The Housing Bubble

From the UK Guardian, Are we better off renting?

http://www.guardian.co.uk/money/2010/nov/14/home-ownership-renting

“For generations, we’ve aspired to be home owners. But evidence shows we’d be better off renting – both individually and as a nation. In Germany and Sweden, the rental market is credited with making people wealthier and happier, and with creating more attractive cities. So, is it time to sell up?”

“Hartwich, originally from Germany, points to the example of his own country as a different model. In 2007, 67% of German households were renter-occupied, thanks largely to a de-centralised planning system that encourages building developments and a legal system that gives tenants greater security and more freedom to decorate their own homes. Whereas in the UK house building targets are set by Whitehall, in Germany, where central government grants are linked to population and tax revenues, local politicians actively compete to attract more residents to their cities by making them more pleasant places to live. Any generated revenue goes back into the local community – by building a new swimming pool, for instance, or lowering parking charges. When local residents can clearly see the benefits of building pleasant housing in order to entice new inhabitants to a city, Hartwich says it defuses the kind of not-in-my-back-yard mentality that prevails in Britain.”

“Switzerland has a similar model – only a third of Swiss households are owner-occupied – and both countries are building new houses that are, on average, 40% larger than their UK equivalents. Where the supply of new homes meets the public demand, house prices stay stable. And because house prices are stable, there is no incentive for people to buy as an investment opportunity.”

“You can still buy a house in Germany for the same price, in real terms, as you could in the 1970s,” says Hartwich. “If I look at the example of my parents – they were in no rush to buy because they could live very well in rented accommodation. They put their money in a bank account and bought their first home when they were in their early 50s and it took them six or seven years to pay off a small mortgage. They were extremely relaxed about it.”

“Fifteen years ago, Andrew Oswald, a professor of economics at the University of Warwick, was one of the first to note that countries with high rates of home ownership (such as Spain, where 89% of households are privately owned) seemed also to have high rates of unemployment. “I argued that that would ossify your labour market and economy,” explains Oswald. “You need labour mobility in an economy, with workers who are able to drop into the right kind of job slots, whether they pop up in Glasgow or Bristol. I continue to worry about the possibility that home ownership slows down people’s ability to move around.”

From UK Guardian: http://tinyurl.com/32582ts

The concept is ’slivers of work’. It will be an administrative nightmare, but no doubt payroll admins are salaried and do not get OT in the UK, if indeed they have such a law. On the plus side, this will be a great way to get folks some income with which to reduce welfare outlays. But I can see a downside - the emergence of a new norm. It may now become acceptable to cut a 40 hour work week into four segments of 10 each, watch ‘em scramble, and reward the ‘best’ producer with more hours up to a half time jobbe. It reminds me of the street markets in Bolivia, where potatoes are sold one at a time.

I foresee rapid adoption on this side of the pond. We are all subprime now.

“Disabled people and lone parents face further upheaval to their benefits as an “ultra-flexible” work system, which allows people to sell their labour in small blocks of time, is placed at the heart of the government’s welfare reforms.

Lord Freud and Maria Miller, the welfare ministers, are examining changes to benefit rules to allow people to sign up for work for as little as two hours a week under the slivers of time initiative.

The government’s decision to throw its weight behind the pioneering system comes as Tesco announces it is to throw open a slivers of time scheme to its 340,000-strong workforce. From today, any Tesco employee will be able to sign up for overtime for modest or longer periods of time at their workplace or at any Tesco store in their area.

Slivers of time, a social enterprise founded by the former BBC producer Wingham Rowan, is designed to tap into the pool of people who cannot work the usual hours expected even of the average part-time employee. It is aimed at parents with young children, disabled people who may not be available for work for most of the week, people who care for a dependent adult or the long-term unemployed who want to ease slowly back into work.”

Quantitative Easing Explained…

http://www.youtube.com/watch?v=PTUY16CkS-k

Some areas of the economy are thriving….

—–

Columbia, Yale, Penn Presidents’ Pay Topped $1 Million in 2008, Study Says

Columbia University President Lee Bollinger was the Ivy League’s highest-paid president in 2008 at $1.75 million in total compensation, as 30 college leaders received more than $1 million in pay.

Yale University and the University of Pennsylvania joined Columbia as Ivy League schools paying their top executive more than $1 million, according to the Chronicle of Higher Education. The paper yesterday published a study of pay for presidents of 448 private, nonprofit U.S. colleges and universities.

The number of presidents making more than $1 million a year rose from 23 in 2007. None was making that much as recently as 2004, according to the Chronicle. After 2008, the U.S. Internal Revenue Service changed some compensation reporting requirements for colleges, including adjusting the time period surveyed to a calendar year rather than a fiscal year. As a result, comparisons to previous years can’t be made.

“Baby boomers make up the largest share of college presidents and many will retire soon and see large payouts,” according to a Chronicle statement. “With a large number of retirements expected, boards are also competing against each other for top talent to replace the retiring leaders, making colleges more willing to cut deals in presidential contracts.”

Stock Futures Rise With Retail Sales Data On Tap- AP

Retail sales likely posted another increase in October as a solid month for car dealers helped to offset lackluster gains for many department stores.

Greenspan: High deficits could spark bond crisis

WASHINGTON (Reuters) - The United States must move to rein in its massive budget deficits or it faces the risk of a bond market crisis, former Federal Reserve Chairman Alan Greenspan said on Sunday.

“We’ve got to resolve this issue before it gets forced upon us,” Greenspan said of the ballooning U.S. debt levels.

He spoke as a panel, chaired by former White House chief of staff Erskine Bowles and former Senator Alan Simpson, is due to deliver a report on debt and deficits by December 1.

A draft report made public last week offered a series of politically tough tax and spending choices that would seek to reduce the debt by $4 trillion by 2020.

The suggestions received a lukewarm reception from some politicians and outright condemnation by others, including House of Representatives Speaker Nancy Pelosi, who pronounced the ideas “simply unacceptable.”

Opinion | One and done: To be a great president, Obama should not seek re-election

In recent days, he has offered differing visions of how he might approach the country’s problems. At one point, he spoke of the need for “mid-course corrections.” At another, he expressed a desire to take ideas from both sides of the aisle. And before this month’s midterm elections, he said he believed that the next two years would involve “hand-to-hand combat” with Republicans, whom he also referred to as “enemies.”

It is clear that the president is still trying to reach a resolution in his own mind as to what he should do and how he should do it.

This is a critical moment for the country. From the faltering economy to the burdensome deficit to our foreign policy struggles, America is suffering a widespread sense of crisis and anxiety about the future. Under these circumstances, Obama has the opportunity to seize the high ground and the imagination of the nation once again, and to galvanize the public for the hard decisions that must be made. The only way he can do so, though, is by putting national interests ahead of personal or political ones.

To that end, we believe Obama should announce immediately that he will not be a candidate for reelection in 2012.

If the president goes down the reelection road, we are guaranteed two years of political gridlock at a time when we can ill afford it. But by explicitly saying he will be a one-term president, Obama can deliver on his central campaign promise of 2008, draining the poison from our culture of polarization and ending the resentment and division that have eroded our national identity and common purpose.

We do not come to this conclusion lightly. But it is clear, we believe, that the president has largely lost the consent of the governed. The midterm elections were effectively a referendum on the Obama presidency. And even if it was not an endorsement of a Republican vision for America, the drubbing the Democrats took was certainly a vote of no confidence in Obama and his party. The president has almost no credibility left with Republicans and little with independents.

The best way for him to address both our national challenges and the serious threats to his credibility and stature is to make clear that, for the next two years, he will focus exclusively on the problems we face as Americans, rather than the politics of the moment - or of the 2012 campaign.

Quite simply, given our political divisions and economic problems, governing and campaigning have become incompatible. Obama can and should dispense with the pollsters, the advisers, the consultants and the strategists who dissect all decisions and judgments in terms of their impact on the president’s political prospects.

Obama himself once said to Diane Sawyer: “I’d rather be a really good one-term president than a mediocre two-term president.” He now has the chance to deliver on that idea.

Palm Beach County out $500,000 to rehab desolate apartments now in foreclosure

By Pat Beall Palm Beach Post Staff Writer
Posted: 9:15 p.m. Sunday, Nov. 14, 2010

At one point, greenbacks flowed freely to the Oasis apartments on Avenue J in Riviera Beach: government loans totaling roughly $700,000 to a company owned by a dental hygienist turned real estate developer.

The money is gone. The project is a weedy stretch of empty apartments where shattered windows and bashed-in walls vie for code enforcement attention. A playground’s colors are slowly washing out in the sun. Doors swing in the wind.

http://www.palmbeachpost.com/news/palm-beach-county-out-500-000-to-rehab-1048031.html - -

Lenders face lawmaker wrath over foreclosures

WASHINGTON/CHARLOTTE, North Carolina (Reuters) - Banks under fire over their foreclosure practices face twin hearings in Congress this week, at which they will come under renewed pressure to find ways to keep borrowers in their homes.

The hearings on Tuesday and Thursday will include the first appearances by executives from major lenders like Bank of America (NYSE:BAC - News) and JPMorgan Chase (NYSE:JPM - News) since the furor over sloppy foreclosure paperwork erupted in September.

Banks are accused of having used “robo-signers” to sign hundreds of foreclosure documents a day, a fiasco that has reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.

Lenders will be pressed on whether the paperwork problems are further evidence that modifying loans is a better alternative to eviction.

“Foreclosure should be the last option and we need to examine barriers to mortgage modifications,” Democratic Senator Tim Johnson, expected to lead the Banking Committee next year, said in an emailed response to Reuters.

A little something more for the thumb sucking bed wetters to worry about…

Lead in reusable grocery bags prompts call for federal inquiry
~ USA TODAY

Lead found in some reusable grocery bags is raising concerns that the toxin could pose environmental or health concerns to consumers.

Sen. Charles Schumer, D-N.Y., is asking for a federal investigation into the reusable bags following a series by The Tampa Tribune. The newspaper found lead in bags purchased at Winn-Dixie, Publix, Sweetbay, Walmart and Target.

Reusable bags are often sold by retailers and used by consumers instead of plastic bags. They may be canvas or made of recycled plastic. In some areas, consumers are charged a fee if they use a plastic bag from a store.

The concern is that lead in bags could cause environmental problems in landfills or leach into food products that are kept in them.

“Federal agencies need to put a ban in place for reusable bags that have lead in them,” Schumer said in a statement. In a letter asking the Food and Drug Administration to open an investigation into the issue, he says, “Any situation where lead bags are coming into contact with the food being purchased by Americans needs to be immediately investigated and resolved.”

I have a great idea:

Now that Chinese banks have halted home loans I think there is a great opportunity for Fannie and Freddie to write subprime loans on Chinese specuvestor houses. Stated income and no money down should be just the trick to put the GSEs back on track. What could possibly go wrong?

America’s real mortgage rate
November 12, 2010 12:05 pm

Record low mortgage rates? Too bad no one is taking advantage of them. Most homeowners still pay around 6% for their loans.

Mortgage rates dropped to another record low this week following the Fed’s move to pump hundreds of billions of dollars into the U.S. economy. Though officials hope that buying Treasuries with newly-printed money will give the slow-growing economy a big boost, the move likely won’t give today’s homeowners much relief.

Now is one of the cheapest times in decades to finance a home, but few are actually locking in record low mortgage rates. This isn’t just because many don’t qualify for refinancing as home prices plummet and banks continue to enforce tighter lending standards.

It’s also because many owners who locked in relatively low rates between 2003 and 2005 don’t think it’s worth refinancing, according to a U.S. Federal Reserve study of the mortgage market released in September. This is a factor that has largely been overlooked

http://finance.fortune.cnn.com/2010/11/12/americas-real-mortgage-rate/ - 123k

Lab Rats Proven Smarter Than Human Beings:

GM retirees weigh buying its stock again.

http://finance.yahoo.com/news/GM-Retirees-Weigh-Buying-Its-nytimes-1113396111.html?x=0&sec=topStories&pos=8&asset=&ccode=

Never trust a realtor. They cannot be trusted.

If a Fed governor raises the issue to prominence, is it still just a media circus?

Fed’s Raskin Is `Gravely Concerned’ About Mortgage Servicing
By Caroline Salas - Nov 12, 2010 1:35 PM PT

Federal Reserve Governor Sarah Bloom Raskin said she’s “gravely concerned” about the impact of mortgage-servicing problems on consumers and the housing market and that increased reforms are needed.

“Many may view these procedural flaws as trivial, technical or inconsequential, but I consider them to be part of a deeper, systemic problem and am gravely concerned,” Raskin said in the text of remarks given in Boston, her first public appearance since being sworn in as a Fed governor on Oct. 4. “Serious and sustained reform is needed to address the larger problems in mortgage servicing.”

Attorneys general in all 50 states began a coordinated probe in October into whether banks and loan servicers used false documents and signatures on hundreds of thousands of foreclosures in a process known as “robo-signing.”

Bank of America Corp., the largest U.S. lender, temporarily halted repossessions nationwide as it reviewed processes, while JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC unit froze home seizures in states where courts oversee foreclosures.

“Given the potential ramifications for consumers, the housing market, and the economy as a whole, I believe it’s fair to say that every relevant arm of the federal government is taking the underlying dynamics of the mortgage foreclosure crisis very seriously,” said Raskin, 49, who had been Maryland’s commissioner of financial regulation since 2007.
…

U.S. Fed governor doubts QE rationale
English.news.cn 2010-11-09 00:08:07

WASHINGTON, Nov. 8 (Xinhua) — Kevin Warsh, a member of the Board of Governors of the U.S. Federal Reserve, doubted the effectiveness and uncertainties of the second round of quantitative easing (QE) taken by the U.S. central bank recently.

Given what ails us, additional monetary policy measures are ” poor substitutes for more powerful pro-growth policies.” The Fed can lose its hard-earned credibility — and monetary policy can lose its considerable sway — if its policies “overpromise or under deliver”, Warsh said in an article on Monday’s Wall Street Journal.

The Federal Open Market Committee (FOMC), the interest rate policy making body of the central bank, announced on Nov. 3 to start a controversial plan of buying 600 billion U.S. dollars in Treasury bonds till the second quarter of 2011, known as the ” Quantitative Easing” (QE2) monetary policy, in a bid to jumpstart the sluggish U.S. economic growth, which has invited wide concerns and criticism both at home and abroad.

“I consider the FOMC’s action as necessarily limited, circumscribed and subject to regular review. Policies should be altered if certain objectives are satisfied, purported benefits disappoint, or potential risks threaten to materialize,” noted Warsh.
…

Companies quit printing white-pages phone books

RICHMOND, Va. — What’s black and white and read all over? Not the white pages, which is why regulators have begun granting telecommunications companies the go-ahead to stop mass-printing residential phone books, a musty fixture of Americans’ kitchen counters, refrigerator tops and junk drawers.

In the past month alone, New York, Florida and Pennsylvania approved Verizon Communications’s request to quit distributing residential white pages. Residents in Virginia have until Nov. 19 to provide comments on a similar request pending with state regulators.

Telephone companies argue that most consumers now check the Internet rather than flip through pages when they want to reach out and touch someone.

“Anybody who doesn’t have access to some kind of online way to look things up now is probably too old to be able to read the print in the white pages anyway,” joked Robert Thompson, a pop culture professor at Syracuse University.

Oof!

market pulse
Nov. 15, 2010, 8:30 a.m. EST
November Empire State reading plunges to -11.1
By Steve Goldstein

WASHINGTON (MarketWatch) — Business conditions in the New York area deteriorated in November, as the New York Fed’s Empire State manufacturing survey plummeted 27 points to -11.1, driven by a sharp drop in new orders. The release was far worse than economist expectations for a +15 reading and marks the first negative reading since July 2009. The shipments index also fell below zero.

Dips buying opportunity ahead in bank stocks?

Fed official kicks dividend hikes down the road
Posted by Colin Barr
November 12, 2010 1:01 pm

It looks like bank investors are going to be stuck with a lot of small change for a while.

Federal Reserve Governor Daniel Tarullo said in a speech Friday that he expects U.S. bank regulators to take a “conservative” approach in handling requests by big bank holding companies to increase their dividends.
…

Apologia:

No offense intended yesterday toward SCdave, ahansen, and Exeter, in lumping them together using the L-word.

You guys are entitled to your opinions.

Yours Regretfully,

Cobalt blue Monday

Robo-signer Grand Kabuki scheduled for Congress this week…

U.S. banks to face lawmaker wrath on foreclosures
November 15, 2010 | 07:53
Reuters

Banks under fire over their foreclosure practices face twin hearings in Congress this week, at which they will come under renewed pressure to find ways to keep borrowers in their homes.

The hearings on Tuesday and Thursday will include the first appearances by executives from major lenders like Bank of America and JPMorgan Chase since the furor over sloppy foreclosure paperwork erupted in September.

Banks are accused of having used “robo-signers” to sign hundreds of foreclosure documents a day, a fiasco that has reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.

Lenders will be pressed on whether the paperwork problems are further evidence that modifying loans is a better alternative to eviction.

“Foreclosure should be the last option and we need to examine barriers to mortgage modifications,” Democratic Senator Tim Johnson, expected to lead the Banking Committee next year, said in an emailed response to Reuters.
…

Lowe’s sales disappoint as homeowners postpone renos
November 15, 2010 | 08:12
Reuters

Lowe’s Cos missed quarterly sales estimates as U.S. shoppers put off expensive home renovations in a weak economy, prompting the company to forecast a full-year profit below Wall Street expectations.
…

Move over flipping - flopping is the new hotness. I can hardly wait until there is a show on HGTV - Flop That House!

In a rising market, investors “flip” houses, buying them and then reselling for a profit as overall values rise.

“Flopping is the opposite of flipping,” said Amy Swaney, regional Arizona sales managers for Citywide Home Loans and a past president of the Arizona Mortgage Lenders Association. “It is the art of profiting off the devaluation of property rather than an increase in value of a property.”

It is impossible to know how many homes have been “flopped” since short sales began to be widely accepted by lenders in the past year.

But a key indicator is how quickly short-sale homes are resold. An owner who buys in a short sale and sells the home again within a few days most likely had the second buyer lined up in advance.

In the past year, nearly 20,000 short sales closed in metro Phoenix. Of those, at least 1,000 were flops, according to an analysis by Tom Ruff of the real-estate research firm Information Market. A few examples: a Tolleson home sold for $90,000 through a short sale and then was flopped within 20 days for $106,000; a northwest Phoenix home was purchased first through a short sale for $28,500 and then resold through a flop within two weeks for $50,000; and a Scottsdale house sold via short sale for $90,000 and then for $122,000 through a subsequent flop less than a month later.

http://www.azcentral.com/business/realestate/articles/2010/11/14/20101114phoenix-real-estate-short-sale-flopping.html

New York state manufacturing plunges: NY Fed
afp 15 November 2010

New York state manufacturing unexpectedly plunged in November, the first contraction since July 2009 when the US economy exited recession, official data showed Monday.

The Federal Reserve Bank of New York reported its manufacturing activity index dropped to minus 11.1 points in November, from a positive 15.7 points in the previous month.

The Empire State Manufacturing Survey index is considered a bellwether of the manufacturing sector which has been a key strength in the economic recovery.

It was the first time the index fell below zero since July 2009, the month after the worst recession in decades was officially declared over.

The sharp 27-point decline surprised analysts, who had forecast on average a slip to a positive 11.7-point reading.

Earlier in the day Christie discussed the Parsippany Board and Seitz at a town hall meeting in Toms River. “Let me tell you about the new poster boy for all that’s wrong with the public school system that is being dictated by greed,” the governor told the audience. “This contract is the definition of greed and arrogance. I’m going to be speaking out loudly and clearly every day I can about Lee Seitz. If Lee Seitz wants to try to put his greed and his arrogance ahead of the taxpayers of New Jersey, you elected me to stand up to people like Lee Seitz and others across the state and I will.”

The day before the meeting Seitz is quoted in the Daily Record as saying, “Because of the proposed salary caps, I have to look at my future and the financial welfare of my family. I certainly would have options if I didn’t feel the compensation in this district, or New Jersey, is appropriate.”

The governor reacted to Seitz’s veiled threats to leave New Jersey and go to a nearby state where there is no state salary. “I will say in response to Mr. Seitz, ‘Let me help you pack.’ We have real problems in our state that we have to fix and we don’t have the time, nor the money, nor the patience any longer for people who put themselves before our citizens,” Christie railed.

Christie is full of shit. The major problem with the public school system is the parents. They don’t care about the kids’ education, they’d rather spend money on football and cheerleading than academics and god forbid if a teacher dares to scold pweshus or give him/her a failing grade.

Fed’s ability to influence market could be over
Investors priced its moves in advance, now fundamentals may rule

Stock markets are forward looking. Once the Fed began signaling in late August that it had a stimulus plan in the works, investors started to push stock prices higher. But over the past five days, ominous signs emerged about the global economy:

* Concerned deepened that Ireland’s debt crisis would require a bailout by the European Union.
* European and Asian countries attacked the Fed policy because it is resulting in a falling dollar that will help U.S. exports at their expense. Fears of a global trade war increased when President Barack Obama and U.S. negotiators failed to reach a new trade agreement with South Korea.
* Technology giant Cisco Systems Inc. cut its revenue forecast for the rest of the year. Cisco is the world’s No. 1 maker of computer networking equipment and a bellwether for the technology industry.

“Everybody was focused on the doctor without looking at the patient,” said David Rosenberg, chief economist at Gluskin Sheff in Toronto, likening the Fed to a doctor and the economy to its patient. “The patient may be out of the operating room, but it’s still in the sick bay.”

I thought WalMart was open 24 hours aleady. WTF?

http://finance.yahoo.com/news/WalMart-expands-Black-Friday-apf-2104899007.html?x=0&sec=topStories&pos=6&asset=&ccode=

New Castle councilman calls cops on boys’ cupcake sale

NEW CASTLE — When Andrew DeMarchis and Kevin Graff, two 13-year-olds from Chappaqua’s Seven Bridges Middle School, set up shop at Gedney Park on a fall weekend last month, they were expecting a tidy profit.

Instead, the two wannabe entrepreneurs selling cupcakes, cookies, brownies and Rice Krispie treats baked by them for $1 apiece got a taste of cold, hard bureaucracy .

New Castle Councilman Michael Wolfensohn came upon the sale and called the cops on the kids for operating without a license.

The boys’ parents are incensed and can’t believe a Town Board member would handle the situation that way.

“I am shocked and sad for the boys. It was such a great idea, and they worked hard at it,” said Laura Graff, Kevin’s mother. “But then some Town Board member decided to get on his high horse and wreck their dreams.”

DeMarchis and Graff, along with two other classmates, Zachary Bass and Daniel Katz, had a simple, if half-baked, business plan: sell their treats at Gedney Park for a couple of years and save up enough to open a restaurant.

Their first day was wildly successful, the boys said. They netted $120, of which they invested $60 to buy a cart from Target and added water and Gatorade to their offerings on their second day, the next Saturday, Oct. 9.

Wal-Mart expands Black Friday hours, unveils deals
Wal-Mart to open most stores at midnight on Black Friday, plans $298 laptop, $198 TV deal

NEW YORK (AP) — Wal-Mart plans to open most of its stores at midnight the day after Thanksgiving, the company said Monday, becoming the latest in a series of retailers to expand hours to lure in shoppers who want to get a head-start on holiday bargain shopping.

The world’s largest retailer also is offering shoppers a sneak preview of the discounts it has planned, from laptops to jeans.

As of Oct. 31, Wal-Mart Stores Inc. operated 3,792 Walmart stores, of which 2,882 are supercenters. The company’s super centers are typically open around the clock. But the rest of its stores previously opened at 5 a.m the day after Thanksgiving.

Starting at midnight, Wal-Mart will offer discounts on a wide range of items from toys to clothing, including $9 Wrangler jeans and $15 Lego tubs. The company’s big electronics sale will start at 5 a.m. Friday, featuring $298 15.6-inch HP Laptops, $198 Emerson 32-inch LCD HDTV TVs and $59 Kodak Digital cameras.

A positive outlook for San Diego’s economy
Recovery appears to be taking shape
By Dean Calbreath
Friday, February 12, 2010 at 12:04 a.m.
K.C. Alfred / Union-Tribune

When you’ve hit rock bottom, the old saying goes, there’s nowhere to go but up.

Which is one explanation for the growing signs that San Diego’s economy, slowly and unsteadily, is creeping toward recovery.

The latest positive news came yesterday from the index of leading economic indicators by the Burnham-Moores Center for Real Estate at the University of San Diego. For the first time since April 2004, all of the economic criteria that USD uses to evaluate the local economy — housing permits, want ads, consumer confidence, the employment rate, local stock prices and national economic growth — were pointing up in December, suggesting a positive outlook for 2010.

“The indicators have been moving up for nine months in a row now,” said USD economist Alan Gin, who compiles the index. “Last year, I was thinking that the indicators were pointing to a recovery beginning in the first half of 2010. But with the recent data, I’m thinking the recovery could start as soon as the first quarter. Even if there’s a lull in January and February, once spring starts, the improvements in the economy could start getting more noticeable.”
…

OK - dumb question time: What the heck is a “Social media associate”? Someone who plugs a company’s product line on Facebook?

http://money.cnn.com/galleries/2010/pf/1011/gallery.second_jobs/3.html

Greece admits breach of bailout terms as audit begins

ATHENS (AFP) - – Greece acknowledged Monday it would breach conditions for a new instalment of a 110-billion-euro bailout as the IMF and European Union began an audit of the country’s austerity measures.

Greece’s Socialist government faced a week of tough talks with its benefactors and although bolstered by sweeping successes in local elections on Sunday, the outlook is still overshadowed by gloom on the economic front.

The Eurostat statistics agency issued its final revision of Greece’s accounts for the past four years, triggering a new forecast by Athens that its public deficit in 2010 would reach 9.4 percent of output, well above the 8.1-percent target.

Greek bond yields, a measure of investor confidence in the country’s finances, rose on Monday, with the rate on 10-year paper up to 11.280 percent from 11.184 percent on Friday.

Gulfstream to Add 1,000 Jobs, $500 Million to Meet Jet Demand
Nov 15, 2010

A Honeywell survey said the recovery in the global business-jet market may occur in late 2011 and accelerate in 2012.

Gulfstream, the business-jet making unit of General Dynamics Corp., said today it would spend $500 million and add 1,000 jobs in Savannah, Georgia, to meet a growing market for large-cabin aircraft.

The investment, to be spread over seven years, will pay for building plants for the G650 and G250 jets, along with maintenance capacity for all models, Joe Lombardo, president of Gulfstream, said in a telephone interview. New hires in technology and engineering will be followed by manufacturing and service jobs, Lombardo said.

“We are already seeing more demand for our large-cabin, long-range aircraft and are having a pretty good year so far,” he said. Sales for the G650, which typically can carry eight passengers, and the G250, with a capacity for 10, will be driven by international demand, he said.

He’s definitely right about one thing, the FED does whatever the hell ‘it’ wants!

Miller Sees U.S. Stocks Up 15% in Next 12 Months

Legg Mason Inc.’s Bill Miller said U.S. stocks may rise 15 percent in the next 12 months as the Federal Reserve continues efforts to inflate asset prices and boost the economy.

“The Fed wants the stock market to go up, and they will do what’s necessary to get it to whatever level it takes for the wealth effect of higher stock prices to stimulate growth,” Miller wrote in a letter to shareholders released today.

Miller, famed for beating the S&P 500 for a record 15 straight years through 2005, trailed the U.S. benchmark for the next three years as he underestimated the severity of the financial crisis and bets on banks and real-estate companies backfired. He outperformed peers in 2009 as the stock market rebounded from a 12-year low.

Strong Retail Sales, Caterpillar Deal Drive Stocks- AP

Stocks rose Monday following a spike in corporate deal-making and news that retail sales jumped to the highest level in seven months in October.

Cocaine Cash for Clunker Jets:

http://www.ajc.com/business/us-gangs-buy-jets-741662.html

The “Sound Money” conversation has begun!
Even the N.Y. Times has taken up the subject.

“Let the economists gasp: The classical gold standard, the one that was in place from 1880 to 1914, is what the world needs now. In its utility, economy and elegance, there has never been a monetary system like it.

“It was simplicity itself. National currencies were backed by gold. If you didn’t like the currency you could exchange it for shiny coins (money was “sound” if it rang when dropped on a counter). Borders were open and money was footloose. It went where it was treated well. In gold-standard countries, government budgets were mainly balanced. Central banks had the single public function of exchanging gold for paper or paper for gold. The public decided which it wanted.”

~~ How To Make The Dollar Sound Again ~~

> Watch for Paul Krugman and other liberal economists argue that honest money will be ruinous. “We must stick to fiat currency and attempt to heal the economy with a big burst of money inflation”, they will say. Pay no attention. Remember the adage, “Honesty is the best policy.” That applies to legal tender, too.

Bonuses go up in smoke

William Wright and Matt Turner
15 Nov 2010

The highest paid bankers and traders in the UK and Europe who receive a bonus of £1m this year could end up receiving no money at all after tax in 2011 – and may face a tax bill that is bigger than the upfront cash part of their bonus – under current European proposals to reform remuneration.
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California kicks off a $14 billion debt ~ cnnmoney

Cash-strapped California kicked off a $14 billion debt sale Monday, amid a weakening demand for municipal bonds as investors fret that ballooning deficits could trigger cities and states to default on their debt payments.

Yields on municipal bonds have been rising in recent weeks as state and local governments issue debt to boost liquidity as they struggle to trim deficits and balance budgets, said Matt Fabian, managing director at Municipal Market Advisors.

The consulting firm’s index of AAA-rated 30-year municipal jumped 0.15 percentage point last week, which was the biggest jump in 18 months. Bond prices and yields move in opposite directions.

“We’re seeing a huge supply of municipal debt coming to the market this week, almost twice as much as usual,” Fabian said. “The increased supply is adding pressure on the market.”

California, which is trying to address at $25.4 billion budget hole, began to take orders from retail investors Monday on $10 billion in short-term notes. That state is also on tap to issue $2 billion in taxable bonds as part of the Build America Bonds program, $1.75 billion general obligation tax-exempt bonds, and $275 million in bonds backed by public works, all before Thanksgiving.

Mexico’s $80M boom industry: Bulletproof cars USA TODAY

MEXICO CITY — Carlos Nader drives the congested streets in a bulletproof Mercedes-Benz equipped with pepper spray and a 120-decibel alarm.

He has had bullets bounce off the car and once scared off an assailant by blasting his alarm, which is as loud as a jet engine.

Nader knows his car makes him a target of kidnappers and thieves in a country that has an “alarming” rate of carjackings and ransom abductions, according to the U.S. State Department. In Mexico these days, “everyone’s a target,” said Nader, owner of Protecto Glass International, a vehicle armor company.

A growing number of Mexicans — including many from the middle class — see bulletproofing their vehicles as a necessity and not a luxury.

Nader says an increasingly typical customer these days “is a regular guy that works, maybe he has a small business and he’s been approached by criminals to steal his car.”

“You’ll see Hondas, small SUVs … pickups,” Nader said of some of the vehicles arriving at his business.

Extortion is now commonplace in some regions of Mexico. Kidnapping has soared by more than 300% over the past five years and since December 2006, more than 28,000 Mexicans have died in killings blamed on drug-cartel violence.

The violence has sparked a jump in bulletproofing.

Lack’s to file Chapter 11 petition, close all stores within 75 days

Lack’s Stores Inc., Texas’ largest furniture retailer, announced this morning it intends to file a Chapter 11 bankruptcy petition after lenders decided to call their loans on customer receivables.

A news release from the company states closing sales will be held over the next 45 to 75 days at all 36 stores. Lack’s has two stores in Lubbock.

Lack’s had financed customers’ purchases internally, borrowing from banks and other lenders to finance those deals.

The lenders “have demanded repayment of the loan and this has resulted in the necessity of this current action, notwithstanding our company’s strength, viability, and profitability,” according to the release.

The company was founded as an auto supply store in Beeville in 1938, and branched into furniture sales duting World War II. The company moved its headquarters to Victoria in 1941.

Before the current recession, the company had 1,200 employees and sales in excess of $200 million, according to the company announcement.

U.S. Housing Excess Seen Lasting Four More Years: Chart of the Day

So many U.S. homes are unoccupied these days that demand may not catch up with the supply until 2014, according to Josh Levin, an analyst at Citigroup Inc.

The CHART OF THE DAY displays the percentage of housing units that are vacant, according to quarterly data compiled by the Commerce Department. The chart also shows housing starts as a percentage of homes already built, or the housing stock.

Last quarter’s vacancy rate was 10.96 percent, near a peak of 11.05 percent in the second quarter. These figures are based on the number of homes for sale and apartments for rent that are designed for year-round occupancy, and include mobile homes.

About 2.1 million homes now available aren’t needed, Levin wrote in a report yesterday. The estimate is based on the overall rate, along with separate figures for houses and apartments.

“It will take three to four years to work off the excess supply and reach equilibrium,” he wrote. This means housing starts are unlikely to follow “a V-shaped recovery pattern” after plunging in the past few years, the report said.

The number of houses started in September, calculated at an annual rate, was equivalent to 0.5 percent of the housing stock. That’s down from a high of 1.7 percent, set five years earlier.

http://www.bloomberg.com/news/2010-11-15/housing-excess-may-last-another-four-years-citigroup-says-chart-of-day.html

Bank of America Oct. credit card charge-offs rise
Bank of America posts rise in October credit card charge-offs; late payments continue to fall. ~ November 15, 2010

NEW YORK (AP) — Bank of America Corp. said Monday that the rate at which it wrote off credit card debt as uncollectible rose slightly in October. But the Charlotte, N.C.-based bank also posted a drop in late payments, which may indicate the charge-off gain is a blip in a broader trend toward improving payment behavior among credit card customers.

Bank of America wrote off 10.15 percent of credit card balances in October, up from 9.98 percent in September. While an increase, the rate remains near the low end for the year for Bank of America, which posted a peak charge-off rate of 13.53 percent in December.

Card companies typically write off loans after they’re 180 days past due, the point at which it’s assumed the balances won’t be able to be collected.

Scientists propose one-way trips to Mars

PULLMAN, Wash. – It’s always cheaper to fly one way, even to Mars. Two scientists are suggesting that colonization of the red planet could happen faster and more economically if astronauts behaved like the first settlers to come to North America — not expecting to go home.

“The main point is to get Mars exploration moving,” said Dirk Schulze-Makuch, a Washington State University professor who co-authored an article that seriously proposes what sounds like a preposterous idea.

At least one moon-walking astronaut was not impressed.

“This is premature,” Ed Mitchell of Apollo 14 wrote in an e-mail. “We aren’t ready for this yet.”

Also cool to the idea was NASA. President Barack Obama has already outlined a plan to go to Mars by the mid-2030s. But he never suggested these space travelers wouldn’t come home.

“We want our people back,” NASA spokesman Michael Braukus said.

The article titled “To Boldly Go” appears in the latest issue of the Journal of Cosmology, which featured more than 50 articles and essays on Mars exploration.

Schulze-Makuch and Paul Davies, a physicist at Arizona State University, argue that humans must begin colonizing another planet as a hedge against a catastrophe on Earth. They believe the one-way trips could start in two decades.

“You would send a little bit older folks, around 60 or something like that,” Schulze-Makuch said, bringing to mind the aging heroes who saved the day in the movie “Space Cowboys.”

That’s because the mission would undoubtedly reduce a person’s lifespan, from a lack of medical care and exposure to radiation. Radiation could also damage reproductive organs, so sending people of childbearing age is not a good idea, Schulze-Makuch said.

Mars is a six-month flight away, possesses surface gravity, an atmosphere, abundant water, carbon dioxide and essential minerals. The two scientists propose the missions begin with two two-person teams, in separate ships that would serve as living quarters on the planet. More colonists and regular supply ships would follow.

They need to roast this clown…

Ethics panel begins deliberations in Rangel case

WASHINGTON – Shortly after veteran Rep. Charles Rangel of New York walked out of his ethics trial in protest, a House panel began closed-door deliberations Monday on 13 counts of alleged financial and fundraising misconduct that could bring formal condemnation.

Only recently one of the most powerful members of Congress, Rangel was reduced to pleading in vain for colleagues to give him time to raise money for a lawyer before taking up the charges. The 80-year-old congressman left even before they said no, and the rare proceeding — only the second for this type of hearing in two decades — went on without him.

An ethics committee panel of four Democrats and four Republicans was sitting as a jury in the case late Monday. The official acting as prosecutor said the facts were so clear there was no need to call witnesses, and panel members agreed.

Holy cow! Money Magazine saying no bottom until second half of 2011, and to lowball all your bids!

Gotta like MSM hitting ‘acceptance’ mode, even if there is still a ton of sunshine and fairyfarts in the article.

The Financial Times
US Treasury yields rise sharply
By Telis Demos in New York
Published: November 15 2010 03:56 | Last updated: November 15 2010 21:50

Foreclosure company finds itself in default
By SHANNON BEHNKEN | The Tampa Tribune
Published: November 15, 2010
Updated: 04:41 pm

TAMPA - In a regulatory filing many homeowners may find ironic, a mortgage business run by a Florida lawyer whose “foreclosure mill” is under state investigation says it may close if unable to resolve a default with its lender. DJSP Enterprises Inc. handles the non-legal work for the Plantation law offices of David J. Stern. On Monday, the company said it has not paid its November rent and that its DAL Group LLC unit defaulted on a $15 million line of credit to Bank of America.
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