The Housing Bubble

I learned a valuable lesson last night.

Being part of an HOA is the same as being a renter. When a water leak breaks through your ceiling in the middle of the night and tries to flood your apartment or condo there’s nothing the water department can do without landlord or HOA permission. (I’m renting.)

Unless the water is leaking through the light fixtures. Then it’s a hazard and the fire department comes to fix it.

Thank you San Diego Fire Department!

Just hope to see our credit rating down graded as it should be.

Geithner: ‘We’re almost out of runway’ on the debt ceiling
CNN MONEY

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.”

If Congress fails to raise the $14.3 trillion debt limit, Americans could face rising interest rates and a declining dollar, among other problems.

On Friday, the latest round of talks between House Speaker John Boehner and President Obama collapsed, a development that was announced after U.S. markets closed for the weekend.

Always been amazed how many believe WFC’s pronouncements of innocence….

Should You Get Only $7000 if Wells Stole Your House?

While it is nice that the Federal Reserve is forcing Wells Fargo to compensate victims of the bad loan origination practices, the penalties seem to fall flat. What about the investors in the loans made by Wells Fargo? Prior to the crisis and many times since, Wells Fargo has trumpeted its pristine reputation and pointed out that it is different from the bad actors in the mortgage market. Many investors relied on these pronouncements of integrity by Wells when investing in mortgage backed securities with Wells Fargo loans. And Wells, which was much more heavily regulated than other banks (although this subsidiary was likely not) no doubt benefitted from the halo effect of being presumed to be under heavier regulatory scrutiny than non-bank subprime originators.

Most market participants had reason to suspect that subprime lenders like Novastar, New Century and Ameriquest were using aggressive and questionable lending tactics and those loans received additional diligence, as a result (of course, it turned out the diligence didn’t help much). It turns out, Wells Fargo used similar tactics, while holding itself out as a superior lender. Assuming the number of loans affected was 10,000 and the average loan balance was about $180,000, the balance of these loans would have been about $1.8 billion. How many mortgage securities contained these loans? How many CDOs did those MBS end up in? How did these bad loans alter the way rating agencies and investors weighted the risk of the deals they reviewed?

It seems reasonable to argue that Wells Fargo’s offenses were worse than the small, reputation-challenged subprime lenders precisely because Wells Fargo claimed to be superior. If Wells engaged in such ugly tactics, it illustrates just how universal the abandonment of underwriting standards and procedures was.

http://www.nakedcapitalism.com/2011/07/should-you-get-only-7000-if-a-bank-steals-your-house.html

Stumpf is a liar(from 2009):

“Q You mentioned earlier that you didn’t do a lot of the crazy things that other banks did. But recently a nonprofit group rated Wells Fargo as one of the largest subprime housing lenders in the country.

A We did some subprime, but we didn’t do a lot of it. … For example, the subprime that we did for our own portfolio was a debt consolidation real estate product out of Wells Fargo Financial. So you already own the home, you have three or four debts you consolidate into one debt, then we made a loan on the home for that consumer. It reduced the payment, it consolidated their bills. It made it more affordable. In fact, that portfolio is one of our best-performing portfolios. We were about $25 billion outstanding in that product.”

“And we don’t ever push to do something that doesn’t make sense. I’ll give you an example. In the early part of this decade, in 2002, 2003 and 2004, layering risk, doing `no-doc’ mortgages, no down-payment mortgages to subprime borrowers, we didn’t do it. Option ARMs, these negative amortization loans, we didn’t do those. We gave up market share. We gave up billions of dollars in originations because it didn’t make sense to us. So we didn’t participate in that, and now when those companies that did that are either gone or in trouble, we’re now able to go out and do business the way we’ve always done it, with our vision and values, and we’re winning new customers because of that. In fact, we shrunk the balance sheet two or three years ago. We couldn’t get the returns”

http://www.startribune.com/business/45799642.html?page=2&c=y

Families face a fall in living standards which will be ‘as bad as the 1970s’
By Simon Duke 25th July 2011 Daily Mail UK

Families are facing a crash in living standards as severe as the 1970s, a leading economist has warned.

A grim cocktail of soaring inflation, tax rises and stagnant wage growth will put a huge strain on household spending power, according to the Institute of Fiscal Studies.

Payback time: Households have so far been spared the full brunt of the recession but this is expected to change

It comes as a study shows that the share of national income going to ordinary workers has fallen dramatically over the past 30 years.

Households have so far been spared the full brunt of the downturn after the Labour government cut VAT and ramped up spending in an effort to prevent an economic meltdown.

But with the Coalition’s austerity cuts beginning to hit home, a brutal day of reckoning is in prospect for millions of families, Mr Johnson said.

‘Lower welfare benefits, lower interest income for savers and higher taxes mean that most of the population will share in the pain,’ he added.

‘We have not seen a period like that since the 1970s when rampant inflation and rising unemployment undermined living standards.’
Pugh

According to IFS estimates, the average family will have £360 less to spend this year following a fall of ‘at least’ 1.5 per cent in household income compared with 2008.

But with the prospect of years of paltry wage increases, the squeeze is set to intensify. By 2014, household budgets will ‘almost certainly’ remain below 2008 levels after taking account of inflation, and could ‘quite possibly drop’ to the 2002 level, the IFS warned.

With the economy barely climbing out of recession, salaries will continue to lag behind the rocketing inflation rate, which is running at more than twice the official 2 per cent target.

The Bank of England recently warned that the inflation could soon hit levels not seen since the early 1990s following alarming surges in food and energy costs.

Meanwhile, a study found that those in the bottom half of the earnings range have seen their pay as a share of GDP fall by a quarter – while the richest 1 per cent have seen their share shoot up by more than half.

The inequalities are even more stark once the effect of City bankers’ bonuses are factored in.

The report, Missing Out, by centre-left think-tank Resolution Foundation, said: ‘In 1977, of every £100 of value generated by the UK economy, £16 went to the bottom half of workers in wages; by 2010 it had fallen to £12. Inclusion of bonus payments reduces the bottom half’s share to just £10.’

Workers in the top 10 per cent increased their share of value from £12 to £14 in every £100 (a 22 per cent rise) – more than the whole of the bottom half. The share of the top 1 per cent grew from £2 in 1977 to £3.

The study found that inequality has increased in all sectors of the economy.

Gavin Kelly, chief executive of the Resolution Foundation, said: ‘If these worrying trends continue in the decade ahead, it casts doubt on whether those on low-to-middle earnings will see their living standards rise in line with economic growth.’

I checked on CD rates banks are paying. .02 of one percent does not add up to much. To buy extra checks for my MM account would be over $1 per blank check .Soon we may be paying banks to keep our $$$$$ for us .Like in Japan.

Sussex County DE report

Anectodal observations are that the tourist trade is as strong as ever but I haven’t actually discussed with business owners. Hotels, streets and beaches mobbed as always.

Construction- To my surprise, I’m seeing a lot of new starts in existing developments. Lots of Tyvek, trusses and rafters on the horizon. The good news is that Mrs. RAL and I see the billboard price points for new construction dramatically lower. SFR’s starting in the very low $100’s. And not just one billboard either. This is a dramatic shift from the inflated start prices of the bubble years. The common advertised price point seems to be 200-230k for quite nice floor plans. I confidently state that these floor plan were selling in the 325k-350k range during the bubble. Nevertheless, low $200k’s seem to be the broader price point for all housing.
The fact that builders are still building and at much lower price points is not a good sign for the tens of thousands of suckers who bought during the bubble years. I see resale prices in the 300k-$400k range many many miles from the beaches. The delusion runs deep for these resellers. I’m certain Lying Realtors® could cherrypick a sale outside the range to support their lies but generally speaking, the *active* price is dramatically lower in a general sense. The homedebtors attempting to resell reminds me of young bucks who buy brandy new spankin cars and trucks and sink thousands of dollars in aftermarket “stuff” into them and can’t figure out why they can’t squeeze their money back out of them. Sucks to be you resellers.
We’ll do some driving/looking/surveying later to validate what we’ve observed thus far. It’s beachtime for the RAL’s at the moment.

Warning, this post is grossly off topic (but at least still financially related).

I bought a car this weekend, and, although I was intending to purchase the car, I came out of the transaction with a lease. I got all the numbers from the dealer and went home and crunched the numbers for hours, and I just wanted to run it past the folks here to see if I’m missing something (or I’m just stupid). This is the first time I’ve ever leased a car.

Basically, the thing that pushed me to lease was that, after running all the numbers, it seems like the dealer/manufacturer is giving me a “free put option” and a subsidized interest rate to take a lease (instead of buy). The sale price of the car didn’t change (between lease/buy) and the money factor on the lease was very low (about 1% interest, when converted); a loan would have been 2.9%.

So, here’s the question. I don’t see how it would ever be better (even if you intend to actually buy the car) to purchase rather than lease (assuming you can buy the car out at the end of the lease with cash). The interest rates are lower on the lease, there’s a built in “put option” (in case the car loses a dramatic amount of value over the term of the lease) and that option also allows you to buy the car at a specific price 3 years in the future. Also, the sales tax (at least in my state) is spread over the term of the lease, which, should you choose not to purchase, is also an advantage vs. buying the car (because if you buy, you pay all the sales tax up front, and don’t get it back when you sell it).

Please let me know what everyone’s opinion on this is. I’m not really looking for “leasing is for people who can’t afford their cars”, I could have bought the car for cash (but you’d have to be nuts to do so with the interest rates offered on new cars today), so it wasn’t an affordability thing. I’m just interested in what others think about the financial innards of a lease, and, is the dealer in fact giving away a subsidized interest rate and a free put when they do a lease (and, if so, why)?

I’d be a hypocrite to say that buying is better than leasing. I prefer renting houses. So I won’t be much help.

“TrueBambooLie™” + follow/investigate them foreigners!

The investigation follows a blog post last week by an American woman who lives in Kunming in Yunnan province, who stumbled across three shops masquerading as bona fide Apple stores in the city. She took photos and posted them on her BirdAbroad blog.

China officials find 5 fake Apple stores in 1 city:
AP News

The proliferation of the fake stores underlines the slow progress that China’s government is making in countering a culture of a rampant piracy and widespread production of bogus goods that is a major irritant in relations with trading partners.

I feel for Obama, as he tried his best to bargain in good faith with people whose game plan was apparently to scuttle any and all potentially viable agreements, in order to call Obama’s leadership into question and to ramp up the risk of renewed financial havoc just before the onset of 2012 presidential election season; presumably the Republicans assume the U.S. voter is not smart enough to refrain from blaming the President for everything that goes wrong with the economy.

Obama did his best to appeal to forge a bipartisan measure that would further the greater good of the Nation and was roundly rebuffed for his efforts. The expression on his face in the photo which accompanies the linked article speaks volumes.

Financial Crisis

Heat is on US over debt default deal

The prospect of America defaulting on its debts edged closer last night after the fraught negotiations between President Barack Obama and top Republicans collapsed.

President Barack Obama listens to a question during a news conference in the East Room of the White House in Washington

Rumours that President Obama was prepared to relent on tax rises provoked a furious response from Democrats. Photo: AP

By Richard Blackden, US Business Editor
12:00PM BST 23 Jul 2011

John Boehner, the top Republican in Congress, pulled out of negotiations with the White House late on Friday, saying that he and President Obama “couldn’t connect.” President Obama has summoned Congressional leaders to The White House for a meeting scheduled for 4pm (BST) today aimed at reviving talks on what’s expected to be the hottest weekend of the year in Washington.

In his weekly video address to America on Saturday, President Obama renewed his appeal for Democrats and Republicans to “work together” on a deal, but refused to back away from new tax demands on the wealthiest.

“Before we cut medical research, we should ask hedge fund managers to stop paying taxes at a lower rate than their secretaries,” he said. “Before we ask seniors to pay more for Medicare, we should ask the wealthiest taxpayers to give up tax breaks we simply cannot afford under these circumstances.”

But President Obama also stressed the need for compromise:

“We can come together for the good of the country and reach a compromise [...] or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing,” he said.
…

The New York Times
Shares Down on U.S. Debt Talks
By CHRISTINE HAUSER
Published: July 25, 2011

The lack of a deal to raise the debt limit in the United States weighed on financial markets on Monday as the process to avoid a default dragged on, shaking the confidence of investors.

Stocks in the United States opened lower, with the major indexes falling more than 1 percent in early trading, following declines by markets in Europe and Asia.

The Dow Jones industrial average was down 133.02 points, or 1.05 percent, within the first half hour of trading, with the broader Standard & Poor’s 500-stock index and the Nasdaq also falling 1 percent. All three indexes later retraced part of their declines.

Little progress was reported over the weekend in the negotiations between President Obama and Congressional Republicans, although few investors believe that the United States will ultimately renege on its debt.

Still, the apparent stalemate unsettled investors. Treasuries were trading lower. As the benchmark 10-year price fell, yields were up 6 basis points to 3.02 percent.

“Investors are becoming leery of Washington’s ability to come to an agreement on a debt deal, which in turn, raises the debt ceiling before the Treasury’s Aug. 2 ‘drop dead’ date on the U.S.’s ability to pay its commitments,” said Kevin H. Giddis, the executive managing director and president for fixed-income capital markets at Morgan Keegan & Company, in a research note.

“The world owns our debt and wants to continue to hold it as long as we can find a way to keep issuing what was once considered, and likely still is, the safest debt on the planet,” Mr. Giddis wrote.

The gridlock in Washington was taking place alongside a debt crisis in Europe, where a bailout package for Greece was agreed to last week. On Monday, Moody’s Investors Service downgraded Greek debt again.

Investors have driven gold above the $1,600 per ounce mark in recent days amid the uncertainty.

“With little optimism on U.S. debt talks at the moment, the gold price acutely reflects investor nervousness that limited progress will be made before the Aug. 2 deadline,” Edel Tully, a strategist at UBS, wrote in a research note. “This nervousness is in many ways justified as the threat of a U.S. ratings downgrade is very real.”
…

Western sovereigns teetering on the brink of default is great for gold prices!

Metals Stocks Archives

July 25, 2011, 10:46 a.m. EDT
Gold hits record as U.S. debt talks grind on
Greece downgrade also pushes buyers to perceived safety of bullion
By Claudia Assis and Virginia Harrison, MarketWatch

SAN FRANCISCO (MarketWatch) — Gold futures traded in record territory Monday as U.S. debt-ceiling talks to avert a default continued, with little to indicate progress toward a deal, and as a debt-ratings agency further downgraded Greece.

Gold for August delivery GC1Q +0.85% gained $13.20, or 0.8%, to $1,614.90 an ounce on the Comex division of the New York Mercantile Exchange. It traded as high as $1,624.30 an ounce earlier.

Protracted U.S. debt-limit negotiations and concerns about Europe’s sovereign-debt crisis have pushed gold to a string of high marks in recent sessions, the latest of which a nominal record of $1,602.40 an ounce a week ago.

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.

While the deadlock in U.S.talks took center stage on Monday, Greece’s further downgrade also contributed to investors’ run to assets deemed as safer.
…

We have heard numerous reports about how a failure to agree on a debt ceiling increase would result in higher Treasury yields, yet they are plunging this morning.

What gives?

Treasurys surge, yield on 10-year note back below 3%
July 25, 2011, 11:01 AM

Yields on treasury’s are dropping sharply.

The yield on the 10-year note US10-year slid below 2.96% in recent action.

Yields had been rising as doubts continue over Washignton’s ability to actually raise the debt-ceiling and cut spending.
…

“Eyes-can-see-the-forest-for-the-tree$” score:

Russians: 1
MUrDoch’s “TruePaidProvoker’s™” Faux News subscribes: 0

Max Keiser: Obama financially lynched by racist GOP
Russia Today

Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)

(RT is a 24/7 English-language news channel.

The channel is government-funded but shapes its editorial policy free from political and commercial influence. Our dedicated team of news professionals unites young talent and household names in the world of broadcast journalism.)

Country: Russia
Hometown: Moscow

HOMESJULY 25, 2011
TV Home Shows Flip Scripts
Amid Real-Estate Bust, Reality Programs Turn Attention to Foreclosure Deals

By LAUREN A. E. SCHUKER

Where are the hundreds of thousands of foreclosed homes in the U.S. ending up? On reality television.

This summer and fall, several TV networks are unveiling reality shows about buying foreclosed houses as a way to reinvent the popular “house flipping” formula, which proliferated in cable programming alongside the real-estate boom.

http://online.wsj.com/article/SB10001424053111903591104576466020679648718.html?KEYWORDS=Hgtv

Stalemate looks worse from inside

The debt-talks stalemate looks even worse on the inside than to the rest of the world, an Obama administration official says.

Ten-year bond rates up a whopping 0.02% (almost to 3%!!!!). GASSSPPPP!!! What are we going to do about the Debt ceiling and our credit rating??? The pain must be stopped!

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.
…
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.
[CORPWEEK] William Brown

‘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.
…

Former U.S. Treasury Member Warns About Debt Ceiling Issue
July 25, 2011

(CNN) — It’s back to the drawing board for Democrats and Republicans.
The two sides failed to come to an agreement on raising the debt ceiling and reducing the deficit over the weekend.

Now both Democratic and Republican congressional leaders are expected to unveil new plans today.

This morning, a former under secretary for the U.S. Treasury Jay Powell told CNN it’s crucial for lawmakers to come to a deal and avoid a government default.

“I have spent a lot of time with members of both parties and leadership in both parties. Yeah, they do get it. The issue is that they’re trying to do something really, really hard here. And, you know, we’re not looking very functional right now from a political standpoint.

But it’s not because people up there on the Hill don’t understand how important it is that we avoid any kind of default. Not just a bond default, which is so unlikely, but defaulting on our benefits payments to seniors or disabled or the elderly. It’s just not something we should do as a country. And I do think the leadership is committed to avoiding that,” said Powell.
…

UAW wants bigger cut of Detroit’s newfound profits

By DEE-ANN DURBIN and TOM KRISHER
AP Auto Writers
Posted on Mon, Jul. 25, 2011 10:26 AM

To help American carmakers stay in business, autoworkers grudgingly gave up pay raises and some benefits four years ago.

Now that General Motors, Ford and Chrysler are making money again, workers want compensation for their sacrifice. Just how much they get is the central question hanging over contract talks that start this week between Detroit and one of the nation’s largest and most powerful unions.

The negotiations, the first since Chrysler and GM took government aid and emerged from bankruptcy, will set wages and benefits for 111,000 members of the United Auto Workers, including those at Ford, which avoided bankruptcy by taking out massive private loans. The UAW’s four-year contracts with the Detroit Three expire on Sept. 14.

There’s more at stake than pay. After the industry’s brush with financial ruin in 2008 and 2009, both sides know how quickly Detroit’s sales and profitability could vanish. Sales are on pace to reach nearly 13 million cars and trucks this year, better than the 10 million in 2009, but still below the 17 million peak in 2005. Americans are worried about buying cars when wages and the job market are weak. The workers and Detroit companies can’t leave themselves vulnerable to rivals.

“Management’s not the enemy at this point,” says Jim Graham, a longtime local union president in Lordstown, Ohio, where workers make the Chevrolet Cruze car. “The enemy is the competition.”

Even so, the talks won’t be easy. Chrysler, which is run by Italian automaker Fiat, wants to hold the line on wages and benefits, while GM and Ford want to cut labor costs even more. There’s friction inside the union, too. Many workers are eager to get a share of company profits and restore pay raises and some benefits given up during the financial crisis.

“You want to get something back,” says Hans Smith, a worker at GM’s pickup plant in Flint, Mich., who knows they won’t get back all the concessions.

http://www.kansascity.com/2011/07/25/3035170/uaw-wants-bigger-cut-of-detroits.html - -

2 injured in water scooter crash at nudist resort

Posted on Monday, 07.25.11
The Associated Press

KISSIMMEE, Fla. — Authorities say two people were injured when their water scooter hit a sea wall near Cypress Cove Nudist Resort in Kissimmee.

An Osceola County Fire Rescue spokeswoman says the crash happened just before 8 p.m. Sunday. A man and a woman, both 62, were taken to Orlando Regional Medical Center.

A receptionist at the nudist resort says the man and woman were guests at Cypress Cove and had borrowed the watercraft from another guest. She says they were wearing their birthday suits while riding the scooter.

Witnesses told authorities the scooter was going about 40 mph before the crash.

Officials say the man suffered two broken arms and a cut on his head. The woman was treated and released. Their names were not immediately available.

http://www.miamiherald.com/2011/07/25/2329752/2-injured-in-water-scooter-crash.html - -

No , not yet.
But getting close!

This may be the plan: Congress to act first on a short-term extension of the debt limit that would give the Treasury about $900 billion in additional borrowing authority — enough to pay the nation’s bills only through early next year. That would be paired with about $1.2 trillion in cuts to government agencies, including the Pentagon, over the next decade. Under the plan, Congress would also create a 12-member committee staffed with lawmakers from both the House and Senate and tasked with identifying at least $1.6 trillion in additional savings by a deadline set for later this year. We’ll soon find out.

. As Arthur Brooks writes in today’s Wall Street Journal, “This is not a political fight between Republicans and Democrats; it is a fight against 50-year trends toward statism. Also, it’s a moral fight, not an economic one. And this is not a fight anyone can win in the 15 months from now to to the presidential election. It will take hard work for at least a decade.”

Brooks argues that no one deserves voter support in his/her run for high political office unless that candidate is willing to work for as long as it takes to “win the moral fight to steer our nation back toward enterprise and self-governance..” {Brooks is President of the American Enterprise Institute.)

South African Man Wakes After 21 Hours in Morgue Fridge
July 25, 2011 | Associated Press

JOHANNESBURG – A South African health official says a man awoke to find himself in a morgue fridge — nearly a day after his family thought he had died.

Health department spokesman Sizwe Kupelo said Monday that the man awoke Sunday afternoon, 21 hours after his family called in an undertaker who sent him to the morgue after an asthma attack.

Kupelo says the man started yelling, prompting morgue workers to run away in fear. They eventually returned and removed him from the fridge. He was then taken to a nearby hospital and later discharged by doctors who deemed him stable.

The mortuary owner says his family is very happy to have him home.

Kupelo urged South Africans to call on health officials to confirm that their relatives are really dead.

We’re making progress, folks, as even the BBC now uses the “used home” designation instead of the REIC-speak “existing homes” moniker.

The more the MSM calls a spade a spade, the sooner this housing bubble episode will be laid to rest.

Used home sales fall in June
20 July 2011 Last updated at 14:40 ET

US existing home sales fall to seven-month low in June

A for sale sign on a house in California

The US housing market is still struggling amid the weak economy and low credit availability

Sales of previously owned US homes fell 0.8% in June to a seven-month low with contract cancellations the main cause.

Contract cancellations jumped from 4% in May to a record 16% as the depressed US housing market continues.

The National Association of Realtors (NAR) said on Wednesday that sales were running at an annual rate of 4.77 million, the lowest since November.

The report overshadowed one on Tuesday that showed a jump in home construction to a six-month high in June.

The NAR cited a combination of factors that were keeping the market depressed, including the sluggish economy - especially the weak labour market - and the difficulty of getting credit.

Some buyers have cancelled purchases after valuations showed the homes were worth less than their initial bids.
…

RIM to Cut 2,000 Jobs as BlackBerry Loses Share
(Bloomberg)

The Blackberry Torch. RIM predicted last month that quarterly revenue may drop for the first time in nine years. The company is losing market. Photographer: Andrew Harrer/Bloomberg
Enlarge image RIM to Cut 2,000 Jobs as BlackBerry Loses Market Share

An Apple iPhone 3G, left, and a BlackBerry Curve. The company is losing market share in the U.S. to Apple ’s iPhone and handsets running Google Inc.’s Android software. Photographer: Daniel Acker/Bloomberg

Research In Motion Ltd., maker of the BlackBerry smartphone, plans to cut 2,000 jobs, or about a tenth of its workforce, as sales slow amid market share losses to Apple Inc.’s iPhone.

The reductions, across all functions, are part of a plan to “focus on areas that offer the highest growth opportunities,” RIM said today in a statement. The job cuts will leave the Waterloo, Ontario-based company with about 17,000 employees.

Bill Bonner
………………………..
The speaker was a weekend visitor, from Washington, DC, a man active in conservative politics.

“First, winning the Cold War was the biggest setback of our lifetimes. There was probably nothing we could do about it, but it unleashed 3 billion people to compete against us.

“But then, the US was still in a position to protect itself. We were providing a protective umbrella to Europe and Japan. Basically, we guaranteed their safety…with our nuclear arms. We also guaranteed their access to oil.

“We did this without getting anything in return. When the Europeans proposed to put up an airplane company that could compete with Boeing, we were still in a position to stop it. But the US was told that unless it went along with the Airbus program, NATO would be a dead issue. NATO was the means for the US to project power in Europe. Rather than let the empire go, the US gave up much of its aircraft industry.

“Same thing in Japan…and now in China. In order to finance the empire’s spending, the US had to give up its own manufacturing industry. That was the imperial bargain. ‘We’ll protect you and let you sell stuff to us…but you have to finance our empire.’”

“Are you saying the US shouldn’t allow foreign cars or foreign-made planes to be sold in the US,” we asked?

“No, I’m just saying that an empire is not a free market enterprise. It makes deals. The deals it made in Europe and Asia doomed its own manufacturers to failure and doomed its middle classes to poverty.

“All I’m saying is that this is part of the story of the empire. Yes, the zombies have taken over, as you put it. But it’s really an empire story. That’s the important part.

“It didn’t matter who was in the White House, Republican or Democrat. Liberal or conservative. They all did the same thing. They followed the imperial agenda. There were stupid leaders, such as George W. Bush. And there were smart leaders, such as Barack Obama. The stupid ones liked sending troops to Iraq, for example, and sent them. The smart ones didn’t like sending troops, but they sent them too. They all do the same thing. Because their real mission – whether they realize it or not – is to build out the empire.

AP-GfK Poll: Worries about debt rising once again

WASHINGTON (AP) — Just last fall, Americans were feeling better about their personal finances. Now they’re starting to worry more about how they’ll pay off debts as they feel the nation’s economic recovery wobbling.

With Congress deadlocked over how to deal with the national debt, household debt is causing stress for nearly half the country, according to a new Associated Press-GfK poll. One in five adults worries about debt most or all of the time. If they bought something on a credit card in the past month, more than a third say they won’t pay it off when the bill comes.

The increased stress represents a reversal from last fall’s AP-GfK poll, which found increasing confidence about personal finances. Debt-related stress is up 17 percent from that November survey, bumping such worries back up to levels seen in 2009 and in the spring of last year.

“It’s not that our debt is huge. It’s just hard to make it, month to month,” said Theresa Telford, 45, a teacher’s aide raising four kids with her husband, a sheriff’s deputy. “It seems like everything is going up, but wages aren’t going up.”

Telford is also nervous because she’s watched so many people lose their jobs in her small town of Davenport, Wash., and some of her friends still can’t find work. Although the recession officially ended in June 2009, Americans display little faith in a recovery hobbled by grinding unemployment, slow economic growth, volatile gasoline and food prices and political feuding over how to stem the skyrocketing national debt. Consumer confidence fell to a seven-month low in June in the Conference Board’s survey.

Remember the heady days of Fall 2008, when there were hundreds of billions of dollars available at the drop of a hat to fund the TARP?

What debt crisis? Plenty of welfare for banks but no money for the rest of us
July 25, 2011, 11:09 AM
By Cody Willard

You guys panicked about the US debt impasse yet? Sigh.

Let’s break down some relative numbers and see just how worried we should be about what the papers and TV are sure is the Most Important Economic Story of the Year.

Remember the original TARP bill? It was for less than $700 billion or so. The outcry was over the top from the public who rightly saw that the Republican/Democrat Regime and the Federal Reserve it allows to monopolize all currency and monetary actions were about to upwardly transfer unprecedented wealth to a bunch of insolvent and crooked bankers.

At the time, I was on TV, interviewing Republican and Democrat Senators and Congressman, all of who confirmed that the public was against the TARP bill by about 9 to 1. Several congressman told me that they’d never seen such a strong consensus from their constituents.

So the bill failed.

And Wall Street tanked for a day by a couple, few percent.

So the Republican/Democrat Regime added another $150 billion or so of pure pork to the TARP bailout. I’m still talking about summer 2008, when it was a Republican Administration (you know those guys who say they are “conservative” and “capitalists”) and a Democrat Congress (you know those guys who say they are “liberal” and for “level playing fields”). These same people, including Obama, McConnell, Boehner, and Reid, somehow were able to find the budget for $150 billion in pork in one day. That’s about 1/6 of a trillion dollars of bribes pork that these guys somehow were able to find in the midst of the “worst financial crisis” in history so that the bankers who backed them and who needed the $700 billion outright welfare infusion to keep from having their own businesses liquidated and purchased by a smarter, more conservative businessmen and bankers.

Guess what happened when these same guys who say we are facing a budge crisis now revoted on that expanded $800 billion TARP bill that included an extra $150 billion or so of outright pork — yup, it passed with all that targeted pork that came out of the US debt. Heck remember the special break on Medicaid for Nebraska citizens that they included as part of the great TARP bailout package that no other state’s citizens deserved apparently?

And don’t believe any of that propaganda about TARP having been paid back. The banks and the Federal Reserve have created upwards of ten trillion dollars of other welfare and bailout programs since the original TARP passed. I mean, do you guys even remember that the entire US government debt was only $8 trillion when we started the bailouts in 2008?
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I apologize if this has been presented here. I haven’t been on the blog for few weeks.

http://innovation.cq.com/media/debt_components/

Very telling chart, I just wish the countries represented had been individually shown.

I still just love this quote from the piss-ant TTT. He makes it clear that “they” will find it very hard. He certainly knows he won’t.

” …This is a very tough economy and I think for a lot of people it’s going to be, it’s going to feel very hard, harder than anything they’ve experienced in a lifetime… ”

-Tim Geithner July 2011

I see Barry is asking for more air time on TV tonight, to pump his BS. I’ll be watching antiques road show.

From the same article.

But sadly tea party has already been hijacked by the neocons…..
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“And what I’m proposing is to eliminate the deficit by renouncing the empire. Of course, this would come as a huge shock to the public. They thought the Pentagon was defending them from something. They don’t even realize that we have an empire. They have no idea what it costs, what it means, or what might happen if we didn’t have one. We’ve never had that debate. Woodrow Wilson launched the nation directly on the path of empire, but there was never any discussion of it. No debate in Congress was ever held. Instead, every time we went further and further away from real national defense – such as when Wilson sent troops in WWI – it was always justified in defense terms. Even then, we were supposedly ‘making the world safe for democracy.’

“But that’s just the way it works. Every empire transforms its own expansion into self defense measures. Germany invaded the Sudetenland, and then Poland largely to secure its own frontiers. Japan marched down Southeast Asia to secure its lifeline of resources. Britain conquered half the world to protect its manufactures….and Napoleon invaded Russia to remove the threat on the East.

“The US didn’t have any real enemies – after the Soviet Union folded up – so it had to invent this whole terrorism thing. Now, we have our forces all over the Mideast and now North Africa, to protect the USA from terrorism. That’s what they say.

“And here’s the scary thing. In all the many examples of empires, none…not one…ever backed up. None ever renounced its imperial destiny. None ever thought better of it. Instead, they all went headlong…forward…until they finally got their butts kicked.

“Some people in the Tea Party…and even in the Republican Party…see what has happened. They understand how the nation has become addicted to cheap credit, cheap money, and to expensive imperial adventures. They are afraid that if they don’t get control of it now, it will soon be too late.

“And my hope for the nation is that they will be successful. I believe there is hope. I think that if we can make the link clear – between the imperial, big spending, big credit, big government project…and the coming bankruptcy of the nation…we might be able to turn the country around.

“At best, it will be a close run. Because the military is about the only institution in America that people still trust. They don’t trust Congress or the banks…or the political parties…or the rich…or the big corporations. And we have no national church, they might trust.

“So, when push comes to shove, the Tea Partiers – like everyone else – are likely to back the military and the empire. There seems to be a knee-jerk reaction; when you’re faced with adversity, you back your military, no matter what they’re doing. Even when it brings you close to extinction. I wouldn’t be at all surprised to see the Tea Party get mixed up and hijacked by the neo-cons and the big-government imperialists in the conservative movement.

“Just the other day, I heard Rush Limbaugh make the argument. He said we should give the Pentagon our full support, because it was the only institution we can still believe in. A lot of Tea Partiers feel the same way. They don’t make the connection between central planning, big budgets, unlimited credit and the big, imperial agenda.

“So, I know I might lose this fight. The Tea Partiers will probably choose the Empire over the Republic…they’ll probably prefer politics to markets. They’ll probably back the troops…and let the country go broke. But if I’m going to live in the United States of America I’ve got to take a stand…I’ve got to do something. And this is all I can do.”

OMG!

I just saw a TV ad for “Care One”, a credit counseling service, so I fired up my computer, went to google and typed in the words “care one scams” and received TWENTY-FOUR MILLION ENTRIES!

I read a few of the entries and now I want to slit my wrists.

What Boehner didn’t say may be much more important than what he said:

3) We don’t talk about the distributional effects of our proposal.

July 26, 2011, 12:01 a.m. EDT
The Fed should twist again
Commentary: Monetary policy’s all that stands between us and recession
By Irwin Kellner, MarketWatch

PORT WASHINGTON, N.Y. (MarketWatch) — With the economy still weak and the politicians unable to agree on a plan to lift the debt ceiling, it might be time for the Federal Reserve to embark on QE3.

Before you think I have lost my mind, please examine the three facts listed below.

First and most important, the economy — supposedly out of recession for two years — is not in good shape. After rising at a paltry rate of 1.9% in the first quarter, the gross domestic product likely crept ahead at an even slower pace in the second, according to the MarketWatch consensus. This is why the unemployment rate now stands at 9.2% — the highest since the end of last year.

The next fact worth noting is that any agreement to increase the debt ceiling will involve a tightening of fiscal policy. Indeed, such policy has already tightened, since spending by Washington has fallen substantially — enough to cost tens of thousands of federal employees their jobs.

Finally, long-term interest rates have backed up. After dropping to a 52-week low of 2.82%, the yield on the Treasury’s ten-year note has once again reached 3%. While its yield has been much higher, it has also been much lower and in this economy, lower is better.
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