The Housing Bubble

Comment by GrizzlyBear
2011-07-23 15:47:45
With the current rate of economic decline, one should be able to find cheap housing in just about any city or town in this county when all is said and done.
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Reply to this comment
Comment by GH
2011-07-23 22:22:53
Unlike other third world countries where the land is wholly owned by rich land barons, all of our land is leveraged to the hilt, so yes, I suspect in 10 years land will be dirt cheap and with few of us left in the economic game most of us will be equally dirt poor.

Of course we could also be ripe for break up as a country, military take over etc. I keep trying to come up with ways we get out of this mess in one piece, but it feels more and more like the day you wake up and REALLY come to terms with the fact you cannot make your bills and your credit is shot.

I mean seriously someone what is the next big thing and are we there?

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Two interesting thoughts from the Oil City thread. I ponder these thoughts myself.

However….. the PTB(FedReserve) wants to make sure everyone is flat out broke before anyone can truly leverage a deflationary environment. All the $$$ at the top and us penniless peons at the bottom. Only at that point will affordable prices of *everything* occur.

615am. Off to Sussex County DE beach towns for a week. Ground zero for publicly traded builder speculation in the mid-atlantic.

Rhode Island city asks retirees to cut their pensions
- CNN

As cities across the United States struggle to keep their finances afloat, Central Falls, Rhode Island, is taking a novel approach to try to avoid bankruptcy.

The city is asking police and firefighter retirees to give up 50% of their pension.

On Tuesday, a state-appointed receiver, Judge Robert Flanders, met with constituents to discuss options that will prevent the city from filing for bankruptcy, but the choices seemed limited: either volunteer for the pension cut, or risk losing it all.

The city has a $5 million per year structural deficit, said Michael Trainor, a spokesman for Flanders.

“Going forward, it’s now at a point where a city is about to run out of cash,” he added.

Central Falls, a city of 19,000 residents living in roughly a square mile, has historically had difficulty reducing its expenses because of a decline in population and the resulting smaller tax revenues, according to Trainor.

Each of the 141 city retirees will receive a voting ballot and a packet by the end of the week, showing how much of their pensions will be slashed if they agree to volunteer for the benefits cut.

With August set as the deadline for further decisions on the financial future of the city, Flanders hopes to find out residents’ decisions by the end of the month.

Those who were planning to retire soon are now worried about doing so, fearing that they may end up with nothing. Firefighters in the city do not receive Social Security benefits.

“They’re very concerned about what’s happening, they worked 20-25 years of their career, they were anticipating having this benefit that they were promised the day they were hired,” said Michael Andrews, president for local firefighters’ union.

Sure it can handle Moro warriors but what about smiling meth heads with hammers? I think we’re gonna need a bigger cartridge….

SHOOTING THE BULL: John Browning’s .45 ACPCartridge

Hostilities between the two cultures quickly erupted into the Philippine-American War, which raged from 1899 to 1902. The second phase of this conflict, known as the Moro Rebellion, waged on till 1913 and markedly demonstrated the inadequacy of American small arms.

Armed with modified sugarcane cutting machetes (bolas), limbs wrapped in leather, and fortified by hallucinogenic potions, the Moro warriors proved nearly unstoppable by the .38 Long Colt and .30-40 Krag-wielding American troops. The search began immediately for a handgun cartridge “with greater stopping power and to be a caliber not less than .45.”

Read more: http://magicvalley.com/lifestyles/recreation/020f88a6-caba-5e82-b48d-79454488d7b7.html#ixzz1T1F004EI

HAPPY VALLEY, Ore. — A bizarre, unprovoked attack outside a Wal-Mart has led to attempted murder charges for a local man.

Police say Jonathan E. Jones, 31, attacked a man with a hammer in the parking lot of a Happy Valley Wal-Mart store. Jones now faces charges of attempted murder, attempted assault and menacing.

The attacker again raised his arm with the weapon, but Anderson was able to block the next intended strike to his head. Anderson suffered a serious wound to his hand, but was able to use that moment to push the attacker away. Anderson said his attacker was smiling the entire time.

“He was absolutely high on something,” Anderson said. “His behavior wasn’t normal, not like a human … it was different.”

Anderson said Jones admitted to investigators he’d been high on meth at the time of the attack.

http://www.komonews.com/news/local/124690579.html

Got into another arguent with my in-laws. Their position is that we can’t raise taxes, can’t cut Social Security, Medicare or DoD, but simply must stop these insane deficits.

Of course, their proposed solution is simply to stop welfare and cut waste.

Argh. When I tried to explain that SS, MC and DoD + interest + pensions + VA are over $2.4T and we only have $2.1T in income… and we haven’t even covered roads, airports, coast guard, courts, jails, etc, etc….

Oh, they get so angry an me when I have actual numbers to apply to their argument that proves it false.

How huch goes to “Welfare”? $250B to Medicare, $50B to disability, $60B to foodstamps, $100B to unemployment, $40B to all forms of public housing and housing subsidies… It all adds up to about 1/3rd the deficit.

Poetic justice

Copper theft: Dangers may not be worth risks

WRENS, Ga. — You’ve heard the stories — copper thefts are on the rise. People are trying to steal the metal to make a quick buck.

It’s not just illegal, it’s dangerous and may not be worth the risk.

Within the past month, at least two people have been taken to the Joseph M. Still Burn Center after being shocked.

Two people, from two different states, are accused of stealing copper, taking big chances and losing.

This is a 911 call from Henderson, North Carolina:
911 DISPATCHER: “911, what’s your emergency?”
CALLER: “Ma’am, I have two men here burned, and I need the ambulances now. They are burned up. All I can tell you is that their skin is melting off their bodies.”

Nicholas Surrett, 39, died in the incident. Officers think he and another man were stealing copper.

Another man, 27-year-old Jonvan Spears of Union, S.C, is in critical condition and Cherokee County deputies believe this was another failed attempt. This week, Spears and two other men were severely burned after officers believe they were trying to steal copper at a brickyard.

Michael Cantey at Jefferson Energy Cooperative demonstrated — using a chicken — what happens to a human body when it makes contact with a high voltage.

“The contact that that copper wire is making with the chicken represents exactly what would happen to your body with that 7,200 volts flowing through it,” Cantey said.

The chicken quickly fried. That chicken represents you, your skin, similar salts and nutrients — same effects

When negotiators can’t even decide where to start, it rarely bodes well for the outcome.

When Democrats talk of increasing revenues, they are starting from the CBO numbers which include the Bush tax cuts expiring and no fix to the AMT which everyone knows gets patched every year to keep it from hitting the middle class.

When the Republicans consider if/how much we are going to riase revenue, they are starting from this year’s rates where the Bush Tax cuts are still in effect and the AMT has already been fixed.

And, then there is the AARP crowd. They are actually believing the lies of congress that they intend to only cut for those under 55…. Like the 20% cut in Social Security, phased in over 20 years by locking COLAs to 1% below inflation…. So, you’re not going to be collecting 5% less 5 years from now? Oh, the cuts will just be for those starting SS after the bill passes… WRONG! And making Medicare a voucher system and locking the voucher to this years average per person expense…. That is for everyone toooo… including those alreasy collecting.

But, but, but… The Republicans siad everyone over 55 would be protected.

Dude, POLITICIANS LIE!!!!!

They are hoping that you won’t noice that your SS check isn’t keeping up with inflation and you are being forced to pay more of your medical, until it is too late.

#@$%! meddling pension board….

Hedge fund rejected by split pension board
The $100 million investment lacked the votes

A recommendation from the county pension board’s portfolio strategist to invest $100 million in a new hedge fund suffered a rare rejection Thursday, in part because board members learned the trader lost $1.8 billion in now-notorious “credit default swap” investments in 2008.

Partridge recommended that the board invest $100 million with Boaz Weinstein, a well-known credit trader who lost $1.8 billion in 2008 when he worked for Deutsche Bank.

Some board members complained that Partridge did not include Weinstein’s investment history in materials he provided the board in advance of his recommendation.

Partridge responded that his firm, Salient Partners of Texas, conducts extensive reviews of the investment managers it recommends but routinely excludes some details from their reports to clients.

“We normally don’t release the background checks to the board; it has never been the practice,” said Partridge

http://www.signonsandiego.com/news/2011/jul/21/hedge-fund-rejected-by-split-pension-board/

Abandoned and foreclosed homes a haven for crime in Lake Worth

By Willie Howard Palm Beach Post Staff Writer
Posted: 5:37 p.m. Saturday, July 23, 2011

LAKE WORTH — Bank foreclosures have aggravated the city’s problem with run-down houses, leaving abandoned properties open to prostitutes, squatters and drug dealers.

“Some of the conditions are Third World,” Commissioner Scott Maxwell said during a tour of blighted houses last month. “We need to stop sugar-coating it.”

In the case of about 75 properties, the city doesn’t have anyone to hold accountable. They’re in foreclosure, but the banks don’t have clear titles. In other cases, the city wants to demolish buildings but can’t get clear title to them

http://www.palmbeachpost.com/news/abandoned-and-foreclosed-homes-a-haven-for-crime-1641488.html - -

IL–Nursing Home Closing
Associated Press July 23, 2011

ASTORIA, Ill.—
A west-central Illinois nursing home will close next week because of late payments from the state, the facility’s administrator said.

Astoria Gardens and Rehab Center has had to wait six months to receive its payments, said administrator Steve Axelbaum, who added that “nothing can survive in this environment.”

“It is criminal that we provide services for the state, and they don’t pay us for six months,” Axelbaum told the (Peoria) Journal Star for a story on its web site Saturday.

Arrangements are being made to move the home’s 35 residents — many of whom are in their 80s and 90s — to other facilities in the area, he said.

The facility, which has been in business for about a decade, employs about 40 people. The property on about 6.5 acres of land will be sold.

Melaney Arnold, spokeswoman for the Illinois Department of Public Health, confirmed that the nursing home in Astoria was closing voluntarily. She said it’s the home’s responsibility to relocate its residents.

Illinois has a multibillion-dollar budget deficit, and the state has dealt with the fiscal crisis, in part, by delaying payments to agencies and providers.

“This is happening all over the region,” Axelbaum said. “It’s a real bitter shame for the community.”

Ben, the Oil CIty thread is gone?!

(Reaches for tin foil hat…)

“Soft patch” riiight!

U.S. Growth Probably Slowed in Second Quarter
Bloomberg - Jul 24, 2011

The U.S. economy probably expanded in the second quarter at the slowest pace in a year as higher fuel costs crimped consumer spending and supply disruptions limited production, economists said before a report this week.

Gross domestic product, the sum of all goods and services produced in the nation, rose at a 1.8 percent annual pace after a 1.9 percent gain in the previous three months, according to the median forecast of 69 economists surveyed by Bloomberg News before the Commerce Department’s July 29 report. Home sales languished and consumer confidence dimmed, other data may show.

Americans’ purchases last quarter grew at the weakest pace since the recession ended in 2009, reflecting limited job growth that may keep holding back the world’s largest economy. That is among reasons Chairman Ben S. Bernanke said this month that the Federal Reserve needs to keep all policy options open.

“The soft patch has hung around a little longer than expected,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “A lot of the slowdown can be blamed on temporary factors, but not all of it. Consumers faced several headwinds, which caused them to ratchet down their spending.”

Gotta love all this hope&change!

Koch, Exxon Mobil Among Corporations Helping Write State Laws
(Bloomberg)

Koch Industries Inc. and Exxon Mobil Corp. are among companies that would benefit from almost identical energy legislation introduced in state capitals from Oregon to New Mexico to New Hampshire — and that’s by design. Photographer: John Gress/Getty Images

Koch Industries Inc. and Exxon Mobil Corp. (XOM) are among companies that would benefit from almost identical energy legislation introduced in state capitals from Oregon to New Mexico to New Hampshire — and that’s by design.

The energy companies helped write the legislation at a meeting organized by a group they finance, the American Legislative Exchange Council, a Washington-based policy institute known as ALEC.

The corporations, both ALEC members, took a seat at the legislative drafting table beside elected officials and policy analysts by paying a fee between $3,000 and $10,000, according to documents obtained by Bloomberg News.

The opportunity for corporations to become co-authors of state laws legally through ALEC covers a wide range of issues from energy to taxes to agriculture. The price for participation is an ALEC membership fee of as much as $25,000 — and the few extra thousands to join one of the group’s legislative-writing task forces. Once the “model legislation” is complete, it’s up to ALEC’s legislator members to shepherd it into law.

“This is just another hidden way for corporations to buy their way into the legislative process,” said Bob Edgar, president of Common Cause, a Washington-based group that advocates for limits on money in politics.

New York’s property tax rates vary widely, depending on where you live

Homeowners in the struggling city of Fulton pay the highest property tax rates of any city in New York state.

For every $1,000 of a home’s value, Fulton residents pay $51.14 to the city, county and school district.

By contrast, homeowners in the village of Skaneateles pay less than half that rate — $24.77.

Everyone knows that New Yorkers pay high property taxes – the fourth highest in the country and twice the national median. But less known is that there is such wide disparity between localities within New York and that this difference favors higher-end real estate markets.

One example: A $200,000 house in the town of Skaneateles and a $175,000 house in Onondaga – about 15 miles apart — were sold at about the same time this year. The Skaneateles owner paid $4,400 a year in taxes; the Onondaga homeowner paid $6,400.

http://www.syracuse.com/news/index.ssf/2011/07/new_yorks_property_tax_rates_v.html

Collectively we’re doing what we can’t do on an individual basis. We’re borrowing massive amounts of money with the willful intention of sending the responsibility for paying it back to our posterity. What a spineless act! Forcing future generations to pay debt with which they had nothing to do!

But, Sir!’ exclaims a pompous ass among the Washington spendthrifts, ‘repudiation of our national debt by future generations would be dishonorable! We have issued our official promises to pay and these promises must be met by future taxpayers. We could not find any buyers for our bonds and other IOUs if they thought the debt they represent might be repudiated. It wouldn’t be fair to the bondholders!

Repudiation is dishonorable? I think the lack of honor lies with the present generation trying to foist its obligations onto future generations. As for ‘fairness to bondholders,’ they are willing to buy these certificates of debt knowing they are claims on the means of future producers who never agreed to the obligation. Why is that honorable?

Our posterity will not be blind. Once the children are grown and in control of the mechanism of governance it may become apparent to them they have been saddled with debt amounting to several trillions of dollars which were spent in an astonishingly reckless era. They will carry a financial burden they never voted for. As former Colorado Governor Lamm put it in 1985, ‘Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want—and their kids pay for it.’

If posterity repudiates the national debt and bondholders are left out in the cold, with whom would your sympathies lie?

Yes tight lending standards and bigger down payments must be the problem with the housing recovery. Here is the sale and loan info on the house that I bid on, but according to the crooked Realtor who had the listing and would not return my calls for 4 days and then said I was second in line with my full price offer that I had in 5 hours later.

Sale Date Sale Price
04/28/2011 $162,200

Type: MTG
Date/Time: 5/10/2011 11:31:25
CFN: 20110169042
Book Type: O
Book/Page: 24515/1811
Pages: 5
Consideration: $158,088.00
Party 1: ROURKE ADAM C
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
GROUP ONE MORTGAGE INC
Legal: CINQUEZ PK L70 L

Phony documents increase in hard economic times
Charlotte-area property owners often victims.
Sunday, July 24th

Some of the documents forgive debt. Others cancel contracts, declare citizens exempt from taxes or even grant home ownership.

Problem is, they’re all fake. And the phony paper can create a nightmare for unsuspecting property owners: stolen identities, seized homes and long hours in court to set the record straight.

In one recent case in Union County, authorities say two scammers obtained a false deed for a vacant home, seized the property during a real estate showing and changed the locks before sheriff’s deputies arrested them a few days later.

Real estate experts and local officials say bogus documents are becoming more common in Charlotte and other places where economic uncertainty and mortgage woes persist. Some fake papers come from borrowers desperate to escape financial hardship; other filers appear to be motivated by political or religious causes.

Although the problem isn’t widespread across North Carolina, it’s a rising concern.

“They were a novelty (a few years ago),” said Mecklenburg County Register of Deeds David Granberry, whose office processes thousands of county records every week. “You’d see one and you’d show it around to everybody. Now, everybody sees them.”

About 200 questionable documents, from fake deeds to letters proclaiming mortgage debts wiped away, have surfaced in Mecklenburg this year - up significantly from before the recession, said Granberry, who was elected to the post in 2008.

Sometimes the paperwork is harmless: jabs at the government or big companies with no legal standing. But in other cases, scammers file documents in an effort to evade payments or control real estate.

A few recent offenders:

– A deed, created to look like it’s from a bank, that transfers the title of a Charlotte property to another owner.

– A certificate of satisfaction showing a $151,900 debt had been paid.

– An affidavit granting the filer “diplomatic status, diplomatic immunity and … the status and treatment of a foreign Sovereign,” plus the right to travel internationally.

Such scams come and go, but they’ve surged in parts of the country in recent years amid the rising tide of distressed properties. In Mecklenburg County last year, for instance, half of residential property sales involved a foreclosed home or one on the brink of foreclosure. Now the Internet makes it easy to find detailed directions on how to fake documents, said Tom Miller, legal counsel at the N.C. Real Estate Commission.

Authorities say some of the fake papers have come from “sovereign citizens,” anti-government crusaders who claim to be above the law. Others come from people who claim to be members of the Moorish Science Temple of America, an obscure religious group. Their motives are sometimes unclear, but in some cases, the documents seek everything from name changes to home ownership to international travel rights.

In a federal sentencing hearing in Charlotte last week, a woman accused of participating in a massive mortgage fraud scam told the court she couldn’t be sentenced because she was a sovereign entity representing herself. Alicia Taylor, who prosecutors said helped facilitate fraudulent loans in the Operation Wax House scheme, had filed paperwork declaring her special status. As authorities handcuffed her and led her from the courtroom, she told the judge he lacked jurisdiction to sentence her.

But a growing number of false documents are clearly tied to the recession, Miller said. Some are from people who have fallen on hard times; others come from scammers who offer to help them - for a fee - by filing documents purporting to eliminate debt or halt the foreclosure process.

“How is the ordinary citizen, who’s stressed out of his mind, supposed to know the difference?” Miller said. “He wants to believe that all of this is true.”

Read more: http://www.charlotteobserver.com/2011/07/24/2477663/phony-documents-increase-in-hard.html#ixzz1T23YVuCV

Just another fine up standing “lawmaker”…

Troubled David Wu reaches out to Nancy Pelosi
By JOHN BRESNAHAN | 7/23/11 POLITICO

Rep. David Wu spoke to House Minority Leader Nancy Pelosi (D-Calif.) and other top Democrats on Saturday about his political future in the wake of allegations of a sexual encounter with a teenager, but it is not clear whether the Oregon Democrat will step down from office.

Wu has been accused of having an “unwanted sexual encounter” with the teenage daughter of a longtime friend last year over Thanksgiving weekend. The teenager, whose identity has not been disclosed, and her family have not filed any criminal complaint against the longtime lawmaker, but the incident, the second accusation of inappropriate sexual behavior against Wu, is “extremely troubling” to Pelosi and other Democrats, say Democratic insiders.

Pelosi has been in the Capitol all day as she and other congressional leaders are struggling to reach a deal to raise the U.S. government’s $14.3 trillion debt ceiling before a default deadline of Aug. 2. Pelosi said she was too busy to comment on the Wu scandal.

Democratic insiders would not comment on Pelosi’s conversation with Wu other than to confirm that the two had spoken and other senior House Democrats have contacted the lawmaker as well.

Wu, who was born in Taiwan, has disappeared from public view in the past day. He is believed to be holed up in his congressional office or residence on Capitol Hill. Wu has not commented on the allegations other than to release a short statement calling the matter “very serious.”

In 1976, Wu was accused of attempted rape by a former girlfriend. No charges were filed in that case, but Wu, who was then attending Stanford University, was required to see a counselor and was disciplined by the university.

It’s looking increasingly likely that those who have been hoping the debt ceiling will not be raised will get their wish, as it appears the Democrats and the Republicans cannot find room for a compromise.

The Wall Street Journal
POLITICS
JULY 24, 2011, 9:03 A.M. ET

Debt Talks Dissolve Again
BY CAROL E. LEE, COREY BOLES AND NAFTALI BENDAVID

WASHINGTON – Congressional talks dissolved in recrimination again Saturday night, as the latest proposal for cutting the deficit and raising the government’s debt limit hit a wall with 10 days left before the U.S. begins defaulting on its obligations.

Republican and Democratic leaders had identified immediate spending cuts of about $1 trillion with future cuts to be specified by a commission.
…

What happens to airplanes that don’t get off the ground before they reach the end of the runway?

America’s Debt Crisis
Geithner: ‘We’re almost out of runway’
By Charles Riley
July 24, 2011: 11:23 AM ET

Treasury Secretary Tim Geithner first told Congress in January that the debt ceiling would need to be raised.

NEW YORK (CNNMoney) — Lawmakers rushed Sunday to find a solution to the debt ceiling debate that would provide some measure of certainty for financial markets, even as both sides continued to spar in public.

The ceiling must be raised by Aug. 2. Lawmakers have been negotiating for months, looking for a way to both cut spending and raise the nation’s legal borrowing limit.

Still, there is no clear path forward.

“It’s taken us seven months to get to the place where we are now,” Treasury Secretary Tim Geithner said Sunday on CNN’s State of the Union. “We’re almost out of runway. We’re not nowhere, but we’re almost out of runway.”
…

Post investigation: Did stimulus money create jobs in Palm Beach County?

By Charles Elmore Palm Beach Post Staff Writer
Posted: 9:33 a.m. Sunday, July 24, 2011

The largest stimulus-fueled road projects in Palm Beach County have created less than 20 percent of the jobs once promised, a Palm Beach Post analysis based on federal job-creation standards shows.

Though the Obama administration pitched stimulus projects as “shovel-ready,” only half of Palm Beach County’s 12 road projects were complete entering July, more than two years after Congress’ approval in February 2009. And the region’s biggest project, the Indian Street Bridge in Martin County, has barely begun.

Florida benefited more than any other state with about 60,000 stimulus-related jobs created or saved in the first quarter of 2011, according to federal statistics compiled at recovery.gov. The biggest chunk went to teachers whose layoffs were averted, at least temporarily, with federal aid.

Local officials forecast nearly 600 jobs at five of Palm Beach County’s largest projects in early 2009. At least that many people got paychecks. But the hours worked amount to slightly more than 100 “full-time equivalent” jobs, based on 40-hour work weeks.

Several city officials said there wasn’t much guidance on how to estimate jobs in the scramble of early 2009 and it’s not really fair to compare the numbers now.

“The joke of something being shovel-ready is not funny if you’ve been unemployed for two years or more,” said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness. “I think the judgment of the stimulus package is it didn’t live up to its billing.”

The view looks different from under Rafael Vicente’s hard hat.

He said stimulus spending preserved his job as a senior inspector with a contractor hired for projects including work on Blue Heron Boulevard and A1A in Riviera Beach.

60 jobs become 17

Take Royal Palm Beach, where a main boulevard bearing the village’s name attracted $2.6 million in federal money to add bike lanes, curbs and landscaping. The village told county planners it expected the work to create 60 jobs in 2009.

Work began in May 2010 and was scheduled for completion in about a year, though village officials say it may be September before it’s done.

http://www.palmbeachpost.com/news/post-investigation-did-stimulus-money-create-jobs-in-1644774.html?cxtype=rss_news - -

http://market-ticker.org/akcs-www?post=190583

Ireland trying to hide a bank default?

I would love to watch Reid throw a hissy/sissy fit, it just has to be hilarious!

Congress ditches Obama on debt talks
POLITICO 44 - 7-24-11

That’s not to say Saturday’s congressional takeover went well.

In a frantic bid to avoid causing a worldwide economic disruption, debt negotiations have shifted wholly to Capitol Hill, as a frustrated President Barack Obama has taken a step back and allowed House and Senate leaders to try to find a way out of the debt-ceiling debacle. After congressional leaders told Obama at the White House Saturday morning they would attempt to stave off the crisis before Asian markets open Sunday evening, leadership aides raced to put together a framework that both parties could support.

With the president staying out of the picture, congressional leaders struggled to make progress on a temporary two-step solution that raises the debt limit with some offsetting cuts.

In an extraordinary Saturday evening session in the Capitol, House Speaker John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader Nancy Pelosi (D-Calif.) sat around negotiating, on their own turf, without White House aides present.

The four smiled for the TV cameras during a photo-op at the top of their 50-minute meeting, but no one would say a word about whether they had made any progress.

“Bye,” Boehner told a reporter who asked about whether he could reassure the country a deal could be reached.

But after the cameras left Boehner’s office, talks grew tense as the four argued over the contours of a package that could define the next 16 months of the congressional and campaign season - and have widespread economic implications.

Reid was “very angry” in the meeting with Boehner and McConnell, according to a Democratic official. Following the meeting, Pelosi escorted Reid back to her office because she didn’t want the furious majority leader to say anything to the press. Reid is “adamant” about no short-term extension of the debt ceiling, the official said.

For Republicans, taking the talks out of the White House has at least something to do with optics — very few Republicans want to vote for a deal with Obama’s name attached to it.

House conservatives have grown deeply distrustful of Obama’s motivations and were skeptical of the “grand bargain” Boehner was negotiating with the president. He didn’t share the details of his negotiations with the House Republican Conference and many of them were privately concerned about any agreement between Obama and the speaker, particularly on the thorny issue of tax increases.

During tense negotiations Saturday night, Reid and Pelosi signaled a willingness to consider a GOP idea to enact a two-step process, calling for trillions of dollars worth of spending cuts and extending the debt ceiling by $2.4 trillion through 2012. The idea was similar to one Obama rejected in his talks with Boehner about a week back - but White House officials weren’t in the room Saturday evening.
s

Interesting conjecture on the effects of the debt ceiling outcome on the U.S. economy; according to this analyst, all outcomes point to near-term recession.

Positioning Investments for a Debt Ceiling Decision
July 24, 2011

As I type, there is still significant uncertainty about the debt ceiling. Will the Republicans give in and allow more spending, or will the Republicans stand firm and bring the government’s operation to a standstill?

If the debt ceiling isn’t raised on time to make the August payments on US Treasury securities, the only options would be for the government to immediately print money to pay the securities or for the US government to immediately shutdown operations, halting paychecks and possibly even halting all federal retirement checks and social security checks.

Because T-bills currently yield 0.02% or below, there is not a strong argument that there is significant need to curtail the debt limit. But of course, there is an argument that this economy is getting totally out of control, and taking any efforts which haven’t been tried yet could be worth a shot.

Effects of the Republican Solution:

If the government is forced to shutdown even just for a few days or the debt limit increase is only very small, there will be no way for the economy to escape a double dip recession. The budget deficit will see immediate improvement, but incomes for much of the US will be lowered. This income reduction will result in an immediate drop in consumer spending, which will decrease GDP, but it will also help reduce the trade deficit. This will result in a strengthening of the dollar. So in other words, the Republican solution and threats will lead to a stronger dollar, but a definite recession. I believe this policy action would effectively take away power from the Federal Reserve and instead put the power in the hands of politicians.

Effects of the Democrat Solution:

On the other hand, using the Democrats’ methods of upping the debt limit right away and without much caution will result in a continuation of what has been occurring for the past several years. The dollar will continue to weaken, which will stimulate net exports, and slightly boost the private sector job market. The Democrats’ plan relies more on a waiting game for the Chinese yuan to be revalued properly to stimulate US exports, while the Republican plan attempts to force even more efficiency on the US economy without any crutches whatsoever.

Analysis:

Either plan will actually work, but politically the Republicans will have the ability to make it appear as if president Obama has destroyed the economy by putting it through two recessions, the second one occurring right before the elections. The truth, without party bias, is that the Republican plan is much harder on America in the short run, but better in the long run. The Democrats’ plan is easier in the short run, but worse for the long run. With such a vicious economy, with seemingly no improvement in sight for years, there is a great argument for either direction. I think if the Republicans directed their government spending cuts energies on the war rather than on essential services and income to the poor, they would have nearly universal support. The logic being, if everybody is totally messed up anyways, why not just officially mess up hard and end the pain sooner? Kind of like pulling off a band-aid quickly rather than slowly. I tend to agree with that philosophy.

The problem is that Republican theory is not designed to improve the economy; it is designed to get their party members elected and nothing more.

Investment Decision Making:

I think it is somewhat safe to prepare for a recession at this point, but if the Republican plans go through, a recession is a near certainty. The recession will probably not hit that hard though because the economy is already in such ruins. The last recession we had would have been much, much deeper if government spending were not increased like it was. Those government jobs which cushioned the recession are now going to be erased due to lack of government ability to pay.

If the Republicans get their way, the best portfolio positioning for a recession will be to take long positions in high duration government bonds such as the (TLT) bond fund. With less debt issued, inflation is much lower of a concern, and the likelihood of a government default in the future decreases when fiscal policy is forced like it will be. Gold (GLD) will be undesirable to hold because fiscal restraint will cause the dollar to strengthen. Also, deflation could come around again if the recession is strong enough, further causing (GLD) to be undesirable. The flight to precious metals in past recessions would likely not occur because this recession would be because of fiscal restraint rather than increased US debt. At the least, Gold would stop its monumental rise. Stocks (SPY, QQQ, DIA), would likely be undesirable to own due to pressure on US exporters from the stronger dollar. In short, the Republican plan should make one bullish for government bonds.

If the Democrats get their way, government bonds (TLT) will weaken due to the increasing inflation pressure and the higher risk for a giant debt default in the future. Stocks would be more desirable to own because US exporters would have a weaker dollar to work with right away. Employment will be much, much better under the Democrats’ plan, so real estate would likely be less risky versus the Republican plan. In short, the Democrats’ plan should make one more bullish on US exporter stocks and real estate and bearish for government bonds.

My guess is the debt ceiling will be raised, but much, much less than the Democrats wished it would. This will probably result in a recession.
…

More jackass-like braying about “reducing regulation on new/startup/small business”.

They just don’t get it.

A bunch of local small businesses have gone under. NONE of them says they went under because of “excess regulation”.

They are failing because of A LACK OF CUSTOMERS.

Nobody is going to start a new business of any kind, if there is no demand for the product, or no customers with disposable income to actually pay for the product.

Democrats in ‘volcanic’ mood
By James Politi in Washington - FT

Barbara Mikulski, Democratic senator from Maryland, best captured the turn of events in the critical US debt talks.

After emerging from a lunch meeting on Thursday with members of her party and Jack Lew, the White House budget director, Ms Mikulski said her colleagues were feeling “volcanic” about the prospect of a $3,000bn deal to cut deficits and raise the debt ceiling that did not include any higher taxes, adding that it was “like Mount Vesuvius” in the room.

Harry Reid, the US Senate majority leader, added: “This can’t be all cuts, there has to be a balance.”

Facing a possible revolt from within Democratic ranks, White House officials immediately dismissed the notion that the president would strike any agreement with Republicans to implement significant spending cuts – including reform of treasured government programmes such as Medicare and Social Security – without garnering any new revenue in return. They also invited Democratic leaders back to the White House for a second straight day of talks in an effort to shore up their support in the negotiations.

Democrats are still expected to back whatever deal President Barack Obama strikes with congressional Republicans, but Thursday’s discontent highlighted the delicate balancing act facing White House officials as they go back-and-forth between the parties in search of a compromise.

Seems like the raising the debt limit debate has come down to this. Demotards want the raise large enough that they don’t have to discuss it again before the election. Reptards, on the other hand, want a small raise so that they get to discuss it one more time before the election.

Turd sandwich and Crap Sandwich, they all stink to the core.

Lower taxes don’t lead to lower prices because corporate America is just out to screw everyone.

Airlines are taking savings from expired taxes

Most US airlines are taking savings from expired taxes, leaving customers with no tax holiday

David Koenig, AP Airlines Writer, On Saturday July 23, 2011, 10:30 pm EDT

DALLAS (AP) — Airlines are tossing consumers aside and grabbing the benefit of lower federal taxes on travel tickets.

By Saturday night, nearly all the major U.S. airlines had raised fares to offset taxes that expired the night before.

That means instead of passing along the savings, the airlines are pocketing the money while customers pay the same amount as before.

American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details sometimes differed. Most of the increases were around 7.5 percent.

Crusiing the Rideau Canal in Ontario again this summer. I’ve been told by two people this week that Canada’s property prices are going down. Sure, it’s only two people, but I never heard a Canadian say this before. Very few for-sale signs on the waterway this year.

Nice to see crude back at $100.00!

Who could have seen this coming…The real-a-tor is fine though.

Once-thriving businesses near Avondale Shipyard are now struggling to survive The Times-Picayune RUSTY COSTANZA 7-24-2011

Darcy Adams can’t believe she used to make enough in tips to go shoe-shopping. She misses those days now.

With more bills and past-due notices arriving every day, Adams, 49, looks stressed as she lights another cigarette and surveys the bar. It’s happy hour, but with just four men in the place, two poking at billiard balls in the corner and two nursing beers at the bar, the dozens of empty bar stools underscore just how dead it really is.

“I can’t sleep at night. I can’t pay my bills. I’m stressing so bad,” said Adams, of Waggaman. “This place used to be packed. Now, I’m lucky if I get 10 customers.”

As the bartender at O’Reilly’s in Bridge City for the past 10 years, Adams is among the hundreds of people in the Avondale Shipyard area who have seen their business plummet in the past year. Since Northrop Grumman announced last July it would close the shipyard by 2013, the yard’s 5,000 workers have been laid off or left to await their fate. The fallout, for the local businesses that rely on their patronage, has been devastating.

“Come 2013, I’ll be 55, unemployed, and unemployable,” said Rob Laborde, 53, who has worked at the shipyard for the past 22 years. “You gotta keep all your money now. You gotta count every dime you got.”

The layoffs have come in waves, with anywhere from 40 to 200 workers being handed pink slips every month or so. With that kind of uncertainty, the shipyard workers have been saving their paychecks.

“They used to buy rounds and rounds of drinks in here. Now they grab one or two beers, always the cheapest ones,” said Adams, adding that the Budweiser and Miller beer truck drivers have commented on the community’s dwindling beer orders during the past few months.

Thursdays — paydays at the shipyard — meant Adams would leave with more than $100 in tips. But in the past few months, her tips have taken a hit. Last Thursday she left with $14.

That kind of drastic drop in sales already has led some once-prosperous businesses to close.

Ray Barrios first opened his restaurant, B&R Restaurant, across the road from the shipyard in 1968. As the only business around at the time, he was very successful. Over the years, he lost some of his income to new businesses that moved in down the street. But it’s the past year’s layoffs that really crushed his restaurant. In December, he had to close.

Now Barrios spends his days in his pickup truck outside the shuttered building, selling parking spaces to the shipyard workers.

“Another 41 were laid off today,” Barrios said a little more than a week ago, while counting money in his truck. “It affects everybody, no doubt about it. What’s gonna happen? Northrup Gumman’s not saying nothing to nobody. Everybody’s wondering, nobody knows.”

At one time Barrios could say he was the first of many businesses to open near the shipyard. Now, he can include that his business was also the first of many to close.

“Pretty soon, all that’s going to be gone,” he said, gesturing toward a few convenience stores, bars and restaurants down the road.

Since he closed, Barrios has been having trouble selling his property, and he’s not alone. With homes being seized by lenders almost every week and the shipyard’s looming demise, property values have plummeted, according to local real estate brokers. One homeowner had to lower his home’s price from $80,000 to $60,000 in the past two years.

“My business won’t die because of Avondale closing because I’ll just move around,” said Shelly Vallee, a broker who works in the area for All Around Realty LLC. “But the Avondale area, it’s not gonna be pretty. The only people buying right now are investors. It’s gonna be a total rental town.”

Uncle Sam seems determined to get into all kinds of businesses which used to be the exclusive province of the private market.

News Hub: Uncle Sam As Your New Landlord?
July 22, 2011

WSJ’s Nick Timiraos reports the Obama administration is weighing the possibility of getting into the housing rental business by renting foreclosed homes. AP Photo/David Zalubowski

Republicans are prepared to “go it alone” on the debt ceiling outcome.

Pottery Barn Rules will come into play once again (”You broke it, you bought it”).

ECONOMY
JULY 24, 2011, 2:07 P.M. ET

Still No Deal as Market Openings Loom
By CAROL E. LEE, NAFTALI BENDAVID and BILL TOMSON

WASHINGTON—Congressional leaders didn’t have a deal to cut the budget deficit and raise the government’s debt limit early Sunday and remained at an impasse over how to reach one just hours before the open of Asian financial markets.

Treasury Secretary Timothy Geithner said a “two-stage” proposal being pushed by House Speaker John Boehner (R., Ohio) that would lift the federal debt ceiling through the end of the year and then again after another deficit debate was a nonstarter because it wouldn’t win enough Democratic votes to pass Congress. He said leaders needed to find a way to reach the framework of an agreement that would give the markets confidence by Sunday night.

“They need to get this process moving in the House Monday night. To achieve that deadline they need to have a framework that they know with complete confidence that will pass both houses of Congress, that is acceptable to the president and that should happen today,” Mr. Geithner said in an interview on ABC’s “This Week.”

“The eyes of the world are on us,” Mr. Geithner said.

Mr. Boehner, however, said in an interview on Fox News Sunday that if he can’t reach an agreement with House Democrats on a deal, then Republicans will go it alone. “I’m trying to find a common ground that’s doable in the time we have remaining,” Mr. Boehner said.

Adding another twist to a debate going down to the wire, Messrs. Boehner and Geithner signaled that back on the table was a potentially more far-reaching deal—the one the speaker had been negotiating with President Barack Obama and that collapsed Friday night.

“It may be pretty hard to put Humpty Dumpty back together again, but my last offer is still out there,” Mr. Boehner said. Mr. Boehner said he had agreed to $800 billion in additional revenue through changes in the tax code as part of the more ambitious $3.5 trillion plan. “Last Sunday, I thought there was an agreement of $800 billion in new revenue coming from a flatter, fairer tax system,” he said.

Mr. Geithner said the White House never agreed to $800 billion. Mr. Obama wanted $400 billion more. In an interview on CNN’s “State of the Union,” Mr. Geithner said Mr. Obama’s preference was still the so-called grand bargain he had been trying to strike with Mr. Boehner, and that talks continued.
…

How would forcing Obama into a position to either veto or lose face possibly reassure Asian markets? This is a patently crazy idea.

Republicans Weigh Short-Term Debt Deal, Risking Obama Veto
July 24, 2011, 1:47 PM EDT
By Margaret Talev and Julie Hirschfeld Davis

July 24 (Bloomberg) — Republicans prepared to force action on a shorter-term extension of the U.S. debt limit than President Barack Obama has requested, defying a veto threat amid warnings that continued stalemate risks roiling financial markets as soon as tonight.

The president would veto a measure to raise the debt ceiling if it doesn’t extend the limit into 2013, White House Chief of Staff Bill Daley said in an interview on NBC’s “Meet the Press.” Daley warned that “markets around the world” would react negatively to a short-term measure offering less than $2.4 trillion in borrowing authority.

“We’ve got to get past this debt-ceiling vote,” Daley said. “It’s time to get some certainty.”

House Speaker John Boehner, an Ohio Republican, said while he’d prefer a compromise package, his party was “prepared to move on our own” if that proved impossible. He aims to announce a framework — bipartisan or not — later today to try to minimize uncertainty before Asian markets open, he said on Fox News.
…

It’s a 4-4 tie between “yesses” and “nos” among San Diego economics experts on whether the GOP’s “cut, cap and balance” budget and debt plan would be good for the economy.

Tying down the federal government with a balanced budget requirement during a period of severe labor market weakness sounds to me like a terrible idea, but I suppose as long as the GOP leaders can shift blame for the bad job market to Obama over the next 16 months, it is no skin off their backs.

U-T EconoMeter
Is GOP budget plan good for the economy?
6 a.m., July 23, 2011

Is the House Republicans’ “cut, cap and balance” budget and debt plan a good economic approach to the federal government’s fiscal problems?
…
Alan Gin, University of San Diego

No

The deficit is a long-term concern, but the more immediate concern is the weakening economic recovery. Fed Chairman Ben Bernanke warned about “sharp cuts in the very near term because of the potential impact on the recovery.” The cap on expenditures to 18 percent of GDP will ultimately require either severe cuts in Medicare, Medicaid, and national defense or else the gutting of virtually everything else in the federal budget. The 2/3 majority requirement to increase taxes in this measure effectively eliminates that as an option to close the deficit at a time when federal revenue as a percent of GDP is at the lowest level since 1950.

James Hamilton, UC San Diego

No

The last thing we want to do in the current situation is drastically reduce government spending. That would mean less income for those currently working for or contracting with the public sector. I agree that several years down the road we will need to make those adjustments, but the time to do that is when there are private-sector jobs available to take up the slack from reduced public spending. I also think that right now, with all the uncertainty about the European sovereign debt situation, is a terrible time to be playing political games with the debt ceiling and the possibility of a U.S. default. The situation could turn very ugly very quickly.
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———————————————————————————-
San Diego Union-Tribune reader poll results*:

Thanks for your vote.

Yes 30%
No 69%

*Note that San Diego is generally viewed as a GOP stronghold.

I don’t see how this can possibly end well.

Debt brinkmanship goes down to the wire
By Stephen Dinan
1:22 p.m., Sunday, July 24, 2011

Racing an afternoon deadline, House Speaker John A. Boehner said Sunday morning he was still working to put together a debt deal that could win bipartisan support, but said if that’s impossible he’ll introduce a short-term debt increase and spending cuts to get the government over its Aug. 2 hurdle.

Fanning out across the Sunday political talk shows, Mr. Boehner and other Washington leaders continued to stake out positions that seem at odds with each other: The White House insisted any plan raise the debt limit beyond the 2012 election and include tax increases, while the GOP said the focus should be on spending cuts.

“I would prefer to have a bipartisan approach to solve this problem. If that is not possible, I and my Republican colleagues in the House are prepared to move on our own,” Mr. Boehner, Ohio Republican, told “Fox News Sunday.”
…
Republicans said they’re likely to produce an increase that would last through the end of the year, pass it through the House and then challenge Senate Democrats to reject it or Mr. Obama to veto it.

Republicans said they doubted the president would follow through on his veto threat.

“I think that’s a ridiculous position, because that’s what he’s going to get presented with,” Sen. Tom Coburn, Oklahoma Republican, told “Meet the Press.” “That’s the compromise way through that’s going to build the compromise.”

Republicans also repeatedly pointed to the plan the House has passed to tie a debt ceiling increase to deep spending cuts and a promise that a balanced budget amendment be proposed for the Constitution.

Republican debt ceiling negotiating strategy:

3) Hope the U.S. electorate is not sufficiently astute to grasp the cynical and destructive nature of the Republican strategy, and instead blames the failed outcome on the President.

Administration, GOP clash anew over debt plan
Posted: Jul 24, 2011 2:10 AM PDT
Updated: Jul 24, 2011 11:41 AM PDT
By CHARLES BABINGTON
Associated Press

WASHINGTON (AP) - With the clock ticking ever louder, Obama administration officials and congressional Republicans clashed anew Sunday over extending the nation’s debt limit, with the White House threatening a veto if the government’s borrowing authority is not extended through the next elections.

Even so, with an eye toward nervous financial markets, Treasury Secretary Timothy Geithner said the two sides seem to be making progress in their long-running debt battle and predicted they will avert a historic federal default.

“It’s unthinkable that this country will not meet its obligations on time. It’s just unthinkable. We never do that. It’s not going to happen,” Geithner said.

House Speaker John Boehner, R-Ohio, flatly rejected President Barack Obama’s insistence on a package that would extend the government’s authority to borrow money beyond the November 2012 presidential and congressional elections. Democratic congressional leaders have also said the extension must last through next year.

“I know the president’s worried about the next elections,” Boehner said. “But my God, shouldn’t we be worried about the country?”
…

Dump the Dollar
May 31, 2011

U.S. economic policy is debasing the dollar, says Axel Merk, manager of the Merk Hard Currency Fund. He tells investors to avoid the greenback and focus instead on countries with strong currencies, such as Sweden and Canada.

This view of the debt ceiling negotiations from across the pond offers some welcome levity:

Economics
Vince Cable launches attack on ‘right wing nutters’ over US debt deal

Vince Cable, the business secretary, has attacked ‘right-wing nutters’ in the US Congress for rejecting a debt deal, saying they pose a bigger threat to the world economy than the eurozone crisis.

Mr Cable’s comments (pictured) came as US Treasury Secretary Timothy Geithner insisted on Sunday that America would not default on its debts. Photo: REX FEATURES
5:22PM BST 24 Jul 2011

The comments by Mr Cable, who is one of the most outspoken members of Britain’s coalition government, came as President Barack Obama vied with Republican lawmakers for a deal to avert an unprecedented debt default.

“The irony of the situation at the moment, with markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few right-wing nutters in the American Congress rather than the eurozone,” Cable told the BBC’s Andrew Marr on Sunday.
…

July 24, 2011 7:21 pm
Markets warning over US debt
By Alan Beattie in Washington

The White House clashed again on Sunday with congressional Republicans over a plan to raise the federal debt ceiling, even as both sides acknowledged that failure to agree could rock global financial markets this week.

“We may have a few stressful days coming up - stressful for the markets of the world and the American people,’’ Bill Daley, White House chief of staff, told CBS on Sunday.

Both the Republican congressional leadership and the White House said that rapid agreement is needed to prevent a potential loss of confidence in US assets, but continued to push their own solutions.

John Boehner, speaker of the House of Representatives, reiterated his support for a two-stage deal, with an initial stopgap agreement to reassure investors and more fundamental reform left until later.

‘’There is going to be a two-stage process. It is not physically possible to do all of this in one step,” he told Fox News. He would seek to gain cross-party support for the proposal but was prepared to drive it forward over Democratic opposition if required, he said.

But Barack Obama’s administration, which has repeatedly said that the president would veto a partial deal, said that a temporary fix risked a loss of confidence and a downgrade in the US’s credit rating.

Mr Daley accused the Republicans of taking risks with the US’s international standing.

“It must be extended in a way that gives certainty to the economy through [2013] and not some short-term gimmick where we’re right back in this fix in six or eight months and the world looks at us once again and says . . . these people can’t get their act together,’’ he told NBC.

The debt ceiling, which constrains US federal borrowing, must be raised by August 2 to avoid the risk that the US will default on its government debt.

Both sides continued their attempts to shift the blame on to the other on Sunday.
…

It is very important to keep this crisis in proper perspective: Namely, that it was manufactured and executed by the Republicans in a cynical attempt to send the U.S. economy back into a recession just before the 2012 presidential election.

TIMELINE-How U.S. debt talks spiraled into crisis
July 24 | Sun Jul 24, 2011 3:21pm EDT

(Reuters) - With financial markets on edge, White House officials and Republican leaders scrambled to reassure them that the United States will avert default and lift its $14.3 trillion borrowing limit before Aug. 2.

Following is a timeline of the U.S. debt debate:

Nov. 2, 2010 - Republicans win control of the House of Representatives on a promise to scale back government spending and tackle budget deficits that have hovered at their highest levels relative to the economy since World War Two.

Dec. 1, 2010 - A report by a bipartisan deficit reduction panel commissioned by Obama advocates $3 trillion in spending cuts and $1 trillion in revenue increases — mainly by closing loopholes in the tax code — over 10 years.

January 2011 - Six Republican and Democratic senators, known as the “Gang of Six,” begin talks on a long-term deficit-reduction deal they can present to their parties.

Feb. 19 - The House passes a budget for the current fiscal year that would cut $61 billion from last year’s levels. The Democratic-controlled Senate defeats it one month later.

April 9 - Obama and congressional leaders bring the government to the brink of a shutdown before they agree on a budget for the current fiscal year that cuts $38 billion from last year’s levels. Billed as the largest domestic spending cut in U.S. history, it actually causes the government to spend $3.2 billion more in the short term.

April 13 - After Obama’s initial proposal is criticized as inadequate, the president lays out a new deficit-reduction plan that would save $4 trillion over 12 years. He proposes that Vice President Joe Biden lead deficit-reduction talks.

April 15 - The House passes a budget that would cut spending by $6 trillion over 10 years, in part by scaling back medical care for the elderly and the poor.

May 5 - Biden and negotiators from both parties hold their first meeting as top Republicans say there will likely be no broad agreement on tax reform and healthcare.

May 9 - House Speaker John Boehner, the top Republican in Congress, says any increase in the debt ceiling must be matched by an equal amount of spending cuts. The Treasury Department estimates it needs at least $2 trillion to cover borrowing through the November 2012 elections.

May 11 - House Republicans release a spending outline for the coming fiscal year that has deep cuts in education, labor and health programs cherished by Democrats.

May 16 - The United States reaches its $14.3 trillion debt limit. The Treasury Department begins tapping other sources of money to cover the government’s bills.

May 17 - The “Gang of Six” talks falter as a leading conservative, Republican Senator Tom Coburn, drops out due to an impasse over healthcare.

May 31 - The House of Representatives rejects a measure to raise the debt limit in a vote staged by Republicans to pressure Obama to agree to accompanying spending cuts. Senior Democrats decry the vote as a political stunt, although 82 Democratic lawmakers join Republicans in defeating the bill.

June 9 - In a sixth meeting of the Biden group, Treasury Secretary Timothy Geithner argues that tax increases need to be part of the equation, but Republicans remain unmoved.

June 14 - Some 34 Senate Republicans vote to repeal tax breaks for ethanol, a sign that there may be some wiggle room in the party’s no-tax-increase stance.

June 23 - Republicans declare an impasse in the Biden talks, saying Democrats are insisting on roughly $400 billion in new revenue by closing tax breaks for the wealthy and certain business sectors.

June 29 - The International Monetary Fund says the United States must lift its debt limit soon to avoid a “severe shock” to global markets and a still-fragile economic recovery. Obama calls for new steps to spur job growth and tax hikes on the rich, irking Republicans who remain focused on deficit cuts.

June 30 - Democratic legislators discuss a scaled-back deal that would avert default but force Congress to tackle the debt ceiling issue again before the 2012 elections. The White House rejects the idea.

July 3 - Obama and Boehner meet secretly to discuss “grand bargain” that would save roughly $4 trillion over 10 years through a tax code overhaul and trims to benefit programs.

July 5 - Obama invites top lawmakers to the White House to restart negotiations and clinch a deal by July 22.

July 7 - After hosting lawmakers at White House, Obama says Republicans and Democrats are still far apart on many issues but that all agree on the need to raise the debt ceiling.

July 8 - A dismal jobs report focuses new attention on the sputtering economy. Obama says uncertainty about the debt ceiling talks is hurting economic expansion.

July 9 - Boehner says grand bargain is out of reach because Republicans will not accept the tax increases Democrats are demanding. He calls for a more modest $2 trillion package that would rely mostly on spending cuts.

July 10 - During a testy, brief meeting at the White House, Obama and congressional leaders agree on little more than the need to meet again the following day.

July 11 - Their follow-up meeting breaks little new ground, but Obama pressures both Democrats and Republicans to make concessions that would clear the way for a deal.

July 12 - Senate Republican leader Mitch McConnell offers backup plan for raising the debt limit if there is no agreement on a broad deficit-reduction plan. Obama warns if the impasse is not resolved soon, government benefits for older Americans might be at risk after Aug. 2.

July 13 - Moody’s Investors Service puts United States on review for possible downgrade. Obama meets lawmakers for nearly two hours but a deal remains elusive.

July 14 - Ratings agency Standard & Poor’s says there is a one-in-two chance it could cut the U.S. credit rating if talks remain stalemated. Obama suspends talks and gives party leaders 24-36 hours to deliver a deadlock-breaking “plan of action.”

July 17 - McConnell and Senate Democratic leader Harry Reid work on a fallback plan to allow Obama to raise the debt limit. Obama meets Boehner and his deputy, Eric Cantor, secretly at White House but no progress is made toward a deal.

July 18 - Republicans push for a measure that would cut and cap government spending and require an amendment to the U.S. Constitution requiring a balanced budget. Obama says he will veto it should Congress send it to his desk.

July 19 - The “Gang of Six” resurfaces with a deficit reduction plan that proposes $3.75 trillion in savings over 10 years and contains $1.2 trillion in new revenues. Obama seizes on it and calls on Congress leaders to start “talking turkey.”

July 20 - The White House signals Obama may accept a very short-term debt limit extension beyond Aug. 2 to give a deficit cutting bill time to clear Congress. Obama meets separately with top Democratic and Republican lawmakers.

July 21 - Obama and Boehner are reported to be discussing a $3 trillion deficit-cutting deal that upsets many Democrats for not including enough tax rises to offset spending cuts. Obama repeats some revenues will need to be part of any accord.

July 22 - Boehner breaks off talks with Obama over impasse on revenue increases. Boehner says agreed to $800 billion in increases but that Obama was seeking $400 billion more.

July 23 - After a brief meeting with Obama, Democratic and Republican leaders disagree over whether the debt limit can be lifted in one step or two. Obama wants to extend the borrowing authority through the 2012 election year.

July 24 - With financial markets growing edgy, Boehner says raising the debt ceiling and enacting fiscal reforms should be done in two stages. Geithner says it must be raised to last 18 months to keep 2012 campaigning from further threatening the U.S. credit rating. (Reporting by Laura MacInnis, Andy Sullivan and Caren Bohan; Editing by Christopher Wilson and Paul Simao)

I fully expect the Plunge Protection Team to intervene as necessary to stabilize the market, in the unfortunate event no debt ceiling agreement is reached today. And I note that the DJIA is up by 26% over last summer’s low point (10K), which gives lots of breathing room for a near-term setback.

Wall St Week Ahead: Markets edgy on debt talk stalemate
Analysis & Opinion
By Edward Krudy
NEW YORK | Sun Jul 24, 2011 4:03pm EDT

(Reuters) - Much of the United States may be frying in near-record temperatures but Wall Street has been feeling the heat for months. Wrangling over the debt ceiling has kept markets on edge, and investors are still waiting for a breakthrough that leads to a deal to avoid a devastating default.

Investors have viewed as extremely unlikely the possibility of a U.S. default if the federal government does not agree to raise the debt ceiling. But the odds are growing, and Congress and the White House remained at odds just a few hours before Asian markets opened on Monday.

“Unless during the course of the day there is a specific, concrete proposal that placates the market before Asian markets open, the worst-case scenario is that the markets just sell off — sell off dramatically,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
…

Diary of a Recession Baby Archives

May 2, 2011, 2:07 p.m. EDT
Burned out at work? Tips to ease your workload
By Ruth Mantell, MarketWatch

WASHINGTON (MarketWatch) — Given all of the work that’s been piled on employees at leanly staffed companies during the weak economy, it’s understandable that some workers want to scale back.

Almost four in 10 workers said one of the most important attributes they will look for in a new employer is a less-stressful work environment, besides competitive pay and benefits, according to a survey of more than 5,000 workers and 2,000 employers conducted in February and March by jobs website CareerBuilder.com.

But with unemployment still high, employees may be wary about talking to their boss about working less.

“The recession resulted in smaller staffs, heavier workloads and longer hours. While companies have become accustomed to doing more with less, workers may be feeling stretched too thin,” said Jennifer Grasz, a spokeswoman for CareerBuilder.com. “As the economy improves, workers are growing more confident in their job prospects and are seeking out opportunities with more manageable workloads and better work-life balance.”

Burned out

To some extent, employers know there’s an issue. In December, CareerBuilder.com asked more than 2,000 employers if productivity levels could last this year, and 16% said: “No, workers are already burned out.”

Meanwhile, most employees have been willing to be somewhat flexible because they are trying to accommodate their employer’s hopefully temporary financial problems, said Ford Myers, a career coach in Haverford, Pa.

With unemployment still high, some are afraid of losing their jobs. “There’s this dynamic of fear that someone will take my job if I don’t do it,” said Andrea Kay, a Cincinnati-based career consultant. “They know it’s not good that they are burned out, but they just don’t know what else to do.”
…

Debt Crisis Update: No Deal Likely by 4 p.m.
July 24, 2011 3:34 PM

Asian markets? They are on their own. A Republican source tells ABC News negotiators do not expect to have a deal or even the framework of a deal on the debt ceiling by 4 p.m. today, as House Speaker John Boehner had said he wanted to steady jittery Asian markets when they open.

In fact, the source says a deal today is now looking unlikely.

The principals are speaking over the phone while the staffs work on the numbers. Congressional Democrats and Republicans continue to try to hash out a compromise, but they are not there yet.

Separately, the source says that the big “grand bargain” now looks, once again, to be “pretty dead” — not buried yet, but not really breathing either. Despite the positive comments by Boehner and Treasury Secretary Tim Geithner this morning, the large deficit reduction plan seems to be too much, too late to accomplish by the Aug. 2 deadline.

“A deal is still elusive,” said one top House Republican.

Geithner: Default Jeopardizes 80M Monthly Payments
By IBTimes Staff Reporter | July 24, 2011 4:12 PM EDT

U.S. Treasury Secretary Timothy Geithner reiterated Sunday that if Congress does not raise the U.S. debt ceiling up to 80 million federal payments and checks this month — including Social Security payments — will be jeopardized.

“Only Congress has the ability to make sure the American people get their payments on time,” Geithner said on “Fox News Sunday with Chris Wallace.”

“We write 80 million checks a month,” Geithner said, Fox News reported Sunday. “There are millions and millions of Americans that depend on those checks coming on time. Not just people that supply our military, but people who get Social Security benefits, Medicare, Medicaid benefits. And we cannot put those payments at risk, and we do not have the ability to limit the damage on them, if Congress fails to act in time.”

As of Sunday at 4 p.m. EDT, Congressional Republicans and the Obama administration still had not reached an agreement on how much to cut the budget deficit by, while increasing the nation’s debt ceiling.
…

So is tomorrow the new unofficial deadline on debt ceiling negotiations? I thought a deal had to be in place by today in order for Asian markets to not implode?

Congress hopes to present debt package by Monday

Talks resume at the White House, where Obama and congressional leaders work on a Republican-backed plan to cut spending by $3 trillion in exchange for a vote on raising the debt ceiling.
By Kathleen Hennessey, Washington Bureau
July 24, 2011
Reporting from Washington—

Picking up the pieces after the latest round of debt negotiations imploded, congressional leaders met Saturday with President Obama and began work on a Republican-backed plan to cut spending by roughly $3 trillion over 10 years in exchange for their vote to raise the debt ceiling, according to a leadership aide familiar with the deal.

Although the proposal still faced stiff hurdles with Democrats, House Speaker John A. Boehner — who abruptly broke off talks with the White House on Friday but was present Saturday — told GOP leaders in a conference call that he hoped to report significant progress, if not a deal, within 24 hours, according to a participant.

But as talks continued into the evening, Democratic Senate Majority Leader Harry Reid said he was “deeply disappointed in the status of the negotiations” with Republicans. At issue is whether Republicans will agree to raise the debt ceiling through the end of 2012, as Obama has demanded.
…

Embattled Boehner Says Bipartisan Debt Plan Must Be Republican Plan
24 July 2011

In a bizarre interview with Fox News’ Chris Wallace, House Speaker John Boehner appeared embattled, distracted and without a firm grip on any solution to the debt ceiling crisis. He seemed to be unable to speak about the debt ceiling crisis in any truthful manner, repeatedly attacking Pres. Obama for not being willing to make a deal, despite Obama offering far more than any president, Democratic or Republican, in debt and deficit reduction, in fact offering far more than Boehner himself was seeking.

Boehner seemed to be bound by certain hostile factions within his caucus, and insisted that he would not accept any plan that was not some variation of “cut, cap and balance.” He appeared frustrated, even shaken, by the failure the House Republican plan—crafted with no consultation with Democratic members of either chamber—failed to pass the Senate.

Wallace reminded him: “The Senate resoundingly tabled the idea of a balanced budget amendment; you’re not going to insist on that again, are you?” Boehner repeated, almost robotically, that he would insist, come what may, on a “framework” based on “cut, cap and balance”, Boehner refused to answer whether he would attempt to force a balanced budget amendment—which, incidentally, could not be made law by August 2 and would, in and of itself, do literally nothing to reduce debt or deficits—as part of a bipartisan framework.
…

Tea Party uses debt ceiling vote to destroy democracy
Washington : DC : USA | Jul 24, 2011
What the Bush tax cuts did to the deficit

Without the Bush tax cuts for the rich, America’s debt ceiling problems would be solved

The debate over whether to throw the US into default by not raising the debt ceiling is not about what is best for the country. Tea Party Republicans have created the potential financial crisis to advance a radical social agenda that ignores the will of the people. The end result is the destruction of democracy.

Since taking control of the House of Representatives and dozens of governorships, Tea Party Republicans have used their new found power to strip union rights, voter’s rights, repeal child labor laws, abortion rights, roll back of environmental, worker safety, banking regulations, and programs for the poor.

In exchange for budget cuts that benefit millions of Americans, the Tea Party Republicans want to make the country’s problems worse by giving any and all budget savings to about 400,000, who represent the top 2% of the wealthiest Americans.

The debt ceiling has been raised 91 times since 1960, under both democratic and republican presidents.

So why is the Tea Party so determined to take the country backward under terrorists-type threats to destroy the economy?

Republican Senate Minority Leader said it best. “We’ve tried elections. Nothing has worked.”

In other words, if America will not do things the way the radical right wants, the GOP will use their power to force their social agenda on the public through any means necessary - even if it means ruining the lives of millions of people.
…

http://www.kitco.com/market/

“Barbaric relic” (gold) hitting all-time highs. No surprise, given the tsunami of unbacked fiat currency being printed by the Fed and Central banks, plus our profligate spending that has long since outstripped our shrinking tax base.

http://market-ticker.org/akcs-www?post=190618

Tea Party laying down the law to Establishment GOP? I’m still expecting a craven capitulation from Boner & Co.

http://news.yahoo.com/anti-austerity-protesters-return-madrid-plaza-203840773.html

Anti-austerity anger building up in the PIIGS. Demonstrators are castigating politicians as uncaring, inept, and corrupt. Which the people of Spain should’ve thought about when they voted them into office.

I can’t really tell whether 11:32 PM has passed or not in whatever time zone this article appeared?

US will not default, Treasury chief says
Published: 24/07/2011 at 11:32 PM
Online news: World

A top US official predicted on Sunday that the world’s leading economy would not default on its massive debt, as lawmakers grappled for a deal just hours before Asian markets were set to open.

The United States will not default on its debt, US Treasury Secretary Timothy Geithner (pictured) said, as the clock ticks down to reaching a deal by August 2 to raise the nation’s debt ceiling.

“It’s unthinkable we would not meet our obligations on time,” Treasury Secretary Timothy Geithner told CNN, with the eyes of the world on the bitter political in-fighting which has paralyzed Washington’s corridors of power.

“It’s not going to happen,” Geithner predicted, amid a warning from US ally Britain that “right-wing nutters” were posing a bigger threat to the world economy than the eurozone crisis.
…

Metals Stocks Archives
July 24, 2011, 8:44 p.m. EDT
Gold hits fresh record as U.S. debt talks grind on
By Virginia Harrison, MarketWatch

SYDNEY(MarketWatch) — Gold futures hit a fresh record in electronic trading Monday, as U.S. debt-ceiling talks to avert a default continued, with no apparent progress toward a deal.

Gold for August delivery GC1Q +0.61% gained $16.30, or 1.0% to $1,617.70 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours.

Last week gold reached a nominal record of $1,602.50 an ounce.

Adjusted for inflation, gold would have to settle at around $2,400 an ounce to supplant a record around $850 an ounce reached in January 1980.

The metal has benefited from the uncertainty stemming from global debt problems in recent weeks, with the deadlock in U.S.negotiations taking center stage on Monday.

U.S. lawmakers failed to reach agreement on an approach to raise the debt-ceiling in Washington on Sunday, despite a weekend of talks. President Barack Obama later met with the congressional leaders of his own party.

The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government is at risk of defaulting on its obligations. Read more on U.S. debt negotiations.

Analysts at MF Global said the lack of resolution in U.S. debt-ceiling talks will weigh on the U.S. dollar, and present upward potential for gold.

“Raising the debt ceiling in such last-minute fashion relays [an] unwelcome message to investors,” the analysts said, “The main casualty of such a decision will be the US dollar.”

Commodities should do better, at least initially, they said, as the asset class will be viewed as an alternative to paper currencies.

“Gold should benefit the most,” they said.
…

It appears the Tea Party may have succeeded in their efforts to destroy the U.S. Treasury’s AAA credit rating.

Treasuries Fall After El-Erian Says U.S. May Lose AAA Rating
Sunday, July 24, 2011

July 25 (Bloomberg) — Treasuries fell, extending a decline from last week, after Mohamed A. El-Erian at Pacific Investment Management Co. said the U.S. may lose its AAA debt rating even if lawmakers reach a plan to avoid a default.

Benchmark yields approached a two-week high as El-Erian, whose company runs the world’s biggest bond fund, said a compromise on raising the borrowing limit this close to the Aug. 2 deadline will leave the rating “extremely vulnerable.” President Barack Obama and House Speaker John Boehner are in a stalemate over how to increase the ceiling, a step needed for the U.S. to keep servicing its debt.

“We don’t know how long it will take to reach an agreement,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “It will push yields higher.”

The rate on the 10-year note climbed four basis points to 3 percent as of 10:01 a.m. in Tokyo, according to Bloomberg Bond Trader pricing. The 3.125 percent security due in May 2021 declined 11, or $3.44 per $1,000 face amount, to 101 1/32.

The yield increased six basis points last week and climbed to 3.04 percent on July 21, the highest since July 11. It is still below the 10-year average of 4.06 percent.

“In most likelihood, a last-minute political compromise will avoid a default but will leave the AAA rating extremely vulnerable,” El-Erian, the Newport Beach, California-based chief executive officer and co-chief investment officer at Pimco, wrote in an e-mail.

Boehner plans to press ahead with a shorter-term increase in the borrowing ceiling than President Obama has requested, he told lawmakers, defying a veto threat and signaling continued deadlock in the Congress as time runs short for an agreement.
…

TheMoneyIllusion
A demographic depression

When I read the newspapers from the 1930s I’d occasionally see hopeful articles about how consumer spending would have to pick up soon, because of all the “pent-up” demand. If people hadn’t been buying cars for a while then presumably their cars would wear out, and this would trigger new demand for replacements. Of course I knew that there actually was no light at the end of the tunnel, which made these articles seem slightly pathetic—as if they were grasping for straws. They overlooked the fact that the depression made America much poorer, and that low consumer demand reflected that poverty. For similar reasons, there isn’t much “pent up demand” for cars in Somalia, despite low sales in recent years.

Sometimes I see this argument applied to the housing slump. Housing construction is down 70%, to levels far lower than at any time in post-war history (relative to population.) And this slump has been going on for a number of years. Surely we’ll soon need to build more houses, to meet our growing population. If only that were true. Unfortunately, as sharply as housing construction has fallen, household formation has fallen even faster.

Jim Glass sent me some very interesting data on household formation, which casts a very different light on the recent housing crash.

By my simple measure recent housing starts peaked with an inventory of 40% of an average year’s worth of starts above the trend line in 2007. That’s a cyclical high but a typical one. About the same or a little higher was reached in three other cycles since 1960.

But the plunge in starts since 2007 is unprecedented — by the end of 2010 cumulative starts were 72% of an average year’s worth of starts below trend. The next-lowest figure was 46% below trend back in 1970. If things were “normal” this would predict a huge boom in housing starts soon.

But housing starts are *following* household formation, which is plunging even faster, like an ICBM heading straight to its target.

In 2007 household formation was 1627k (average 1998-2007: 1499k) and housing starts were 1355k (average 1998-2007: 1716k). In 2010 household formation was all of 357k, down 78% from 2007 and down 76% from the prior ten year average. Housing starts were 587k, down 57% from 2007 and down 66% from the prior ten years. That’s a big fall, but it is still *well behind* the fall in household formation.

If I still had my blog I’d post the graphs — the line for household formation is heading straight down like to the bottom of the sea, it’s three times the fastest-deepest decline of the last 40 years. The line for housing starts looks like it is just striving to not fall too far behind.

I hate to be the bearer of bad news, but that light at the end of the tunnel is an onrushing train called falling household formation. It’s caused by three factors:

1. Less immigration due to the post-2006 crackdown.

2. Less immigration due to the severe recession and high unemployment

3. 20-somethings who can’t get jobs are living with their parents.
…

Call me skeptical, but I will believe higher rates when I see them. It appears that long-term Treasury yields have achieved a permanently low plateau.

Op-Ed Columnist
Republicans, Zealots and Our Security
By NICHOLAS D. KRISTOF
Published: July 23, 2011

IF China or Iran threatened our national credit rating and tried to drive up our interest rates, or if they sought to damage our education system, we would erupt in outrage.

Well, wake up to the national security threat. Only it’s not coming from abroad, but from our own domestic extremists.

We tend to think of national security narrowly as the risk of a military or terrorist attack. But national security is about protecting our people and our national strength — and the blunt truth is that the biggest threat to America’s national security this summer doesn’t come from China, Iran or any other foreign power. It comes from budget machinations, and budget maniacs, at home.

House Republicans start from a legitimate concern about rising long-term debt. Politicians are usually focused only on short-term issues, so it would be commendable to see the Tea Party wing of the Republican Party seriously focused on containing long-term debt. But on this issue, many House Republicans aren’t serious, they’re just obsessive in a destructive way. The upshot is that in their effort to protect the American economy from debt, some of them are willing to drag it over the cliff of default.

It is not exactly true that this would be our first default. We defaulted in 1790. By some definitions, we defaulted on certain gold obligations in 1933. And in 1979, the United States had trouble managing payouts to some individual investors on time (partly because of a failure of word processing equipment) and thus was in technical default.

Yet even that brief lapse in 1979 raised interest payments in the United States. Terry L. Zivney, a finance professor at Ball State University and co-author of a scholarly paper about the episode, says the 1979 default increased American government borrowing costs by 0.6 of a percentage point indefinitely.

Any deliberate and sustained interruption this year could have a greater impact. We would see higher interest rates on mortgages, car loans, business loans and credit cards.

In other words, Republican zeal to lower debts could result in increased interest expenses and higher debts. Their mania to save taxpayers could cost taxpayers. That suggests not governance so much as fanaticism.

More broadly, a default would leave America a global laughingstock. Our “soft power,” our promotion of democracy around the world, and our influence would all take a hit. The spectacle of paralysis in the world’s largest economy is already bewildering to many countries. If there is awe for our military prowess and delight in our movies and music, there is scorn for our political/economic management.
…

Professor Bear’s U.S. home construction industry outlook:

There has never been a better time to buy home builder shares!

EARNINGS
JULY 25, 2011

Is Housing-Market Squeeze Tightening?
By DAWN WOTAPKA

At the start of the year, home builders were cautiously optimistic about their prospects for 2011. Home prices were picking up, prompting some builders to buy additional land and start to plan new communities.

What a difference a few months can make. The spring buying season—typically the strongest season for home sales—ended with a thud. Builders are now backtracking on the land deals and some prices have started to fall again.

With the downturn in its fifth year, some building executives say they thought things would be better by now. After all, families with kids in elementary and middle school when the downturn hit now have teenagers on their hands, causing some entry-level family homes to bust at the seams. While some of those families are buying, many others are choosing to stay cramped up rather than move up.

“There have certainly been some bumps in the road,” said Doug Yearley, chief executive of Toll Bros. Inc., the nation’s largest luxury builder.

Mr. Yearley added that he, “and, I think, every other CEO in this business, are disappointed that we’re just not further along.”

Industry watchers will be paying close attention to a number of indicators and earnings due out this week. On Tuesday, the Census Bureau is scheduled to release sales of new homes for June. Economists generally expect sales to climb to an annual pace of 328,000. That would be up from May’s extremely weak level of 319,000 sales, but far away from 2005 when sales peaked at 1.3 million.

Also out this week are earnings reports from major home builders including PulteGroup Inc., D.R. Horton Inc. and Meritage Homes Corp.

One analyst said not to expect much. “Builders are going to disappoint investors because they’re going to continue to lose money,” said Alex Barron, a founder and analyst with the Housing Research Center, an independent research firm in El Paso, Texas.

Now comes more troubling news: NVR Inc., long considered the industry darling because it managed to earn money during the downturn, reported a weak second quarter on Thursday. Profit slid 46% from a year earlier, dragged down as home closings tumbled 34%.

Particularly concerning is what NVR’s results might say about the Washington, D.C., market. That is NVR’s home market, and it had been one of the nation’s strongest performers. Unlike much of the rest of the nation, house prices in Washington and its suburban Virginia and Maryland neighbors were rising and foreclosures in many communities were relatively low.

But NVR, based in Reston, Va., said orders declined in the mid-Atlantic region, which includes Maryland. According to Raymond James Equity Research, the Washington area’s existing-home sales slumped 19% from a year earlier in June, compared with 8.8% nationwide.

‘Builders are going to disappoint investors because they’re going to continue to lose money,’ says a Housing Research Center analyst.

Industry watchers are now trying to figure out whether NVR’s performance signals further pain ahead for housing, or if Washington-area buyers are simply nervous over the debt-ceiling debate and scared about the possibility of government layoffs.

Part of the problem is that the same head winds persist: Unemployment remains elevated, builders must compete with deeply discounted foreclosed properties for sales and tight bank lending standards are keeping plenty of would-be buyers out of the market.

“The new home-sales market will continue to be depressed” for at least another year, said Bernard Baumohl, chief global economist with the Economic Outlook Group.
…

Forget Anonymous: Evidence Suggests GOP Hacked, Stole 2004 Election
By John Thorpe
Benzinga Staff Writer
July 21, 2011 1:07 PM

Three generations from now, when our great-grandchildren are sitting barefoot in their shanties and wondering how in the hell America turned from the high-point of civilization to a third-world banana republic, they will shake their fists and mutter one name: George Effin’ Bush.

Ironically, it won’t be for any of the things that liberals have been harping on the Bush Administration, either during or after his term in office. Sure, misguided tax cuts that destroyed the surplus, and lax regulations that doomed the economy, and two amazingly awful wars in deserts half a world away are all terrible, empire-sapping events. But they pale in comparison to what it appears the Republican Party did to get President Bush re-elected in 2004.

“A new filing in the King Lincoln Bronzeville v. Blackwell case includes a copy of the Ohio Secretary of State election production system configuration that was in use in Ohio’s 2004 presidential election when there was a sudden and unexpected shift in votes for George W. Bush,” according to Bob Fitrakis, columnist at http://www.freepress.org and co-counsel in the litigation and investigation.
…

Parents are dropping out of the college cost fight
Students have protested throughout the state, but state colleges keep offering less and charging more.

Die-in

Students at Valley College, including Bear Christison, left center, and Julien Lambert, take part in a “die in” in March to protest state budget cuts’ effect on their educational opportunities. (Barbara Davidson, Los Angeles Times / July 23, 2011)

By Sandy Banks

July 23, 2011

It all came down to money this week on my return trip to San Francisco.

And there is good news and bad news in this.

The good news is that my daughter finally found a place to live. It’s a studio apartment, above a tavern, on a grimy stretch of a busy street. But it’s cheap and clean, with a real kitchen and a private bathroom, unlike the other prospects we’d seen.

And it’s a straight shot — one bus — to San Francisco State, where she will be a junior this fall.

That is where the bad news comes in. Her tuition will jump again — by about $600 — this fall. That’s the fourth tuition increase imposed by Cal State University trustees since 2009.

That hikes fees and tuition for classes to more than $6,000 a year, about $2,000 more than we expected when my youngest daughter enrolled as a freshman two years ago.

That’s double trouble for me. Her sister is a senior at Cal State Northridge, so our family is on the hook this year for $4,000 more than I budgeted back when an education in the Cal State system seemed like such a great idea.

That’s the personal toll of a public tragedy. State financing for higher education has been rolled back to levels unseen in years. This year’s budget cuts funding by 20%. That translates to $650 million less, and that has to be covered by somebody.

The poorest kids keep their financial aid; the richest write bigger checks. And the middle-class families get crushed in the crunch, relying on loans to cover the gap.

We can blame the economy, the trustees, the politicians, the citizenry’s lack of collective will.

What we can’t do is keep pretending we don’t see it.
…

Private mortgage lenders could be the accidental beneficiaries of a debt default, as if Uncle Sam stepped aside, they would be the only game in town.

IN THE MARKET
Applying for a home mortgage could get complicated if U.S. government defaults
By G. Steven Bray
07.24.11 | 08:59 am

With the debt limit deadline looming, I thought it would be an interesting exercise to consider what happens to the mortgage market in the event Washington runs out of money.

Before we get into all the scary talk, let me say I think it’s unlikely our elected officials will fail to act before the deadline. But let’s go through the thought exercise anyway.

If you’re applying for a mortgage, the effects of a government shutdown depend on where you are in the process and the type of mortgage you are trying to get. Please understand this is educated speculation. Should a shutdown happen, anything is possible because I expect the politicians will manipulate the situation to their greatest political advantage (I am not a politician, and I don’t want to play one on TV).

If you’re applying for a conventional loan, a shutdown may have little direct impact on you. Most conventional loans are sold to Fannie Mae and Freddie Mac, and, while they are wards of the state now, they still operate fairly independently. However, if your lender needs to verify your tax returns or social security number, you may be out of luck. I expect the IRS and Social Security Administration will not be considered essential government services.

The biggest hassle may be in store for those applying for FHA loans. I expect the White House will deem the Federal Housing Agency (FHA) a non-essential agency. You probably won’t be able to start or close an FHA loan.

If you’re applying for a Veteran’s Administration (VA) loan, you may be able to proceed as long as your lender has processed your VA paperwork (such as your Certificate of Eligibility) and has received the appraisal on your home. I expect the While House will deem the VA a non-essential agency, and, while many of their systems are online now, I expect they will take the Web sites offline while the agency is shut down. If you’re past this point in the process, you should be OK. A VA loan is a guaranteed loan, and the VA delegates underwriting to approved lenders. Thus, the lender closes the loan with its own funds and probably sells the loan into the mortgage market.

If you’re applying for a US Department of Agriculture Rural Development (USDA RD) loan, you may be OK if the loan has been approved. The USDA must review every RD loan, and this review occurs near the end of the process, after the lender has finished its underwriting of the loan. I expect the While House will deem the USDA a non-essential agency, so you’re stuck if the USDA hasn’t completed its review. If the loan is approved, I expect you’ll be able to close because an RD loan, like a VA loan, is a guaranteed loan.

The biggest hassle may be in store for those applying for FHA loans. I expect the White House will deem the Federal Housing Agency (FHA) a non-essential agency. You probably won’t be able to start or close an FHA loan. The FHA must issue a “case number” to start an FHA loan and, because FHA loans are insured loans, the FHA must issue an insurance certificate at closing. Any loans in process probably will grind to a halt until the shut down is over.

What might happen to interest rates if the government bumps up against the debt limit? I don’t claim to be clairvoyant, so I’ll turn to Michael Barr, a former Assistant Treasury Secretary for guidance. He suggests, based on past experience, the effect would be a short-term, modest increase in interest rates, less than 0.1%. However, he notes that many other factors cloud our current economic picture, and the combination could create unexpected effects.

While a government shut down could be a mess, you have to realize that there’s a really big difference between that and a government default. Despite all the political scare tactics, I think it’s VERY unlikely the government will choose to default on its debt. If the deadline passes without action, the government still will take in a lot of money, but it won’t be enough money to cover all its obligations. The government will have to prioritize its bills. If interest payments on the national debt are considered a priority, the government won’t default.

http://www.usdebtclock.org/#