The NY Times today has an excellent article that starts: Ben Bernanke, meet Gary Crittenden. While you’re easing credit, he is tightening it.” In two brief sentences the writer (Floyd Norris) speaks volumes: Gary Crittenden is Citigroup’s CFO, who just told analysts the largest bank in the US is reducing consumer lending and raising interest rates. Asked whether credit card lending was an area where Citi might want to “pull back or increase pricing,” he responded, “All of the above.” Mortgage lending is also being cut.
That’s what a credit crunch looks like, in the ground: lenders working to repair damaged balance sheets end up throwing monkey wrenches into the Fed’s “printing press”. And that’s also how economies slide to the bottom of a liquidity trap, staring in frustration at a useless ZIRP .
The Dealer Made Me Do It
First off, I’m not excusing auto dealers. Or lenders.
They have a moral and business responsibility to try to stop their customers from doing something stupid, such as buying a vehicle with a sticker price that will stick them with an oppressive debt.
But customers have responsibilities, too. It is their purchase, their money and their car payments. It is up to them, more than anyone else, to know their financial limitations and not cross them.
Yet, so many consumers today buy too much vehicle. Then, when the financial squeeze becomes eye-popping, they look for someone to blame. The dealership and lender make nice targets. Seldom do the debt-ridden blame themselves.
I pondered that while reading a Los Angeles Times article headlined, “New Cars That Are Fully Loaded – With Debt.”
The story tells how some Americans of average means roll over an existing loan on an expensive vehicle in order to get another expensive vehicle. They end up with two loans in one, when they couldn’t afford one.
From the LA Times article:
Americans haven’t just been taking out risky mortgages for homes in the last few years; they’ve also been signing larger automobile loans for significantly longer terms than they used to.
As a result, people are slipping into a perpetual cycle of automobile debt that experts think could lead to a new credit crunch extending from dealerships to driveways and all the way to Wall Street.
GPS Liability?
In early January accident, a California computer technician turned his rental car onto some train tracks in New York per the directions of his sat nav system. The car became stuck and he had to abandon it before an oncoming train hit it. There were no injuries, but there were significant delays in travel. “The rental car driver was issued a summons and is being held liable for the damage to the train and track.”
That leads a real live lawyer, Eric J. Sinrod, writing at c|net to examine the potential of a driver to point to the GPS manufacturer as being at fault. The article points out:
A History of the Packers vs. Giants
It was the day before New Year’s Eve, and New Yorkers were leaving the city in droves. Not to escape Times Square celebrations, but to watch the N.F.L. championship game.
Roughly 45 years ago, on Dec. 30, 1962, the Yankee Stadium championship rematch between the Giants and the Green Bay Packers was blacked out on local television sets. Enterprising fans fled to southern New Jersey, searching for the broadcast from Philadelphia, or to the north to receive the signal from Hartford.
Those who succeeded watched a pivotal piece of American sports history. The N.F.L. might have first grabbed the public’s attention in the late 1950s, but it needed celebrity, personality and recurring characters for its Sunday gridiron theater.
The 1961 and 1962 N.F.L. championship games, each ending with a Green Bay victory over the Giants, had it all. Born on those afternoons was pro football’s first televised dynasty with Vince Lombardi as king, Paul Hornung as prince and Bart Starr as trusted knight. And although the Giants were twice defeated, by 37-0 in 1961 and by 16-7 the next year, they were the franchise that brought an eminence to the clashes. The Giants were established N.F.L. royalty, having played for the championship three times in the previous five years. They would play for it again in 1963.
On Sears & Lands End: Retailer’s Profit Warning Signals a Persistent Slide
Sears Holdings Corp., the storied retailer that helped civilize the American frontier with its catalog sales and later defined the modern department store, is searching for a new compass.
The retailer yesterday warned results for its fiscal fourth quarter and year would fall well below its expectations, continuing a sharp slide in sales and profit. Even during the best two months of the year, sales at stores open at least a year fell 3.5% compared with a year ago, the company said. Shares tumbled 5% to a more than two-year low, down $4.79 to $91.38 on the Nasdaq. The stock is off 49% in the past year.
But its record in acquisitions has been dismal. In 2002, it paid $3 billion for mail-order firm Lands’ End, a business that has declined since the deal.
Lands End is based in nearby Dodgeville. The post Sears acquisition of Lands End is a story waiting to be told.
A Visit to Iran
I went because: Iran has been on my list for some time, but it never seemed the “right time.” I decided to finally just go and see what was happening there for myself.
Don’t miss: Iman Square, Isfahan. Secret Parties, Tehran. The wonderful people, all over the country. Fabulous fabrics from many counties on the silk road.
Sir Edmund Hillary: A Life in Pictures
Edmund Hillary (left) and Nepalese Sherpa Tenzing Norgay approach 28,000 feet (8,534 meters) on Mount Everest on May 28, 1953. The next day Hillary would become the first human to stand atop the world’s highest mountain, with Tenzing joining him seconds later.
Surfing at Mavericks
Thousands of big-wave surfing fans straggled onto a small beach north of Half Moon Bay on Saturday morning to watch – or try to watch – the greatest surfers in the world battle the worst that the Pacific Ocean can throw at them.
Watching the fabled Maverick’s contest from the beach seemed nearly as challenging as riding the waves themselves, as close-in breakers blocked the view of the waves that the competitors were riding about a half-mile offshore.
But the fans, many of them tugging on beers as they scrambled for position before sunrise, didn’t care.
Grass Makes Better Ethanol than Corn
Farmers in Nebraska and the Dakotas brought the U.S. closer to becoming a biofuel economy, planting huge tracts of land for the first time with switchgrass—a native North American perennial grass (Panicum virgatum) that often grows on the borders of cropland naturally—and proving that it can deliver more than five times more energy than it takes to grow it.
Working with the U.S. Department of Agriculture (USDA), the farmers tracked the seed used to establish the plant, fertilizer used to boost its growth, fuel used to farm it, overall rainfall and the amount of grass ultimately harvested for five years on fields ranging from seven to 23 acres in size (three to nine hectares).
Once established, the fields yielded from 5.2 to 11.1 metric tons of grass bales per hectare, depending on rainfall, says USDA plant scientist Ken Vogel. “It fluctuates with the timing of the precipitation,” he says. “Switchgrass needs most of its moisture in spring and midsummer. If you get fall rains, it’s not going to do that year’s crops much good.”
The Green Bay Packer’s “Reclusive” Ted Thompson
In a year when New England Patriots executives are being hailed as football geniuses for engineering an undefeated season, Ted Thompson, the reclusive general manager of the Green Bay Packers, has achieved something equally remarkable.
Before this season, fans were calling for Mr. Thompson’s head. While the Packers had won just 12 of their last 32 games, he did not seem to care. No matter how loudly the fans complained, Mr. Thompson, who avoids publicity and rarely explains himself, continued sending away popular veterans and replacing them with untested college players, some of whom weren’t highly regarded by other NFL teams.
This year, led by a core of players that helped make Mr. Thompson a pariah, the Packers won 13 games and made the playoffs. What’s more, the players he’s brought into the league during his career are having an exceptional year — as the playoffs resume Saturday, nearly 10% of the active players on the remaining eight teams were signed out of college by Mr. Thompson.