The Housing Bubble

Ben Bernanke’s bubble trouble
Posted: December 04, 2009, 12:27 PM by Drew Hasselback

Ben Bernanke, the Federal Reserve chairman, has a little problem. He missed one of the biggest housing bubbles in history as it swelled right under his nose. Now, as he goes through the process that will probably see him re-appointed to a second term, he’s enduring a beating from U.S. Senators who want him to promise to do better.

The results of Bernanke’s confirmation hearings will have a lot say about the future role of the Fed chairman. It may also determine how other central bankers around the world conduct themselves in the years ahead.

The big question is whether the Fed will now act preemptively to diagnose bubbles as they happen and pop those bubbles before they get too big. Central banks have long fought against this role because it requires them to be smarter than the market.
…

First! A day ahead even!

* The Wall Street Journal
* REVIEW & OUTLOOK
* DECEMBER 4, 2009

The Bernanke Record
Will he repeat the mistakes of his four years?
…
The real problem is Mr. Bernanke’s record before the panic, with its troubling implications for a second four years. When George W. Bush nominated the Princeton economist four years ago, we offered the backhanded compliment that at least he’d have to clean up the mess that the Alan Greenspan Fed had made. That mess turned out to be bigger than even we thought, but we also didn’t know then how complicit Mr. Bernanke was in Mr. Greenspan’s monetary decisions.

Now we do, thanks to the release of the Federal Open Market Committee transcripts from 2003. They show (see “Bernanke at the Creation,” June 23, 2009) that Mr. Bernanke was the intellectual architect of the decision to keep monetary policy exceptionally easy for far too long as the economy grew rapidly from 2003-2005. He imagined a “deflation” that never occurred, ignored the asset bubbles in commodities and housing, dismissed concerns about dollar weakness, and in the process stoked the credit mania that led to the financial panic.
…
The Fed chairman has shown he knows how to ease money, and creatively so. But that is the easy part of his job. The hard part, the time when central bankers earn their fame, is when they have to take the money away. We see little in the chairman’s policy history or guideposts to suggest he will be willing to endure the criticism that will come with tightening money amid a lackluster recovery, if that is what is required to protect the dollar or prevent an inflation outbreak.

The political irony today is that even as Mr. Bernanke is cruising toward confirmation, the Fed as an institution is under its most sustained political attack in two generations. The political class is especially riled about the Fed’s forays into fiscal policy. While that is understandable given the last year, the response to this action should not be to put the Fed under even greater political control from Congress. That is the Argentinian solution.

The better response is to hold policy makers accountable for their actions, including chairmen of the Federal Reserve. At this monetary moment more than any since the late 1970s, the Fed needs a hard-money chairman with the courage and credibility to resist the temptation to escape from the consequences of the last bubble by floating another one.

First thought when I read the story title: This guy’s day job must be in banking.

* The Wall Street Journal
* BUSINESS
* DECEMBER 5, 2009

The Gambler Who Blew $127 Million

Terrance Watanabe, 52, is believed to have the biggest losing streak in Las Vegas history, losing $112 million dollars in one year. Mr. Watanabe, who now lives in the Bay Area, stands near the entrance to Stanford University on Dec. 3, 2009.

By ALEXANDRA BERZON

LAS VEGAS — During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million.

The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history. It devoured much of Mr. Watanabe’s personal fortune, he says, which he built up over more than two decades running his family’s party-favor import business in Omaha, Neb. It also benefitted the two casinos’ parent company, Harrah’s Entertainment Inc., which derived about 5.6% of its Las Vegas gambling revenue from Mr. Watanabe that year.

Today, Mr. Watanabe and Harrah’s are fighting over another issue: whether the casino company bears some of the responsibility for his losses.
…

Updated December 03, 2009
Bunning Blisters ‘Moral Hazard’ Bernanke at Confirmation Hearing

FOXNews dot com

Ben Bernanke, seeking Senate approval for a second term as head of the Federal Reserve, faced withering criticism Thursday from a Republican senator who called him a “moral hazard” and said he should be sent back to Princeton.

Damn It Feels Good To Be A Banka

Les Leopold

Author of “The Looting of America”
Posted: December 4, 2009 06:12 AM

Jobs and Justice: Tie Wall Street Profits and Bonuses to the Unemployment Rate

Geithner Blasts Bank Bonuses

The Treasury Secretary says banks wouldn’t have survived without federal aid and need tie execs’ pay to long-term goals

By Robert Schmidt

(Bloomberg)—Treasury Secretary Timothy Geithner criticized the record bonuses set to be paid by big banks this year and refuted claims by Goldman Sachs Group Inc. (GS) that it would have survived without government aid.

Taking aim at what he called “an era of irresponsibly high bonuses,” Geithner said all banks—even those that have repaid government aid—need to restrain the amount they pay their leaders and tie compensation to long-term goals.

“We want to see fundamental constraints on how senior executives are paid at these institutions,” Geithner said in an interview today for Bloomberg Television’s “Political Capital With Al Hunt,” that will air today and through the weekend. “It is very important that we change the way these executives are paid, the form of compensation, this year.”
…

BUST THE TOO-BIG-TO-FAIL TRUSTS!!!

Geithner Disputes Goldman Sachs Claims It Didn’t Need U.S. Help

By Rich Miller and Christine Harper

Dec. 5 (Bloomberg) — Treasury Secretary Timothy Geithner disputed claims by Goldman Sachs Group Inc. executives that the bank could have survived the financial crisis without government help and said it and other Wall Street firms should show some restraint in handing out bonuses this year.

“It is very important that we change the way these executives are paid, the form of compensation, this year,” Geithner said in an interview yesterday for Bloomberg Television’s “Political Capital with Al Hunt,” which is being aired throughout the weekend. “We have to end that era of irresponsibly high bonuses.”

Fed’s Plosser Sees Need for Consistent Bailout Policy (Update1)
By Steve Matthews

Dec. 4 (Bloomberg) — Federal Reserve Bank of Philadelphia President Charles Plosser said the U.S. needs a “consistent” policy for bailing out troubled financial firms after efforts to end the credit crisis worsened the “too big to fail” problem.

“No firm ought to be too big to fail,” Plosser said today in remarks prepared for a speech in Philadelphia. “Not only does the too-big-to-fail badge generate moral hazard at these institutions, it also creates powerful incentives for other institutions to become large and complex and take risks at taxpayers’ expense.”
…

(apologies to U2– riffing on a thread from yesterday’s HBB)

I want to run
I want to hide
I want to just walk away
If I can’t refi
So far underwater
I can’t see the sky
Where the fish have no eyes

I want to mail
Just mail in the keys
So what if my FICO drops below
A hundred and three
I can’t just go on
With this debt so outsized
Where the fish have no eyes

Where the fish have no eyes
Where the fish have no eyes
Seeing so many
Burning down lives
Burning down lives
Oh, and I see that
There are so many of you
We’re totally screwed

Tax dollars aflood
After boom turns to bust
Just one final orgy of greed
In an empire of dust
And soon the whole nation
Will find it resides
Where the fish have no eyes

Where the fish have no eyes
Where the fish have no eyes
Instead of building
We’re burning down lives
Burning down lives
Oh, now I fear that
I will also be there too
We’re totally screwed

FDIC Friday… this is the biggest for Ohio since National City went bye-bye.

SAN FRANCISCO (MarketWatch) — Cleveland-based AmTrust Bank, with 66 branches and roughly $8 billion in deposits, was closed by regulators Friday, as the ongoing credit crunch continued to claim victims.

Three smaller banks in Georgia, an Illinois-based bank and a Virginia bank were also shuttered, bringing the 2009 total to 130.

Plundering California.
Public-sector unions have brought the state to its knees.
Steven Greenhut

The economy is struggling, the unemployment rate is high, and many Americans are struggling to pay the bills, but one class of Americans is doing quite well: government workers. Their pay levels are soaring, they enjoy unmatched benefits, and they remain largely immune from layoffs, except for some overly publicized cutbacks around the margins. To make matters worse, government employees—thanks largely to the power of their unions—have carved out special protections that exempt them from many of the rules that other working Americans must live by. California has been on the cutting edge of this dangerous trend, which has essentially turned government employees into a special class of citizens.

When I recently appeared on Glenn Beck’s TV show to discuss California’s dreadful fiscal situation, I mentioned that in Orange County, where I had been a columnist for the Orange County Register, the average pay and benefits package for firefighters was $175,000 per year. After the show, I heard from viewers who couldn’t believe the figure, but it’s true. Firefighters, like all public-safety officials in California, also receive a gold-plated retirement plan: a defined-benefit annual pension that offers 90 percent or more of the worker’s final year’s pay, guaranteed for the rest of his life (and the life of his spouse).

http://www.city-journal.org/2009/eon1123sg.html

Good morning, hbb!

Been a while since I’ve checked in. I hope that all of you are well.

They’re underwater, but they love their “home.”

http://www.tampabay.com/news/business/personalfinance/underwater-and-staying-even-more-than-money-its-about-home/1056509

They sound like fools, and this is yet another reminder of the joys of home rentership.

This blind bastard has a lot of nerve…

U.S. Federal Reserve chief blames Brown for Britain’s economic woes
05th December 2009 ~ UK Mail

Damning verdict: Ben Bernanke says that decisions made my Gordon Brown when he was chancellor hurt Britain’s economy

Damning: Ben Bernanke says decisions made by Gordon Brown when he was chancellor have hurt Britain’s economy

Gordon Brown’s decision to strip the Bank of England of its supervisory role caused ‘major problems’ for the British economy, the head of the American Federal Reserve said yesterday.

Ben Bernanke - regarded by many as the world’s most powerful banker - claimed the UK was ill-prepared to deal with the crisis in the wake of decisions made by Mr Brown when he was chancellor.

In an extraordinary attack, Mr Bernanke said the Prime Minister’s measures - which included stripping the BoE of its powers to regulate banks - had been responsible for the ‘ destructive run’ on Northern Rock.

His comments will embarrass Mr Brown, who has refused to concede his decisions may have contributed to the economic crisis.

Mr Bernanke told the U.S. Senate: ‘The government of Britain removed from the Bank of England most of its supervisory authorities.

Canada Added 79,100 Jobs, Five Times Expectations (Update3)

(Bloomberg) — Canadian employers added more than five times as many jobs as expected in November, led by education, manufacturing and finance, a sign of an accelerating economic recovery.

Employment rose by 79,100 last month, the most in more than a year, Statistics Canada said today in Ottawa. The jobless rate fell to 8.5 percent from October’s 8.6 percent. The median forecast of economists surveyed by Bloomberg was for a 15,000 increase in jobs and an unemployment rate of 8.6 percent.

Bank of Canada Governor Mark Carney will probably reaffirm a commitment to keep his key lending rate at a record low 0.25 percent in a Dec. 8 interest rate announcement, economists say, to sustain the recovery after the country’s first recession since 1992 ended last quarter. Carney and Prime Minister Stephen Harper, who is budgeting a record deficit this year, have said the job market will take longer to recover than it did from past slumps.

“This certainly was a strong report, it probably overstates the strength of the economy,” Millan Mulraine, an economist at TD Securities in Toronto, said in a telephone interview. The Bank of Canada probably won’t alter a commitment to keep the key interest rate unchanged through June, because wage gains are fading and economic growth remains slow, he said.

The country has lost 321,000 jobs since employment peaked in October 2008.

Builder, suburban dad - stickup man?
SF Chronicle December 5, 2009

His Alamo home, surrounded by redwood trees on a cul-de-sac, is worth $2.5 million. Inside, when he takes a break from running his construction business, Bennett can look out the window at Mount Diablo.

In the driveway, there’s a boat, not far from the pickup truck with the stickers for the Air Force Academy and National Rifle Association. Down at the airport, Bennett owns a plane.

But Thursday night, police say, officers found Bennett in the doorway of the Alamo Jewelry Mart, pointing a gun at his head and threatening to kill himself. He had already shot the store’s owner, police say, and the owner had managed to shoot Bennett as well.

Bennett and the owner, 53-year-old Oscar Herrera of Hercules, both ended up in the hospital in critical condition. Bennett is also under arrest, and police and acquaintances are trying to figure out whether what happened was a robbery gone bad, or something else.

Bennett had been suffering from financial problems, said Capt. Dan Terry of the Contra Costa County sheriff’s office, which patrols Alamo. “Whether that is the motive in this incident, we’re still trying to determine,” he said Friday.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/12/04/BA3P1AV10H.DTL&tsp=1#ixzz0YotdOWCV

I just love the old Greek. He really gives a European perspective to the whole Dubaicle. I recall when 60 Minutes was just reverentially breathless in their interview with the Maktoum in Chief. You woulda thought he was the Second Coming. Turns out, England was bowing and scraping, too.

“Because that’s all the Dubai debacle ever was. A desert mirage fueled by greed and sold to suckers by tawny types whose ancestors used to sell flying carpets to dumb Englishmen with sunburnt noses, knees, and elbows.”

http://www.takimag.com/index.php/blogs/article/debacle_in_the_desert

Obama Main Street tour reveals shocking ignorance!
Scott Ott ~ Examiner Columnist ~ December 4, 2009

Just hours before he started his “White House to Main Street” jobs tour with a visit to Lehigh County, Pa., President Obama reportedly told top advisers he was “shocked at the level of ignorance among the common people regarding what it takes to generate jobs,” according to unnamed aides.

The tour is billed as an opportunity to get the president out of the White House, where he’s been holed up for nearly a full working day, to mingle among the citizenry in order to “take the temperature on what Americans are experiencing during these challenging economic times.”

But even before Air Force One touched down at Lehigh Valley International Airport this morning, the president expressed dismay at the general lack of understanding of macroeconomics soon to be displayed by those he might meet in factories, shops and diners.

Although Obama recognizes that most communities “don’t have the benefit of the kind of intellectual firepower” with which he has surrounded himself at the White House, nevertheless he had “hoped business owners and workers would be better informed,” aides said.

“You would think that entrepreneurs and CEOs would realize the vital role the federal government plays in generating economic prosperity,” the president reportedly told his inner circle. “But instead they’ll probably prattle on about something called ‘free enterprise.’ I know now that I’ll have to spend a lot of time explaining that there’s no such thing as a free lunch, let alone a free enterprise. In this country, you have to make your money the old-fashioned way … by lobbying Congress to appropriate it, or writing memoirs and such.”

The president planned to discuss the subject over a complimentary midday meal at the Hamilton Family Restaurant near downtown Allentown, before boarding Air Force One to return to the White House, where he’ll create more jobs.

Requiem for the Dollar

( Somewhere in NZ aladinsane is saying I told you so)

Ben S. Bernanke doesn’t know how lucky he is. Tongue-lashings from Bernie Sanders, the populist senator from Vermont, are one thing. The hangman’s noose is another. Section 19 of this country’s founding monetary legislation, the Coinage Act of 1792, prescribed the death penalty for any official who fraudulently debased the people’s money. Was the massive printing of dollar bills to lift Wall Street (and the rest of us, too) off the rocks last year a kind of fraud? If the U.S. Senate so determines, it may send Mr. Bernanke back home to Princeton. But not even Ron Paul, the Texas Republican sponsor of a bill to subject the Fed to periodic congressional audits, is calling for the Federal Reserve chairman’s head.

http://online.wsj.com/article/SB10001424052748704342404574575761660481996.html

“Although Obama recognizes that most communities “don’t have the benefit of the kind of intellectual firepower” with which he has surrounded himself at the White House”

I think everyone agrees on that point, unschooled redneck gun-toting Republigoons, and educated, caring, metrosexual Democrats alike.

The first thing Obama should do to fix the economy is appoint about ten million Federal Life-Coach Czars to personally manage the finances, education plans,buying habits, and career paths of everyone else across America. At a salary of $250,000 per czar, millions of ACORN and undocumented guest workers could immediately be employed to bring diversity of opinion to the other job seekers and stimulate the economy like a line of coke.

Tubo says so

Geithner: Can shift “substantial” bailout funds to jobs December 4, 2009 5:46 PM ET

All Thomson Reuters newsWASHINGTON (Reuters) - The Obama administration can shift “substantial” resources from bank bailouts to job creation and will soon spell out the case for doing so, Treasury Secretary Timothy Geithner said on Friday.

Interviewed on Bloomberg television’s “Political Capital with Al Hunt,” Geithner said money from the $700-billion Troubled Assets Relief Program will be available.

“We’re going to explain that we’re going to have substantial savings, that we’re going to have very substantial resources that we can make available to support not just the immediate priorities the country faces in spurring investment in job creation, but also to meet our long-term fiscal challenges,” he said.

Can he get anything straight? TurboTax failed him. So, apparently, did Outlook calendar.

Hapless Treasury Secretary Tim Geithner claims he didn’t find out about the AIG bonus issue until March 10. This was contradicted by AIG president Edward Liddy’s testimony before Congress earlier this week. Liddy was right. Geithner was wrong. And it’s all on videotape. DealBlog this morning referenced a House hearing on March 3 in which Geithner was directly questioned about the specific bosnues, a full week before Geithner claims he was made aware of the impending controversy.

TurboTax Doesn’t Prompt Users to Pay Self-Employment Taxes? Or Just Geithner’s Copy of the Software?

In today’s confirmation hearing, Treasury Secretary nominee Tim Geithner said he used TurboTax to prepare his returns for the years in question where he failed to pay self-employment taxes — even though he collected reimbursement from his employer, the International Monetary Fund.

Senator Chuck Grassley, R-Iowa, asked, “Did the software prompt you to pay those taxes?”

“Not to my recollection,” Geithner answered.

Can you trust mainstream news media to provide unbiased reporting? Not by a long shot!

In 2002, The New York Times reported George Bush’s 5.7 percent unemployment rate, noting that it was a drop from 5.9 percent. “Unemployment fell in August. Drop is called Insignificant.”

Mind you, the drop was 0.2 percent, the same as the unemployment number reported yesterday. In 2002 the Times said: “The labor market improved slightly last month but offered little hope that the economy would soon emerge from its prolonged weakness.”

But it’s now 2009 and a 0.2 percent decline in unemployment is cause for celebration. The Times headline: “U.S. Economy Lost Only 11,000 Jobs in November.”

“In the strongest jobs report since the recession began two years ago, the nation’s employers all but stopped shedding jobs in November, the government reported on Friday, and they appeared to be on the verge of finally rebuilding the work force.”

Columnist Warner Huston calls the New York Times merely an arm of the Democratic Party.

Geithner: Can shift “substantial” bailout funds to jobs.

WASHINGTON (Reuters) - The Obama administration can shift “substantial” resources from bank bailouts to job creation and will soon spell out the case for doing so, Treasury Secretary Timothy Geithner said on Friday.
Economy

Interviewed on Bloomberg television’s “Political Capital with Al Hunt,” Geithner said money from the $700-billion Troubled Assets Relief Program will be available.

“We’re going to explain that we’re going to have substantial savings, that we’re going to have very substantial resources that we can make available to support not just the immediate priorities the country faces in spurring investment in job creation, but also to meet our long-term fiscal challenges,” he said.

President Obama is to lay out job creation strategies in a speech next Tuesday morning, a potential venue for specifying how much TARP money the White House might redirect from its original purpose of propping up ailing financial institutions.

Geithner said money was being repaid in greater volumes by banks and that he expected $175 billion to come back by the end of next year. “That’s substantially more than we anticipated even just a few months ago,” Geithner added.

“Nothing has been resolved, it’s just being postponed…The ultimate crisis will not just bankrupt the banking system as happened in 2008, it will bankrupt governments.”

~Marc Faber

This looks like a 11/6/09 air date based on the DOW ticker. It is a Fox Business call-in segment with a seriously underwater Nevada f’d borrower (although one who put 20% down). What amazingly awful advice from most of the panel. I mean, I despise flippers and speculators, but there is no way that financial advisers could ever justify keeping this loan current indefinitely.

Also, someone should advise the female panelist on the right that wearing only a slip and a blazer is probably inappropriate for news reporting.

http://www.youtube.com/watch?v=jZOg1YPZSjk

Any tips for lowballing rentals? I think I may have been blacklisted… do realtors still do this?

Retail bankruptcies may hit new wave in 2010
Phoenix Business Journal

A new wave of retail bankruptcies and closures is looming after the holidays.

That’s according to local bankruptcy attorneys and economists who say retail-related bankruptcies have been on the rise. They expect more next year in the wake of downtrodden consumer confidence, tight credit, underwater mortgages and rising unemployment.

Bob Novak, a bankruptcy attorney with Jennings Strouss & Salmon PLC, said the past two years have been very tough on retailers, their landlords and suppliers, and he expects more of them to pack it in after the holidays.

Arizona’s 2009 retail sales are projected to be down by 12 percent to 15 percent compared with 2008, following an 8.5 percent drop from 2007 to 2008, said Arizona State University economist Lee McPheters.

“We have catastrophic retail sales,” he said.

McPheters also said other barometers of retail demand and sentiment — state sales tax revenue, tourism, population and job growth, and personal income — are all down in Arizona.

OK …What did Wall Street and Corporations create with all the de-regulations and favorable laws and trade laws that were passed in their favor by bribed Politicians .

I1) Wall Street created a unregulated Casino market of high leverage bets and investments
that mixed with the regulated markets with the regulated markets that created the biggest, bogus ,leveraged ,real estate Ponzi scheme in History . They gave Americans credit based on this false scheme.
(2) Corporation and Big Business out-sourced jobs ,took manufacturing overseas ,they underfunded their pension plans ,they hired illegals expecting the taxpayer to pick up the health care costs .
(3) Employers increasingly cancelled benefits expecting employees to
make up the costs ,while they didn’t raise incomes accordingly for a decade
while the Corporations raised prices based on false wealth from real estate and credit . This was good for the Wall Street stock market game
(4) The Health Care Industry and all the Industries that collude with it created a monopoly that raised costs beyond reason ,while at the same time private insurance companies increasing sought ways to ration and not provide coverage to parties that needed it .
(5) Wall Street and Corporations shifted employees to 401k’s ,that benefited them in the generation of money that they could play with on Wall Street in their highly leveraged risky games ,because the regulated was playing with the unregulated ,thus playing with protected pension plans,on high risk games in combination with false ratings on junk.
In short .
(6) As the cheap labor monopoly continued ,without proper trade balances and tariffs and none of this for American owned Companies ,
the wonderful government failed to protect home based Companies
from cheap labor monopolies forcing Companies to outsource or close up
because of not being able to compete .
(7) The money supply was not controlled ,because it was all a investment game ,so money was directed and mis-allocated creating about 17 million extra units of real estate that was built in locations of lack of true end-user demand .
(8) Because of advertising revenue from the Greed machine making absurd profits the Media was bought off creating in fact a PR campaign
of rah rahing the Casino games and the faulty lending and toxic loans .
This PR campaign is still ongoing for the sole purpose to keep the Casinos
going and the ongoing favors from Politicians to the monopolies

And when everything failed Wall Street ,Lenders ,Corporations and the Politicians sought to bail out the culprits and still to this very day they seek to protect the systems that failed and obstruct justice . The Wall Street Casino is still open and Corporation are in and outsourcing and moving to foreign countries and will continue in the name of profits while
American taxpayers are expected to pay for this crash .and eventually lose their Country and standard of living ,just because the Greed Machine has enough money to buy votes and control the media by advertising dollars .

Wow, talk about recourse loans. Dubai style.

“The Emirate has been struggling for many months, and if you scratch the surface the pain in this new and gaudy metropolis is palpable. Ross, who asked not to be identified, is one of countless expatriates who have been caught out by the collapse in Dubai’s once-booming property market.

Like many he bought a flat off-plan in what was a red-hot property market. Today he is trapped, his passport confiscated until he repays bank loans he used to invest in a property that may never exist. If his work dries up before he can clear his debts he will go to jail.”

http://www.timesonline.co.uk/tol/news/world/middle_east/article6945283.ece

“Democracy… while it lasts is more bloody than either aristocracy or monarchy. Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There is never a democracy that did not commit suicide.”

-John Adams 2nd President of the United States from 1797-1801

Take back Al Gore’s Oscar, 2 Academy members demand in light of Climategate

Ex-VP Democrat Al Gore clutches his 2007 Oscar–from his cold dead hands

No, it wouldn’t do anything for the environment.

But two Hollywood conservatives (yes, there are some) have called upon the Academy of Motion Picture Arts and Sciences to rescind the prestigious, profitable gold Oscar statuette that it gave ex-Vice President Al Gore et al two years ago for the environmental movie “An Inconvenient Truth.”

Roger L. Simon and Lionel Chetwynd, both Academy members, are among a small, meandering pack of known political conservatives still believed to be on the loose in the liberal bastion of movie-making.

In 2007, Hollywood’s Academy sanctified Gore’s cinematic message of global warming with its famous statue, enriched his earnings by $100,000 per 85-minute appearance and helped elevate the Tennesseean’s profile to win the Nobel Peace Prize despite losing the election battle of 2000 to a Texan and living in a large house with lots of energy-driven appliances.

Chetwynd and Simon were prompted to make their hopeless demand this week by the….

…leak two weeks ago of a blizzard of British academic e-mails purporting to show that scientists at the University of East Anglia Climatic Research Unit systematically falsified data to document the appearance of global warming in recent years.

The university is reportedly investigating the claims, which added dry fuel to the never-ending political debate over whether the Earth really is warming as a result of human activity or if it’s just normal natural cycles and the debate is what’s heated. The demand to withdraw Gore’s award provides yet another opportunity to argue.

The startling leak comes at an inconvenient time just before next week’s United Nations’ climate change meeting that will cause an immense carbon footprint with thousands of people flying up or over to Denmark to talk about saving the environment.

These airplanes will include Air Force One with its primary passenger President Obama, who’s returning to the Copenhagen scene where he didn’t help win the 2016 Summer Olympics for Chicago, which could do with a little global warming at this time of year.

A follow up from a little ways up the thread:

“…I mentioned that in Orange County, the average pay and benefits package for firefighters was $175,000 per year.”

You see, the “compassionate conservatives” of “The O.C.” …can be quite “Liberal” when they free like it!

Tough-on-crime stance emptied California’s pocketbook:

By BRIAN JOSEPH and TONY SAAVEDRA
The Orange County Register December 04, 2009

Up and down the Golden State, from San Francisco to San Diego, voters consistently put their support behind tough-on-crime candidates, tough-on-crime ballot initiatives, tough-on-crime sentencing laws. Everyone wants to punish the bad guys and keep them off the streets. In the current fiscal year alone, public safety spending will consume $13.5 billion – 11 percent of the state’s total budget.

But there are consequences to this mindset.

At a time when the state is struggling with its finances, the spiraling costs of California’s focus on public safety have tied the hands of budget-makers who want to spend more on education and social services – and have given power, influence and wealth to the state’s law enforcement community. Consider:

•California has the most costly state prisons in the nation. But the $8 billion a year system is plagued by inconsistent and outdated policies that have led to severe overcrowding and high recidivism. California’s lock-em-up mentality gets criminals off the streets—but New York has cut crime far more by keeping fewer convicts in prison.

•State and local governments are buckling under the weight of generous public safety pensions, which were given to police, firefighters and prison guards without a sufficient examination of future costs. Pension costs have driven one city to bankruptcy and pushed others in that direction. Since the pensions were liberalized in 1999, state pension resources have fallen from a surplus of $32.8 billion to an unfunded actuarial liability of $35 billion last year, according to the state’s own numbers.

•California has become more protective of its police than any state in the nation. Police and prison guard unions and other public safety lobbies have secured laws that keep the public from gaining access to police disciplinary records, making it almost impossible to publicly identify offending officers and determine whether they are being adequately punished.

The central bankers are turning cannibalistic. This can only be a good thing.

Geithner Says He Supports Congress Inquiry Into Fed Governance
By Craig Torres

Dec. 5 (Bloomberg) — U.S. Treasury Secretary Timothy Geithner broke ranks with his former central bank colleagues and said he would support moves by Congress to take a look at how regional Federal Reserve bank presidents are appointed.

“I think it is very appropriate, and I would be completely supportive of the Congress taking a look at that broader governance structure” of regional Fed banks, Geithner said yesterday in an interview for Bloomberg Television’s “Political Capital With Al Hunt,” airing this weekend.

“You do not want to have any public institution in the position where its judgments, the judgments of their executives, are viewed through the prism of concern they are subject to influence of the financial community,” Geithner said. While that was “never the case,” he added, limiting such concerns would help protect the Fed, he said.

Federal Reserve spokeswoman Michelle Smith wasn’t immediately available for comment.
…

Bernanke: ‘Little bit early’ to make case for second stimulus
By Silla Brush - 12/03/09 12:02 PM ET

Federal Reserve Chairman Ben Bernanke on Thursday threw cold water on efforts to push a major new fiscal stimulus package.

At his confirmation hearing for a second term as chairman, Bernanke emphasized that the government has spent less than half of the money in the $787-billion package passed earlier this year and that analysts are still determining its impact.

“Only about 30 percent of the funds have been disbursed,” Bernanke said. “It’s a little bit early to make a strong judgment, a little bit early to decide whether or not to do additional fiscal actions.”
…

Why Congress is Furious at the Fed
By Justin Fox Friday, Dec. 04, 2009

The Federal Reserve system, that mysterious organization with the temple-like headquarters just off the Washington Mall and thick-walled outposts in cities across the land, is under assault. It’s “the most serious attack that I have seen on the Federal Reserve in the many, many years that I’ve studied it as a scholar,” says Columbia economist and former Fed governor Frederic Mishkin.

Texas libertarian-Republican-obstetrician-Congressman Ron Paul–a man not known for bipartisan consensus-building–has gotten 313 of his colleagues, more than 100 of them Democrats, to back a bill that would subject the Fed to audits by the Government Accountability Office, and the Financial Services Committee has approved a version of it. On the other side of Capitol Hill, Senate Banking Committee chairman Chris Dodd is pushing reforms that would strip the Fed of its power to regulate banks.

It has gotten so bad that Fed Chairman Ben Bernanke has resorted to the equivalent of heavy artillery, taking to the opinion pages of the Washington Post on Nov. 29 to express his concern that these measures “would significantly reduce the capacity of the Federal Reserve to perform its core functions.” (For Fedspeak, this is seriously blunt language.)
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Busch: The Best Questions For Ben Bernanke
Published: Thursday, 3 Dec 2009 | 9:32 AM ET
By: Andrew B. Busch
CNBC Contributor
Global Currency & Public Policy Strategist
BMO Financial Group

Let’s get right to heart of what really matters here for the Fed. Just two questions need to be asked.

1. Why should the Fed have any regulatory oversight considering what a poor job they did in the past?

2. Why should the Fed have a dual mandate?

Whether they were terrible predictions or merely spin, Bernanke’s consistent track record of missed calls on the economic situation has caught up with him.

“It is better to keep your mouth shut and appear dumb than to open it and remove all doubt.”

December 3, 2009, 6:11 pm
Bernanke, Pro and Con
By DAVID LEONHARDT

Should Ben Bernanke be reappointed the chairman of the Federal Reserve? The Senate Banking Committee is considering the question this week. Here’s a quick summary of the debate, with arguments from both the con and pro camps:

Brendan Smialowski
for The New York Times

Bernie Sanders, the independent senator from Vermont, has become the public face of the anti-Bernanke camp, and Mr. Sanders’s Web site has a useful summary of his reasoning. In sum: “When you have a football coach who keeps losing games, you have to bring in someone new.”

Perhaps the strongest part of his case is the list of statements from Mr. Bernanke over the past few years that Mr. Sanders’s staff has dug up. These stretch over both his time as Fed chairman, which began in February 2006, as well as his previous time as a Bush administration adviser and a Fed governor. Among the highlights (the parenthetical comments are mine):

* July 1, 2005 (responding to a CNBC question about whether there was a housing bubble and whether it could cause a recession): “It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

* May 17, 2007: “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”

* July 18, 2007 (a month before the subprime mortgage market began having problems and five months before the recession began): “Employment should continue to expand. … The global economy continues to be strong. … Financial markets have remained supportive of economic growth.”

* Feb. 28, 2008: “Among the largest banks, the capital ratios remain good, and I don’t expect any serious problems … among the large, internationally active banks that make up a very substantial part of our banking system.”

* June 9, 2008 (six months into the recession and three months before the financial panic began): “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”

* May 5, 2009: “Currently, we don’t think [the unemployment rate] will get to 10 percent.” (Five months later, the rate reached 10.2 percent.)

Also opposed to Mr. Bernanke are Stephen Roach, an economist who is now chairman of Morgan Stanley Asia; Anna Jacobson Schwartz, an economist who was Milton Friedman’s co-author; The Wall Street Journal editorial board; and James Galbraith, the liberal University of Texas economist (see the PBS “NewsHour” forum mentioned below).
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The Financial Times
Bernanke faces battle on two fronts
By Tom Braithwaite and Krishna Guha in Washington

Published: December 4 2009 02:00 | Last updated: December 4 2009 02:00

Ben Bernanke’s confident defence of the Federal Reserve yesterday left him with enough support to all but guarantee his eventual reconfirmation - but only minority backing for his vision of the future role of the US central bank.

As the Fed chairman repeatedly urged the Senate not to strip the Fed of its banking supervision powers, Chris Dodd, the Senate banking committee chairman, stood firmly behind his plan to do so - and was backed by Richard Shelby, the senior Republican, and others on the committee.

“The country is best served by a strong, focused central bank, not one that is saddled with too many diverse missions and competing responsibilities,” Mr Dodd said.

Mr Bernanke insisted that bank supervision was essential to effectively maintain financial stability. “It is a very, very serious matter to take the Fed essentially out of financial stability management, which this would I think do,” he said. Respect for Mr Bernanke among most senators was mixed with widespread unease about the institutional role of the Fed - focused mostly on its regulatory failings in the run-up to the crisis - and some outright hostility to the Fed chief among Republicans.

His long-time critic, senator Jim Bunning, said he would “do everything I can to stop your nomination”. Branding Mr Bernanke the embodiment of moral hazard, he added: “To keep filling up the punch bowl you cranked up the printing presses.”

Mr Bernanke, who enjoys broad support across financial markets, is expected to be reconfirmed - even though the blocking tactics of his critics will require a super-majority of 60 senators to vote in his favour. However, the vote could slip into next year.

In his defence against charges he had bailed out banks to the detriment of ordinary people, Mr Bernanke provided an unusually personal take on the crisis.

He said: “It’s extraordinarily important to understand that I did not intervene because I care about Wall Street. I am not a Wall Street person. I’m an academic. I come from a small town. I did it because I knew from my studies that the collapse of the financial system would have extraordinarily bad consequences for Main Street.”
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If you are incapable of seeing a bubble, how could you possibly use rates to pop one?

Top News December 3, 2009, 4:31PM EST
Bernanke May Use Rates to Pop Bubbles

The Fed chairman tells Senators that he sees no sign of “extreme misvaluations” of assets in U.S. markets

By Steve Matthews and Vivien Lou Chen

(Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said he doesn’t rule out using monetary policy to pop asset-price bubbles, while stressing that financial regulation is his preferred approach.
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The Financial Times
Bernanke confirmation hits new hurdle

By Tom Braithwaite and Krishna Guha in Washington

Published: December 3 2009 05:30 | Last updated: December 3 2009 05:30

Ben Bernanke faces a tougher path to being reconfirmed as Federal Reserve chairman after an independent senator put a hold on his confirmation on Wednesday evening.

Bernie Sanders, a senator from Vermont who usually votes with the Democrats, said he was using the procedural device because Mr Bernanke had been too supportive of Wall Street at the height of the financial crisis last year.

“The American people want a new direction on Wall Street and at the Fed,” he said in a statement. “They do not want as chairman someone who has been part of the problem and who has been responsible for many of the enormous difficulties that we are now experiencing. It’s time for him to go.”
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Oh, bugger — again!

Economy Watch Live Updates on the Financial Crisis
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Quarter of borrowers in anti-foreclosure plan are behind
Delinquencies worry some; other experts say it’s too early to judge

By Renae Merle
Washington Post Staff Writer
Saturday, December 5, 2009

About 25 percent of borrowers helped under the administration’s massive foreclosure prevention plan have already fallen behind on their new mortgage payments, according to government data that raise new questions about the program’s effectiveness.

The delinquency figures reflect the latest troubles of the program, known as Making Home Affordable. Earlier this week, Treasury officials announced a campaign to put new pressure on lenders to do more to move struggling homeowners into loans with easier terms.

So far, more than 650,000 borrowers have been enrolled into the initial, or “trial,” phase of the program and have seen their payments lowered by an average of $640 a month, or 40 percent. But a recent survey of large mortgage servicers published by the Treasury Department found that that more than 25 percent of borrowers in the program were not current on their trial payments.
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December 4, 2009
Foreclosure “shadow inventory”

Some of you have wondered how many foreclosed homes are on the sidelines of the housing market, neither for sale nor in the process of being sold. Lender Processing Services, a mortgage-industry services provider that tracks nearly 45 million loans across the country, says the answer is nearly 30 percent … of properties in foreclosure for 12 months.

Yikes.

That’s “twice the level of the prior year,” the firm noted this week in a report looking at data through the end of October.

On top of that, Lender Processing Services said, mortgage holders haven’t started foreclosure proceedings on almost 30 percent of loans with at least six missed payments. Two years ago, it was 13 percent. (The Mortgage Bankers Association, seeing similar trends, said lenders are trying to work out modifications with borrowers.)
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http://www.safehaven.com/article-15206.htm

Tim Wood and the housing cycle. He beleives the upturn in RE that started this spring is over and a low will develop in 2010 and how that turns out will tell if the RE bottom is over.

I see more homes for sale now and I bet its because the recent upturn in sales this summer and fall maybe because of fear the 8K government credit would expire.

still renting and happy with that.