SOTD: Alphawezen - Speed of Light

Countrywide Financial Conference Call

Here's all you need to know about Countrywide Financial (CFC):

Thank you very much, Mr. Vasselakos. Our final question today, ladies and gentlemen, we go to the line of Tom Atteberry with First Pacific Advisors. Please go ahead, sir.

Thomas Atteberry - First Pacific Advisors

Thank you. Gentlemen, I do appreciate you giving more detail on a conference call than normally arises from you and from most others, but I do want to follow-up with one question that was made earlier, and then I have a different question to ask. I would like to know from each of management what their intention is or how much money they are going to go purchase in the amount of stock in this company, given the glowing reports you think you are going to have going forward?

Angelo R. Mozilo

That’s an individual, personal decision that each of the management will make and I don’t think it’s appropriate for me, as Chairman and CEO, to commit anybody to that. I’ve always considered the employees’ participation in stock or the handling of stock options to be very personal to them, and so it’s a question that we just won’t answer. I don’t think we’re capable of answering, frankly.

Thomas Atteberry - First Pacific Advisors

Well, I’ll ask another question, but I will have one follow-up -- you have asked us as investors to put more money forward and I, merely as an investor, are asking you to put money forward also, because from what you’ve presented, it appears to be the beginnings of a turnaround situation.

Angelo R. Mozilo

I think that you -- are you a money manager? Is that what you are? Or an analyst? What are you?

Thomas Atteberry - First Pacific Advisors

I’m a money manager and I also have personal money.

Angelo R. Mozilo

Okay, and I think that that’s -- that’s a decision that, after reviewing our presentation, whether it be us or any other company that you might invest in, you have to make a determination whether or not you think that Countrywide is a worthy investment for you and will fulfill your investment objectives, both on a personal level and as a money manager.

We just present the story -- your decision to buy or sell is yours.

Yep. Here's a story: Countrywide will eventually go bust.

Californian Home Prices Are Over-Valued By 35-40%

So says the title of a Goldman Sachs report (the overpaid rocket scientists at GS could've found out the same thing a year or more ago by reading Calculated Risk or the Irvine Housing Blog or any one of a number of other sites).

Anyway, highlights include:

• CA prices as 35-40% overvalued.
• The madness started in 2004.
• National prices are 13-14% overvalued.
• Countrywide (CFC) and Washington Mutual (WM) have high exposure (45-50%) to CA.
• While housing prices have been "surprisingly resilient", a downturn is "imminent".
• Subprime adjustable mortgage resets peak in March 2008.
• Pay-option adjustable mortgage resets peak in June 2010.

We are nowhere near a bottom in housing.

SOTD: William Orbit - Surfin'

Here's Why We're Going To War With Iran

Hint: It might have something to do with oil.

Fiscal Conservative?

Wow. If you didn't know any better, you'd think Bush was a Liberal Democrat.

At least W spends his money very wisely, on tax cuts for the rich and spreading peace and freedom to the Iraqis - not on stupid stuff like body armor for our troops, medical insurance for American children or levees or water-dropping airplanes.

No Comment

Glenn Beck is an Idiot

What a scumbag. Here's what the right-wing CNN talking head had to say about the California inferno:

I think there is a handful of people who hate America. Unfortunately for them, a lot of them are losing their homes in a forest fire today.

He also said this:

Can we do a fundraiser for the Hollywood Malibu crowd tomorrow? I am so concerned…they're losing their houses. The people who tell us we're too stupid to understand things build their houses on cliffs.

What a scumbag.

SOTD: Radiohead - All I Need - Amsterdam 8/28/06

Chuck Storm

Ouch.

Toshack Highway - I've Lost The Feeling

SOTD: Silent Hill 2 - Haunted by Poe

SOTD: The Dandy Warhols - Horse Pills

Quote of the Day

"I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."

- Hank Paulson, U.S. Secretary of the Treasury

- ...oh, wait...actually that quote is from Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929...never mind.

Time to Buy Home Builders?

Uh, no.

"Time to Buy Home Builders?" Forbes, April 25, 2007 [Home builder index down about 50% since].

"Time to Buy Horrible Home-Builder Stocks, MSNBC, December 2006 [Jon Markman recommends KB Homes (Then $52.57, now $26.88), Avatar (then $72.05, now $45.77), Tarragon (then $11.65, now $2.68), DR Horton (then $26.79, now $13.10) and Brookfield (then $39.7, now $17.79). Overall an average 47.6% loss just since December. ]

Set your money on fire instead.

CitiEnronCorp

The more things change, the more they remain the same..this is a blast from the past:

Citigroup Agrees to Pay $120 Million to Settle SEC Allegations that It Helped Enron and Dynegy Commit Fraud

Washington, D.C., July 28, 2003 — The Securities and Exchange Commission today instituted and settled enforcement proceedings against two major financial institutions, J.P. Morgan Chase & Co. and Citigroup, Inc., for their roles in Enron Corp.'s manipulation of its financial statements. Each institution helped Enron mislead its investors by characterizing what were essentially loan proceeds as cash from operating activities.

..."These two cases serve as yet another reminder that you can't turn a blind eye to the consequences of your actions — if you know or have reason to know that you are helping a company mislead its investors, you are in violation of the federal securities laws," said Stephen M. Cutler, Director of SEC's Enforcement Division. His deputy, Linda Chatman Thomsen, added: "As today's actions illustrate, we intend to continue to hold counter-parties responsible for helping companies manipulate their reported results. Financial institutions in particular should know better than to enter into structured transactions where the structure is determined solely by accounting and reporting wishes of a public company."

J.P. Morgan Chase and Citigroup engaged in, and indeed helped their clients design, complex structured finance transactions. The structural complexity of these transactions had no business purpose aside from masking the fact that, in substance, they were loans.

As alleged in the charging documents, by engaging in certain structural contortions, these financial institutions helped their clients: (1) inflate reported cash flow from operating activities; (2) underreport cash flow from financing activities; and (3) underreport debt. As a result, Enron and Dynegy presented false and misleading pictures of their financial health and results of operations. Significantly, with respect to Enron, both financial institutions knew that Enron engaged in these transactions specifically to allay investor, analyst, and rating agency concerns about its cash flow from operating activities and outstanding debt.

...As alleged by the Commission, these institutions knew that Enron engaged in the structured finance transactions that are the subject of today's Commission actions to match its so-called mark-to-market earnings (paper earnings based on changes in the market value of certain assets held by Enron) with cash flow from operating activities. As alleged, by matching mark-to-market earnings with cash flow from operating activities, Enron sought to convince analysts and credit rating agencies that its reported mark-to-market earnings were real, i.e., that the value of the underlying assets would ultimately be converted into cash.

The Commission further alleges that these institutions also knew that these structured finance transactions yielded another substantial benefit to Enron: they allowed Enron to hide the true extent of its borrowings from investors and rating agencies because sums borrowed in these structured finance transactions did not appear as "debt" on Enron's balance sheet.

Unreal.

Minyanville also has a nice piece on the subject.

With the announcement this week of the $100-billion Citigroup-led bailout plan it's obvious Citigroup learned something from helping Enron commit fraud. Yeah Linda, financial institutions should know better.

I'm sure the SEC is all over Citigroup on this latest mess. Ha Ha.

The stock is around $45 today. Next stop $37. Unless the Fed, I mean government, I mean taxpayers, bail them out again.

SOTD: Solar Powered People - Last Day in Love

SOTD: Sutrastore ::: Clouds

SOTD: Elastica - Connection

A Nightmare With No End In Sight

This is from the top commander of U.S. troops from June 2003 to July 2004. (I don't think they can use the "terrorist-loving, defeatocrat" smear on him - they'll have to try something else).

The former top commander of U.S. troops in Iraq slammed the handling of the war and gave a bleak assessment of the current situation in Iraq.

“There is no question that America is living a nightmare with no end in sight,” retired Lt. Gen. Ricardo Sanchez told a convention of military journalists on Friday.

“From a catastrophically flawed, unrealistically optimistic war plan, to the administration’s latest surge strategy, this administration has failed to employ and synchronize the political, economic and military power,” Sanchez said.

“The administration, Congress and the entire inter-agency, especially the State Department, must shoulder the responsibility for this catastrophic failure and the American people must hold them accountable.”

Let's hope that all those who lied, ignored inconvenient truths, and covered-up their own incompetence in leading this country into this God-forsaken war will be held accountable, somehow, someday.

Down is Up

Apparently California's already in recession.

Countrywide's lending is down 44% in September (and foreclosures doubled).

Good thing there's no inflation

Heating oil up to 22% this year
Propane up 16%
Natural gas up 10%
Electricity up 4%.

And the economy is doing super.

Building material imports - down 20%
Furniture imports - down 17%
Clothing imports - down 10%
Footwear - down 8%

Wall Street types are still completely out of touch and total jerks.

Morgan Stanley traders are so smart they lost $433 million in one day.

Goldman Sachs holds $72 billion of assets that are priced using the "mark to make-believe" method.

The dollar is more worthless every day.

So, naturally the stock market is at all time highs.

SOTD: Boss Hog - I Dig You

SOTD: Veruca Salt - Shutterbug

Bush Administration Screws Up Again

If true, this is criminal incompetence. Is it 2008 yet?

A small private intelligence company that monitors Islamic terrorist groups obtained a new Osama Bin Laden video ahead of its official release last month, and around 10 a.m. on Sept. 7, it notified the Bush administration of its secret acquisition. It gave two senior officials access on the condition that the officials not reveal they had it until the al-Qaeda release.

Within 20 minutes, a range of intelligence agencies had begun downloading it from the company's Web site. By midafternoon that day, the video and a transcript of its audio track had been leaked from within the Bush administration to cable television news and broadcast worldwide.

The founder of the company, the SITE Intelligence Group, says this premature disclosure tipped al-Qaeda to a security breach and destroyed a years-long surveillance operation that the company has used to intercept and pass along secret messages, videos and advance warnings of suicide bombings from the terrorist group's communications network.

"Techniques that took years to develop are now ineffective and worthless," said Rita Katz, the firm's 44-year-old founder, who has garnered wide attention by publicizing statements and videos from extremist chat rooms and Web sites, while attracting controversy over the secrecy of SITE's methodology.

Econ. 101

Boo-ya!

Howard Blackstein presents the sort of honest economic analysis [in ALL CAPS no less] you won't see on CNBS...

THE DIRTY TRUTH ABOUT THE FEDS ACTIONS- WHEN THE FED 1) CUT THE DISCOUNT RATE BY 50 BASIS POINTS,AND 2) CUT THE FED FUNDS AND DISCOUNT RATES SEPT. 18,WHO DID THEY HELP?

IF WE ANSWER THAT QUESTION,WE KNOW WHO THE FED REALLY THINKS MATTERS!!! THEY HELPED THE BANKS, BUT NOW CREDIT IS TIGHTER FOR THE AVERAGE CONSUMER THAN BEFORE!!!

THEY LOWERED THE SHORT TERM INTEREST RATE THAT BANKS MUST PAY TO DEPOSITORS - THUS HURTING RETIRED AND AVERAGE INCOME PEOPLE!!!

THEY HURT THE HOUSING MARKET BY THE FACT THAT BY LOWERING THE FED FUNDS RATE, THEY LOWERED THE APPETITE FOR FOREIGNERS TO HOLD OUR LONG PAPER , THUS RAISING THE INTEREST RATES THAT DETERMINE MORTGAGE RATES.

THEY WILL BAIL OUT THE RICH, BUT THEY WILL LET THE REST OF US SWING IN THE BREEZE.

THEY WILL NOT FUND CHILDRENS HEALTH CARE,BUT THEY WILL DEFEND WITH THEIR LIVES THE 15% DIVIDEND TAX RATE ,WHICH ONLY THE RICH TAKE ADVANTAGE OF. SAVERS PAY THE HIGHER, REGULAR INCOME TAX RATE ON INTEREST.

THIS IS A GOVT OF THE RICH, BY THE RICH AND FOR THE RICH!!!!!

Bush's Message to the American People

SOTD: Minor Majority - Wish You'd Hold That Smile

SOTD: Me'Shell NdegéOcello - Thankful

Who Hates Donovan?

On YouTube, they won't let you imbed Donovan videos on websites...now I have to ask: what idiot is managing Donovan, thinking that he is relevant except to about 12 people who actually remember how cool a couple of his songs were?

Songs like Hurdy Gurdy Man, Sunshine Superman or Season of the Witch?

What idiot decided that making these songs available to a broader audience was a bad idea?

What complete moron, in the soon to be extinct "music" industry, thinks that Donovan is so good that they can actually restrict access to his music and people will break down walls trying to pay for it?

Good luck, record industry. All you Under-Assistant West Coast Promo Men can start practicing now: "Would you like fries with that?"

SOTD 3: Depeche Mode - Precious