September 28, 2012

Bits Bucket for September 28, 2012

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




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195 Comments »

Comment by frankie
2012-09-28 02:28:44

Retailers face ‘perfect storm’ of September rent day
Almost 40,000 jobs have already been lost in the retail industry this year and shops are facing a new “perfect storm” as they prepare to pay millions of pounds to landlords on Saturday for September’s quarterly rent day.

The challenges facing the high street have been highlighted by the demise of JJB Sports, which is set to call in administrators.

Begbies Traynor said that 15,312 retailers are “experiencing significant and critical financial distress”, while property agent CBRE says JJB will be the 42nd retailer to fail this year and that in the first half of 2012, 40,000 retail jobs have been lost.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9571842/Retailers-face-perfect-storm-of-September-rent-day.html

Comment by Arizona Slim
2012-09-28 06:57:01

So much for the notion of shopping ’til you drop. Seems as if the consumer is all shopped out.

Comment by ocsandrenter
2012-09-28 07:35:25

shopping ’til you drop

Yup. Many of those formerly shopping on credit have maxed out their credit limits and dropped into bankruptcy court. Student loans get garnished out of their wages, rent, food and other needs are now cash and carry, nothing left for ipads, iphone, karate lessons for the kids, etc. Welcome to your new life Joe and Jane Sixpack.

Comment by In Colorado
2012-09-28 07:57:42

You’d be surprised how quickly one’s credit recovers from a BK. Also, my understanding is that a BK does not automatically make your student loans garnish your wages, that requires non payment and in some cases not even that.

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Comment by Bad Andy
2012-09-28 08:19:15

If you’re judgement proof, they can’t collect even on student loans.

 
Comment by Prime_Is_Contained
2012-09-28 08:35:59

On the contrary, if you will ever have an income at any time in the future, they can collect on your student loans; if you will ever receive a tax refund at any time in the future, they can collect on your student loans; if you will ever receive SS in the future, they can collect on your student loans.

 
Comment by Bad Andy
2012-09-28 08:39:38

OK, try again. Yes, they can latch onto your income tax refund you can make sure that doesn’t happen by your allowances. If you’re a recent graduate, I wouldn’t worry too much about them collecting your SS.

If you’re judgement proof they cannot garnish wages.

 
Comment by Montana
2012-09-28 08:43:43

“If you’re judgement proof they cannot garnish wages.”

If you’ve got wages to garnish you’re not judgment proof.

 
Comment by Bad Andy
2012-09-28 08:54:19

Wrong. Each state has a long list of exemptions. The federal exemption is 30 times minimum wage!

 
Comment by polly
2012-09-28 11:17:09

Federal minimum wage is $7.25 an hour. Are you claiming that $217.50 a week is exempt from garnishment? Because $11,310 a year (pre-tax) before getting your wages garnished for student loan repayment is hardly generous.

 
Comment by Montana
2012-09-28 12:27:49

In my state, benefits can’t be garnished except for alimony and child support. But regular wages can be.

 
 
Comment by goon squad
2012-09-28 08:42:23

Welcome to your new life

The critical piece you omitted is getting laid off and getting a new job at 40-60% less salary. Or getting laid off after age 50. The future belongs to Lucky Ducky :)

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Comment by frankie
2012-09-28 02:31:34

How a broker spent $520m in a drunken stupor and moved the global oil price
PVM Oil Futures trader Steve Perkins bought 7m barrels of crude in late-night trading binge on his laptop, driving the oil price to an eight-month high.

The investigation also shows that he was able to trade huge volumes with very little cash up front and no position limit, exposing how it easy it was for a single British broker on a bender to cause chaos in the oil market.

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7862246/How-a-broker-spent-520m-in-a-drunken-stupor-and-moved-the-global-oil-price.html

Old news, but interesting how one drunk can affect the world

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 07:21:35

“Old news, but interesting how one drunk can affect the world”

Sounds like access to massive financial leverage plus alcohol is a dangerous combination!

Comment by Housing Wizard
2012-09-28 08:07:00

But ,that was the story with the AIG guy in one department who bought all those credit default swaps insurance contracts on leverage that resulted in AIG being under water by billions and we ended up bailing it out .

The story is really hard to believe and its more likely, in my view, that this was some sort of set up to be able to pull off some bail outs without it looking like who it was directly benefiting.

 
 
 
Comment by Martin
2012-09-28 04:50:19

Can Japan really do to QExxx? Is there no end to this nonsense?
Can it all just go down for once and we start rebuilding properly rather than feeding the monsters.

Looks like that would be the future of the whole world. We are all set for GD2.

Comment by ocsandrenter
2012-09-28 07:41:30

We are all set for GD2.

GD2 is in (at least - some would argue it began in 2000) its 5th year (fed’s first emergency cut was aug ‘07), with Central banks across the globe fighting it with as much fiat printing as to keep the mirage propped up…until WWIII gets started.

Comment by michael
2012-09-28 07:46:03

+1

 
Comment by Blue Skye
2012-09-28 08:00:47

GD2 needs fewer Black Hawk helicopters

http://www.the-leader.com/features/x264118812/Sikorsky-facilities-to-close-575-expected-to-lose-jobs

Major Elmira employer pulling the plug. I doubt that the War Plane Museum that they trashed will come back.

Comment by rms
2012-09-28 12:08:52

GD2 needs fewer Black Hawk helicopters

A Sikorsky UH-60 Black Hawk can only carry a limited amount of cash. Now the Boeing CH-47 Chinook . . .

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Comment by rms
2012-09-28 12:04:44

…until WWIII gets started.

Actually it’s well under way if you live in the middle-east, roadside bombs v. unmanned drones. And no sign of Jesus anywhere on the horizon despite $ trillions spent.

 
 
Comment by leosdad
 
 
Comment by Martin
2012-09-28 05:00:01

Wall Street about to layoff more people. No CEOs ever get fired, and een if they get fired they walk away with a ton.

http://www.forbes.com/sites/halahtouryalai/2012/09/27/wall-streets-brutal-job-cuts-are-about-to-much-get-worse/

Comment by Combotechie
2012-09-28 06:48:40

Karma.

 
Comment by In Colorado
2012-09-28 07:29:17

Wall Street about to layoff more people. No CEOs ever get fired, and even if they get fired they walk away with a ton.

Reminds me of when HP fired both Carly Fiorina and later fired her successor Mark Hurd. Both walked away with severance packages that looked like Lotto jackpots.

It’s good to be the King.

 
Comment by WT Economist
2012-09-28 07:35:44

They’re laying off the due dilligence people to save money for higher bonsues again, I’d guess.

 
Comment by measton
2012-09-28 08:05:39

With fewer ships to plunder the Pirate captains need fewer pirates.

 
 
Comment by Combotechie
2012-09-28 05:26:36

“Can Japan really do to QExxx?”

Japan can do whatever it wants.

“Is there no end to this nonsense?”

There is indeed an end but the end is not very pleasant, hence QExxx.

“Can it all just go down for once and we start rebuilding properly rather than feeding the monsters?”

If we all just go down for once we may not, for once, come back up. We are in uncharted territory here.

Comment by In Colorado
2012-09-28 07:35:52

If we all just go down for once we may not, for once, come back up.

Will Marxism get a second chance if the global economy collapses? And by Marxism, I mean good old fashioned USSR or Maoist style Marxism.

And if that happens, will the world’s richies find a safe haven somewhere to hide?

Comment by goon squad
2012-09-28 08:45:26

a safe haven somewhere to hide

Master Blaster run Bartertown!

 
 
Comment by Prime_Is_Contained
2012-09-28 08:06:05

If we all just go down for once we may not, for once, come back up.

Why would you say that, combo? I strongly disagree.

Fundamental human needs will remain even if the wheels come off. These fundamental needs will still drive an economy.

There is always a new beginning, phoenix-like, that rises from the ashes.

Comment by Housing Wizard
2012-09-28 08:14:29

I also agree that a rise from the ashes would take place .Maybe new economic systems that are more sustainable and needed and maybe better for Planet Earth and life itself .

 
Comment by Blue Skye
2012-09-28 08:15:33

With fewer bankers.

 
Comment by Combotechie
2012-09-28 08:27:23

“Why would you say that, combo.”

Because of what happened just of couple of years ago when the financial integrity of all the major banks of the world was questionable and thus it was questionable whether financial transactions would clear or not clear.

If it’s not clear that the financial side of a physical transaction will clear then the physical transaction will not take place. No physical transactions means nothing gets produced or moved.

Spend a moment or two and think of the consequences of something like this happening.

Banks couldn’t cut it on their own - couldn’t guarantee they would remain in business to clear transactions - so they needed Central Bank backing.

And so here we are.

Comment by Prime_Is_Contained
2012-09-28 08:38:52

and thus it was questionable whether financial transactions would clear or not clear.

This is an incredibly strong argument for why the “transaction clearing” side of the banking business should be INCREDIBLY regulated. They should not be allowed to take any risks at all.

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Comment by Blue Skye
2012-09-28 08:43:28

“think of the consequences of something like this happening…”

If you think that the global credit contraction will continue, in fits and spurts like a game of musical chairs, then you wouldn’t want to depend completely on the daily delivery of necessities would you? It’s no mystery why Grandma wasn’t happy unless the pantry shelves were stocked.

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Comment by polly
2012-09-28 09:52:32

Grandma’s pantry issues are a little different than ours are. That being said, with the unreliability of the local power company, it isn’t a bad idea to be able to get through a week or so without power and without the ability to get new stuff at the grocery store.

 
Comment by Blue Skye
2012-09-28 10:31:56

Different? Yes I suppose.

Grandma remembered a time when seed could not be had and then a time when seed could be had but noone had the money for it. Her family survived three years without a harvest on a Kansas farm. Don’t ask me how, I don’t know. I just know she thought reserves were important.

 
Comment by alpha-sloth
2012-09-28 14:44:10

Her family survived three years without a harvest on a Kansas farm. Don’t ask me how, I don’t know.

You should ask FPSS. I bet he has a theory.

 
2012-09-28 16:34:51

Trapping? Hunting? Foraging?

Barter?

I find it hard to believe but it’s possible I think. What was the size of the family?

 
Comment by alpha-sloth
2012-09-28 16:40:10

Trapping? Hunting? Foraging?

A still older profession than these?

 
Comment by Blue Skye
2012-09-28 18:21:09

Seven children. The mother died during that time.

 
2012-09-28 19:26:17

All of the above then.

Trapping. Hunting. Foraging. Bartering.

I bet your grandma lied. Fantasies are better than truth.

I bet she got seeds in exchange for a percentage of a crop. And that there was a crop in the first place.

I don’t take what people say at face value. Everyone loves to self-aggrandize and your grandma, on a probabilistic basis, is no paragon of virtue in this particular respect.

Plus, the stories get “more impressive” over time. I wouldn’t believe a word of any of them without documentation.

 
2012-09-28 19:40:57

I bet on all of the above.

Trapping. Foraging. Hunting. Barter.

I can see it being absurdly rough but I can just barely see it working for the timeframe you say.

Jeebus Cripus though! I bow myself to your grandma.

 
Comment by rms
2012-09-28 20:06:49

I bet your grandma lied. Fantasies are better than truth.

You’d enjoy the read, “Ten Lost Years.”
http://www.amazon.com/Ten-Lost-Years-1929-1939-Depression/dp/0771016522

 
Comment by alpha-sloth
2012-09-28 20:37:56

I bow myself to your grandma.

Must be Dr. Jeckyll night. Mr. Hyde would have her giving hand jobs at the bus depot.

 
Comment by Blue Skye
2012-09-28 21:33:37

Well, she didn’t speak of it as heroic. She was quite understated. Visiting her house in that little town decades ago I asked why they had built an elevated road parallel to the railroad tracks. “Oh, that’s a drift, the dust.” Was all she said.

She told my oldest daughter (at age six) the story of her family traveling from Colorado to Kansas by Wagon when she was a girl. She walked. No dramatization.

You are jaded FPSS. The trouble with living in the city is that if things are not complex they are impossible.

 
Comment by ahansen
2012-09-28 22:44:05

Amen, Blue Skye. This country is one solar pulse away from a major awakening.

 
 
 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 05:46:12

Which tail threatens to wag the global stock market dog more violently: The Eurozone or China?

Shares slip as Spanish optimism short lived
By Marc Jones
LONDON | Fri Sep 28, 2012 8:23am EDT

(Reuters) - Spain’s borrowing costs rose back above 6 percent and European shares dropped on Friday, as the upbeat reaction to Madrid’s new debt cutting plans gave way to anxiety over its troubled banks, France’s finances and faltering global growth.

The euro zone blue-chip Euro index, which has fallen 8.8 percent from a 6-month high hit in mid-September, ceded early gains to stand down almost 1 percent at 1145 GMT.

Global stocks were pulled to near flat. Madrid’s IBEX .IBEX led the falls down 1.3 percent, as the early lift from Spain’s new round of spending cuts, which had also boosted U.S. and Asian markets overnight, collapsed.

“We had some boost overnight from Spain but at the moment we are looking to the U.S. data later,” said Rabobank strategist Philip Marey, adding that recent global data had not been promising. “Although the markets had a lift from the ECB and the Fed decisions, everything we have seen this week has not been good.”

Spain, too, will remain in focus. The results of an independent audit of the country’s banks will be published later in the day, while Moody’s Investors Service is expected to finish a rating review which may cost Madrid its sovereign investment grade status.

France is also under the microscope with President Francois Hollande’s fiscal credibility on the line. His first annual budget, France’s toughest in 30 years, raised taxes to bring in 30 billion euros ($39 billion) to keep deficit-cutting promises.

As equities dropped, the euro was left clinging to slim gains. The single currency, which had fallen more than 2 percent in less than two weeks until Wednesday, was up 0.09 percent at $1.2935 at 1145 GMT against a broadly flat dollar.

“The euro may still squeeze higher over the short term but any rally will be unsustainable,” said Derek Halpenny at Bank of Tokyo Mitsubishi.

“At some point that (Spanish) credibility issue is likely to come back to undermine the current confidence. This is the fifth package - so the history of previous packages is that they weren’t enough and lacked credibility.”

MARKET WOBBLE

A busy data day still lies ahead. It includes key Chicago purchasing manager index numbers and, with personal consumption figures and the quarter-end in focus, U.S. stock index futures pointed to a soft open on Wall Street.

 
Comment by Neuromance
2012-09-28 05:51:45

Shiller Data Questions Housing Revival Power: Cutting Research
By Simon Kennedy - Sep 28, 2012 8:16 AM ET
Bloomberg

Don’t bet the house on a robust revival of the U.S. property market, says the Yale University professor who predicted the bursting of the dot-com and subprime-mortgage bubbles.

The results of their work, entitled “What Have They Been Thinking? Home Buyer Behavior in Hot and Cold Markets,” are based on the responses of almost 5,000 recent homebuyers in four cities to regular mail surveys over the past 25 years.

Easy monetary policy may not necessarily drive a stronger recovery if financial crises are the source of the slump, according to a working paper published this week by the Bank for International Settlements in Basel, Switzerland.

A study of downturns and rebounds in 24 developed economies dating back to the 1960s suggests interest rate cuts and other monetary stimulus spur recovery in a typical slowdown.

“However, in downturns associated with a financial crisis, this result is no longer statistically significant,” said economists Morten L. Bech, Leonardo Gambacorta and Enisse Kharroubi.

By contrast, reducing debt during a downturn that’s associated with financial turmoil has a positive effect on the subsequent recovery, they say. A 10 percent reduction in the private debt-to-GDP ratio during the slide leads to a 0.6 percentage point increase in the average output growth in the recovery, they estimated.

http://www.bloomberg.com/news/2012-09-27/shiller-data-questions-housing-revival-power-cutting-research.html

Comment by Arizona Slim
2012-09-28 07:00:57

In addition to the points made above, there’s a whole generation coming up that doesn’t view homeownership the way their parents did. They saw their parents overpay for houses, and, in some cases, lose those houses in a foreclosure. Which means that they see the downside risk.

They’re also weighed down by student loan debt. And that cripples their ability to buy a house.

Comment by Blue Skye
2012-09-28 07:40:44

That’s why manias like this only happen once in a lifetime. All of today’s kids will be dead before there is another “it’s different this time.”

Plan accordingly. Get/stay out of debt.

Comment by oxide
2012-09-28 08:33:52

“get/stay out of debt.”

Yes, that’s why I bought a house.

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Comment by Blue Skye
2012-09-28 10:12:57

I tried to borrow my way out of debt for many years without success. May you fare better.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 19:34:55

“Yes, that’s why I bought a house.”

With cash? If not, I’m missing how that strategy kept you out of debt.

 
Comment by GrizzlyBear
2012-09-28 19:41:08

“get/stay out of debt.”

“Yes, that’s why I bought a house.”

I didn’t know you paid cash.

 
Comment by oxide
2012-09-29 04:24:37

I didn’t pay cash. But I am getting out of debt a little bit every single month. A renter is ALWAYS in debt.

 
Comment by Carl Morris
2012-09-29 07:33:39

A renter is ALWAYS in debt.

No. A renter is always at risk of needing to find another place to sleep and stash their stuff, but that is not the same as being in debt.

 
Comment by Prime_Is_Contained
2012-09-29 10:01:57

No. A renter is always at risk of needing to find another place to sleep and stash their stuff, but that is not the same as being in debt.

I’ve long thought of our basic needs as a form of indenture. We all have a need for food that we must fulfill for the remainder of our days; similarly with shelter, clothing, etc.

We are all born indentured servants in this regard.

 
Comment by Carl Morris
2012-09-29 14:32:15

Yes, we all face a lifetime of finding a bit of food and a place to lay our head each night. And though we might accumulate enough money ahead of time to do that, things can go wrong and once again leave us living day to day. But for me that’s still different than debt…especially debt like student loans. When you have no debt things could get much better tomorrow. With enough debt you’re screwed for the rest of your life no matter how well tomorrow goes.

 
Comment by Prime_Is_Contained
2012-09-30 15:04:03

True, Carl. I get the distinction; one is the biological reality that we are born into, and the other is self-inflicted. My calling them the same was at last partially tongue-in-cheek.

 
 
Comment by Diogenes (Tampa, Fl)
2012-09-28 09:08:53

Plan accordingly. Get/stay out of debt………..
It’s an interesting, but losing philosophy. It means your are competing in life with all the “borrowers” that the FED and the banks promote.
In 2002 I had been saving diligently to buy a house away from Tampa, a horribly corrupt town. I was saving $1000 per month and had $24,000 toward another house. (I would have saved more but spent the prior 10 years paying off my current homestead). I was going to save another $10,000 before committing to buy an $65,000 to $80,000 house in Pinellas County.
I started shopping in the area I wanted to move in 2002, and surprise, surprise, Prices were going up $2000 per month, faster than I could save. I was losing money by saving.
Then bid wars started. Prices increased 30% or more a year for several years.
The “cost” of being debt free and saving money has destroyed most of my “savings” for more than a decade.
Finally, I bought a much cheaper house that needs a lot of work and more money. I am unwilling to “Invest” in just about anything. I watch the financial news daily trying to figure out what moves to make to keep my “savings” from being destroyed by FED printing and BAnkster money-laundering, or vice versa.
Deflation will save me, but the FED wants to inflate away all the bank debts. All stocks are priced high, commodities have had major runs, Bonds are pure losers.
Debt free is great, especially if you are young and in the workforce. Your earnings will generally provide some increases for the higher cost of living. I can’t increase the value of money I earned 15 years ago. I simply watch the prices increase and find I need to spend more every month for food and gas and insurance and taxes.
When I finally qualify for SS in about 5 years, I suspect it won’t buy much of anything.
I am the generation caught in the middle.
They say I’m a “BOOMER”, but most of the easy money was made before I got there, and most of the big money retirement pay has already been paid out. I don’t think I’ll see much of anything, just a continuing decline in what little I have managed to “save”.
Saving is a losing proposition in a BANKSTER/Federal Reserve money printing scheme when you have to earn your savings. Much better to be on a government “Entitlement”, so at least you get paid for doing nothing, and you never lose your continual payout from Uncle Sugar. IF prices go up, then you get an increase in your ‘entitlement’. It’s good to be a Parasite.

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Comment by Blue Skye
2012-09-28 10:26:31

I got in the Ponzi scheme in the early stages and lost my nerve. You stayed out in the early stages and then lost your nerve. It’s a rough game.

 
 
 
Comment by Bub Diddley
2012-09-28 08:46:52

That’s why I didn’t get sucked into the bubble like a lot of my peers - my parents bought a farm at the height of the farmland bubble in the 80s when I was a kid. I heard them say frequently “This place will never be worth what we paid for it.” 20 years later, when they sold the farm, they got about what they paid for it in the 80s.

So, I knew “real estate always goes up” was b.s. all along. The difference is, there was no government action to prop up the market for farmland after that bubble popped.

 
 
 
Comment by Neuromance
2012-09-28 05:57:53

Russian Bear stops Finland leaving euro
By: Ambrose Evans Pritchard
3:36PM BST 19 Aug 2012
The Telegraph

Once Finns break the taboo, it would be easier for Germany to extricate itself from an escalating national disaster without inviting opprobrium from across Europe, or so goes the argument.

“We can’t start this off, but the Finns can,” said Hans-Olaf Henkel, former head of Germany’s industry federation.

Berlin’s policy elites are constrained by their honourable - if misdirected - feelings of moral duty towards the euro. They cannot bring themselves to plunge the dagger.

Or as ex-Bundesbanker Thilo Sarrazin puts it, they are driven by “the very German reflex that the Holocaust and Second World War will only be atoned for finally when all our interests, including our money, are in Europe’s hands”.

The Finns survived their own gruelling depression without foreign help in the early 1990s when the Soviet Union collapsed and exposed the fragility of the Finnish banking system. The economy shrank by 13pc.

“We had the IMF knocking at our back-door. Unemployment was at 18pc. We said ‘never again’ and yet here we are in a fresh crisis because of somebody else’s fault,” said Mr Stubb.

For the True Finns - with 19pc of the vote in the last election - it is an outrage. “We bailed out our own banks, and now after all the lying, dishonesty and malfeasance in Europe, we are being asked to bail out their banks. This is the last straw,” said Mr Soini.

There is no doubt that Finland could go it alone. It is the last unsullied AAA state in the Euroland, with a public debt of just 51pc of GDP. The reason why Moody’s did not place the country on negative watch last month along with Germany and Holland is a lack of banking exposure to Club Med debt and “relative insulation from the euro area” in trade.

More than two-thirds of Finnish exports go outside the euro bloc, chiefly to Russia, Sweden and the US. In other words, Finland lives in a different economic universe from core-EMU, and is deemed better for it by rating agencies. You could not find a more likely candidate for euro exit.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9485917/Russian-Bear-stops-Finland-leaving-euro.html

Comment by In Colorado
2012-09-28 07:41:25

“We bailed out our own banks, and now after all the lying, dishonesty and malfeasance in Europe, we are being asked to bail out their banks. This is the last straw,” said Mr Soini.

Are there any banks, anywhere in the world, that don’t need a bail out?

Comment by measton
2012-09-28 08:09:06

Of course again Germany profited from the other banks lending as they maintained the huge trade imballances.

Don’t cry for Germany they want their cake and to eat it too.

Comment by Diogenes (Tampa, Fl)
2012-09-28 09:22:26

That is really some of the most ridiculous reasoning that I have seen in the news, and I can’t believe most people would be taken in by it.
Trade “Imbalance”???
Let’s see, Germans produce a bunch of BMW’s and Mercedes and get back a bunch of paper that says the Greeks and the Italians will provide EQUAL VALUE in services and goods for the stuff they got. OH? Wait! They don’t have anything to trade.
So, the Italians and Greeks get a bunch of fine automobiles, some electronics and some German wines and pastries and the others send back a few jars of olive oil and some shell necklaces.
OH, yes indeed, there is a TRADE IMBALANCE.
The Germans expected to be paid for their work. And they were paid, in worthless promises.
So, now, they want to hold back further support payments from Bankster and Government to Governments not paying and it’s “unfair”.
The Euro was a bad deal because, just like the FED and it’s unholy alliance with the Wallstreet Broker/Banksters, the ECB gave away money to the NON-productive economies and let them buy labor and materials with the same paper that the actual producers use.
Who’s getting robbed? The Greeks?
They’re the ones who want to HAVE THEIR CAKE and Eat is too. They’ve already eaten more than their share and want another helping. Yes, the Germans want to “sell” their products. But they thought that “selling” them meant they would actually get paid.
Please stop reading American “financial” propaganda and use your brain.

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Comment by Ross Peroxide
2012-09-28 10:04:37

Germany is like our sub-prime bankers and it willingly participated in “broadning” the customer base. The deal was beneficial to both as long as the minimum payment was paid.

 
Comment by Carl Morris
2012-09-28 10:15:54

Sounds like China.

 
Comment by In Colorado
2012-09-28 10:32:55

Actually, while the Greeks have no real industry to speak of, the Italians do actually design and make stuff.

 
Comment by In Colorado
2012-09-28 10:34:31

Let us not forget that the Germans can buy assets (like farmland and other income generating assets) that exist in these countries.

 
Comment by Housing Wizard
2012-09-28 12:41:32

The lesson is don’t make bad loans ,or sell products at prices that people can’t afford absent easy debt that becomes unpayable . The people that gave the debt should be the losers in the final analysis .

We had Lenders here in America giving real estate loans
to the unqualified based on a false value . Don’t make a loan unless your know the value is real andbased on wages and sustainable ,especially on a long term loan .

They want to choose who the losers are when it was a unjustified high leverge lending Ponzi scheme to the unqualified ,based on fake values . What do they expect ,what did they think would happen ? I guess they knew the government would bail them out .

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 19:39:11

“Are there any banks, anywhere in the world, that don’t need a bail out?”

I was going to suggest the ones with a fiat money press don’t need a bailout, but then I remembered about the story I heard on NPR driving home about Iranian money.

Can’t Change Your Money In Iran? Try Afghanistan
by Soraya Sarhaddi Nelson

Sep 28, 2012 (All Things Considered) — Large sums of Iranian currency come into western Afghanistan every day and are exchanged for dollars, and then shipped back to Iran. There may be international sanctions against Iran, but in Afghan provinces that border the Islamic Republic, trade and money laundering are thriving.

The western Afghan city of Herat has become a thriving hub for the money exchange business, a consequence of geography and politics. Money-changers throng the currency market carrying thick stacks of Iranian currency, much of it brought in by the hundreds of thousands of Afghan workers who earn their living in Iran.

While the stacks of crisp 100,000 rial notes that money-changers bring to the market might look like a small fortune, the 10 million rials in each of these stacks is worth less than $400, because the Iranian currency recently lost more than half of its value.

Abdullah Dashti, who heads the Afghan money dealers union in Herat, says the money-changers are feeling the pinch of the international sanctions against Iran and are now looking to unload Iranian currency.

 
 
 
Comment by Englishmanin NJ
2012-09-28 06:01:45

This will/must continue until we end fractional reserve banking.

Until all money in circulation (except the paltry amount of physical coins) ceases to be debt/credit, this will/can never end.

Simple mathematics says so.

Boy, I am cranky this morning and it’s raining like hell in NYC which isn’t helping my commute.

Comment by Blue Skye
2012-09-28 08:18:55

The first step is to correct negative reserve lending. The Fed is working on this.

 
Comment by michael
2012-09-28 11:38:15

“Until all money in circulation (except the paltry amount of physical coins) ceases to be debt/credit, this will/can never end.”

I bought a new car this weekend. It’s the first new car I have bought in 10 years. To really understand the point above; I would suggest that everyone on this blog go to their nearest dealership. You don’t have to buy a new car; just pretend you are up until the final moment.

It’s a great exercise to really see how screwed up this economy is and how screwed we are.

Comment by Montana
2012-09-28 13:00:17

just pretend you are up until the final moment.

OMG I don’t think I could bear up. Car salesguys are scary.

2012-09-28 16:37:50

I think I’d lose my cool about 7 seconds into their bogus spiel. Assuming I could keep it together that long.

It’s just as well I’m not in the market for a car.

Now, a couple of telephoto lenses. Come to me, my precious(es)!

I think I’ll hold off though. I can’t truly justify that expense.

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Comment by In Colorado
2012-09-28 13:35:10

“It’s a great exercise to really see how screwed up this economy is and how screwed we are.”

Could you elaborate on that? Is it the desperation to sell a car?

 
 
Comment by ahansen
2012-09-28 22:53:45

Hey there, ho there, English. Nice to see ye again.

 
 
Comment by UNKNOWN TENANT
2012-09-28 06:09:08

Move over Peggy!

Obama Voter Says Vote for Obama because he gives a free Phone …
http://www.youtube.com/watch?v=tpAOwJvTOio -

“The program is called Lifeline, established in 1984, originally created to subsidize landline phone service for low income Americans, funded by government-collected telecommunication fees, paid by consumers.”

“In 2008, the program was expanded to support cell phones which quickly escalated the cost of the program. In 2008 the program cost $772 million, but by 2011 it cost $1.6 billion.”

“A 2011 audit found that 269,000 wireless Lifeline subscribers were receiving free phones and monthly service from two or more carriers. Several websites have been created to promote “free” government cell phones, including the”The Obama Cell Phone” website at Obamaphone.net.”

How do I Get an Obama Phone?
http://obamaphone.net/how-do-i-get-an-obama-phone - 53k -

Who Pays for the Obama Phone?
in Obama Phone Questions / no comments

“Lifeline is a government sponsored program, but who is paying for it. Some people claim that the government is using taxpayer’s money to run this program, however, the claim is false. Universal Service Fund (USF) which is administers by Federal Communication Commission along the Universal Service Administration Company (USAC), pays for the Lifeline phone assistance program.”

The money actually comes from a fee added to most people’s monthly phone bills, called the Universal Service Fund fee. I personally pay for 5 monthly cell phone bills for my struggling business and my struggling family.

Comment by Northeastener
2012-09-28 08:00:12

In 2008, the program was expanded to support cell phones which quickly escalated the cost of the program. In 2008 the program cost $772 million, but by 2011 it cost $1.6 billion.

More free $h1t for the free $h1t army. I’m waiting for the liberals to defend this program because poor people deserve cell phones, too. As I said yesterday, liberals are social engineering their way to a Marxist paradise… one tax at a time.

Comment by Bad Andy
2012-09-28 08:24:01

Come on liberal posters. We really need to hear how everyone deserves a cell phone. Keep in mind any old cell phone can at least dial 911, so please take emergencies out of the argument. Also keep in mind you can get phones that stay active with minimal minutes for under $10 per month.

Comment by measton
2012-09-28 08:58:20

The president has no direct impact on the program, and one could hardly call these devices “Obama Phones,” as the e-mail author does. This specific program, SafeLink, started under President George Bush, with grants from an independent company created under President Bill Clinton, which was a legacy of an act passed under President Franklin Roosevelt, which was influenced by an agreement reached between telecommunications companies and the administration of President Woodrow Wilson

factcheck.org/2009/10/the-obama-phone/

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Comment by Bad Andy
2012-09-28 09:11:05

Obama is good at executive orders. He could get rid of this program via executive order and I for one wouldn’t complain about the abuse of power.

 
Comment by measton
2012-09-28 09:20:07

You are kidding right ANDY
You post a challenge to liberals only to find that the program you’re complaining about was started by your side. Unknown Tennants article calls it the Obama Phone

Never argue with a PIG, it wastes your time and annoys the pig.

 
Comment by michael
2012-09-28 13:19:29

so she should be voting for a republican instead.

interesting.

 
 
Comment by measton
2012-09-28 09:02:35

Man do you guys all get the emails in the morning and run right to the computer.

http://www.snopes.com/politics/taxes/cellphone.asp

You know computers can be used for factchecking as well as propaganda.

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Comment by Bad Andy
2012-09-28 09:09:37

No one except the person being interviewed in the video (the one with the free phone) claimed that Obama started the program only that the program is stupid and wasteful.

 
Comment by measton
2012-09-28 09:21:54

They called it the obama phone giving him ownership??

 
Comment by Bad Andy
2012-09-28 10:05:16

The lady in the video called it the Obama phone and cited it for her reason for voting for Obama.

I simply asked for the liberal folks like yourself to start defending the program. Your only defense is we didn’t start it? Seriously?

 
Comment by measton
2012-09-28 11:16:09

Oh I see you’re innocent???

If anything it’s liberals who should be asking you to justify the plan.

 
 
Comment by measton
2012-09-28 09:08:34

The real beauty of this deal is that they add a fee to everyones cell phone. So it’s a hidden regressive tax on the middle class to prop up phone company profits. Now I can understand where it came from.

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Comment by aNYCdj
2012-09-28 10:08:31

But READ it again its 128 minutes a month…..and what you dont use gets rolled over…so its possible to wind up with 1000+ free minutes if you hardly use it…Or 250 minutes and you lose what you dont use…it gets reset back to 250 each month

Its only what… 4-8 minutes a DAY…..

 
Comment by measton
2012-09-28 11:14:08

So phone company makes bank for providing 4-8 minutes a day.

I’m not opposed to 4-8 minutes a day (job interview picking up kids calling a cab) but I imagine like with all programs like this the US gov is way overpaying for it. I also object to it being paid for by the middle class.

 
Comment by Ol'Bubba
2012-09-28 17:23:53

I have a prepaid phone and every 60 days I need to add 300 minutes to extend the activation time another 60 days. This have been going on for several years now. I have well over 4500 rollover minutes.

 
 
 
Comment by Blue Skye
2012-09-28 08:27:34

“I want there to be no peasant in my realm so poor that he will not have a chicken in his pot every Sunday.”

Henry IV

 
Comment by goon squad
2012-09-28 08:28:12

Read the link posted by Spook below to see what could happen when the Free Sh*t Army gets their Free Sh*t cut off.

On a related note, Northeasterner, we need a gun recommendation for elk, bighorn sheep, zombies. 30.06, .308, preferably whatever ammo is cheapest and widely available, advice please.

Comment by Carl Morris
2012-09-28 08:51:06

Big game hunting (legal hunting anyway) rules out the most commonly available stuff, which is .22lr and .223/5.56. But .308/7.62×51 or .30-06 or 7.62×39 would all be reasonable choices. Pick your favorite gun that fires one of those rounds and stock up on that ammo. .30-06 isn’t used as much these days as it used to be, so that would probably be my last choice of the 3.

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Comment by goon squad
2012-09-28 09:01:15

The squad has a Yugoslavian SKS and lots of cheap 7.62×39 which would be effective against zombies but not against larger game mammals.

 
Comment by Blue Skye
2012-09-28 10:04:55

Big game can be brought down efficiently with .22LR in the right hands. Less noisy and less messy.

 
Comment by Carl Morris
2012-09-28 10:24:25

That’s true, but in some cases .22LR can go horribly wrong. I’d have no hesitation about hunting big game at distances of less than 100 yards with 7.62×39, though.

 
Comment by Blue Skye
2012-09-28 10:43:00

I like .270 for pinpoint stopping power out to a couple hundred yards. It echoes though. Recently I have learned how to bring down a 25 pound groundhog with a pellet gun. There is a small spot behind the ear. Quiet has it’s advantages when hunting in town.

The target needs to hold still for me in either case.

 
 
 
Comment by Prime_Is_Contained
2012-09-28 08:34:30

In general, I don’t think people have a right to free or subsidized cell phones; it is a luxury, not a need for most people.

However, there is one class of folks for whom this does not apply. For poor women who have been victims of domestic violence, and have a restraining order against someone, a cell-phone and the ability to call the cops from anywhere can be the difference between life and death.

Comment by Bad Andy
2012-09-28 08:40:43

911 can be called from ANY cell phone active or not. Finding a phone that isn’t active isn’t hard.

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Comment by measton
2012-09-28 08:40:31

I’m sure this phone deal had a lot to do with lobbying by Verizon and others.

Not sure your casting the stones at the right people given it has been in place since 1984 (reagan) and was updated in 2008. How much more are they paying for cellular than land lines? Are there restrictions on amount of use?

You might want to check out FACTCHECK

factcheck.org/2009/10/the-obama-phone/
“This specific program, SafeLink, started under President George Bush, with grants from an independent company created under President Bill Clinton, which was a legacy of an act passed under President Franklin Roosevelt”

I liked this

You’re paying for it on your phone bill. It’s called the Universal Service Charge.

So another regressive tax on the middle class. The middle class pays for this via their phone bill, to the elite this is a rounding error.

So now it makes sense as to who passed it. A regressive hiddent tax on the middle class that allows corporate phone giants to make money.

Comment by In Colorado
2012-09-28 09:17:27

So now it makes sense as to who passed it. A regressive hiddent tax on the middle class that allows corporate phone giants to make money.

Ding, ding, ding! We have a winner!

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Comment by measton
2012-09-28 09:03:56

The president has no direct impact on the program, and one could hardly call these devices “Obama Phones,” as the e-mail author does. This specific program, SafeLink, started under President George Bush, with grants from an independent company created under President Bill Clinton, which was a legacy of an act passed under President Franklin Roosevelt, which was influenced by an agreement reached between telecommunications companies and the administration of President Woodrow Wilson.

factcheck.org/2009/10/the-obama-phone/

Comment by Blue Skye
2012-09-28 10:06:48

“Wilson phones” just doesn’t have the same ringtone.

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Comment by measton
2012-09-28 11:18:25

And we all know of course that these youtube videos weren’t produced for political purposes by the GOP right.

We still remember the capaign staffer saying we won’t let factcheckers run this campaign.

Comment by alpha-sloth
2012-09-28 16:11:49

And we all know of course that these youtube videos weren’t produced for political purposes by the GOP right.

And thanks to UNKNOWN TENANT/Jethro for running the BS for 3 days in a row now. Jeez, we let the Romney ‘planes should have windows you can roll down’ thing go after one day of yucks.

And it was true, unlike your propaganda.

Comment by UNKNOWN TENANT
2012-09-29 05:37:25

“And we all know of course that these youtube videos weren’t produced for political purposes by the GOP right.”

SEIU Protesters Admit to Being Paid $11 an Hour to Protest Romney Event

Posted on September 27, 2012 at 5:23pm by

SEIU protesters outside a Mitt Romney campaign event in Ohio on Wednesday admitted on camera that they were paid $11 an hour to picket.

The video, posted to YouTube on Wednesday, showed protesters carrying a variety of signs including “SEIU for Obama 2012.” Some wore T-shirts in the labor union’s signature purple.

“We rode down here today,“ one man with an ”SEIU for Obama” sign said on camera. “They’re paying $11 an hour.”

http://www.theblaze.com/stories/seiu-protesters-admit-to-being-paid-11-an-hour-to-protest-romney-event/ - 150k -

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Comment by UNKNOWN TENANT
2012-09-29 05:46:11

“And it was true, unlike your propaganda.”

Tapped? ‘LifeLine’ program offers free phone

By Kim Komando, Special for USA TODAY
Updated 5/31/2012 3:56 PM

Going through a rough patch financially? As you cut your monthly bills to the bone, it may be tempting to decide to go without cell phone or Internet service.

If you meet certain low-income requirements, you can receive a free basic cell phone with a free calling plan of 250 minutes per month. You may also be eligible to receive a $10 per month broadband Internet connection and a low-cost desktop or laptop computer for your family.

MORE: Komando columns
The FCC’s LifeLine Assistance program was set up in the ’90s to help low-income families with monthly landline bills. Over the past few years, the program has put more than 12 million wireless feature phones into the hands of low-income Americans.

The informational website FreeGovernmentCellPhones.net estimates that as many as 50 million additional households might be eligible for the program. LifeLine is funded by the small Universal Service Fee that is added to phone subscribers’ monthly bills.

If you are in one of the 38 participating states, you’ll next need to confirm that you qualify for the program. Income guidelines for free phones vary by state. If you already receive food stamps, Supplemental Security Income, home energy assistance or free school lunches, you will likely qualify for a free phone.

In addition to the feature phone and 250 minutes, eligible participants usually receive voice mail, caller ID and call waiting. You can tack on a low-cost texting plan, if needed, and it’s easy to buy extra minutes when appropriate. No contracts are required.

When your financial situation improves, you just drop out of the program. If a year goes by and you still need the service, you’ll re-qualify by answering a few questions.

http://www.usatoday.com/tech/columnist/kimkomando/story/2012-06-01/low-income-lifeline-plan/55315532/1 - 53k

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 06:10:51

Some posters here claim this graph is meaningless for predicting election outcomes, but I disagree, at least as regards the popular vote in the upcoming election. I understand the Electoral College is a very different ballgame.

I note the graph has been rescaled to show the Obama price heading north of $0.80.

 
 
Comment by Spook
2012-09-28 06:34:10

Comment by Combotechie
2012-09-28 05:26:36
If we all just go down for once we may not, for once, come back up. We are in uncharted territory here.
————————————————

Some people have seen it go down in other countries, but there was always somewhere to move to get away from it.

Most of these guys are confident of their survival, but they will be disapointed when they realize thats all they get to do.

http://westernrifleshooters.wordpress.com/2012/09/03/bracken-when-the-music-stops-how-americas-cities-may-explode-in-violence/

If you read the comments, notice they degenerate into people saying they will kill children; and/or eat people they kill…

Like I said, the ghetto is not a place, its a person.

*stay out of the ghetto*

Comment by Combotechie
2012-09-28 07:04:18

“Like I said, the ghetto is not a place, its a person.”

And, like I said, it is fortunate for the rest of us that those ghetto persons tend to collect in one location.

All one needs to do is identify the location and then not go there.

Comment by Combotechie
2012-09-28 07:18:01

If a thief is going to steal from a house he first needs to case - he needs to identify who is at home and who isn’t, who has something worth stealing, who doesn’t, etc.

This is easy to do when the thief lives in the neighborhood but it is tough to do when he has never been there before. This is - partly - the reason crime is so high in the high-criminal-count areas and so low in the low-criminal-count areas, why poor people who have nothing worth stealing have bars on the windows of their houses and people who live elsewhere who do have things worth stealing have no bars at all on their windows.

Comment by Combotechie
2012-09-28 07:52:55

It’s interesting that the looting and burning by the ghetto residents occur in the very ghettos they live in. The rioters in South Central L.A. never seen to think of storming Rodeo Drive in Beverly Hills even though that is where the money is and it is only an inch or so away on the map.

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Comment by Urbanachiever
2012-09-28 08:35:33

Logistics?

 
Comment by In Colorado
2012-09-28 09:19:09

I lived in San Diego during the LA Rodney King riots. There was a great deal of palpable fear that the riots would make it to “America’s Finest City”.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 19:42:22

Policing?

 
 
 
 
Comment by goon squad
2012-09-28 07:20:26

That article is EXCELLENT! A perfect summary of the Long Hot Summer that no amount of COEXIST stickers will ever prevent :)

Comment by Bub Diddley
2012-09-28 09:00:49

You were predicting this “long hot summer” all winter and spring.

It is now almost October, and I didn’t see no long hot summer, except in temperature.

Comment by goon squad
2012-09-28 09:05:29

We know :(

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Comment by In Colorado
2012-09-28 09:25:26

I didn’t see no long hot summer

Maybe because the “free sh!t army” is still getting their SNAP cards recharged each month.

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Comment by Spook
2012-09-28 09:03:37

Is it just me? or does anyone else see how Combo just don’t get it?

If this scenario goes down there is not going to be a “safe place” for anyone to observe from except a coffin.

Read the comments on that site. These people are all gunned up for the zombies and fedgov… but you can be sold out for 30 peices of SILVER by your own “friends”.

In addition, the real wildcard in this situation is all the people who ain’t sayin nothin?

They ain’t makin youtube videos, they ain’t spoutin off in any comments section… Waterboarding is gonna make a comeback when criminals are looking for your stash:

“I don’t have any, but I know a guy that does… his name is COMB….”

And another scary part will be all the nervous people walking around with fire arms for the first time and NO TRAINING.

Even cops often start shooting because another cop had an accidental discharge.

Good luck Combo.

Comment by Carl Morris
2012-09-28 10:29:07

If this scenario goes down there is not going to be a “safe place” for anyone to observe from except a coffin.

I don’t think that will be true for sparsely populated areas. It might be true for the places most people think of as civilization, though.

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Comment by Bluestar
2012-09-28 13:06:57

Do you ever wonder that just ‘browsing’ extreme left/right web sites flags your IP (and maybe a lot more) info to the State Security Apparatus? There are at least a dozen government agencies who must have vast digital surveillance capabilities that ‘may’ be monitoring them. Don’t be dumb, think before you click.
Anyway we all know there are crazy people out there and their psychosis can be transmitted digitally it seems.

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Comment by Spook
2012-09-28 16:09:46

Bluestar, how does adding hay to the haystack make it easier to find a needle?

 
 
 
 
Comment by Carl Morris
2012-09-28 08:45:19

I wonder why the author assumes that cell phone towers wouldn’t immediately be shut down.

I also wonder why the author assumes that the vigilantes will have millions of rounds available for ambushing rioters. Yeah, “zombie fighters” have been stockpiling ammo, but probably not nearly enough for conducting those kind of operations for very long.

Comment by goon squad
2012-09-28 08:53:56

Dude, you’re in Colorado. Look to critically acclaimed film Red Dawn as inspiration. If a ragtag bunch of high school kids can take on the Soviet-backed Nicaraguan army, anyone could take to the hills with only what they can carry and fend off the zombie hordes.

WOLVERINES!

 
Comment by Spook
2012-09-28 09:32:00

“I wonder why the author assumes that cell phone towers wouldn’t immediately be shut down.”

what? and leave frightened nervous heavily armed people alone with their thoughts to wonder whats going on?

Bad idea when a cop can’t get through to his own family.

BTW, Is it just me? or does anyone else see how Combo just don’t get it?

If this scenario goes down there is not going to be a “safe place” for anyone to observe from except a coffin.

Read the comments on that site. These people are all gunned up for the zombies and fedgov… but you can be sold out for 30 peices of SILVER by your own “friends”.

In addition, the real wildcard in this situation is all the people who ain’t sayin nothin?

They ain’t makin youtube videos, they ain’t spoutin off in any comments section… Waterboarding is gonna make a comeback when criminals are looking for your stash:

“I don’t have any, but I know a guy that does… his name is COMB?”

And another scary part will be all the nervous people walking around with fire arms for the first time and NO TRAINING.

Even cops often start shooting JUST because another cop had an accidental discharge.

Good luck Combo.

Comment by Combotechie
2012-09-28 16:22:31

“BTW, Is it just me? or does anyone else see how Combo just don’t get it?”

If you mean by “get it” as buying into the prospect of a total collapse of law and order and society and such then it is true, I do not get it.

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Comment by ahansen
2012-09-28 23:18:11

Spook,

These “survivalists” haven’t the first clue how silly they’ll look with their stockpiles of ammo when they’re defending their stash all by their lonely and they’re surrounded by twenty determined invaders. Ask anyone with an orchard and a local blackbird population how easy it is to stay awake and alert for 24 hours a day over the course of a month.

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Comment by Carl Morris
2012-09-29 07:37:03

Yeah, even survivalists need to band together in groups big enough to share watch duty.

 
 
 
 
Comment by b-hamster
2012-09-28 09:25:11

Interesting link, albeit a bit racially slanted. Although it discusses the MUYs, what about all the chalkie hilljacks that will be storming the Super Walmarts when their government adsistance stops? There are more whites on EBT (from a numbers standpoint) and from from my knowldege, just as heavily armed and more difficult to contain due to their dispersion. Probably the concentration of MUYs in the inner cities make it easier to orchestate a flash mob.

It’s refreshing to see such fear in Americans, land of the free.

Comment by goon squad
2012-09-28 10:22:47

refreshing to see

Yes, very :)

 
Comment by ahansen
2012-09-28 23:20:29

“Chalkie hilljack”? Dang. That’s just excellent! Thanks, b-H.

 
 
Comment by ahansen
2012-09-29 01:19:44

Fear and loathing and gunporn at its finest. These nitwits and all their “platforms” wouldn’t last ten minutes in an actual confrontation, (most likely, they’d be laughed out of the hood) but maybe it makes them feel better to play out their little scenarios for the benefit of this pathetic blog.

When I got to the fellow slavering about crucifying five-year-olds and posting it on the internet, I had to call it a night. Feel like soaping my eyeballs, but thanks for the link. Can have some fun with this one…. ;-)

 
 
Comment by azdude
2012-09-28 06:40:44

home equity and stock gains are the new economy. The system doesnt work if those assets are not rising.

Comment by Blue Skye
2012-09-28 08:47:17

Did you just wake up from a six year nap?

Comment by azdude
2012-09-28 09:21:31

just saying they will print until home prices go up bro.

Comment by oxide
2012-09-28 16:46:35

Printing money and rising home prices
are
the
same
thing.

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Comment by Blue Skye
2012-09-28 21:53:07

“Printing money and rising home prices are the same thing”

Earning and borrowing are the same thing!

 
 
 
 
 
Comment by UNKNOWN TENANT
2012-09-28 06:47:59

The Housing Bubble in Phoenix Is an Utter Fraud and Scam

Gary Anderson, Strategic Default Books | Sep. 27, 2012, 2:05 PM

http://www.businessinsider.com/the-housing-bubble-in-phoenix-is-an-utter-fraud-and-scam-2012-9 - -

Comment by azdude
2012-09-28 07:00:32

there is another bubble already, that was fast.

 
Comment by Arizona Slim
2012-09-28 07:03:24

Key points from the linked article:

The only way people will risk negative equity is if their house prices are cheaper than rent. But the artificial inflation of housing prices will do nothing but push the average Joe away from housing.

Keep in mind that about 4.4 million houses were sold in 2011 and only 2.4 million mortgages were taken out for purchase. That is a mortgage depression and the rise in house prices has not changed that mortgage depression.

People are learning that the uptick in prices is a scam, both by banks withholding massive inventory, and by the Fed making more easy money available to the rich. Once they own most of the inventory, they will be forced to initiate a housing bubble or they will be stuck with the properties.

Americans will downsize and live multigenerationally, in order to offset the fraud they know exists in real estate. Until there is wage growth, and that could be years or decades away, people will not trust any upward movement in real estate values.

Comment by In Colorado
2012-09-28 07:51:27

Once they own most of the inventory, they will be forced to initiate a housing bubble or they will be stuck with the properties.

Which they will rent out and since they pay 0% interest on the money they will make a profit. Could the FedRes, which is buying $40B of mortgages each month, end up becoming the nation’s landlord when it ends up owning the growing shadow inventory?

Comment by Blue Skye
2012-09-28 08:56:17

Why would the Fed become a landlord? That takes real work. The Fed will dump the houses in bulk to insiders and make it look like a profit on their supposed books. They don’t pay interest because they don’t borrow, they create the money to plug these holes. The shadow inventory is headed for a big flush because of this Fed program. JMO.

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Comment by In Colorado
2012-09-28 09:21:50

In the end its the same thing. A small elite ends up owning everything.

 
Comment by Blue Skye
2012-09-28 09:58:59

Falling asset prices benefits the modest and crushes the elite.

 
Comment by Arizona Slim
2012-09-28 10:27:03

Why would the Fed become a landlord? That takes real work.

Methinks that a lot of the buyers of these properties will also learn the truth about landlording. As said above, it takes real work. And they won’t like that one single bit.

Expect to see a lot of these properties dumping in the coming years. Because landlording is a lot harder than kicking back and collecting rent checks.

 
Comment by In Colorado
2012-09-28 10:30:16

But only the elite is being allowed to buy up the bargain priced inventory.

 
Comment by Blue Skye
2012-09-28 10:36:23

And then they will find out what the market clearing price is. Early in good for them. Then they get crushed. See, I am always optomistic.

 
Comment by Carl Morris
2012-09-28 10:52:49

What about the elite with their own printing press? Do they even care what their assets are priced at?

 
Comment by In Colorado
2012-09-28 13:29:13

What about the elite with their own printing press? Do they even care what their assets are priced at?

Exactly.

 
Comment by In Colorado
2012-09-28 13:32:31

Then they get crushed. See, I am always optomistic.

You’re looking at it from an appreciation perspective, as opposed to a cash flow perspective. If they can borrow at 0%, the rentals will cash flow positive.

 
 
 
Comment by Rental Watch
2012-09-28 10:23:41

This is fascinating:

“Keep in mind that about 4.4 million houses were sold in 2011 and only 2.4 million mortgages were taken out for purchase. That is a mortgage depression and the rise in house prices has not changed that mortgage depression.”

Some of those 2 million cash buyers were owner-occupants (Awaiting), some were buy-flip investors, and some were buy-rent investors.

Now recognizing that there is a lot of churn here (a cash buyer might be a seller within the year, and re-buy with the same cash), at an average of, say $150k per home (US Median is higher than this), this is an amount of money “playing” in the housing market on a cash-buying basis of $300 billion.

Puts in perspective when people talk about $1 billion invested by a certain group–that’s a drop in the bucket relative to the overall cash buyer activity in the market.

Given that, how much is the “howmuchamonth” buyer really affecting the market?

If there weren’t cash buyers, how many “howmuchamonth” buyers would be filling the void (there are plenty of stories of sellers only accepting cash buyers)? Are there enough?

How much is this $300 billion being driven by people getting chased into the market by the Fed’s ZIRP?

How much is this $300 billion being pulled into the market because of actual rental yields generated?

Comment by Arizona Slim
2012-09-28 11:26:54

How much is this $300 billion being driven by people getting chased into the market by the Fed’s ZIRP?

My guess: Quite a bit of it. And I’ll betcha money that a lot of the “quite a bit” people have no clue about the realities of landlording. Boy, are they going to get schooled. And not in a good way.

How much is this $300 billion being pulled into the market because of actual rental yields generated?

My guess: Very little.

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Comment by Rental Watch
2012-09-28 12:21:57

I agree with your first guess. I think the jury is out on your second.

I’ve seen the math on the rentals. It is compelling when you are comparing the yields to apartments, etc. Whether the spreadsheets hold up under the bright light of real-life landlording is the big question.

I think we will find out quickly if the “pull” of this spreadsheet math is sticky.

In other words, I think plenty of investors have been pulled in by the spreadsheets. I don’t know whether they will stay. If we see similar or higher volume of cash buyers ($300 Billion annual run rate), I think we can conclude that the “pull” is real.

If the “pull” is an illusion, then many of those who put in the money for rentals in 2011 won’t be seeing the yields they were promised, and won’t be back to the game for 2012–word will spread quickly that the rental game doesn’t work, and capital will stop flowing into the sector.

Among what I have seen (for what it’s worth), are smaller operators who started small (maybe $5 million or $10 million), and are now on their second or third fund of capital. The fund sizes are sequentially bigger. How much of this is coming from investors who are “re-upping” is unknown to me.

 
 
 
 
 
Comment by goon squad
2012-09-28 06:54:29

Here’s your “Recovery” in the WSJ

Spending, Driven by Prices, Outpaced Wage Growth, Again:

“U.S. consumer spending outpaced wages in August, the latest data shows, and while the spending pace was the fastest in six months, the undercurrents don’t bode well, as spending was driven by higher prices, rather than demand, forcing Americans to dip into their already meager savings.

The savings rate fell to 3.7% from 4.1%, meaning Americans cut into their savings to support spending, and since the spending is largely as a result of higher prices, this means inflation is eating into savings. Wages are not keeping pace with even tepid levels of inflation, and that’s a concern.”

A concern to who? The future belongs to Lucky Ducky :)

Comment by In Colorado
2012-09-28 07:48:05

LOL! I recall some years ago when I worked at HP and found out that wages were being cut across the board. When I complained to a manager I was told it was that it wasn’t their problem, and that I was welcome to leave if I didn’t like it. They certainly were not “concerned”.

Of course, they are concerned that people aren’t buying those nifty photorealistic printers HP makes along with the pricey ink cartridges they require. But that’s what happens when you have to cut luxuries out of your budget when your wages fail to keep pace with inflation.

So maybe they should be concerned.

Comment by polly
2012-09-28 10:18:31

Paying workers a wage that allowed them to buy the goods they made worked for Ford when they were pretty much the only ones making cars and a car was *the* single luxury item that everyone (or at least all the factory workers) wanted. Also, the car was used in public, so it was advertising as well as sales.

With pretty much anything else, you are dealing with a totally different situation. If HP pays its workers enough to buy their fancy printers, they will probably spend that money on all sorts of other luxury goods before buying a fancy printer even crosses their mind. They get all the cost of paying the extra salary and almost none of the benefits of having well-paid workers in the economy.

Comment by In Colorado
2012-09-28 11:34:29

I agree. The problem is that HP (and everyone else) wants the “Other Guys” to pay the wages that keep pace with inflation, but almost no one does.

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Comment by UNKNOWN TENANT
2012-09-28 07:07:42

Updated: 9:37 a.m. Friday, Sept. 28, 2012 | Posted: 9:36 a.m. Friday, Sept. 28, 2012

Higher gas costs push US consumer spending up

By MARTIN CRUTSINGER

The Associated Press

WASHINGTON —
Americans boosted their spending in August even though their income barely grew. Much of the spending increase went to pay higher gas prices, which may have forced consumers to cut back elsewhere.

Comment by Englishmanin NJ
2012-09-28 07:53:07

Oh, that’s a bit inconvenient for the “everything is under control” crowd.

BTW, talk of QE4 on Yahoo Finance this morning. Now, why didn’t I think of that?

Comment by Bad Andy
2012-09-28 08:28:13

I heard it called QE3.5, but yes.

 
 
Comment by oxide
2012-09-28 08:20:57

If consumers cut back elsewhere in order to buy gas, then how did they “boost” their spending? Spending should have remained the same.

Comment by goon squad
2012-09-28 09:15:45

Reduced savings, per the WSJ article posted above.

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 07:19:44

Just lately, I have seen lots of economic data releases come out “the worst since 2009.” I’m sure it is just coincidental, though…after all, we have been assured and reassured the economic recovery is intact and on track.

Chicago PMI lowest in three years

Stocks feel Chicago chill

A contraction in manufacturing activity in the Chicago-area in September causes stock losses to escalate; The Chicago PMI falls to 49.7, the lowest level in three years.

 
 
Comment by X-GSfixr
2012-09-28 08:11:10

Re: ahansen’s “casement windows” from yesterday.

I’m currently at one of the big MRO facilities for corporate aviation, doing a “C” Check. Lots of engineers doing custom aircraft modifications on corporate jets, from Cessna CJs up to G550s and Bombardier Global Expresses.

Told one of them I wanted an RFQ to install roll down windows in our airplane. After the laughter died down, they asked me if we were planning on flying Mitt Romney. Laughter started again when I told them we wanted it for in-flight fire prevention/smoke removal.

You can make a dog turd a delicacy. But why waste the time. Even cracked 1/16th of a inch, opening the windows will dump the pressurization. Then when the pressure is equalized, you will have -40 to -60F air blowing in the cabin at 400-600 mph.

Ask an old B-17 or B-24 waist gunner what it was like having 200 mph blow on you at 20,000 feet.

Comment by Ross Peroxide
2012-09-28 08:16:23

Is it possible that it was a hint to Mittens that it’s not his time?

Comment by Ross Peroxide
2012-09-28 08:17:42

(Mega TFH)

 
 
Comment by MiddleCoaster
2012-09-28 08:27:26

Seems there might be an opportunity here for a new tourist experience: “Why go to Mt. Everest when you can duplicate the weather conditions in the safety of a jet aircraft?”

:D

 
Comment by Arizona Slim
2012-09-28 10:28:47

You can make a dog turd a delicacy. But why waste the time. Even cracked 1/16th of a inch, opening the windows will dump the pressurization. Then when the pressure is equalized, you will have -40 to -60F air blowing in the cabin at 400-600 mph.

Ask an old B-17 or B-24 waist gunner what it was like having 200 mph blow on you at 20,000 feet.

And this is why I so enjoy the HBB. Thanks again to Ben for creating this place for our big dysfunctional family.

 
2012-09-28 16:32:07

You can make a dog turd a delicacy. But why waste the time?

GENIUS.

BWAHAHAHHAHAHAHHAHAHAHHAHAHHAHAHHHHHHHHHHHHHHH!!!!

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 19:46:59

Just use the finest chocolate, and a dog turd cast. Same visual, but much better flavor.

 
 
Comment by ahansen
2012-09-29 00:04:11

:-)

 
 
Comment by Crater
Comment by Cantankerous Intellectual Bomb Thrower©
2012-09-28 09:09:19

NBC News | Aired on June 21, 2012
House swallowed by sinkhole in Florida

A growing sinkhole has opened under Florida home. WFLA’s Samara Sodos reports.

Comment by frankie
2012-09-28 09:13:30

A block of flats which has been left teetering on the brink of collapse by floods this week is set to be demolished.

Spencer Court in Newburn, Tyne and Wear, was left with its foundations totally exposed after extreme rainfall ripped away the ground from underneath the building.

Read more: http://www.dailymail.co.uk/news/article-2209934/UK-floods-Block-flats-left-teetering-brink-collapse-heavy-rains-demolished.html#ixzz27mWJduwC

Sometimes that river view isn’t all it’s cracked up to be.

 
Comment by michael
2012-09-28 09:48:00

come on…all it needs is granite and stainless steel and it would be worth…ummm…i don’t know….a zillion dollars!

 
 
 
Comment by rms
2012-09-28 12:15:08

Money talks . . .

“David Green: The Biblical Billionaire Backing The Evangelical Movement”

“David Green insists God is the true owner of his $3 billion arts and crafts chain. Acting as His disciple, Green has become the largest evangelical benefactor in the world—with plans for unprecedented gifts once he’s in heaven.”

http://www.forbes.com/sites/briansolomon/2012/09/18/david-green-the-biblical-billionaire-backing-the-evangelical-movement/

Comment by In Colorado
2012-09-28 13:25:19

FWIW, unlike other big box stores that pay its employees minimum wage, he pays his in store staff $13/hr.

 
 
Comment by measton
2012-09-28 13:22:31

I thought ACORN was the problem??

news.yahoo.com/voter-registration-problems-widening-florida-154156242–election.html

We need someone to dress up like a pimp and investigate

 
Comment by I blame progressives
2012-09-28 14:39:17

Progressives are fully supporting and covering for the Islamic Jihadists in this country and around the world, the same progressives who routinely trash Judaism and Christianity. Why?

Progressives in our own government are bending over for the Jihadists to such a degree, they were willing to sacrifice four American patriots in Libya and cover for the Jihadists by blaming the attack on a ridiculous movie. Why?

Progressives in the United Nations are pushing a global ban on blasphemy towards Islam. Why?

Comment by aNYCdj
2012-09-28 15:38:02

Its easy…they play a game called

My gawd is better then your gawd, if you dont convert..I’ll kill you.

simple easy game.

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-28 19:48:38

Also, a fatwa on your head if you make fun of my gawd.

Comment by rms
2012-09-28 20:08:27

+1 LOL . . . hole in one!

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Comment by Michael Viking
2012-09-28 21:36:56

It’s the same in politics. Muslicrats vs. Christiacans. Each is sure they have all the answers and the other team is full of idiots.

Comment by rms
2012-09-28 22:35:25

“Muslicrats vs. Christiacans.”

+1 Awesome!

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Comment by rms
2012-09-28 22:49:42

Here’s a professionally staged listing!

Redfin North Tempe, AZ only $155/sqft
http://www.redfin.com/AZ/Tempe/24-E-Garfield-St-85281/home/27362864

 
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