The Housing Bubble

http://www.larouchepub.com/other/2010/3708brazil_carry_trade.html

….Take the case of the European Union, and its euro-based monetary system. It is totally bankrupt, with an ongoing meltdown centered—not in Greece, as the international media are fond of lying—but in Spain and the United Kingdom, with a special role played by the London-run Santander Bank of Spain. For the credulous, the magician’s illusion of financial solvency in the region has been maintained until recently by a bloated real estate bubble (most notoriously in Spain and the U.K.), and, especially, by the Brazil carry trade, an international Ponzi scheme, which, for a decade, has been bringing financial speculators a 25% rate of annual return on their capital—by looting the Brazilian population and nation to the bone.

Even a cursory look at the on-the-books debt of the countries that the British media like to call the PIIGS (Portugal, Ireland, Italy, Greece, and Spain), shows that Greece accounts for less than 10% of the total debt, public and private, of the PIIGS—which is a whopping $3.4 trillion. None of these countries can pay the debts which the banks have foisted on them: not Greece, not Ireland ($710 billion), and certainly not bankrupt Spain ($944 billion). And the United Kingdom itself is probably more bankrupt than all of them, with a gigantic real estate bubble and collapsing industrial base. As the London Guardian reported on Feb. 18: “Britain’s own relatively high deficit, its slow growth rate and high inflation have prompted some to speculate it could be the next country to alarm global markets.”

In recent years, international banks, such as London-run Santander, have borrowed hundreds of billions of dollars from the European Central Bank at a 1% interest rate, or from the U.S. Federal Reserve at similarly low rates. They then “carry” these funds to places like Brazil, where they are placed in government treasury bills denominated in reals (the local currency), yielding the highest interest rates in the world: an average of 16% per year, over the seven years that Luiz Inacio Lula da Silva has been President (2003-present).

How in the world did Brazil keep making these payments? In large part, by bringing in more capital to invest in more bonds, thus going further in debt—the classic Ponzi scheme. As a result, Brazil’s public debt rose from 563 billion reals in 2000, to 1.345 trillion reals in 2009—782 billion reals in new debt. In effect, these new loans covered exactly half of the 1.564 trillion in interest payments made. The other half came out of the hides of the Brazilians (population, 190 million), whose domestic consumption was drastically reduced in order to export goods to earn foreign exchange with which to pay the debt.

How has Brazil continued to attract such volumes of foreign capital? In part, by offering exorbitant interest rates. But also by ensuring the appreciation, or revaluation, of the real vis-à-vis the dollar, which ensures foreign speculators an additional margin on this account. In fact, the real has appreciated in value every single year of the Lula Presidency, with the exception of 2008, when the global financial meltdown struck. As a result, the actual average return on the foreign carry trade under Lula, has been a breathtaking 24% per year. On his seven-year watch on behalf of London, the equivalent of $859 billion (or some $123 billion per year) has been looted from the Brazilian economy and people.

But as with all Ponzi schemes, the instant the escalating flows stop, the whole house of cards comes crashing down, and the magician’s illusion is shown to be nothing but smoke and mirrors—and genocide.

http://www.larouchepub.com/hzl/2010/3708eurozone_dictatorship.html

….But the worst is yet to come for Great Britain, because Spain, with which the City of London is closely intertwined, is a much larger financial bomb than Greece. The Union Bank of Switzerland (UBS) recently published a comprehensive 68-page report, warning its customers that the Spanish banks are covering up their losses, especially in the mortgage market and commercial real estate. The Spanish real estate market, according to the bank, was overvalued by more than 30%, and NPL (non-performing loans) were probably on a scale of 30-40%, which was concealed by all sorts of restructuring.

The Financial Times wrote on Feb. 18 that people should be much more worried about Spain than about Greece, because Spain’s debts are so massive that even Germany and France combined could not save it. And the guru of a one-world currency, Robert Mundell, told Bloomberg that Italy is the biggest problem of the Eurozone.

While the media initially tried to focus on the relatively small crisis in Greece, and the EU desperately tried to make it a bloody example of austerity policies, still the magnitude of the crisis can no longer be swept under the rug: In fact, we are dealing here with the collapse of the international debt bubble whose center is the British Empire—i.e., the conglomerate of investment banks, hedge funds, and financial institutions that, since the crisis broke out in late July 2007, have insisted, again and again, on “rescue packages,” at the taxpayers’ expense.

This conglomerate is “too big to save.” Because the attempt to “save” all the countries that are threatened with state bankruptcy—which have meanwhile mutated from “PIIGS” to “STUPID” (Spain, Turkey, United Kingdom, Portugal, Italy, and Dubai; and we would have to add a whole series of other countries)—could only lead to a massive hyperinflationary policy, opening the monetary floodgates. Such a depreciation of the currency would have incalculable social consequences for the so-called little people, who are already furious at the fat bonuses given to the bankers.

What if that house next to you in mid-renovation goes into foreclosure?

http://voiceofsandiego.org/survival/article_8a2ce684-2d75-11df-8c30-001cc4c03286.html

“We had this update from the city’s code compliance chief this morning — that unless the project is vacant, unsecured or becomes a public nuisance, the city doesn’t usually get involved.”

“The Plum Street property’s owner, Francisco Mendiola, obtained a building permit in August 2007. The foreclosure notice on the property says Mendiola stopped making his payments in September.”

“Ahmadi said that the Point Loma property doesn’t seem to be a public nuisance. And the city’s hands are tied unless it is. “If it’s there and it just looks ugly, we can’t do anything about it,” she said. “I’ve had one of those in our neighborhood, and the house has been under construction for many, many years. And it looks ugly but it’s not a public nuisance.”"

Harry Reid ’s wife lays in the hospital in critical condition .Broken back , neck , who knows what all . Her husband dashes to her side , but then get this . He then goes to the White House for a meeting . A man who leaves his wife like that really is no good , and he is running the country ????

Earned Income Tax Credit: Silent Stimulus

This story needs to get exposed. I have been hearing tales of people who are getting large tax refunds ($5k-$10k) for 2009 duing which these individuals were unemployed and drawing unemployment checks during the entire tax year. I am not making this up. I am guessing this is the redistribution of wealth that was promised by Obama. The tax-windfall recipients are hardly in a position to complain or raise a fuss (and I am sure they are being paid to vote for keeping things unchanged) and the working people are unaware of the amounts being awarded for not working. I am certain that the “economic recovery” is being heavily fueled by this “unseen stimulus” which has got to be costing the government trillions of dollars. Yes, trillions. Just think of the total cost of the Bush $300 stimulus checks (hundreds of billions) and you can get some idea what a program that paid out $7k to all unemployed would cost. If you think I am making this up, ask any unemployed aquaintence for the details.

The Subprime-Lending Business Survives, Even Thrives
By Stephen Gandel Thursday, Mar. 11, 2010

Poor credit? It’s still no problem for some lenders.

The financial crisis was supposed to ring the death knell for companies that make loans to people who have had problems with debt. But a year and a half later, so-called subprime lending is alive and well. What’s more, fears that increased regulation following the credit crisis would dramatically curtail the profits of these lenders is receding. A deal struck in the Senate would reportedly dramatically weaken a proposal meant to crack down on so-called payday lenders and other specialty finance firms that cater to people with lower credit scores. (See “Is There Too Much Worry About the Debt?”)

Though there are soft spots in the subprime market, overall, business is good. The percentage of auto loans going to people with poor credit, for example, has been increasing. And while a number of banks have stopped offering credit cards to the debt-challenged, there are still companies handing out subprime plastic. First Premier Bank, for one, just tweaked the fees on its credit cards aimed at individuals with low credit scores to comply with recent legislation, and its business proceeds apace.
…
The lone exception is housing. Mortgage brokers say it is still hard for individuals with bad credit to get home loans. The subprime home loan market peaked in 2005, according to the publication Inside Mortgage Finance. That year, thousands of lenders and mortgage brokers handed out $625 billion in mortgages to borrowers with low credit scores, which is generally anything below 650. The credit crunch, though, put most of those firms out of business. Last year, financial firms made just $4 billion in home loans to people with poor credit. That number excludes loans backed by the Federal Housing Administration (FHA), which traditionally has helped troubled borrowers get mortgages.

But even the home lender of last resort is increasingly ditching those with low scores in favor of people with better credit. In the last seven months of 2009, the most recent data available, the FHA, which doesn’t make its own loans but provides insurance for lenders that do, backed just $8.3 billion in loans to borrowers with a credit score of 619 or worse. That’s down from $39 billion in the same time period a year before. (See a report card on the stimulus programs.)

“We’re back to where the subprime market started out 25 years ago,” says Inside Mortgage Finance’s publisher, Guy Cecala. “If you can’t put 30% down on your house, you’re not going to get a loan.”
…

Yesterday I gave the 12-year-old computer-geek kid who lives down the street a list of houses I want bulldozed.

He’ll spend most of the day (the list is long) hacking into the bank’s computer and entering these addresses into their database.

I’m about to find out who can take a joke and who can’t.

Marc Faber: Don’t Expect Another Crash … Bernanke Won’t Allow it
Mar 12, 2010 Peter Gorenstein in Investing, Newsmakers.

The bulls are firmly in control on Wall Street. Heading into Friday’s session, the S&P 500 is at a 17-month high. Undaunted, the bears point to light volume as a sign of weakness and a correction to come.

“I would rather be lightening up on positions in the next couple of weeks than heavily buying in here,” says Marc Faber, editor of the Gloom, Boom and Doom Report.

Accompanied by Michael “Mish” Shedlock, the man behind the economics blog, MISH’S Global Economic Trend Analysis, Faber tells Tech Ticker there’s very few opportunities to make money in the market right now.

“Mish” who also thinks it’s time to take profits, goes even further, predicting a “50-50 chance the bottom is not in yet.”

Faber, however, is confident we won’t “see 666 on the S&P 500 ever again.” He says “if we go down by 10-20% on the S&P 500, our money printer Ben Bernanke will flood the market, weakening the dollar,” and thereby driving up stock prices.

If you are going to put money to work in stocks both market watchers think Japan is the place to be. After a 20 year bear market and despite high-debt-to-GDP levels, the pair think the market has become too cheap to ignore. Always a contrarian, Faber believes the lack of interest in Japanese stocks makes it one of the most compelling buys in the world.

New FHA Loan Guidelines: Grab that FHA loan while you can
By Broderick Perkins | March 2, 2010 at 12:20 am

WASHINGTON, D.C. – Mar. 2, 2010 – (FreeRateUpdate dot com) – It’s about to get tougher to qualify for an FHA mortgage — a government insured, low-down payment home loan often considered the replacement loan for subprime mortgages.

Moving to head off the financial impact of defaulting borrowers, the FHA is adding more-stringent lending requirements and higher fees borrowers must pay to get the federally-insured loans.

Rising foreclosures have gutted the FHA’s reserves, leaving them $45 billion in reserves to cover $757 billion in home-loan guarantees. The cushion is far below the amount mandated by Congress.

RealtyTrac says January’s foreclosures were up 15 percent from a year ago and it could get worse.

“If history repeats itself, we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works,” said James J. Saccacio, chief executive officer of RealtyTrac.”
…

reason dot com
FREE MINDS AND FREE MARKETS

Five Lies About the American Economy
The Obama team’s favorite slices of fiscal baloney

From the April 2010 issue

The ongoing recession has raised a troubling question for otherwise resurgent Keynesian economists: How can the American economy keep getting worse under the intensive care of an interventionist economic team almost universally praised for its brilliance? The answer may be that the Obama administration is dealing with a fictional economy, one that bears little resemblance to the economy the rest of us inhabit. And when the difference between fact and fiction becomes too apparent, they just make stuff up. Herewith, five big lies the administration loves to tell and the mainstream media (with some notable exceptions) love to repeat:

1. Bold government action staved off a Depression, saving or creating 1.5 million jobs.

“Just remember,” Treasury Secretary Tim Geithner said on November 1, 2009, “a year ago today, last year, you had markets around the world come to a stop. Economic activity just stopped, came to a standstill, like flipping a switch.”
…
2. “No one wants banks making the kinds of risky loans that got us into this situation in the first place.”

President Obama made this claim following a December meeting with big bank officials, then contradicted himself by urging bankers to take “third and fourth” looks at rejected business loan applications. But the administration has been even more enthusiastic about encouraging another type of credit: the precise risky loans that got us into this situation in the first place.
…
3. The economic crisis is a “subprime crisis.”

“We believe the effect of the troubles in the subprime sector on the broader housing market will be limited,” Federal Reserve Chairman Ben Bernanke said in May 2007, “and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”
…
4. Ben Bernanke is a heroic leader.

“The man next to me, Ben Bernanke, has led the Fed through one of the worst financial crises that this nation and the world has ever faced,” Obama said when nominating Bernanke for a second term as Fed chairman. “As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another. But because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve.”
…
5. The worst is behind us.

“Here is what I know,” Larry Summers, Obama’s top economic adviser, told ABC in December. “We were talking about Depression; we were talking about the financial system collapsing. Today, everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be.”
…

Listening to some financial annalist last night on ABC. He stated that the overwhelming driver of the stock market over the last year has been institutional investors (big players) and that the small investor is just not in the game, which he found “very troubling”.

So if history can be of any use as a guide, when the little fish jump back into the pond, they’ll get caught, cleaned and deep fried.

Not a government-sponsored program? Please remind me then what the ‘F’ in FHA denotes?

Mortgage Q&A: FHA loans attractive for some

By Henry Savage SPECIAL TO THE WASHINGTON TIMES

Q. My wife and I are considering buying our first home this summer. The only thing we have done so far is poke around the Internet to learn about the process. It appears that an FHA loan is the most suitable for us because we don’t have a lot of cash for a down payment. I’m wary of programs sponsored by the federal government. Would you recommend an FHA loan to a first-time homebuyer?

A. As a matter of fact, I would - not necessarily because you’re a first-time homebuyer, but because it would allow you to purchase the home with a low down payment. During the housing boom, FHA loans were largely replaced by more attractive conventional loans that offered little or no down payment. Since the mortgage meltdown, FHA loans have regained favor.

Let’s review the details of an FHA loan. First, it is not a government-sponsored program.
…

Has the T-dept decided to change course 180 degrees to a housing crash acceleration plan?

Government to push lenders to do short sales

Robert Selna, Chronicle Staff Writer

Wednesday, March 10, 2010

The Treasury Department spent 2009 pushing banks to modify mortgage payments so that distressed homeowners would not be displaced. Next month, the government will start a program encouraging owners and banks to sell some of those same homes.

The program, scheduled to begin April 5, focuses on transactions known as short sales, in which a lender allows a homeowner to sell a house for less than, or short of, what is owed on the mortgage.

But even before the program has begun, it’s receiving mixed reviews from real estate agents, some of whom say it will give owners incentive to sell, and others who believe banks don’t have the capacity to pursue more of the labor-intensive sales.

Typically, owners seek short sales to lessen the credit damage that comes with a foreclosure. Banks have resisted the approach because it not only requires added administrative work to analyze details such as the owner’s finances and property values, but also is a guaranteed loss.

Meanwhile, more than 5 million U.S. households are behind on their mortgages, and a government-sponsored program in which banks reduce monthly payments has, by all accounts, foundered.
…

Collusion or delusion?.

Obama Administration Tells Court Government-Run Fannie Mae and Freddie Mac Not Subject to Open Records FOIA Law
Marketwatch 3/9/10

Judicial Watch Battles in Federal Court to Release Fannie and Freddie Political Contribution Information

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has filed a new motion in its Freedom of Information Act (FOIA) lawsuit against the Federal Housing Finance Agency (FHFA) that would force the Obama administration to release documents related to political contributions made by the mortgage giants Fannie Mae and Freddie Mac.

As noted in a recent Obama administration court filing: “…Any records created by or held in the custody of the Enterprises [Fannie Mae and Freddie Mac] reflecting their political campaign contributions or policies, stipulations and requirements concerning campaign contributions necessarily are private corporate documents. They are not ‘agency records’ subject to disclosure under FOIA.”

According to Judicial Watch’s motion filed on March 5, 2009, Fannie and Freddie are no longer private enterprises, and therefore their records are subject to FOIA law:

“Apparently, American taxpayers are paying the tab for the collapse of Fannie and Freddie, but are not allowed to ask any questions about why it happened. When it comes to Fannie and Freddie, the Obama administration is saying, in effect, ‘None of your business,’” said Judicial Watch President Tom Fitton. “Obama administration officials and their lawyers can argue until they are blue in the face that Fannie and Freddie are not federal agencies, but their reasoning is straight out of Alice in Wonderland. There is nothing ambiguous about the government’s absolute control of Fannie and Freddie. Which raises the question: What does the Obama administration have to hide?”

According to a review of the top recipients of Fannie and Freddie campaign contributions from 1989 through 2008, President Obama is second on the list, sandwiched between Democratic Senators Chris Dodd (first) and Senator John Kerry (third). The president achieved this ranking during his relatively brief three-year stint in the U.S. Senate.

“Judicial Watch’s effort to open up Fannie and Freddie to public scrutiny as the law requires is not just about political corruption — it also about accountability.

http://www.marketwatch.com/story/obama-administration-tells-court-government-run-fannie-mae-and-freddie-mac-not-subject-to-open-records-foia-law-2010-03-09?reflink=MW_news_stmp

Op-Ed Contributor
A New Chapter for Bankruptcy

By RONALD MANN
Published: March 11, 2010

THE Obama administration introduced a plan this week to encourage defaulting homeowners to sell their houses at a loss, the latest in a long line of reform packages promising to break the logjam of underwater mortgages. But without major changes to the bankruptcy system, such measures won’t aid the American families torn apart by the economic upheavals of the last two years.

To date, our bankruptcy courts have done little to help the millions of people swimming in debt. Almost 5 percent of mortgage loans are now in foreclosure, an increase of more than 85 percent since the beginning of 2008, and more than 10 percent of credit card accounts are delinquent. Yet bankruptcy filings for the first two months of this year are only 1.5 times what they were two years ago. And even after that increase, current filing levels are far below those in the first half of this decade.
…

631 Million Credit Cards for 113 Million Households – Credit Card Excess Contracting for First Time in 40 Years. How Plastic Hid Middle Class Financial Decay.

“In 1968 Americans carried $1.3 billion in revolving credit. By 2008 that number was up to $975 billion. Nonstop growth for nearly 40 years. Yet for the first time in over a generation this amount has fallen by a large number. Today, $864 billion in revolving debt is outstanding. Since the peak in 2008 we have seen consumer credit contract by a stunning $111 billion. For a consumption driven economy this does not bode well for economic growth since many Americans are finding it harder to spend in such a weak employment market.”

http://www.mybudget360.com/631-million-credit-cards-for-113-million-households-%E2%80%93-credit-card-excess-contracting-for-first-time-in-40-years-how-plastic-hid-middle-class-financial-decay

I can guess how Ben Bernanke is going to react to this news. We, Americans, will be required to hold credit card debt and not allowed to pay it off under penalty of law. Ben will completely engorge the country with a money enema.

You think we’ve seen money printing up to this point?

Just wait.

Roidy
P.S. I’m “tased” sooner or later.

* The Wall Street Journal
* OPINION
* MARCH 12, 2010

Fed Vacancies and the Monetary Challenge
Chairman Bernanke needs all the wise counsel he can get as he unwinds expansionary policy and tackles regulatory reform.

By ALAN S. BLINDER

And then there were four. Well, not quite. Federal Reserve Vice Chairman Donald Kohn’s recent announcement that he will retire in June will bring the Federal Reserve Board down to four members—unless the Obama administration gets some new members in place by then. Recent history is not propitious.

While the law states that the board has seven governors, vacancies have become the norm in recent decades. President Obama has been content to live with two vacancies for the entire 14 months of his presidency to date. Under President Bush, the Fed was at full strength for only about three years out of eight—a low standard that almost exactly matched that of President Clinton. Actually, Mr. Bush did even worse than Mr. Clinton, because the Fed had only five governors for about half the Bush presidency, versus only three years under President Clinton. Overall, our last three presidents have made it clear by their actions that they place low priority on filling Fed vacancies other than that of the chairman. Let’s hope Mr. Obama breaks that pattern—soon.
…

Hope springs eternal in the minds of fools.

Dream Of A Tropical Resort Inspires Midwest Town
by Chris Arnold
March 12, 2010

A year ago, nearly 1 in every 5 residents of Elkhart, Ind., was unemployed. The city had just lost thousands of manufacturing jobs.

Still, some entrepreneurs remain optimistic. One is even dreaming big — where others see a declining town in the Rust Belt, he sees the perfect spot for a resort.

Even though there’s just snow and the stubble from last year’s corn crop on the edge of a field in Elkhart County, there are plans to transform the landscape into a tropical paradise with giant glass domes covering indoor pools, waterslides, rivers and even a jungle forest.

“We envision this and dream that this will be a totally new type of family attraction that we’ve not seen in America,” says Leroy Troyer, a local developer and architect. The dozens of planned activities and amenities include bowling, tennis and miniature golf.

There would also be 600 villas for tourists to stay in.
…

Serial bottom callers always manage to spot a near-term silver lining inside long-term dark clouds.

Lab space vacancy is at 10.1%
Experts’ forecasts vary on market’s prospects
By Penni Crabtree, SPECIAL TO THE UNION-TRIBUNE

Friday, March 12, 2010 at 12:04 a.m.

The Cushman & Wakefield commercial real estate firm estimates the vacancy rate for laboratory space countywide at 10.1 percent, with 1.4 million square feet available, in the fourth quarter of last year.

Since last year, the near-empty life-science laboratory building in Torrey Pines has been a monument — make that mausoleum — to a moribund economy.

“It looks post-apocalyptic here,” quipped Scott Struthers, founder of Crinetics Pharmaceuticals, a fledgling biotechnology company that leased 1,700 square feet in January from Touchstone Investments, the landlord for the 92,000-square-foot property at 11099 Torrey Pines Road.

The building, which Touchstone purchased in 2008 — before the Wall Street crash and the subsequent surge in unemployment — remains about 80 percent vacant, with some 75,000 square feet available to be leased.

“Ever walk through an empty apartment building?” asked Struthers, whose four-person company is developing drugs to treat osteoporosis. “It’s just weird. You can walk 100 yards here, and it’s empty labs.”

There are a lot of eerie echoes from empty life-science laboratories in San Diego County these days — at least compared with the boom years, according to real estate experts.

San Diego, the nation’s third-largest biotech hub behind the San Francisco Bay Area and Boston/Cambridge, consists of about 13.7 million square feet of laboratory space dedicated to the life-sciences industry.

Today, the vacancy rate stands at about 10.1 percent countywide with some areas of the life-science real estate market suffering vacancy rates over 20 percent, said Greg Bisconti, senior director of the global life-sciences group for Cushman & Wakefield. By comparison, the lowest vacancy rate in the past several years was reached in 2008, at 5.97 percent.

The vacancy rate for all industrial space countywide in the fourth quarter was 9.8 percent.

Bisconti predicts that vacancy rates within the life-science real estate market will bounce between 10 percent to 12 percent for most of the year, and possibly into 2011.

“Last year, everything was just in limbo, now the mood is, ‘Here is where we are, so it can only be flat or get better,’ ” Bisconti said. “We’re no longer just waiting for the sky to fall on us. It’s already fallen, so now we can get back to business.”
…
Life-science vacancy rate by submarket:

• Torrey Pines — 10.1 percent

• University Town Center — 22.2 percent

• Sorrento Mesa — 8.8 percent

• Sorrento Valley — 14.4 percent

Mexico’s antitrust watchdog barks and bites.

Mexico fines Eli Lilly, others for collusion
Reuters 2/23/10

* Eli Lilly fined for coordinating insulin tenders

MEXICO CITY, Feb 23 (Reuters) - Mexico’s antitrust watchdog said on Tuesday it fined Eli Lilly and Co (LLY.N) and other global medical companies for colluding to inflate prices… eliminating competition and ensuring artificially high prices, the antitrust commission said.

“The companies that have been fined conspired for years to make badly needed medicine artificially expensive,” commission head Eduardo Perez-Motta said in a statement.

Many U.S. drug makers have been hit with past fines in the hundreds of millions of dollars in the United States for a range of allegedly improper practices.

Shouldn’t this say, “Fed Gives Itself Credit for Economic Turnaround”?

News Hub: Fed Gets Credit for Economic Turnaround
March 11, 2010

Economist say the Federal Reserve played a key role in rescuing the U.S. economy from the financial crisis, according to the latest Wall Street Journal forecasting survey. Phil Izzo discusses the results as well as new data showing U.S. household debt actually fell in 2009.

Nice to see that real-a-tors hit the top 5 in both sex groups.

Who Cheats? Docs and Stay at Home Moms!
Momlogic.com Mar 1, 2010

Ever wonder what professions top the list as the most guilty of infidelity?

AshleyMadison.com, the dating site for married people (yes, you heard right), surveyed all of their new members last year. Of the 1.9 million folks who signed up to cheat, er, date in 2009, these were the top professions:

For Women:
1. Teachers
2. Stay-at-home Moms
3. Nurses
4. Administrative Assistants
5. Real Estate Agents

For Men:
1. Physicians
2. Police Officers
3. Lawyers
4. Real Estate Agents
5. Engineers

The president and founder of AshleyMadison.com Noel Biderman notes these top professions are often high stress and require many to work long hours.

Consumer sentiment turns out “worse than expected” in March:

market pulse

March 12, 2010, 9:57 a.m. EST
Consumer sentiment dips in March

WASHINGTON (MarketWatch) — U.S. consumer sentiment dipped in early March, according to media reports on Friday of the Reuters/University of Michigan index. Amid signs that the labor market is approaching a trough but remains frail, the consumer sentiment index declined to 72.5 in March from 73.6 in February. Economists surveyed by MarketWatch had been expecting the sentiment index to hit 74 in March.
…

Obama’s $3,000,000,000,000 Tax Hike.
The president’s budget would borrow 42 cents for each dollar spent in 2010. WSJ ~ 3-12-10

When he released his new budget proposal on February 1, President Barack Obama asserted that the government “simply cannot continue to spend as if deficits don’t have consequences; as if waste doesn’t matter; as if the hard-earned tax dollars of the American people can be treated like Monopoly money; as if we can ignore this challenge for another generation.”[1]

Yet the President’s new budget does exactly that– raising taxes by $3 trillion and federal spending by $1.6 trillion over the next ten years. If enacted, this budget would increase the 2010 deficit to more than $1.5 trillion, and leave a deficit of more than $1 trillion even after an assumed return to peace and prosperity. Overall, the President’s budget would double the national debt over the next decade.[2]

President Obama’s Budget

•Would permanently expand the federal government by 3 percent of gross domestic product (GDP) over 2007 pre-recession levels;

•Would raise taxes on all Americans by nearly $3 trillion over the next decade;

•Would raise taxes for 3.2 million small businesses and upper-income taxpayers by an average of $300,000 over the next decade;

•Would borrow 42 cents for each dollar spent in 2010;

•Would run a $1.6 trillion deficit in 2010–$143 billion higher than the recession-driven 2009 deficit;

•Would leave permanent deficits that top $1 trillion as late as 2020;

•Would dump an additional $74,000 per household of debt into the laps of our children and grandchildren; and

•Would double the publicly held national debt to over $18 trillion.

“It was those Lehman Guys! They did it!” -not our fault…

http://finance.yahoo.com/news/Lehman-executives-cause-of-hmoney-2776767886.html?x=0&sec=topStories&pos=3&asset=fe39316593c26d42c382ec9e41cb04f2&ccode=1

Buy buy buy!!!

Sell sell sell!!!

February video game sales decline 15 percent, software and console sales still slow. ~ March 11, 2010

SEATTLE (AP) — U.S. retail sales of video games declined 15 percent in February, hurt in part by an ongoing decline in sales of music games and lower sales of the Wii system.

Americans spent $1.26 billion on video game systems, software and accessories during the month, down from $1.48 billion a year ago, market researcher NPD Group said Thursday.

February isn’t generally a big month for the video game industry, which still makes much of its money during the holiday season. Even so, several high-profile titles launched during the month, including “BioShock 2,” the follow-up to Take-Two Interactive Software Inc.’s popular sci-fi shooter, and “Dante’s Inferno” from Electronic-Arts Inc., both appealing to hardcore video game fans.

“I had expected the industry to perform somewhat better this month,” said NPD Group analyst Anita Frazier in a statement.

Sales of individual games have declined for more than a year, hurt by a combination of the economic downturn and fewer launches of hit games.

U.S. setting bad example on protectionism - Sarkozy
Mar 12, 2010

LONDON, March 12 (Reuters) - President Nicolas Sarkozy of France accused Washington on Friday of setting the wrong example on protectionism, suggesting there had not been a level playing field in the race for a $50 billion refuelling plane contract.

U.S. defence contractor Northrop Grumman and its European partner EADS withdrew on Monday from a renewed competition to supply tankers to the U.S. Air Force, saying the rules favoured rival bidder Boeing, the top U.S. exporter.

Boeing is now the sole known bidder for the contract.

Asked what he thought of the issue during a joint press conference with British Prime Minister Gordon Brown, Sarkozy delivered a scathing attack on how the United States had handled the tender.

“I did not appreciate this decision … This is not the right way to behave,” Sarkozy said.

“Such methods by the United States are not good for its European allies, and such methods are not good for the United States, a great, leading nation with which we are on close and friendly terms,” he said.

“If they want to be heard in the fight against protectionism, they should not set the example of protectionism.”

Dodd’s Decision to Snub Republicans Could Stall Financial Bill.

March 12 (Bloomberg) — The most ambitious attempt to overhaul U.S. financial rules since the 1930s suffered a setback as the third bipartisan push collapsed, setting the stage for wrangling that could delay a final bill for months.

Senate Banking Committee Chairman Christopher Dodd, whose talks with Republican Bob Corker of Tennessee ended yesterday, now plans to introduce his own bill March 15. A lack of bipartisan backing may diminish the bill’s chances in a Senate where Republicans are needed to advance legislation.

“We were already becoming increasingly pessimistic about the chances of a bill,” said Brian Gardner, an analyst at New York-based Keefe Bruyette & Woods Inc. Dodd’s announcement “just bolsters our view.”

Two years after the worst financial crisis since the Great Depression, Congress has yet to approve rules to avoid a future collapse. President Barack Obama asked Congress in June for legislation to protect consumers from abusive mortgage lending practices, tighten oversight of derivatives trading and detect practices that could pose a risk to the financial system.

The House passed legislation in December, adopting many Obama proposals. Dodd said yesterday he ended talks because time is running out to complete work in the Senate as lawmakers focus on re-election campaigns. Dodd said some proposals offered by Republicans will be in his bill.

Here’s an expose on Gollum Sacks. Show your friends, they’ll be stoked!

his video is a visualization of Matt Taibbi’s “The Great American Bubble Machine” It has been cut down slightly to fit the 10 minute time

http://www.youtube.com/watch?v=7SFywA_LQuU

Free markets baby…

What?! Another Time Warner Cable rate hike?
It’s time for cable and satellite subscribers to pay only for the channels they want, rather than the dozens that they don’t.
March 12, 2010 ~ LA Times

There’s definitely an art to informing customers that you’re about to smack them upside the head.

About 500,000 Time Warner Cable customers in Southern California probably knew they were in for trouble when they received a letter the other day that began: “At Time Warner Cable, we strive to bring you the best products and services available.”

Does a sentence like that ever signal anything except bad news?

Time Warner takes two full paragraphs to clear its corporate throat before it finally gets to the point:

“We are making some adjustments effective with your next billing statement. Certain services, packages and equipment prices will change.”

Even then, the company can’t quite bring itself to clearly state that prices are going up again. The letter refers only to “price adjustments,” and nowhere does it say that your cable bill is about to get more expensive.

States may hold onto tax refunds for months
USA TODAY

Residents eager to get their state tax refunds may have a long wait this year: The recession has tied up cash and caused officials in half a dozen states to consider freezing refunds, in one case for as long as five months.

States from New York to Hawaii that have been hard-hit by the economic downturn say they have either delayed refunds or are considering doing so because of budget shortfalls.

“It’s an indicator of how bad it is,” says Scott Pattison, executive director of the National Association of State Budget Officers. “You know things are bad when you have to do that.”

New York, hit with a $9 billion deficit, may delay $500 million in refunds to keep the state from running out of cash, says Gov. David Paterson.

Hawaii’s Department of Taxation says some residents may not see state income tax refunds until the end of August, The Honolulu Advertiser reported. It was part of a plan by Gov. Linda Lingle to deal with a revenue drop-off by pushing costs into the next fiscal period, which begins in July.

States often do not have a timetable for refunds because delays are based on cash flow. Most states typically issue refunds within 30 days.

Here’s EverBanks Chris Gaffney’s take on the pending selection of Janet Yellen for Fed’s #2 spot.

“So what will her appointment to the Vice Chairmanship mean for the Fed policy? The Vice Chairman doesn’t get an extra vote, and their vote is still just one of several. The big difference is that the Vice Chairman gets a permanent vote on monetary policy, while the other Fed heads only get a vote one year out of every three as a regional Fed chief. Therefore, the Vice Chairman has three times more influence on Fed policy and the direction of interest rates”.

“And Yellen wants to keep interest rates low in order to continue stimulating our economy. Last month she said the US economy “still needs the support of extraordinarily low” interest rates. She is a strong supporter of Bernanke”.

Interesting conversation with an analyst yesterday. In California from the East Coast and had just visited 9 companies the day before. Said that all companies reported doing quite well. So maybe there really is a jobless recovery.

Of course, I won’t preclude the CEO and CFO’s actually lying, but still.

I did mention that CA. is still laying people off.

Darby & Darby, New York IP Firm, Is Shutting Down.
WSJ ~ 3-12-10

Just when we thought it was all hope and light in the law-firm economy, venerable New York-based intellectual-property firm Darby & Darby announced today that it’s closing its doors.

Here’s a statement from the 50-lawyer firm with five offices, including in New York, D.C. and Seattle:

It is with a heavy heart that we announce that after more than 100 years in continuous operation, Darby & Darby will begin the process of winding down the firm in anticipation of an orderly dissolution. While we continue to have exceptional clients, from individual inventors to Fortune Global 500 Companies, and remain profitable, many of the factors frequently cited in demise of other firms’ have made as similar impact on us.

What might the aforesaid “factors” be?

Darby & Darby has been stung of late by partner defections to BigLaw, according to a source with knowledge of the firm. It has been hard for Darby to compete with the sort of monster pay packages that AmLaw 200 firms these days are willing to lavish on IP talent. Gone, it seems, are the glory days of the IP boutique. While some still exist — Finnegan Henderson and Kenyon & Kenyon are two notable examples — others have either disbanded or been subsumed into larger firms.

Still, in its statement, Darby offered a vote of confidence to the IP boutique model, saying it “continues to produce some of the best legal talent in the intellectual property field.”

As of yet, it’s unclear precisely when the firm will padlock its doors. We wish all the displaced lawyers the best of luck.

“You have to use their seeds and pay their prices.” LA Times

For 40 years, farmer Todd Leake and his family have battled bitter cold, hungry pests and a short growing season to coax soybeans out of their fields in eastern North Dakota.

The one thing they never had to fight for, though, was their seeds.

A decade ago, salesmen from as many as 50 seed companies would compete for their dollars. Each would promise healthier plants, richer yields or a better discount.

Today the Leakes have little choice: There are four seed companies in their area, and all sell seeds that include genetic traits patented and licensed by Monsanto Co., the world’s largest seed firm.

“There’s basically nothing else available,” said Leake, 48. “You have to use their seeds and pay their prices.”

The concerns of farmers such as Leake will take center stage in Ankeny, Iowa, on Friday as the Justice Department and U.S. Department of Agriculture kick off the first of a yearlong series of public meetings to examine whether antitrust practices in agriculture are driving food prices higher.

The meetings are intended to allow producers, competitors and activists to air their concerns about the grain, poultry, dairy and livestock industries. The government is also trying to ferret out reasons for the sometimes vast gaps between what farmers are paid for producing food and the prices shoppers pay at the grocery store.

Justice Department officials, who spoke on background because they said it was too early to comment about concerns raised at the meetings, said the workshops were a chance for the government to examine the changes the food sector had undergone in recent years.

Virginia Hands Out 6996 Traffic Tickets In One Weekend In An Effort To Raise Revenue For The State Government

In the old days, police officers wrote traffic tickers primarily to keep people safe and to prevent citizens from breaking the traffic laws. But in the new Amerika, all of that has changed. Now traffic tickets are primarily viewed as a revenue raising tool for state and local governments. For example, a federally funded ticketing blitz in the state of Virginia resulted in a total of 6996 traffic tickets being handed out this past weekend. This most recent ticketing blitz is part of a campaign code-named “Operation Air, Land & Speed”. Last Saturday and Sunday state troopers were ordered to absolutely saturate Interstate 95 and Interstate 81 and to issue as many traffic tickets as humanly possible during those two days. Why? Well, it turns out that the state of Virginia has a 2.2 billion dollar budget deficit that they are trying to deal with, and so they need to find some quick sources of cash.

You see, state and local governments all over the nation are massively jacking up traffic fines and are starting to write a lot more tickets in an attempt to “enhance” their streams of revenue.

In other words, state and local governments across the U.S. are broke and so they need some suckers to prey on.

Not that it was ever a good idea to break the traffic laws. But now even a minor violation can put a massive hole in your wallet. For instance, driving as little as 15 miles an hour over the speed limit in Virginia can get you a reckless driving charge that can carry a fine of up to $2500.

So why the hefty fines?

Well, the law increasing the traffic fines in Virginia clearly admitted why they are so high….

“The purpose of the civil remedial fees imposed in this section is to generate revenue.” (Virginia Code 46.2-206.1)

Are you starting to get the picture?

But this kind of thing is not just happening in Virginia.

“Sobriety checkpoints” in the state of California are increasingly bring used as revenue raising operations. It turns out that these sobriety checkpoints are far more likely to seize cars from unlicensed motorists than they are to catch drunk drivers.

So how profitable are these “sobriety” checkpoints?

Well, research done by the Investigative Reporting Program at UC Berkeley with California Watch discovered that impounds at “sobriety” checkpoints in 2009 alone generated approximately 40 million dollars in towing fees and police fines.

That is what you call a source of revenue.

In Detroit, even the police admit that the fundamental nature of police work is changing. Just consider the following quote from from Police Chief Michael Reaves of Utica, Michigan….

“When I first started in this job 30 years ago, police work was never about revenue enhancement, but if you’re a chief now, you have to look at whether your department produces revenues.”

Sgt. Richard Lyons of Trenton, Michigan is even more blunt about what is happening in his community….

“They’re trying to use police officers to balance the budget on the backs of drivers, and it’s too bad. The people we count on to support us and help us when we’re on the road are the ones who end up paying the bills, and they’re ticked off about it. We might as well just go door to door and tell people, ‘Slide us $100 now since your 16-year-old is going to end up paying us anyway when he starts driving.’ You can’t blame people for getting upset.”

http://www.guardian.co.uk/world/2010/mar/12/eu-agrees-greece-bailout

The EU has agreed to put together a bailout package for Greece. As usual, the bureaucrats ignored the vehement opposition of their taxpayers who will be footing the bill. In return for the massive bailout, Greece promises to mend its ways. While trying not to snicker.

Hope ‘n Change does Europe.

http://english.pravda.ru/russia/kremlin/112428-victory_day-0

U.S. troops will be parading in Red Square on May 9th, while socialism spreads its tentacles in the US. The old Soviet propaganda outlet, Pravda “Truth” actually carries some hard-hitting reporting, while the Washington Post, NYT etc. act as shills for the liberal establishment.

The world has indeed turned upside down.

whether antitrust practices in agriculture are driving food prices higher

What antitrust practices? Seems to me that Monsanto has a lock on seed production. We NEED more antitrust protection, that’s the problem.

And the upside down homeowners thought they had their work cut out for them:

http://blog.syracuse.com/cny/2010/03/for_sale_an_irish_castle_skaneateles_resident_offers_16th-century_castle_for_89_million.html

Apologies if this was posted yesterday. Didn’t see it.

Why the U.S. can’t inflate its way out of debt

“NEW YORK (CNNMoney.com) — It’s dawning on people that getting a handle on burgeoning U.S. debt will be a long and hard process.

So if lawmakers can’t agree on a credible plan, some have suggested that the country could just “inflate its way” out of its fiscal ditch.

“Many countries have tried this and they’ve all failed,” said Mark Zandi, chief economist at Moody’s Economy.com.

It’s true that inflation could reduce a small portion of U.S. debt. The International Monetary Fund (IMF) estimates that in advanced economies less than a quarter of the anticipated growth in the debt-to-GDP ratio would be reduced by inflation.

But the mother lode of the country’s looming debt burden would remain and the negative effects of inflation could create a whole new set of problems.”

The last line in the first paragraph is great! Shows the retarded thought process of reporter/writers …

New wave of foreclosures threatens market
Up to 7 million homes are potentially eligible but haven’t been repossessed. Fri., March. 12, 2010

WASHINGTON - The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners.

And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.

The party’s over. . .

“Even if America taxed 100% of all household wealth, it would not be enough to put its balance sheet in the black. And Professors Rogoff and Reinhart show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both. IMF data show the US already too far gone on both scores, with external debt at 96% of GDP and 748% of exports.

Wow, just had some CD’s at the credit union get rolled over but I called them the day after and was able to move the funds. Turns out their new rate for 12 months, even jumbo, is 0.7% while they lend at 5% to 10%. They must be getting cheap government funds so they don’t care if you withdraw funds or not. Definitely a war on savers to move you into a high risk area. As people move into stocks they’ll be moving out and the market will take a dive.

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