The Housing Bubble

So, Obama says he may go along with effort to riase the debt ceiling without significant spending cuts or any tax increases…

WEAK!!!

Years ago, when people asked why I wanted house prices to collapse and bring the economy down with them, my response was simple. It is inevitable, and the sooner it happens, the less destructive it will be. Things can’t start getting better until they stop getting worse first.

Well, same with the exploding debt. Yes, when we stop the massive deficits that are keeping the economy inflated, we return to full collapse mode. But, things can’t start getting better until the first stop getting worse.

Do I want a greator depression? Of course not. However, it is inevitable, and the sooner things stop getting worse and really begin correcting, the sooner they will begin to start getting better.

We have massive trade imbalances, and so far attempts to make them better have just caused import and commodity prices to increase, making trade deficits worse.

I am doing an East Coast vacation this week. Gettysburg Saturday, American History museum of the Smithsonian Sunday, Natural History and Holocaust yesterday. Air and Space and possibly other things today. Arlington tomorrow then late evening flight back to Phoenix.

Forgive the format of what follows:

Four score and 18 years ago our fathers brought forth upon this country a new economic system. One founded on the incorrect belief that liquididty and not uncollectable debt was the achelies heal of the banking system. By pooling liquidity it was believed that the banking system could be made safe and sound.

This new false trust in the banking system set off a firestorm of lending, a frenzy of economic activity, and an orgy of malinvestments. From railroads to nowhere, to skyscrapers of record height, from farmers using new mechanical farming equipment to break up the native grasses in drought plagued lands to make way for crops ill suited to the climate to factories capable of feeding supplies into this orgy of malinvestment, loans were being made providing funds to speed the rate of malinvestment.

No where was the orgy of malinvestment more focused than in New York’s stock exchanges where shares of companies were not traded on fundamental value as determined by assets and porfits, but rather based on the false belief that stocks always go up and there will always be a greater fool coming along to overpay by even more than you just overpaid.

Once it became clear that we were running out of greater fools, everyone wanted out of stocks. As prices plunged, it became clear that loans made to stock investors could not be repaid. Uncollectable debts resulted in bank closures, wiping out depoistors, trigger more runs on banks.

It became clear that it was in fact, uncollectable loans and not simple liquidity that was the achelies heal of the modern economic model.

For a decade, those with hard assets (valuable land, natural resources, precious metals and gems, hard capital) struggled to hold onto those assets while those with debts and few assets struggled to find work. The world plunged into a morass of hate, fear, loathing and political bickering and infighting.

To pull themselves out of the funk, the world began turning to strong leaders who through iron wills and jangoistic ferver were able to focus unprecedinted power to shape thier respective nations. Whether it be the ego-meniachael (and possibly insane) Hitler in Germany, the brutal Stalin in the Soviet Union, the power hungry military rulers of Japan, or the kindler and gentler near-dictator Roosevelt in the United States, the people of the world were willing to give up personal liberty to a strong national leader that promised to pull them from the first truely global and longest lasting economic depression.

Now, after 30 years of massive lending, horrid malinvestment, and ever new and creative ways to hide uncollectable loans and call them assets, I fear the world is on the verge of plunging back into a global depression, I see the same political gamemanship and unwillingness to make the difficult decisions that lead to the weak governments that preceeded the people turning to iron fisted leaders that promised to end the malaze in exchange for total power.

I am ready for global collapse of the current corrupt and unstable debt based economic model. I fear what new political idiology that scared and desperate people will turn to in exchage for the promise of better days in the future.

Northern farmers feared the expansion of slavery into territories that grew the same crops that they grew. They flat out refused to allow the expansion of slavery under any circumstances. The South having little power in the population based House of Representatives feared that new free states entering the union would erase all power they held in the Senate. They produced 60% of the exported output of the nation but would hold less than 1/3rd of the political power. They refused to accept new states as free states. Will weak leadership and unwillingness to make tough political decisions lead to war between states?

Will people blame the rich, leading to the formation of a new political party preaching hatred?

Will we reject capitalism and turn to some form of confiscation and state owned property system which places total power into the hands of a few, easily corruptable, who will soon be replaced by the most brutal people willing to do whatever it takes to obtain and hold power?

When the Nazi’s came to power, the first arrests, mass killings and slave labor camps were not of Jews, but of opposing political organizations.

Seeing the blind devotion to political parties and the insane hatred of my parents generation to Obama (a balck man who dared consider himself an equal to whites, who had a muslum father, raised by his atheist mother, who rose to politcal power through traditional democrat party affiliations of poverty pimping, white bashing scapegoating, and welfare socialist policies… yikes!). Seeing how easily they were lured to the quickly usurped Tea Party movement based on ignorance and hate.

On the other side I see no difference. People quick to riot over Rodeny King beating, blinded by political idiology into believing anything about Clarance Thomas simply because of his stance on abortion, ignoring the obvious character flaws of Clinton, easily convinced that Bush must have stolen the election…

I fear that sound bite news coverage, bumper sticker politics, polarizing demogogary, politicis of personal destruction, and flat out refusal of either party to tell the American people the truth and deal honestly with our current economic situation, has opened the door for dark and sinister things which may follow.

At some moments I look at the possibility of total economic collapse from the focus that it is a house of cards. It needs to come down before we can rebuild the economy on a more stable foundation with better building codes.

At other moments I look into the hearts of Americans and fear what atrocity they are capable of when faced with harsh reality which they can not accept and political truth they are unwilling to acknowledge.

When the Baby Boomers are on the verge of being put into the streets due to massive spending cuts, how high will they be willing to raise taxes and on whom? When the GenX and GenY are being crushed under 70% tax rates for the 50% that have full time jobs that pay better than minimum wage, all to provide the Boomers with a better retirement than they will ever be able to have, to whom will they turn for releif? What would they be willing to do to get the Boomer generation off their backs?

I fear the future. I am sure the Washington D.C. politicians look to the future with equal fear. No wonder they are unwilling and unable to face the future and get on with what everyone knows must be done.

Banks default on duty, let foreclosed homes become eyesores - and disregard fines

BY Robert Gearty
DAILY NEWS STAFF WRITER
Sunday, July 24th 2011, 4:00 AM

Some of the nation’s biggest banks have let thousands of abandoned New York City homes seized in foreclosure fall into dangerous disrepair, the Daily News has found.

Since the housing market collapsed in 2008, banks have repossessed thousands of homes in neighborhoods across the five boroughs.

Records show the city has cited hundreds of these properties for dangerous conditions such as unstable walls, vermin infestation and illegal apartments.

In case after case, big banks - including Deutsche Bank, U.S. Bank and Fannie Mae, the quasi-governmental agency that buys mortgages - have ignored city inspectors, shrugged off hearings and declined to pay fines, records show.

http://www.nydailynews.com/money/2011/07/24/2011-07-24_banks_default_on_duty_let_foreclosed_homes_become_eyesores__and_disregard_fines.html - -

National Association of Realtors downsizing by 10%
Tara Steele |Agent Genius - July 25, 2011

NAR going through layoffs?

Rumors of layoffs have been flying for months, quietly echoing in the halls of the National Association of Realtors (NAR), the largest trade association in the world. Chicago computers have been humming with updating of resumes as NAR staff anxiously awaits the possibility of their job on the guillotine.

NAR Chief Executive Officer, Dale Stinton informed us that internally, leadership and staff were told in March that as part of the annual budget process for 2012, NAR was going to “reduce headcount (mostly through attrition) by about 10 percent.”

Stinton indicated the cuts would not have a major impact on programming and that NAR is already “well on [their] way to achieve this reduction this year so that the benefit of the savings will be realized going into 2012.” Stinton also notes that this move is “sound fiscal and program management – nothing more nothing less.”

Number of homeless veterans explodes
By Gregg Zoroya, USA TODAY

More than 10,000 Iraq and Afghanistan veterans are homeless or in programs aimed at keeping them off the streets, a number that has doubled three times since 2006, according to figures released by the Department of Veterans Affairs.

The rise comes at a time when the total number of homeless veterans has declined from a peak of about 400,000 in 2004 to 135,000 today.

“We’re seeing more and more (Iraq and Afghanistan veterans),” says Richard Thomas, a Volunteers of America case manager at a shelter in Los Angeles. “It’s just a bad time for them to return now and get out of the military.”

The VA blames the rise on a poor economy and the nature of the current wars, where a limited number of troops serve multiple deployments.

The result is a group of homeless veterans where 70% have a history of combat exposure with its psychological effects, says Pete Dougherty, a senior policy adviser on homelessness at the VA.

Among all homeless veterans, perhaps 20% to 33% were in combat, he says.
Homeless vets

Number of U.S. veterans from Iraq and Afghanistan wars who are homeless or in programs to prevent homelessness:
2006: 1,297
2007: 2,167
2008: 3,495
2009: 5,881
2010: 9,750
2011: 10,476 (through May)
Source: Department of Veterans Affairs

LaShonna Perry, a former Army mechanic who served in Iraq and Afghanistan, was homeless for more than year after leaving the military. She rented an apartment last year with a federal voucher.

“Some soldiers still have issues they’re dealing with from what they’ve seen, what they’ve experienced,” she says. “Some think, ‘There’s nothing wrong with me.’ They can deal with it on their own. Until it gets out of control.”

FDIC: Failed Bank List

http://www.fdic.gov/bank/individual/failed/banklist.html - 185k -

Drought Withers Smallest U.S. Hay Crop in a Century to Boost Cost of Beef. (Bloomberg)

Rising feed costs are prompting a reduction in cattle herds and eroding profit for milk producers. The USDA yesterday forecast retail-meat prices may increase this year as much as 7 percent and dairy products may jump 6 percent, more than the rate of overall food inflation at 3 percent to 4 percent.

The smallest U.S. hay crop in more than a century is withering under a record Texas drought, boosting the cost of livestock feed for dairy farmers and beef producers from California to Maryland.

The price of alfalfa, the most common hay variety, surged 51 percent in the past year, reaching a record $186 a short ton in May, government data show. Hay and grass make up about half of what cattle eat over their lifetimes, so parched pastures are forcing ranchers to find alternative sources of feed, pushing some spot-market corn to the highest ever.

Farmers in Oklahoma and in Texas, the biggest producer of hay and cattle, may harvest only one crop from alfalfa and Bermuda grass this year, compared with three normally, said Larry Redmon, a state forage specialist at Texas A&M University. Cattle that usually graze on fields through September or October are instead being sold to feedlots, where they are confined in pens and eat mostly corn.

“We’re just running out of grass,” Bo Kizziar, the feedlot manager at Hansford County Feeders, said by telephone from Spearman, Texas. With pastures disappearing, Hansford is moving cattle into its 50,000-head feedlot three months earlier than normal, boosting costs as the company buys more corn, he said.

The drought, which is the worst ever in Texas, is compounding a hay shortage caused by farmers shifting this year to more profitable crops, including corn. The U.S. may harvest 57.605 million acres of hay in 2011, the least on records going back to 1909, U.S. Department of Agriculture data show. Corn was sown on 92.282 million acres, the second-most since 1944.

Looks like a little “austerity” is stating to show up on our shores. That can’t be, it’s for the other countries.

Bankruptcy: From Greece to Rhode Island
By Frederick Sheehan - TDR

07/25/11 Central Falls, Rhode Island faces a plight that should be studied for its application elsewhere. It is nearly out of money. This is common news today, whether in Greece or California. The various parties are assumed to possess a means to carry on. This is assumed because it is generally so. The banks had the Fed; General Electric had the Fed and the FDIC; Greece has the ECB; California is prepared to launch a bridge loan.

Despite the band-aids, the trend towards insolvency continues. Central Falls has reached a dead end.

Quoting The New York Times (July 11, 2011): “The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers’ pension fund will probably run out of money in October…”

The retirees face a bleak future: “Central Falls, like many American cities, has not placed its police and firefighters in Social Security. Many have no other benefits to fall back on.”

The inability to meet payments, as is true across the western world, was evident decades ago. The parties refused to think through the consequences of their actions: “The city, just north of Providence, is small and poor, but over the years it has promised police officers and firefighters retirement benefits like those offered in big, rich states like California and New York. These uniformed workers can retire after just 20 years of service, receive free health care in retirement, and qualify for full disability pensions when only partly disabled.”

The previous paragraph reflects poorly on the grand wizards of Central Falls. The Times noted: “Central Falls…filled mostly with immigrant families, struggles on a median household income of less than $33,520 a year… The typical single-family house…is worth about $130,000.”

Although this was a news story, the Times reporters, Mary Williams Walsh and Abby Goodnough, could not restrain their fury: “It is hard to see how anyone thought such an impoverished tax base could come up with an additional $80 million for retirement benefits. If the city were contributing the recommended amount to the plan each year, it would take 57 percent of local property tax revenue.”

That is hindsight. We are used to expedients: delayed pension contributions; 8% projected investment returns; economic recoveries around the corner; market recoveries around the corner; real-estate appreciation (higher tax receipts); higher tax rates; bank loans; bond issues; state bailouts; federal bailouts.

widest wealth gap between US whites, minorities
By HOPE YEN -Associated Press 2011-07-26

The wealth gaps between whites and minorities have grown to their widest levels since the U.S. government began tabulating them a quarter-century ago. The recession and uneven recovery have erased decades of minority gains, leaving whites on average with 20 times the net worth of blacks and 18 times that of Hispanics, according to an analysis of new Census data.

The analysis shows the racial and ethnic impact of the recent economic meltdown, which ravaged housing values and sent unemployment soaring. It also offers the most direct government evidence yet of the stark wealth divide, a disparity between predominantly younger minorities whose main asset is their home and older whites who are more likely to have 401(k) retirement accounts or other stock holdings.

“I am afraid that this pushes us back to what the Kerner Commission characterized as `two societies, separate and unequal,’” said Roderick Harrison, a former chief of racial statistics at the Census Bureau, referring to the 1960s presidential commission that examined U.S. race relations. “The great difference is that the second society has now become both black and Hispanic.”

The median wealth of white U.S. households in 2009 was $113,149, compared to $6,325 for Hispanics and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center. Those ratios, roughly 20 to 1 for blacks and 18 to 1 for Hispanics, far exceed the low mark of 7 to 1 for both groups reached in 1995, when the nation’s economic expansion lifted many low-income groups to the middle class.

The white-black wealth gap also is the widest since census began tracking such data in 1984, when the ratio was roughly 12 to 1.

“What’s pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade, because that was the American dream, are seeing big declines,” said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in income inequality.

Stock holdings play an important role in the economic well-being of white households. Stock funds, IRA and Keogh accounts as well as 401(k) and savings accounts were responsible for 28 percent of whites’ net worth, compared with 19 percent for blacks and 15 percent for Hispanics.

“There’s a good chance the wealth gap will widen further,” Smeeding said, citing the stalled housing market. “What we need to do is help lower-income people move up.”

Chart
Created 22 jobs 2.7 million projected complete Dec. 2010
Created 23 jobs 4.1 million projected complete Early 2012
Created 17 jobs 2.6 million projected complete Sep. 2011
Created 32 jobs 5.2 million projected complete June 2011
Created 15 jobs 6.9 million projected complete July 2011

Jobs projected 569
Jobs created 109

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

http://www.palmbeachpost.com/news/post-investigation-did-stimulus-money-create-jobs-in-1644774.html - 97k -

“TALLAHASSEE — The state-run property insurer is proposing to increase sinkhole insurance premiums by more than 2,000 percent in some parts of the Tampa Bay area, and an average of more than 400 percent across the state.”

http://www.tampabay.com/news/business/banking/article1182362.ece

Today’s house:

http://www.zillow.com/homedetails/106-Spring-St-Gaithersburg-MD-20877/37219202_zpid/#{scid=hdp-site-map-list-address}

This is a tidy-looking 1963 brick rambler.
6/3 1000 sq ft — 3 bedrooms in the basement.
Somewhat walkable to the last Metro station, decent price, full basement. 0.15 acre.

Sold: Aug 2005 $239K
Sold: Dec 2005 $415K (that’s a pretty hefty flip from a price that is way off the Zestimate, probably fraud somewhere…)
Listed: $235K

$223 per sq foot, but that’s because the finished basement isn’t included in the sq footage.

Days on Zillow: 206 — been chasing down from $260K since 2009.
I find this strange, this is type of house I would expect to be snapped up. There’s only one photo, so maybe something is wrong with it.

Realtors Are Liars®

New polls confirm Obama’s Democratic base crumbles

But while most of the media focuses on Republican Boehner and the tea party pressures on him to raise the debt limit not one Liberty dime, Sanders’ mumblings are a useful reminder that hidden in the shadows of this left-handed presidency are militant progressives like Sanders who don’t want to cut one Liberty dime of non-Pentagon spending.

Sanders: Would be ‘good’ for Obama to face primary challenge
By Michael O’Brien - 07/25/11

One of the Senate’s liberal stalwarts suggested over the weekend that President Obama could benefit from a primary challenger over the next year.

Sen. Bernie Sanders (Vt.), an Independent who caucuses with Democrats, said it would be a “good idea” for Obama to face a primary challenger, if for nothing else than as a counterweight to Republican voices in the presidential debate.
“My suggestion is, I think one of the reasons the president has been able to move so far to the right is that there is no primary opposition to him, and I think it would do this country a good deal of service if people started thinking about candidates out there to begin contrasting what is a progressive agenda as opposed to what Obama is doing,” Sanders told talk show host Thom Hartmann over the weekend. “I think it would be a good idea if President Obama faced some primary opposition.”

Appears Barry’s pay czar is really on the ball.

Gulf oil spill victims weary of wait for payouts
By Rick Jervis, USA TODAY

NEW ORLEANS — Robert Campo once believed the TV commercials by oil giant BP that promised to “make it right” and compensate those along the Gulf Coast who lost work during last year’s disastrous oil spill.

Oyster fisherman Robert Campo from St. Bernard Parish, La., says the Gulf oil spill compensation fund has offered him less than one-third of what he requested for 2010 losses.

More than a year after the spill ruined his oyster beds, however, Campo is still waiting for what he believes is full payment. The $20 billion fund created by BP to compensate those ruined by the spill has offered him less than one-third of what he requested. He’s still waiting to hear why.

“I’m not looking for a handout. I’m just looking for them to make right what they did wrong,” says Campo, an oyster fisherman from St. Bernard Parish, La. “It’s taken way too long.”

Campo joins a chorus of local fishermen, seafood processors, hoteliers and others who say that nearly a year since it opened its doors, the Gulf Coast Claims Facility that administers the BP fund has not moved fast enough to pay those hurt most by the spill. Last week, Attorney General Eric Holder ordered an independent audit of the fund. Kenneth Feinberg, the fund’s administrator, has agreed to the audit, scheduled for sometime this year.

The Gulf Coast Claims Facility has paid nearly $5 billion in claims to about 200,000 claimants, one of the largest payout efforts in U.S. history, according to the facility.
Compensation fund

The compensation fund for victims of last year’s Gulf of Mexico oil spill has paid out less than 25% of the money available:

Total amount of fund: $20 billion
Total amount paid: $4.8 billion
Source: Gulf Coast Claims Facility

The fund was started in the wake of the explosion and sinking of the Deepwater Horizon rig in April 2010, which killed 11 workers and unleashed more than 170 million gallons of crude into the Gulf. BP leased the rig and assumed most of the responsibility for its aftermath.

Local officials and some claimants say the facility has improved in recent months after earlier complaints of taking too long to process claims and not clearly explaining why some were rejected. Customer service at the facility’s Gulf Coast offices, for example, has improved and claimants are at least getting answers on the status of their claims, says Tony Kennon, mayor of Orange Beach, Ala., an early critic of Feinberg and the fund.

“Some aspects of the program have gotten better,” Kennon says. “We still don’t feel like we’re where we should be, but I do appreciate (Feinberg) moving in our direction.”

Critics of the facility say the process still appears bogged down and random: Some boat deckhands are getting paid full compensation while business owners with full documentation are receiving only a percentage of their losses.

George Barisich, a Louisiana shrimper and president of the United Commercial Fisherman’s Alliance, says he has produced tax documents and other receipts showing he lost $200,000 last year. The facility offered him $25,000.

Every week, facility workers ask him for more documentation, Barisich says. “It’s a game,” he says. “The game is: Starve these poor (fishermen) out until they’re ready to take whatever’s offered.”

Let’s see, GE pays little to no taxes, it’s president is a top adviser to our countries president, and they are screwing the U.S. a little more each day. Yet no one in D.C. sees any problem with this apparently.

ITEM: GE Moves 115-Year-Old X-Ray Unit’s Base to China to
Tap Growth (Bloomberg)

General Electric Co.’s health-care unit, the world’s biggest maker of medical-imaging machines, is moving the headquarters of its 115-year-old X-ray business to Beijing to tap growth in China.

“A handful” of top managers will move to the Chinese capital and there won’t be any job cuts, Anne LeGrand, vice president and general manager of X-ray for GE Healthcare, said in an interview. The headquarters will move from Waukesha, Wisconsin, amid a broader parent-company plan to invest about $2 billion across China, including opening six “customer innovation” and development centers.

The move follows the introduction earlier this year of GE Healthcare’s “Spring Wind” initiative to develop and distribute medical products and services in China, GE said in a statement today. More than 20 percent of the X-ray unit’s new products will be developed in China, LeGrand said.

The division should have “double-digit” growth rates as the country converts from film and analog to digital X-ray technology, LeGrand said. “When you look at a market like China, it’s primarily analog. So we feel this will also bring digital technology at an appropriate price-point.”

GE Healthcare, also the world’s biggest maker of magnetic resonance imaging and cardiac tomography scanners, got about $1.1 billion of its $16.9 billion in sales from China last year. Health-care device markets are forecast to more than double this year, according to researcher Epsicom.

The soaring cost of back-to-school basics - MSNBC

NEW YORK — Paper and pens are just the beginning of back-to-school expenses for a growing number of families.

State and local governments are cutting back, leading more public school districts to charge kids to compete in sports or play in the band. Such fees, commonly known as “pay-to-participate” or “pay-to-play” cropped up in the 1980s.

Initially, most of the extra fees were tied to athletics, particularly expensive sports like football and hockey.

Researching schools in Ohio in the late 1990s as part of his research for his PhD, Scott Smith found that about 20 percent of its school districts required some fees to play sports.

Today the practice is proliferating, said Smith, now chairman of the Department of Physical Education & Sport at Central Michigan University.

“Across the country, there’s kind of a national phenomenon taking place,” he said. “Obviously school budgets are being cut everywhere, and as school budgets are cut extracurriculars are cut.”

And it’s not just sports. From Connecticut to Arizona, districts are adding fees to participate in after-school clubs, music programs and other activities.

The price tags vary — some districts charge more for expensive sports while others set flat rates. It’s not uncommon for districts to set an annual cap for families with more than one student enrolled in a school.

Payson High School in Payson, Ariz., for instance, assesses a $200 sports participation fee for students to try out and play one of 14 sports. A second sport is $50. There is no charge for a third sport, and fees are capped at $400 per family. The school also charges fees for certain electives: $20 for art or business and $40 for computer tech, for example.

Rating Cut May Force Student-Loan Security Sales
(BLOOMBERG)

A cut in the U.S. government’s AAA grade could force investors to sell asset-backed securities tied to student loans, causing spreads to widen “significantly,” according to Citigroup Inc.

“A ratings downgrade would be a significant blow” to the $250 billion government-guaranteed sector, Citigroup analysts led by Mary Kane said in a July 22 report. “The likelihood of forced selling is elevated.”

Citigroup sees a 50 percent chance of a ratings cut this year as the U.S. struggles to reduce its long-term debt. Many investors buy student-loan securities specifically because they’re so highly rated and a U.S. government credit risk, according to analysts at the New York-based lender. Money managers with rating-based guidelines would be forced to sell into a sinking market, affecting the sector more than other asset-backed debt tied to consumers, commercial mortgages and corporate loans, they wrote.

Securities linked to student borrowings yield 170 basis points, or 1.7 percentage points, more than Treasuries, according to a Bank of America Merrill Lynch index. The spread has narrowed from 186 basis points since Dec. 31.

Citigroup considers it highly probable that President Barack Obama and Congress will reach a deal to raise the debt ceiling by Aug. 2 that doesn’t adequately address the long-term fiscal situation. It’s less likely that the U.S. will breach the ceiling and default on its debt, which would have a “massive impact on numerous markets,” analysts Brett Rose and Siddharth Joshi wrote in the same report.

David Weidner’s Writing on the Wall

July 26, 2011, 12:01 a.m. EDT
Mortgages for dummies
Commentary: Banks have a certain kind of borrower they prefer
By David Weidner, MarketWatch

NEW YORK (MarketWatch) — Are you an idiot? If so, you may qualify for a bank loan with a special rate.

This isn’t a put on. It’s simply the logical conclusion given last week’s House vote on a bill that would “improve” on the newly formed Consumer Financial Protection Bureau by undermining its authority and cutting its funding.

In other words: banks like dumb customers.

Given all the banking turmoil these days — the mortgage write-downs, foreclosure woes, and new regulation — you’d think that banks would be interested in teaching consumers how to manage all of these complicated loan products they’ve devised.

You’d think the last thing they want is to undermine an agency that’s main role is educating borrowers and ensuring lending fairness. But H.R. 1315 does basically that. It shrinks the CFPB.

The bill was introduced by Rep. Sean Duffy, (R.-Wis.), a 38-year-old attorney who was elected to his first congressional term in November, and was dubbed one of the “young guns” of the Republican Party by none other than The Wall Street Journal’s editorial page.

Duffy, a tea-party favorite, said he ran to foster “free markets” and halt “creeping socialism.”

If it weren’t for his stated concern for the American consumer, you’d might think Duffy is a patsy of the big banks. Congressman Duffy has taken more than $100,000 from the financial lobby, his biggest contributing industry by far. He counts home builders and the American Bankers Association among his biggest donors.

You could say he’s brought that free market spirit to his office.
…

IMF chief urges US to raise borrowing limit

The Associated Press
July 26, 2011 10:06 AM EDT

WASHINGTON — The head of the International Monetary Fund says failure to raise the U.S. borrowing limit could damage the global economy.

In a speech in New York, Christine Lagarde calls on U.S. political leaders to show the same “political courage” that European leaders demonstrated last week, when they agreed on several new measures to address Greece’s debt crisis.

President Barack Obama and Republican lawmakers are at an impasse in negotiations to raise the nation’s $14.3 trillion borrowing limit. The federal government is at risk of defaulting on its debt after Aug. 2 if an agreement isn’t reached by then.

Lagarde says a default or downgrade of U.S. debt “would be a very, very, very serious event not just for the United States but for the global economy at large.”

Postal Service targets 3,600 offices for closure
Postmaster to release list, propose shifting some functions to local stores
~MSNBC

The U.S. Postal Service is expected to announce a plan Tuesday to close more than 3,600 post offices, mostly in small communities, to close a widening budget gap, according to published reports.

The list of proposed closures, amounting to about 11 percent of the total, will be made public Tuesday by Postmaster General Patrick Donahoe.

The selected locations were chosen because they get the “least amount of foot traffic and retail sales,” according to The Wall Street Journal.

They also may be near other local businesses that could replace some or all postal services by selling stamps and accepting packages under a so-called new “village post office concept.”

Despite cutting $12 billion in labor costs over the past four years, the postal service expects to face a deficit of $8 billion to $9 billion in the current fiscal year and has maxed out its line of credit with the federal government, Donahoe told the Journal.

The Postal Service said in January it was considering half the nation’s post offices for potential closure, with the objective of closing up to 2,000 offices . The new plan, also reported by CNNMoney, would be considerably more aggressive.

The Postal Service also has been pushing to eliminate costly Saturday scheduled mail delivery, which it says could save $3 billion a year.

Bank of America to cut 59 jobs in Fort Lauderdale
South Florida Business Journal

Bank of AmericabizWatch filed notice with Florida that it intends to lay off 59 employees in Fort Lauderdale.

The layoffs will take place at the bank’s office at 1425 N.W. 62nd St. (Cypress Creek Road) from Nov. 1 through Jan. 31.

BofA spokeswoman Christina Beyer Toth said the bank would leave its Fort Lauderdale deposit products operation and monitoring site with an early lease exit. The impacted employees may be eligible for severance pay and/or relocation assistance, she added.

BofA ranked second in South Florida, with $23.1 billion in deposits and 206 branches on June 30, 2010. The Charlotte, N.C.-based company (NYSE: BAC) was stung by an $8.8 billion loss in the second quarter.

FHA May Be Next in Line for Bailout: Delisle and Papagianis

The nationwide decline in house prices has created a vacuum in the U.S. mortgage market. Private financing for home loans has all but dried up and the U.S. government is now guaranteeing almost every new mortgage. Fannie Mae and Freddie Mac have received most of the media’s attention, but policy makers need to focus on the third leg of the housing- support stool: the Federal Housing Administration.

The FHA has some major accounting problems. Left unaddressed, they could spook the markets, lead the FHA to seek a federal cash infusion and further enrage taxpayers. These outcomes can be avoided — but only if policy makers are more transparent about the risks involved in guaranteeing mortgages.

The FHA provides private lenders with a 100 percent guarantee against defaults on home mortgages that meet certain underwriting criteria, such as a minimum down payment and credit score. Traditionally, the FHA has served first-time homebuyers and low- to moderate-income families who pay an insurance premium for this loan guarantee.

As private-financing options have disappeared, the role of the FHA has grown. Its market share has increased to about 30 percent today from 3-4 percent in 2007. That’s because the agency is now practically the only game in town, accepting borrowers with down payments of as low as 3.5 percent. As the last few years have made clear, sizable down payments — or “skin in the game” — are the key to avoiding defaults in the near term and to achieving a stable housing market in the long term.

That “giant sucking sound” just never goes away…

BP Solar to close Frederick facility, lay off 58
The Baltimore Sun

BP Solar warned state regulators Monday that it will close what remains of its Frederick operation and lay off 58 employees, starting this fall.

The company’s decision to shut the solar-power facility, cutting research and development jobs as well as sales and marketing positions, came after it relocated the manufacturing operation there overseas. BP announced in March 2010 that the site would lose 320 manufacturing jobs as a result.

Resler said BP Solar is shifting away from selling solar modules through distributors and will focus solely on developing large solar projects, a move that will require fewer employees.

New-home sales fell 1 percent in June

By MARTIN CRUTSINGER The Associated Press
Posted: 10:11 a.m. Tuesday, July 26, 2011

WASHINGTON — Fewer people bought new homes in June, evidence that the housing market remains weak.

Sales of new homes fell 1 percent last month to an annual rate of 312,000, the Commerce Department said Tuesday. That’s less than half the 700,000 that economists say is typical in healthy markets.

Last year was the worst for new-home sales on records dating back a half century. Through the first six months of this year, sales are lagging behind last year’s totals.

New-Home Sales Unexpectedly Fell for 2nd Month
July 26 (Bloomberg) –

Sales of new U.S. homes unexpectedly declined for a second month in June, indicating housing is still languishing two years into the economic recovery.

Purchases dropped 1 percent to a 312,000 annual pace, a three-month low, figures from the Commerce Department showed today in Washington. The median estimate in a Bloomberg News survey of economists called for a 320,000 rate. The median selling price of a new home rose from a year earlier, while inventories fell to the lowest on record.

Builders have little incentive to start projects as the prospect of more distressed properties entering the foreclosure pipeline depresses home values. The figures underscore Federal Reserve Chairman Ben S. Bernanke’s comments that demand for homes has been held back by slow job growth and restrained consumer optimism.

“You’re still dealing with a supply-demand imbalance that suggests home prices will remain under pressure,” Tom Porcelli, chief U.S. economist at RBC Capital Markets Corp. in New York, who forecast June sales at a 310,000 pace. “As unemployment stays high, it will be difficult to generate meaningful gains in home sales.”

Confidence among U.S. consumers unexpectedly rose in July from an eight-month low, led by a rebound in the outlook for jobs over the next six months. The Conference Board’s index climbed to 59.5 from a revised 57.6 reading in June.

States have no place to hide from debt crisis

MIAMI (Reuters) - State governments across America know the stakes for them are high in Washington’s gathering debt-ceiling crisis but are finding few ways to hedge against the big losses they know are coming.

The weeks-old negotiations in Washington over enlarging the federal government’s borrowing authorization are so scattered and twisted that state officials reliant on federal monies for large portions of their budgets can’t handicap the outcomes.

“A complete unknown at this point …,” said H.D. Palmer, spokesman for California’s finance department of the standoff. “We just don’t know where things are going to end up.”

Officials in Maine, and in Virginia, which was one of five AAA-rated states called out for possible ratings cuts last week by Moody’s Investors Service because of the debt face-off, said they can’t plan adjustments because outcomes were so clouded.

“We have been examining areas where we think there could be impacts, but cannot make any firm contingency plans because of the uncertainty of what impacts we may see …,” said Jeff Caldwell, spokesman for Virginia Gov. Bob McDonnell.

Some state and local governments, which together got $478 billion from the federal government in 2010, said they will tap reserves or borrowings and use other funds to make up for any short-run losses of federal monies.

Some state finance officials have shifted bond sales because of the federal standoff and others are bracing for possible downturns in sales tax revenues if Social Security and other payments to individuals are interrupted.

In Wisconsin, where federal revenue is about 29 percent, or $9.3 billion, of the annual budget, the state has enough money to fund federal programs for at least three months due to proceeds from a recent $800 million note sale and the state’s ability to borrow from other funds, an official said.

“Right now it appears that Wisconsin will be able in the short term to handle any type of default the federal government would have,” Mike Huebsch, secretary of the state’s administration department, told reporters on Monday.

Huebsch said the federal debt crisis could affect Medicaid healthcare spending, student loans, state university research grants, low-income heating assistance and child welfare.

But even if a deal is reached by August 2, the day U.S. Treasury officials say the government’s current borrowing authorization expires, big questions about federal funds for states and local governments will linger for a long time.

“If there is a deal, there will be a headline number,” said Chris Whatley of the Council of State Governments. “But the cuts themselves won’t be known for months. You won’t know what the numbers will be for your state for a long time.”

Even so, governors, legislators and local officials do know that the flows of money from the federal government will be slower in coming years, according to Whatley.

“This is uncharted territory. I don’t think we know how it could affect us,” said Martha Haynie, comptroller for Florida’s Orange County.

A simple question… Maybe Combotechie or ProfessorBear can answer this. Why would the value of long bonds go up when they are denominated in dollars, which are losing value against almost every other fiat currency? The ten year right now is 2.96% (down from 3.02 yesterday, up .7%) and the dollar is falling like a rock (down .07%)? Why would someone buy a bond which pays in dollars when the value of said dollars just keeps losing value? The math doesn’t work.

Clam down Karl, no need to get all wee-weed up. The debit ceiling will rise, and one day in the future we’ll default. We are not about to the rip the band-aid off, or sit down and eat our peas. The empire is crumbling.

Article: No, You’re Not King Sir Jackass
The Market Ticker ® - Commentary on The Capital Markets
by Karl Denninger

That was an absolute disaster for Obama.

Let us not forget that this President came into office and ran the credit card to the extent of more than $1,500 billion a year for the last two years. He continued the bankrupt policies of George Bush who did the same damn thing. He has blown money like crazy, yet has utterly refused to face the fact that there is no way he can continue to do what we’ve been doing with these deficits for the indefinite future.

We were told these deficits were necessary due to a crisis in 2008. But we have also been told the crisis is over. That our economy is recovering. That Wall Street is “healthy.” That the banks are “ok” and “well-capitalized.”

These are lies and The President knows it! The economy is a damn wreck. The banks are only “solvent” because they’re lying about asset values. And Wall Street is punch-drunk - again - on cheap leverage, headed for yet another utter and complete disaster.

So now, having run smack into the Tea Party and Boehner saying “no more damnit; we’re going to blow up if this crap continues!” The President now turns around and throws a temper tantrum on national television threatening the old “tanks in the streets” (effectively) if he does not get what he wants - which is yet another blank check.

Well Mr. President I want to know when the blank check demands stop!

Why? Because there’s no damn money, that’s why. The US Government is unable to keep doing this crap forever.

It has to stop!

In fact S&P has clearly stated that if you pull the crap you intend the downgrade you claim you’re trying to avoid will come.

I know in advance it is going to suck when the deficit spending stops. I’ve been writing on it for more than four years and have been utterly consistent. There is no escape from the mathematical facts.

So, Mr. President, if you intend to demand this crap continue, you have the affirmative obligation to tell the American people exactly when and how this is going to stop because you are not a King, you’re a President and you are subservient to the people - not the other way around.

If you can’t or won’t then Congress has the absolute responsibility to say NO - period - and force a balanced budget right now, since you will have, by doing so, declared that you never intend to resolve the underlying problem.

It’s that simple.

California Seeks $5B ’Bridge’ Loan to Pay Bills
(Bloomberg)

California will borrow $5 billion today through a temporary loan as U.S. states make plans to cope with any credit-market disruption should lawmakers fail to raise the federal debt ceiling by the Aug. 2 deadline.

Proceeds from California’s bridge loan will help pay bills until the state can sell cash-flow notes that had been scheduled for late August. New Mexico is asking agencies to complete requests for federal reimbursement by midday July 29 to ensure the it can get repaid, and Maryland was forced to cut $206 million off a planned bond sale as the debt talks dragged on.

“Given the uncertainty in Washington with the debt ceiling, the treasurer felt it was prudent to get a bridge loan,” said Tom Dresslar, a spokesman for California Treasurer Bill Lockyer. “We couldn’t have planned on the president and Congress taking us to the brink.”

States and local governments face higher borrowing costs if Congress fails to reach a compromise by the deadline. Because the U.S. borrows money through the sale of Treasury notes to pay its bills and refinance maturing debt, it could default if the limit isn’t increased. That might cost the government its top- ranked credit score, upend financial markets and send interest rates higher.

Moody’s Investors Service has said it may lower its top ratings on Maryland, South Carolina, New Mexico, Tennessee and Virginia because their dependence on federal revenue makes them vulnerable to a U.S. credit cut should talks to raise the debt limit fail.
Costing Taxpayers

Moody’s has also said another 7,000 top-rated municipal credits would have their ratings cut if the U.S. government loses its Aaa grade.

“It would ultimately cost taxpayers in Virginia more” if the state’s rating is cut, said Jeff Caldwell, a spokesman for Virginia Governor Bob McDonnell.

$120.00 oil should have little to no effect on the great American consumer, since energy cost’s are a variable.

ITEM: Oil at $120 Becomes Biggest Energy Bet as Futures Leave Forecasters (Bloomberg)

The biggest bet in the oil market has become a 20 percent increase to $120 by the end of the year as global growth drives demand for raw materials.

The number of contracts held by traders in options to buy West Texas Intermediate crude at $120 a barrel in December totaled 45,502 lots on the New York Mercantile Exchange as of July 21, 4,226 lots more than the next-highest wager, which is for $125. Open interest in the two contracts jumped 29 percent in the past four weeks, according to data compiled by Bloomberg.

Traders anticipate this year’s gains will exceed forecasts of the most accurate strategists as economic expansion in emerging markets outweighs the debt crisis in Europe, slowing U.S. growth and efforts by Saudi Arabia and the International Energy Agency to curb prices. Bullish bets mark a turnaround from April, when $80 a barrel was the favorite wager and futures fell as much as 22 percent in the next two months.

“We’re in a sweet spot,” said Gordon Kwan, the Hong Kong- based head of regional energy research at Mirae Asset Securities Ltd. and the most accurate forecaster for New York oil among 26 analysts ranked by Bloomberg in the past eight quarters. “Oil prices are well supported,” he said in a July 20 interview. “It’s very profitable for the energy sector but not high enough to kill any economic growth.”

The Help-Wanted Sign Comes With a Frustrating Asterisk
- The New York Times

The unemployed need not apply.

That is the message being broadcast by many of the nation’s employers, making it even more difficult for 14 million jobless Americans to get back to work.

A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.

Unemployed workers have long suspected that the gaping holes on their résumés left them less attractive to employers. But with the country in the worst jobs crisis since the Great Depression, many had hoped employers would be more forgiving.

“I feel like I am being shunned by our entire society,” said Kelly Wiedemer, 45, an information technology operations analyst who said a recruiter had told her that despite her skill set she would be a “hard sell” because she had been out of work for more than six months.

Legal experts say that the practice probably does not violate discrimination laws because unemployment is not a protected status, like age or race. The Equal Employment Opportunity Commission recently held a hearing, though, on whether discriminating against the jobless might be illegal because it disproportionately hurts older people and blacks.

The practice is common enough that New Jersey recently passed a law outlawing job ads that bar unemployed workers from applying. New York and Michigan are considering the idea, and similar legislation has been introduced in Congress. The National Employment Law Project, a nonprofit organization that studies the labor market and helps the unemployed apply for benefits, has been reviewing the issue, and last week issued a report that has nudged more politicians to condemn these ads.

Given that the average duration of unemployment today is nine months — a record high — limiting a search to the “recently employed,” much less the currently employed, disqualifies millions.

So much for affordable housing programs designed to help minority families become homeowner households…

Wealth in America: Whites leave minorities behind
The housing crisis hit Hispanics and blacks much harder than it did whites
By Mike Brunker Projects Team editor

WASHINGTON — As Congress and the White House wrestle whether to raise taxes for the wealthiest Americans, a new analysis of Census data shows that the wealth gaps between whites and blacks and Hispanics widened dramatically during the recession.

The analysis by the Pew Research Center, released on Tuesday, found that from 2005 to 2009, inflation-adjusted median wealth fell 66 percent among Hispanic households and 53 percent among black households, compared with a 16 percent decline among white households.

Those declines increased the wealth gap between white and minority households to the largest since the census began collecting such data in 1984. The ratio of wealth for whites to blacks, for instance, is now roughly 20 to 1, compared to 12 to 1 in the first survey 25 years ago and 7 to 1 in 1995, when a booming economy lifted many low-income Americans into the middle class.

The wealth ratio for whites to Hispanics was 18 to 1 in 2009, also up from 7 to 1 in 1995, the Pew analysis found.

The declines from the recession left the median black household with $5,677 in wealth (assets minus debts, where assets include items like a car, a home, savings, retirement funds, etc.) and the typical Hispanic household with $6,325. White households, by comparison, had $113,149, the study found.

Sliced another way, the data from the Census Bureau’s Survey of Income and Program Participation (SIPP), showed that 35 percent of black households and 31 percent of Hispanic households had zero or negative net worth in 2009. The comparable rate for white households was 15 percent.
…

401K question
OK some of us have a 401K with the typical investment options. Stocks or bonds. Cash, gold or real estate are not an option, neither is taking the 10% penalty and cashing out….at least not where I work.
So my question is, if the feces hits the rotary device, what will cause less damage to my portfolio, stocks or bonds?
If the government defaults baonds are not exactly the best place to be. On the other hand I am sure the stock market won’t find much to cheer either.
I tried to cash out, but that’s against rules and regulations where I work unless I quit my job…not an option.

Mohamed El-Erian
Mohamed Mondays
Americans can ill-afford this debt ceiling debacle
Jul 25, 2011 10:45 EDT

Friday’s stunning and very public quarrel between the president and the Speaker of the House of Representatives was the catalyst for a weekend of frantic negotiations on how to increase America’s debt ceiling, maintain the country’s sacred AAA rating, and avoid a near-term default. Meanwhile, administration officials and members of Congress took to the airwaves on Sunday trying, but largely failing, to strike the balance between statesmanship and another round of the Washington blame game.

It was hoped that all this would serve as a prelude to a political compromise announced just before the opening of Asian markets. This did not materialize. But while another self-imposed deadline has been missed, it is likely that the nation’s leadership will stumble into a short-term compromise over the next few days — one that raises the debt ceiling and avoids a debt default but, importantly, leaves the AAA rating extremely vulnerable and does little to lift the damaging clouds hanging over the US economy.

It will come down to the wire; and when the stopgap compromise is reached, many in Washington will declare victory and, in the process, claim credit for averting a national disaster. Yet the resolution will likely be temporary, and the damage will be real and long-lasting — both of which render an already worrisome situation even more difficult going forward. Indeed, by illustrating so vividly to the whole world what is ailing America, the weekend’s political theatrics should make us all worry even more about the world’s largest economy.

First, consider the context. America’s already-fragile economic psyche and its global standing have taken a material hit. Forget about “animal spirits” for now. Instead, worry even more about an economy that is already having tremendous difficulty sustaining an acceptable growth momentum, and that already suffers from an unemployment crisis that is increasingly protracted in nature. Analysts will now scramble to again revise down their projections for growth, and up those for unemployment.

Second, remember the content. The debt and deficit issues that are at the root of the debt ceiling drama are, unfortunately, a small part of a much larger set of structural impediments to employment, investment and wealth creation. The housing sector is still languishing, credit intermediation is uneven, infrastructure investment is lagging, job skill mismatches are increasing, and income and wealth inequalities are worsening.

Third, lament the process. Virtually all Americans worry about these problems and too many feel them acutely on a daily basis. Astonishingly, however, our elected representatives and their appointees are just bickering and, distressingly, failing miserably to communicate a vision that provides for even the smallest amount of medium-term optimism. The endless political squabbles compel all to question whether politicians are aware of Main Street’s realities, let alone up to the task of making things better.

Finally, don’t forget the international angle. Anyone who travels will tell you that America’s friends and allies are bewildered at what is going on here (and its enemies rejoicing). This comes at a time when the country can ill-afford to lose the confidence of large foreign holders of US Treasury bonds, overseas manufacturers with factories here, those that use the dollar as the reserve currency, and the many who have outsourced to here the intermediation of their hard-earned savings and pensions.

Yes, after taking it to the edge, it is still highly probable that Washington will manage to step back from defaulting on the national debt. But no one will, or should, feel good about how this happens.

It is highly likely that the solution will be a band aid that has to be replaced in the coming months. In the meantime, America’s structural injuries will deepen and, to an extent that was unthinkable, America’s economic future will become even cloudier.
…

George Lopez - I will leave US if Palin wins…..

Probably the only one reason to root for Palin presidency.

DES MOINES, Iowa (AP) — A federal judge has ruled that Whirlpool can change benefits for about 3,000 people who had retired from Maytag.

Whirlpool bought Maytag in 2006 and later closed the Maytag corporate headquarters and a factory in Newton.

Whirlpool had said it wanted to change the retirees’ medical benefits to bring them in line with current Whirlpool employees.

Des Moines television station WHO reports that Whirlpool is expected to drop prescription drug and other medical benefits for the retirees.

Local 997 retirees chairman Larry Shaver says the union is considering an appeal.

Whirlpool is based in Benton Harbor, Mich.

The sound of money going poof. ie they bought the company knowing the benefits that had been agreed to, but are now allowed to make cuts. Seems like a simple way to shed pension obligations sell company from right hand to the left and then claim that new ownership should have the right to slash contracted benefits.

There is always a way around the rules…

Soros to close Quantum fund to outsiders
By Dan McCrum in New York - FT

George Soros, the billionaire hedge fund manager, is closing his Quantum fund to outside investors and returning their money.

The fund, which will continue to manage about $24.5bn of Mr Soros’ own money, blamed the decision on new financial regulations requiring it to register with the Securities and Exchange Commission.

“An unfortunate consequence of these new circumstances is that we will no longer be able to manage assets for anyone other than a family client as defined under the regulations”, Jonathan and Robert Soros, George’s sons and co-deputy chairmen of the fund, wrote in a letter to investors on Tuesday.

The fund is returning about $750m of capital to outside investors, according to a person familiar with the situation. Keith Anderson, chief investment officer since 2008, is also leaving the fund.

The move brings an end Mr Soros’ four-decade career as a hedge fund manager. A Hungarian emigré, he made more than $1bn in 1992 betting that the UK would be forced to devalue sterling and pull out of the European exchange rate mechanism.

Obama to Banks: We’re Not Defaulting
| FOXBusiness

While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn’t raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.

In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn’t raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn’t raised, and President Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.

While the negotiations to craft a budget remain at an impasse, Republicans and Democrats on Monday began crafting their own plans to cut spending that could lead to an agreement to raise the debt ceiling. It’s unclear if a broad agreement can be reached any time soon, but even if a deal is struck, a complicating issue for lawmakers and the administration is the possibility of a downgrade to the US debt rating, which would cut the triple-A rating on the nation’s debt to a lower level.

Good luck to my American friends. The future does look grim but if you were Chinese or East Indian it has not looked so good in centuries. We in the west are going to have to get used to having very rich and very poor people in our countries, as they do in India where so many American jobs have gone to. One sad marker of American influence is that while American astronauts must now hitch a ride to the International Space Station with the Russians, the Chinese are about to launch their own Space Station into orbit. I remember watching the Apollo 11 landing on TV; a truly magnificent achievement.
For the USA to regain its footing I think it has to repatriate its manufacturing and jobs base and innovate at ANY cost. The debt ceiling is the immediate problem but the malaise is far deeper.

Another turd flushed from the cesspool…

Rep. David Wu(D) announces he will resign after accusations of sexual misconduct ~ The Oregonian

The Democrat said in a statement that he would leave office after Congress resolves the debt ceiling crisis.

“With great sadness, I therefore intend to resign effective upon the resolution of the debt ceiling crisis. This is the right decision for my family, the institution of the House, and my colleagues.”

The Oregonian reported Friday that Wu had been accused of an unwanted sexual encounter with the 18-year-old daughter of a childhood friend. The incident occurred in Orange County last year.

Wu’s announcement came only minutes after Oregon’s two Democratic senators — Ron Wyden and Jeff Merkley — called on him to resign, saying the embattled lawmaker had lost his ability to effectively serve in the wake of accusations of improper sexual conduct that “are both jarring and exceptionally serious.”

“While he, like every American, deserves an opportunity to address those accusations and defend himself, our constituents in the first district of Oregon deserve a member in the House of Representatives whose main focus is fighting for their interests.

Meet America’s New Most Expensive Home for Sale
by Morgan Brennan - Forbes

Even as so many Americans struggle under the weight of their underwater mortgage loans, in the high-rolling world of billionaire real estate, 2011 has been a year of record-breaking uber expensive properties. In March billionaire investor Yuri Milner plunked down $100 million for a Silicon Valley Estate, breaking previous purchase price records in the U.S. More recently, billionaire heiress Petra Ecclestone became the new owner of the Spelling Manor — an estate whose $150 million asking price had garnered it the title of America’s most expensive home for sale. Just days later, a new property is taking over that “most expensive” title: the $175 million Jackson Land & Cattle ranch.

Jackson Land & Cattle hit the sale block last week, listed with John C. Pierce of Hall & Hall, a ranch real estate firm. The property’s owner is Richard Fields, chief executive of Coastal Development, LLC, a gaming and resort development company. Fields’ $175 million compound encompasses more than 1,750 acres of rolling, green land just outside of Jackson Hole, Wyoming, in Teton County. The expansive ranch hosts cattle and horses. Aspen, evergreen and timber trees stud the hills interspersed with large hay meadows. There are three fishing ponds, a spring creek and over 800 acres of irrigated meadows. The Teton Range of the Rocky Mountains rise up in the distance.

The ranch’s biggest draw is certainly not the residence. The home itself is an old barn that’s been converted into a quaint three bedroom residence. There’s also a four bedroom guest house and two employee apartments. No, the real draw is the world-class 52-stall equestrian center.

The equestrian center started life as an English-style riding center. Fields had it retrofitted for cutting horse training, a Western style of riding in which a rider and his horse separate an animal out from a herd (think of the horseback maneuvers ranchers in western movies do). The center is designed by renowned western architect Jonathan Foote, perhaps most famous for his use of distressed woods, glass and Montana moss rock. Fields convinced the architect to come out of retirement and re-skin the center with rough-cut stone and barnwood. There’s an outdoor riding rink and an indoor one from which you can gaze out windows onto the mountains.

“You can fish and ride and hunt and you’re still only three minutes from downtown Jackson Hole,” says Jonathan Pierce, the property’s listing agent. And for billionaires — the prospective buyers of this pricey piece of nature — the locale comes with benefits. Most notably on taxes. Wyoming doesn’t have a state income tax or an estate tax; even property taxes are low. Jackson and its neighboring areas host a plethora of secondary homes since taxes also don’t have to be paid on out-of-state retirement income. In response, the area draws a substantial number of ultra wealthy residents like Walmart billionaire Christy Walton, the world’s richest woman. Indeed Teton County is one of America’s wealthiest counties per capita.

A notable factor contributing to Jackson Land & Cattle’s price is the fact that it carries entitlements for up to 35 homesites. In other words, if a buyer doesn’t want all that land for himself, he can subdivide and sell parcels of it. Even so there are hopes that the estate’s buyer won’t find it necessary to do that. “We are dealing with a very capable seller who is hoping for a conservation outcome on the property, although certainly not dictating that,” explains Pierce. “It’s a signature property that the entire community would love to see someone come along that shares Mr. Fields’ appreciation for the open space.”

POLITICS
JULY 26, 2011, 2:40 P.M. ET

Big GOP Bloc in House Opposes Boehner’s Plan
By COREY BOLES And NAFTALI BENDAVID

The leader of a large group of House conservatives said Tuesday he was “confident” there weren’t enough GOP lawmakers to pass a plan by Republican House Speaker John Boehner to increase the debt ceiling and reduce the deficit.

Rep. Jim Jordan (R., Ohio), who said the Boehner plan didn’t cut spending enough, heads a group that includes 178 of the 240 Republican House lawmakers.

Mr. Jordan, the chairman of the Republican Study Committee, said there weren’t 218 House Republicans who would vote for the plan Mr. Boehner released Monday. Mr. Jordan’s announcement injects more uncertainty about the endgame of the debt-ceiling drama, as Congress remained deadlocked a week before the government runs out of cash to pay its bills.

In addition to Mr. Jordan, at least five other House Republicans announced their opposition: Reps. Louie Gohmert of Texas, Tom Graves of Georgia, Tim Huelskamp of Kansas, Connie Mack of Florida, and Steve Southerland, also of Florida. Without any Democratic support, Mr. Boehner can only afford to lose 22 votes for his plan to pass the House. House Minority Whip Steny Hoyer (D., Md.) said “very few” Democratic representatives would back the Boehner plan, scheduled for a vote Wednesday.
…

Wonder what happens in Cuba after the Castro brothers kick the bucket?

Cubans Still Suffer, But Media Looks Away
By Mike Gonzalez| FoxNews.com

Last week, just outside Cuba’s holiest Catholic shrine, government thugs attacked in plain daylight a group of opposition women — beating them, stoning them and stripping them naked to the waist. The women, mostly black and middle-aged, suffered this public humiliation because they were trying to find a dignified way to bring attention to the plight of their husbands, who are in prison for freely speaking their minds.

The archbishop of Santiago de Cuba has condemned the attack. You can find an eyewitness account in Spanish here:

It should make for poignant watching today, the anniversary of the start of the Cuban Revolution.

Unfortunately, there’s nothing unusual in this grotesque attack on the Damas de Blanco (or Ladies in White, the harassed association of wives of political prisoners) on the street outside the shrine of Our Lady of La Caridad del Cobre. It’s routine for Cubans to be publicly degraded, brutalized and imprisoned when they dare speak their minds. Their daily existence has been one of fear and wretched suffering for 50 years now.

Yet the chances are that you probably haven’t heard about this story. A quick Google search of the attacks on the Damas de Blanco turned up only about five hits, none from a major publication. Why?

Not because it’s a dog-bites-man story (literally, in this case), as some journalists might have you believe. No, it’s simply because the media don’t report the daily attacks on the Cuban dissidents.

All the major international news wires, and at least two TV networks, have bureaus in Cuba. But they’re either so afraid of being expelled, or have so bought into the regime’s propaganda, that all they report is how Raul Castro is bringing economic reforms to Cuba.

So little is the story of Cuba’s oppression known outside that island prison that, were the constant repression reported occasionally, it might actually cause a stir.

Clearly, Raul—Fidel’s brother, who was handed the day-to-day reins of the island when his elder brother fell ill a couple of years back—has no intention of doing anything that will threaten communism’s firm grip on Cuba. Otherwise, his goons would feel no need to terrorize and drag a bunch of older women naked through the streets.

What this dearth of news on the Gulag Next Door has produced is a strange double standard, where similar repression in far-away Burma, Zimbabwe or Libya — also by leftist regimes — gets far better coverage. Such is the ignorance of events in Cuba that MSNBC host Chris Matthews two years ago asked this question in an interview:

“Congressman Burton, why do you think Cubans on the island still support the Castro brothers? What is it that allows that lock on those people to continue?”

Well, Chris, here’s your answer to what happens to Cubans when they try to pick that lock. Leaving Cuba is illegal, so you either stay silent, brave shark-infested waters on inner tubes (it is illegal to own boats in Cuba, for reasons that should be apparent), or risk suffering the fate of the Damas de Blanco.

The body language in the photo which accompanies this article can be summarized in one word: DIVORCE.

US debt crisis talks reach an impasse
IMF chief warns of serious consequences for world economy as Obama and Republicans fail to agree on approach

Ewen MacAskill in Washington and Dominic Rushe in New York
guardian.co.uk, Tuesday 26 July 2011 19.44 BST

A guy in line at the grocery store was holding a huge box of frozen hamburger patties. The checker said that lots of people didn’t like that brand, cheapest meat, smallish patties, previous recalls, etc., while the other brand was just a little more and tasted way better. Oh, these are for my dog…see, food stamps won’t pay for dog food.

Democrats Oppose Obama-U.N. Gun Control Treaty
By Paul Bedard - U.S.News

Twelve Democratic senators have joined 45 Republicans in a fast growing movement to halt progress on an Obama-backed United Nations effort that could bring international gun control into the United States and slap America’s gun owners with severe restrictions.

Montana Democratic Sen. Jon Tester’s office today provided Whispers with their letter, signed by 11 other Democrats, urging the president to press for significant changes in the treaty. Their major concern: that domestic manufacture, possession, and sales of firearms and ammo will be included, thereby giving an international authority the right to regulate arms sales already protected by the Second Amendment. They also said any move for an international gun registry would be a non-starter.

A Republican letter circulated by Kansas Republican Sen. Jerry Moran has 45 signatures.

Ratification requires two-thirds of the Senate. So far 57 senators have said they would vote against the treaty, expected to be wrapped up next year.

In his letter, Moran wrote, “Our country’s sovereignty and the Second Amendment rights of American citizens must not be infringed upon by the United Nations,” Moran wrote in the letter. “Today, the Senate sends a powerful message to the Obama Administration: an Arms Trade Treaty that does not protect ownership of civilian firearms will fail in the Senate. Our firearm freedoms are not negotiable.”

The emergence of strong Democratic resistance comes as the president is trying to deal with fallout from liberal Democrats upset that he has opened the door to major changes in Social Security and Medicare as part of the debt ceiling crisis.

Debt ceiling poll: Voters with Obama
The president is pictured smiling. | AP Photo
The majority of the poll’s respondents most closely aligned with the president’s position. | AP Photo Close
By JENNIFER EPSTEIN | 7/26/11 3:26 PM EDT

Most Americans would like to see a mix of spending cuts and tax increases be part of a deal to raise the debt ceiling, a new poll finds, aligning the majority with President Barack Obama’s position.

Of those surveyed for a Reuters/Ipsos poll released Tuesday, 56 percent said they want to see a mix of approaches used in an agreement to raise the debt ceiling. The poll was conducted overnight Monday, as Obama and House Speaker John Boehner (R-Ohio) voiced their views on the impasse in negotiations in back-to-back televised primetime speeches.

“It does seem to be that the popular narrative is falling on the side of the president on this one,” Ipsos pollster Julia Clark said.

Just 19 percent of Americans said they favor a plan like Boehner’s, which would rely solely on spending cuts to existing programs to reduce the deficit. Twelve percent said they would prefer a plan to reduce the deficit only by raising taxes.

Americans’ blame for the impasse is spread all around, though is particularly strong against congressional Republicans, with 31 percent of those surveyed saying they are responsible for it. Twenty-one percent blamed Obama and nine percent blamed congressional Democrats.
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A 21 year old used car salesman has seen the light…

ITEM: More Americans unhappy with Obama on economy, jobs
By Ylan Q. Mui and Jon Cohen

More than a third of Americans now believe that President Obama’s policies are hurting the economy, and confidence in his ability to create jobs is sharply eroding among his base, according to a new Washington Post-ABC News poll.

But Americans’ discontent does not stop there. The survey also found that Americans harbor negative feelings toward congressional Republicans. Roughly as many people blame Republican policies for the poor economy as they do Obama. But 65 percent disapprove of the GOP’s handling of jobs, compared to 52 percent for the president.

The dissatisfaction is fueled by the fact that many Americans continue to see little relief from the pain of a recession that technically ended two years ago. Ninety percent of those surveyed said the economy is not doing well, and four out of five report that jobs are difficult to find. In interviews, several people said that they feel abandoned by both parties, particularly as debates over the debt ceiling gridlock Washington.

“What I’ve realized is it doesn’t matter if you’re Republican or Democrat anymore,” said Joey Wakim, 21, a used car salesman from Allentown, Pa. “We just want somebody who’s gonna get things right.”

The Post-ABC survey found that a majority of Americans still blame former president George W. Bush for the state of the economy. But it also found that Americans who identified most closely with the burgeoning tea party movement are more likely to have experienced lifestyle changes because of the downturn.

Rose Bear, 52, said her husband travels 800 miles round trip to work in North Dakota because there are not enough jobs near their home in Laurel, Mont. Bear said she supports the tea party in part because of its focus on taxes and employment.

“If you keep throwing up the taxes and busting the guy who’s employing you, people are gonna lose jobs,” she said. “They’re addressing the issue of the joblessness.”

BIRMINGHAM, Ala. (AP) — Alabama’s largest county is laying the groundwork for filing what would be the largest municipal bankruptcy in U.S. history, over a more than $3 billion debt for its sewer system. The Jefferson County Commission approved resolutions Tuesday to hire prominent bankruptcy lawyers and to sell bonds later in case money is needed to emerge from bankruptcy.

US house prices fall 4.5% in year to May
By Shannon Bond in New York
Published: July 26 2011 15:10 | Last updated: July 26 2011 17:01

House prices fell in 19 of the 20 biggest US cities in May and new home sales declined for a second month, adding to evidence that the property market is still struggling following the housing bust.

Consumer confidence edged higher in July, however, as the outlook for the jobs market over the next six months improved.

Prices of single-family homes dropped 4.5 per cent from May 2010, following a revised 4.2 per cent decline in April, according to the S&P Case-Shiller home price index. The fall was in line with expectations of economists surveyed by Bloomberg.

House prices have remained depressed amid a glut of distressed properties for sale and downbeat sentiment among homebuilders and buyers.

Over the month, prices were flat on a seasonally adjusted basis – as expected – after rising 0.4 per cent in April. On an unadjusted basis, prices rose 1 per cent from April to May, a reflection of the traditionally stronger spring buying season.

“This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected,” said David Blitzer, chairman of Standard & Poor’s index committee. “The concern is that much of the monthly gains are only seasonal.”
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Oh, shhhh…

…it. Arizona’s in deep number two again. From today’s fishwrap:

‘Underwater’ loans: Arizona is No. 2

Above, I mentioned that Social Security is projected to begin running huge deficits over the next 10 years. I was challenged to provide numbers.

http://www.gpoaccess.gov/usbudget/fy12/xls/BUDGET-2012-PER-1-5-1.xls

Line 830 of that spread sheet.

Total manditory SS spending 2010 was expected to be 701B. For 2011, 730B. By 2021, 1,085B.

Why are SS payments expected to skyrocket? People already retired were born at 3 million a year in the 20s and 2.5 million a year in the 30s. People about to retire were born at a rate of 3.5-4.5 million a year in the Baby Boom. 10 years from now we can expect 50% more people collected SS than are now. 15 years from now, almost double the number of people collecting. SS trust fund is expected to be completely drained in less than 20 years.

After Aiding Republicans, Business Groups Press Them on Debt Ceiling
By BINYAMIN APPELBAUM
Published: July 26, 2011

WASHINGTON — The U.S. Chamber of Commerce, which spent millions of dollars last year helping elect Republicans to Congressional seats, is struggling to convince the House it helped to build that the debt ceiling must be increased.

The chamber and other business groups have pressed with increasing urgency for Congress to raise the maximum amount that the government can borrow. They have cataloged the consequences of default at meetings, parties and dinners and over drinks.

On Tuesday, the chamber threw its weight behind the proposal of the House speaker, John A. Boehner, telling recalcitrant Republicans that a pending vote on the plan was a with-us-or-against-us moment that would be remembered during the next election campaign.

But as the government runs out of money, those efforts have not produced the desired result. The freshman class of House Republicans, along with longer-serving members, is balking at Mr. Boehner’s plan, let alone anything that Senate Democrats and the White House might be willing to accept.

The tension highlights the distance between the pro-business stalwarts of the traditional Republican Party and the populism of its newer representatives, many of whom seem to view Wall Street and Washington with equal suspicion.

“I think they’re very pleased with the antigovernment inclinations of the Tea Party Republicans when it comes to taxes and regulation,” said David Axelrod, one of the president’s chief political advisers. “But now we have a situation where the integrity of the economy and the U.S. financial system is at stake, and they’re being hoisted on their own petards.”
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