. They owners tried to extort the town a few years ago by asking for huge tax breaks, again with the argument of all the jobs they provide as if it was everybody’s dream to be a cashier at the Pottery Barn. But the town said no. A small victory.

      Meanwhile in a separate part of town, they town council broke the zoning laws to allow a large commercial building higher than anything around it to go up because it would “help the economy” and that new building has been sitting vacant for quite a while now. While they were building it I questioned exactly what businesses were clamoring to set up shop in a fairly vacant part of town but our supremely wise town council let the deal go through and now we have a nice new eyesore. And all over the area I see more and more vacant storefronts. Businesses can’t afford the rent and the owners would rather let them sit vacant than give a rent reduction, possibly because they overpaid for the real estate themselves while everything was booming and can’t survive themselves with lower rent payments.

      The net effect of all this will be to stick the residents with higher taxes of course or just let the schools crumble and cut other services. It just doesn’t seem like anybody either at a local state or national level knows their ass from a hole in the ground right now. I see local reps get elected enthusiastic and ready to make some changes and then they come back for a district meeting after being in office for a month or two and start talking about how we can’t rock the boat too much trying to get decent health care etc after the lobbyists sink their hooks into them. Just seems like nobody has the will or the brains to stand up and do what’s right.

      We have a fairly good model of how to create a decent middle class who aren’t struggling to survive called the New Deal. But rather than trying to continue and improve upon that everybody everywhere in government keeps telling us why a more equitable society just isn’t feasible and why the government can’t do anything to fix things.

      The people who really understand what needs to be done get ignored and all we hear from are the dog faced baboons.

      • Stemella permalink*
        April 24, 2009 7:15 am

        Same scenario happening in my city. There are three GGP owned mega malls being affected by this bankruptcy. That’s a lot of jobs on the line if the businesses renting in those malls decide to run for it.

        My local government, particularly at the State level, are definitely dog faced baboons, except for some the baboon butt is where the face should be!!

        I have a feeling from your depiction, that is precisely what’s happening all over the country. Main Street is getting reamed and becoming vacant. Wall Street keeps raking in the big bucks.

        Keep an eye out for the stress test news today, the banks are going to hear theirs before we do. There will no doubt be leaks.

        • cometman permalink*
          April 24, 2009 12:18 pm

          Looking around the tubes I haven’t come across any leaks yet. Just more bullshit like this saying how the results are being given to the banks and that Obama promises to be open about the process at the same time we get this:

          Regulators have asked the banks not to disclose what they learn in meetings today at the various Federal Reserve banks, according to a regulatory official who requested anonymity because he was not authorized to discuss the process.

          One reason is that the results could still change. Banks have a few days to process the data and potentially file appeals. Regulators also have not decided how much information will be disclosed May 4 — by officials or the banks.

          An anonymous regulator says nothing can be disclosed because the results may change after the banks have a chance to look them over and decide whether they like them or not? Please. Do they really think we’re all idiots?

        • cometman permalink*
          April 25, 2009 8:07 am

          Tyler Durden at Zero Hedge has his Stress Test Cliff Notes. He doesn’t mince words about what a complete whitewash these “stress tests” are – nothing more than the banks giving out the numbers the want the far too few regulators on the case to have. The last point was particularly interesting:

          (12) “Supervisors evaluated firm loss estimates using a Monte Carlo simulation that projected a distribution of losses by examining potential dispersion around central probabilities of default.”

          Ah…smells like Gaussian distributions. The old standard. We have seen how well that assumption works in these unusual times. An example of the dependability of using Gauss, taken from stock market movements in October, and calculated by Nassim Nicholas Taleb of Black Swan fame, showed that the price movements seen in October 2008 could be expected to occur—using estimates based on Gaussian distributions—once every 73,000,000,000,000,000,000,000 years. For those of you not tied to Biblical strict constructionism, the Universe is around 18,500,000,000 years old. Looks like it will be a few quintillion years before we see October again.

          The Gaussian distribution is just the use of a normal bell curve like you’d use to predict the outcome of a series of coin flips or a casino game. It assumes that each result is independent of the last. For a coin flip that is true – whether you came up heads on one toss does not affect the probability that you’ll come up heads again; it’s always a 50/50 chance. But for the stock markets it is not true as people like Benoit Mandelbrot have shown. He talked about this extensively in the (Mis) Behavior of Markets. If a stock drops in price one day there is not a 50/50 chance it will drop the next day, in fact the likelihood that it will drop again is greater than 50% as traders try to take advantage of market trends.

  2. Stemella permalink*
    April 24, 2009 6:33 am

    Lawrence Summers passed out at a meeting with Credit Card execs yesterday while Obama was speaking. See photos here and laugh.

    • cometman permalink*
      April 24, 2009 6:51 am

      Ha! Good to see he’s taking things seriously.

      The credit card reforms that are being proposed are a start but they don’t go nearly far enough. Saw this from McClatchy and it seems like a bunch of lip service more than anything. I really wish I could stop being so cynical but it just seems like rearranging the deck chairs rather than a change of course.

      The House Financial Services Committee on Wednesday passed a measure that would ban credit card companies from raising rates on existing balances and charging late fees when they haven’t given customers enough time to make payments.

      The bankers association said the bill would “have a negative effect on lenders’ ability to offer reasonably priced credit to consumers and may make matters worse for the broader economy.”

      Similar legislation is proposed in the Senate, Obama said he had several principles for any bill he’d sign.

      “There has to be strong and reliable protections for consumers — protections that ban unfair rate increases and forbid abusive fees and penalties,” he said. “The days of any time, any reason rate hikes and late fee traps have to end.”

      Also, he said, all forms and statements must be written in plain language. “No more fine print, no more confusing terms and conditions,” he said.

      Finally, he said, credit card companies should make contract terms available online so that consumers can easily compare different cards.

      Congress members are of course the ones who changed the laws to allow these practices in the first place and I doubt they will do anything to hurt some of their largest campaign donors too much. This problem started a few decades ago when legislators removed the maximum rate credit card companies could charge and at the time it was done for a fairly good reason – the national interest rate was higher than the rate credit companies were allowed to lend at. The only problem is that once national rates went down nobody bothered to cap the rate again and now you see these companies charging usurious rates even as they borrow money themselves for next to nothing. So allowing them not to change the rate may be nice, but who cares if they just keep charging a flat rate that is still exorbitant. And changing the fine print??!?!? Does anybody think that will amount to more than a pisshole in the snow?

      • Stemella permalink*
        April 24, 2009 7:29 am

        Yes, isn’t our VP, Biden one of the biggest Credit Card ass kissers? A little quid pro quo there Joey? Now he’s moved on to the choo choo’s, but that one, high speed rail, is long overdue for this country and I’m all for it. That’s going to be another zapato to fly, when everyone just bails and stops paying their Credit Card debt. It’s been happening already with rising job losses, but there could be an upcoming hundredth monkey effect where it happens en masse.

        The govt needs to get radical on those banks, but it won’t. The banks own the govt.

      • triv33 permalink
        April 24, 2009 7:59 am

        It does not pay to be less cynical when it comes to the government. Or big corporate conglomerations. Be more cynical. That’s the only reasonable thing to do.

    • Stemella permalink*
      April 25, 2009 12:03 pm

      As Tyler says it’s all a whitewash – as we are so not shocked to find – and more an example of Timmy’s Unbearable Vagueness (hattip to that brilliant title again) and lack of honesty, utility and transparency. It seems to me that Timmy and Benjie are using old bys just like Paulson before and like Paulson refuse to admit they don’t know what the fuck they are doing and are scared like hell. Nevertheless, they keep aiding the funneling of the public coffers off to the private sector of cretins and greedheads.

  3. Stemella permalink*
    April 24, 2009 7:00 am

    A couple of articles that look good that I don’t have time to read yet but wanted to share:


    “Catastrophic to Awful!” – The Banking Spin Cycle

    and some remarks by one of my faves, James K. Galbraith on the Recovery to Come

    • cometman permalink*
      April 25, 2009 7:49 am

      That first article by Das mentions the nice little trick pulled by GoldmanSux in reporting there most recent earnings by simply leaving out the entire month of December which would have normally been included:

      Goldman Sachs changed it balance date reporting results to the end of March rather than February. Given that its last financials were for the year to the end of November 2008, Goldman separately reported a loss for December 2008. It is not clear how much Goldman Sachs profit benefited from the change in the reporting dates.

      He also notes that while reporting these great earnings from the last quarter, little mention is made of the accounting tricks being used by the banks to make things seem better than they are:

      Analysis of recent financial performance does not also take into account the underlying favourable current dynamics of the banking industry. Banks are currently beneficiaries of very low and, in some cases, zero cost of deposits. Banks also benefit from a sharply upward sloping yield curve that allows them to generate significant earnings from borrowing short and lending long. Banks have also benefited from subsidies and support from governments. They have also benefited from favourable changes in the fair value accounting treatment of securities. Banks have also benefited from sharply lower competition in most market segments. Adjusting for these factors, it is surprising that banks haven’t actually performed better.

  4. cometman permalink*
    April 24, 2009 9:55 am

    Mike Whitney says the housing market is a looooong way from rebounding despite the rosier picture some are trying to create:

    Why is the press misleading the public about housing? The housing market is crashing. There are no “green shoots” or “glimmers of hope”; the market is worn to a stump, it’s kaput. Still, whenever new housing figures are released, they’re crunched and tweaked and spin-dried until they tell a totally different story; a hopeful story about an elusive “light in the tunnel”. But there is no light in the tunnel; it’s dark as pitch as far as the eye can see. There’s no sign of a turnaround or a “bottom” in housing at all; not yet, at least. The real estate market is freefalling and it looks like it’s got a long way to go. So why are the media still peddling the same “rose-colored” claptrap that put the country in this pickle to begin with? Here’s an example of media spin which appeared in Bloomberg News on Wednesday:

    “US home prices rose 0.7 percent in February from the month before, the Federal Housing Finance Agency said in Washington today, a sign that low interest rates may be moderating declines in real estate values….Housing market data indicates prices are starting to “stabilize,” and households’ available cash should improve through each quarter of 2009 and into 2010.” (Bloomberg)

    This report is complete gibberish. The only way to get a fix on what’s really happening with housing is to compare prices year over year (yoy) not month to month. Clearly, the journalist decided to spin the story from this angle because it offered the one flimsy sign of hope in a sector that’s been reduced to rubble. But, don’t be fooled, housing isn’t staging a comeback. Not by a long shot.

    This is from Marketwatch:

    “The Case-Shiller index of 20 major cities fell 2.8 per cent in January, the fastest decline on record. The Case-Shiller index rose more than the Federal Housing Finance Agency (FHFA) index did during the bubble, and it’s fallen faster since the bubble burst….The index was down 19 per cent year-over-year in January.”

    So, the only reason that housing prices rebounded (slightly) in February was because, one month earlier, they were “declining at the fastest pace on record.” That’s not a sign of “green shoots” like the Pollyannas say. It’s a sign of a ferocious ongoing contraction.

  5. cometman permalink*
    April 24, 2009 12:03 pm

    Nice article from Nomi Prins just for the title alone: The Unbearable Vagueness of Timothy Geithner.

    Not too many details that haven’t been discussed here but it gives a nice summary of how bad the problems are and the equivocations of Geithner et al as they try to find a way to hand over more money without causing pissed off people to tear Wall Street apart.

    Geithner has said that stabilizing the financial system requires the government “to take risks.” That’s a scary notion given that overzealous risk taking is what got us into this mess. When it comes to digging us out of this financial fiasco, adding more risk to the equation doesn’t seem like a strategy that will bode well for the future. Equally troubling is Geithner’s tendency to skirt even the most straightforward questions about Treasury’s economic recovery efforts.

    • Stemella permalink*
      April 25, 2009 12:11 pm

      That title is worthy of being enshrined in gold somewhere. Like on the exterior of Gold mansux on Wall st.

      Adding to my previous comment. Regardless what these stress tests end up illustrating on behalf of the zombies, I’m not going to believe a damn thing that comes out of the unbearable one’s mouth or his sidekick Benny. Until I see the foreclosure signs and for lease signs come down and the help wanted and grand opening signs go up, I’ll know they’re talking out of their colos.

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