The Housing Bubble

Let’em crater.

Updated: 7:37 a.m. Sunday, July 22, 2012 | Posted: 7:34 a.m. Sunday, July 22, 2012

US poverty on track to rise to highest since 1960s

By HOPE YEN

The Associated Press

WASHINGTON —
The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

Census figures for 2011 will be released this fall in the critical weeks ahead of the November elections.

The Associated Press surveyed more than a dozen economists, think tanks and academics, both nonpartisan and those with known liberal or conservative leanings, and found a broad consensus: The official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent. Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest since 1965.

Poverty is spreading at record levels across many groups, from underemployed workers and suburban families to the poorest poor. More discouraged workers are giving up on the job market, leaving them vulnerable as unemployment aid begins to run out. Suburbs are seeing increases in poverty, including in such political battlegrounds as Colorado, Florida and Nevada, where voters are coping with a new norm of living hand to mouth.

“I grew up going to Hawaii every summer. Now I’m here, applying for assistance because it’s hard to make ends meet. It’s very hard to adjust,” said Laura Fritz, 27, of Wheat Ridge, Colo., describing her slide from rich to poor as she filled out aid forms at a county center. Since 2000, large swaths of Jefferson County just outside Denver have seen poverty nearly double.

Fritz says she grew up wealthy in the Denver suburb of Highlands Ranch, but fortunes turned after her parents lost a significant amount of money in the housing bust. Stuck in a half-million dollar house, her parents began living off food stamps and Fritz’s college money evaporated. She tried joining the Army but was injured during basic training.

Now she’s living on disability, with an infant daughter and a boyfriend, Garrett Goudeseune, 25, who can’t find work as a landscaper. They are struggling to pay their $650 rent on his unemployment checks and don’t know how they would get by without the extra help as they hope for the job market to improve.

In an election year dominated by discussion of the middle class, Fritz’s case highlights a dim reality for the growing group in poverty. Millions could fall through the cracks as government aid from unemployment insurance, Medicaid, welfare and food stamps diminishes.

Shadow inventory still massively inflated…. and climbing.

http://img84.imageshack.us/img84/5382/69208773.jpg

Ohbewanna new healthplan: Long Island College Hospital laid off 150 employees on Friday in a major bloodletting at the ailing medical institution.

http://www.brooklynpaper.com/stories/35/30/dtg_lichlayoffs_2012_07_20_bk.html

Dear HBB,

Four years ago I dashed off a quick post to Ben’s forum, threw some tea down my throat, and headed up the mountain to work on my irrigation system. It didn’t turn out so well for me that day, but in the aftermath of a horrific bear attack you guys came through like champs.

I’ve written a book about my misadventure and would like to share the part about the “ursadent” with all of you who so nicely contributed to my reassembly and rehabilitation. If you read the blog regularly you’ve probably noted, I’m back– and I’m just as ornery as ever.

This is my anniversary thank you to everyone. And especially to Ben for his lifesaver of a blog!

Go to:
ursadent.com
Choose: Special edition for HBB Members
Password at the prompt is: HBB

With special thanks to ArizonaSlim for setting up this nifty website.

I, for one, enjoyed the bubble. No lie!

The bubble in real estate allowed me to play rich for more than a dozen years. That is half a career; it was fun to make money faster than I could spend it. I got to see my kids growing up with mom and I both at home, pay for schooling, pay for surgeries, be a landlord, and own a paid for house at the end. It has been fun to play with hundreds of thousands of dollars. Too bad I did not have the good sense to stop. I coulda done better if I woulda stopped after selling two properties in 2006. Should have seen the writing on the wall then my kids would have modest college funds. But I guess I didn’t find the HBB soon enough.

So I took a couple $100+ thousand dollar hits after the market turned. Even on the house my wife foreclosed on. We got burned because we put our skin in the game. Put $80k down and $75k more in mortgage payments. Lost another 100k+ going all in in Utah on our dreamhome in hostile territory. The Mormon biship(prophet? more like profit) that sold us that place was the liar; he said we would fit in(as non-LDS in Cache County) and we foolishly believed him.

If some of you feel angry, blame also the greater fools who allowed me to lock in gains time and time again. Do you begrudge people who invest in stocks when they win or lose?

Never needed a Heloc; just needed to ring the register a few times, and cash out that equity. Cha-ching. Easy come easy go. When I sold vegetables my nickname was Easy Money. What’s next?

The chart which accompanies this article suggests California has the highest foreclosure rate in the U.S. as of June 2012, with one out of 288 housing units entering foreclosure. So much for the repetitively false theory that the housing market has bottomed out.

Eminent domain and mortgages
Negative enmity
An unusual plan to relieve struggling homeowners quickly makes enemies
Jul 21st 2012 | ONTARIO, CALIFORNIA | from the print edition

BRENT SCHULTZ, housing director for Ontario, points out the foreclosed houses on the residential streets of this sleepy town in south-east California. Their boarded-up windows and unkempt façades annoy the neighbours. Having seen the value of their own properties plummet, in some cases by 50% or more, householders do not need eyesores next door.

The crash hit San Bernardino County, of which Ontario is one of the larger cities, particularly hard. Nearly half the mortgages in the county are “underwater”, meaning that the value of the outstanding loan exceeds the market value of the property, according to Greg Devereux, the county’s chief executive. The local foreclosure rate was among the highest in California in June, which in turn had the highest rate among America’s states.

So the county and two of its cities (including Ontario) are considering an innovative proposal: to use the powers of eminent domain to seize underwater mortgages from investors and chop them down to size. “Eminent domain”, a power implied by the fifth amendment to the constitution, grants governments the right to make compulsory purchases of private property for public use. A state may, for example, forcibly eject a recalcitrant landowner to make way for a railway, so long as he is compensated at fair value.

Mortgage Resolution Partners (MRP), a firm based in San Francisco, thinks that power could be extended to buy up mortgages. Large numbers of struggling homeowners hamper economic recovery, runs the argument; relieving them, with proper compensation for the mortgage-holders, would satisfy the constitutional requirement for “public use”.

Under its proposal, MRP would work with officials to identify mortgages ripe for seizure; at first, only homeowners who were up-to-date on their repayments would be eligible. MRP would drum up private investment to finance the mortgage purchases at prices determined in court (as in all eminent-domain cases). Once the loan is bought, the principal would be cut and the repayment terms eased. A win for the homeowner; a win for the local economy, thanks to growing consumer spending and (with luck) a revived construction industry; and a win for MRP, which earns a juicy fee from each transaction.

But there is always a loser under eminent domain. And in this case the loser is not a crank in a shed hurling abuse at railway planners, but wealthy investors in mortgage-backed securities.
…

FEW SAN DIEGANS TRY FORECLOSURE REVIEW
Some who put in requests aren’t hopeful; many avoiding forms out of fatigue, distrust
Written by Lily Leung
12:01 a.m., July 22, 2012
Updated 9:42 p.m. , July 20, 2012

Imagine trying to move on from a foreclosure, and years later, getting a letter asking if you’d consider a free review of that painful event. Would you take it or leave it?

It appears few are saying yes to those offers, which lenders were required to send out under government order. Of the 4 million people who may be eligible for reviews, only 5.3 percent have actually submitted for one.

And many of those who have put in requests, like Trevor Richardson of Mission Valley, aren’t hopeful it will make much of a difference in the end.

“If it works, it works … I totally thought it was a long shot,” said Richardson, who was in the foreclosure process in 2009.

Richardson, 41, is among a legion of ex-borrowers who have felt strung along and slapped around by lenders. They’re fatigued and have lost trust in the same corporations that have been known to repeatedly lose documents from homeowners seeking loan modifications and improperly approve paperwork in what became the robo-signing crisis of 2009 and 2010.

Borrower fatigue is a key topic in a June report from the U.S. Government Accountability Office. That report mainly discusses design flaws in the foreclosure-review process that may have deterred people from participating.

Government auditors maintain that the federal agencies that mandated the reviews — the Federal Reserve, Office of the Comptroller of the Currency and the Office of Thrift Supervision — failed to carefully plot out how the review letters would be sent out and by whom.

Many borrowers have said they initially thought the review letters were junk, possible scams. Others who verified their authenticity were still turned off by the offers because they associated bad memories with the senders — the lenders.
…

Gentle Readers,
Still no perp walks? Hmmm.
Regards,
Roidy

Whu whu wait. An article on abandoned homes in upstate NY? NO WAY! There was never a bubble there. This is soooooo unexpected.

http://www.democratandchronicle.com/article/20120722/NEWS01/307220027/Vacant-homes-Rochester?odyssey=tab|topnews|text|Home

If ya have some time,listen to my friend Lola starts at 330-6pm ET….tell me what you think..

http://kzsulive.stanford.edu/

So here’s one for the HBB record books. My BIL is buying a house (outside NYC) because his wife recently had a stillborn and they don’t want to bury the ashes at a rental.

Oh bugger — it looks like another miserable week ahead for Wall Street investors. How many more rotten weeks like this can The Street endure before the entire world gives up on the stock market?

July 22, 2012, 9:00 a.m. EDT
U.S. economy moving sideways again
Momentum unlikely to pick up much in third quarter
By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — All evidence points to another slowdown in the U.S. economy and the government is expected to make it official on Friday.

The key economic report of the week, gross domestic product, is likely to show growth fizzled in the second quarter. The U.S. probably grew at a tepid 1.3%, down from 1.9% in the first quarter and 3.0% in the last three months of 2011, Economists surveyed by MarketWatch estimate.

That’s bad news for millions of Americans who still cannot find work several years after the last recession officially ended. Such a slow growth rate reflects an economy incapable of adding jobs fast enough to dramatically lower the nation’s 8.2% unemployment rate.

Yet with the second-quarter now in the rearview mirror, the more critical question is whether sluggish growth will persist in the third quarter — July through September. The short answer: probably.

The headwinds from overseas are well known. Europe still has not resolved a financial crisis that has sapped its economy. And growth in China, the world’s second largest economy, has also slowed.

The darker global picture has undercut American exports, a major source of growth over the past year.

Anxiety in the U.S. is also growing, for different reasons. Many businesses are increasingly worried about a so-called fiscal cliff — large spending cuts and tax increases set to take effect Jan. 1 unless squabbling Democrats and Republicans in Washington agree to change current law.

The confluence of concerns at home and abroad have undermined the confidence of American consumers and businesses. The result: Less confident consumers have cut back on spending while businesses are delaying major investments. Retail spending, for example, has fallen three straight months for the first time since the recession.

That’s a recipe for very slow growth.

“Businesses are being very careful in regards to investment. Unemployment remains elevated. And consumers are still very cautious,” said economist Sam Bullard at Wells Fargo. His firm projects GDP will rise only slightly in the third quarter to about 1.4%.
…

We’re Not Even Close to a Robust Recovery
Here are five reasons why.
By Nouriel Roubini|Posted Sunday, July 22, 2012, at 7:30 AM ET
A Borders Books customer walks by signs advertising a going out of business sale at a Borders Bookstore on July 22, 2011 in San Francisco, California.
How close is a recovery? Not close.

Photograph by Justin Sullivan/Getty Images.

While the risk of a disorderly crisis in the eurozone is well recognized, a more sanguine view of the United States has prevailed. For the last three years, the consensus has been that the U.S. economy was on the verge of a robust and self-sustaining recovery that would restore above-potential growth. That turned out to be wrong, as a painful process of balance-sheet deleveraging—reflecting excessive private-sector debt, and then its carryover to the public sector—implies that the recovery will remain, at best, below-trend for many years to come.

Even this year, the consensus got it wrong, expecting a recovery to annual GDP growth of better than than 3 percent. But the first-half growth rate looks set to come in closer to 1.5 percent at best, even below 2011’s dismal 1.7 percent. And now, after getting the first half of 2012 wrong, many are repeating the fairy tale that a combination of lower oil prices, rising auto sales, recovering house prices, and a resurgence of U.S. manufacturing will boost growth in the second half of the year and fuel above-potential growth by 2013.

The reality is the opposite: For several reasons, growth will slow further in the second half of 2012 and be even lower in 2013—close to stall speed. First, growth in the second quarter has decelerated from a mediocre 1.8 percent in January-March, as job creation—averaging 70,000 a month—fell sharply.
…

Is it safe to assume the fiscal cliff is covered by the message of the placard that used to hang on my grandmother’s kitchen wall:

4 Reasons To Be Concerned About The Fiscal Cliff
July 22, 2012

Despite all the headlines lately warning about the pending fiscal cliff, I have yet to meet an investor who doesn’t expect Washington to arrive at a last minute deal later this year to avert the tax hikes and spending cuts set to take effect in January 2013.

Just look at recent economic forecasts: The consensus expects U.S. gross domestic product growth, for instance, to modestly accelerate in 2013 and isn’t discounting in a high likelihood of either tax hikes or spending cuts. And I have to admit that I too believe the most likely scenario is another 11th hour compromise that, at the very least, postpones the bulk of the tax hikes and spending cuts.
…

Is it safe to assume that:

Don’t get caught with your pants down when the Fed makes its QE3 announcement!

Front Running QE3
July 22, 2012

The market is running on the hopes of QE3 being released by The Fed. Let’s have a look at five asset classes in the hopes of gaining some perspective into movements of those markets. I want to look at the prior QE1 and QE2 time periods and see how the markets reacted prior and after the announcement. The five asset class ETFs are S&P 500 (SPY), Copper (JJC), Soft Commodities (JJG) ETN, and I am including oil ($WTIC) as the fourth and Gold (GLD) as number five. From here we can make an argument whether QE3 will even be a consideration and if so, what can we expect from the markets based on two prior QE releases.
…

opinion
Editorial: “Fiscal cliff” looming if Washington doesn’t act
Lawmakers appear to be once again waiting until the last minute to address economic disaster, which could happen on Jan. 1, 2013.
Posted: 07/22/2012 01:00:00 AM MDT
By The Denver Post

After years spent “kicking the can down the road” when it comes to addressing the federal debt, lawmakers may soon find out what happens when the road disappears.

We’re talking about the “fiscal cliff” looming for the United States on Jan. 1.

The situation takes its name from the combined negative impacts on New Year’s Day from the expiration of the Bush tax cuts and a payroll tax break as well as more than $1 trillion in mandatory budget cuts.

Already, Morgan Stanley has warned, the prospect is hampering the economy.

The dysfunction that defines Washington is demonstrated by lawmakers’ inability to accomplish anything in the way of meaningful fiscal policy without the clock ticking close to zero.

And politicians from both parties are content to wait until after the November elections to address the issues in the “lame duck” session.

According to The New York Times, Senate Democrats are considering a plan to let the Bush tax cuts expire so that Republicans wouldn’t be in violation of their “no new taxes” pledge should the tax breaks be reinstated for all but the wealthiest Americans.

Speaking to the Senate banking committee on Tuesday, Federal Reserve Chairman Ben Bernanke said Congress must come up with a plan that addresses long-term sustainability while considering the state of the current economy.

“Doing so earlier rather than later would help reduce uncertainty and boost household and business confidence,” he said.
…

The story about the Spanish debt fears seems frozen in time. You’d think the markets would digest it and move on, but the evidence so far suggests otherwise.

Bond Rates in Spain Inch Higher Amid Fears
By JAMES KANTER and RAPHAEL MINDER
Published: July 20, 2012

BRUSSELS — Spanish borrowing costs rose to worrisome levels for a second day on Friday as the government said the economy would remain in recession through 2013 and the region of Valencia would need state financing.

The yield, or interest rate, on 10-year Spanish sovereign bonds was at 7.185 percent, having crept above 7 percent on Thursday — a level that many analysts fear could shut Spain out of public markets and eventually lead to a full-scale bailout.

Bond yields spiked and the IBEX stock index fell after José Ciscar, the vice president of Valencia’s regional government, said that it would request an unspecified amount of state aid to meet its debt-refinancing obligations, as well as to pay suppliers of health care and other basic services. Essentially, Valencia became the first region to make an official plea for help to the Spanish government.

At the same time, euro zone finance ministers agreed Friday on an interim payment for Spain’s troubled banking sector of 30 billion euros, or $37 billion. Approval was expected after the German Parliament signed off on the aid package Thursday.

The loan is “warranted to safeguard financial stability in the euro area as a whole,” the ministers said in a statement. The goal, they said, was the “return of all parts of the Spanish banking sector to soundness and stability.”

The ministers also agreed that loans for Spanish banks could amount to as much as $123 billion. At a summit meeting of European Union leaders in June, it was agreed that some of those funds might be disbursed directly to banks in vulnerable countries rather than to states once more oversight of their banking sectors was in place.

That agreement helped rein in borrowing costs for Spain for a time. But costs have been edging higher because of concerns about how the bailout will work and about the economy in Spain, where mass protests have occurred this week against austerity and other changes endorsed by Prime Minister Mariano Rajoy.

The treasury minister, Cristóbal Montoro, said Friday that Spain’s recession would drag into 2013, with the economy contracting 0.5 percent next year, compared with a previous forecast of 0.2 percent growth.
…

Eurozone crisis: Euro slumps on Spain fears despite EU agreeing bank rescue

• Finance ministers stress that the Spanish government will remain on the hook for the loan
• Valencia request for help from central government spooks markets
• Euro tumbles to 3 1/2 year low against sterling
• Spanish 10-year bond yields hit new euro era high

Julia Kollewe and Nick Fletcher
guardian.co.uk, Friday 20 July 2012 02.23 EDT

Flags of the EU member states fly outside the European Parliament in Brussels on July 19, 2012. Eurozone finance ministers will hold a teleconference tomorrow to finalise a Spanish bank bailout deal, Luxembourg Prime Minister and Eurozone President Jean-Claude Juncker said.
Flags of the EU member states fly outside the European Parliament in Brussels. Eurozone finance ministers will hold a conference call at lunchtime to finalise a Spanish bank bailout deal. AFP PHOTO/ GEORGES GOBET

The announcement earlier by the ECB that it would no longer accept Greek sovereign bonds as collatoral - as of next week - has caused some confusion and, it would seem, no little consternation. It prompted Greek prime minister Antonis Samaras to contact members of the Troika, reports Helena Smith in Athens.
…

Markets fear for Spanish economy as local governments seek financial aid

ECB president insists the eurozone will not collapse as Murcia becomes latest region to request funding

Giles Tremlett Madrid and Julia Kollewe
guardian.co.uk, Sunday 22 July 2012 17.39 EDT

Park Guell in Barcelona – Catalonia is expected to join several other regions in asking for financial aid from Spain’s central government. Photograph: Jorg Greuel/Getty Images

Spain’s regional woes are expected to weigh on financial markets this week after a second local government in three days asked for state aid, increasing fears that the eurozone’s fourth largest economy will be forced to seek a full-blown rescue.

On Sunday Murcia became the latest region to admit it needed central government help, after European finance ministers waved through a €100bn (£77.8bn) recapitalisation of Spanish banks on Friday. Several other regions are expected to follow, with Catalonia reportedly unable to pay the interest on €48bn of borrowings.

Murcia’s president, Ramón Luis Valcárcel, said he expected the south-eastern region to ask for up to €300m from Madrid as it struggled to refinance debt and cover its deficit.

“Don’t imagine they are going to simply make a present of the money,” he said, warning that Spain’s prime minister, Mariano Rajoy, would impose strict conditions.

Murcia joins the far larger region of Valencia – which flagged up a cash shortage on Friday – on the list of regional governments that have said they will tap an €18bn liquidity fund set up by the central government just 10 days ago.

Several others among Spain’s 17 semi-autonomous regions are expected to follow. They include the two biggest regions, Catalonia and Andalucia, as well as central Castilla La Mancha.
…

Where does the buck stop at JPMorgan?

I noticed that at Barclay’s, it stops at the CEO’s desk.

JPMorgan Blaming Marks on Traders Baffles Ex-Employees
By Dawn Kopecki - Jul 16, 2012 2:01 PM PT

JPMorgan Chase & Co. (JPM)’s assertion that traders at its London chief investment office may have intentionally mismarked trades, masking losses that total at least $5.8 billion, makes little sense, according to former executives with direct knowledge of the unit’s operation.

The bank restated first-quarter results, paring profit by $459 million, in part because an internal review revealed that U.K. traders had priced their books “aggressively,” Mike Cavanagh, head of Treasury & Securities Services, said in a July 13 meeting with analysts. The mispricing made losses on a portfolio of credit derivatives look smaller than they were, and executives concluded that traders may have sought to hide the “full amount of losses,” JPMorgan said in a presentation.

JPMorgan requires traders to mark their positions daily so the firm can track their profits, losses and risk. An internal control group double-checks the marks against market prices monthly and at the end of each quarter, said three former executives from the CIO and a senior executive in market risk. The firm uses the control group’s prices, not what individual traders submit, to calculate earnings, making it difficult for one trader or trading desk to rig prices, the people said.

“We just have questions about whether the traders were doing what they need to do for accounting, which is put a mark on their positions where they think they can exit,” Cavanagh, who led the internal review, said on a conference call with reporters. “Instead, it felt more like they were pricing their marks a little bit more aggressively, but generally inside the bid-ask spread.”
…

Would any Millennials who happen to read this care to comment on whether the opinion expressed in this article is fair?

Are Millennials the Screwed Generation?
by Joel Kotkin Jul 16, 2012 1:00 AM EDT
‘Boomer America’ never had it so good. As a result, today’s young Americans have never had it so bad.

Today’s youth, both here and abroad, have been screwed by their parents’ fiscal profligacy and economic mismanagement. Neil Howe, a leading generational theorist, cites the “greed, shortsightedness, and blind partisanship” of the boomers, of whom he is one, for having “brought the global economy to its knees.”
…

There has never been a better time to own Treasurys! And this is great for Uncle Sam’s borrowing costs — win-win!

Bloomberg News
Treasury 5-Year Yields Fall to Record on Europe Crisis
By Daniel Kruger on July 21, 2012

Five-year Treasury note yields fell to a record low as data showed the U.S. economic growth slowing and investor concern Europe’s debt crisis is worsening led to increased demand for the safest assets.

U.S. government debt gained for a fourth consecutive week as yields on Spain’s bonds climbed to record highs relative to German bunds. The pace of economic expansion in the U.S. probably cooled, data next week may show. The Treasury will sell $99 billion of two-, five-and seven-year notes next week.

“Europe remains a big question,” said Priya Misra, head of U.S. rates strategy at Bank of America Merrill Lynch in New York, one of the 21 primary dealers required to bid on the securities. “Flight-to-quality bids will remain. We’re pricing in weak growth in the U.S.”
…

Check out what is on tap for Mormon Pioneer Day!

A Fed audit would be a great way to determine which recent Fed policies lie outside the bounds of their charter.

House Vote on Audit the Fed Bill Planned for July 24
July 20, 2012
AFP
By Ron Paul

Later this month Congress will have an unprecedented opportunity to force the Federal Reserve to provide meaningful transparency to lawmakers and taxpayers. H.R. 459, my bill known as “Audit the Fed,” is scheduled for a vote before the full Congress in July. More than 270 of my colleagues cosponsored the bill, and it has the support of congressional leadership. But its passage in the House of Representatives is only the beginning of the battle, as many senators and the president still don’t see the critical need to have a national discussion about monetary policy.
…

Screw the political pressure story. I want to known what laws were broken by Fed insiders, by whom and when.

Where in the U.S. Constitution does it say the Fed can do whatever it wants, especially to rob Peter in order to enrich Paul?

Ben Bernanke voices opposition to Ron Paul’s Fed-audit bill
By Alex Kane Rudansky / McClatchy Washington Bureau
Thursday, July 19, 2012 - Added 3 days ago

WASHINGTON - Federal Reserve Chairman Ben Bernanke, completing his second day of testimony on Capitol Hill, voiced his opposition Wednesday to a Republican-backed bill that would subject the Fed to outside auditors - and, he said, unhealthy political pressure.
…

Is it within the Fed’s mandate to financially engineer wealth transfer schemes?

The greater fools currently buying houses in the U.S. seem entirely clueless about the financial tsunami rapidly approaching the global economy.

GLOBAL ECONOMY WEEK AHEAD-No winners in race for growth medals
Mon Jul 23, 2012 12:30am IST

* Euro zone manufacturing may be stabilising at low level

* U.S. set for sluggish Q2 GDP as British recession drags on

* China fears euro zone headwinds will hit exports

By Alan Wheatley, Global Economics Correspondent

LONDON, July 22 (Reuters) - “Faster, Higher, Stronger” is the motto of the Olympics opening in London on Friday. “Slower, Lower, Weaker” would be a better description of the economic performance of many of the countries competing in the games.

None of the big names will look worthy of a place on the podium if forecasts for a raft of data due this week from the euro zone, the United States and Britain prove accurate.

Even China, the long-standing growth champion, is huffing and puffing.

And for all the growth hormones injected in the form of cheap central bank money, the global economy is likely to be running on the spot for some time yet given fears that the United States could fall off a fiscal cliff, the softer trend in China and, above all, the debilitating euro zone crisis.

July’s advance surveys of purchasing managers in the 17-nation single currency area, due on Tuesday, are expected to produce readings well beneath the boom-bust mark of 50, signalling recession. At best, the reports will show both manufacturing and services are at least stabilising.

Two other important early glimpses of how the third quarter is shaping up, Germany’s IFO business climate and Belgium’s leading indicator, are scheduled for Wednesday and are forecast to show a modest deterioration.

“Risks to the economic outlook and to the euro zone sovereign situation are stacked on the downside, and we see a significant probability of a rate cut by the ECB within the next three months,” said Riccardo Barbieri, chief European economist at Mizuho in London.
…

Polly:

“What is wrong with you these days? You have been in a particularly foul and accusative mood.”

Pardon me for my dismay at discovering criminals in high places can commit crimes with impunity.

HomePath
PALM BEACH COUNTY LISTINGS - 472 TOTAL

717 W 7TH ST
WEST PALM BEACH, FL 33404 PRICE REDUCED
List price:
$29,900

County records

Property Detail

Location Address 717 W 7TH ST
Municipality RIVIERA BEACH
Parcel Control Number 56-43-42-32-01-041-0050

Year Built 1959
Total Square Footage : 1150

Sales Information

OCT-1999 $41,000
FEB-2007 $110,000
OCT-2007 $154,500
DEC-2010 $0 FEDERAL NATIONAL MORTGAGE ASSN

I convinced myself to sell my remaining dividend stocks. One was yielding 10% and the other 4%. The 4% is at its all-time high and I have a good gain on it. The other one has a $300 gain, which is small but decent. I’m going to be happy to have $21,000 more cash sitting in my brokerage account this week!

Yeah Combo I might come around to your way of thinking that Cash is King.

I think there will be a selloff of dividend stocks in a few weeks. Wiley Coyote ran over the cliff and did not look down yet. Dividends taxed at ordinary rates will mean they become less attractive to own. The prices will tumble. My $4500 total gain might be miniscule, but I’m more concerned with getting back my principle!

I will not only have enough cash and T-bills to pay off my other half of my Roth conversion, but enough to sit out for a year or two from work if I need to. Realistically I will more probably have to sit out a month or two per year between engineering contracts and pay for break-leases once or twice a year the next few years.

The young supervisor put in the paperwork to renew my contract here in L.A. That’s good news. He told me if it’s approved I will know by the end of July or in early August. My current contract expires at the end of August. All I want is to continue through the end of September to lock in my ESPP of about 400 or more shares of my company stock. With plenty of cash I’m a free agent after that. And ZERO debt. No credit card, no stupid mortgage. Footloose and extremely mobile for the bad years ahead.

Here they come again! It`s like Night of the Living Deadbeats, these financial corpses won`t die.They`re crawling out of the shadows and ready to sign their name to another promissory note that they will blame someone for giving them to sign when they Re-Beat!

Posted: 4:28 p.m. Thursday, July 19, 2012

Post panel: Former homeowners get second chance at American Dream

By Kimberly Miller

Palm Beach Post Staff Writer

Homeowners forced into a short sale or foreclosure during the worst of the real estate bust are tip-toeing back into the housing market as their credit improves and lender prohibitions time out.

Palm Beach County real estate experts who spoke this week during a forum hosted by The Palm Beach Post said people who lost their homes in 2009 and 2010 are able to get new home loans under certain circumstances.

“Starting right now, this month, there is a big population of people who are starting to fit the timeline of those who can qualify after losing a home a few years ago,” said Skip McDonough, president of Family Mortgage in Jupiter, during the forum titled “Finding the up in a down market.”

While having a foreclosure or short sale on your record was once at least a three- to-seven-year sentence against buying another home, McDonough said the Federal Housing Administration as well as federal mortgage backers Fannie Mae and Freddie Mac have softened those rules.

It especially helps if the short sale or foreclosure is the only blemish on the homebuyer’s credit record, and if they have a good reason, such as job loss or family illness, for losing the property.

“For the next few months I believe the largest segment of buyers will be those who believed in the American dream and can now get back into the market,” McDonough said.

But whether they’ll find a home may be a different story.

Other panelists at the forum, including Realtors Association of the Palm Beaches President Bonnie Lazar, Platinum Properties Broker-Associate Kevin Kent and Brad Hunter, chief economist for Metrostudy in Palm Beach Gardens, said a shrinking inventory is driving up prices and increasing competition for homes.

About 65 people attended the forum, which was held Wednesday evening at The Palm Beach Post’s West Palm Beach office.

“Are there buys out there? Sure. Are there steals? No,” Lazar said. “If you were waiting for rock bottom, you missed it.”

According to a report released Thursday by the Realtors Association of the Palm Beaches, the inventory of single family homes in Palm Beach County fell to five months in June, down from 12 months during the same time last year.

AsifSarfi and his wife RubayaSarfi, who attended The Post’s forum, have seen the dearth of choices first hand. The couple, who married in October, have “passively” looked for a home for about two months.

“What I’ve found is stuff in good condition and that is a good value, cash buyers are coming in and swooping it up,” AsifSarfi said.

And the couple is concerned prices will go lower as more foreclosures — the so-called shadow inventory — are put on the market.

Hunter, of Metrostudy, said he expects prices may slip some, but it will be selective, falling mostly in neighborhoods where there was too much speculation during the run up to the real estate bust.

“There are a couple million homes nationwide in the shadow inventory and that’s not something that is trivial or something to be ignored,” Hunter said.

Still, Lazar said banks have learned from their earlier mistakes when they flooded the market with foreclosures and crashed prices. She believes even though there are hundreds of thousands of foreclosure cases still held up in Florida’s courts that banks will mete them out more strategically.

“I don’t think you’ll just see the inventory dumped on the market,” Lazar said. “(The banks) got smart and saw what they had done to themselves.”

People wishing to attend the next Straight from the Source panel discussion, on Jobs and the Economy, tentatively scheduled for Wednesday, Aug. 22 at 6 p.m. at The Palm Beach Post, should call (561) 820-4100 for reservations. The event is free of charge.

Where would a person earning more than $250,000 (not me) move his money to shelter from the communists?

Obama proposed putting a cap on the tax free income from municipal bonds. 35,000 people with incomes over $200,000 pay no income tax because they earn income from tax free municipal bonds.

Well so did a lot of people in 1978. But I don’t think even Communist Carter proposed capping munis back then.

I think it is a trial balloon from the one term president and not going to happen for a few years. Maybe never happen. But it goes to show that you should diversify among tax strategies. Roth IRAs are a great alternative.

I have other ideas that are alternatives but cannot mention them for certain reasons. Like they are my favorite fishing holes.

How is that decoupling theory that Gollum Sucks economist floated about the BRICs economies a few years back holding up these days to emerging data?

July 22, 2012, 9:20 p.m. EDT
Asia stocks drop as Europe worries weigh
By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) — Asian shares dropped on Monday, with investors reacting to renewed concerns about Europe’s debt problems.

Japan’s Nikkei Stock Average (JP:100000018 -1.26%) lost 0.9%, South Korea’s Kospi (KR:SEU -2.10%) fell 1.7%, and Australia’s S&P/ASX 200 index (AU:XJO -1.24%) slid 1.1%.

U.S. and European shares ended with losses Friday after investors retreated from stocks amid fear that Spain’s bank-sector bailout could widen to include aid for the government as well.

“We expect a continuation of the negativity in Asia on concerns over the external environment and how it will slow growth and financial flows to the region,” said Credit Agricole strategists.

Spain revised down its gross domestic product estimates for this year, next year and 2014, while Friday also brought reports that the region of Valencia will ask the central Spanish government for financial assistance. A separate report said the region of Murcia may also need aid, according to its president. See report on Murcia aid possibility.

“Against this backdrop, we expect market tensions to persist. With the European Central Bank still reluctant to step in, the probability is increasing that Spain will have to ask for additional support, likely in the form of bond purchases by the European Financial Stability Facility,” said strategists at Barclays Capital.

Further adding to European concerns, a German report over the weekend said that the International Monetary Fund may cut off aid to Greece. Read more on reported IMF Greek aid suspension.

“[Reports of] the halting of a bailout tranche due to failure to meet targets, the European Central Bank decision not to accept Greek debt as collateral, and the visit of the Troika will keep markets nervous as default fears intensify,” said strategists at Credit Agricole. The Troika refers to the Eurogroup, the European Central Bank and the International Monetary Fund, which collectively oversee Greek aid.

Australian miners were among the sectors sensitive to the possible European drag on global growth, with BHP Billiton Ltd. (AU:BHP -2.68% BHP -1.69%) trading down 2.7%, Rio Tinto Ltd. (AU:RIO -2.87% RIO -3.02%) losing 2.2% and Fortescue Metals Group Ltd. (AU:FMG -3.67% FSUMF -4.45%) tanking by 4.6%.
…

21 burned by hot coals at Robbins event

ASSOCIATED PRESS

SAN FRANCISCO — Fire officials said 21 people at an event hosted by motivational speaker Tony Robbins suf­fered burns while walking across hot coals and three were treated at hospitals.

The injuries took place dur­ing the first day Thursday of a four-day event at the San Jose Convention Center hosted by Robbins called “Unleash the Power Within.” Most of those hurt had second and third de­gree burns, fire officials said.

Walking across hot coals on lanes measuring 10 feet long and heated to between 1,200 to 2,000 degrees provides atten­dees an opportunity to “under­stand that there is ab­s olutely nothing you can’t over­come,” ac­cording to Robbins’ website.

Robbins Research International said in a written statement that 6,000 attendees of the event walked across the coals Thursday.

Requests for additional in­formation from The Associat­ed Press were not immediately returned.

Organizers had an “open burn permit” and medical staff at the event, and there was also a fire inspector on the scene, Williams said.

“Once they (the medical staff) became overwhelmed, our inspector called for us,” Williams said.

Witness Jonathan Correll was not attending the event, but when he saw a large crowd gathered on a closed-off sur­face street near the conven­tion center, he got off the light rail he was riding to see what was going on.

“I just heard these screams of agony,” he told The Associ­ated Press. “People were in pain. It sounded like people were being tortured.”

Republican candidate advice on how to remedy the financial crisis:

Newt Cash Money

July 19, 2012, 3:47 p.m. ET

UPDATE: N.Y. Fed Backs Limiting Some Types of Money-Market Fund Withdrawals

–New York Fed supports limiting some types of money-market fund withdrawals

–Analysts in staff report propose money-market funds could be strengthened if they were to have a “minimum balance at risk”

–New York Fed president says further money-market fund reform is “essential” to U.S. financial stability

(Adds details on comments by New York Fed president in third paragraph, details on SEC chairman’s proposal on money funds starting in eighth paragraph.)

By Michael S. Derby and Andrew Ackerman

NEW YORK–The Federal Reserve Bank of New York said it supports limiting some types of money-market fund withdrawals in a bid to protect those funds from suffering the equivalent of a bank run.

The recommendations came from a staff report released Thursday. New York Fed President William Dudley in a press release accompanying the document said he “strongly” endorses the ideas put forth by authors Patrick McCabe, Marco Cipriani, Michael Holscher and Antoine Martin.

“Further reform of money funds is essential for our nation’s financial stability,” Mr. Dudley said.
…

Is anyone looking to buy a nice investment condo in La Jolla? They are selling now from the “low $200s”

There has never been a better time to buy!

July 22, 2012 10:38 PM

Report: World’s rich hide at least $21T offshore

North West Point in April, 2008, in Grand Cayman, Cayman Islands. (David Rogers/Getty Images)

(CBS News) With about 55,000 inhabitants, the Cayman Islands should not be a well-known name in the rest of the world, but the tiny Caribbean territory has become famous as a tax haven for the world’s super rich. According to a new report, the Caymans - along with the other dozen or so international havens for wealth like Switzerland and Bermuda - are the holders of so much of the world’s capital, entire regional economies could be moved on it.

The Tax Justice Network has just released a report estimating that the world’s tax havens house anywhere from $21 trillion to $32 trillion of money that governments cannot tax.

“This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and - most importantly - to have very significant negative impacts on the domestic tax bases of ’source’ countries,” James Henry, the report’s author and a former chief economist at consultancy McKinsey told the Guardian.
…

GLOBAL MARKETS-
Shares, euro pressured as Spain stokes bailout fears
Mon Jul 23, 2012 5:42am IST

* MSCI Asia ex-Japan falls 0.6 pct, Nikkei opens down 1 pct

* Euro hits 12-year low vs yen, 2-year low vs US dollar

By Chikako Mogi

TOKYO, July 23 (Reuters) - Shares fell and the euro stayed vulnerable after hitting fresh lows early on Monday in Asia, as concerns grew about Spain’s ability to stave off a sovereign bailout.

U.S. and European stocks tumbled on Friday after indebted region Valencia sought financial aid from Madrid. Spain’s main stock index plunged 5.8 percent for its biggest one-day drop in two years, while Spain’s 10-year government bond yield scaled a euro-era high at 7.32 percent.

In thin early trade, the euro slipped below 95 yen to its lowest since November 2000 against the Japanese yen and a two-year low against the U.S. dollar around $1.2103. The single currency also plumbed record lows against the Australian and New Zealand currencies at A$1.1671 and NZ$1.5104.

“There is nothing good from Europe and that keeps the euro under pressure, especially the first half of the week when we have euro zone data,” such as consumer confidence and manufacturing, said Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo.

“Markets may test more psychological support levels, having seen the euro already hit historic lows,” Saito added.
…

Does the MSM keep publishing the same story over and over again, just changing the date?

July 22, 2012, 10:15 p.m. ET

Asian Shares Fall on Spanish Debt Concerns

Asian markets fell on Monday after Spain’s borrowing costs climbed to a euro-era high, pushing the single currency down to multi-year lows against both the dollar and the yen.

Europe once again was pressed to the forefront of investor concerns, as yields on Spanish 10-year sovereign bonds reached 7.24% on Friday, after the state of Valencia asked for government aid to help refinance its debt.

“It’s not the kind of situation where fears are just going to fade away, since the required amount of aid that Spain will need is likely to mount given the increasing needs of local governments,” said Rakuten Securities senior market analyst at Masayuki Doshida.

The Spanish government also cut the country’s growth forecasts for 2013 and said that it will remain in recession next year.
…

I can’t help but suspect that pouring so much money down the housing market rat hole is a major factor in the uncured U.S. economic malaise.

Niall Ferguson: The Cure for Our Economy’s Stationary State
Jul 16, 2012 1:00 AM EDT
Adam Smith knew what ails us—and he prescribed the cure.

Jesse L. Jackson Jr. has been suffering from “a mood disorder.”

He is not alone. The world economy may not be in a depression as bad as that of the early 1930s. But it’s certainly got emotional problems.

A year ago, according to Gallup, economic confidence in the United States plunged, touching bottom in late August. It then rallied, only to start sliding again with the arrival of summer. Sunshine doesn’t seem to work like it used to.

What is going on?

The answer is that much of the developed world, including the United States, is stagnating. The founder of economics, Adam Smith, had a term for this. He called it “the stationary state.” In his day it was China that looked stationary: a once “opulent” country that had simply ceased to grow. Smith blamed China’s unfavorable institutions—including its bureaucracy—for the stasis. He also noticed how the stationary state favored the super-rich and civil servants, leaving poor laborers to slide toward subsistence wages.

Now the boot is on the other foot. It is Westerners who are in the stationary state, while China is growing faster than any other major economy in the world. The World Bank expects the European economy to contract this year and the U.S. to grow by just 2 percent. China will grow as much as four times faster than that.

The mood disorder is especially bad for investors. Only seven out of 47 national stock markets around the world have posted gains in the last 12 months.

The currently voguish explanation for the slowdown is “deleveraging.” The argument is that the excessive debts the West ran up in the past 10 or 20 years are now acting as a drag on growth. Households and banks are desperately trying to reduce their debts, having gambled foolishly on ever-rising property prices. To prevent this process from generating a lethal debt deflation, governments and central banks have stepped in with fiscal and monetary stimulus. That helps for a time, but it ultimately transforms a crisis of excess private debt into a crisis of excess public debt.

Yet more is going on here than deleveraging. Consider this: the U.S. economy has created 2.6 million jobs since June 2009. In the same period, 3.1 million workers have signed up for disability benefits. Back in 1992 there was one person on disability benefits for every 36 people in employment. Now the ratio is 1 to 16. Unemployment is being concealed—and rendered permanent—in ways all too familiar to Europeans.

The stationary state is literally stationary. People claim to be disabled. And they also stay put. Traditionally around 3 percent of the U.S. population moves to a new state each year. That rate has halved since the crisis began. You can’t blame all this on deleveraging.
…

Oh no — don’t tell me stocks are tumbling again!

July 23, 2012, 1:22 a.m. EDT
Asia stocks tumble as Greece, Spain fears mount
By Sarah Turner and V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) — Asian stocks received a thrashing Monday as fears that Greece may not receive further aid and rising worries over Spain prompted a deep, region-wide sell-off, with Hong Kong equities suffering the most.

The dollar jumped against most other major currencies, while crude oil and other commodities declined, as investors sold down risk assets amid concern the weak global environment will affect growth and financial flows into Asia.

The Hang Seng Index slumped 2.6% in Hong Kong, while South Korea’s Kospi fell 2.2%, Australia’s S&P/ASX 200 Index slid 1.5% and Japan’s Nikkei Stock Average lost 1.4%.

Taiwan’s Taiex slid 2.3%, while China’s Shanghai Composite, the best performer among major regional benchmarks, dropped 1.2%.

“[Reports of] the halting of a bailout tranche due to failure to meet targets, the European Central Bank decision not to accept Greek debt as collateral, and the visit of the Troika will keep markets nervous as default fears intensify,” said Mitul Kotecha, a strategist at Credit Agricole.
…

Oh my…where’d I leave that hand lotion?

July 22, 2012, 11:51 a.m. EDT
IMF to cut off aid to Greece: reports
By Russ Britt

LOS ANGELES (MarketWatch) — The International Monetary Fund is expected to cut off further rescue aid to troubled Greece, reports said Sunday. The move is likely to lead to debt-saddled Greece’s insolvency in September. Reports say Greece will not be able to meet debt-reduction targets by 2020, meanign the country will need $60.8 billion in additional aid. But other European nations are unwilling to keep funding the nation, reports said.