Time to Buy?--the whole store

Being a former Richmonder, I've been keeping an eye on the shares of Circuit City (CC).

It closed today at 37 cents per share. That's down from the all time high of $30.39 on May 30, 2006. Now, I know CC has had it's problems. But 37 cents?

That means the market cap today is $65 million. Circuit City owns 682 superstores and 11 other stores in the U.S. according to Yahoo Finance and did business out of 779 Canadian stores. They also own a retail electronics website business.

Let's do the math. $65 mil. divided by 1472 stores comes to a market cap of $44,158 per store. We'll throw the website in for free. I know, I know, they're sitting on $288 million in debt. Divide that by 1472 stores and add the debt to the price and it comes to $239,810 per store.

Circuit City is valued by Wall Street at $240,000 per store?!?!? Yes they're bleeding cash, but golly jeeez, that's $140,000 less than the median price of a home in California this year!

Anyone out there who can explain that, I'd like to hear. Something can't be right.

Double Entendre

A good friend told me yesterday that corporate execs are presently sitting in board rooms around the country making tough decisions that affect us all.

They don't know whether to lay Mary or Jack off. (. . . or jack off.)

Depending on how you read that, they're either choosing between Mary and Jack or choosing between screwing employees and pleasuring themselves.

I had to laugh.

WTF?

What are you thinking, McC?

Billary is/are the one/two who is/are credited with the idea of the government buying stressed mortgages up and renegotiating them. As an example, someone put zero down on a house that is now worth $20,000 less than they owe with an interest rate that has recently gone to 3% more than it was before it adjusted. Uncle Sam buys the mortgage and "re-adjusts" it to what the house appraises for now and at the current interest rate.

This is supposed to be good bc. the bank doesn't have to foreclose and so real estate prices supposedly will stop falling. The bank avoids suffering by dumping the bad loan. The homeowner gets to stay in the house and gets a reduced payment and mortgage. But the taxpayer has to come up with the money to buy the loan and has to eat the $20,000 loss.

Here's a clue, McC: Barry beat the snot out of Billary. He'll beat the snot out of you if you insist on this.

Picture this. My neighbor and I bought our houses at about the same time--2005, the height of the bubble. One of us put 20% down and did a 30 year fixed rate mortgage. One of us put 10% down with a three year ARM. The interest rate has now adjusted and we can't afford the payment. Prices in the 'hood are now down 20% so the former of us has a house that is worth what we owe, the other has a house that is worth 10% less than what we owe. One of us can afford to continue making payments, one of us cannot.

Billary and now McC want the government to buy the mortgage of the house that's under water, adjust the mortgage principle down and the interest rate down so that what's owed is now only what the house is worth. The tax payers pick up the dif. So the one guy gets a lower mortgage and a lower payment for nothing and the other guy was a sucker for saving up for a 20% down payment. Asininity at it's finest.

But "fair". I guess you can say that it's "fair".

Like hell.

There is no way that even this Congress could be so stupid as to pass this thing.

But I've been amazed before. If they do seriously consider this monstrosity, let me suggest a couple of riders to the bill. Anyone who gets this Stressed Mortgage Assistance is banned, for as long as they own the house, from having cable TV. They will be allowed one motor vehicle per family. Any extra cars, as well as any boats, campers, jet skis, or pleasure boats will be auctioned to the highest bidder before the government will buy their mortgage. Auctioned also will be the flat screen TV, DVD player, central air conditioner, dryer, and microwave oven in every one of these houses. Don't need 'em, use a clothes line. (This by the way should be named The Green Amendment bc. it will not only save the taxpayer money, it will save electricity and, thus, prevent global warming.) Limit cell phones to one per family. All credit cards are canceled save one (for emergencies) with a $1,000 limit. A vacation prohibition will take effect: anyone getting mortgage relief who is caught going to Disney, the Bahamas, Atlantic City, or on a cruise for five years will immediately forfeit all Stressed Mortgage Assistance.

Come on, McC, get a grip.

McNabb the Typical Dem

Donovan McNabb must be a Dem. The W is not important: what is is that you "feel" that you are the better team.

Check out this stinging post on Chris Cooley's blog.

"We just didn't show it." Isn't it your job to show it?

Statehouse Bailout Next?

Looks like the states will be the next ones stepping up to the trough for a bailout. California and Massachusetts have both asked the Fed if they can borrow money under the same terms as the bank bailout. Maryland is sure to follow as the dam breaks and states rush to take advantage of a new source of funds.

There's a reason folks won't buy your bonds, Sacramento and Boston: you're a bad risk! Like all those sub-prime borrowers and "greedy" fat cats at Countrywide and Lehman Brothers, you assumed real estate prices would continue to rise and made decisions based on that assumption. You made health care promises and created generous pensions for teachers, firefighters, and other public employees. You borrowed money for road projects, pork projects, and prisons.

Now real estate prices have headed south meaning lower assessments and lower property tax receipts. The economy is in the crapper meaning lower tax receipts. It's the proverbial Rainy Day. But there's no rainy day fund.

Ironic (or hypocritical) that you won't hear Congress complain about the statehouse politicians they way they complain about the Wall Street boys even tho both of them made the same bad bets. Wall Street did it for profit, Boston and Sacramento politicians did it for votes. In fact, not only will the libs in Congress not attack their statehouse cronies, it will be the libs in Congress who will push to bail the states out.

Barney Frank, the man who had as much to do as anybody with killing Fannie and Freddie reform legislation over the years, is already talking it up. "I hope that the money won't be needed . . . but if it is, there is no better borrower than the state." Yeah, right. If that's the case, why does the Governator have to come begging to the Fed for a handout?

What Congress should do is tell fiscally irresponsible states to take a hike.

Mud Bowl at U Mich

Here's the Mud Bowl at the SAE house in Ann Arbor on Saturday. the photographer didn't get one of the guys playing.

It was a great day except for the loss by the varsity to the Illini.

Masterpiece 5--Southern Cross

This qualifies as a masterpiece.

To my untrained ear the harmony is as good as any (tho, maybe not so much in this live version) and the imagery vivid.

Two lines always stand out.

So we cheated and we lied
And we tested
And we never failed to fail
It was the easiest thing to do.
You will survive being bested.
Somebody fine
Will come along
Make me forget about loving you.

Anyone who's ever screwed up in life--which is probably just about all of us--can surely relate. And find comfort in the song.

The other line is part of the chorus.

Spirits are using me
larger voices callin'.

Creativity--one of the great mysteries. Where do great ideas come from? And great symphonies, novels, and paintings? How about a great invention or a unique solution to a problem?

Taoists speak of the Uncarved Block. Within the block of stone lies a statue. The sculptor connects with the Tao in a Holy Act of creativity--carving the statue to reveal what is Meant To Be for the block of stone and what is Meant To Be for the gifted sculptor. And the whole world is rewarded. The statue was always there, the sculptor always had it in him, and final product is what's Meant To Be.

Surely, this is what is meant by "Spirits are using me/larger voices callin'"--Crosby, Stills, & Nash sing of the Holy connection between Spirit and Artist.

One need not be Leonardo da Vinci or Paul McCartney to connect with the Spirit, tho. One can be an artist just by living a virtuous, passionate, and loving life. It's in every one us.

Thanks to Lyrics Depot for the text of the lyrics.