Barney Frank’s oscillating views on housing (shown in video after the Read More) underscore the question of whether anyone saw the housing bubble and the subprime mortgage crisis coming. After all, if the primary purpose of additional proposed regulatory oversight, the control, the ‘accountability’ of the new managed capitalism is to ‘prevent’ a similar occurence, then events like the subprime crisis have to be detectable in principle while they are still in the offing. Legal researchers are trying to settle the question of whether the meltdown was predictable because the success of class-action suits depends to a large extent on it. If events like the meltdown are not predictable then no bureaucracy is going to be able to prevent it.
This paper explores the economic and legal causes and consequences of the 2007-2008 credit crisis. We provide basic descriptive statistics and institutional details on the mortgage origination process, mortgage-backed securities (MBS), and collateralized debt obligations (CDOs). We examine a number of aspects of these markets, including the identity of MBS and CDO sponsors, CDO trustees, CDO liquidations, MBS insured and registered amounts, the evolution of MBS tranche structure over time, mortgage originations, underwriting quality of mortgage originations, and writedowns of the commercial and investment banks. We discuss the financial difficulties faced by investment and commercial banks. In light of this discussion, the paper then addresses questions as to whether these difficulties might have been foreseen, and some of the main legal issues that will play an important role in the extensive litigation (summarized in the paper) that is underway, including the Rule 10b-5 class-action lawsuits that have already been filed against the banks, pending ERISA litigation, the causes-of-action available to MBS and CDO purchasers, and litigation against the rating agencies. In the course of this discussion, the paper discusses three principles that will likely prove central in the resolution of the securities class-action litigation: (1) “no fraud by hindsight”; (2) “truth on the market”; and (3) “loss causation.”
It is argued that certain events cannot be foreseen. Niall Ferguson observed that the bond markets did not anticipate the First World War, which he called “a bolt from the blue”. “The main question addressed is why political events appeared to affect the world’s biggest financial market, the London bond market, much less between 1881 and 1914 than they had between 1843 and 1880. In particular, I ask why the outbreak of the First World War, an event traditionally seen as having been heralded by a series of international crises, was not apparently anticipated by investors. … To investors, the First World War truly came as a bolt from the blue.” These events have been called Black Swans.
However Naseem Taleb himself, the author of the Black Swan, believes that subprime crisis was entirely foreseeable: that it was not a Black Swan. Taleb told Bryan Appleyard about his repeated warnings and his Cassandra-like reception. “Bankers and economists scorned and raged at Taleb. He didn’t understand, they said. A few months later, the full global implications of the sub-prime-driven credit crunch became clear. The world banking system still teeters on the edge of meltdown. Taleb had been vindicated. ‘It was my greatest vindication. But to me that wasn’t a black swan; it was a white swan. I knew it would happen and I said so. It was a black swan to Ben Bernanke [the chairman of the Federal Reserve]. I wouldn’t use him to drive my car. These guys are dangerous. They’re not qualified in their own field.’”
So which bureaucrat or bureaucracy is going to be any better? One led by Barney Frank?
| embedded by Embedded Video YouTube Direkt |
embedded by Embedded Video YouTube Direkt |
My own guess is that one of the principle obstacles to predicting catastrophes is political orthodoxy. When an activity acquires enough political support then evidence which tends to undermine its rationale is suppressed, sometimes unconsciously, by those who have too much invested in the program to abandon it. The last bubble had a lot of support simply because there was so much invested in it. Stickiness in human institutions, not mathematical or scientific techniques, is often the real reason why catastrophes are not foreseen. Which implies, sadly, that a system with a lot bureaucratic oversight can be just as badly surprised as one with less. Putting more Barney Franks in charge of a system may not necessarily improve its ability to dodge bullets.
PJM Home
Pajamas Media appreciates your comments that abide by the following guidelines:
1. Avoid profanities or foul language unless it is contained in a necessary quote or is relevant to the comment.
2. Stay on topic.
3. Disagree, but avoid ad hominem attacks.
4. Threats are treated seriously and reported to law enforcement.
5. Spam and advertising are not permitted in the comments area.
The clause regarding "hate speech" has been deleted because readers criticized it as being too loosely defined. We agreed.
These guidelines are very general and cannot cover every possible situation. Please don't assume that Pajamas Media management agrees with or otherwise endorses any particular comment. We reserve the right to filter or delete comments or to deny posting privileges entirely at our discretion. If you feel your comment was filtered inappropriately, please email us at story@pajamasmedia.com.
49 Comments
1. dan:i was unlucky enough to work in a mortgage servicing company from 2004-2007 analyzing mortgage financing trends in order to sell a “less expensive, faster, more accurate” property valuation (appraisal) product to companies like WaMu, Citi, and Freddie Mac. i will tell you that i relied heavily on an entire cottage industry of pessimists publishing all over the web on all the reputable financial sites who brayed constantly that we were headed for ruin due to banks’ and appraisers’ collusion in the over-valuation of properties in order to inflate their securities packages to meet their insane stock price requirements. they all foresaw general real estate collapse, the hobbling of related industries, and – implicitly – some form of cratering of securities bundles the value of which depended ultimately on a valuation at $400,000 instead of $287,000 authored by an appraiser who couldn’t keep his relationship with a bank’s mortgage wing if he didn’t produce loans the bank wanted to write.
that’s it, with lies from there up. after all, who would want to spoil the show when you could join and make money?
this whole thing was more than well-known – it was only a question of time. i know because i read it, immiserated by boredom, every single week for at least 2 years, and this was 4 years ago.
Apr 24, 2009 - 1:10 pm 2. vanderleun:Anybody living in southern California 2002-2007 with a brain (such as myself) knew it was a huge bubble set to explode. What we didn’t know was how huge and how far the flaming wreckage would be strewn.
Apr 24, 2009 - 1:14 pm 3. buddy larsen:Why isn’t the student the house banking chair? Why? No really, WHY??? Many reasons? Starting with, he’s not a gangster?
But what i came to say was that Jim Cramer, again this week, made another (i think about the fifth major) impassioned plea that a special prosecuter look into the entire affair, soup to nuts, and indict some people. Cramer i think knows who they are and I’m sure that by this time, so does the FBI –it’s whoever is on the known end of certain of those seven billion phantom shares resting in the DTCC in Manhattan. specifically the naked shorters that knocked the banks down 70% at ten times normal short volumes in the half dozen trading days leading up to Lehman Bro’s sudden banckruptcy on Sept 15. Lehman Bros’ golden-parachuted-early-on CEO Dick Fuld was mentioned by name in Cramer’s latest rant so we’re edging closer to knowing what really happened. Meanwhile, take a quick once over at these search terms –remembering that the panic commenced when the Treasury & Fed refused (on markedly specious terms) to do what they had proactively led the financial world to believe they would do, that is, bail out Lehman.
And now here we are, with 500 TARP banks about to have their USG-held preferred shares converted by fiat to [voting] common, teetering on the razor’s edge of the Communist Manifesto demand #5: state ownership of credit.
Apr 24, 2009 - 1:27 pm 4. Rob:Of course it was foreseeable. Giving out loans to people who can’t afford them, and then they’re not able to make the payments: How is that not foreseeable?
The only way it wasn’t was if you believed home prices would go up forever, and that’s never happened before. In fact, I’d argue that there was an implicit understanding by the banks making these bad loans (forced by Congressman like Franks and community activists like Obama) that they would be bailed out by the government when these high-risk loans went south. And in such a situation there was no incentive for the bankers to do anything but collect their fees and sit back and get rich.
Apr 24, 2009 - 1:37 pm 5. michael hoskins:W said “When an activity acquires enough political support then evidence which tends to undermine its rationale is suppressed, sometimes unconsciously, by those who have too much invested in the program to abandon it.”
And that is just it. Politicians consider politics. It is what they do. Butchers, bakers, candlestick makers, and bankers, do their thing. Any activity done by the political sphere must be done for political gain…which is rarely the same as sound business, engineering, scientific, cultural or social practice.
When the politicians begin controlling our housing choices on top of “big fat” and education the animal farm has arrived.
Apr 24, 2009 - 1:38 pm 6. buddy larsen:Mr. Vanderleun, how could you possibly know where the flaming wreckage would land, unless you were in on the long-march preparation of those landing sites?
Apr 24, 2009 - 1:43 pm 7. sirius_sir:I would posit any chairman of the Federal Reserve is dangerous.
Apr 24, 2009 - 1:50 pm 8. blert:That all of Greenspan’s liquidity was ending up in China instead of stimulating American industry was apparent to me in 2003…
WAY too obvious, it was…
Calling for the Greatest Depression… beginning in 2008… again, too obvious…
We’re not even half way through the Super Depression…
Like WWI the First Financial World War will destroy the major pre-war powers… probably ALL of them.
Expect a Super-Psycho-Blow from Syn-CDO’s… the nuke ticking in the corner. It’s a real Q-bomb: review ‘The Mouse that Roared.’
Even at this date it’s obvious that Ireland, Switzerland, Britain, Spain, Italy, Germany, France, Poland, Venezuela, Iran, Pakistan and Japan are in the blast crater.
Russia is running out of Russians: thank you Putin! I had to chuckle at George Will’s recent column. In all his calculations he failed to note that the population decline drops 50% with the next cohort! ( Those born in the mid-90’s )
When the rampant alcoholism and premature death of White Russian males is considered… The number of man-years available for industrial and military output is collapsing. It’s as if Russia had ALREADY lost a massive war — losing industrial and human capital on a staggering scale.
Any Putin-Mafia expansion will blow out like a Red Giant Star… and then flame out leaving a White Russian Dwarf (Muscovy); Center having shot its wad.
We are on the cusp of this event and should ponder it.
I find the Chinese lust for the ultimate military metal, copper, notable. She is buying like WWV is right around the corner.
The last time the world witnessed such a rush to military commodities was Hitlerite Germany 1936-39.
Japan went after Korea, Manchuria and eventually China for raw materials and slave labor. Years later she moved against her primary rivals, the West.
China may follow the exact same tendency to pick up the easy pieces… after which bold moves are made.
Interesting times, no?
Apr 24, 2009 - 1:59 pm 9. blert:BTW, the imminent bankruptcies of Chrysler and GM are default triggers in virtually all of the Syn-CDOs.
I think the design margin is heading straight to zero.
Chrysler
GM
FNMA
Freddie Mac
AIG
Lehman Brothers
Smith Barney
Who’s next to be deemed in default?
Apr 24, 2009 - 2:05 pm 10. Insufficiently Sensitive:The mortgage debacle was predictable, and the New York Times accurately predicted it – in 1999.
Specifically, an article of September 30, 1999, by one Stehpen A. Holmes, entitled “Fannie Mae Eases Credit To Aid Mortgage Lending”. A couple of brief quotes:
“In moving, even tentatively, into this new era of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s”.
“From the perspective of many people, including me, this is another thrift industry growing up around us”, said Peter Wallison, a resident fellow at the American Enterprise Institute. “If they fail, the government will have to step in and bail them out the way it stepped up and bailed out the thrift industry”.
If that wasn’t enough, the Bush Administration placed seventeen (17) proposals before Congress between 2001 and the end of 2007, recommending additional regulation to head off just such a crash.
It is the sneerists who fought off those proposals who should be reporting for tar and feathers about now.
Apr 24, 2009 - 2:07 pm 11. Mad Fiddler:The elevation of such as Barney Frank to the positions of power he has enjoyed compares with the installation by a certain notorious Caesar of a horse in the Roman Senate.
At least the Roman Senate got the entire horse.
Apr 24, 2009 - 2:12 pm 12. dan:“Chinese lust [for copper]”
Gold too – increased their reserves by 2/3 to $30.9 billion in the last couple years. Hm – wonder why?
Apr 24, 2009 - 2:12 pm 13. buddy larsen:blert, take a look at Martin Weiss’ blog –he’s been going thru the releases and is saying that the CDO exposures to any ONE of three bank’s counterparties exceeds bank capital in these three banks. Well, you asked for it: Citi, Wells, and Suntrust. “Accelerating asset-quality deterioration” is his term for these three’s current condition.
Apr 24, 2009 - 2:16 pm 14. Brian:Richard wrote:
Yes. In his masterful, readable and enlightening essay entitled How to Sell a Pseudoscience, Anthony Pratkanis has much to say about persuasion, both self-persuasion and the persuasion of others. He outlines 12 simple techniques, of which the second is this:
Apr 24, 2009 - 2:20 pm 15. buddy larsen:dan, blert, John Rutledge is saying (he had dinner with the PRC’s top finance ministers last week) that they are terrified of what DC is doing to the Dollar and and cannot hedge any other way but to blow into the commod’s –despite the price rises they stimulate. Gold and copper were their two favorite hedges –he implied liquidity is a factor. ‘course that could be blowing smoke up Rutledge’s behind, but he’s pretty savvy –and is 130% in equities at the mo, he says.
Apr 24, 2009 - 2:22 pm 16. Tcobb:Its all about the reward/punishment ratio. Its really easy to hold up a convenience store, but what’s going to happen to you afterwards for the $300 dollars you got makes it seem like an awfully expensive $300. You get risky behavior when the structure of the system is skewed so that the cost of reckless behavior is minimized. Just imagine what would happen if the maximum penalty for robbing a convenience store was a $10 fine.
And that’s what we did with governmental interference in the housing market. And see where its got us.
Apr 24, 2009 - 2:23 pm 17. buddy larsen:tcobb, exactly –somewhere around 2007, crime got legal. just look at the headlines, crime ain’t illegal no more.
Apr 24, 2009 - 2:31 pm 18. Tcobb:somewhere around 2007, crime got legal. just look at the headlines, crime ain’t illegal no more.
Apr 24, 2009 - 2:47 pm 19. blert:With no disrespect intended Mr. Larsen, I disagree. Crimes are still crimes if you have no political connections. When I lived in Austin, Texas you couldn’t get the local police motivated about something as trivial as being burglarized. But God help you if they observed you driving without your seatbelt on.
You’re confusing law enforcement with tax collections.
No revenuer wants to be diverted by an alarm response.
It’s in direct conflict with his collection mandate. He’s expected to be self-funding, you know…
Apr 24, 2009 - 3:20 pm 20. buddy larsen:har –too shay!
Apr 24, 2009 - 3:28 pm 21. Matt Beck (Man of the West):I have to concur with many of the other commentators. The correct question to ask is, “Is there anyone who didn’t see this coming?”
Apr 24, 2009 - 3:46 pm 22. rjsasko:Plenty of people forecasted the housing collapse. I have been following a couple of housing blogs for four or five years that were culling articles and collating data from the most bubblicious areas from around the U.S. and in other parts of the world. We though it would pop years ago due to the average house price being 4,5,6 or more times median household income.
What blindsided so many of us was that so many financial institutions who were writing this bad paper were also buying this bad paper?!! How in the hell did they not know what they were buying? I am/was a lowly flooring installer and I figured it out in 2004! Went to buy a property and the prices had jumped and I couldn’t make the numbers pencil out to buy/hold/rehab/sell in any combination. I kept seeing acres of granite(@$110+ lin. ft.), Plasma tvs ($5000+ back then), and $12,000 Viking stoves popping up everywhere. Then I went to buy a used truck (after wondering how all of those guys in construction could afford $50,000 new trucks) and the salesman said “would you like 2.9% financing with nothing down and no trade-in on your used truck through Bank of America for 48, 60, or 72 months”! I said “sign me up for 6 years” and all of the pieces fell into place: the banks were giving money away to all takers. Hence the toys everywhere and the run-up in housing prices.
I find it damned hard to believe that actual finance types in business or in D.C. politics never saw any of the charts we saw showing the credit bubble.
Apr 24, 2009 - 3:48 pm 23. buddy larsen:rjsasko, Mohawk was up 30% just before close today –on very high volume –someone big has started buying flooring again –looks like, anyway –
Apr 24, 2009 - 3:54 pm 24. rjsasko:Paint and carpet are the two cheapest ways to update a house to sell it.
Apr 24, 2009 - 4:01 pm 25. Tcobb:You’re confusing law enforcement with tax collections.
Apr 24, 2009 - 4:12 pm 26. rjsasko:Not really. Its all just tactics in this Orwellian Age of Euphemism. Put the tasks of tax collection onto the police, and then shift the majority of their functions away from the duties that are traditionally associated with the word “police.” When anybody objects, vilify them for being against the traditional purpose of what “police” meant, that being the suppression or apprehension of criminals. If done properly you can brand anyone who’s against taxes as being a supporter of rapists, thieves and child-molesters.
And the process doesn’t just apply to the police and tax collection. Substitute any governmental entity and any function. Its what “progressives” have been doing for a long time.
I have no idea why anyone would run up Mohawk’s stock? Do they have some kind of forward options on oil for manufacturing their carpets? Are they a take-over target? I live outside of Chicago and I can tell you that they aren’t selling a heck of a lot of flooring around here. Very, very little construction is taking place at all. Most of the guys I know in various trades are sitting at home every day getting their bankruptcy paperwork in order…
Apr 24, 2009 - 4:12 pm 27. blert:rjsasko @24…
And I would have bet it was lipstick!
Or turning out the lights…
Apr 24, 2009 - 4:17 pm 28. blert:Back in the days of the Crown you paid stamp taxes on any number of transactions, particularly legal matters; law carried a price.
I’d say that municipalities are going to move in this direction to clip the ‘commercial class’ so as to maintain funding for its primary dependent class: its own crew.
Apr 24, 2009 - 4:22 pm 29. buddy larsen:rjsasko –laminated flooring, the talking head on FoxBiz said. but she was in go-fast mode & may’ve just been fillin’. jeez that sounds bad, in the trades –christ a mighty –
Apr 24, 2009 - 4:44 pm 30. rjsasko:Laminate flooring? When I started laminate was $4 sq. ft. retail with a cost of $2 and 1 manufacturer. Now there are dozens of manufacturers and it is retailed at 65 cents and up with most of it around $1.79 and no profit margin. Why would anyone want to buy a laminate manufacturer when they can get it from China/Russia/Darkside of the moon for peanuts?
Apr 24, 2009 - 4:54 pm 31. Ashcat:Bird and Fortune not only foresaw it, they made comedy about it. See especially after 3:00 minutes:
Apr 24, 2009 - 5:04 pm 32. bogie wheel:http://www.youtube.com/watch?v=SwRFoxgEcHc&feature=related
I’d say that municipalities are going to move in this direction to clip the ‘commercial class’ so as to maintain funding for its primary dependent class: its own crew.
Alfonzo Rachel of PJTV spoke at a Tea Party last week. He asked the crowd something to the effect of, “I wanna know why I can’t list the government as a dependent on my tax return …?”
People will fight tooth and nail to preserve their jobs. Government bureaucrats are no different. In fact, they are the job- preservationist uber-zealots. 41% of public sector employees are unionized, compared to 11% in the private sector. For a detailed description of just how destructive a public employees union can be to taxpayers and to the political voice of the ordinary person, go read Stephen Malanga’s 2005 article in City Journal, “The Real Engine of Blue America.”
Govt bureaucrats = drones. They produce nothing and they can’t defend the hive. Their only function is to mate with the queen (aka Washington, or a state capital near you). Gee, if only the D.C. drones had the 90-day life expectancy of their bee counterparts.
Apr 24, 2009 - 5:17 pm 33. Unsk:Vanderleun,
I have a slight disagreement on your point. Much of the rise in housing prices in LA from the early nineties, unlike the rest of the country, were due to lack of supply of new single family housing in the face of a huge increase in population, ( millions -mostly illegal) and a steep rise in construction and development costs over that period. Many economists I’ve seen have noted that the housing price/ household income ratios are way out of whack compared to historical ratios.
Well, in LA you can thank your local socialists for that.
The socialist local governments in LA County, particularly LA City, severely restricted housing growth from the late 80’s onward, and made development of new housing very expensive, risky and time consuming. Officially from 1990 – 2006, permits for only 400,000 housing units were issued versus the increase in household formation of 800,000 not counting the likely millions in uncounted new illegal alien households. Those new unit numbers also don’t discount the huge amount of units needed to be demolished to construct the new ones. Furthermore, due to the scarcity of raw land in LA County, and it’s utopian policies, the vast majority of units built were either apartments or condos. The net gain of single family residences was negligible. Add a deteriorating social environment due to the influx of illegals, and presto! you’ve got very expensive housing in desirable neighborhoods, and pretty expensive housing in neighborhoods where you don’t want to be caught out at night. Drat! The Law of Supply and Demand defeated the utopian socialists again!
Wow houses in nicer neighborhoods, are still fetching big prices even in this market, because of the scarcity, although prices are dropping considerably in lesser neighborhoods because of the greater defaults and the significantly higher rates of sub-prime or Alt A financing in those neighborhoods.
Yes the situation is unsustainable, but isn’t that always true for socialism?
Apr 24, 2009 - 5:22 pm 34. bogie wheel:Unsk @ 33 –
Thomas Sowell has been making the same case for years. The “affordable housing” crowd is the same group of people who enact land use restrictions and enviro building codes up the wazoo … essentially ensuring that housing prices become unaffordable to everyone but the arugula-wagyu crowd (themselves, natch). Exhibit A: Marin County.
It’s either the densest sort of maroonery on the most basic laws of economics … or deliberate elitist destroy-the-middle-class-and-keep -the-scum-in-the-slums economic warfare.
Apr 24, 2009 - 5:42 pm 35. Brock:Anyone who didn’t see this coming was either not paying attention, an idiot of the first order, or delusional.
I saw this coming from far away, and I was neither in the industry nor am I am Harvard man. Anyone, when asked in a common sense fashion, understands that when you lend money to people who (a) can’t pay the loan and (b) don’t have sufficient collateral, you’re going to lose the money. This isn’t rocket science.
Some people managed to convince themselves of things that just aren’t and can’t ever be true, like asset prices that rise indefinitely. It’s the same psychological phenomena that allows people to believe that the War on Drugs can be won or that America is always in the wrong. Evidence has no effect on them. We are in this sorry state because too many crazy people all believed the same crazy shit at the same time.
Apr 24, 2009 - 5:47 pm 36. RWE:Dan and Vanderlun and Rob and Brock all have it right – that given what was happening how could it NOT crash? But then again, maybe I took too much thermodynamics in college.
One of the problems in foreseeing it is that it was not equally spread all over the country. In parts of Florida we have a 10 to 15 year supply of housing built up and for sale, and in some cases not even finished yet. And that is in normal times; in today’s environment it probably is an even longer horizon supply. California, Nevada, Arizona, and a few other states have similar problems. When you are in the middle of the insanity it is easy to see; not so in other places.
One of the more difficult aspects is that it seems a lot of people think that the insanity was normal. The Stimulus Package is aimed mainly at providing the construction industry with jobs, under the mistaken belief that they can hang on until the insanity starts again.
Apr 24, 2009 - 5:52 pm 37. buddy larsen:rjsasko, the news what dunnit. also, search MHK for more –they ‘pear to be hiring –down Georgia tho –long ways off.
Apr 24, 2009 - 6:03 pm 38. buddy larsen:wretchard’s point about the problem of Barney Franks’ seeming admission that he saw it coming but ’so what’ since there was no controlling legal authority mandating he raise the alarum, has an exact and timely parallel in Pelosi’s attempt to square her own circle, her saying she of course knew waterboarding was proposed but ‘did not know it was being used’.
Is she that stoopid, that she thinks no one will ask her “Sooo, what did you DO about it, Nancy m’dear? To WHOM did you voice your concern?”
Put her under oath. Really, who ARE these people, that will be the end of us all –themselves too?
WAY peter-principled.
Apr 24, 2009 - 6:27 pm 39. rjsasko:Buddy, I read through the article and I still can’t figure out why their stock jumped. They “think” the market will pick up? I “think” they are mistaken until late 2011. But what do I know other than a lot of unemployed flooring installers, suppliers, and retail dealers? I must be missing the BIG picture. Maybe I should move to Calhoun , GA and apply for a job at Mohawk? And that would be a shame because I already have a street corner picked out for my new Hot Dog Cart venture.
Apr 24, 2009 - 7:31 pm 40. buddy larsen:rjsasko, here’s the whole schmear including a great interactive price/volume chart (play with it –it expands and changes scales per mouse). 52 wk high 80 makes the 50 close look less like a bon-ton-roulette and more a slight recovery of enormous lost ground. OTOH, 52 wk low of 16 makes that 50 close today look hot. anyhoo this link will take you ALL the latest dope plus news of competitors and scuttlebutt of takeover or buyout –also some forums –google finance is so good i really wish their politics would hurry and catch up.
Apr 24, 2009 - 7:55 pm 41. joe buzz:The two queens of congress knew it all and didnt know a thing. They are taking lessons from TOTUS. Buddy dont let google fool your “their politics” get in the way of the facts. Vander, you didnt have to live in Cali to see it coming. I lived in Loudoun Co, VA which was among the fastest growing in the country during that time slot and the bubble overwhelmed us…..
Apr 24, 2009 - 8:17 pm 42. buddy larsen:oh no, buzz –i got the big picture on those two –i wouldn’t let ‘em sleep in the hog pens unlest i could keep an eye on ‘em at all times. Yikes, perish THAT thought –
Apr 24, 2009 - 8:22 pm 43. buddy larsen:if i was starting a hot dog cart venture, i’d have a good-size griddle and toast the boiled weinies and the open buns on it with a little butter –per order. a chili dog –i wouldn’t offer a single messy wasteful unsanitary condiment, not even kechup and mustard, but would have a zesty chili pot –chopped onions added a little at a time thru the day to keep ‘em half raw & crunchy. that’d be the sole item on the menu –a chili dog, wrapped & bagged for take-out. make a packaged single of processed cheeze and a small bag of healthy chips for the asking, no extra charge. i’d have a good variety of healthy (to balance the dog) single serve glass bottle fruit soft drinks on ice and in view, with a prominent sign re my green return of reuseable empties, if you’ll bring yours back. of course you’ll want to buy from a vendor who does take back and reuse. this is marketing as much as anything real for Gaia. Anyhoo you get the dog, chips, cheese, and drink for five bucks. no subs, except if you don’t want one or more of the items dropped in the bag. Still $5, the cook running the cash register and all, gotta keep it simple. and i’d make it a rule not to overwork, so i could be rested and cheerful with the customers –er, clients. I might even do it up 50s style and wear a white casual long sleeved dress shirt (have two changes), bow tie, and small modified chef’s hat (a toque is it called?). a dozen office max folding chairs for those who want to eat by the Kart. Everyone gets a Bounty paper towel and a mint (for the post prandial onion, er, breath). PS –it’s gotta be gooood chili. canned is fine but hype it with kept-crunchy bell peppers and onions. blow ‘em away in Chi-town with instead of salt Tony Chacherie’s Original Creole Seasoning, or instead of salt n pepper Zatarain’s Creole Seasoning. And a dash of Tabasco. then you can call it a New Orleans Chili Dog and start listening to French language tapes in the Kart when biz is slow. pretty soon you’ll be a virtual cajun and they don’t never worry about nuthin.
Apr 24, 2009 - 10:09 pm 44. RWE:Buddy:
Based on observations of certain roadside vendors here in Florida, the surest way to make money selling hotdawgs is to have the advertising, dispensing, cash receipt, and possibly even the cooking of product be done by a stunning young lady wearing the smallest swimsuit imaginable. That gets results.
And have an ambulance and tow truck standing by for the inevitable rear end collisions that will result as well.
Apr 25, 2009 - 9:51 am 45. buddy larsen:RWE –heck, we gotta eat anyway right? might as well lock up the brakes right about HERE
Apr 25, 2009 - 1:10 pm 46. orlandoslug:kinda late; but…
Mohawk’s move is tied to the coming green tide…
…if you’re green, and you’re ahead of the curve, you’re gonna get work thrown your way!
as obamania pushes thru mandates in order to enlighten us in hopes of us becoming tre’ continental – those in the “know” will be rewarded for their enlightenment!
in B.O.’s mind, all the knuckle-dragging Bubba’s in fly-over country might be dragged into the present century if he can create mechanisms for them to see the light, as the Europeans and the bourgeois from around the world (except; er, the Chinese and Indians) have already so readily grasped.
voi-la!
Charity is to raise all intellectual boats together by allowing the enlightened to make choices for the less intelligent…
in the waning era of the 3rd generation of america (throes of FDR-ism), regulatory mandate will be the tool of choice with the rational of trying to save the proletariat from the cesspool of his existence – something Bubba, nor his representative official might never choose on their own!
I apologize for the diatribe…
back to Mohawk – they, along with everyone else with politically correct, green, make up stand to benefit from the regulations coming down the pike…
Mohawk LEEDs the way in recycle content in their products (despite being more expensive), and by jove, the rampant marketplace is not what’s it’s cracked up to be and needs to be tweaked in order to save us from ourselves…
while denouncing conservatives for being greedy the enlightened will line the pockets of the politically correct thru manipulation of the regulatory body…
…who will be hit? of course the proletariat; but, then again, he had a miserable existence to begin with…
Apr 25, 2009 - 4:38 pm 47. HV:My anecdote for what it’s worth – I heard from a London banker in 2007 that a Depression-like catastrophe was coming. This was his assessment of where the then already unraveling real estate bubble was heading. At the time I thought it must surely be an exaggeration, but it got me to start looking more closely at the problems, for example as described in the FT well before the Fall crash. I especially remember a long article in the FT about the derivatives markets that I read in the spring of 2008 that had me in a panic. I thank God every day for those early warnings.
Apr 25, 2009 - 5:00 pm 48. Derek:I think that there is more involved. WW1 was mentioned. Churchill described a march to madness, where all the decisions made no sense, were in no one’s interest and eventually destroyed just about everyone involved.
The mess we are in today is similar. The political class is totally disconnected from reality. Look at the reaction to Islamists. The US gov’t has borrowed or printed trillions of dollars and essentially given it to Wall Street. There is talk of a health bill being pushed through the senate with no deliberation. 17% of the economy. The political class knows no limit, and will along with many others, be destroyed before this is through.
There is a madness afoot today that won’t be sated until blood runs in the streets.
Derek
Apr 26, 2009 - 9:16 am 49. buddy larsen:derek, i think you are at a 50/50 proposition –there’s still time to retreat from the abyss –that’s the other 50.
Apr 26, 2009 - 11:44 amSorry, comments for this entry are closed at this time.