Bits Bucket For May 15, 2010
Post off-topic ideas, links and Craigslist finds here. The DC meetup link at the forum is here. Click here for the shadow inventory thread.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Is there anyone else out there whose internal clock is still screwed up by Daylight Savings Time, or is it just me?
It’s just you. Time to reboot your avionics and fire up another pot of coffee.
Wake up before sunrise and watch the sun come up. This will set your internal clock.
Try giving up an alarm clock. A few days of waking up very late missing school/work, etc. will force you to get to bed early. Also wake up when the sun comes up. Don’t try to wake up when it’s still dark - you will still be tired. So going to bed at 10:30 and waking up at 6:30 will probably make you feel refreshed.
Sounds like you just took off and merely forgot to set your altimeter.
no problemo
Companies Dodge $60 Billion in Taxes Even Tea Party Condemns
(Bloomberg) — Tyler Hurst swiped his debit card at a Walgreens pharmacy in central Phoenix and kicked off an international odyssey of corporate tax avoidance.
Hurst went home with an amber bottle of Lexapro, the world’s third-best selling antidepressant. The profits from his $99 purchase began a 9,400-mile journey that would lead across the Atlantic Ocean and more than halfway back again, to a grassy industrial park in Dublin, a glass skyscraper in Amsterdam and a law office in Bermuda surrounded by palm trees.
While Forest Laboratories Inc., the medicine’s maker, sells Lexapro only in the U.S., the voyage ensures most of its profits aren’t taxed there — and they face little tax anywhere else. Forest cut its U.S. tax bill by more than a third last year with a technique known as transfer pricing, a method that carves an estimated $60 billion a year from the U.S. Treasury as it combines tax planning and alchemy. (See an interactive graphic on Forest’s tax strategy here.)
Transfer pricing lets companies such as Forest, Oracle Corp., Eli Lilly & Co. and Pfizer Inc., legally avoid some income taxes by converting sales in one country to profits in another — on paper only, and often in places where they have few employees or actual sales.
After an economic bailout in which the U.S. government lent, spent or guaranteed as much as $12.8 trillion, the Obama administration faces a projected budget deficit of $1.5 trillion this year. In February, the administration said it would target some of the techniques companies use to shift profits offshore — part of a package intended to raise $12 billion a year over the coming decade.
$1 Trillion Offshore
U.S. companies amassed at least $1 trillion in foreign profits not taxed in the U.S. as of the end of last year, according to data compiled by Bloomberg. That cumulative total, based on filings by 135 companies, increased 70 percent over three years, from $590 billion in 2006.
I think its time to eliminate corporate income taxes….that means no taxes on today’s profits and NO tax rebates/refunds or tax loss carry forwards, applying it to past profits if you lose money.
Then all expenses go to the bottom line……
America has the highest corporate tax rate of the industrialized world.
So - corporation are doing to do anything they can to avoid paying those taxes.
Many just move opeations out of America. Most take their profits out of America (by creating expenses here) and that money never comes back (becuase America is one of the few countries in the industrialized world that fully taxes profits made overseas).
No matter how much liberals and democrats want to believe - Higher taxes does not equal more money to the government to spend.
In many cases, it means less and less money.
Money saved on taxes means a hefty return on investment for campaign contributions to those fine upstanding bought-and-paid-for Congress critters that wrote the laws allowing this to happen.
Spot on! And isn’t it funny, we individuals are not attacked by socialists for maximizing our hourly rates or salaries and going from city to city for the best pay, yet people deride groups of individuals (corporations) for getting the biggest bang for the buck.
Hypocrites.
Er, what color is the sky in your world?
The difference being of course that as an individual you had almost no influence in creating the tax law. Otherwise AMT would not exist. VAT tax would not be talked about, and you wouldn’t be paying a much higher effective tax rate than Wall Street Bankers who get paid in stock,back dated options, zero interest rate loans, jets, insurance etc.
Only western country knee deep in 2 hot wars.
“Only western country knee deep in 2 hot wars.”
Strange, two guys in suits kept telling me that “We’re on a mission from God.”
In any given year, up to half of ALL corporations doing business in the US pay NO income taxes.
-Reuters
Hypocrisy? Don’t even start.
Another poor sucker gets drawn into the prescription drug racket. Just say no to this crap, people!
Good times ahead for the homebuyer? ~ bankrate
If you missed the April 30 homebuyer tax credit deadline without snagging a house, pat yourself on the back: You just may turn out to be one of the lucky ones.
While the credit is now history, savvy buyers may be able to make up that money — and then some — through some shrewd house hunting over the next two months, industry experts say.
“Savvy buyers can put their feet back into the market,” says Rona Fischman, principal broker at 4 Buyers Real Estate in Cambridge, Mass. “It will be more sane and less of a sellers’ market.”
Thanks to the tax credit, buyers came into the market over the past year who otherwise might have waited on the sidelines, says Olivier Garret, chief executive officer of Casey Research in Stowe, Vt.
Because the credit pulled demand forward, competition among buyers is set to plummet just as the spring market traditionally peaks in May and June. That could create bargains for buyers.
“Because the credit pulled demand forward, competition among buyers is set to plummet”
So many gullible buyers have been taken out of the market, I think we have a huge vacuum under the market now.
I am patting myself on the back (thank you). But May and June are much too soon to see “bargains” IMO.
It seems like even many HBB’ers hurried up and bought a house because of the tax credit. Weird.
“It seems like even many HBB’ers hurried up and bought a house because of the tax credit. Weird.”
They were unduely pressured by their wives and tiny Tomato Plants.
I will say it again…
“I am not married and I will NOT die watching a stupid Tomato Plant grow !!”
Dick Fuld Re-Emerges at Legend Securities
TheStreet.com
NEW YORK (TheStreet) — Former Lehman Brothers CEO Dick Fuld is re-emerging on Wall Street, according to information on the Financial Industry Regulatory Authority’s Web site.
Richard S. Fuld Jr. is currently employed by Legend Securities in New York and has been registered with the firm since May 6, according to FINRA’s BrokerCheck Web site. The broker report shows that Fuld was employed previously by Lehman Brothers from June 1984 until December 2009, as well as Lehman Government Securities and Lehman Special Securities before that.
Fuld is not currently listed on Legend Securities’ management team on the firm’s Web site. Legend Securities declined to comment for this story when reached by phone.
According to the Web site, the firm is a diversified broker-dealer and a Finra member. “In the ever changing world of the market, Legend can provide our customers with the best technology and up to date knowledge on the markets,” the site says.
Fuld was at the helm of Lehman when the company famously collapsed in late 2008. He has kept a relatively low profile since leaving the company, reportedly spending his time on a ranch in Idaho.
Wall Street crooks are like vampires: they have to be staked down in the light of the sun to be destroyed. Anything less and they’ll return later with even more power and their previous crimes will have been forgotten by the masses as if a spell had been cast.
We got into a near-shouting match at a camp out last night over whether Gollum was reporting honestly when it claimed the federal government forced it to take TARP money. On one side of the argument were an attorney who has worked for Gollum and other major security firms, and an FBI agent; on the other side were a banker and moi. It seems the banker and I are mutually skeptical about anything that comes out of Gollum’s PR machine, while the FBI agent bought into the story hook-line-and-sinker that Gollum was force-fed the TARP money against its will.
“We got into a near-shouting match at a camp out last night over whether Gollum was reporting honestly when it claimed the federal government forced it to take TARP money.”
LOL
FBI = Fumbling Bunch of Idiots.
By Gollum’s PR machine, I assume you mean the entire Establishment financial media?
What morons. It is easily confirmed with Google that GS voluntarily changed their status to grab as much of the TARP money as they could.
The only reports of being forced are recent. Where was this information 2 years ago?
“Markets are becoming aware of the fact that the decline in house prices is not stopping. I have no particular regrets. The housing bubble is not a reflection of what we did, as it is a global phenomenon.”
Alan Greenspan, November 23, 2007
Atlas shrugged.
Atlas shagged
“I have no particular regrets.” What a bstrd.
He is a loose cannon.
More like a sociopath.
He basically broke the economy, encouraged people to gamble nearly their “youngest virgin daughters” to flip houses, and he has no regrets?
Work will set you free!
I saw that somewhere else before: “Arbeit mach frei” as I recall.
A gateway to a rather unpleasant place.
I’ve seen that up close.
Terezin is an interesting place. About 50 miles NW of Prague. Very much an eerie, manufactured community - it remains intact, and therefore it’s easy to imagine the Nazi propaganda machine in operation back in the 1940s.
While the entire area makes your skin crawl, visiting the crematorium (complete with ashes), seeing bullets lodged in the walls of a courtyard, and walking through the solitary confinement cells where Princip, among others, met his end is something else entirely.
Voltaire said about the same thing in Candide.
I didn’t remember that Dennis, I must reread.
About the very last sentence in Candide is IIRC “but first we must cultivate our garden”.
In other words, philosophical BS is nice but first carry on with day to day work.
That “cultivate our own garden” stuff I got out of reading Candide was part of what helped me get out of the rut of being a “career student” in college and get into the real world. I was a libertarian activist in the early 1980s and I put material gain on the back burner. Then stories such as “Candide” lit a match for me.
A big hello from Wisconsin HBBers.
That said, this smoked my ears: (from Wiki)
In mid-January 2008, hedge fund Paulson & Co. hired Greenspan as an adviser on economic issues and monetary policy. This is the third private role given to Greenspan, the first two being given by Deutsche Bank and bond investment company Pacific Investment Management (PIMCO). Greenspan advises Paulson & Co on economics issues surrounding United States and world financial markets.[19]
Greenspan also counsels on monetary policy and falling housing prices and about a possible recession in the United States. Paulson & Co is famously known for its record profit making during 2007 by conducting bets against mortgage derivatives which earned the firm billions of dollars last year. The financial terms of the agreement were not disclosed and Greenspan must not, under the agreement, advise any other hedge fund manager while working for Paulson.[19]
Greenspan also now works as a private advisor making speeches and providing consulting for firms through his company, Greenspan Associates LLC. Directly following his retirement as Fed chairman, Greenspan accepted an honorary (unpaid) position at HM Treasury in the United Kingdom. In May 2007, Greenspan was hired as a special consultant by PIMCO to participate in Pimco’s quarterly economic forums and speak privately with the bond manager about Fed interest rate policy.[20] In August 2007, Deutsche Bank announced that it would be retaining Greenspan as a Senior Advisor to its investment banking team and clients.[21]
Grrrrrr…
Leigh
Leighsong,
How’s the family? How’s the house coming along. Good to see you posting.
We’re great! Thanks for asking.
I’ve been thinking about our Beloved Oly as we put in the fruit orchard and started a humongous garden.
I can feel her sweet smile as I play in the dirt on a beautiful sunny day.
Smiles,
Leigh
As I have posted before, I am in my second rental house that the LL is not paying the mortgage. They both live in much nicer homes than they have rented to me. The first pocketed 2 years or about 20k, and the second has an extra $7,000.00 in his pocket since March 1st. So not only has the bank not gotten anything from these victims but the taxes are not being paid. Funny thing, they both have jobs that are paid by taxpayers. The first one is a Union Painter who works for a schoolboard in Long Island N.Y. and the second works for a local municipality in South Florida. I wonder if they are getting their cost of living increase this year?
Why are you paying them anything?
Indeed. Jeff, look up Florida law on adverse possession. I am not giving you legal advice here, but it is possible you could end up owning that property, if you were to pay the taxes on it. Of course, you’d have to hold on for seven years and defend your claim.
Adverse possession relates to abandoned property, dating back into history when you could actually stake out and claim such property. Assuming some version is still recognized in FL, it is not relevant to someone who has possession via a lease. Jeff has notice that someone other than him is claiming ownership and he is there simply by permission/contract. Also, Jeff has no legal right not to pay unless he has reason to believe that LL is not the legal owner or the LL is in breach of the lease, in which case it should be paid into escrow with a certified letter to the LL stating the same. There is no law that you dont have to pay on contracts with those that do not pay pay their bills to third parties on a timely basis or at all. If Jeff does not pay, he can be evicted and have his credit ruined.
“Assuming some version is still recognized in FL,”
It is.
“Also, Jeff has no legal right not to pay unless he has reason to believe that LL is not the legal owner”
If the LL isn’t paying, he’s probably no longer the legal owner, no?
“it should be paid into escrow with a certified letter to the LL stating the same.”
Yes.
“If Jeff does not pay, he can be evicted and have his credit ruined.”
That thought did occur to me. It would depend on how far one wanted to take it.
Having said all that, it seems that the law is breaking down big time in the US, on all levels.
“If Jeff does not pay, he can be evicted and have his credit ruined.”
If Jeff did not pay his father would rise from his grave and slap him while telling him, I told you when you give your word, shake on a deal or sign your name you hold up your end of it. If you don`t do that, your word, your handshake and your name are worthless.
Here is the statute. Are you suggesting he consider purchasing that property for deliquent taxes and hope he is not challenged? To me that seems like a risky and unlikely scenario. I would be interested to know if you have any real examples that this might be a sound strategy. I have a feeling as soon as he stops paying rent and claims ownership he would be evicted almost immediately.
http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=Ch0095/titl0095.htm
BTW, Natalie, I’m assuming you’re an attorney, or have some sort of legal background. For those of you who are involved in the law, it must be painful to see the laws of the US turning into a complete joke. Oh, I realize we still have what laughingly passes for a “justice” system, but it is capriciously applied, no?
For example, I was watching McLaughlin last night and of course they discussed the Gulf oil spill. Part of that discussion was the charade of hearings by Congress, and how Halliburton, BP and Transocean all pointed fingers at each other. Mort Zuckerman, who understands corporate mentality, pointed out that it was basically these three companies setting things up for complex litigation that would last for years.
And yet, jeff could be evicted and *gasp* have his credit ruined.
“If the LL isn’t paying, he’s probably no longer the legal owner, no?” Until he is foreclosed (with respect to the bank) or the property is sold for deliquent taxes (with respect to the government), he is still the legal owner of the property in breach of contract with a third party or statute. Jeff’s lease may address this, and it may in fact be a breach of the contract between Jeff and LL with specified remedies, but I doubt it. Someone else had asked a few details about renting in this environment. I would try to get a clause put in that addresses what happens if the owner gets notice of default (i.e., renter can get out without notice or penalty, and perhaps even a relocation charge payable to the renter - although if the LL isnt paying his bills, good luck collecting).
“I’m assuming you’re an attorney.” Yes, I have a law degree but do not practice property law directly. I wasnt trying to be argumentative. I just have never heard of a renter claiming AP, as I was always under the impression you have to claim to be the owner of the property for the relevant time period, and a lease cuts against an ownership claim. I really just wanted to hear if some State has a different rule because I would find it interesting.
“I was watching McLaughlin last night and of course they discussed the Gulf oil spill. Part of that discussion was the charade of hearings by Congress, and how Halliburton, BP and Transocean all pointed fingers at each other.” I watch that show too. Another example would be Obama pointing the finger at Wall Street while at the same time agreeing to financial support plans with Greece/EU, and other back door nut job proposals, that in essence equate to debt leverage higher than even many on Wall Street could swallow while at the same time taking actions, such as proposing increased taxes and other costs for risk, productivity and innovation, that will ensure lower future returns available to pay our Country’s debt service and a decreased standard of living for the vast majority.
Natalie:
here in NYC we have something called “Use and Occupancy” which a tenant can sue for. What it means is the landlord is not providing the proper services for that amount of rent in the lease, and the tenant is asking a judge to lower the amount to be reasonable or terminate the lease without any penalties.
I think jeff could see if that applies where he lives….you can’t live for free….but you could try and take a chance the landlord is so broke he has no money to pay a lawyer and wont sue you
Yes. There there is an implied agreement read into most leases that the premises will be habitable, even if not expressly stated therein, in most if not all States. For example, if the LL has agreed to provide utilities and they are being cut off, or the LL is not making necessary repairs, thus making the property unsafe, Jeff would most likely be entitled to a credit. Courts would usually see this as just an excuse and be unsympathetic if Jeff just stoped paying rent however, unless he took some pictures and sent a certified letter to the LL stating that unless you fix the following items he considers the property uninhabitable in volation of the terms of the lease and State law, and will not pay rent until fixed and will be forced to move out with the expectation that any deposit be returned. I am not sure he is in such a situation though.
Ah yes the implied warranty of habitability….from the dust of my 1L real property class.
Pretty much any adverse possession statutes I’ve seen have the element of “possession under a claim of right” which excludes leaseholders.
California has tightened up its adverse possession statute so it’s damned near impossible to get nowadays - the best you can get is a prescriptive easement instead. We read a case in real property about a dispute down the block from my Dad’s house where the developer put in lot-line stakes into the ground that were generally off by about 40′ from the legal survey of the subdivision. A guy built a boat dock on land he thought was his and tried to later claim adverse possession on the strip of land. All he could get was a prescriptive easement because the strip wasn’t taxed separately.
“Having said all that, it seems that the law is breaking down big time in the US, on all levels.”
This is part of the goal.
Once the law breaks down, might will make right, and the banksters and crooks have all the might they need.
I’m not a lawyer nor do I pretend to be one on Ben’s HBB. However, I do have nearly 20 faithful years of tee vee’s “Law and Order” under my belt.
That should count for something !!
Drags out small wooden fruit box and flips around his “Open for Business” sign.
The house I am in now $1,700.00 a month. I gave them first and security + $250.00 pet deposit in Feb. that covered March, I paid April and May, and on May 2nd a rep from Wells Fargo knocked on the door and handed my wife forclosure papers that said they had not made their Jan. 2010 payment or any after that. The last place was $1,700.00 also.
I didn’t know foreclosure papers were served. I would send him a certified letter stating that because you were served foreclosure papers, you believe he is in violation of the lease and State law, and have no way of knowing who the real owner is. As a result, you intend to pay all future rent into escrow until ownership is proven, that you believe you are entitled to break the lease at will without penalty and are entitled to a return of your deposit, and believe you are entitled to recover any damages you incur as a result, and see what he says. I would also run it buy someone familar with real estate law in your area. Depending on your adveresion to risk, if it is on law firm letterhead, with cites to actual statutes and case law, it will be much more intimidating, but may cost you a few hundred. Good luck.
I should warn you though that he could be an asshole and still try to evict you and seek penalities and ruin your credit rather than reach a resolution. It is all a matter of risk tolerance, and bad ppl can do bad things to good ppl, regardless of who is right.
Jeff Saturday can successfully make the argument that the entire lease is invalid, based on the fact that it wasn’t negotiated in good faith on the part of the LL as evidenced by the fact the LL stopped paying the mortgage prior to the signing of the lease.
I wouldn’t presume intent. The LL may argue he intended to use the rent to catch up on the mortgage and Jeff knew his situation, then something else came up. I also wouldn’t presume any argument would be successful without knowing all the facts and even then outcomes are not always predictable. In addition, I am not sure it gets you any place different. Unless the contract was illegal, equity would demand that Jeff pay something for the period that he lived in the house. As is usually the case in law, the best tactic is to scare the hell out the other team, and have parties settle it amongst themselves.
My folks were renting a place from an FB that got an NOD so they basically told the FB to pound sand and lived there rent free for about 4 months. If the landlord dared to sue them, thud would have countersued for breach of contract (that the place was habitable until end of lease rather than being forced to leave early by the bank. They even got a couple of grand from the bank to not thrash the place (not that they would have).
If you like the house, why not put your rent payments into a separate savings account and buy the house at the foreclosure auction. It is probably useless to pay the landlord.
Some thoughts
1. Stop paying them
2. Report them to the IRS
3. Contact a pro-bono attorny - they are most likely breaking the law if you have a signed lease
oh yeah those pro bono attys are all over the place. if you’re on welfare, go for it. If not, you may have to pay a fee.
2 years or about 20k
sorry, that P.O.S. pocketed about 40k
I used to evict lots of students in a corporate job I had in Texas back in the day. In that state, it isn’t exactly easy to evict someone. Speaking for myself only, I’d stop paying and see if the FB took the time/effort to try and evict me.
As a corrollary to my above comment, if I were you I’d stop paying entirely and put the money in a savings account. That way its no skin off your back if either the landlord or bank “evicts” you. You’ll have the money for a new rental and you won’t be paying a crook.
These guys, and similar landlords who are pocketing rent checks while not paying their own notes (which, presumably, the rent checks were supposed to cover), appear to me to be perpetrating fraud. Is there any chance they could wind up in prison, where they quite apparently belong?
Fair disclaimer: I am not an attorney, but I believe I have a pretty good sniffer when it comes to detecting the stench of fraud.
Move. Start looking now. Keep your nose out of their personal lives figure out how to get of there soonest.
“Keep your nose out of their personal lives”
They told me where they worked and what they did for a living. It`s not like I had them fill out an application with there personal info on it like they had me do. I just moved in March and I am looking for another place now. It would be a lot easier if I didn`t have kids that are in High School like both of these LL`s and a dog like both of these LL`s (once again they told me I didn`t get that from a credit app.) But hey you are right, otherwise the personal lives of these tax paid leeches on society is none of my business.
Jeff, a phone call to the IRS would make you feel a whole lot better. I’m sure the LL’s are not claiming income.
I hadn`t thought of that. I feel better already.
The IRS rat line is 1-800-829-0433. You can get up to 15% of what they collect and your name will not be released.
But don’t expect anything near 15%. Just dropping a dime won’t get you 15%, but do a lot of background work and you may close in on the 15% figure.
The IRS wants a return on its investment just as everybody else does. If it appears that going after a guy will generate a good ROI then it may take on the case. If it looks as if the ROI won’t be worth the trouble then the IRS may take a pass. Do a lot of background work yourself (and make it easy for the IRS) and the chances of you making some money will increase.
I had to analyze why Jeff’s situation infuriates me so much. I was very upset by his post. He is truly an innocent victim of circumstances, and he has no good alternatives.
I suggest that he find a new place, then break the lease, and in the meantime stop paying rent for a couple of months. With the new lease he might try Natalie’s suggestion about demanding a clause to address NOD. I am assuming that his landlord doesn’t have a management company and can’t afford an attorney.
If I lived in Jeff’s town I would volunteer to make serial lowball offers to find him a place to buy.
Hang in there, Jeff.
In my experience, contacting the IRS is a total waste of time.
I agree. My sister tried to anonymously report a former employer who had two sets of books, and boy were they cooked. The IRS basically did nothing, when millions of dollars were being funneled from the business.
Hey guys this a luxury Condoze with some interesting problems…UH OH!
http://queenscrap.blogspot.com/2010/05/hey-pistilli-youve-got-little-leak.html
That’s insane but why the hell don’t they just move?
Drumminj,
Thanks for the JTE. It’s the first time I’ve used it. Wonderful.
Glad people find it useful. Let me know any feedback you might have via the email address on the web page - I don’t have time to read here every day anymore, unfortunately.
Congressman must receive a heck of a salary…
“The National Legal and Policy Center, a Falls Church, Virginia-based group that backs smaller government, in 2006 filed a complaint with the U.S. Justice Department questioning an increase in Mollohan’s net worth. For 2005, Mollohan and his wife reported assets worth $6.8 million to $25.7 million, up from $116,000 to $315,000 in 1999″
Never mind, it’s the side jobs that pay so well..
“Also in 2006, Mollohan came under criticism for steering $250 million in federal funds to nonprofit groups he founded that were staffed by friends”
Good start on ridding Washington of ever last incumbent…
http://www.businessweek.com/news/2010-05-12/mollohan-loses-west-virginia-primary-after-14-terms-update1-.html
It’s a bummer that every incumbent senator and us rep is replaced by a state legislator. In my state, California, by the time they become a state legislator they have usually become corrupted by their time as a councilman or county supervisor.
Every single senator or “representative” who voted for the Wall Street bailout, and all the Friends of the Fed who refused to back Ron Paul’s original Audit the Feb bill, need to be given the heave-ho. Preferably in the primaries.
Congress is, for the most part, by, of and for millionaires.
Millionires do not and never will have any empathy, sympathy or mercy for the working class. The few that do are negligible.
There has never been a better time to find an affordable hotel room for your Greek vacation!
=============================================================Athens hotels say Greek riots emptying rooms
May 15, 2010, 01:07 AM
By Nicholas Paphitis
The Associated Press
ATHENS, Greece — Images of flaming buildings and riots in Athens during last week’s protests in debt-ridden Greece have taken an early toll on the country’s vital tourism industry, hotel owners said Thursday.
About 20,000 overnight stays at hotels in Athens and nearby resorts have been canceled since May 5 riots that left three people dead, according to the local hoteliers’ association.
The setback reveals persisting challenges for Greece’s battered economy, despite a euro110 billion ($138 billion) international rescue program that staved off bankruptcy. A painful austerity program taken to secure the aid is expected to keep the economy in recession until 2012, while unemployment has hit new records.
Greece has little heavy industry and a large trade deficit. But tourism accounts for an estimated 17 percent of annual economic output and one in five jobs, and a significant drop could cost more jobs and slow the country’s way out of recession.
“There is clearly a significant fall in our clientele and the trend for cancellations is rising,” Yiannis Retsos, head of the Athens and Attica Hoteliers’ Association, told the Associated Press.
“We have clients calling us up to ask whether there is still a revolt going on,” he said. “The footage of the riots and the burnt bank has been played repeatedly for days on international media. Your average American thinks that Athens is continuously burning.”
Violent protests broke out after the government announced harsh austerity measures — including salary and pension cuts — that have deepened Greece’s recession but were needed to secure the rescue loans.
About 100,000 people took part in the May 5 protest during a general strike, when three bank employees died after becoming trapped in a burning building torched by rioters. Extensive clashes saw 15 civilians and 41 police injured, in what the government called “a black day for democracy.” Unions have called a new general strike for May 20.
The hoteliers’ association said the cancellation data concerned just 68 of the area’s 450 hotels, and included group and conference bookings.
“The most worrying thing is that the rate of new bookings has frozen, during a couple of months that are traditionally the best for (tourism) in the greater Athens region,” it said in a statement. “There is also a significant drop in new bookings throughout Greece, which is due to international reaction as long as the situation in our country is seen as uncertain.”
An estimated 14.9 million people visited the Mediterranean country in 2009, drawn by its perennial lure of sun, beaches and ancient sites. That was still about 1 million fewer than in 2008, and 1.2 million down from 2007.
“We want people to understand that right now in these times of hardship, when tourism must serve as a significant source of economic growth, the situation must change because this does not just affect Athens but also the entire country,” Retsos said.
…
Oompah!
Ryan Grim
ryan@huffingtonpost.com | HuffPost Reporting
Conservatives Blast McConnell For Voting ‘No’ On Audit The Fed
First Posted: 05-14-10 03:55 PM | Updated: 05-14-10 05:36 PM
Just days ahead of a key Kentucky GOP primary, Mitch McConnell cast a symbolic vote against auditing the Federal Reserve — the issue that is most closely associated with Ron Paul, whose son Rand Paul has surged past McConnell’s preferred candidate, Trey Grayson.
With that vote, McConnell, who effectively founded the Kentucky GOP, passed up a prime opportunity to show home state Republicans that he and Grayson are both willing to battle entrenched interests in Washington, political activist Grover Norquist said.
“Mitch McConnell is a surprise. I don’t understand what went on,” Norquist told HuffPost after McConnell voted against an amendment put forward by Louisiana Republican David Vitter that was a Senate version of a measure sponsored by Ron Paul in the House. “And for crying out loud, he’s trying to elect a guy who’s running against Ron Paul’s son. This would’ve been the way to go: ‘Well, we disagree on, say, occupying Afghanistan for the next 500 years, but we can agree on auditing the Fed. I just thought it would have strengthened your case, not the other way.”
…
Heh! Grover still thinks the repubs are the party of fiscal conservatism and small government. Too funny. You’re gonna need a bigger bathtub, Norquist!
I can’t wait to see Mitch pouting when his golden boy Grayson loses. Great going away/good riddance present for Bunning (who’s endorsing Paul, BTW).
McConnell epitomizes the sleazy Wall Street subsidiary called the Establishment GOP. Anyone who would be surprised by McConnell’s slavish obsequiousness to the Fed and his Wall Street masters is willfully blind and mentally circumscribed. Ron and Rand Paul have been fighting almost singlehandedly for true Republican principles, while the zombie party that bears the Republican name continues to sucker so-called “conservatives” into participating in their political puppet show.
Yep.
Don’t say the Fed didn’t warn on inflation risk:
Fed’s Hoenig says low rates can lead to bubbles: report
WASHINGTON
Sat May 15, 2010 10:13am EDT
The U.S. Federal Reserve Building is pictured in Washington, January 26, 2010. REUTERS/Jason Reed
WASHINGTON (Reuters) - Keeping interest rates low for a long time can create ripe conditions for dangerous asset price bubbles, a Federal Reserve official said in a Wall Street Journal interview published on Saturday.
Thomas Hoenig, president of the Kansas City Federal Reserve Bank, said it was “understandable” that the U.S. central bank cut interest rates to near zero during the financial crisis, but it was time to at least start reconsidering that stance.
“We’ve gotten through the crisis,” he said. “We are not out of the woods, the economy isn’t booming, but we are now in a position where we ought to be thinking about the long run. That’s what central banks should do.”
Hoenig has dissented at the past three meetings of the Fed’s policy-setting committee because he is uncomfortable with the central bank’s pledge to keep rates ultra-low for “an extended period” of time.
He said keeping rates near zero gave Wall Street banks an advantage over Main Street because financial firms could borrow at low rates and lend or invest for bigger returns.
“I can’t guarantee the carpenter down the street a margin. I really don’t think we should be guaranteeing Wall Street a margin by guaranteeing them a zero or near zero interest rate environment,” he said.
The Fed has said that its low-rate pledge will stand as long as the economy is weak, unemployment high, and inflation low. But Hoenig said monetary policy “has to be about more than just targeting inflation.
“It is a more powerful tool than that.”
He also said Greece’s debt crisis was a lesson for the United States, which has its own massive debt pile that could eventually drive up interest rates if creditors grow uncomfortable with cheaply financing large deficits.
“We shouldn’t be so, if I may say, arrogant to think that that couldn’t happen to us or others,” he said. “We’re fortunate, we’re a much bigger economy and we’re the reserve currency.”
He said U.S. deficits were not sustainable, and there could be pressure on the Fed to print money to pay off debts. If that happens, “the outcome of that will be a very strong inflationary bias,” Hoenig said.
Hoenig is the Fed’s own Pontius Pilate. He could have vigorously fought for what he knew was right, but instead offered only muted resistance to Bernanke and his fellow counterfeiters.
He’s talking about a lot more than inflation.
Sounds like the Chicago Democrats have Wall Street banks where they want them now.
* The Wall Street Journal
* BUSINESS
* MAY 15, 2010
Bank Rescue Down to Wire
By ELIZABETH WILLIAMSON And JOHN D. MCKINNON
WASHINGTON—Talks to save Chicago lender ShoreBank Corp. continued Friday, as the small bank with a big roster of political supporters sought to land a recapitalization deal financed by some of Wall Street’s biggest players, or face closure by regulators within days.
“I’m in sort of hour-by-hour contact with them. It’s still a bit of a nail-biter, but it’s very, very active and they’re getting closer to where they need to be,” said Rep. Jan Schakowsky (D., Ill.), who has been lobbying for assistance for ShoreBank.
However, a person close to the situation said the outlook for the ShoreBank rescue effort looked “pessimistic” on Friday evening.
ShoreBank’s supporters hope that investors, including Goldman Sachs Group Inc., Citigroup Inc., J.P. Morgan Chase & Co., Bank of America Corp. and Morgan Stanley, will agree to put in $125 million that will allow ShoreBank to tap an additional $75 million in government capital through Treasury’s Troubled Asset Relief Program. But Treasury help is by no means certain, and if the bank is closed its private investors will likely lose their money.
“We have no comment on the press reports other than to reiterate we are working on our proposed capital raise and appreciate all parties, including a number of banks, who are supporting us in this effort,” said ShoreBank spokesman Brian Berg.
Ms. Schakowsky said that assistance for ShoreBank from Goldman and other big banks “would be a very good move for the banks, to spare one of the victims … of their recklessness.”
ShoreBank is a pioneer in lending to low- and middle-income consumers, and has high-profile supporters in Washington and Chicago. ShoreBank’s lending programs for small businesses in low-income neighborhoods and its international micro-lending programs have garnered acclaim from President Obama and former President Bill Clinton.
Losses racked up during the recession have left the bank facing a demand to raise new capital or face likely closure by regulators. Mr. Berg said the bank wasn’t involved in subprime mortgage lending, the type of loans made to borrowers that helped touch off the credit crunch and financial crisis. The bank suffered losses on loans to businesses that served low- and middle-income communities hit hard by the recession and unemployment.
Mr. Berg said that no current employee of the bank or any of its board members has contacted the White House about its troubles.
“White House officials have not met with ShoreBank regarding support measures for their bank,” said White House spokeswoman Amy Brundage.
Goldman jumped into the effort to save ShoreBank in recent days, pledging $20 million to $25 million in capital that would make it one of the bank’s biggest investors, people familiar with the discussions say. Goldman, BofA, Citi and J.P. Morgan and Morgan Stanley all declined to comment.
The effort to save ShoreBank comes as Goldman and other big Wall Street banks come under pressure in Washington to help small businesses and consumers in the aftermath of the financial crisis. Goldman is also fighting civil fraud charges brought by the Securities and Exchange Commission in a case related to its mortgage securities business.
ShoreBank’s effort to secure financial rescuers is being led by David Vitale, a prominent Chicago banker well-known to leaders in Chicago city government and Obama administration officials. Mr. Vitale would likely lead the bank should the effort succeed. Mr. Vitale is working with former Clinton administration official Eugene Ludwig to engineer a public-private bailout for ShoreBank.
A ShoreBank spokesman said Mr. Vitale, who is engaged in the talks, wasn’t available Friday for an interview.
Mr. Vitale was a former president of the First National Bank of Chicago, now owned by J.P. Morgan. In 2003, Mr. Vitale joined the Chicago public-school system as an unpaid top adviser to then chief executive Arne Duncan. Mr. Vitale’s pro-bono role was soon expanded to chief administrative officer, still unpaid. He worked with Mr. Duncan, who is now Secretary of Education, until 2008.
Write to Elizabeth Williamson at elizabeth.williamson@wsj.com and John D. McKinnon at john.mckinnon@wsj.com
What a racket.
Wells: Why Gordon Gekko is still at home on Wall Street
Suits on the trading floors are slimmer than in 1987, but the greed never left
Published On Fri May 14 2010
Michael Douglas as Gordon Gekko with his 1987 state-of-the-art Motorola DynaTAC 8000 phone.
* Why Gordon Gekko is still at home on Wall Street
* ‘Wall Street’ sequel: Not nearly as much fun as original
* Oliver Stone praises ‘classy’ Royal Bank of Canada
By Jennifer Wells Feature Writer
Bud Fox’s TV has rabbit ears, members of the board of Teldar Paper smoke at the annual stockholders’ meeting, and Gordon Gekko hoists his hefty Motorola DynaTAC 8000 to his ear as though he were listening for the beating heart of a small animal.
Remember this? Gekko stands in the California surf barking at Bud through that first version of the mobile phone (which cost about four grand, by the way). “Money never sleeps, pal,” Gekko instructs — one of those sticky aphorisms that naturally complement the non-stop swagger of Wall Street.
Time passes. Gekko is out of jail, having served eight years for the trifecta of fraud, money laundering and racketeering, and director Oliver Stone is taking a second pass at the amorality of Wall Street with his new movie entitled, catchily, Wall Street: Money Never Sleeps.
It didn’t work the first time. Nailing the amorality that is. Alan Flusser, the custom clothier who dressed Michael Douglas for Wall Street One, says moviegoers with money not only loved the sartorial splendour, they wanted to be Gordon Gekko. “People from literally all over the world would fly in to look like Michael Douglas,” Flusser says from the Manhattan offices of Alan Flusser Custom. “Michael tells me he runs into people (who say), ‘Because of your role in Wall Street I became an investment banker.’ ”
…
Posted on Friday, 05.14.10
FARK it! INVESTMENT BANKS
Wall Street banks face rising heat
Big banks are facing wider state and federal probes into whether they misled investors or ratings agencies over risky mortgage securities.
FILE - In this Dec. 11, 2008 file photo, New York Attorney General Andrew Cuomo speaks in Albany, N.Y. The New York attorney general has launched an investigation into eight banks to determine whether they misled ratings agencies about mortgage securities, according to a person familiar with the investigation.
By GREG GORDON
McClatchy New Service
WASHINGTON — The Wall Street investment banks at the center of the subprime mortgage meltdown face broadening state and federal inquiries into whether they duped investors into buying dicey mortgage securities or manipulated ratings agencies into bestowing investment grades on those faulty products.
The Justice Department and the Securities and Exchange Commission have expanded preliminary criminal inquiries into conduct by Goldman Sachs and Morgan Stanley to four other banks, a person who is familiar with the inquiry said Thursday, speaking on the condition of anonymity because of the sensitivity of the matter.
The agencies have requested information from JPMorgan Chase, Citigroup Inc., Deutsche Bank AG and UBS AG, and federal prosecutors have sought advice from Wall Street experts in complex securities to help unravel the banks’ layered offshore deals, the person said.
Meanwhile, New York Attorney General Andrew Cuomo subpoenaed eight banks Wednesday to determine whether they’d deceived rating agencies into minimizing the securities’ risks for investors, said a person knowledgeable about that inquiry, who is prohibited from discussing the matter publicly and asked not to be identified. The rating agencies also are subjects of a Connecticut attorney general’s suit accusing them of misleading investors and of federal inquiries into whether they engaged in deceptive practices.
Asked whether the rating agencies or the banks were at greater fault, the person familiar with the inquiry said that Cuomo’s investigators are “looking at the entire process to see what went wrong and when.”
Cuomo’s office, which polices Wall Street under New York laws, is especially interested in the hiring by Goldman Sachs and other investment banks of key employees of major rating agencies who then helped to procure ratings, many of them of triple A stature, that attracted institutional investors. The agencies gave top ratings to hundreds of billions of dollars in securities, many of which later were downgraded to junk status.
Those subpoenaed are Merrill Lynch, now owned by Charlotte, N.C.-based Bank of America Corp.; Goldman Sachs; Morgan Stanley; Citigroup; the Swiss banks UBS and Credit Suisse; Germany-based Deutsche Bank; and French bank Credit Agricole.
Read more: http://www.miamiherald.com/2010/05/14/1628530/wall-street-banks-face-rising.html#ixzz0o1jPzf8u
From time to time, I have read through postings at the loansafe.org forums. A year or two ago, it was primarily a support group/information center for people seeking modifications. Now, it is mostly people congratulating each other over their decisions to walk away from their house debt. Of course, that info is probably skewed by the fact that I usually just do a keyword search for Arizona, since I live there and it is obviously one of the foreclosure capitals.
This one is fairly typical:
http://tinyurl.com/3ad9lyf
I find it to be pretty interesting to read.
http://www.businessinsider.com/arnold-schwarzenegger-compares-california-to-greece-2010-5
Oh no he didn’t … Ahh-nold compares California to the PIIGS. Meaning the state is ripe for draconian austerity programs so the banksters can recoup their losses.
Too Clever by Half?
by James Surowiecki May 17, 2010
Innovate or die. The phrase, popularized in Silicon Valley in the nineteen-nineties, has since become a mantra throughout the business world, and nowhere has it been more popular than on Wall Street, which in recent years has churned out a seemingly endless stream of new ways to manage capital and slice and dice risk. But, while Silicon Valley’s innovations have brought enormous benefits to society, the value of Wall Street’s innovations seems a lot less clear. (The former Fed chair Paul Volcker has said, for instance, that the last valuable new product in banking was the A.T.M.) The Valley gave us the microprocessor, Google, and the iPod. The Street gave us the C.D.O., the A.B.S., and the C.D.S.—not to mention the kind of computerized trading that enabled last week’s stock-market nosedive. Not surprisingly, then, the whole notion of “financial innovation” is being looked at with a gimlet eye, and Congress is now considering various ways to rein in the banking industry’s excesses. Given the tumult of the past few years, the barter system is starting to look good.
http://www.newyorker.com/talk/financial/2010/05/17/100517ta_talk_surowiecki#ixzz0o2iTkIkB
Ithaca is a neat place to visit and live. One of my favorite towns across America
The Color of Money
Just after the recession of the 1990s, Paul Glover finished college and returned to his hometown of Ithaca, New York, with one goal in mind: to prove that the environment and the economy could work together. To promote a new way of using money, Glover invented a new paper currency–the Ithaca HOURS. The new bills were imprinted with pictures of waterfalls, lizards, and children, and hundreds of vendors began accepting them in exchange for food, services, and even medical care.
Today, Glover, who teaches urban studies at Temple University in Philadelphia, is involved in a variety of grassroots initiatives: the Philadelphia Orchard Project, a publication called Green Jobs Philly, and the Philadelphia Fund for Ecological Living, to name a few. The Atlantic spoke to him about how he implemented one of his first ideas in Ithaca, and about his far-reaching vision for local currency.
http://www.theatlantic.com/special-report/the-future-of-the-city/archive/2010/05/the-color-of-money/56629/
Ithica sure is beautiful to visit. And much more open to different concepts than many areas that surround them.