The Housing Bubble

City of Rochester demolishes 8.6 acres in a corporate welfare project, and now the corp. may not construct their building there after all.

http://www.democratandchronicle.com/article/20110807/NEWS01/108070336/Midtown-PAETEC-project-not-dead-yet?

Posted on Sat, Aug. 06, 2011 10:15 PM

Deal to raise debt ceiling affects government loans for graduate students
By MARÁ ROSE WILLIAMS
The Kansas City Star

The nation’s graduate students were not exactly thrown under the bus in the recent Washington collision over the debt ceiling, but they did get nicked a bit.

They’ve taken the hit, it might be said, for the almost 10 million college undergraduates who need Pell Grants.

Deep cuts to the Pell program — which offers low-income undergraduate students grants that do not need to be repaid — were considered but then taken off the table.

“We are very relieved,” said Larry Moeder, director of admissions and student financial assistance at Kansas State University, where about half of the students get some type of federal assistance for tuition.

“The Pell Grant was designed to help the very neediest to afford a higher education. The neediest were protected in this process.”

Instead, the negotiators decided to save money by requiring graduate or professional-school students to pay the 6.8 percent interest on their government Stafford Loans that is accrued while they are in school.

Currently the government picks up that interest during school years. Under the change that begins July 1 next year, however, that interest will be paid by the student after graduation.

Last week’s compromise also eliminated the financial incentives to students to repay loans on time.
…

Bloomberg
U.S. Stocks Sink in Biggest Drop Since 2008 on Economic Concern
August 05, 2011, 10:36 PM EDT
By Nikolaj Gammeltoft

Aug. 6 (Bloomberg) — U.S. stocks fell the most in 32 months this week, erasing the Standard & Poor’s 500 Index’s 2011 advance, as investors fled equities amid signs that the economy is stalling. An early rally faded yesterday as concern grew that S&P would cut the American credit rating, speculation which proved to be true after financial markets closed.
…
The S&P 500 slumped 7.2 percent to 1,199.38, the biggest weekly drop since November 2008 and the lowest level since Nov. 30, 2010. The Dow rose 60.93 points yesterday. For the week, it dropped 698.63 points, or 5.8 percent, to 11,444.61. The measures erased year-to-date gains that reached 8.4 percent and 11 percent as of April 29, respectively.

“It was disaster,” Michael Gibbs, Memphis, Tennessee- based chief equity strategist at Morgan Keegan Inc., said yesterday in a telephone interview. His firm oversees about $80 billion in client assets. “The weakness in the U.S. economy combined with the lack of confidence in European leadership made the perfect storm for investors.”

About $1.87 trillion has been erased from the value of U.S. equities since July 22, including the 4.8 percent plunge by the S&P 500 on Aug. 4 that was the biggest drop since February 2009.
…

World leaders in huddle over US, Europe debt crisis
Press Trust Of India
Posted on Aug 07, 2011 at 05:17pm IST

Washington: The policymakers from across the world engaged themselves in emergency huddles on Sunday to discuss the twin-trouble of an unprecedented downgrade in the US’ credit-worthiness and the debt crisis in Eurozone.

The two issues have been the major reasons for the meltdown in global markets last week, when more than $ 2.5 trillion was wiped off from investors’ wealth, and the policy-makers were seen debating over ways to avoid further turmoil.

The Indian market has also been severely affected with a loss of about Rs 4 lakh crore (about $ 90 billion) in last four trading sessions. This included a loss of Rs 1.3 lakh crore on Friday itself when the markets slumped to their lowest levels in more than a year.

The weekend development of S&P’s downgrading sovereign long-term credit rating of the US from the top-notch ‘AAA’ level is widely expected to further aggravate the troubles when the global markets resume trading on Monday.

Sensing troubles ahead for the markets, global leaders and policymakers were seen holding emergency discussions on a Sunday.
…

Editorial
The cruel politics of credit rating
Sunday, August 07, 2011

WE note with a great deal of interest that the AAA credit rating which the United States of America has always had was downgraded for the first time by Standard & Poor’s to AA+.

This action immediately prompted a sharp rebuke from the US treasury, which pointed out that the adjusted rating was fatally flawed because it was based on calculations including several numerical errors that over-stated the budget deficit by US$2 trillion. This was indeed an egregious error, or was it a deliberate act of political sabotage?

S&P defended its action by intimating that it was based on its judgment that the debt ceiling deal agreed on last week would not be enough to curtail the continuation of record budget deficits.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed falls short of what, in our view, would be necessary to stabilise the Government’s medium-term debt dynamics”.

Credit rating agencies such as S&P and Moody’s have an appalling record of issuing judgments which have simply been totally incorrect and unwarranted. Their most notable failure was being wrong about institutions and countries before and since the eruption of the global financial crisis.

Regrettably, they certified financial institutions and companies that collapsed and downgraded others that survived and made profits. Their dubious pronouncements seriously damage firms, banks, shareholders, investors and governments by making it more difficult and costly for their victims to borrow or sometimes their predictions of doom become self-fulfilling prophecies when they spark a contagion of panic. There is no recourse against this irresponsible behaviour.

The credit rating agencies practise a special brand of alchemy which is mostly subjective speculation and not enough careful financial analysis. The accuracy of credit rating agencies is so dubious that many governments have strongly criticised their ratings, among them Jamaica and more recently Barbados.

Maybe now that the injustice has been perpetrated on the US, as against poor, defenceless Third World countries, some remedial measures will be implemented. At one time there was a debate on how they should be regulated and there were even suggestions that they should be replaced by national public sector agencies or multilateral institutions. It would be interesting to explore the possibility of punitive damage against credit rating agencies through legal action in the courts.
l…

It may have been the Tea Party’s threatened strategic default on U.S. debt that precipitated S&P’s downgrade. How would you feel if you were a mortgage lender and one of your borrowers stopped by to let you know that he was thinking about defaulting on his mortgage, even though he could still afford the payments?

…
Reuter’s blogger Felix Salmon said it was clear that the U.S. no longer deserved S&P’s highest AAA rating. He said griping about S&P’s math was silly. Salmon says the real issue is not the U.S.’s ability to pay, it’s the U.S.’s willingness to pay. The ratings agency has to make a call on both when it tells investors the likelihood they will get paid back. And, Salmon says, with a serious contingent of politicians in Washington more than willing to drive the U.S. into default - with many in the Tea Party openly saying they wanted a default and even voting against the 11th and three-quarters hour deal - S&P was well with its analytic right to alert investors to the fact that America’s willingness to pay is in serious question.
…

Prediction: From now until at least the 2012 presidential elections, Republicans will be in perpetual public denial that it was their intransigent negotiating style that led to the S&P downgrade.

Denial ain’t a river in Egypt, folks. There is a price to be paid for politicians who try to prove how tough they are by never compromising.

S&P and the USA
Paul Krugman - New York Times Blog
August 5, 2011, 9:19 pm
S&P and the USA

OK, so Standard and Poors has gone ahead with the threatened downgrade. It’s a strange situation.

On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency.

On the other hand, it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?

Just to make it perfect, it turns out that S&P got the math wrong by $2 trillion, and after much discussion conceded the point — then went ahead with the downgrade.
…

http://www.bbc.co.uk/news/uk-england-london-14435251

The usual lament from clueless city leaders after urban riots: “No one could have anticipated this level of violence.”

As economic malaise spreads and austerity forces both social services and emergency services and law enforcement cuts, these riots are going to become a lot worse and a lot more widespread, in the UK, Europe, and here. And in most US cities, liberal and corrupt Democrat administrations will see to it the the populations that will be victimized the most are not able to legally defend themselves with handguns or other firearms.

The Republican spin machine’s “BLAME OBAMA” campaign is spinning away madly to cover up culpability for the S&P credit downgrade. Good luck with that plan! Propaganda will only get you so far in a country with a free press.

S&P Blames GOP For U.S. Credit Problem, Associated Press, Politico Cover It Up

The Standard & Poors’ rating agency decision to reduce the United States’ long term debt from AAA to AA+ was explained in a press release that specifically mentioned “the majority of Republicans in Congress continue to resist any measure that would raise revenues,” should, itself, make headlines like “Standard And Poors Blames U.S. Credit Rating Reduction On Republicans.”

But the fact is, some publications, most notable The Associated Press and Politico, are working (thus far) to cover up S&P’s finger-pointing at Republicans. Instead, they appear to be pointing their own fingers at President Obama - someone not mentioned in the Standard and Poor’s press release.
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The Myth of the Middle Class Mortgage Deduction
The mortgage interest deduction no longer primarily benefits the middle class
Anthony Randazzo | August 5, 2011

Conventional wisdom has it that without the ability to deduct mortgage interest from federal taxes, homeownership rates and housing prices would tumble. Worse, middle class families would be relegated a fate worse than foreclosure: renting. Two decades ago, these dire predictions may have had some relationship to reality. But in recent years, the middle class has seen its share of the mortgage interest deduction (MID) steadily erode, undermining the political case for retaining the subsidy.

In 1991, households earning near the inflation-adjusted median income of around $50,000 were 48 percent of those benefiting from the MID (see nearby chart). That share has fallen to 30 percent in 2009, while at the same time the portion of households claiming the MID with six-figure salaries or higher has tripled from 13.5 percent to 41.5 percent.

What caused this trend? The answer lies in understanding who really benefits from the mortgage interest deduction, and how much the specialized subsidy is worth.

In 2009, only one-fourth of taxpayers in 2009 claimed the mortgage interest deduction. And this has been a relatively stable historical trend, with between 21 and 26 percent of taxpayers claiming the MID each year since 1991. Of those few who do benefit from the MID, most are households in the top income brackets and younger individuals with large mortgages 
who have not paid off much of their loans. Families where the head of household is between 25 and 35 years-old with incomes over $250,000 have, on average, a $7,711 deduction from mortgage interest, compared to a similar household with earnings between $40,000 and $75,000 a year, and taking an average $571 deduction. Meanwhile, low-income families, seniors, and Americans without mortgages gain virtually nothing from the program.

Many Americans believe the mortgage interest deduction allows them to deduct their entire interest payments from their tax bills—and make home purchasing decisions based on that misunderstanding. Instead, the MID lowers taxable income. Tax bills are lowered, but that’s a much smaller benefit.

When considering the actual tax savings of the mortgage interest deduction, the benefits to the middle class become even more meager. The average tax savings for households with income between $40,000 and $75,000 is just $152 a year. That’s $12.66 a month. Compare that to the highest earners, those making $200,000 or more, who see an average of $1,862 a year off their tax bills because of the MID benefit.

One reason often cited for preserving the mortgage interest deduction is the belief that it helps increase 
the homeownership rate. But as it turns out, the MID is an inefficient tool for increasing homeownership. Since 1994, the homeownership level has gone from 64.2 percent up to 69.2 percent 
in 2004 and then down to 66.4 percent today. The recession and collapse of the housing market is largely responsible
 for the decrease in homeownership. If the mortgage interest deduction were driving people to buy homes we would expect to see some correlation between homeownership rates and the use of the deduction, but we don’t. The total mortgage interest deduction subsidy has grown from roughly $50 billion to $80 billion since 1994 with little impact on homeownership levels.

This is because those households that rent but would prefer to own a home—if they had just a bit more financial flexibility—are typically low-income families. And if they bought a home they would be much less likely to itemize their deductions and claim the MID because they are low-income in the first place. For median income families that do itemize, a $12.66 per month tax savings is not likely to be the difference between affording a mortgage payment and renting. As a result, rather than increasing the homeownership rate, the primary impact of the MID is to increase the amount spent on housing by consumers who would likely choose to own a home anyway, subsidizing spending on housing rather than homeownership.
…

Limits on mortgage-interest deduction worth considering

The Seattle Times editorial page argues that the federal income tax deduction for mortgage interest could be limited to debt on principal residences, and in other ways.

THE news this week included a report that Congress may cut back the tax deduction for mortgage interest. Done carefully, this could be a good thing. It could help lower the federal deficit and the growth in the national debt with little hurt to homeownership.

In gross dollars, the mortgage tax deduction is one of the largest exemptions in the federal tax code. About 25 percent of taxpayers benefit from it, with more benefit at the upper end. The more you borrow, up to $1 million, the greater the deduction you get. That makes this tax break especially valuable for people who buy the biggest houses or who live in regions with the highest house prices, such as Los Angeles and San Francisco.
…

Posted this yesterday, but looking at the comments in the PB Post it seems like more and more people are catching on to some of these victims. The first time this story was in the local paper in April, I posted Lynn Szymoniak`s refis and I was attacked by the I shouldn`t have to pay anyone I was cheated by the evil banks they don`t even know who I owe the money to I should get my house for free it was my equity crowd. And I never posted the “equity” she took out of her condo, just her house. That alone took up more space than this entire post.

‘60 Minutes’ to re-air show featuring Palm Beach County foreclosure case

By Kimberly Miller Palm Beach Post Staff Writer
Posted: 12:27 p.m. Friday, Aug. 5, 2011

The CBS news show 60 Minutes will re-air a segment Sunday featuring a Palm Beach County homeowner fighting an allegedly fraudulent foreclosure that exposed the now infamous robo-signer Linda Green.

The segment, which originally aired in April, led officials from Michigan, Massachusetts and North Carolina to pull court documents bearing Green’s name and forward them to federal regulators and attorneys general.

Palm Beach Gardens homeowner Lynn Szymoniak, whose foreclosure is highlighted in the show, said she approaches the re-airing with mixed feelings because she said lenders and politicians have largely ignored the evidence presented.

“By far, my overwhelming feeling four months later is anger mixed with renewed determination to speak the truth,” Szymoniak said. “I am very disturbed by the power of the banks.”

19 COMMENTS

She sure did like to refi. In 2006 it looks like she cashed out over a million on her home and condo. Then she stopped making payments when the values dropped. She’s lucky the banks have been slow due to “pretend and extend”.

The lady is a deadbeat leech.

Cheeseus Sonofdog
5:38 PM, 8/5/2011

So think about it. This ATTORNEY hasn’t paid a mortgage payment since 2006. She know how to “play” the system. She needs to be put in JAIL. Come on America, are we that stupid?

REALLY America

Its funny… You refinance for 3 times your house cost you when you bought it and spent the money on your house and now you cant pay the money back and you are mad? That is stealing… If I was a bank I would make it so you would never be able to borrow again. Maybe a education would have helped when you signed the dotted line.. Well im not made because now I live in a great place brand new foreclosure some stupid person gave up and I paid next to nothing. haha!!! HAVE FUN DRIVEN YOUR KIA!

Im Rich BIOOTCH
11:17 AM, 8/6/2011
11:16 AM, 8/6/2011

http://www.palmbeachpost.com/money/foreclosures/60-minutes-to-re-air-show-featuring-palm-1698955.html - 88k

“England swings like a pendulum do
bobbies on bicycles two by two
Westminster Abbey the Tower of Big Ben
the rosy red cheeks of the little children”

Roger Miller

Manistique Paper Mill Closing After 90 Years
Big blow to 150 workers

MANISTIQUE, Mich. (AP) — Stung by the economy, a paper mill that has operated in Michigan’s Upper Peninsula for 90 years is closing, a big blow to 150 workers and a community that has benefited from its philanthropy.

Manistique Papers, known as MPI, said Friday it’s filing for bankruptcy and seeking a buyer after failing to reach an agreement with a lender.

“The business circumstances leading to this decision were unforeseen. We are as shocked by this as everyone else,” general manager Jon Johnson said in a statement. “We had thought and hoped that the lender would allow us to continue operations while we searched for alternative financing.”

The Daily Press in Escanaba (http://bit.ly/ovsbZS) said the company cited a steady increase in the cost of raw materials and lower demand as reasons for its financial woes. MPI made paper from recycled fibers.

“While our values and service have not changed since 1920, the American economy has changed,” Johnson said.

Manistique, population 3,300, is on Lake Michigan, 90 miles west of the Mackinac Bridge, which connects Michigan’s peninsulas.

“Hopefully they find a buyer,” resident Debra Rumrill said. “It’s just a trickle-down effect; all of those people spend their money here in Manistique. It affects the school system, too. It’s tough.”

Sandy Patrick, owner of the Aunt Sandy’s Health and Gourmet Foods, said MPI made contributions all over Manistique. “It’s sad,” she said.

City Manager Sheila Aldrich said the company has been an “icon to Manistique and Schoolcraft County.”

Johnson said he’s not giving up, despite the decision to shut down.

“We will work diligently to find new owners and to bring the noise of a successful paper mill back to Manistique,” he said.

It’s all about money
And fundamentals, such as backing our currency, still apply.

American politics has revolved around slavery, free coinage of silver, civil rights, big government, little government, and a chicken in every pot. The dominant question today is money.

I think politics for the near future will be about money — how government should create it in the form of credit, how government spends it, how much it borrows, and above all, how much should be controlled by the private sector instead of government. If you want to talk about jobs, the economy, and deficits, the place to start is money.

That, of course, has always been an elusive concept to understand and even more elusive to handle, though for more than two millennia money has been fundamental to Western civilization.

Gold and silver first served that purpose. The metals were attractive and scarce but not too rare to use as media of exchange. Beauty and rarity made them things of intrinsic value. However, the Greeks and, later, the Romans discovered the use of fiduciary money, giving base-metal coins (copper or brass) an arbitrary value beyond their metallic worth. In the Roman empire and in India and China gold and silver were used as stores of value while most marketplace transactions were carried out with copper coins. The invention of paper money was only a refinement of this.

However, the value of early paper money issued by governments was precarious unless it was backed by, or exchangeable into, gold or silver. Experiments with notes backed only by the credit of the state, whether in France or America, were disastrous.

In the 19th century paper came into use, in advanced nations, when a bill represented a finite amount of precious metal. For many years the U.S. government could not, by law, print a note unless its face value in gold was held in the treasury. Less-advanced nations printed paper with widely fluctuating values, and economic theory held that a prosperous industrial economy could not exist without a stable currency.

Wars and depressions did away with all that. Today money is backed only by the faith and credit of government; its value is what government says it is and can make it stick. And just as under the gold standard, some governments can manage their money, most cannot.

In fact, anything can be used for money, with three provisos: It must be hard to counterfeit; there must be enough of it for commercial needs and to allow economic growth; there must not be too much of it, either in cash or credits, because this leads to distortions (bubbles and busts) and inflation. All our recessions have been caused by too much cheap money in the form of credit. This is the reason we created the Federal Reserve — to manage the money supply.

Because of politics — some part of society always demands cheap money, another part stability — the Federal Reserve’s role has always been hampered. In the 1970s Congress made the Fed’s role contradictory and impossible by charging it with maintaining employment as well as managing money. You know how well this has worked: deepening monetary, economic, and political crisis.

The problem with money is that, as time goes by, the fundamental things still apply.

Read more: http://www.mysanantonio.com/news/article/It-s-all-about-money-1643727.php#ixzz1ULiItYc9

Hey Mr. Ben, eyes don’t knows exactly why… but this is the main banner ad at the top of yer blog…Hilarious!

Fraud by Biganeh & Bijan Majdlessi

Well, off to work; looks like a nice day too. Eighty hours this past week, but things will be near dead in two months as the winter weather tightens its grip, so it’s time to hustle.

People here know that I travel a lot.

I’m not a “Four Seasons” kinda traveler (I can afford it!) but I go to the most remote locations with my backpack and my camera equipment. I was in the Philippines most recently.

Best food ever. The stuff American food aspires to without the crappy mega-corp food complex.

I traveled to my friend’s aunt’s remote farm (think: outhouse) in the South of the Philippines. It’s a “dangerous” region - yeah, sure! yank the other one, buddy.

Nobody kidnapped me, and I had a blast running with the kids through wet muddy rice fields.

What’s my point?

Invest in experiences. Not stuff. Experiences.

Greenspan sees stock market drop after downgrade

Published 11:20 a.m., Sunday, August 7, 2011

WASHINGTON (AP) — Former Federal Reserve Chairman Alan Greenspan says he expects the stock market slide to continue in the wake of a decision by credit rating agency Standard & Poor’s to downgrade the U.S. credit rating.

Appearing Sunday on NBC’s “Meet the Press,” Greenspan said markets will take time to bottom out and that he expects a negative reaction on Monday to the S&P action.

But Greenspan also says he doesn’t see any risk in investing in the United States and says that S&P’s downgrade won’t change that.

The former Fed chairman says the downgrade “hit a nerve” and is damaging to the “psyche” of the country. But he says he can’t foresee a scenario in which the U.S. will default on its debts.

http://www.greenwichtime.com/news/article/Greenspan-sees-stock-market-drop-after-downgrade-1751976.php#ixzz1UMFeJIcC

The paradox of thrift.

What is best for the individual (like making more than you spend) is not what is best for the economy (because if everyone spends less than they earn, all of the money is quickly drained from the economy).

Turning this from the point fo view of the individual to teh point of view of the owners of the corporations. Let’s say you make a lot of money selling people stuff, but then pay people less eage than you brought in. What do you do with this money? Put it in the bank so that it can be loaned out? To whom is it loaned out? Oh, right. Those very people that you are paying less than they are spending on your goods.

Tomorrow’s profit comes from loaning yesterday’s profit to people that you are paying less in wages than they are spending on your goods.

You can only take in more money than you spend, if someone else is spending more than you take in, and this is only possible if you loan them your profits so they can keep spending.

And all the time that you are making money off the people that you are loaning your money to, you stand on a pedistal and complain about all those people that are spending more than they make…. even though that is a necessary prerequisite to you making more than you spend.

YOU CAN NOT MAKE MORE THAN YOU SPEND UNLESS SOMEONE IS SPENDING MORE THAN THEY MAKE BECASUE YOU ARE LOANING THEM YOUR SAVINGS. PERIOD!!!!!!!!!!!!

Those people can’t pay you back, unless you start spending more than you make and they start making more than they spend… DOUBLE PERIOD!!!!!!!!!!!!!!!

I am simply amazed by how many people do not have a clue what money is.

Your money is someone elses debt. You could not have made your money, had someone else not borrowed it into existance then spent it. You can only make more than you spend if there is someone that is spending more than they make. What do you do with all that money that you make? You loan it to people that spend more than they make so that you can again make more than you spend.

The rich love to complain about all the idots that spend more than they make, all the time refusing to understand that is a necessary prerequisite to you making more than you spend.

The rich then complain if we suggest that they spend more than they make, even though that is a necessary prerequisite to the poor being able to pay back all the money they owe the rich.

Poor getting deeper in debt is not a random coicidence to the rich getting richer. It is a necessary prerequisite.

For 30 years business and consumer debt has been increasing at 3x the sustainable rate. Meanwhile, corporations, especially those that deal with the generation and servicing of debt have been making insane profits.

Oh, if only we had those record profits without all that debt… think how great the country would be. Yeah, and can I have an invisable pink unicorn too?

The profits were not made in a vacuume. The profits were only possible, and in fact were a direct result of, that unsustainable rate of debt growth.

Now, the rich do not want to get poorer. Well, too bad. The debt must go away, and that can only heppen if the rich get poorer. Either we tax the money away from the rich and give it to the poor so that the poor can pay back thier debts OR we force the rich to pay more in wages than they are taking in as revenue so the poor have money to pay back their debt OR we do neither of the above and the poor default on their debts and the rich just write off the debt as uncollectable.

Any way it happens, the debt can not go away without the rich getting poorer, for exactly the same reason that the rich could not have gotten rich in the first place had the poor not been getting further in debt.

Anyone that disagrees with me, simply is not willing to accept the reality that your money was created when someone else borrowed it into existance and then spent it into the economy.

Agree with your last 2 posts Darrell.
I believe a combo of all your suggestions is the way out of this mess .

45,000 Verizon workers go on strike over contract

By CRISTIAN SALAZAR, Sunday, August 7, 12:56 AM

NEW YORK — Tens of thousands of unionized Verizon Communications Inc. workers from Massachusetts to Washington, D.C., went on strike early Sunday after they failed to agree on a new labor contract with the telecommunications company.

Mark C. Reed, Verizon’s executive vice president of human resources, called the outcome of the unions’ actions “regrettable” for customers and employees.

The contract that expired at midnight Saturday covers 45,000 workers, including 10,000 represented by the International Brotherhood of Electrical Workers, who serve as telephone and repair technicians, customer service representatives, operators and more.

“Even at the 11th hour, as contracts were set to expire, Verizon continued to seek to strip away 50 years of collective bargaining gains for middle class workers and their families,” CWA said in a statement Sunday.

Verizon, the nation’s largest wireless carrier, has 196,000 workers; 135,000 are non-union.

At the center of the contract dispute are the costs of health care, pensions and work rules.

The CWA said the concessions are unjustified and harsh, given that Verizon is highly profitable — the company’s revenue rose 2.8 percent to $27.5 billion in the second quarter. Its growth was largely attributed to its wireless business.

But Verizon said its wireline business has been in decline for more than a decade, and that it is asking for changes in the contract to strengthen the unit. The company said union employees contribute nothing to their health care premiums.

http://www.washingtonpost.com/45000-verizon-workers-go-on-strike-over-contract/2011/08/07/gIQA17kjzI_story.html - -

http://www.myfoxdetroit.com/dpp/news/alexis_wiley/agents-raid-wrong-house-in-sterling-heights-20110730-rs

Fourth Ammendment trampled on yet again in the War on Drugs. Yet most of the sheeple will continue to ignore such violations of their Constitutional rights until it happens to them or someone they care about.

I never got a chance to chum for sharks, so I`ll just post this instead.

EDITORIAL: Obama’s downgraded America
S&P tells it like it is: the U.S. is out of money

By THE WASHINGTON TIMES
6:53 p.m., Saturday, August 6, 2011

The Obama administration has made history by presiding over the first-ever downgrade in the U.S. credit rating. President Obama has outdone all his predecessors in wrecking America’s good name. His answer to this problem: Spend even more.

Raising the debt ceiling was sold as a way of guaranteeing the U.S. credit rating. It had the opposite effect, which makes sense to anyone who understands credit. Take a family with a median household income around $50,000. If they spend $85,000 a year and have debt at $300,000 and growing, it’d be foolish to let them borrow more because they don’t have the income to pay it back. Raising the debt ceiling ignored this reality. Then, the Obama administration immediately demonstrated its utter lack of creditworthiness by blowing 60 percent of the initial $400 billion increase in one day, the largest single-day accumulation of debt in U.S. history.

The White House blames the George W. Bush administration for every economic woe, but the numbers speak for themselves. In 2008, the federal budget deficit was around 3 percent of gross domestic product. In 2011, it’s around 11 percent. Total federal debt was $10.7 trillion at the end of 2008 and is currently $14.6 trillion. Debt as a percentage of GDP was a painful 69 percent at the end of the Bush years, but Mr. Obama is pushing it over 100 percent, another disgraceful historic milestone. A record 45.8 million are on food stamps, and the percentage of working-aged Americans who have jobs is the lowest in three decades. According to Gallup’s daily tracking poll, in late January, 44 percent of Americans felt the economy was getting better, and 52 percent thought it was worsening. Now only 17 percent have a positive view; 77 percent understand our economy is nosediving.

Mr. Obama is blithely passing the buck. At a Wednesday fundraiser, he refused to own up to his responsibility for the economic calamity America is facing, saying “because we were inheriting so many challenges, we’re not even halfway there yet. When I said, ‘change we can believe in,’ I didn’t say ‘change we can believe in tomorrow.’ ” If the nation continues on this disastrous course Mr. Obama has set, there will be no tomorrow.

http://www.washingtontimes.com/news/2011/aug/6/obamas-downgraded-america/ - -

Geithner says he will stay at Treasury

By MARTIN CRUTSINGER The Associated Press
Posted: 2:36 p.m. Sunday, Aug. 7, 2011

WASHINGTON — Timothy Geithner has told President Barack Obama that he will remain on the job as Treasury secretary.

The Treasury Department released a statement Sunday saying Geithner had informed the president of his decision to remain in the administration.

Geithner is the only remaining top official on Obama’s original economics team.

http://www.telegraph.co.uk/finance/jobs/8687445/Bonfire-of-the-jobless-bankers.html

Thousands of jobless bankers face bleak employment prospects in economies looted into husks by their former employers. Ben, can we organize some kind of charity event for them? Maybe Sally Struthers can pull our heartstrings a bit.

By Rita Nazareth and Nikolaj Gammeltoft - Aug 7, 2011 / Bloomberg

The U.S. merits a “quadruple A” rating, Buffett, 80, said Aug. 6

Oil sank 3.2 percent to $84.11 a barrel

BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)

“fueled concern$”…

You betcha, concern$ for all the oil in $torage! $torage! $torage!

No ‘Forced Selling’ at BlackRock:

BlackRock Inc., the world’s largest asset manager, issued a statement saying it has been preparing for the downgrade for a month and will not need to do any “forced selling of securities.”

“TrueGridLok$editionist’s™” wee-peeParty tea toadlers + China non-heroin Communist Gov’t = “TrueGetlil’Opie™”… while pissing down American’s backs!

BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)

China demands U.S. ‘live within its means’:
The largest foreign holder of U.S. treasuries responds to the S&P downgrading by calling for decreases in U.S. military outlays and social spending.

Reporting from Beijing—
By David Pierson / Los Angeles Times Staff Writer / August 6, 2011

China called on the United States to “cure its addiction to debts” and “learn to live within its means” in a searing commentary published Saturday by the official New China News Agency in response to Standard & Poor’s historic downgrading of the U.S. government’s credit rating a day earlier.

China’s central bank must jettison trillions of incoming foreign exchange to ensure the yuan remains low. For the most part, U.S. treasuries represent the only destination large enough to accommodate China’s holdings.

Seems Joe-the-plumber & Standard Poor Opinion$ $haker-quaker$ have a few things in common:

False Fear! & the in ability to put a cork in it.

“True$erialEnabler$$editionist’s™”

S&P’s ‘Credibility and Integrity’ Questioned: Treasury
International Business Times / August 7, 2011

S&P’s document that explained its downgrade stated that it “reflects our opinion

Once S&P realized the mistake, Bellows said it changed its economic justification to political ones.

Bellows’ argument is that S&P first based its justification for the downgrade primarily on the economic grounds that the debt ceiling deal (Budget Control Act of 2011) failed to reduce debt to a sustainable level relative to the GDP.

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However, S&P’s debt-to-GDP projections was based on a mathematical error that threw off their figures by $2 trillion, or eight percentage points of the projected GDP of 2021.

S&P Criticism

In the aftermath of the global financial debt crisis, S&P and other major ratings agencies were heavily criticized for giving AAA ratings for collateralized debt obligations (CDOs) that went on to suffer heavy losses.

Now, it is being criticized by the U.S. government for cutting the U.S. ratings even though “millions of investors around the globe…assess [the U.S.] creditworthiness every minute of every day, and their collective judgment is that the U.S. has the means and political will to make good on its obligations.”

Obama adviser blames tea party for downgrade
AP – 7 hrs ago

..WASHINGTON (AP) — A top political adviser to President Barack Obama is blaming the downgrade of the U.S. credit rating on tea party Republicans, whom he says were unwilling to compromise on how to reduce the federal debt.

Obama campaign strategist David Axelrod tells CBS’ “Face the Nation” on Sunday that the decision by the Standard & Poor’s credit agency to downgrade the U.S. from AAA to AA+ for the first time was strongly influenced by weeks of standoff between Democrats and Republicans over the debt.

Axelrod calls the action, in his words, “a tea party downgrade” and says it’s clearly on the backs of lawmakers who were willing to see the country default to get their way.

Axelrod also criticized GOP presidential candidates for not speaking up in favor of compromise.

http://news.yahoo.com/obama-adviser-blames-tea-party-downgrade-163131453.html - -

Why? Because……
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Realtors Are Liars®

America’s economy
Time for a double dip?
A lousy debt deal, rising fears of a recession, the danger of longer-term stagnation: America’s outlook is grim

Aug 6th 2011 | from the print edition

THIS ought to have been a good week for the American economy. The country’s leaders at last ended a ludicrously irresponsible bout of fiscal brinkmanship, removing the threat of global financial Armageddon by agreeing to raise the federal debt ceiling. Yet far from heaving a sigh of relief, investors are nervous. Stockmarkets around the world have tumbled (see article). On August 2nd, the day the debt deal was signed, the S&P 500 index saw its biggest one-day fall in over a year, and yields on ten-year Treasury bonds dropped to 2.6%, their lowest level in nine months, as investors sought safety.

It is not all to do with America: the euro zone is a mess (see article) and manufacturing everywhere seems to be slowing. But America’s prospects have suddenly darkened. Statistical revisions and some grim new figures have revealed a weaker-than-assumed recovery that has all but ground to a halt. Once stalled, an economy can easily tip back into recession, particularly if it is hit by a new shock—as America’s is about to be, thanks to a hefty dose of fiscal tightening made worse by the debt deal. The odds of a double dip over the coming year are uncomfortably high, perhaps as high as 50%.
…

I don’t know if you all caught it today so it should be noted that the GOP party platform now includes a plan to rework every single mortgage in the US to “keep people in their homes”. John McCain announced this today on Meet The Press.

“Paradox of Thrift”

Here is some Paradox of Thrift for you all:

My siblings, parents, a few extended family members and I just enjoyed a nice family reunion in the Midwest. My family members have positive net worths, due to keeping incomes and spending in balance over the years. While most of America is digging themselves out of a hole of debt into which they dug themselves, we are able to stimulate the economy by making purchases without going into hock or making exorbitant, extortionary interest payments to the banksters.

What on Gawd’s earth was Keynes talking about, anyway?

“They’ve handled themselves very poorly. And they’ve shown a stunning lack of knowledge about the basic U.S. fiscal budget math,” Geithner said in his first public comments about the credit rating decision.

-Says a guy who claims he was completly symied by the complexities of Turbo-Tax.

You can all relax now. The current wave of global financial panic is all contained by G-7 central bank collusion.

P.S. This might be a good time to add to your gold holdings and other inflation hedges.

Aug. 7, 2011, 9:18 p.m. EDT
G-7 says it’s ready to stem market tension
By Greg Robb

WASHINGTON (MarketWatch) — The Group of Seven leading economies said Sunday that it was ready to respond as needed to market tensions over concerns the U.S. and Europe cannot handle debt burdens they took on to ease the global financial crisis. “We are committed to taking coordinated action where needed, to ensuring liquidity, and to supporting financial market functioning, financial stability and economic growth,” the statement from the finance ministers and central bankers of the seven leading industrial economies said.
…

Hugh Carey dies.

http://xfinity.comcast.net/articles/news-general/20110807/US.Obit.Carey/

“The governor had inherited the worst economic climate since the Great Depression. New York City, the nation’s Wall Street-powered economic engine, was nearing bankruptcy. Famously declaring the “days of wine and roses are over,” the well-to-do son of an entrepreneur rose to the challenge, forced major changes in the way New York governed and financed itself, and stared down a Republican president to keep New York City from insolvency.

The liberal Democrat who reversed the tax-and-spend excesses of his Republican predecessor to keep the city and state afloat died Sunday at his summer home on Shelter Island. He was 92.”

Reasonable people are beginning to raise serious questions about the mortgage interest deduction (aka “Welfare for the Wealthiest“).

The stimulus we need
Cut deductions, reduce tax rates
August 7, 2011

This should be the moment — a reprise of 1986 — when Democrats and Republicans join forces to pass ambitious tax reform.
…
As is, the federal government collects more than $1 trillion a year in income taxes — and simultaneously gives taxpayers roughly the same amount in “tax expenditures.” That’s econospeak for tax deductions, credits, loopholes, exclusions — all the ways in which the tax code creates incentives and rewards for politically favored subsets of taxpayers. Conservative Sen. Tom Coburn of Oklahoma has a word for all this: “Tax subsidies,” he says, “are socialism.”
…
The most sacrosanct of these subsidies, the deduction for home mortgage interest, arguably creates the greatest distortions. Not that there’s anything wrong with the government aggressively encouraging people to buy too much house and incur too much debt — is there? We tried to explain other failings of this deduction in a March 23 editorial:

If you rent, you get nothing. If you have reasons not to itemize deductions, you get nothing. If you pay off your mortgage to live debt-free, you get nothing. Borrow a fortune for a McMansion, however, and the Internal Revenue Service provides a big discount, at the expense of every other taxpayer. About three-fourths of the benefit from the mortgage-interest deduction goes to the 14 percent of tax filers reporting six-figure incomes. Almost one-third of the subsidy goes to the population reporting incomes of $200,000 or more.

…

Did you ever argue with the cop who issued you a speeding ticket? Not really a great idea, IMHO…

MARKETS
AUGUST 8, 2011

Markets Brace for Downgrade’s Toll
Stocks Slide in Early Asian Trading; White House Reaches Out to Investors as S&P Defends Its Move Against Criticism
BY TOM LAURICELLA, MATT PHILLIPS AND SERENA NG

The first-ever credit downgrade of the U.S. left Wall Street and Washington struggling to come to grips with a new world order.

With the U.S. stripped by Standard & Poor’s of its triple-A credit rating, big banks brought in people to staff trading desks over the weekend, and Obama administration officials put a full-court press on skittish investors. Treasury Secretary Timothy Geithner—who agreed to stay through the 2012 election—told NBC News that “S&P has shown really terrible judgment.”
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It doesn’t really seem there is any easy way out for the Fed.

HEARD ON THE STREET
AUGUST 6, 2011

Fed Could Trip Up Bond Bulls
By DAVID REILLY

Friday’s better-than-expected jobs figure gave some relief. But with markets still on edge, many stock investors continue to pray the Federal Reserve eventually will ride to their rescue.

The same can’t be said for investors who in recent days piled into U.S. Treasurys. Although the Fed is expected to stand pat for now, any indication it is preparing to come off the sidelines could lead to a reversal for longer-dated government bonds.

Treasury yields steadied on the back of the jobs report, but are still exceptionally low. And the speed of their recent fall has been stunning. The yield on the 10-year Treasury has dropped to about 2.48% from 3% in less than two weeks, while the 30-year bond yield has dropped to about 3.74% from 4.32%.

From that level, yields could rebound fast. They did during both of the Fed’s previous bond-buying bouts. For example, the yield on the 10-year Treasury sank in October 2010 to around 2.4%, just before the Fed at its November meeting confirmed it would buy $600 billion in Treasurys. The yield quickly backed up, reaching a peak of 3.7% in February. A similar pattern played out in early 2009, when the Fed began its first round of purchases, which mostly involved buying government-backed mortgage bonds.

The yield spikes were the opposite of what the Fed ostensibly wanted, that is to lower long-run rates. But the rise in yields reflected hope that quantitative easing would stimulate economic growth, or push investors into riskier assets. It also raised concerns among some investors that the Fed could unleash inflation. Should the Fed again intervene, the reaction may be no different.

Of course, the Fed may decide extraordinary action isn’t warranted or wise, given its balance sheet has already ballooned to $2.8 trillion. While the Fed meets next week, it is unlikely to immediately take such drastic, and politically sensitive, action without additional data showing the economy is in more than a soft patch. Some regional Fed presidents have indicated in recent speeches, for example, that they believe factors that caused first-half growth to disappoint will prove transitory.

The longer the Fed holds off, the more markets could become convinced of a double-dip for the economy and push yields lower. In that case, yields may have further to fall. After all, the yield on the 30-year bond hit 2.55% in December 2008, while the 10-year note reached a low of 2.12% in the same month.
…

Futures shows the market down 200 plus at the opening

Is the stock market forecasting a Double Dip ?

Probably not a good time to but overpriced RE in CA