Santayana

Hope for the best, plan for the worst.

Eric, why do you say the levels are unsustainable? With autos, I don't see why we need to have any production in this country. With housing, the current building rate may be unsustainable over the very long term, but I think we have years before the rate would need to increase in order to accomodate new household creation.

So basically they are saying they only expect 5-10 loans to recast all of next year? And why don't they mention 2011? I think there has to be a bit more too it than this.

So you think we will have historically low rates forever? I also think that unemployment and inability to pay are going to continue driving prices down.

And if you live in state without income tax, you're even less likely to have enough deductions to make it worthwhile.

Well said Broxburn!

Schwab is showing a bid/ask of 59/72 right now. Will be very interesting to see how the price reacts next week. Often on a buyout announcement you see the target trade below the proposed price because of fear the won't go through. I think in this case we'll see ORH trade over $60 as people may be expecting a higher offer.

Arrrrgghhh! I sold my ORH 50 calls when Fairfax announced the deal with the Chinese insurer. >:(

Minimum wage today is $7.25. Scorpion, what did you mean by the minimum wage is certainly not double the $3.50 number you referred to? It's almost exactly that.

I sold first thing this morning because I had to liquidate some 401(k) holdings to complete an IRA rollover. Right now I'm wishing I had waited a bit longer. Who would have guessed we would get a 5% up day with the markets down almost 2%.

Very roughly... 50% cash 20% FFH 10% ORH 10% Various preferreds and high yield dividend payers. 10% SPY puts of varying strikes and expirations. I fully expect that we will retest the March lows, and going lower wouldn't surprise me.

Like everything else in life, it depends. I personally will not invest in companies that do not pay divs except for the occasional small cap speculation play. It's not always a question of can you invest the money better, many of us believe that an investment that doesn't produce cash flow is not an investment at all. In Berkshire's case, if the majority of shareholders do not want a dividend, that is their prerogative, but your "investment" is then completely dependent on whether someone else is willing and able to buy your shares from you at a future date. It seems like everyone would be better served by paying a dividend, and then those who want to can reinvest.

Kawikaho, If you are only looking for a handful of measures, you probably want to find some openly available information out on the net somewhere. For a product like Compustat or CRSP you would be paying $100,000K plus for their historical data. I don't think they have an option where an individual can pick and choose variables on an a la carte basis. When I was in the industry vendors would quote us $1M plus for historical datasets. Financial data is not cheap! Just a good data model without information in it can cost hundreds of thousands as in the case of FIDM.

Welcome back!

I certainly have no problems with the ads. We should all be thanking Sanjeev for all he's done rather than complaining about things being in "poor taste". But then there are lots of people in this world who expect something for nothing. I think Jack River has already done significant damage to this board by the way he kept pushing Ericopoly's buttons trying to get a response. I can only hope that having the ads is offensive enough to him that he leaves for good.

This is going to be affecting everyone's borrowing costs. Could be a very rough 3rd quarter for a lot of businesses if the rates don't come back down. It's pretty clear that the Fed has no control over interest rates. I really don't have any idea what happens next, but if rates do keep spiking, the worry does become deflation rather than inflation.

You're right that the business cycle is not dead, but I think you're wrong about where we are. With foreclosures and unemployment rising, and consumer spending falling, I think we're still somewhat early on in the first step. Don't be misled by the blip in equity prices that was mostly driven by managed earnings and accounting tricks. I'm with Mandeep, there will be plenty of opportunities to buy at lower prices. I think most people would have said the same thing about Wells and GE at those prices anytime in the past 10 years, but look where we ended up.

Define IV.

Yes, I do think that risk exists. As I said though, I'm long ORH myself, and consider that risk small enough to stomach with some of my investments. However I still have a substantial portion of my capital in Treasuries and FDIC insured accounts as I have since July '07. Inflation is not a risk I'm worried about.

I'm long ORH myself, but don't be fooled into thinking there is any "no risk" investment in this market. We're going to start seeing some Munis default as tax receipts are coming in very low. Yes the Berkshire insurance is a huge plus, but I'm still not putting all my eggs in one basket. I trust FDIC more than BRK at this time....not saying that can't change.

It may not violate legal boundaries, but I disagree that there is not a problem with the ethics. Just because you are allowed to do something does not mean it is right. And it's not hypocritical to say so unless I were doing the same thing myself.

There is a difference between not being a market for certain "assets", and the owner not liking what the market is willing to pay for those assets. There are plenty of people willing and able to buy some of these distressed securities, but the owners just don't like the bid. I also thought the idea behind capital ratios was that the banks had liquid assets to back their loans. If there really is no market, then those assets shouldn't be allowed to count towards their tier 1 ratio. Unfortunately it's become abundantly clear that the taxpayer will end up covering any difference between the marked value and actual realized value. Heads they win, tails you lose.

That's a good point. But it makes me wonder if the historical numbers are on the same basis. Hopefully most of the writedowns are done already, and the difference won't matter much.

It all comes down to what you think earnings will look like over the next couple of years. I think $63 is incredibly optimistic given that we just came out of a quarter where the number was negative. There were a variety of sources listed, do you know where the earnings estimate was coming from?

One other piece to consider in the California housing market is that there are some very large developments that were mothballed in various stages of completion, especially in the I-15 corridor. I think this skews the inventory numbers as many of the homes are done, but not on the market.