April 22, 2012

Bits Bucket for April 22, 2012

Post off-topic ideas, links, and Craigslist finds here.

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Comment by CarrieAnn
2012-04-22 04:51:46

I missed it yesterday. Wanted to get my Happy Birthday wishes in to Awaiting and Ole Bubba.

Hope you guys enjoyed your special days.

Comment by Happy2bHeard
2012-04-22 11:03:34

Hear, here!

Happy birthday!

Comment by Ol'Bubba
2012-04-22 11:26:31

Thank you, CarrieAnn. My birthday was actually a couple of weeks ago, but I appreciate the sentiment.

Comment by palmetto
2012-04-22 05:28:56

I am watching this Arizona immigration law case before the SCOTUS with great trepidation. If AZ loses, the US as we know (or knew) it is done, IMO. Last stand for states’ rights.

Comment by palmetto
2012-04-22 05:33:58

But hey, if it doesn’t work out, you can always grab a bite with Ann.

Comment by skroodle
2012-04-22 12:21:49

The jobs available to recent immigrants is vanishing. I grabbed a coffee at McDonalds this morning and was shocked to see a mostly non-hispanic crew working. It was like the 1980’s.

Drug lords in Mexico seem to be putting a damper on immigrants as well.

Comment by Awaiting
2012-04-22 05:44:30

I live in the epicenter of the invasion (So Ca). Los Angeles now has two tier system for car impounding. Illegals get a pass, and everyone else (Non-Hispanics) get a 30 Day impound. The PTB don’t want to put a financial burden on poor “undocumented” imigrants. The criteria is the same, but the “punishment” isn’t. Insanity.

Comment by In Colorado
2012-04-22 10:48:18

Hey, business needs its cheap labor, and how will the uninsured illegals get to work if their cars are impounded?

Comment by skroodle
2012-04-22 12:22:53

The bus?

Comment by In Colorado
2012-04-22 12:54:44

Doesn’t work so well unless you are close to work to begin with. I used to live in Escondido and I rode the bus to downtown San Diego one time I had jury duty. There was an express bus, that took about an hour (not too bad). But if they released us midday there was no express and the regular bus took over 2.5 hours to get home.

Buses might work on the East Coast, but they’re pretty much useless on the west coast.

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Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 14:33:34

I’ve taken the bus to San Diego jury duty myself. It actually worked fine for me; maybe they have improved the service from North County to downtown? (For those not familiar with the area, Rancho Bernardo lies just south of Escondido…)

Comment by In Colorado
2012-04-22 16:56:49

Like I said, the express didn’t take much longer than driving, because it went straight from Escondido to downtown San Diego without any stops. But the regular bus, the one that went from downtown to the North County Fair mall, took forever as it made a million stops. And then I had to wait for another bus to take me to Escondido.

The next day I drove down and paid to park my car. Good thing too, as we were released by 10 AM.

Comment by In Colorado
2012-04-22 16:57:54

My other choice was to wait until around 4 PM for the northbound express service to begin.

Comment by Mike in Carlsbad
2012-04-22 21:56:11

The San Diego MTA came to my work, a large defense contractor in UTC and asked that I point to where I live so she could generate the best public transit route to take. I pointed to Escondido where I lived at the time and she just started apologizing right off, saying that’s about the only place they have poor public transit to anywhere in San Diego. I tend to agree, although this was just before the Sprinter was finished so things may have improved as long as you aren’t going south.

Fast forward to now and I live in Carlsbad and can take the Coaster train down to Sorrento Valley and shuttles take people right into the heart of San Diego’s job center. My work will even foot the bill for Coaster fare. Also they are going to expand the 5 Freeway from O’side to La Jolla to an 8 laner with SpeedPass availability.

Many more options for public transit if you live North County Coastal, East County Trolley, South by the international border, Mission Valley… about the only place still hurtin is… North County inland and Temecula.

Too bad they killed the high speed rail stops in Murietta/Temecula, that was the only reason I voted for it.

Comment by palmetto
2012-04-22 05:52:11

Oh, yeah, I nearly fergot. Happy Earth Day, folks! As the country becomes more polluted, overbuilt and overpopulated, while striving to bomb other countries into democracy.

Be nice to America, or she’ll bring democracy to your country!

Comment by combotechie
2012-04-22 05:58:55

“… Happy Earth Day …”

Every day should be celebrated as a Happy Day; Each one comes by only once.

What you do with it is largely up to you.

Comment by palmetto
2012-04-22 06:04:53

Doncha get it, combo? Earth Day is for peons. Elites don’t need no stinkin’ earth day. Bombs, more bombs.

LOL, how much pollution d’ya suppose weapons cause? I’ve never heard anything about that.

Green bombs, green bullets! Let’s make war, but do it with ecology in mind. Recycle those dead bodies for fertilizer.

Comment by combotechie
2012-04-22 06:12:17

“Doncha get it combo? Earth Day is for peons. Elites don’t need no stinkin’ earth day.”

Considering everything that the elites have to contend with being a peon isn’t all that uncomfortable, at least not in this day and age.

The discomfort begins when the peons fall into the traps and play the games that the elites set up for them.

A point to consider: Who need the other more, the elites or the peons? Which one is it that feeds off the other?

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Comment by palmetto
2012-04-22 06:15:57

“The discomfort begins when the peons fall into the traps and play the games that the elites set up for them.”


Comment by combotechie
2012-04-22 06:20:19

It all comes down to personal choices, doesn’t it?

INFORMED personal choices.

Comment by palmetto
2012-04-22 06:40:28

Well, I’ve enjoyed the conversation, but I’ve gotta go grab a bite with Ann.

Comment by alpha-sloth
2012-04-22 18:50:40

Considering everything that the elites have to contend with being a peon isn’t all that uncomfortable, at least not in this day and age.

Good god, do you get paid by the elite to expound this crap?

You sound like the people who used to justify slavery by saying the slaves actually enjoyed it.

Comment by SD Renter
2012-04-22 07:35:52

“while striving to bomb other countries into democracy.”

Palmy-oh, that was good. If you don’t mind I will be stealing that one:-)

Comment by Bill in Los Angeles
2012-04-22 09:32:50

I love that quote too: “bomb other countries into democracy.” That is Wilsonianism at work. Wait…Wilson was a progressive and a Democrat.

Comment by Awaiting
2012-04-22 08:10:45

Nothing like bombing other countries into submission. What’s collateral damage anyway.

And regarding earthday, it just burns my arse that in California, autos have to pass a smog test and PAY, while SUV’s and trucks don’t. The carcinogens coming out of the exempt polluters is a far greater risk to our planet and health.

I should have married a lobbyist, not an EE.

Comment by ibbots
2012-04-22 10:18:50

Smog tests are required for suv and trucks in CA, whoever told you they don’t was misinformed.

Comment by CharlieTango
2012-04-22 10:46:15

A friend of mine had to buy a new Semi tractor because his perfectly good truck will no longer be permissible in California due to the year it was built.

Comment by ahansen
2012-04-22 15:33:32

Why didn’t he just register it as an historic vehicle or get it (diesel) modified? Sounds like maybe your friend was itching to buy a new semi? Am I missing something here, Charlie?

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Comment by CharlieTango
2012-04-22 16:26:56

He had to replace his disel semi tractor with a new one. Its a little old but not historic.

Comment by GrizzlyBear
2012-04-22 18:02:00

It’s a good thing they’re doing away with those black-smoke-belching dinosaurs. The new diesel technology is much better. You can stand next to the exhaust pipe and not even smell it.

Comment by In Colorado
2012-04-22 10:55:26

Mexicans have a saying: “Poor Mexico, so far from God and so close to the United States.”

“Be nice to America, or she’ll bring democracy to your country!”

But, but those Navy commercials say that “Its a force for good.”

And they have all those nice pictures and videos of US soldiers playing soccer with the local kids, or handing out candy and toys. They love us, don’t they?

Comment by ahansen
2012-04-22 22:20:05

“Its a force for good.”

Poor dumb kids ’round these parts really believe that $hit, too. It’s like a big video game to them– and marketed the same way.

Comment by In Colorado
2012-04-22 11:00:58

“As the country becomes more polluted, overbuilt and overpopulated, while striving to bomb other countries into democracy.”

Invade the world, invite the world.

A week ago I was in Silicon Valley for the first time in about 12 years. The change in demographics was simply astounding.

Comment by Bill in Carolina
2012-04-22 11:57:09


Comment by skroodle
2012-04-22 12:24:11

It was like visiting Asia the last time I was there.

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Comment by In Colorado
2012-04-22 12:49:18

Exactly. Especially the Indians. I had no idea there were so many there now.

Comment by MightyMike
2012-04-22 16:49:35

It must be just like the immigration from the south. The Indians are doing jobs that Americans won’t do.

Comment by combotechie
2012-04-22 07:08:01

Math can be fun:

Go to a retirement seminar and you will learn that the retirement guru will handle your money for you and ‘only’ charge you 1.1 percent for doing so. That’s 1.1 percent of the total amount of money you turn over to him for handling, meaning that’s 1.1 percent of the principle taken right off the top.

But this 1.1 percent figure is deceiving because it’s the earnings generated by the principle that is suppposed to dribble down to you for you to live on, not cuts into the principle. But the money manager doesn’t take money from the earnings, he takes money from the principle.

Let’s suppose your principle is $500,000 and it earns a, say, a five percent return. This means the money manager gets 1.1 percent of this $500,000 which will be subtracted from the earnings, and you get what’s left.

But 5% of $500,000 is $25,000, and 1.1% of 500,000 is $5,500 so the money manager ends up subtracting his $5,500 fee from $25,000 of earnings leaving you $19,500 for you to spend.

Such a deal! - for the money manager. He may tap into 1.1 percent of the principle but (with a 5 percent return) he will end up tapping into 22 percent of the earnings.

And it really gets worse as the return on the principle falls off; The percent of management fee rises as the return on principle drops until, at a 1.1 percent return, the management fee becomes 100 percent of the return. And anything below a 1.1 percent return on principle ends up being a negative return for the receipiant.

But it’s not all that bad in that the money manager still ends up with his cut. (snark)

Oh, and then there’s the CHURN - but I don’t want to get into that.

Comment by polly
2012-04-22 07:26:56

Doesn’t the manager take his cut at the beginning of the year so your principle is lowered before he even starts managing it?

Comment by combotechie
2012-04-22 07:45:16

The money managers I talked to subtract their fees monthly.

I’m set up for another retirement seminar next Thrusday.

Going to these seminars is becoming a sort of hobby - amusing and educational experiences that includes free meals for my wife and I.

If RAL thinks realtors are big liars he should attend a few of these seminars. The drift I am getting is the white lies and truth omissions are done in the group seminars and the heavy, big, bold and black lies are saved for the one-on-one sessions that are set up later.

Comment by Muggy
2012-04-22 13:40:33

“Going to these seminars is becoming a sort of hobby”

Perhaps you’re thinking about retiring, but you’re not sure, so you go to these things to see what these people have to say. You want to believe them. The reason: you’d like to believe that they can make cash flow from these investments, because if they did, you would not need cash to flow from working.

You don’t want to work anymore, but you don’t like your options.

Channeling Combo, on Combo

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Comment by combotechie
2012-04-22 15:06:16

“Perhaps you are thinking about retiring, but you are not sure …”


“… so you go to these things to see what these people have to say.”


Not only what THEY have to say but what the other attendees have to say. Or what they don’t say.

It’s a learning experience from both ends: From the wolves’ end and also from the sheeples’ end. It is truly amazing how little many people seem to know about money.

But there is a selection process going on: People who do know about money are selected out because they don’t need a guru to handle their finances, so that leaves the uninformed to fill the seats, and guys such as myself (and my wife) who get to observe The Game and how it is played - all the while getting fed a free meal.

Comment by combotechie
2012-04-22 15:19:01

Several posts below this post is a post I posted earlier about a guru named Jon. W. James who reportidly was filled with lots of charm and charisma, and I would have LOVED to attend one of his seminars just to see a master manipulator at work.

Comment by ahansen
2012-04-22 15:49:41

Good for you, combo!

Back in the early 1970’s my long-haired hippie-freak hubby and I loved those free real estate sales weekends and investment seminars. They’d fly you to wherever, feed you, take you on interminable tours, try to sell you property that’s STILL worthless. We’d just get loaded and watch the show…. (Also enjoyed eating shrooms, going to the Billy Graham crusades, and getting “saved.”)

I always loved watching the promoters blanch when the two of us showed up at their receptions and took our name tags. They usually they couldn’t get us out of there fast enough. (But we always stayed for dinner.)

The irony is that today the ex hubby is an enormously successful real estate developer– who probably throws these wingdings himself.

Comment by aNYCdj
2012-04-22 18:20:10

Now THAT”S a cool story……

Comment by Awaiting
2012-04-22 08:03:11

I interviewed (as a financial advisor) a CFP/CFA who sucked 1.5 per qtr. Wow, no wonder he owns a boat, two nice homes, one inland San Diego, and a beach house.

People who make money off opm are better situated than us wage slaves. I’d feel shame stealing opm.

Thanks for the belated B-Day wishes. Who wants to join me in Brazil for a facelift? lol (kinda)

Comment by Bill in Los Angeles
2012-04-22 09:35:07

A financial gal I know keeps trying to get me to invest in her schemes. An annuity for instance. Oops…3% fee. No thanks. How about cancer insurance where you will get $100,000 spending money if you get detected a cancer? No thanks.

I checked Vanguard’s site and even though it’s investor-owned and the fees are lower I still cannot justify a silly annuity.

Comment by Awaiting
2012-04-22 09:54:14

My late father went to a DW (Dean W…) gal. She sucked his small nestegg dry. He use brag what a brain she, was as got promoted for her annual revenue infusion into DW. Meanwhile, a good chunk of their $ was eaten in fees with little roi. The whole thing made me sick. My parents would have been better off enjoying some travel on it before his demise.

Comment by Awaiting
2012-04-22 09:57:47

He use brag what a brain she was, as she got promoted for her annual revenue infusion into DW.

(boo boo- there, that’s better)

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Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 10:35:39

I frankly don’t get why retirees are such suckers for financial planner types who are itching for the chance to suck their nest eggs dry. I had to lean very hard on my dad to get him to pull his money away from a financial planner who had him deeply invested in stocks back in 2007. Luckily Dad listened to me for the most part. The part of his portfolio that remained invested with the planner dude got hammered in the big Fall 2008 Wall Street financial meltdown.

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Comment by combotechie
2012-04-22 11:13:25

I know a guy (and his wife) who got sucked into turning every cent they had to this Jon. W. James guy (who promised a 24% annual return) right before the SEC shut him down.


Another person I worked with got sucked in around the same time (2006) and had all the paperwork filled out, the envelope in the mailbox for the next morning’s pick up, but an endless night of tossing and turning caused her to change her mind. Then the rentless phone calls came rolling in from the Jon W. James folks pressuring her to commit. And they would not take “no” for an answer.

Comment by Bill in Carolina
2012-04-22 12:02:49

From what I’ve read, our BS detectors start to fail as we get older. That’s even in people who show no signs of dementia up to the day they die. Add a little dementia and it’s a field day for financial scammers, er, planners.

Comment by Realtors Are Liars®
2012-04-22 12:12:04

I believe that. How do you account for the cluelessness of the entire blue hair generation?

Comment by CarrieAnn
2012-04-22 12:52:48

Is it cluelessness or stubbornness? Essentially when we approach them, we are saying a decision they’ve made was wrong.

I don’t think there is one suggestion including suggesting a top freezer vs bottom freezer might be better for their backs was ever taken seriously by my husband’s parents. It only took about 6 weeks for them to regret the fridge purchase but they never told us we’d been right all along. They only told us they were ready for a different fridge like all our comments beforehand never happened.

We’ve been joking for years we’re going to tell them the exact opposite of what we think they should do because like teenagers making a strong statement often sends them in the opposite direction.

Comment by ahansen
2012-04-22 15:54:35

With all due respect, RAL, the only “bluehairs” I see anymore are in their teens. Women with investable resources tend to color their hair shades of red or gold anymore. ;-)

Comment by Happy2bHeard
2012-04-22 23:26:04

“Women with investable resources tend to color their hair shades of red or gold anymore.”

My mother colors her hair as much for the body it gives it as for the color. If her hair were thicker, she would be content with white.

Comment by skroodle
2012-04-22 12:26:56

Annuities when interest rates are at an all time low? LOL! The gall of those financial “experts”.

Comment by combotechie
2012-04-22 12:51:24

IMO these low returns increases the value of earned money as compared to the value of invested money.

For example, if it takes two million dollars of invested capital to generate a secure return of sixty thousand dollars at a secure return of three percent, then it could be argued that a job that nets sixty thousand dollars is worth two million dollars.

If the secure return rises to, say, six percent then the value of the job that nets sixty thousand dollars drops down to one million dollars.

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Comment by combotechie
2012-04-22 16:42:49

The past era, when the value of a house increased each year, say 60 thousand dollars (which means 60 thousand dollars of cash could be sucked out of the house’s equity each year) such a house ‘earned’ as much as a worker who netted 60 thousand dollars a year earned.

If a person could weasel his way into having three such houses then he could suck out three times as much equity - he could suck out 180 thousand dollars a year. In the past era if you were to offer such a person a good job that paid something like 60 thousand dollars a year net of taxes he would probably laugh in you face.

But not today; Today he would most likely get on his knees and beg you for a job that netted 60 thousand dollars a year.

Comment by In Colorado
2012-04-22 18:20:46

The power of the home equity spigot. At least we now know why so many incompetent, skill-less losers had luxury cars, dressed like movie stars and took the family every year to either Hawaii or Disneyworld (or both).

Comment by alpha-sloth
2012-04-22 19:18:05

if it takes two million dollars of invested capital to generate a secure return of sixty thousand dollars at a secure return of three percent, then it could be argued that a job that nets sixty thousand dollars is worth two million dollars.

Except that the job requires you to get up and go to work every day. The two mill lets you sit on the beach and sip pina coladas.

Comment by ecofeco
2012-04-22 11:20:52

No doubt that less regulation would provide better returns for the customers.


(there’s a special place in hell for people who prey on the elderly.)

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 08:09:10

Step right up and get your Lower Manhattan office towers at fire-sale prices!

April 16, 2012, 6:31 PM

Bank of America in Deal to Sell New York Office Tower
By Eliot Brown

CoStar Group
Bank of America has agreed to sell 222 Broadway, a 31-story building in Lower Manhattan.

Bank of America Corp., in its latest move to shed some of its real estate, has reached a deal to sell one of its Manhattan office buildings to an investment group for about $230 million, according to multiple people familiar with the matter.

A team of Beacon Capital Partners LLC, a large U.S. office landlord, and L&L Holding Co., a New York developer, has agreed to buy 222 Broadway, a 31-story building in Lower Manhattan, and lease part of the building back to the Charlotte, N.C.-based bank, the people said. The price comes to just under $300 a square foot, the people said.

Bank of America has been selling some of its real estate holdings as part of an effort to sell off operations it doesn’t consider essential to its business. In February, it reached a deal to sell 100 Federal Street in Boston to Boston Properties for $615 million.

Comment by Bill in Carolina
2012-04-22 12:05:12

Anybody know what they originally paid for it? How much net profit they got from leases? How much depreciation they were able to take?

Comment by Happy2bHeard
2012-04-22 11:13:55


“While the United States struggles with a weak dollar and a quarter-trillion-dollar trade imbalance with China, exotic-seafood sales have become one of the nation’s economic bright spots. Even Puget Sound’s small sea-cucumber export industry has seen prices double in a year.

And geoducks support a niche market unlike any other. With a neck that can snake 3 feet from its shell, this high-end seafood is popular for celebrations and banquets and with the business elite in parts of Asia where wealth — and demand — just keep climbing.

“Everything about geoduck is driven by China,” said Mark Schaffel, who raises farmed geoducks for Olympia’s Northwest Shellfish Company. “They’re really into it, they’ve got money, and there is no substitute.”

Do I see a geoduck bubble?

I miss Oly.

Comment by Carl Morris
2012-04-22 13:57:33

I miss her, too. On the positive side I can almost hear/see the commentary on a Geoduck bubble :-).

Comment by ecofeco
2012-04-22 18:11:33

Yeah. Damn.

Comment by alpha-sloth
2012-04-22 19:33:26

I don’t think she’d be down with the farm-raised geoducks. But I’d love to hear her riff on it.

Comment by Realtors Are Liars®
2012-04-22 12:08:23

Realtors still shamelessly scamming the public.

Circa 2006, some idiot pays $800k for 30 acre plot of land with pond and 70’s rancher. Began 1200sq ft addition in 2007, defaulted in early 2008 and abandoned. 2008 I begin bassin’ the pond every season including 2011. Sweet pond. Deutsche Bank takes possession in 2008. Eyeballing place as it is right down the road from our current residence. No Liar signs, no MLS listing, house and addition is half complete, no windows roughed in, no siding, place truly deteriorating rapidly 2008-2011. Told wife we’ll offer $60k for it if and when it comes on the market as it will require another 140k to repair the existing structure and complete the addition, then sell off 25 acres for 40-50k. Kids trashing it every weekend and needs to be gutted down to primary frame. Inground pool caved in, etc. Mechanical a complete loss.

So the story? I found out yesterday that it sold two weeks ago. Not a sign, never listed on MLS/Realtor yet it had a MLS#. I only found out as I checked out another dump nearby that came up and saw that this place was statused “recently sold”.

Because of the corrupt Realtor Crime Syndicate, I nor anyone else had an opportunity to buy or pass on this. That decision was taken from us and made by Scumbag Realtors.

You realtors are the most dishonest, greedy, underhanded, sneaky, corrupt, unprofessional creeps on the planet. You people are pathetic. What kind of bribe did you take from the buyer? How cheap were you?

This is the second time in 3 years we’ve been scammed by realtors in this same exact way.

Comment by CarrieAnn
2012-04-22 12:55:58

Do you think it was part of someone’s investor package? 1000 properties at 10-25% of original value only for the big boys bearing lots of cash.

Comment by Realtors Are Liars®
2012-04-22 17:09:44

Doubtful Carrie. It sold for exactly what it was worth…. It might have been overpriced a bit. $87k is no bargain for 30 acres of untillable dirt with a pond and a structure that has marginal value.

Comment by X-GSfixr
2012-04-22 13:04:18

Don’t sugarcoat it…….tell us what you really think. :)

2012-04-22 13:34:48

“Because of the corrupt Realtor Crime Syndicate, I nor anyone else had an opportunity to buy or pass on this. That decision was taken from us and made by Scumbag Realtors.”

That`s even a better trick than the listing Liar telling their client what your bid is so they can double side the commision.

Comment by Muggy
2012-04-22 13:43:02

You need to make inroads with a scamming realtor and a few scamming banksters. If I get serious about buying in Florida, this is exactly what I will do.

You will need to make it look one way on paper, so they can show something isn’t worth a lot, then stuff their pockets with cash.

Why not?

Comment by Realtors Are Liars®
2012-04-22 17:40:50

I have no problem with slipping a Liar a $100 bill. Some will accept, others won’t.

Comment by CharlieTango
2012-04-22 16:40:32

Your plan to pick up 5 acres plus a house to re-build for $10-$20k was spoiled by “corrupt”, “crime”[inal], “Scumbag”, “dishonest”, “greedy”, “underhanded”, “sneaky”, “corrupt”, “unprofessional”, “creeps” [realtors] ?

Boy I feel for you, that $10-$20k plan of yours was one where you would have earned what you received but the liars robbed you a 2nd time in 3 years? Damn.

Comment by Realtors Are Liars®
2012-04-22 17:06:14

Considering it sold for $87k, you demonstrate you know about this situation as much as your construction experience.

Comment by CharlieTango
2012-04-22 17:53:03

Considering it sold for $87k

So it sold for 45% more than you were planning to offer and yet you claim that you were somehow scammed time and again?

If the buyer paid $87k and you planned to offer $60k, how were you scammed?

Perhaps your offer would not have been accepted in favor of the much higher one?

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Comment by Realtors Are Liars®
2012-04-22 18:08:18

Perhaps if it were marketed to the market instead of tunneled to a backdoor buyer, someone else might have paid more.

Your point or are you still butt hurt over getting your insulation scam exposed?

Comment by CharlieTango
2012-04-22 19:15:27

Perhaps if it were marketed to the market instead of tunneled to a backdoor buyer, someone else might have paid more.

If someone had paid even more, then your claim to having been scammed would be even more silly.

Your claims to exposing my “scam” are just more silliness, you did no such thing except perhaps in your own eyes.

Comment by Liberals Are Liars®
2012-04-22 19:20:30

No one “paid more” because the opportunity to do so was removed by realtors.

Catching on yet?

Comment by Rental Watch
2012-04-22 21:46:01

I bought my house off-market (ready to be listed within the week). Negotiation was done directly with the seller. I fully expect that the home would have gone for more if it was fully marketed.

However, the seller was highly sophisticated, with plenty of money, and was looking for certainty and speed. If the seller didn’t find a buyer with some confidence of closing, and a price that they felt was “good enough”, it would have gone to market.

I understand in this case the seller was DB, and it is likely that they weren’t paying attention. It is also possible that DB told their selling agent to try to sell it quickly with a minimum number. Sometimes, “off-market” gets a buyer excited, and willing to do things like signing non-contingent, as-is offers with short closing timeframes.

I admit that it’s possible that the owner got screwed by a back-door deal.

It’s also possible that the owner got exactly what they wanted, a quick sale with an as-is buyer, who was willing to take all sorts of risk with a crappy structure on the property.

In our business, we’ve bought a lot of properties off-market, always with the seller fully aware that the property wasn’t listed (in one case with us telling the seller that they could likely get more if they put it on the market–they wanted certainty). We’ve also sold properties off-market, for various reasons, fully aware that a full marketing process hadn’t taken place. In some cases, the reason to sell off-market was to save commissions that would have otherwise been payable to brokers.

Comment by ahansen
2012-04-22 22:29:08

Ditto, rental, done the same thing to keep the middlemen out of the paperwork. But nobody here wants to deal with that fact. Curious, though, that the property RAL’s talking about ended up on the MLS after the fact. How/why does that happen?

Comment by Rental Watch
2012-04-22 23:15:14

Don’t know exactly (contrary to popular belief, I’m not a RE agent).

I can only guess that there was an MLS number assigned in prep for listing if a sale fell through, and there may be some requirement that if you get a number, you must disclose what happened.

Comment by ecofeco
2012-04-22 18:14:16

The entire FIRE sector is a crime syndicate.

Comment by X-GSfixr
2012-04-22 13:08:18

“Nothing in writing”

Soon to be followed by “But they said…….”

Is it just me, or does it seem like the stupidity is multiplying exponentially this year?

Comment by Carl Morris
2012-04-22 13:59:50

Hey, if the bottom is in then it’s time to go full stupid, right? Worked last time.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 13:44:05

Didn’t anyone explain to Mitt Romney that the MID is the “third rail” of U.S. government subsidies to the REIC?

Did Mitt Romney Slip On a Banana Peel When It Comes to Second Homes?
April 20, 2012

Mitt Romney caused quite a stir this week when he told fundraisers in tony Palm Beach that he might consider limiting the home mortgage interest deduction on second homes.

“I’m going to probably eliminate for high income people the second home mortgage deduction,” reporters overheard the presumptive GOP presidential nominee tell donors at a private fundraiser. “By virtue of doing that, we’ll get the same tax revenue, but we’ll have lower rates.”

The campaign has since retreated from those remarks, playing them off as casual conversation, but others say the issue is no laughing matter.

Comment by oxide
2012-04-22 14:30:00

Which is really too bad, because knocking out MID for second homes is a great idea. Of course it wouldn’t fly with Romney’s base who probably use the MID on the cabin to keep the wine cellar stocked.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 14:39:33

That’s exactly it! Eliminating the second-home MID would primarily hammer the Republican base. I frankly am skeptical the reporters who reported this story heard right…

Comment by CharlieTango
2012-04-22 16:48:24

I suspect that not many 2nd homes are being purchased at the moment. I know that very few are being built in the California resort where I live. A 2nd assumption is that existing 2nd homes will grandfather and only new loans would fail to qualify for the MID. If I’m right the result should be lower values that offset the lost MID, essentially the current land or homeowners will have to take the loss not the new buyer.

(Comments wont nest below this level)
Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 13:48:58

In Nothing We Trust
Ralf-Finn Hestoft

Feeling betrayed: Johnny Whitmire
Americans are losing faith in the institutions that made this country great.

By Ron Fournier and Sophie Quinton
Updated: April 21, 2012 | 5:43 p.m.
April 19, 2012 | 4:00 p.m.

MUNCIE, Ind.—Johnny Whitmire shuts off his lawn mower and takes a long draw from a water bottle. He sloshes the liquid from cheek to cheek and squirts it between his work boots. He is sweating through his white T-shirt. His jeans are dirty. His middle-aged back hurts like hell. But the calf-high grass is cut, and the weeds are tamed at 1900 W. 10th St., a house that Whitmire and his family once called home. “I’ve decided to keep the place up,” he says, “because I hope to buy it back from the bank.”

Whitmire tells a familiar story of how public and private institutions derailed an American’s dream: In 2000, he bought the $40,000 house with no money down and a $620 monthly mortgage. He made every payment. Then, in the fall of 2010, his partially disabled wife lost her state job. “Governor [Mitch] Daniels slashed the budget, and they looked for any excuse to squeeze people out,” Whitmire says. “We got lost in that shuffle—cut adrift.” The Whitmires couldn’t make their payments anymore.

(PICTURES: How Institutions Are Crumbling)

They applied for a trial loan-modification through an Obama administration program, and when it was granted, their monthly bill fell to $473.87. But, like nearly a million others, the modification was canceled. After charging the lower rate for three months, their mortgage lender reinstated the higher fee and billed the family $1,878.88 in back payments. Whitmire didn’t have that kind of cash and couldn’t get it, so he and his wife filed for bankruptcy. His attorney advised him to live in the house until the bank foreclosed, but “I don’t believe in a free lunch,” Whitmire says. He moved out, leaving the keys on the kitchen table. “I thought the bank should have them.”

(RELATED: Chat Wrap: Ron Fournier and Sophie Quinton on the Economy)

A year later, City Hall sent him salt for his wounds: a $300 citation for tall grass at 1900 W. 10th St. Telling the story, he swipes dried grass from his jeans and shakes his head. “The city dinged me for tall weeds at my bank’s house.” After another pull from the water bottle, Whitmire kicks a steel-toed boot into the ground he once owned. “You can’t trust anybody or anything anymore.”

(RELATED: Restoration Calls—Complete Coverage)

Whitmire is an angry man. He is among a group of voters most skeptical of President Obama: noncollege-educated white males. He feels betrayed—not just by Obama, who won his vote in 2008, but by the institutions that were supposed to protect him: his state, which laid off his wife; his government in Washington, which couldn’t rescue homeowners who had played by the rules; his bank, which failed to walk him through the correct paperwork or warn him about a potential mortgage hike; his city, which penalized him for somebody else’s error; and even his employer, a construction company he likes even though he got laid off. “I was middle class for 10 years, but it’s done,” Whitmire says. “I’ve lost my home. I live in a trailer now because of a mortgage company and an incompetent government.”

(RELATED: For Magazine Subscribers—Why We Trust Doctors)

Whitmire is a story of Muncie, and Muncie is the story of America. In this place—dubbed “Middletown” by early 20th-century sociologists—people have lost faith in their institutions. Government, politics, corporations, the media, organized religion, organized labor, banks, businesses, and other mainstays of a healthy society are failing. It’s not just that the institutions are corrupt or broken; those clichés oversimplify an existential problem: With few notable exceptions, the nation’s onetime social pillars are ill-equipped for the 21st century. Most critically, they are failing to adapt quickly enough for a population buffeted by wrenching economic, technological, and demographic change.

Knock around Muncie for proof: City Hall, like Washington, is petty and polarized, driving down voter engagement. Stodgy mainline churches are losing worshipers in droves. Low-tech and unruly public schools are prompting parents to pull their children out. The city’s once-beloved business class shuttered its factories, leaving a legacy of double-digit unemployment and helplessness. Labor unions once credited with creating the middle class are now often blamed for the demise of industry. Even The Star Press, Muncie’s daily newspaper once venerated for holding locals to account, was gutted after a job-killing merger in 1996 and the sale, a few years later, to media giant Gannett.

(RELATED: Why Muncie Is Middletown and More)

Muncie is a microcosm of a nation whose motto could be, “In Nothing We Trust.” Seven in 10 Americans believe that the country is on the wrong track; eight in 10 are dissatisfied with the way the nation is being governed. Only 23 percent have confidence in banks, and just 19 percent have confidence in big business. Less than half the population expresses “a great deal” of confidence in the public-school system or organized religion. “We have lost our gods,” says Laura Hansen, an assistant professor of sociology at Western New England University in Springfield, Mass. “We lost [faith] in the media: Remember Walter Cronkite? We lost it in our culture: You can’t point to a movie star who might inspire us, because we know too much about them. We lost it in politics, because we know too much about politicians’ lives. We’ve lost it—that basic sense of trust and confidence—in everything.”

Comment by oxide
2012-04-22 14:42:28

“In 2000, he bought the $40,000 house with no money down and a $620 monthly mortgage.”

Zillow says that Muncie tax + ins is about $125/month. Let’s assume PMI at $100/month. That leaves about $400/month for the mortgage. On a $40K loan, he would have had to buy at a 12% interest rate. Were interest rates at 12% in 2000?

This is interesting: “which failed to walk him through the correct paperwork or warn him about a potential mortgage hike.” Either he bought with a 12% ARM in 2000, or I smell am ARM HELOC.

Comment by Muggy
2012-04-22 17:18:41

“$1,878.88 in back payments. Whitmire didn’t have that kind of cash and couldn’t get it”

Good lord, this guy can come up with $2G? I am living mo-to-mo and I could still pull it off if I had to.

Comment by ecofeco
2012-04-22 18:05:17

A recent study (last year) says that at least HALF of Americans can’t come up with $2000 for emergencies, so when the inevitable emergency happens, they are screwed.

I’ll bet it’s the same half that makes $500 a week or less.

And THAT’S why it’s almost impossible to get ahead these days.

For a better understanding of why, go here: http://www.halfhill.com/inflation.html

Comment by ecofeco
2012-04-22 18:23:32

A recent report from last year shows that HALF of all American don’t have and cannot raise $2000 for an emergency.

So when the inevitable emergency happens, they are screwed and it take YEARS to recover due to the double whammy of a low paying and offshoring of jobs.

Comment by ecofeco
2012-04-22 18:25:15

Where’s my post?

Comment by ecofeco
2012-04-22 18:20:22

Welcome to my entire life, Whitmire.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 13:54:26

Housing slump cuts mortgage tax break for many Americans
Bloomberg News
4 hours ago

The cost of one of the country’s most expensive individual tax breaks is shrinking as the number of Americans who own homes declines and mortgage rates hover near historic lows.

Federal tax filers claimed almost $71 billion less in mortgage interest deductions for 2009 than for 2007, a 14 percent drop, according to the Internal Revenue Service. That trend continued in 2010, the IRS said in a report last month, as preliminary data showed that lower interest rates, home ownership and home prices curbed use of the tax deduction by 7.2 percent.

“People are walking away and losing their homes and they no longer have the mortgage interest deductions,” said Andrew Hanson, an assistant professor of economics at Georgia State University who has researched the tax break. “That’s got to be a big part of it.”

Tax revenue fell as unemployment rose during the most severe recession since the 1930s, and the housing market was shaken by 16 million foreclosures since 2007. On the flip side were gains from declining use of the mortgage deduction, saving the U.S. government $13 billion to $26 billion from 2007 to 2010, according to an estimate from Hanson.

The home ownership rate in the U.S. dropped from a peak of 69.2 percent in 2004 to 65.9 percent in the second quarter of 2011, according to the U.S. Census Bureau. Median home prices fell more than 30 percent from July 2006 to January, according to data from the National Association of Realtors.

The mortgage interest deduction is projected to cost the federal government $464 billion in revenue from 2011 to 2015, according to the congressional Joint Committee on Taxation.

While popular with taxpayers, the deduction is often proposed for elimination by those seeking to reduce the federal budget deficit. The fiscal commissions of two presidents in 2005 and 2010 recommended scaling it back and replacing it with a tax credit. President Barack Obama’s budget proposal for fiscal 2013 would impose a cap that would limit the benefit of tax breaks, including the mortgage interest deduction, for high-income taxpayers.

At the federal level, the deduction is allowed for interest on mortgages up to $1 million for both primary and secondary residences. Only taxpayers who itemize can take the deduction. Some economists maintain that the deduction disproportionately benefits the wealthy and spurs people to take on more debt.

“Most economists don’t like it,” said Kim Rueben, senior fellow at the Tax Policy Center in Washington, a nonpartisan research group, noting that there is little evidence that the tax break spurs home ownership.

David Albouy, assistant professor of economics at the University of Michigan, says the deduction along with subprime lending are partly responsible for pushing people into homes they otherwise couldn’t afford. The decline in homeownership and the drop in the use of the deduction may be the home market righting itself, he said.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 15:53:54

I guess with a mass exodus of middle class households out of California, it’s entirely up to the all-cash Canadian and Chinese housing investors to keep the housing market afloat.

April 20, 2012, 7:19 p.m. ET

Joel Kotkin: The Great California Exodus

A leading U.S. demographer and ‘Truman Democrat’ talks about what is driving the middle class out of the Golden State.

‘California is God’s best moment,” says Joel Kotkin. “It’s the best place in the world to live.” Or at least it used to be.

Mr. Kotkin, one of the nation’s premier demographers, left his native New York City in 1971 to enroll at the University of California, Berkeley. The state was a far-out paradise for hipsters who had grown up listening to the Mamas & the Papas’ iconic “California Dreamin’” and the Beach Boys’ “California Girls.” But it also attracted young, ambitious people “who had a lot of dreams, wanted to build big companies.” Think Intel, Apple and Hewlett-Packard.

Now, however, the Golden State’s fastest-growing entity is government and its biggest product is red tape. The first thing that comes to many American minds when you mention California isn’t Hollywood or tanned girls on a beach, but Greece. Many progressives in California take that as a compliment since Greeks are ostensibly happier. But as Mr. Kotkin notes, Californians are increasingly pursuing happiness elsewhere.

Nearly four million more people have left the Golden State in the last two decades than have come from other states. This is a sharp reversal from the 1980s, when 100,000 more Americans were settling in California each year than were leaving. According to Mr. Kotkin, most of those leaving are between the ages of 5 and 14 or 34 to 45. In other words, young families.

The scruffy-looking urban studies professor at Chapman University in Orange, Calif., has been studying and writing on demographic and geographic trends for 30 years. Part of California’s dysfunction, he says, stems from state and local government restrictions on development. These policies have artificially limited housing supply and put a premium on real estate in coastal regions.

Basically, if you don’t own a piece of Facebook or Google and you haven’t robbed a bank and don’t have rich parents, then your chances of being able to buy a house or raise a family in the Bay Area or in most of coastal California is pretty weak,” says Mr. Kotkin.

While many middle-class families have moved inland, those regions don’t have the same allure or amenities as the coast. People might as well move to Nevada or Texas, where housing and everything else is cheaper and there’s no income tax.

And things will only get worse in the coming years as Democratic Gov. Jerry Brown and his green cadre implement their “smart growth” plans to cram the proletariat into high-density housing. “What I find reprehensible beyond belief is that the people pushing [high-density housing] themselves live in single-family homes and often drive very fancy cars, but want everyone else to live like my grandmother did in Brownsville in Brooklyn in the 1920s,” Mr. Kotkin declares.

“The new regime”—his name for progressive apparatchiks who run California’s government—”wants to destroy the essential reason why people move to California in order to protect their own lifestyles.”

Housing is merely one front of what he calls the “progressive war on the middle class.” Another is the cap-and-trade law AB32, which will raise the cost of energy and drive out manufacturing jobs without making even a dent in global carbon emissions. Then there are the renewable portfolio standards, which mandate that a third of the state’s energy come from renewable sources like wind and the sun by 2020. California’s electricity prices are already 50% higher than the national average.

Oh, and don’t forget the $100 billion bullet train. Mr. Kotkin calls the runaway-cost train “classic California.” “Where [Brown] with the state going bankrupt is even thinking about an expenditure like this is beyond comprehension. When the schools are falling apart, when the roads are falling apart, the bridges are unsafe, the state economy is in free fall. We’re still doing much worse than the rest of the country, we’ve got this growing permanent welfare class, and high-speed rail is going to solve this?”

Mr. Kotkin describes himself as an old-fashioned Truman Democrat. In fact, he voted for Mr. Brown—who previously served as governor, secretary of state and attorney general—because he believed Mr. Brown “was interesting and thought outside the box.”

But “Jerry’s been a big disappointment,” Mr. Kotkin says. “I’ve known Jerry for 35 years, and he’s smart, but he just can’t seem to be a paradigm breaker. And of course, it’s because he really believes in this green stuff.”

Comment by In Colorado
2012-04-22 18:17:24

While many middle-class families have moved inland, those regions don’t have the same allure or amenities as the coast. People might as well move to Nevada or Texas, where housing and everything else is cheaper and there’s no income tax.

Kind of hard to take a quick drive on the weekend to see mom-n-dad in Orange County or take the kids for a quick day trip to Disneyland if you move to Texas.

Comment by ahansen
2012-04-22 21:52:28

Joel Kotkin, affiliated with a barely-accredited Christian college, has a political axe to grind here. Oh, those awful regulations against rampant development! They’re simply RUINING “our” state.

Native Californians are delighted to see the likes of him whining, and encourage them to keep leaving. Bye, Joel….

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 15:58:56

Former Goldman trader schools the muppets
Shawn Langlois’s London Sketch
Commentary: Deck stacked against them, retail traders seek magic ticket
April 21, 2012|Shawn Langlois, MarketWatch

LONDON (MarketWatch) — Anton Kreil would certainly forgive my cynicism as I walked into Kings College on a soggy Thursday night to listen to his two-hour trading seminar. In fact, he’d encourage it.

I’ve spent more than my fair share of time over the years with slick traders claiming to know the path to financial success and hot chicks.

“You’ll make six figures this year and probably seven figures next year,” my buddy told me about a decade ago. No problem. We’re going large, he said. This was a potential invitation into the 1%. A door to that despicable segment of society that probably doesn’t seem nearly as vile when you’re part of it.

I was still relatively fresh to journalism at the time, having left a lackey’s job on a trading floor in San Francisco for the financial-news upstart CBS MarketWatch. I had no intention of getting back into banking or of leaving my Internet bubble job and its Margarita Fridays.

But then my good friend, whom I had known since we were kids, approached me with a hefty offer. His team was looking to build out its trading room. They had invested the money. The infrastructure was in place. The early returns for clients were glorious. Suspiciously so.

And the pay? Also far too good to be true, despite strong assurances from a stream of fast-talking suits that it was legit. So, after a few restless nights, I declined, feeling three parts stupid and one part relieved.

Good thing. Turns out that fateful interview was with the KL Group, the West Palm Beach, Fla.–based trading firm that shortly thereafter fleeced its customers of hundreds of millions of dollars. A complete sham.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 16:07:32

I agree with Newt. Why not just eliminate the MID across the board? That would be more fair to families for whom renting is a more sensible choice than owning a home, such as those of military servicemen who frequently need to relocate.

Political Insider
Your morning jolt: Newt Gingrich slams Mitt Romney over limiting mortgage deductions
9:34 am April 18, 2012, by jgalloway

So why is Newt Gingrich still in the GOP presidential race? So he can issue statements like the one below, which arrived this morning:

Governor [Mitt] Romney’s proposal to limit certain tax deductions based on income, including the deduction for mortgage interest on second homes, is a surrender to the class warfare rhetoric of the Left.

Over the weekend, at a fundraiser in Florida, Romney was overheard saying that he might seek to limit tax deductions for second home mortgages and eliminate the Department of Housing and Urban Development.

But apparently, it’s far too early for a Sistah Souljah moment. Aides later said the presumptive GOP nominee was simply tossing around ideas.

Says Gingrich:

Conservatives believe in the classical American definition of fairness – that every American be treated equally under the law…

Governor Romney’s tax proposal violates that principle by giving politicians the power to carve out exceptions in the law for people of certain incomes. Furthermore, it sets the stage for future tax increases, as politicians will continually try to decrease the income threshold where citizens will no longer be able to avail themselves of the deductions.

Comment by In Colorado
2012-04-22 18:14:29

“Governor Romney’s tax proposal violates that principle by giving politicians the power to carve out exceptions in the law for people of certain incomes.”

Like the kind that allow the super rich to pay less tax on their capital gains than middle class wage earners pay on their “earned income”,

Comment by ecofeco
2012-04-22 18:26:44

“Conservatives believe in the classical American definition of fairness – that every American be treated equally under the law…”

They sure don’t vote that way!

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 18:29:44

If you realize that it’s just a pack of political lies to maintain control of the 99% by the 1%, it will make more sense to you.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 16:11:50

Real estate investors are screaming over the possibility of losing their special deduction. What I would like to know is, how did the government get into the business of giving away free money to real estate investors in the first place? It’s bad enough for Uncle Sam to encourage home ownership, but second home ownership? Come on! With so many Americans unable to afford to buy a home to live in, forceing taxpayers to hand over money to investors is just plain wrong.

Romney, hands off second mortgages

Friday, Apr 20 2012, 1:41 pm

Fresh out of the gate after basically gaining the Republican nomination for president, Mitt Romney has stumbled. He has been stung by attacks on his reported wealth of $250 million; and by President Obama’s call for a new “Buffet Rule” tax, named after billionaire Warren Buffet, of a 30 percent minimum tax on millionaires.

In response, Mr. Romney called for ending second-home mortgage deductions for wealthy people as part of his tax-reform proposals. We’re interested in any ideas he and President Obama come up with. As the Beatles sang, “You say you got a real solution. Well, you know, we’d all love to see the plan.”

But unless Mr. Romney’s idea is part of comprehensive tax reform and reduction, it could do more harm than good. The real estate market has been hammered now for five straight years, with no recovery in sight.

Comment by Realtors Are Liars®
2012-04-22 17:33:11

With the steady stream of bribes from NAR, NAHB and MBA to congress, the candidates can say whatever they want and get away with it, yet nothing with change.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 16:16:35

Home, Deductible Home
Timothy Noah
April 17, 2012 | 2:30 pm

We continue our celebration of tax day, which began with a plug for my book, with a plug for someone else’s book: The Benefit And The Burden: Tax Reform–Why We Need It And What It Will Take, by Bruce Bartlett. I’m not really sold on the need for tax reform this year (more on that in my forthcoming TRB column), but The Benefit And The Burden is a wonderfully clear primer on the relevant issues and the history is behind them. A conservative architect of the 1981 Reagan tax cut who lost patience with his team during the George W. Bush administration, Bartlett calls bullshit on supply-side claims that the ‘81 cut boosted revenues. “The only metric that really matters is revenues as a share of the gross domestic product,” Bartlett writes. “By this measure, total federal revenues fell from 19.6 percent of GDP in 1981 to 18.4 percent of GDP by 1989. This suggests that revenues were $66 billion lower in 1989 as a result of Reagan’s policies.”

Like Bartlett, I favor elimination of the mortgage interest deduction, which sucks about $100 billion out of the coffers every year. (It’s the third-biggest tax expenditure, after the exclusions of employer-provided health insurance and pensions.) I’m not sure right now is the best time to do it, given the shaky state of the housing market. But Bartlett makes a good case that whatever impact eliminating the deduction has on home prices will be a “one-time-only effect”:

We know this because many other countries, such as Australia, Canada, Germany, Israel, and Japan, do not allow mortgage interest to be deducted, have homeownership rates comparable or even greater than those in the United States, and in many cases have seen historical home appreciation even greater than that in the United States. Great Britain abolished the deduction for mortgage interest in April 2000, yet housing prices rose more over the next decade than they did in the United States despite predictions to the contrary

Interestingly, Bartlett concludes that tax reform probably isn’t possible without a Republican president and a Democratic Congress. “In the postwar era, every serious tax reform–in 1969, 1976, and 1986–took place when there was a Republican president and a Democratic Congress,” he writes. “The Tax Reform Act of 1986 is only a slight exception: there was a Republican president and Republican control of the Senate, but Democrats held the House of Representatives.” Bartlett thinks you need a Republican president to give political cover to Democrats and “prevent his own party from throwing up insurmountable obstacles.” This is part of a larger pattern in which Republicans do not permit the nation’s business to be conducted except when they’re in charge (and not always then). I feel less inclined than Bartlett to accept this as a fact of life. But anyway, read his book.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 18:16:50

So it sounds like the IMF is stabilizing share prices now.

Shares, euro steady after IMF funding; China eyed

Traders work on the floor of the New York Stock Exchange (NYSE) September 12, 2011. REUTERS/Brendan McDermid

By Chikako Mogi

TOKYO | Sun Apr 22, 2012 8:20pm EDT

(Reuters) - Asian shares and the euro steadied on Monday after the IMF secured new funding to prevent the contagion of the euro zone’s debt crisis, with investors turning to Chinese data to gauge the market’s resilience to risk.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was nearly flat while Japan’s Nikkei average .N225 opened up 0.4 percent.

The contagion risk of Europe’s debt problems was reduced slightly when the International Monetary Fund secured $430 billion to boost its firepower in case Europe’s debt woes worsen and spill over to peripheral economies.

Global finance chiefs wasted no time in weekend talks to press Europe to quickly implement the economic reforms needed to stamp out its debt crisis now that newly increased financial buffers have bought some time.

They continued to face resistance from the European Central Bank to do more to further reduce the risk of a new flare-up on the crisis.

Markets will return their focus to economic data and policy events this week, starting with a flash reading of China’s manufacturing activity for April from HSBC due at 0230 GMT and the euro zone’s manufacturing activity report later in the session.

“We expect China’s PMI number on Monday to confirm our view that activity remains well supported,” Barclays Capital analysts said in a research note. “We also expect Euro area PMI to come marginally above consensus on Monday, helping markets keep the positive tone inherited from Friday.”

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 18:20:30

Global Crisis Not Over, China Reforms to Go On: Wen
Published: Sunday, 22 Apr 2012 | 7:45 PM ET
By: Reuters

The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a “tortuous” recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany.

Wen also said China, the world’s biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors — a major concern for the growing number of German firms active in the country.

“Currently, the international financial crisis is not over and the global economic recovery is difficult and tortuous,” Wen said at the Hanover trade fair that was also attended by German Chancellor Angela Merkel.

More investment in the real economy and technical innovation will be the most powerful drivers of global recovery, he said.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 18:34:12

ECB Rejects Geithner-IMF Push for Measures
By Jeff Black, Rainer Buergin and Meera Louis on April 22, 2012

Timothy F. Geithner, U.S. treasury secretary, said the ECB and other European authorities should act decisively to end the turmoil. Photographer: Jonathan Ernst/Bloomberg

European Central Bank officials led by President Mario Draghi resisted calls from the International Monetary Fund and U.S. Treasury to do more to stem the debt crisis roiling the euro-area economy.

As talks of global finance chiefs ended yesterday in Washington, euro-area central bankers from Draghi to Bundesbank President Jens Weidmann argued they have done enough by cutting interest rates and issuing more long-term bank loans.

“None of the advice that the IMF is offering has been discussed by the Governing Council, in recent times at least,” Draghi said on April 20 while attending IMF meetings in Washington. Weidmann said in an interview that “the problems in Europe can’t be solved by monetary policy measures.”

Officials in Europe and around the world are bickering about additional crisis-calming steps, as turmoil returns to the continent’s bond market amid concern that Spain may need a bailout. While Draghi says Spain and Italy need to agree further action, Prime Minister Mariano Rajoy’s government wants the ECB to reactivate its bond-buying program.

Spain and Italy have made “remarkable” progress on structural changes, Draghi said. Even so, the process is far from complete for both countries, he said.

“The ECB is drawing a line to keep pressure on governments to make the necessary adjustments,” said Megan Greene, head of European economics at Roubini Global Economics LLC, who was in Washington. “If push came to shove the ECB would step in, but they’ll hold the line for now.”

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 18:41:45

Fannie Mae Fix Said to Retain Some U.S. Mortgage Role
By Clea Benson, Ian Katz and Cheyenne Hopkins on April 18, 2012

U.S. Treasury officials are leaning toward recommending that Fannie Mae and Freddie Mac be replaced with a government safety net for the mortgage finance system and continued federal backing for loans to lower-income homebuyers, according to three people briefed on the discussions.

Treasury Secretary Timothy F. Geithner has said in recent public appearances that an agency recommendation for winding down the two taxpayer-owned mortgage companies could be released in coming weeks. It hasn’t yet been determined whether the plan, likely to be a broad outline rather than a detailed prescription for legislation, will be released that soon, the people said.

In timing its proposal, Treasury must balance political and economic realities. Presidential campaign politics and deep divisions between Democrats and Republicans in Congress make it unlikely that mortgage-finance reform will be enacted this year. At the same time, the lack of a clear blueprint is contributing to continued weakness in the housing market, said Karen Dynan, a former economist with the Federal Reserve Board of Governors.

“The uncertainty surrounding the future of the mortgage finance system has impeded the rebound of the housing market and the private housing-finance market,” said Dynan, who now serves as a vice president at the Brookings Institution. “It’s just really hard for the players to make decisions when you don’t know what the rules are going to be in the future.”

The two companies, which veered toward bankruptcy when the housing market collapsed in 2008, were seized by regulators and have drawn almost $190 billion in taxpayer aid. Fannie Mae and Freddie Mac became targets of at least 18 Republican bills seeking to reduce or eliminate the government role in mortgages.
Dominating the Market

The debate over the companies’ future has been complicated by their growing prominence in the housing market. As private investors have pulled back in the recession, Fannie Mae and Freddie Mac have come to own or guarantee 60 percent of outstanding U.S. residential mortgages. That has prompted the real estate industry to lobby Congress to move slowly on reducing the government’s role.

“There’s a lot of ideological chest-pounding about getting the government out of housing, but I think most people recognize that if it’s done in any precipitous fashion, it will have negative consequences for the American homeowner, consumer and economy,” said Jim Millstein, Treasury’s former chief restructuring officer, who is now chairman and chief executive officer of Washington financial advisory firm Millstein & Co.

Mitt Romney, the leading contender for the Republican presidential nomination, has criticized Fannie Mae and Freddie Mac and has called for more private capital in the mortgage market, but has not released specific plans.

‘Dysfunctional’ Politics

While some Republicans who initially called for immediate abolition of Fannie Mae and Freddie Mac now say they would accept a gradual wind-down, split party control of Congress stands in the way of resolving the matter in 2012.

“The political environment is dysfunctional,” Michael Barr, a University of Michigan law professor and former assistant Treasury secretary for financial institutions, said in an interview. “The presidential campaign is taking up all the oxygen. There’s almost no appetite for compromise on anything substantive.”

Geithner more than a year ago unveiled three options for weaning the mortgage market from its government dependence. He said in February that he expected to “lay out more detail” about the approach “in the spring.”

While a Treasury official said all options remain under review, the people familiar with the talks said the third option — the one with the largest government role — most closely resembles what the Obama administration is likely to propose.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 22:14:11

How can a “bank,” which is an inanimate institutional organization, fear something? Wouldn’t it be more appropriate to say something like “The Man Criminals Fear Most”? Why would an honest man have anything whatever to fear?

The Man the Banks Fear Most
Harold Meyerson
April 23, 2012

For three years, President Obama refused to launch 
a criminal investigation of Wall Street for its role in 
wrecking the economy—until New York Attorney General 
Eric Schneiderman compelled him to change course.

In February 2011, one month after he’d been sworn in as New York state’s attorney general, Eric Schneiderman sat down with the staff attorney who’d been delegated to track the negotiations that the 50 state attorneys general and the Obama administration were conducting with five of the country’s biggest banks. A few months earlier, the story had broken that the banks had been “robo-signing” thousands of notices foreclosing on homes. Instead of assessing how far behind in their payments the homeowners had fallen or seeking to modify the terms of their mortgages, the banks had employed junior staffers, some hired right off the street, to sign hundreds of foreclosure documents daily, though the banks’ title to many of the properties was uncertain. Even when the banks’ claims to ownership were clear, robo-signing violated numerous state laws requiring due diligence before a bank can foreclose on a home.

The scandal had prompted a number of banks—Bank of America most prominently—to suspend their foreclosures for a while. The Justice Department, the Department of Housing and Urban Development, and the state attorneys general had initiated talks with Bank of America, as well as JPMorgan Chase, Citibank, Wells Fargo, and Ally Financial to arrive at a settlement for these abuses. As the only state law-enforcement official with direct jurisdiction over Wall Street, Schneiderman had been named to the committee the attorneys general had established to negotiate with the banks. He asked his aide how the talks were going.

“I was told it was being handled,” he says. The administration, his aide informed him, had proposed that the banks come up with $20 billion for aggrieved homeowners and former homeowners. Schneiderman wasn’t satisfied. What documents, he asked, had been subpoenaed? None, he was told. Who’d been called in to testify? Nobody, he was told. Most important, what did the banks want in return for paying the penalty? The aide responded that the issue had never been raised. Schneiderman was shocked.

“This didn’t make any sense,” he says. “You can’t negotiate anything like this without knowing what you’re giving up. We get $20 for what? A tie clip? A car?”

Schneiderman had been a successful Wall Street attorney before he turned to public-interest law and then served 12 years as the de facto leader of liberal Democrats in the New York Senate. He’d represented banks and exchanges in complex fraud litigation. He knew that the banks wouldn’t enter negotiations without expecting, at the very least, immunity from any lawsuits emanating from the robo-signing.

“I had friends at the banks,” he says. “I had friends who were lawyers for the banks. I talked to them, and they said they wanted a release from everything.”

It wasn’t just foreclosing on homes without the required due diligence on which the banks wanted a pass. They wanted a release from any crimes they may have committed in originating unsound mortgages and then bundling those mortgages into securities that they assured investors were safe, even when they knew otherwise, and unloading them at a profit—at times, even betting against them. They wanted a release, that is, from all liability for the misconduct that had plunged the United States into the deepest and most intractable recession since the 1930s.

Schneiderman’s manner is hardly that of a populist firebrand. Indeed, he has an impeccable Wall Street pedigree. His father, Irwin Schneiderman, was outside counsel for Drexel Burnham Lambert in the 1980s, where he helped Michael Milken devise the junk-bond trade. A close family friend was Joseph Flom, the legendary attorney who became corporate America’s primary adviser on takeovers, both friendly and hostile. At 57, trim and quietly combative, Eric Schneiderman looks every bit the discreet, no-nonsense counselor whom a bank would want to represent it in complex litigation. (A sign on his desk reads, “Assume nothing.”) Amicably divorced for the past dozen years from political consultant Jennifer Cunningham (she managed his 2010 campaign for attorney general), father of a 19-year-old daughter with whom, friends attest, he’s famously close, Schneiderman has a regular-guy demeanor that belies his history of taking on—and often winning—impossible battles.

Comment by Happy2bHeard
2012-04-23 08:33:22

For three years, President Obama refused to launch 
a criminal investigation of Wall Street for its role in 
wrecking the economy—until New York Attorney General 
Eric Schneiderman compelled him to change course.

In February 2011, one month after he’d been sworn in as New York state’s attorney general,

In February 2011, Obama had been in office 2 years.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 22:31:37

It sounds as though the CFPB is planning to make it more challenging for bankers to screw over their customers.

U.S. may require banks to provide more information on mortgages
The Consumer Financial Protection Bureau is considering tough rules for home loan servicers, including more easily understood statements and warnings before interest rate changes.
April 10, 2012|By Jim Puzzanghera, Los Angeles Times

“It’s time to put the service back in mortgage servicing,” says Richard Cordray, director of the Consumer Financial Protection Bureau.

“It’s time to put the service back in mortgage servicing,”… (Alex Wong, Getty Images)

WASHINGTON — The federal government’s consumer finance watchdog is considering tough new rules on banks to provide homeowners with more — and clearer — information about their mortgages.

Banks could be required to make monthly statements easier for customers to understand. And they may have to provide borrowers with warnings before their interest rates adjust. In addition, the rules could make it easier for homeowners to avoid foreclosure.

Richard Cordray, director of the Consumer Financial Protection Bureau, will outline the possible measures Tuesday as part of an effort to bring greater transparency to the mortgage-servicing industry. The goal is to make banks and other servicers more accountable in light of the controversy over botched foreclosure paperwork, the agency said.

The rules would extend to all mortgage servicers, and some are similar to changes agreed to by the largest institutions as part of a recent settlement with federal and state officials.

“It’s time to put the service back in mortgage servicing,” Cordray said.

Among the rules under consideration is a requirement for servicers to make a good-faith effort to contact homeowners who fall behind on their mortgages to let them know about options to avoid foreclosure. Institutions may also be required to provide “direct, easy and ongoing access to employees who are dedicated and empowered to help the troubled borrowers.”

The agency said it would seek input from consumers and the financial industry before formally proposing rules this summer. It plans to finalize the rules in January.

Several of the proposals are similar to changes the five largest mortgage servicers agreed to implement as part of the recent $25-billion settlement with federal officials and attorneys general from California and 48 other states over so-called robo-signing and other foreclosure abuses.

Those banks — Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. — service about 55% of all U.S. mortgages. The new rules would codify the changes in federal regulations and extend them to all servicers.

The five large servicers agreed to measures to provide clearer information to customers, such as monthly bills that show unpaid principal, fees and charges. The servicers also promised to improve the handling and accuracy of customer data, including applying payments to accounts within two days and promptly fixing errors.

In addition, the servicers agreed to take more steps to help homeowners avoid foreclosure. Those included providing a single point of contact to customers to prevent bureaucratic runarounds and to hold off on foreclosure proceedings while a homeowner is being considered for a loan modification.

The consumer bureau is considering requiring all servicers to immediately credit payments to homeowners’ accounts and to quickly correct errors in their accounts. Servicers could be required to acknowledge within five days that a homeowner has contacted them about an error, and they may have to finish investigating it within 30 days.

“The mortgage-servicing rules we are considering reflect two basic, common-sense principles: no surprises and no runarounds,” Cordray said. “For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress.”

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 22:37:48

To Combat Spanish Recession, Prostitutes Won’t Service Banksters
By Mark Kernes
Apr 03rd, 2012 07:43 AM

MADRID, Spain—It’s been a long time since we graduated college, and what with the push to sanitize everything kids see and hear, we’re not sure if English or drama courses are still teaching Aristophanes’ classic play Lysistrata.

The word literally means “army-disbander,” and in the play, the women of ancient Greece, headed by the activist Lysistrata, want to force their men-folk to stop fighting the seemingly interminable Peloponnesian War, and they figure the best way to do that is to withhold sex from them. The women even seize the state treasury at Acropolis to prevent the war from being further funded. In short, it’s both an anti-war and a pro-female empowerment play, which is still occasionally performed since its messages are timeless.

But times change, even if people usually don’t, and in Spain, since the beginning of the current Great Recession, banks have foreclosed on thousands of citizens’ homes, made refinancing more difficult, and generally have been stingy about granting loans and other financial instruments.

And Spanish women have taken notice.

According to an article on DigitalJournal.com, Spain’s largest trade association of “luxury escorts” have gone on strike against any of their clients who happen to be bankers. In other words, no nookie for them—until they “return to providing credits to Spanish families and also small- and medium-sized businesses.”

The movement started when one of the prostitutes reportedly refused to service one of her banker-clients until he agreed to grant her a line of credit and a loan and “fulfill[ed] his responsibility to society”—and the concept spread quickly throughout the escort community.

Spain, according to the latest reports, is deeply in recession, with half of all youths unemployed, the economy shrinking at a rate of 2.7 percent, and “austerity” measures that will shortly leave the country with an expected 6.6 percent deficit. Add to that a Wall Street Journal report that “credit conditions remain tight as banks still face the legacy of a real-estate bubble” and Spanish hookers have a lot to worry about … and protest.

“We are the only ones with a real ability to pressure the [banking] sector,” a spokeswoman for the escorts’ association said in late March. “We have been on strike for three days now and we don’t think they can withstand much more.”

Indeed; the spokeswoman reported that some of the bankers had sought to get laid by pretending to be architects or engineers, but “they don’t fool anyone since it has been many years since these professionals could afford rates that start from 300 Euro [$400 U.S.] an hour,” she said.

As Spain’s Minister of Economy and Competitiveness sees it, however, the problem is that the escorts aren’t well-enough regulated, and that’s made it difficult for the government to try to force the ladies to “sell their wares” to anyone willing to pay.

“In fact, there has not even been a formal communication of the strike,” he said. “The escorts are making use of their right of admission or denying entry to … well, you know. So no one can negotiate.”

What a shame that America’s own filles de joie can’t (or won’t) take a hint from their compatriots abroad; who knows how long the recession would continue if they did?

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 22:42:13

How does Wachter expect FedGov to continue propping up housing prices without a fully-federalized mortgage lending system?

After the bailout: few fans but no fix for Fannie and Freddie
Mon Apr 23, 2012 1:00am EDT

* Democrats and Republicans want to replace mortgage giants

* No quick action from Congress expected in election year

By Margaret Chadbourn

WASHINGTON, April 23 (Reuters) - In considering how to fix the ailing U.S. housing market, Republicans and Democrats in Washington have found a rare point of agreement: they would prefer life without failed mortgage giants Fannie Mae and Freddie Mac.

But even with agreement that the system is broken, it is unlikely Congress will soon tackle the mammoth task of winding down two entities that have cost taxpayers more than $150 billion since their bailout in September 2008. Fannie and Freddie now support about 60 percent of all new U.S. home loans.

Already, lawmakers have taken tentative steps to scale back Fannie Mae and Freddie Mac’s involvement by reducing the size of loans that they can guarantee. Republicans and Democrats have unified behind preserving affordable homeownership.

But more dramatic actions could be politically treacherous in an election year. Home buyers still rely on the government backstop in nine of 10 new mortgages, and the fragile market must be weaned slowly from its dependence on federal programs providing financial backing.

Changing the present system might prove hard for lawmakers who are wary of risking harm to the housing recovery. Some would fear alienating the deep-pocketed housing lobby and various consumer groups rallying around the issue.

“There’s not a politician out there who is willing to take the risk of proposing something with a short transition period that would potentially be blamed for cratering the housing market,” said Douglas Elliott, a Brookings Institution fellow and former investment banker.

The Obama administration will release an updated plan in coming weeks that is expected to further define its goals for the federal government’s role in the housing finance system, according to sources familiar with the matter.

The administration in February 2011 offered three big-picture options for overhauling the mortgage market.

One would be to eliminate federal involvement altogether, but most experts say this could upend the housing market.

Another option creates a system that would help some types of low-income and veteran buyers and also provides an expanded guarantee the government would offer mostly in times of financial distress.

A third would include government reinsurance for some types of mortgages, but only if lenders first purchased a guarantee from a private insurer.

The administration has not endorsed a legislative plan at this point, but continues to consider these options, according to a U.S. Treasury official.


Susan Wachter, real estate and finance professor at the University of Pennsylvania’s Wharton School, believes the time may have come for “testing the withdrawal of a fully federalized system.”

It’s untenable for the U.S. to continue on a path in which we rely on a federal housing finance system,” she said.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 22:47:42

On the advice of Glenn “Give It Your Best Shot” Hubbard, Romney may turn out to be a big GSE finance guy. So much for Republican free market principles.

Romney speaks! My Q&A with Republican presidential front-runner Mitt Romney
By James Pethokoukis
March 31, 2012, 9:41 am

PETHOKOUKIS: Speaking of housing, Glenn Hubbard has a plan to use [Fannie Mae and Freddie Mac] for a mass refinancing of GSE mortgages. Do you think there is any merit in that idea?

ROMNEY: I am studying that. As you know, Glenn is an adviser of mine, and there are some elements, which I am forced to consider when I study a program like that. One is not to encourage moral hazard where we encourage people to believe they’re going to get bailed out. And secondly, not to break the contract which had existed with any party to the mortgage document. It would be inappropriate to throw a huge loss to some party which had relied upon the existing practices of the marketplace. That being said, I am always interested in new ideas and will give it a careful review but no conclusion at this stage.

Comment by Happy2bHeard
2012-04-23 08:39:45

Mitt has been running for President for 5 years and the best he can do is give it a review. We have part time posters here who could give him a full blown plan.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-22 23:30:10

Rumors of Occupy Wall Street’s untimely demise are greatly exaggerated.

Occupy Wall Street’s Declaration of Independence
Sherman Stein in Politics, Occupy Wall Street
14 hours ago

There have been complaints that the Occupy Movement has no clearcut agenda. I think it has one. In fact, I’ve just written it. I’ve set it in the tone of the Declaration of Independence.


When in the course of human events, it becomes necessary for the economically weaker to alter the bonds which have connected them with the economically stronger, and to assume a separate and equal status to which the laws of nature entitle them, a decent respect for the opinion of mankind requires that they should declare the causes which impel them to this alteration. Our grievances do not concern a foreign prince but a minority of our fellow citizens.

For this reason, let the facts be submitted to the candid world.

They have so corrupted the political dialog that even the words “government” and “tax” have only negative connotations.

They have gone to such extremes that they view even the eradication of a tax loophole as a new tax.

They have opposed the establishment of the bureau whose only purpose is to protect the middle class, the poor, and the homeless from exploitation.

They have shaped the tax code so that wealth moves from the bottom to the top of the economic ladder. Consequently, the total demand for goods and services has been so reduced that we cannot maintain the equilibrium of a robust economy.

They have not distinguished between good taxes and bad taxes, and have gone so far as to sign a pledge not to vote for any tax.

They have opposed the public financing of candidates to high office.

They have corrupted elections by allowing corporations and wealthy donors to make arbitrarily large donations and to do so in secrecy.

They have allowed our infrastructure to decay while spending lavishly on a military budget larger than the rest of the world’s combined.

They have supported legislation to make abortion illegal, as if this country had not already suffered the consequence of such a prohibition.

They have opposed single payer government-sponsored health care as socialistic.

They have diverted the financial sector from supporting improvements in our lives to the invention of instruments with no discernible benefit to the community.

In every stage of these actions we have sought redress by the political process, but our repeated petitions have been answered only by repeated injury. We have appealed to their sense of justice and magnanimity, to the belief that we form a single community. They have been deaf to the voice of justice and consanguinity.

We, therefore, the victims of an ideology that views government as if it were an obstacle imposed by a foreign despot rather than as an instrument through which we the people can enhance our lives, solemnly declare that we will unite to achieve a better world for the present inhabitants of this nation and for their descendents.

* We will seek to curtail the role of money in elections and in legislation.
* We will seek a tax code that no longer facilitates the movement of the nation’s accumulated wealth to a small minority but instead helps sustain a balanced economy.
* We will cultivate and support candidates for office who have consistently demonstrated support for our agenda.
* We will seek a universal health care system as good as that enjoyed by members of Congress.

For the support of this declaration, with a firm reliance on the belief that justice will triumph, we mutually pledge to work toward achieving these goals peacefully and with deliberate haste.

Comment by Professor Bear
2012-04-22 23:37:39

April 22, 2012, 11:56 p.m. EDT
China manufacturing shrinks at slower pace: HSBC
Initial PMI reading of 49.1 still marks contraction
By V. Phani Kumar, MarketWatch

A man drives past an assembly line at an SAIC Motor automobile factory in Shanghai.

HONG KONG (MarketWatch) — Business conditions in China improved for manufacturers in April from levels seen in the previous month, although activity in the sector continued to decline, data released by HSBC showed Monday, prompting calls for Beijing to loosen its policies.

HSBC’s preliminary “flash” Purchasing Managers’ Index rose to a two-month high of 49.1, compared with a final reading of 48.3 in March, as the rate of output, new-order booking and employment all eased at a slower pace.

However, the reading remained below 50, indicating contraction, rather than expansion for readings above 50.

To satisfy Chinese consumers’ increasing demand for milk products, companies like China Modern Dairy are importing higher-yielding foreign cows and using U.S. factory-farming techniques.

“This suggests that the earlier easing measures [from Beijing] have started to work, and hence should ease concerns of a sharp growth slowdown,” HSBC chief China economist Hongbin Qu said in a statement accompanying the data release.

HSBC also noted that the backlog of work expanded and that input prices saw inflation, although the rate of increase for both indicators declined.

“The pace of both output and demand growth remains at a low level in an historical context, and the job market is under pressure. This calls for additional easing measures in the coming months. We expect monetary and fiscal easing to speed up” in the second quarter, Qu said.

Comment by Professor Bear
2012-04-22 23:39:50

April 23, 2012, 12:06 a.m. EDT
Black weekend for Europe economic, monetary union
Commentary: French election, German suit threatens Merkel’s strategy
By David Marsh, MarketWatch

LONDON (MarketWatch) — It’s been a black weekend for economic and monetary union (EMU). The first round of the French presidential elections has torpedoed German Chancellor Angela Merkel’s strategy for guiding cash-strapped EMU members out of trouble. The euro area’s No. 2 creditor country after Germany, the Netherlands, is without a functioning administration after the government fell on Saturday in another row over shoring up the single currency’s faltering framework.

Germany’s querulous Bundesbank president, Jens Weidmann, again lined up his heavy guns on the European Central Bank, saying it’s up to governments, not the ECB, to alleviate the strains in EMU. Oh yes … the Bundesbank is being sued by a southern German lawyer, backed by some of the country’s best-heeled private family companies, claiming that the German central bank is taking liberties with taxpayers’ funds through the ECB’s Target-2 payments system.

True, the International Monetary Fund at its spring meeting in Washington lined up $430 billion in extra resources to add to bailout financing for hard-up euro (EURUSD -0.03%) members. But the money is bound to be tied to conditions from the emerging-market economies that will weaken further the hold of Western countries on world economic governance.

Not a propitious time for Merkel. After finishing second in the first stage of the French poll, her preferred candidate, incumbent Nicolas Sarkozy, is almost certain to move his campaign still further to the right to take votes in the second round on May 6 from third-placed Marine Le Pen, head of the ultra-populist National Front — who actually wants France to quit EMU altogether. This will mean further attacks on the tough “fiscal pact” Merkel wishes to enshrine as EMU’s guiding framework. François Hollande, the Socialist candidate who is now clear favorite to become France’s next president, has already pledged to renegotiate the agreement. So Merkel’s ambitions lie in shreds.

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