September 30, 2012

Bits Bucket for September 30, 2012

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




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Comment by frankie
2012-09-30 06:00:10

While police and the conservative government of prime minister Mariano Rajoy were accused of authoritarian behaviour, radical protesters from both the far left and the far right were putting a hard, street-fighting edge on to the once peaceful protests of the civilised but ineffectual indignados.

Cristina Cifuentes, the government delegate in Madrid, had warned before the protests that they were being infiltrated by violent members of Spain’s far right and were attracting the country’s most radical leftwingers. But protesters later pointed to a group of undercover policemen who, they claimed, had been at the front of the protest waving red flags and encouraging others to violence.

Other police certainly thought their undercover colleagues were troublemakers, and there is also film of one of them being dragged out of the crowd to be arrested and shouting: “I am a colleague! I am a colleague!”

http://www.guardian.co.uk/world/2012/sep/29/spain-riot-police?newsfeed=true

Comment by alpha-sloth
2012-09-30 13:22:28

protesters later pointed to a group of undercover policemen who, they claimed, had been at the front of the protest waving red flags and encouraging others to violence.

…also film of one of them being dragged out of the crowd to be arrested and shouting: “I am a colleague! I am a colleague!”

Yup. The 1%ers have their own ‘black bloc’ that they send in to turn peaceful protests violent- thus discrediting the protesters. We saw it here with the Occupy protests.

 
 
Comment by azdude
2012-09-30 06:00:45

Do they have stated refinances yet?

Comment by One For Each State
2012-09-30 06:03:41

There are 57 stated refinances.

Comment by azdude
2012-09-30 06:09:39

can i interest anyone in some bird dogging cash?

http://www.youtube.com/watch?v=fN_vvQEiedQ

 
 
 
Comment by polly
2012-09-30 06:04:50

For those of you who were worried about FBs getting undeserved loan forgiveness from the program that encourages banks to forgive, this is a must read. It is pretty short. I’m just going to post the whole thing. No way to know yet exactly what the banks are doing since they are blaming the kerfuffle on a poorly worded letter, but please feel free to speculate if you like.

Link: http://www.nytimes.com/2012/09/30/business/when-banks-erase-a-debt-that-isnt-there.html

Fair Game
How to Erase a Debt That Isn’t There
By GRETCHEN MORGENSON
Published: September 29, 2012

GREETINGS, unhappy homeowners! Here’s some wonderful news:

“We are canceling the remaining amount you owe Chase!” says a letter that JPMorgan Chase sent recently to thousands of home loan borrowers. “You are approved for a full principal forgiveness of your Home Equity Account,” says another, from Bank of America.

Jackie Esposito, of Guilford, Conn., got a letter like that. But she wasn’t elated — because she doesn’t owe the money anymore. She and her husband filed for bankruptcy three years ago. The roughly $64,000 they owed Chase has been legally wiped out.

What’s going on?

Cast your mind back to February. Five of the nation’s big banks, including Chase and Bank of America, agreed to pay $25 billion to settle state and federal claims over questionable mortgage practices and promised to work harder to help borrowers who were in trouble. To prod the banks, the government said it would give them credits against the amounts they agreed to pay.

So, to the ire of customers who couldn’t get banks to work with them before, banks are now forgiving debts that no longer exist.

“When I got this letter that said they were going to relieve our debt, I just about fell over,” Ms. Esposito said last week. “You can’t forgive a debt that you’re legally unable to collect.”

Others have received similar letters about phantom debts. A borrower in Florida received word this month that Chase was erasing $190,065.10 of debt that had already been wiped out. Bank of America told a Virginia resident that a $231,767 home equity loan was being forgiven, even though the debt was discharged last May.

Neil Crane is a lawyer in Hamden, Conn., who represented Ms. Esposito and her husband in their bankruptcy. He says four of his other clients have recently received letters from banks claiming to forgive discharged debt.

“I never thought in my wildest dreams that the banks would do this properly,” Mr. Crane said last week. “But I think it’s really wrong to be foreclosing on mortgages you don’t own and relinquishing debt you don’t own.”

It’s bad enough that these letters are inaccurate. But even worse are the tax problems that they may create for people like Ms. Esposito. In most cases, the Internal Revenue Service considers debt that is forgiven to be taxable income. One exception occurs in bankruptcy; when a debt is discharged, it is not taxable.

But the letters sent by Chase and Bank of America clearly warn that the forgiveness will be reported to the I.R.S. If so, these borrowers may have to prove that the banks erred in claiming to have forgiven the debts.

I ASKED spokesmen for Chase and Bank of America how they could forgive debts that no longer existed. Both gave the same unsatisfying answer. Very similar letters had been sent, both banks said, to two very different types of borrowers. One set of borrowers has outstanding debt that the banks are offering to forgive. The other set has had their debts discharged in bankruptcy, but the bank still holds a lien against their properties. Releasing the liens provides a benefit to borrowers when they go to sell their homes, and both banks said the letters were intended to notify borrowers whose liens were being released.

Why not take care to write letters specifically tailored to each borrower’s situation?

Dan Frahm, a Bank of America spokesman, said the bank would work on clarifying what was in the letters to borrowers. And, late Friday, the bank put a more extensive description of the forgiveness and lien release program on its Web site. Not a bad idea, since nowhere does Bank of America’s letter discuss releasing the lien. Mr. Frahm estimated that 12,000 Bank of America customers whose debts had been discharged had received these letters.

Tom Kelly, a Chase spokesman, conceded that the bank “may have caused some confusion for customers.” Its letter does note that the bank is releasing the lien on the property.

But even this is incorrect in Ms. Esposito’s case, Mr. Crane said. Her lien was actually eliminated back in 2009, during her bankruptcy proceeding.

All of this made me wonder: are the banks’ forgiveness letters a way to gain credits for debts these institutions are improperly claiming to have extinguished? The banks say no.

But Chase appears to be claiming to release a lien on Ms. Esposito’s property that it does not hold. And under the mortgage settlement, it could receive a credit.

So I asked Joseph A. Smith Jr., a former banking regulator in North Carolina who is monitoring the settlement, how he planned to vet the banks’ claims of relief provided and credit earned. For example, how will he ensure that institutions do not receive credit for releasing liens that have been eliminated?

“We will review compliance with this requirement as we will with all of the consumer relief requirements,” Mr. Smith said, “through review of the corporate records relating to such transactions.”

Good luck with that.

AS for Ms. Esposito, she said she found the bogus loan forgiveness letter from Chase especially upsetting because of the years she has spent trying to have the bank modify her first mortgage. She pays 9 percent on her loan and cannot refinance it into a lower-rate mortgage, given her recent bankruptcy.

Chase won’t help her modify her loan, Ms. Esposito said, but it is happy to help by forgiving a loan that has already been discharged and releasing a lien that is already gone.

“There is no chance that this group of institutions can help homeowners,” Mr. Crane said. “They should not be in charge of fixing problems they helped create.”

Comment by Combotechie
2012-09-30 06:28:48

“To prod the banks, the government said it would give them credits against the amounts they agreed to pay.”

I love it. Do not collect money that you are not owed and you get credits from the government for doing so, or not doing so - or whatever.

 
Comment by UNKNOWN TENANT
2012-09-30 06:46:44

“There is no chance that this group of institutions can help homeowners,”

Still sooooooo many people down here living in a house they have not made a payment on in 3-5 years. I guess I am wrong but that seemed like help to me.

Comment by UNKNOWN TENANT
2012-09-30 06:59:06

New Jersey Housing Suffers as Defaults Exceed Nevada: Mortgages

By John Gittelsohn and Prashant Gopal
Sep 18, 2012 10:29 AM ET

Wendell and Margret Brady haven’t paid their mortgage in more than three years, withholding the money amid a foreclosure dispute on the couple’s 11-bedroom house in Morristown, New Jersey.

The Victorian home, built in 1887 and owned by the retired couple for 38 years, is part of the growing backlog of properties facing repossession in the state, which now has the second-highest serious delinquency rate in the U.S. While shrinking nationwide, the pipeline of distressed real estate, or shadow inventory, is also growing in New York, Connecticut, Maine and Pennsylvania because of state laws that slow the foreclosure process. The Bradys heard nothing from their lender from May 2011, until a letter arrived in the mail last week.

“This was like going back to day one,” said Margret Brady, 77, after she and her husband received on Sept. 15 the certified letter saying they must pay $223,730 by the end of the month or face losing the house. “It was like we hadn’t gone through any of the stuff of the last three years.”

New Jersey’s judicial review of all foreclosures, which delays seizures to help borrowers, threatens to hold down prices for years as properties remain subject to repossession and then may be sold at a discount. That’s buffeting a housing market already hurt by unemployment that’s risen to a 35-year high.

http://www.bloomberg.com/news/2012-09-18/new-jersey-housing-suffers-as-defaults-exceed-nevada-mortgages.html - 149k -

Comment by aNYCdj
2012-09-30 07:51:22

seems like our hail mary pass…hire a couple of million unemployed to tear down all the rotted abandoned houses in america…recycle the parts ..make sure no illegals are hired then all the money is recycled back into our county……what else do they have left?

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Comment by Blue Skye
2012-09-30 08:51:37

How can there be illegals when there is no law?

 
Comment by aNYCdj
2012-09-30 09:05:52

4 more deadbeat years…

You should honor the deadbeats with more taxes on your boat.. you use it for business…i want MY free phone!

 
Comment by alpha-sloth
2012-09-30 13:30:07

i want MY free phone!

Are you on SNAP, dj?

 
Comment by aNYCdj
2012-09-30 23:59:25

Nah I just want a free phone so i can love ohbewanna…..maybe i should join the freee $$$heett army….there must be a white folks entitlement plan too…right?

Its just pathetic our country has come down to find your own clients if you want a job.

 
 
Comment by B. Durbin
2012-09-30 08:13:28

The mortgage they haven’t paid in three years… but have owned for 38?

Why the hell would anyone have a mortgage on their home after thirty years? *headdesk* (The only reason to get a thirty year mortgage is if you’re intending to pay it off early… which you can do in nineteen years if you make just one extra payment a year.)

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Comment by David Lereah
2012-09-30 08:29:23

“Why the hell would anyone have a mortgage on their home after thirty years?”

Hey ease up! All he was doing was handling his finances efficiently.

 
Comment by UNKNOWN TENANT
2012-09-30 08:55:56

“Why the hell would anyone have a mortgage on their home after thirty years?”

STANLEY!

lendingtree commercial - YouTube
http://www.youtube.com/watch?v=hn5EP9StlVA - 153k -

Call 1-800-555-TREE now

 
Comment by Prime_Is_Contained
2012-09-30 09:34:18

Hey ease up! All he was doing was handling his finances efficiently.

Yeah, I’m sure was one of those “sophisticated” types that bought the line about not paying off your house and investing elsewhere at higher rates…

How’s that working out for ‘ya, Wendell?

 
Comment by oxide
2012-09-30 11:50:05

The only reason to get a thirty year mortgage is if you’re intending to pay it off early… which you can do in nineteen years if you make just one extra payment a year

How do you get that? I’m making the equivalent of 1.5 extra payments a year and my mortgage will be about 22.5 years.

 
Comment by Rental Watch
2012-09-30 13:01:54

It’s a variable effect based on interest rates.

Example. If the interest rate were 0%, paying one extra payment per year would have your mortgage repaid in almost 28 years.

At my rate, an extra payment each year gets my loan repaid in a shade over 26 years.

At 7%, an extra payment each year gets the loan repaid in 24 years.

At 10%, an extra payment each year gets the loan repaid in a shade over 21 years.

 
Comment by B. Durbin
2012-10-07 06:17:10

Ah. My math is probably off because we’re paying half the monthly every two weeks… while that works out to one extra payment per year, interest-wise it front-loads it by a bigger margin. And I don’t know exactly how long, because we throw extra money at it when we can.

 
 
Comment by Diogenes (Tampa, Fl)
2012-09-30 11:35:52

That’s buffeting a housing market already hurt by unemployment that’s risen to a 35-year high.
What?
That can’t be so. Obama’s fiscal stimulus and “jobs programs” saved America from collapse.
I see the ads all the time about how he “added” new jobs to the economy.
This must be a lie.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 07:51:43

“I guess I am wrong but that seemed like help to me.”

Banks call it forbearance when they help homeowners who cannot pay their mortgages by letting them live rent-free indefinitely.

Comment by polly
2012-09-30 09:51:41

No, they call it collecting fees on a non-performing loan that they are servicing. They don’t care if it helps anyone.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:11:04

Polly, are you suggesting that banks get paid for servicing non-performing loans?

It seems like somebody is losing money on this arrangement…

 
Comment by polly
2012-09-30 13:13:02

Of course they get paid for servicing non-performing loans. If you were agreeing to do the administrative work necessary to service a loan, would you agree to accept no money but still do work once the borrower stopped paying? The whole point of being a servicer, not an owner of the loan is that you are no longer at risk of losing money if the borrower stops paying.

You need to read the next article I posted. The lawyer basically says they get paid more to service non-performing loans.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 16:16:47

“The lawyer basically says they get paid more to service non-performing loans.”

That’s amazing.

By contrast, I am overwhelmingly confident our Mexican yard crew gets paid the same for showing up and going through the motions of mowing the lawn, whether or not there is any grass to mow.

 
 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 07:49:40

“So, to the ire of customers who couldn’t get banks to work with them before, banks are now forgiving debts that no longer exist.”

It may seem to a lawyer or a reporter that a debt discharged in bankruptcy no longer exists, but I am pretty sure the lenders who got stiffed don’t feel that way.

Comment by polly
2012-09-30 09:52:50

It doesn’t matter what they feel. Once it is discharged in bankruptcy, their accountants have to take it off the books as an asset. It’s an accounting thing.

Comment by Dale
2012-09-30 11:07:11

If we could get everyone who can’t pay to file for bankruptcy, the banks would have to write off the bad loans and would no longer have enough assets to stay soluble.

Is this 40 billion/month to buy up the loans that are actually going bankrupt just to keep the banks afloat?

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Comment by Diogenes (Tampa, Fl)
2012-09-30 11:42:42

Is this 40 billion/month to buy up the loans that are actually going bankrupt just to keep the banks afloat?
You need to ask? Of course it is.
The ONLY reason the FED exists is to provide a backstop to the BAnksters. They can screw up whatever part of American or world economy they want. They have NO accountability.
The must be PAID. The need more money to live a grand lifestyle, jetting around the world to luxurious resorts, while the rest of us pay for it.
That is the way the “system” is set up, and supported by the Administration and the politicians.
The “rich” will get richer. Now at $40 billion a month times their leverage allowance. Is the 10X, 20X or 30X…….
We don’t know what that is because it’s all a national secret.

 
Comment by polly
2012-09-30 13:15:28

No, the bond holders (whether banks or not) would have to finally write down the value of the bonds to zero or very little more than that. Banks would have problems because they own some of them, but also insurance companies and pension funds would be in BIG trouble.

 
Comment by alpha-sloth
2012-09-30 13:47:53

but also insurance companies and pension funds would be in BIG trouble.

Exactly. It’s a bailout of the whole system.

 
 
Comment by Dale
2012-09-30 11:09:24

“It’s an accounting thing.”

So was mark to market if I recall correctly.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:12:37

Accounting lies seem to be covering up a lot of economic reality these days…

 
Comment by GrizzlyBear
2012-09-30 16:25:39

This cooked books accounting is despicable.

 
Comment by DO NOT Buy Housing Right Now
2012-09-30 17:59:46

You guys are on it.

An accountant friend repeatedly states, “I can make the books look good or bad and the average person would never figure it out.”

 
 
 
 
Comment by oxide
2012-09-30 11:58:28

Presumably the underwater FB “paid” part of the debt when they gave the house back to the bank per the contract. The rest of it… was it discharged in BK? Connecticut is a recourse state. Is that what Chase is pursuing?

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 17:08:06

So after sweeping away the details, isn’t this whole story really about yet another flavor of officially-tolerated bank fraud by Megabank, Inc?

What about taking credit for erasing a non-existing debt is not fraudulent?

 
 
Comment by frankie
2012-09-30 06:05:07

China’s economic slowdown has led to weak demand for coal from the domestic market and eroded the profitability of coal producers, the country’s top economic planner has said.

“Weakened demand, falling prices and rising costs have squeezed profit margins in the coal sector and increased enterprises’ financial pressures,” according to a statement issued by the National Development and Reform Commission (NDRC).

The prices of power-coal at Qinghuangdao Port, China’s largest coal shipment center where prices are considered a benchmark, hovered between 625 yuan (98.58 US dollars) and 635 yuan per tonne in August, down over 20 percent from the corresponding period in 2011, the NDRC said.

http://www.globaltimes.cn/content/736167.shtml

CHINESE industrial businesses saw their profits fall by 6.2% year-on-year in August, marking their fifth consecutive monthly drop.

Observers said the disappointing results are likely to prompt the government to adopt stronger measures to boost economic growth.

http://thestar.com.my/news/story.asp?file=/2012/9/30/asia/12098220&sec=asia

 
Comment by polly
2012-09-30 06:10:31

Oh, I like this one too.

Fair Game
A Condo Was Sold, Until It Wasn’t
By GRETCHEN MORGENSON
Published: September 15, 2012

http://www.nytimes.com/2012/09/16/business/a-florida-condo-sale-and-a-markets-dysfunction-fair-game.html?_r=1&ref=gretchenmorgenson

HORROR stories abound across Foreclosure Nation. But once in a while, a new one comes along to remind us just how dysfunctional our mortgage market is.

[Description of bad/contradictory stuff happening to one short seller. Then the real meat comes towards the end.]

This short sale ended happily, but far more do not. Some foreclosure experts contend that such sales are stymied because of conflicts inherent among mortgage servicers who decide them on behalf of institutions like Fannie Mae.

April Charney, a foreclosure defense lawyer formerly with Jacksonville Area Legal Aid and now in private practice in Sarasota, Fla., said mortgage servicers lose fees when a short sale occurs. Handling defaulted loans is more lucrative than handling performing ones.

“Why in the world would a bank ever finish one of these deals?” Ms. Charney asked. “When they renege, they get to keep servicing a defaulted loan.”

To be sure, short sales can be tricky. But Dixon Pearce, a lawyer in Mount Pleasant, S.C., whose firm does many short sales, said they don’t have to be so difficult. He has a recommendation. “The government ought to get in there,” he said, “and do a uniform process and make this easier for everybody.”

2012-09-30 06:24:25

Sometimes I wonder if we’re the only people that realize how dysfunctional the mortgage market actually is?

How scores of people blithefully sign away 30 years of their life (voluntary indentured servitude) is beyond me!

Comment by polly
2012-09-30 06:43:22

I paid off $70K worth of student loans. I think there were as many as 12 different notes (maybe more) since I don’t think any of them were larger than $7500. You used to be able to make a request for one bank to buy your loan from another bank and they had to comply as long as you were current on all the loans. I would find what I thought was a customer service department that could answer a question and request they buy my loans. Until I finally gave up and just concentrated on paying them all off as quickly as possible.

And that is just the lowest, easiest, most basic part of commercial banking. Nothing complicated at all.

I worked on stock deal once where in order to adjust for a possible change in the dividends received deduction, the investment banking documents included a formula to make the deductions the same, not the amount of money you would keep after the deduction and paying taxes the same.

I have NO delusions about any part of the banking industry. They are better at screwing you over than you can possibly be at protecting yourself.

Comment by Combotechie
2012-09-30 07:01:04

“I have NO delusions about any part of the banking industry. Thay are better at screwing you over that you can possibly be at protecting yourself.”

Yeah? Well it’s their game. Play somebody else’s game at your own risk.

You work hard then send a big chunk of your hard-earned money to somebody else - some stranger. And when you have a beef about the money you get to learn that possession is nine-tenths of the law.

You may be entirely in the right but they are the ones that have your money and they are the ones that own the game.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 07:54:36

“Sometimes I wonder if we’re the only people that realize how dysfunctional the mortgage market actually is?”

Is it that we are the only group who realize it, or rather that we are one of the few groups willing to discuss it?

“How scores of people blithefully sign away 30 years of their life”

As we are collectively aware, many people figure out how to get out from under the 30 year debt slavery contract before their full term of servitude is over.

 
 
Comment by Combotechie
2012-09-30 06:34:13

“Why in the world would a bank ever finish one of these deals? When they renege, they get to keep servicing a defaulted loan.”

There it is.

Comment by UNKNOWN TENANT
2012-09-30 07:20:38

“There it is.”

I believe that is…..

Whoomp! (there It Is)

Comment by aNYCdj
2012-09-30 07:54:01

trivia question…where did they the bass line for that song?

http://www.youtube.com/watch?v=KhXMcoRfEY0

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Comment by Dale
2012-09-30 07:49:27

So who is paying them to service the loans? Are they just piling more debt on already “uncollectible” debt? Is this just some accounting trick to make the banks look profitable or will the government make good on the service fees when they buy the 40 billon/month MBS?

Comment by Combotechie
2012-09-30 08:01:52

If banks can forgive debts that not longer exist - and can receive government credits for doing so - then, IMO, it is not a stretch to think that a bank will be able to write off service fees they never received and receive credits for doing so.

Besides, even though these service fees are never received they can make the income statement look good and hence will make the bank’s earnings look good which will make the pay-for-performance numbers look good.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:15:33

“If banks can forgive debts that not longer exist - and can receive government credits for doing so - then, IMO, it is not a stretch to think that a bank will be able to write off service fees they never received and receive credits for doing so.”

Taking it a step further, why should FBs who stop paying their mortgages ever be kicked out of their homes? Simply credit them for making mortgage payments that were never made, and they won’t ever need to go into default.

I’m sure there is a way to change the accounting rules that would enable this arrangement.

 
Comment by Carl Morris
2012-09-30 14:16:48

If it’ll help the banks, then get ready for it.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 16:23:34

“If it’ll help the banks, then get ready for it.”

If you credit the FBs with making mortgage payments that aren’t actually made, then the banks don’t have to write down the value of the loans on their asset column. A healthy balance sheet will result, with a high stock price, high investor confidence in the banking sector. Enough similar lies can support a positive future economic outlook that will help encourage firms to hire more workers.

Lying is good for America’s future economic growth!

 
 
Comment by polly
2012-09-30 09:30:17

The contract is for servicing a pool of loans. As long as any of the loans in the pool are paying out, there is cash flow from which they can pay themselves their servicing fees. You better believe that the contracts are written so that they can pay themselves first. That is on top of the fact that even if no loans are paying out, they can use accrual accounting to put the money into their financial statements so the executives earn their bonuses.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:19:22

“As long as any of the loans in the pool are paying out, there is cash flow from which they can pay themselves their servicing fees.”

This reminds me of the Mexican yard crew who take care of our landlord’s lawn. This year the rabbits ran rampant and ate all the grass. But you’d better believe the yard crew nonetheless shows up every Wendesday at 7:30 a.m. to mow the nonexistent grass, and collect payment…

 
 
 
 
 
Comment by UNKNOWN TENANT
2012-09-30 06:17:05

Time for the Sunday morning Obama network infomercials.

Comment by goon squad
2012-09-30 06:26:41

Obama network infomercials

Speaking of which, this got nary a mention in today’s WSJ, NY Times, Washington Post, but made the front of the UK Guardian:

http://www.guardian.co.uk/world/2012/sep/30/us-death-toll-afghanistan-2000

Comment by Bill in Carolina
2012-09-30 06:51:31

There’s only one way the body count will once again be covered by the U.S. media, and that’s if Romney is elected next month. In addition, drone strikes will get far more publicity.

Comment by scdave
2012-09-30 09:20:29

There’s only one way the body count will once again be covered by the U.S. media, and that’s if Romney is elected next month. In addition, drone strikes will get far more publicity ??

Why doesn’t FOX cover it then ??

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Comment by Montana
2012-09-30 10:47:41

Bush’s war.

 
 
Comment by RioAmericanInBrasil
2012-09-30 10:26:37

I’ve been thinking. If 95% of the media is owned by 6 or 7 multi-billion dollar corporations and the media is “liberally biased” then maybe those huge corporations believe that the Democrats are better for businesses than Republicans.

We have seen that for the past 50 years job creation has done better, and for the past 100 years the stock market has done better when a Democrat was president.

http://www.politifact.com/truth-o-meter/statements/2012/sep/06/bill-clinton/bill-clinton-says-democratic-presidents-top-republ/

http://www.guardian.co.uk/business/economics-blog/2012/aug/29/democrats-better-wall-street-republicans

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Comment by Blue Skye
2012-09-30 18:54:21

Clinton would be the rub. Offshoring deals and personal payoffs, consequences fall in later administrations.

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

One of our local guys was killed in Afghanistan recently. Based on the hoopla that the local media made for the guy, you’d think that it was Superman who died, they just wouldn’t stop talking about what an incredible hero this guy was.

Of course, all the guys and gals who come home with damaged minds or missing limbs don’t quite get the same treatment.

Comment by UNKNOWN TENANT
2012-09-30 09:41:47

Alot of things don`t get much press.

Real Unemployment Reaches 20% In 7 Colorado Counties

September 28, 2012
By Tyler Sandberg

DENVER — The slowest economic recovery since World War II is going especially slow for sections of Colorado, according to a letter from the Colorado Department of Labor and Employment (CDLE) obtained by The Colorado Observer.

In seven counties in Colorado unemployed individuals are close to or exceeding 20% of the population, a letter from the Chief Economist of CDLE to the U.S. Department of Agriculture says.

The letter, obtained through the Colorado Open Records Act, was sent August 29 as required by federal law. According to the Consolidated Farm and Rural Development Act, the Colorado Labor Department is required to certify counties where the “Not Employed Rate” surpasses 19.5%.

http://thecoloradoobserver.com/2012/09/real-unemployment-reaches-20-in-7-colorado-counties/ - 84k -

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Comment by aNYCdj
2012-09-30 11:20:49

Remember they ALL volunteered……they knew the risks or they would have moved to where the jobs are.

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Comment by Lip
2012-09-30 07:07:01

MSNBC Caught Doctoring Video to Attack Romney

“The crowd was yelling,” caller Sherry recounts, “the crowd was screaming ‘Romney! Romney!’ and Romney, being the gentleman [he is], we can‘t get in his head because he’s so stinking nice, he stopped us to add ‘Romney-Ryan.’”

Townhall’s Greg Hengler stitched the videos together so that you can see what MSNBC has done.

This hatchet job marks the second time that MSNBC has created a problem for Romney by doctoring video.

http://pjmedia.com/tatler/2012/09/28/msnbc-caught-doctoring-video-to-attack-romney/

Those that rely on MSNBC for news have no idea what’s really going on as they are totally skewing the news for Obama’s benefit.

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

Don’t forget who actually owns the MSM.

 
Comment by RioAmericanInBrasil
2012-09-30 10:37:55

This hatchet job marks the second time that MSNBC has created a problem for Romney by doctoring video.

I’ve listened both versions a few times now. I’m hearing “Ryan” much more than “Romney” but did you guys hear that black helicopter in the background?

Comment by UNKNOWN TENANT
2012-09-30 11:53:40

Ruh ro

Univision Says It’s Found More Fast & Furious Victims in Investigation Special

Posted on September 30, 2012 at 10:34am by

An hour-long investigation special to air Sunday night promises to show the human toll of Fast and Furious, and its findings are apparently “the holy grail” congressional investigators have been seeking.

http://www.theblaze.com/stories/univision-says-its-found-more-fast-furious-victims-in-investigation-special/ -

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Comment by alpha-sloth
2012-09-30 14:31:57

Fast and Furious? That was that gunrunning sting thing that started and ran mostly under the Bush 2 admin, right?

(Sorry to pop your propaganda bubble, Jethro.)

 
Comment by nickpapageorgio
2012-09-30 16:10:15

” That was that gunrunning sting thing that started and ran mostly under the Bush 2 admin, right?”

Nope, your man Holder owns this one. You know…the guy who ripped Elian Gonzalez from his home at Gunpoint and shipped him back to Communist Cuba. Holder is 100% political, consequences be damned, he wanted to tarnish the second amendment…period.

 
Comment by alpha-sloth
2012-09-30 17:05:18

Nope, your man Holder owns this one.

Nope!

ATF gunwalking scandal (redirect from “Operation Fast and Furious”)

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) ran a series of “gunwalking” sting operations[2][3] between 2006[4] and 2011.[2][5] These operations were done under the umbrella of Project Gunrunner, a project intended to stem the flow of firearms into Mexico by interdicting straw purchasers and gun traffickers within the United States.[6] “Gun walking” or “letting guns walk” was a tactic whereby the ATF “purposely allowed licensed firearms dealers to sell weapons to illegal straw buyers, hoping to track the guns to Mexican drug cartel leaders.”[7] The stated goal of allowing these purchases was to continue to track the firearms as they were transferred to higher-level traffickers and key figures in Mexican cartels, with the expectation that this would lead to their arrests and the dismantling of the cartels.[8][9] The tactic was questioned during the operations by a number of people, including ATF field agents and cooperating licensed gun dealers.[10][11][12][13][14] Operation Fast and Furious, by far the largest “gunwalking” probe, monitored the sale of over 2,000 firearms, of which nearly 700 were recovered as of October 20, 2011.[

 
Comment by alpha-sloth
2012-09-30 17:12:24

As you see from my prematurely sent post, the ATF gunrunning (’gunwalking’) operations began and ran for years under W, although the specific operation named ‘Fast and Furious’ was under Obama. But only a total weasel bent on propagandizing would claim it was all on Obama’s watch. It was a series of ongoing operations that he inherited from the Bush 2 admin. Granted, he kept them going.

Now ya know!

The quote in my previous post is from wikipedia.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 17:22:24

“… between 2006[4] and 2011…”

So the Republican strawman creationists are claiming that Holder launched this operation before Obama ever got into office?

Brings to mind their attempts to pin blame for the Great Recession on Obama; never mind that it started in December 2007, more than a full year before the end of Bush’s second term, a fact we know despite Bust Treasury Secretary Hank Paulson’s failed attempt to cover up the onset.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 17:23:59

“But only a total weasel bent on propagandizing…”

I can’t believe that even a weasel would waste his time telling lie after lie after lie. Unless somebody was paying him, or he was a moron…

 
Comment by Blue Skye
2012-09-30 19:07:51

” a moron…”

You’re sharp PB, until it comes to blaming what has happened on who was the titular head at the moment. I wish, with your prolific posting, that you would peel a layer off the onion, and look at the game itself rather than the stars of it. Perpetuating the “King of Homecoming” contest takes us all backwards.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 20:47:59

As you know, I’m not much of a fan of endless propagandizing. I plan to call out propagandists every time they post lies here.

 
 
 
 
Comment by Lip
2012-09-30 07:14:18

Mainstream media is threatening our country’s future by Pat Caddell

You know, when I first started in politics – and for a long time before that – everyone on both sides, Democrats and Republicans, despised the press commonly, because they were SOBs to everybody.

A few weeks ago I wrote a piece which was called “The Audacity of Cronyism” in Breitbart, and my talk today is “The Audacity of Corruption.” What I pointed out was, that it was appalling that Valerie Jarrett had a Secret Service detail. A staff member in the White House who is a senior aide and has a full Secret Service detail, even while on vacation, and nobody in the press had asked why.

That has become more poignant, as I said, last week, when we discovered that we had an American ambassador, on the anniversary of 9/11, who was without adequate security—while she still has a Secret Service detail assigned to her full-time, at a massive cost, and no one in the media has gone to ask why.

Read more: http://www.foxnews.com/opinion/2012/09/29/mainstream-media-threatening-our-country-future/#ixzz27xjKm8uI

Comment by UNKNOWN TENANT
2012-09-30 08:49:32

” and no one in the media has gone to ask why.”

Valerie Jarrett Denies Journalist Claim About DNC Removal

Posted: 09/06/2012 7:15 pm Updated: 09/06/2012 10:01 pm

CHARLOTTE, N.C. — Valerie Jarrett, a top adviser to President Barack Obama, denies journalist Michael Tracey’s claim that she or her staff had him removed from a media area in the Time Warner Arena during the first night of the Democratic National Convention, a spokeswoman for Jarrett said.

In an American Conservative article published Wednesday, Tracey claimed that “Jarrett’s staff called the cops to kick me out of a media area” on Tuesday night for asking her about drone strikes.

The American Conservative headline — “Valerie Jarrett Threw Me Out of the DNC for Asking about Pakistanis Killed by Drones” — suggests Tracey was removed from the convention, which is not the case. In fact, Tracey — who’s covered the Republican convention for Salon — moved to another area on Tuesday night and has continued working from the Time Warner Cable Arena.

“If this reporter was removed from anywhere Tuesday, that was done independently of Valerie Jarrett and the Obama Campaign,” campaign spokeswoman Clo Ewing said in an emailed statement to The Huffington Post.

In the article, Tracey claimed he approached Jarrett in the arena after she wrapped up a television interview to ask about Democratic criticism of the administration’s policy on drone strikes. Jarrett wouldn’t answer the question, by his account, and the encounter played out as follows:

“Why can’t you comment right now, given that I’m already interacting with you?” I countered. “I would suggest that you do just what Politico, and just what [inaudible] did, and ask for an interview. And we would be happy to accommodate you. I don’t think it makes sense –”

“So you have no comment on drone strikes?” I interjected. She started for the exit.

“Many Pakistanis are dying, ma’am,” I shouted. No response. By then Jarrett was out of reach.

“Do you have a card?” her aide, Clo Ewing — Director of Constituency Press for the Obama campaign — queried me angrily. (She did not reply to an emailed request for comment.)

“No.”

Ewing looked intently at my credential, seemingly incredulous that I was entitled to be in her boss’s presence.

Jarrett’s handlers, alarmed, then joined forces with Convention staff and summoned two uniformed police officers, who informed me I was to leave the area immediately — my duly-assigned credential notwithstanding. (In fairness, the officers themselves were friendly about this, and actually seemed rather befuddled.)

In an interview with The Huffington Post, Tracey said he’s “repulsed by drone strikes” and would have asked the same question of any top Obama adviser who he’d encountered that night.

http://www.huffingtonpost.com/2012/09/06/valerie-jarrett-dnc-journalist-removal_n_1862817.html - 392k -

Comment by ahansen
2012-09-30 12:07:19

“Why?” is because Ms. Jarrett is a top advisor and personal friend of the family whose kidnapping would be of great strategic value to any criminal or terrorist element.

Secret Service decides who’s Secretly Serviced and when, not POTUS.

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Comment by nickpapageorgio
2012-09-30 15:59:42

“drone strikes”

Obama and his merry band of peaceful progressives are quite the cold blooded killers eh?

Where are all of the human shields from International Answer?

Where are all of the Student Protesters?

I know, they are busy organizing flotillas carrying weapons and other supplies to the militant Palestinians.

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Comment by polly
2012-09-30 06:32:38

And Dean Baker over at Beat the Press nails it again. Please use the link to see the very interesting Consumption as a Share of Disposable Income graph that doesn’t transfer with a cut and paste.

Please note that based on my previous reading of his blog, Mr. Baker (Dr. Baker?) doesn’t think that the collapse of the housing bubble is a bad thing though you could read the title of the post that way. He thinks the bubble was the real problem. I believe “the problem” he is referring to in this post is simply the economic downturn. Read it and give him a chance.

http://www.cepr.net/index.php/beat-the-press/

The Problem is a Collapsed Housing Bubble, Not a Financial Crisis #4306
Saturday, 29 September 2012 17:00

It is remarkable how people keep insisting, in spite of all the evidence to the contrary, that the problem of the downturn is a financial crisis rather than simply a collapsed housing bubble. The latter story is simple. Housing construction was driven by bubble-inflated prices. When prices plunged, construction collapsed. Not only did we no longer have inflated prices to drive construction, we also had an enormous oversupply as a result of 5 years of near record rates of construction. From 2006 to 2009 construction fell by more than 4 percentage points of GDP, leading to a loss of more than $600 billion in annual demand.

In addition, the loss of $8 trillion in housing wealth lead to sharp falloff in consumption. While the housing wealth effect is a long-established and widely accepted economic phenomenon, most discussions of the financial crisis act as though this effect does not exist. The wealth created by the run-up in house prices led to a consumption boom as the saving rate fell to near zero. With the collapse of the bubble, consumption fell back as the wealth that has been driving it disappeared.

[graph]

However, contrary to what is widely asserted, for example by David Leonhardt in his column today, consumption remains high, not low. The saving rate averaged more than 8.0 percent of disposable income in the years prior to the rise of the stock bubble in the 90s. Currently, it is between 4 and 5 percent of disposable income. If anything, we should be asking why consumption is so high, not why it is low.

It would be to absurd to expect bubble levels of consumption in the absence of the bubble. However this is what proponents of the financial crisis theory seem to be arguing. In short, the collapse of the bubble led to a gap of more than $1 trillion in lost demand due to the plunge in construction and the falloff in consumption. What if any part of this requires a story about the financial crisis?

2012-09-30 06:45:41

Read the comments. It’s ALL the banks’ fault apparently.

It takes two to tango and the buyers never blame themselves for getting carried away.

Of course, Galbraith nails this psychology cold in his short book about manias. When they end, the public always looks for a scapegoat because looking inwards and admitting financial cluelessness is just too psychologically painful.

That having been said, the consumption is still way too high. I agree with his argument.

Comment by azdude
2012-09-30 07:07:18

They have turned this into ” the banks fault” to justify the bailouts.

2012-09-30 07:14:23

Huh?

This statement makes no sense whatsoever.

If it’s ALL the “banks’ fault” then there should be no bailouts.

I want whatever you’re smoking. Pass it on. Don’t bogart it.

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Comment by azdude
2012-09-30 08:12:57

the politicians are demonizing banks to justify the bailouts sir.

 
 
 
Comment by Blue Skye
2012-09-30 08:56:31

“for a scapegoat….”

Well, otherwise it wouldn’t be a righteous mania.

 
 
Comment by SF Bay Area
2012-09-30 08:02:53

Polly, that graph just about made me ill just looking at it. And that’s the average. If you exclude the upper decile it is paycheck-in, bill-payment-out for the rest of the proletariat. We read the numbers but sometimes seeing it in graphic form gives you a richer experience of the data. Thanks for posting!

Comment by polly
2012-09-30 09:41:44

I thought it was rather stunning too. Try looking again and covering everything from 93 on with your hand. Looks like a burst of irresponsibility peaked at 1988 but then things started to get better. Then remove your hand.

Oh, and I do not know if the red line (the adjusted one) refers to a tax number (adjusted gross income) or something else, but I am pretty sure I know what it doesn’t refer to. I have read several times that the old savings numbers don’t include any adjustment to take into account the “forced” savings of earning a pension (like including the contributions to a pension fund in both the numerator and denominator of a savings percentage), but that 401k amounts are included. So before pensions started to be eliminated and converted to defined contribution systems, the savings amounts were really quite a bit higher.

 
 
Comment by Prime_Is_Contained
2012-09-30 10:26:45

It is remarkable how people keep insisting, in spite of all the evidence to the contrary, that the problem of the downturn is a financial crisis rather than simply a collapsed housing bubble.

I’m glad that he is directing focus to the housing bubble—that’s great.

But he’s wrong that it was “simply a collapsed housing bubble.”

It was both.

A “financial crisis” is whenever the banks are in trouble after they make tons of money on the rising up-slope of a bubble arriving. A “good business cycle” is when they make money coming and going on a bubble.

Clearly we had the former. It’s all in the after-math.

Comment by Prime_Is_Contained
2012-09-30 10:29:49

And the quote that I disagree with the most:


The wealth created by the run-up in house prices led to a consumption boom as the saving rate fell to near zero.

The _appearance_ of wealth (e.g. people thinking they were wealthy) led to a consumption boom.

There was no actual wealth-creation; in fact, there was wealth destruction as capital was mis-allocated from its best use.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:23:30

“When prices plunged, construction collapsed. Not only did we no longer have inflated prices to drive construction, we also had an enormous oversupply as a result of 5 years of near record rates of construction. From 2006 to 2009 construction fell by more than 4 percentage points of GDP, leading to a loss of more than $600 billion in annual demand.”

The trouble with this explanation is that it would suggest the Fed’s housing bubble reflation efforts are an exercise in futility.

 
Comment by Dale
2012-09-30 11:30:28

“Read it and give him a chance.”

I think Dean Baker has always had credibility on this blog. If I recall he left UCLA anderson forecast shortly before they became shills for the housing industry.(and they got much worse after he did)

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:35:26

You’re confusing him with Chris Thornberg, though I agree with the point about his credibility.

For as long as I have been on the HBB, Dean Baker has been at CEPR.

 
Comment by rms
2012-09-30 13:06:32

I think PBear is correct, it’s Thornberg.

Unfortunately Thornberg has become something resembling a shill, IMHO. Maybe he was taken to the Western Wall and converted into submission?

Comment by Spook
2012-09-30 17:54:52

according to BB King, the shill is gone.

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Comment by Dale
2012-09-30 22:43:37

I stand corrected, it was Thornberg I was thinking of. Sorry to hear he has gone over to the dark side. I used to google both him and Baker back in the early days as they both seemed to have a handle on what was going on.

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Comment by polly
2012-09-30 13:23:54

I was just concerned about someone reading, “The Problem is a Collapsed Housing Bubble,” in isolation and conflating him with the nuts who talk about housing prices as if they are too low now.

 
 
 
Comment by Cracker Bob
2012-09-30 07:18:01

A great article in the Orlando Sentinel about the giant failed subdivision Bella Collina in Lake County Florida. This is, in a nutshell, what this entire bubble was about.

“At the bend of a residential street virtually devoid of houses, Bella Collina residents Brad and Lana Heckenberg enjoy an unobstructed view of a small lake from the lanai of their 4,300-square-foot home. Last year, the retirees bought the lot next door to their house from Wells Fargo & Co. for just $8,800. Five years earlier, the same lot had been sold to investors for $895,000.”

http://articles.orlandosentinel.com/2012-09-29/business/os-bella-collina-20120929_1_property-owners-bella-collina-estate-homes

Comment by UNKNOWN TENANT
2012-09-30 07:34:27

“Last year, the retirees bought the lot next door to their house from Wells Fargo & Co. for just $8,800. Five years earlier, the same lot had been sold to investors for $895,000.”

I think the retirees overpaid.

Along those lines, i was talking to a 60 year old laborer last week. He is a really good guy I have known for about 15 years who has survived a life on the road less traveled. Well the road less traveled unless you take the road that goes by a bar every night.

I said… Hey man you`re looking a little tired today, he replied…. I know, I got over-poured last night.

Comment by Prime_Is_Contained
2012-09-30 11:49:51

I think the retirees overpaid.

Quite possibly.

Or maybe it was worth even more than $9K to them to avoid having some @ss#@t build a McMansion right next door…

 
Comment by alpha-sloth
2012-09-30 15:13:26

I know, I got over-poured last night.

A friend of mine’s version is that he was ‘over-served’.

Comment by Prime_Is_Contained
2012-09-30 17:53:57

Unbelievable.

It’s someone _else’s_ responsibility to know when you should stop?

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 07:38:35

BUDGET TROUBLE IMPERILS SCIENCE FUNDING
NIH cuts could cost 10 percent of industry’s workforce in San Diego
Written by Gary Robbins
12:01 a.m., Sept. 30, 2012
Updated 6:45 p.m. , Sept. 29, 2012

Joy is mixed with worry these days in Joel Linden’s lab at the La Jolla Institute for Immunology & Allergy. He’s developing a promising drug to fight sickle cell anemia. But the grant money paying for his research is in jeopardy because of an epic budget brawl that’s expected to play out in Congress.

Starting in January, the federal budget will be cut by $1.2 trillion over the next 10 years, an across-the-board amount required by the 2011 Budget Control Act after a bipartisan congressional committee failed to reach a deal to slash the deficit.

Half the cuts will come from the military budget, which could threaten 30,000 defense-related jobs in San Diego County over time. The rest will come from domestic programs, including the National Institutes of Health, the largest public underwriter of medical research.

Economists say the automatic cuts, known as “sequestration,” could slam NIH, eliminating up to 3,100 life-science jobs in San Diego. An additional 1,400 industry support workers could lose jobs.

“This is frightening. NIH funding is already at historically low levels,” said Linden. “I can’t run deficits in my lab. I’d have to let workers go if we get big cuts.”

The local threat was quantified last week by John Reed, chief executive at the Sanford-Burnham Medical Research Institute in La Jolla. Reed, one of the nation’s top cancer scientists, did an analysis that says NIH could be forced to cut its budget by 17 percent, costing San Diego about $290 million in funding, or the equivalent of 3,000 jobs.

“That size cut is approaching 10 percent of the entire San Diego life-sciences workforce,” said Reed, referring to the 42,000 people who work locally in science and biotech.

Lynn Reaser, an economist at Point Loma Nazarene University, reviewed the data and said the direct science job loss could reach 3,100, with an additional loss of 1,400 support jobs, bringing the total to 4,500.

The cuts could affect everything from efforts to develop drugs for Alzheimer’s and Parkinson’s disease to finding better ways to monitor people with diabetes, to using genetics to spot disease in children.

“We’ve never had job losses this large in the science sector of the county, and it is a very important sector,” Reaser said.

Comment by SF Bay Area
2012-09-30 08:14:31

A cold hearted and calculating individual might be tempted to point at the this epic “sequestration” (if it actually occurs) will take care of slightly less than 10% of the total annual budget deficit. Allowing *all* the Bush tax cuts to expire will take care of 20% (that includes allowing tax cuts to expire on the poor). And then when Obamacare kicks in it’ll boost the deficit right back up again. So how is the rest of the 70 - 80% of the budget deficit going to be closed?

The feeling that Western Civilization is about to have a “negative appreciation” event is palpable.

Comment by ahansen
2012-09-30 12:12:45

“… So how is the rest of the 70 - 80% of the budget deficit going to be closed…?”

Attrition, accountability, better technology, and gradual lowering of expectations over the next two generations. It’s not going to happen all at once, but it will happen — just like it always does. :-)

 
 
Comment by scdave
2012-09-30 09:28:56

Joy is mixed with worry these days in Joel Linden’s lab at the La Jolla Institute for Immunology & Allergy. He’s developing a promising drug to fight sickle cell anemia ??

Yeah…Why invest in this kind of research…Lets build hummers & Tomahawk missiles instead….

Comment by In Colorado
2012-09-30 09:51:09

But don’t worry … the private sector will pay for research into better and more effective ED medication, and pay handsomely to advertise it during NFL games.

Comment by aNYCdj
2012-09-30 11:30:40

Talk about overkill…..its as bad as every traffic report on 1010 Wins lately is sponsored by 1 800 Kars For Kids….enough already we get it….

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Comment by sfbubblebuyer
2012-09-30 15:29:35

You know, it’d almost be worth a 10% cut to science to get a 50% cut to the military. We WAAAAAAAAAAAAAY overspend on the military.

Comment by SF Bay Area
2012-09-30 15:46:54

I’m a Ron Paul kind of small government & bring the troops home kind-of-guy. I also love science and think science is key to our future. You don’t get better bang for the buck than all the research you get virtually for pennies on the dollar via the U.S. Grad Student / Lab Slave system we have. It really is unsurpassed in terms of value.

But from the research I’ve done to date even if we “bring the troops home.” And end the empire most of the military spending is fixed because of pensions, medical care, base mothballing, etc. We’ve sent the kids out damaged them and now we got to pay. It’s going to be very painful to pay. But we’ll be paying for decades. I think the most you could cut the budget for military is 20% in the future because of all the fixed costs for the vets and bases. That’s not going to balance the budget. That only takes another ~15% off the deficit. The cost of war goes on for many decades after they end unfortunately.

End *all* bush tax cuts, bring all the troops home and end the empire. We still need to find another 65% to cut.

Sad but true.

Comment by ahansen
2012-09-30 22:47:03

“…We’ve sent the kids out damaged them and now we got to pay….”

No we don’t.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 07:42:26

Why ask Realtards hard questions about economics? Shouldn’t the reporter at least seek the opinion of economics experts?

U-T HOUSING HUDDLE
IF THE MORTGAGE INTEREST DEDUCTION IS CUT, WOULD IT RUIN THE HOUSING RECOVERY?
Written by Lily Leung
12:01 a.m., Sept. 29, 2012
Updated 3:46 p.m. , Sept. 28, 2012

Michael Lea: Director of the Corky McMillin Center for Real Estate at SDSU

If the mortgage interest deduction is completely eliminated, it would set back the housing recovery. The value of the deduction is capitalized into house prices, so its elimination would have a negative impact. The impact would not be evenly distributed. It would hit higher-end housing as upper-income households disproportionately benefit from the deduction. It would not have much impact on the lower end of the market, as lower-income households do not itemize. The biggest impact would be on middle-income households as they are more dependent on the deduction to afford the purchase of a house.

Alan Nevin: Economist and a principal at London Group Realty Advisors

The Feds have already put a cap on mortgage deductions for loans over $1,000,000. It would be political suicide to eliminate the mortgage interest deduction in one fell swoop, so I suspect that they will gradually reduce the deductibility level over time. If they do it very gradually, it would most probably not kill the housing market. Canada eliminated the mortgage deduction a quarter century ago, and it has had virtually no impact on housing prices or volume of sales. In fact, it would be delightful if our sale housing market were as vibrant as Canada’s.

Amy O’Dorisio: Realtor at Ascent Real Estate in Bankers Hill

Yes: The housing recovery will be affected in a negative way if the mortgage interest deduction is eliminated. Homeownership is a positive economic stimulator, creates pride of ownership and has a positive effect on communities. It also affects emotional outlook on personal wealth. This deduction is a significant motivator for first-time and move-up buyers, and if cut, will demotivate many. As the housing market goes, so goes the economy. The focus should be placed on how to stimulate job creators to further increase workforce, which will produce the tax revenue the feds are seeking, rather than take away from taxpayers.

Comment by SF Bay Area
2012-09-30 08:25:42

“Homeownership is a positive economic stimulator, creates pride of ownership and has a positive effect on communities. It also affects emotional outlook on personal wealth. This deduction is a significant motivator for first-time and move-up buyers, and if cut, will demotivate many.”

My propaganda alert chip ™ just started to beep. Notice the attempt to appeal to the readers emotions.

If the mortgage deduction is eliminated all at once it’ll start an immediate second leg down for home prices. Most people have a reflex to avoid paying taxes at all costs even if they net less money as a result of avoiding taxes. It defies all logic.

The deductibility of interest on loan amounts above the $417K conforming limit is a national disgrace. And for second homes? Why? I say cut ‘em down to a $417K limit from $1 million.

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:33:25

“My propaganda alert chip ™ just started to beep. Notice the attempt to appeal to the readers emotions.”

I’m about to suggest to my wife to cancel our dead tree subscription to UT-San Diego. It’s gonna be all real estate propaganda all the time from now on, since they were recently bought by a real estate developer. And they also had the audacity to raise subscription prices, commensurate with the increased level of real estate boosterism.

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 07:46:20

I don’t see how one can infer tightening loan standards from average credit scores. For instance, what if all the people with bad credit scores are already homeowners? That would only leave high credit score individuals to apply for loans.

KENNETH HARNEY NATION’S HOUSING
HOME LOAN STANDARDS APPEAR TO BE TIGHTENING
By Union-Tribune
12:01 a.m., Sept. 30, 2012
Updated 9:15 p.m. , Sept. 28, 2012

Consumers who score high enough to meet today’s FICO score averages at Fannie Mae and Freddie Mac

With 30-year mortgage rates hitting new lows and recent borrowers’ payment performance the best by far in decades, you’d think that banks and other lenders might be loosening up on their hyper-strict underwriting standards.

But new national data from inside the industry suggest this is not happening. In fact, in some key areas, standards appear to be tightening even further, and the time needed to close a loan is getting longer.

The average FICO credit score on all new loans closed in August was 750, fully nine points higher than it was one year earlier, according to Ellie Mae Inc., a Pleasanton-based mortgage technology firm whose software is used by many lenders. The survey sample represents approximately one-fifth of all new loans — about 2 million mortgages.

At Fannie Mae and Freddie Mac, the dominant players in the conventional mortgage market, the average FICO score was even higher. For refinancings in August, the average approved borrower had a 769 FICO score, up six points from August 2011. The average score for borrowers purchasing homes was 763, one point higher than the year before.

FICO scores are used by virtually all mortgage lenders to gauge the credit risk posed by a borrower. Scores range from 300 to 850, with low scores representing higher probability of default, high scores indicating low risk. Fair Isaac Co., developer of the FICO scoring model, says 78.5 percent of all consumers currently have scores between 300 and 749. Barely one in five, in other words, scores high enough to meet today’s FICO score averages at Fannie and Freddie.

Comment by azdude
2012-09-30 08:17:09

lmao the only way for housing to fully recover is to issue new loans to all the deadbeats who didnt pay their old loans. I dont see a housing recovery based on people with solid credit. not enough people out there.

Look at auto loans. they cannot sell any cars relying on people with good credit. People with good credit are few and far between.

Comment by aNYCdj
2012-09-30 09:01:15

And this bring us back to the question what do you do with people that had good or great credit for 15- 20- 30 years before the crash?

Don’t ya think if people had jobs they would return to their old habits and be ultra responsible?

Comment by polly
2012-09-30 09:49:32

What makes you think the lenders care what you would do IF you had a good paying job again? Your FICO score is a measure of how likely you were to pay your bills over the past few years under the circumstances that actually existed in the past few years. They have no reason to believe your circumstances are going to be noticeably different over the next few years, so they have no reason to think about your hypothetical. They aren’t going to lend you money because you used to have a job.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:36:32

With the Fed snapping up $40bn in MBS a month, will everyone qualify going forward?

 
 
Comment by rms
2012-09-30 13:20:26

“Ellie Mae Inc., a Pleasanton-based mortgage technology firm”

WTF is a mortgage technology firm?

“The average purchaser of a home using a Fannie-Freddie loan made a down payment of 21 percent in August and had a squeaky-clean debt-to-income ratio — with total monthly debt payments, including the mortgage — amounting to just 33 percent of income.”

Doubtful if this is in the higher priced markets.

Comment by polly
2012-09-30 15:22:32

33% of my gross income is 67.5% of my take home pay. It would probably be a little less than the full 2/3’s if I reduced my income tax with holding to take into account the MID.

 
 
 
Comment by UNKNOWN TENANT
2012-09-30 08:17:28

Scores of homeowners unsure how to get back title from trusts

Posted: 7:00 a.m. Saturday, Sept. 29, 2012

By Kimberly Miller

Palm Beach Post Staff Writer

WEST PALM BEACH —
For some, it was the last hope to keep their homes and so they listened to the pitch rather than their gut.

They paid thousands of dollars, deeded their homes to a land trust company, and waited for the payout — a canceled mortgage, lower monthly payments, regained equity in their homes.

Boynton Beach homeowner Marcie Lowe signed her deed over to Fidelity in April and has paperwork reflecting a proposed new $269,600 mortgage. She said she paid $2,600 up front, but didn’t realize there would be a monthly mortgage payment due to Fidelity.

Then she got a call saying she was late on her monthly payments, she said.

“They had all this paperwork we signed and I suspected something was going on but wasn’t really sure,” Lowe said. “I don’t need my $2,600 back. I just want their name off the deed.”

http://www.palmbeachpost.com/news/business/real-estate/scores-of-homeowners-unsure-how-to-get-back-title-/nSPTc/ - 86k
———————————————————————————

Owners
LOWE MARCIE S
LOWE MAYNARD V JR &
THE FIDELITY LAND TRUST CO LLC TR

Sales Date
MAR-2003 $571,200 15061 / 1429 WARRANTY DEED LOWE MAYNARD V JR &

Well it`s our equity

Type: MTG
Date/Time: 12/7/2005 14:04:41
CFN: 20050748551
Book Type: O
Book/Page: 19633/1367
Pages: 17
Consideration: $100,000.00
Party 1: LOWE MAYNARD V
LOWE MARCIE S
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
COUNTRYWIDE HOME LOANS INC
Legal: VALENCIA ISL 1 L322 L

Type: MTG
Date/Time: 5/3/2007 12:22:40
CFN: 20070215776
Book Type: O
Book/Page: 21693/145
Pages: 18
Consideration: $365,000.00
Party 1: LOWE MAYNARD V JR
LOWE MARCIE S
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
COUNTRYWIDE HOME LOANS INC
Legal: VALENCIA ISL 1 L322 L

Comment by Montana
2012-09-30 11:41:29

oh wah, I don’t get it. How was this scheme supposed to have worked?

Comment by polly
2012-09-30 13:28:55

Have you seen that cartoon with two scientists standing in front of a blackboard with a bunch of mathy stuff on the right and left sides and in the middle the words “a miracle happens”? I think it works like that.

Comment by Carl Morris
2012-09-30 14:38:49

a bunch of mathy stuff

Thanks for making me think of Oly.

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Comment by Montana
2012-09-30 18:47:36

Oh I get it:

1. Convey your real property title to me.
2. ??????
3. Profit! (for me)

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Comment by 2banana
2012-09-30 08:42:02

The “something for nothing” army is not happy.

They paid thousands of dollars, deeded their homes to a land trust company, and waited for the payout — a canceled mortgage, lower monthly payments, regained equity in their homes.

 
Comment by Prime_Is_Contained
2012-09-30 09:18:07

Response to thread from yesterday:


Comment by SF Bay Area
2012-09-29 11:05:57

What’s going on in Canada is mind boggling. I know a large number of folks up there that a few years ago were average Joe’s. Now they are all Thirstin Howl, III types. It’s amazing how much wealth has been accumulated in Canada based on the housing market.
Reply to this comment
Comment by Carl Morris
2012-09-29 14:25:54

I remember our bubble and all the Thurston Howell types, too. But how much wealth was actually accumulated and how much was just showing off with HELOC money?

Comment by Prime_Is_Contained
2012-09-30 09:29:40

Carl has it right, SF Bay Area.

There was no actual wealth-creation. There was just the _appearance_ of wealth due to the credit bubble. Money sloshing around sure looks a lot like wealth, but I would argue that since it is going into places that are NOT where actual market forces would push it, it is actually MIS-allocation, and the net result is less real wealth.

Mis-allocation reduces true wealth-creation.


It’s amazing how much wealth has been accumulated in Canada based on the housing market.

False.

Comment by Cantankerous Intellectual Bomb Thrower™
 
 
Comment by In Colorado
2012-09-30 09:49:09

“how much was just showing off with HELOC money?”

Didn’t we call them the “40K per year millionaires” back then?

Comment by goon squad
Comment by SF Bay Area
2012-09-30 10:25:59

Good one. I picked up the term “cash flow millionaire” from the book “The Millionaire Mind.” (as opposed to an actual “balance sheet affluent” person).

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:48:22

I called them “three income households,” as the husband, the wife and the house were all providing for the consumption binge.

Comment by Carl Morris
2012-09-30 14:41:24

And then one day the house stopped getting out of bed and going to work and started hanging out aimlessly and eating everything in sight.

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Comment by SF Bay Area
2012-09-30 15:32:17

LOL - that’s classic man! Classic!

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Comment by rms
2012-09-30 15:43:42

“I called them “three income households,” as the husband, the wife and the house were all providing for the consumption binge.”

One of my friends did exactly that, but they had nice cash cusion to work with, and two great incomes too. They made a tidy haul over a couple of years. Me . . . envious.

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Comment by SF Bay Area
2012-09-30 10:22:53

Prime - I was being cynical - hence the jab - calling them Thirstin Howl, III types. And the arrogance and conspicuous consumption is really dripping at this point. I see them posted pictures of new toys they buy every week extolling the unpackaging experience in graphic detail.

It reminds me of a flight I took around 2005 or 2006. I was flying first class and they seated me right next to Morgan Stanley’s Head Guru in charge of real estate. He was just flying back from California after closing up a big deal in the Bay Area. We struck up a conversation regarding the real estate bubble. He paused, flared his nostrils and responded, “My good man, I assure you this is the *real deal.*” Chills ran down my spine. The experts had no idea what was about to befall them or they hid it with great skill.

It reminded me of the airplane scene in the movie “12 Monkeys” a post-apocalyptic vision about the annihilation of mankind by a terrorist (Dr. Peters) using a deadly virus and the few survivors that live underground trying to fix the problem by sending prisoners back into the past led my one Ms Jones a 0.001%’er:

Dr. Peters (Virus terrorist) sits down on the plane in first class next to Ms Jones.

Miss Jones: “It’s obscene. All the violence, all the lunacy. Shootings even at airports now. You might say we’re the next endangered species, human beings.”

Dr. Peters (Virus terrorist): “I think you’re right ma’am. I think you’ve hit the nail on the head.”

Miss Jones: “Jones is my name. I’m in insurance.”

And she reaches out her hand to Dr. Peters who unbeknownst to her is infected with the virus that will soon by spread by that plane and take down the planet.

Comment by B. Durbin
2012-10-07 06:29:03

I was under the impression that what she said was “I’m AN insurance.” As in, she was there to get a pristine sample of the virus for the future and a knowing sacrifice.

 
 
 
Comment by SF Bay Area
2012-09-30 09:56:44

“Thousands in Germany Protest for Wealth Tax
By: AP

Germany
Thousands of people across Germany have protested for the introduction of taxes on wealth and financial transactions.

Organizers said Saturday around 40,000 people took to the streets in 40 cities to demand a more equal society.

Police estimates of the turnout in the country’s biggest cities were lower than the organizers’. Frankfurt police said about 4,000 took to the streets and Cologne reported 2,000. Authorities in Berlin declined to provide an estimate but organizers said about 5,000 protested in the capital.

The organizers — including unions, civil society groups and the anti-globalization group Attac — demand a permanent tax on people’s wealth “to have rich households contribute significantly more.” They said the tax they’re supporting would only affect the country’s wealthiest citizens, with almost 99 percent not paying additional taxes.”

Comment by 2banana
2012-09-30 12:40:28

Wow…

Public unions and Marxists groups demanding higher taxes.

Only bigger government and the state can solve all our problems.

 
Comment by Anon In DC
2012-09-30 12:54:53

Guess the “potesters” can work for things they want or stage temper tantrums demand that someone else buy them the things they want.

 
 
Comment by UNKNOWN TENANT
2012-09-30 09:58:28

Seaweed!

They found 400 pounds but I`ll bet 800 pounds floated in. :)

Posted: 8:45 p.m. Saturday, Sept. 29, 2012

Found on Jupiter Beach: 400 pounds of pot

By Liz Balmaseda

Palm Beach Post Staff Writer

An estimated 400 pounds of marijuana washed ashore on Jupiter Beach inside eight large burlap sacks, Jupiter police said Saturday.

The pot-filled sacks were discovered by a fisherman near the 3000 block of A1A, on a stretch between walkovers 26 and 32, said police who were dispatched to the area early Saturday morning.

Authorities canvassed the area and surrounding waterways, searching for more suspicious packages, but found none, police said.

The sacks contained a total of 75 packages of marijuana, according to a Jupiter Police news release, which also said federal agencies were notified of the marijuana recovery for a follow-up investigation.

Comment by SF Bay Area
2012-09-30 10:29:07

Don’t worry - I’m sure it was intended for medical purposes.

 
 
Comment by 2banana
2012-09-30 10:16:47

President’s Aplogists Perplexing
Waterloo-Cedar Falls Courier | 9/30/2012 | Dennis Clayson

Dr. Barbara Bellar, a former nun, Army major, medical doctor and Illinois politician recently put this into perspective. I quote:

“So let me get this straight. We are going to be gifted with a health care plan we are forced to purchase and fined if we don’t, which purportedly adds 10 million more people without adding a single new doctor, but provides for 16,000 new IRS agents, written by a committee whose chairman says he doesn’t understand it, passed by a Congress that didn’t read it but exempted themselves from it and signed by the president who smokes, with funding administrated by a treasury chief who didn’t pay his taxes, but by which we will be taxed for four years before any benefits take effect, by a government which has already bankrupted Social Security and Medicare, all to be overseen by a surgeon general who is obese and financed by a country that is broke. So what the ____ could possibly go wrong?”

Comment by SF Bay Area
2012-09-30 10:57:06

Bellar for governor! LOL

 
Comment by Red Heifer
2012-09-30 11:01:54

forced to purchase and fined if we don’t

There’s no fine. There are way too many exemptions there.

You are Amish, you don’t have to pay fine.
Your religion prevents it, you don’t have to pay fine.
You are poor, you don’t have to pay fine.

There are just way too many……

Comment by SF Bay Area
2012-09-30 11:17:14

That’s silly - most of us don’t fall under any exemptions.

 
 
Comment by UNKNOWN TENANT
2012-09-30 11:33:44

OK huddle-up huddle-up

We`re gonna have a health care plan written they are forced to purchase and will be fined if they don’t, which will add 10 million more people without adding a single new doctor, but provides for 16,000 new IRS agents, written by a committee whose chairman won’t understand it, have it passed by a Congress that won’t read it but will exempt themselves from and will be signed by the president who smokes, with funding administrated by our treasury chief who didn’t pay his taxes, but by which we will be taxed for four years before any benefits take effect, by our government which has already bankrupted Social Security and Medicare, all will be overseen by a surgeon general who is obese and financed by a country that is broke.

On three-ready BREAK!

Comment by nickpapageorgio
2012-09-30 15:48:43

Many on this board and in this country don’t really care about the details, they just want their “free” health care.

 
 
Comment by Pete
2012-09-30 15:44:18

“which purportedly adds 10 million more people without adding a single new doctor”

So when the demand for doctors goes up, hospitals won’t hire any?

Comment by alpha-sloth
2012-09-30 17:21:49

No room for logic in right-winger-land. Not when you’ve got something this hysterically funny.

Look for Jethro to run it for the next three days.

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 17:34:24

Also no room / need for facts…

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Comment by alpha-sloth
2012-09-30 17:39:46

Facts = Science = Liberal BS

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 17:49:16

“Facts = Science = Liberal BS”

Good point. I guess the Republican lies can trump will science and fact every time, so long as there is enough money behind their propaganda campaign?

 
 
 
 
 
Comment by Bluestar
2012-09-30 10:27:54

We had a 3.4 earthquake here in DFW last night. Some minor damage at ground zero and for unrelated reasons (I’m sure) I lost grid power for 20 min. at the same time. The local media was quick to point out that there is no proven relationship between all these earthquakes and the thousands of fracking and injection wells drilled here since 2005.

The trend is accelerating now with 2.x & 3.x quakes every 6 months so we might get a 4.x by the end of 2013. No big deal unless we start getting activity down by Comanche Peak reactors. Those nuclear plants were built over a dormant fault line, a little fact omitted when they granted permits back in the 70’s. Back in 2008 the USGS rated Comanche Peak a 1 in 250,000 chance each year. Old estimate: 1 in 833,333. Change in risk: 233 percent. I would point out that there have now been dozens of quakes in the Barrnet Shale gas field since 2008. But the nukes are probably not going to be the problem though, what could be a much bigger problem are the miles of high pressure Nat Gas lines that snake though dense urban areas now. If one or more of those rupture then we could have a serious risk of death and fire damage.

Time for some more Nat Gas commercials stressing how safe and clean they are.

Comment by ahansen
2012-09-30 12:25:46

No one could figure out why Long Beach, CA., nearly self-destructed in
1933 after Standard Oil displaced Signal Hill, either. Or why Bakersfield did in 1952. Them Dakotas are in for one hu-mongous surprise; too bad for the aquifer, though.

Watch PBS for the mea culpa commercials before the Newshour to see who’s doing damage control in advance of the lawsuits.

Comment by polly
2012-09-30 13:32:45

That is the best description of PBS vanity “ads” (called sponsorships for tax reasons) that I have ever read.

 
 
 
Comment by SF Bay Area
2012-09-30 10:54:17

money laundering driven real estate boom ending
http://www.zerohedge.com/news/2012-09-30/money-laundering-driven-real-estate-boom-ending

While hardly a secret, for decades the ultra-luxury housing segment in any country was the target not so much of local wealthy individuals and business, but foreigners, for whom the grass was always greener, and sought to put their money into “hard assets” abroad to save it from local confiscation. After all, it is far easier to be sued and prosecuted by your own government than a foreign one. Two very vivid examples are the most expensive house in Miami ever sold, which two months ago fetched a price of $47 million, which was purchased by “a Russian who bought the home in the name of a U.S.-based limited-liability company” and in the until recently a record $88 million paid for a 15 CPW penthouse for the daughter of Russian billionaire, Dmitry Rybolovlev (bought from Citi’s Sandy “End TBTF” Weill). The record was topped at $90 million paid for a One57 duplex apartment paid by an unknown individual, almost certainly a foreigner.

For now. Because if London is any indication, global ultra-luxury real estate market is the next “Swiss bank account.”

What happened in London? The NYT explains:

At the request of the Athens government, the British financial authorities recently handed over a detailed list of about 400 Greek individuals who have bought and sold London properties since 2009.

The common theme here of course is that foreigners come to the US (or London, or Geneva, or Hong Kong) or any other wealthy megapolis with their almost always ill-gotten, and untaxed gains, spend the money indiscriminately on local real estate even as the local authorities look the other way because by lifting any offer, these foreigners, while laundering illegal money, are also keeping the all important housing market afloat thus perpetuing the illusion that the domestic economic is rising. Instead all that is happening is it is attracting illegal foreign capital flows.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 10:58:32

Given withdrawals from stock funds month-in, month-out, what supports the market’s ever-rising price level?

AP News
Cash pulled from stock funds for 6th month in row
By Mark Jewell on September 13, 2012

BOSTON (AP) — Another month of a rising stock market, another month of retreat for mutual fund investors who exited stocks and moved into bonds.

A net $11 billion was withdrawn from U.S. stock funds in August, the sixth month in a row that withdrawals exceeded deposits, industry consultant Strategic Insight said on Thursday. It was the largest monthly withdrawal total this year, despite the 2.3 percent rise in the Standard & Poor’s 500 index during August.

Investors also withdrew from stock funds in June and July, although stocks rose modestly both those months. The last month that investors added new cash to stock funds was February.

It’s more evidence of conservative investing trends dating to 2008, suggesting investors remain nervous about stock volatility and the economy four years after the financial crisis.

Stock investors remain in a holding pattern, with many watching the rising stock prices with regret or disbelief, while others take some of their recent profits off the table,” said Avi Nachmany, research director with New York-based Strategic Insight.

The cautious attitudes could persist a few months more, Nachmany said. However, sentiment could shift if the housing and jobs markets continue to improve, and the November elections are decided.

For now, investors continue to add cash to bond mutual funds, a more conservative investment option than stock funds with less potential for sharp gains or losses. A net $34 billion flowed into bond funds in August, the 12th month in a row that deposits have exceeded
withdrawals.

Some $213 billion has flowed into bond funds through August, putting the category on track to exceed $300 billion in new cash for the full year if the trend holds up. Strategic Insight said assets in bond funds have more than doubled since the end of 2008 to more than $3 trillion, due to investors adding cash, and investment appreciation.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 11:27:07

Jim Rogers: “We’re All Going To Pay A Horrible Price For This…”
By Money Morning Staff Reports

As the Fed gets ready to launch quantitative easing, dubbed QE3 or QE Forever — legendary investor Jim Rogers is shaking his head.

In fact, Rogers, a long-time critic of the Feds policies of money printing, said repeating the same program the Fed has already attempted will make policymakers “look like fools again.”

Any relief will be temporary, warned Rogers in a gripping interview on CNBC.

The iconic financier also lashed out at the new developments in Europe, implying that their latest plan to save the euro amounts to nothing more than governments abusing their license to print money.

On Europe’s move to implement a euro version of QE, Rogers said it affords the Western world “unanimity towards mutual destruction.”

“We’re all going to pay a horrible price for this in a year or two or three,” he said.

How horrible? Worse than Rogers predicts, according to a new investigation.

In a newly released documentary that went viral last month, a team of influential economic experts say they have discovered a “frightening pattern” they believe points to a massive economic catastrophe unlike anything ever seen in history.

And according to these experts - who have presented their findings to the United Nations, the UK Parliament and a long list of world governments - the catastrophe may happen well before Americans hit the polls in November.

“What this pattern represents is a dangerous countdown clock that’s quickly approaching zero,” said Keith Fitz-Gerald, the Chief Investment Strategist for the Money Map Press, who predicted the 2008 oil shock, the credit default swap crisis that helped bring about the recession, and the Greek and European fiscal catastrophe that is still wreaking havoc until this day.

“The resulting chaos is going to crush Americans.”

Comment by In Colorado
2012-09-30 14:27:00

From the article:

“Fitz-Gerald says people should take immediate steps to protect themselves from what is happening.”

And what, pray tell, might these steps be? You can only hoard so much food or ammo. And even if you do, someone with more and bigger guns can take it all away from you.

Comment by alpha-sloth
2012-09-30 17:25:21

the catastrophe may happen well before Americans hit the polls in November.

And it sounds like we may only have one month to prepare.

 
 
 
Comment by SF Bay Area
2012-09-30 11:56:40

Income tax rate for CA for 2013 59.6%:

39.5% FedEx + 16.3% CA State + 3.8% Obamacare = 59.6% top tax rate in California for 2013.

So we’ll get to keep 40.4% of our income! Yippee!

How can that be right?

39.5% is the top federal bracket assuming the Bush tax cuts on the “rich” expire January 1 2013.

The 3.8% Obamacare tax kicks in on January 1 2013.

The state of CA has two income tax increases on the ballot that look like they are easily going to pass according to the latest polls:

CA Proposition 30 - raised the top rate from 10.3% to 13.3%
If this proposition is passed in November, 2012, the income tax will apply retroactively to all income earned or received since the first of the year (1 January, 2012).

CA Proposition 38 would add another 3% on top of that - for a total top CA bracket of 16.3% Wow!

And there you have it -a 59.6% top tax rate in California for 2013. That leaves 40.4% for the tax payer to keep.

That’s gotta be bullish for Coastal California Real Estate, especially the $1M+ segment.

Looks like I’ve got two choices:

1) leave the state
or
2) go Galt in-state, quit my business and just living off the old savings.

Comment by 2banana
2012-09-30 12:31:01

Hey - you are only paying your fair share for investments in our future

One penny less and we would turn into Somalia!

No - we can’t cut government - not even a little bit.

You didn’t build that!

At what percent between 0% and 100% taxation do we turn into slaves?

Comment by Anon In DC
2012-09-30 13:01:48

Stop your complaining and pay your “fair shar.” just like Obumer and Warren Buffett say. You know Obumer and Buffett the fellows who say that even they should be paying more taxes but don’t pay. Limousine liberals in action.

 
Comment by In Colorado
2012-09-30 14:29:37

“No - we can’t cut government - not even a little bit.”

I think the DoD budget would be a great place to start.

Comment by 2banana
2012-09-30 14:43:38

The Federal Budget:

20% goes to Defense
55% goes to Entitlements

The Feds borrow 40 cents of every dollar they spend.

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Comment by In Colorado
2012-09-30 16:23:40

The bulk of entitlements are SS and Medicare, which are funded via the payroll tax and do not contribute to the deficit the way military spending does. We do NOT borrow 40 cents of every SS and Medicare dollar spent. We’ve been over this a million times. Why are you so obtuse about this?

 
Comment by SF Bay Area
2012-09-30 18:01:14

I’m a Ron Paul kind of small government & bring the troops home kind-of-guy. I also love science and think science is key to our future. You don’t get better bang for the buck than all the research you get virtually for pennies on the dollar via the U.S. Grad Student / Lab Slave system we have. It really is unsurpassed in terms of value.

But from the research I’ve done to date even if we “bring the troops home.” And end the empire most of the military spending is fixed because of pensions, medical care, base mothballing, etc. We’ve sent the kids out damaged them and now we got to pay. It’s going to be very painful to pay. But we’ll be paying for decades. I think the most you could cut the budget for military is 20% in the future because of all the fixed costs for the vets and bases. That’s not going to balance the budget. That only takes another ~15% off the deficit. The cost of war goes on for many decades after they end unfortunately.

End *all* bush tax cuts, bring all the troops home and end the empire. We still need to find another 65% to cut.

Sad but true. Where are the rest of the cuts?

I don’t like it anymore than you do.

 
 
 
Comment by In Colorado
2012-09-30 14:38:34

At what percent between 0% and 100% taxation do we turn into slaves?

Well, last year we paid 16% between Fed, State and FICA.

To hit those top marginal rates either you earn some serious coin or don’t have any deductions.

Comment by 2banana
2012-09-30 14:41:12

Funny - you did NOT answer the question.

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Comment by In Colorado
2012-09-30 16:20:17

My answer was that normal middle class people don’t pay those crazy rates, so for most people its utterly irrelevant. We grossed 112k, last year and didn’t even come close to paying those rates.

As for your bellyaching about the federal rates, they would still be lower than they were under St. Ronnie Reagan, so no, they aren’t that high.

 
Comment by SF Bay Area
2012-09-30 17:14:00

Colorado - even though I earn more than an order of magnitude more than you - I have to admire you balls for putting your income on the line and saying what you think without distorting the facts. We need that kind of honesty. Kudos!

 
Comment by Montana
2012-09-30 19:05:08

lol - what else do you want to compare?

 
 
Comment by SF Bay Area
2012-09-30 15:16:16

I walked downstairs after posting this and went over my calculations with my significant other. We earn serious coin and would be subject to the full 59.6% rate (and we have no deductions). Her first reaction was “What country do you want to move to Honey?” and was serious. Well I’m glad to have the support.

So I hit the running trails to pound the ground a bit and let out some steam with a running friend of mine. We talked about it and decided January 1, 2013 might be an excellent time for me to retire early.

Driving home I popped on the radio and Bob Brinker was on. He says the top marginal rate in California will actually go to over 60% so I’m thinking I must being missing a 1% tax in there somewhere. He usually does his homework.

People who think people like me won’t change our residency or work habits in response to a 60% tax rate are sorely mistaken. My former income (and tax payments) will be sorely missed by the state. Rip! I don’t really mind paying my fair share but 60%? That’s may “Going Galt Number.” I’d rather take up gardening. Turns out I have a green thumb.

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Comment by shendi
2012-09-30 17:25:15

If I make serious coin, say like 500k a year I will pay the progressive tax - whatever it is. Why? because I will have enough left over to support my life style.

 
Comment by Weed Wacker
2012-09-30 17:47:55

I live in Tucson, AZ. But the company I work for is in SF, CA. I telecommute. I am much happier living here than I was when living in the Bay Area. Income tax here is 4.5%. It was 10.5% in CA when I left 4 years ago. Depending on what your job is, you might be able to make a deal to keep it but live someplace else. With the internet and all the communication software available you can be there without actually being there.

Not sure if any place in the USA will be safe from high taxes as the shit comes down. But you don’t have to stay in CA if you don’t like it. It wasn’t an easy decision to leave, big change never is. I left behind friends and good weather. But I also left behind ridiculous traffic, waiting in long lines, overpriced everything (housing!), and endless smug. It turned out to be a great move.

 
Comment by SF Bay Area
2012-09-30 17:54:18

Shendi - give me one simple answer please? How much in tax is too much as a percent?

I’m looking for a direct answer. 60% is clearly not your number since that is what I would be paying next year. So it must be something higher - 70 80 90 100%? I will respect and honest number. I’ll be disappointed with hemming and hahing.

Making $100K or $200K is pretty simple in the U.S. You play by certain rules - you can do it. But making seven figures (over one million for the math challenged) takes much more. You don’t live a lifestyle. For the most part most of these people:

Worked when everyone else was enjoying the good times

Didn’t just work hard but also planned and worked smart

Took all their earnings and didn’t spend a dime - just reinvested

Took on a lot of risk - that they were responsible for regardless of the outcome - and this could cost them for the rest of their lives

Spent a considerable amount of time on education

Sacrificed years building something up

Work hours that most people can’t imagine

You read - a lot of books - the hard ones - not the ones with pictures

Sacrificed health

Scarified much more

Gave considerable sums to charity and government for your favorite causes

All I’m saying is if you work that hard for that many years to get there… if it is all going to be taken away why bother? In other words - the 1% will simply “un-build that.” They can slack like the rest of the $100K - $200K crowd with a fraction of the % taxes. They don’t need the headache.

 
Comment by SF Bay Area
2012-09-30 18:04:37

Looking for a roommate?

LOL Just kidding.

What does Tuscon have to offer? I’ve never lived there. I’m entertaining options.

 
Comment by aNYCdj
2012-10-01 00:09:11

AZ slim is in Tuscon, and you can hear her on the radio too….great shows she puts together..

 
Comment by Weed Wacker
2012-10-01 00:59:31

Tucson has some things going for it. The winter is mild though the summer can be brutal. It is fairly bicycle friendly. Doesn’t rain a whole lot except in July and Aug. There is lots of interesting wildlife and plants you don’t see anywhere else. There is a university. Things are fairly spread out so it isn’t too crowded. Houses are pretty cheap. :^)

 
Comment by Weed Wacker
2012-10-01 01:19:18

And I can really relate to what you are saying SF. When I left CA it was essentially to drop out. I thought the economy was just stupid and I was not going to play in it anymore. I was unimpressed with the way the govt spent my taxes so I was not going to pay them anymore (by not making any money). After a couple of years of goofing off and playing I started to feel like I needed to do something more substantial. Now I work for the sense of accomplishment and the social aspect of being on a team and feeling that I am building something that is useful. There is more to it than just making money to live off of. Overtaxing overachievers will definitely not help motivate them, but it may have less of an negative effect than what you are imagining.

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 16:03:43

“You didn’t build that!”

A campaign organized around a slogan which was distilled from a strawman misinterpretation of a sound bite taken out of context is doomed to fail.

Comment by Carl Morris
2012-09-30 16:19:22

Maybe in an ideal world :-).

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Comment by SF Bay Area
2012-09-30 16:35:11

Either way - I’m gonna un-build that. Sorry California!

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 16:47:43

My take on the “You built that!” theme: It’s a way to make trust fund babies feel better about all the special advantages they enjoy while growing their businesses that the 99% don’t enjoy.

 
Comment by SF Bay Area
2012-09-30 17:10:41

Let’s look at the research. People like me that build businesses and make it into the 1% are mostly self made. That is the fact. Most suffered deprivation growing up. Many came from war torn countries. They were motivated. Only about 1% of the 1% were trust fund babies. So 0.01% are trust fund babies and many of them are not among the wealthiest among us (maybe they lost their drive).

So can we cease and desist the misinformation campaign about the trust fund babies? Because in actual fact there are more “trust fund babies” in the other 99% than there are in the 1%.

I don’t mean to be condescending. I’m not better because I’m rich. But I do love science and facts and if we are ever to resolve the mess caused by the tech and housing bubbles we need to understand the facts - all of us.

 
Comment by alpha-sloth
2012-09-30 18:16:29

Let’s look at the research.

Show it to us and we’ll look at it.

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 16:37:26

“No - we can’t cut government - not even a little bit.”

Try not to let the facts stand in the way of your rants.

September 27, 2012, 1:48 PM

Nearly 400,000 More Jobs Added Than First Thought
By Ben Casselman

Today’s job revisions contain a few other interesting tidbits. The government shed 67,000 more jobs than previously realized, making the drag from public-sector job cuts look even worse than they already did. The manufacturing sector lost jobs, too, a sign factories began to slow hiring earlier than previously realized. But employment in the construction industry, a major laggard in the recovery, was revised up by 85,000 jobs.

 
 
Comment by In Colorado
2012-09-30 14:21:36

How many people will even reach the marginal rates you mention?

FWIW, it doesn’t seem to deter my Silicon Valley based colleagues. They all seem quite happy to stay put. Even when I tell them about Colorado’s relatively low state income tax rates (4.63% flat rate) and even lower property tax rates, all I ever hear them say is “but Denver is a cow town” and “wages are really low in Denver”.

Comment by In Colorado
2012-09-30 14:22:51

And to add to what I said. We left California, not because of taxes, but because of sky high real estate prices.

Comment by SF Bay Area
2012-09-30 15:21:46

Tax rates in California didn’t seem to be that high to me either here. Yeah they were above average but hey you paid a little bit more to live in the Golden State and I was OK with that.

But 60%?

So I’m hoping you have an extra room out there in Loveland. I’m also hoping for some gardening room in the backyard. Do you ride? I’m going to need a cycling mate to do the old Niwot Loop and the peak-to-peak highway from Netherlands to Estes Park. I could get back into rock climbing over in Eldorado Canyon. Come to think of it - sounds pretty good!

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Comment by In Colorado
2012-09-30 16:16:07

Who is going to pay that marginal rate? Very few people. When I lived there I didn’t come close to the top marginal rates. You have to make some very serious coin to pay those top marginal rates, which are only applicable to a small portion of your income anyway, unless you make really crazy money.

 
Comment by SF Bay Area
2012-09-30 16:32:41

“Who is going to pay that marginal rate?”

Unfortunately me.

“which are only applicable to a small portion of your income anyway, unless you make really crazy money.”

I guess I’m crazy. Hey someone has to be crazy, right?

And I’m modest. You should meet some of my peers here now. I feel very poor next to them. I think things may have changed since you left.

 
Comment by ahansen
2012-09-30 23:30:03

Has “Honey” been on strike or something, because you’re sure rubbing one out on the forum today.

 
 
 
Comment by B. Durbin
2012-10-07 06:43:25

“Denver is a cow town”? Seriously? I love Denver, it’s a nice city with a decent weather spread and lots of pretty nature around it and in it. I hate it when certain cities sneer at other places with phrases like that; it’s like going to someone else’s house and criticizing their choice of wallpaper.

Okay, I will admit that the first time I went there, we passed a pickup with cows in the back on the interstate. Never thought of that as a transportation option, honestly…

 
 
 
Comment by frankie
2012-09-30 13:27:29

Microsoft has entered the US immigration debate with a novel proposal for expanding the number of visas available for foreign techies: have companies pay the government a good chunk of change for an expanded number of them.

Redmond’s general counsel Brad Smith, speaking on a panel discussing STEM (science, technology, engineering and mathematics) education at the Brookings Institution on Thursday, proposed that companies pay $10,000 for each worker they hire under an expanded STEM-specific H-1B visa program, and $15,000 for every green card issued to foreign tech workers

http://www.theregister.co.uk/2012/09/28/microsoft_immigration_proposal/

Comment by rms
2012-09-30 15:34:34

Why doesn’t Microsoft just open an office where their desired unwashed programmers live?

Comment by SF Bay Area
2012-09-30 16:03:10

After the tax rates in the People Republic of California go up to 59.6% on January 1, 2013 (see my post above) I think a lot of high tech works may be leaving the Golden State and moving to the tax-free Evergreen State of Washington and joining the Microsoft campus at a discount.

Go Seahawks!!!

LOL

Bullish - WA State Real Estate.
Bearish - CA SF Bay Area Real Estate.

 
Comment by In Colorado
2012-09-30 16:17:20

<i.Why doesn’t Microsoft just open an office where their desired unwashed programmers live?

They, and most of corporate America, already do.

 
Comment by Montana
2012-09-30 19:07:19

I wish they’d hang the ones who have forked up Word 2010 so badly.

Comment by Carl Morris
2012-09-30 19:47:31

When was the last time Word added a feature that you really needed or appreciated? For me it’s been over 10 years now, and Open Office is completely “good enough”.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 16:09:54

The upside of rising student loan defaults: Most of the money is owed to Uncle Sam, which opens the door to unconventional loan forgiveness programs which private lenders would never consider.

U.S. NEWS
Updated September 28, 2012, 1:32 p.m. ET

Student-Loan Defaults Mount Again

By JOSH MITCHELL and RACHEL LOUISE ENSIGN

The number of Americans who defaulted on federal student loans edged up again in the most recent reporting period, reflecting many borrowers’ difficulty keeping up with their bills in a weak economy.

The Education Department said Friday that of the students whose loans came due after October 2009, 9.1% had defaulted within two years.

That is up from 8.8% in the previous two-year reporting period and almost double the rate of five years earlier.

The report provides a window on a small subset of student loan borrowers, since it only counts defaults that occurred in the first several years of repayment.

The report doesn’t take into account borrowers who have been allowed to postpone payments for a set period due to “hardship,” such as unemployment.

The government projects that roughly one in five borrowers who took out federal loans for undergraduate study will default at some point in their lifetime.

The report underscores the struggles of student borrowers graduating into a sluggish economy, with high debt loads and limited job prospects.

The unemployment rate has exceeded 8% since early 2009.

“The labor market’s been particularly difficult for 18- to 29- year-olds,” said Richard Fry, an economist at the Pew Research Center in Washington, D.C.

The Obama administration has sought to ease the burden of student debt by expanding a program that limits debt payments by income and time.

The new rules, authorized by Congress and set to be finalized next month, will cap payments on federal student loans at 10% of a borrower’s “discretionary” income—essentially the money remaining after taxes and living expenses—and then forgive any remaining debt after 20 years.

The government also blocks schools from receiving federal aid when the default rate of their former students exceeds 25% for three consecutive years.

Most outstanding student debt is owed to the federal government.

Comment by Carl Morris
2012-09-30 16:21:32

It’s not unusual to get student loan forgiveness for doing one military enlistment. I don’t know if that’s available at this moment, though.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 16:12:20

Lifestyle
Student Loans Become a Heavy Burden to Bear

Student-loan debt is having a sharp effect on people’s lifestyles. Four-figure monthly loan payments are handcuffing grads at all levels of the work force. Sue Shellenbarger has details on Lunch Break. Photo: Jon Lowenstein for The Wall Street Journal

4/17/2012 5:10:00 PM3:36

Comment by Combotechie
2012-09-30 18:35:54

“So, what have you been doing since you graduated from college.”

“I’ve been working for the bank.”

“Really? Doing what?”

“Mostly serving lunch at Applebee’s.”

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 17:33:24

“Comment by Prime_Is_Contained
2012-09-30 08:33:32

Double-check your math, Prof; I got 9.65 inches of rain.”

Thanks for the assist; after writing out the calculation, I agree:

245 litres X (1000 ml / 1 litre) X (1 cc / 1 ml) X (1 cubic meter / (100 cc)^3) X (39.4 inches / 1 meter) = 9.65 inches.

Still an incredible amount of rainfall for one storm! (I believe that exceeds the San Diego annual average total rainfall…)

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 17:52:54

Interesting to note that the BBC reports volume per cubic area unit on the ground versus vertical height of an implicit column of rain in the U.S. … that added an interesting twist to the last step (rightmost factor) of the above calculation.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 18:12:20

Bound to Sea but Buried in Debt, Spain’s Fishermen Blame Bloc’s Policies
Emilio Morenatti/Associated Press

Fishermen loaded bluefin tuna onto a boat in southern Spain, where many suffer under large loans and falling fish prices.

By RAPHAEL MINDER
Published: September 29, 2012

CÁDIZ, Spain — Millions of Spaniards took advantage of cheap financing to buy new houses during Spain’s decade-long economic boom and housing bubble beginning in the late 1990s. The country’s fishermen, many encouraged by European Union subsidies, did much the same for their own homes away from home: new boats.

Since then, they have run into problems: declining fish stocks, tighter quotas on catches, rising operating costs and a sharp economic downturn that has slashed both fish prices and demand.

The impact has devastated much of Spain’s coastal economy. It has also generated intensifying criticism of European Union policies that, environmental groups and experts say, have increased fishing communities’ dependency on subsidies to make up for the decline in both revenues and fish populations, even as the bloc continues to pay generous subsidies to scrap older vessels to upgrade Europe’s fleet. The new boats are typically bigger and more powerful, adding pressure on declining fish populations.

Coastal regions, they warn, are in the grip of a vicious downward spiral, with steep economic and environmental costs that they are urging leaders to halt.

Spain has been one of the worst examples of using public money to modernize and increase the capacity of the fleet,” said Saskia Richartz of Greenpeace in Brussels, the group’s European Union oceans policy director. “We have now reached a crisis point, with a generation of fishermen whose boats are owned by banks and who have no fish to catch.”

 
Comment by UNKNOWN TENANT
2012-09-30 18:19:35

Goodnight HBB

The Waltons say goodnight - YouTube
http://www.youtube.com/watch?v=cp7_u0kcQRo - 158k -

 
Comment by alpha-sloth
2012-09-30 19:23:15

Another classic from the Romney/Ryan campaign:

Paul Ryan says “it would take me too long to go through all the math” involved in the tax plan he and Mitt Romney are proposing.
Yahoo

The Republican vice presidential nominee said on “Fox News Sunday” that their plan–a 20 percent across-the-board income tax cut–would focus on deductions and closing tax loopholes for the rich, but declined to offer specifics.

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 20:49:04

Math is hard, but lying is easy.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 21:20:44

IEM Republican Winner-Takes-All presidential election futures prices are making a comeback since bottoming out on 9/27/12…

09/24/12 REP12_WTA 1,213 269.918 0.200 0.249 0.223 0.200
09/25/12 REP12_WTA 1,961 414.853 0.200 0.239 0.212 0.221
09/26/12 REP12_WTA 1,009 220.586 0.206 0.221 0.219 0.206
09/27/12 REP12_WTA 900 179.060 0.186 0.217 0.199 0.186
09/28/12 REP12_WTA 1,705 353.629 0.177 0.250 0.207 0.248
09/29/12 REP12_WTA 506 109.350 0.193 0.234 0.216 0.234

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 21:23:58

Asian markets are Tankan again (that’s a pun…).

Tankan weighs on Tokyo
Big manufacturers’ sentiment worsens to minus 3

Japanese shares begin fourth quarter on a downbeat note after the Bank of Japan’s Tankan survey. Sentiment also affected by Friday’s drop on Wall Street and weekend data from HSBC showing a deterioration in Chinese manufacturing activity.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 21:31:11

China Manufacturing Slowdown Persists Before Handover
By Bloomberg News - Sep 30, 2012 5:42 PM PT

China’s manufacturing contracted for an 11th straight month, a private survey found, increasing pressure on the government to bolster growth in the world’s second-largest economy.

The purchasing managers’ index from HSBC Holdings Plc (HSBA) and Markit Economics was at 47.9 for September from 47.6 in August. Export orders declined at the fastest pace in 42 months and purchasing activity in manufacturing fell for a fifth consecutive month, the Sept. 29 report showed.

A separate manufacturing report will today give a second reading of the economy as China’s leaders prepare for a once-a- decade handover of power that begins in November and has been clouded by the ouster of Politburo member Bo Xilai. The government is trying to retain public support by sustaining growth while avoiding a resurgence in home prices.

“The failure of both external and internal demand is weighing heavily on Chinese manufacturing,” said Glenn Maguire, principal at consultant Asia Sentry Advisory Pty and former Societe Generale SA chief Asia economist. “External demand recovery requires a stronger U.S., Japan and Europe — a highly unlikely dynamic in the near term. Internal demand recovery requires greater policy support.”

Stock Surge

Speculation that authorities will take steps to counter a deepening slowdown spurred a 4.1 percent surge in the benchmark Shanghai Composite Index in last week’s final two trading days. The yuan climbed on Sept. 28 to its strongest level since 1993. The People’s Bank of China injected record funds into the financial system last week to ease a cash squeeze before a week- long holiday. China’s markets are closed through Oct. 7.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 21:34:05

Asian Stocks Drop as China, Japan Data Signal Slowodown
By Jonathan Burgos and Yoshiaki Nohara - Sep 30, 2012 8:08 PM PT

Asian stocks dropped a second day after Japan’s largest manufacturers became more pessimistic and China’s manufacturing shrank for second month amid a global economic slowdown that has sapped export demand.

Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, fell 1.6 percent. Nippon Shokubai Co. plunged 13 percent after a deadly fire shut output at one of the chemical maker’s factories. Arrium Ltd., the Australian iron ore producer previously known as OneSteel Ltd., surged 22 percent after rejecting a A$1.01 billion ($1.05 billion) bid from companies led by Noble Group Ltd. and Posco Australia Pty.

The MSCI Asia Pacific Index (MXAP) declined 0.7 percent to 121.65 as of 11:50 a.m. in Tokyo. Three shares fell for each that rose on the gauge, with markets in China, Hong Kong and South Korea closed for holidays. The regional benchmark index fell in the past two weeks amid concern political discord will prevent Europe from resolving its debt crisis.

“People still have to downgrade their assumptions for economic growth, and that will probably flow through the next quarter or next half in lower profit assumptions for companies,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Given markets are closed in many parts, I think we are probably in for a relatively quiet, but soft start to the week.”

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 21:38:24

Survey shows China manufacturing contracting
By Joe Mc Donald on October 01, 2012

BEIJING (AP) — China’s manufacturing contracted again in September but improved from the previous month in a possible sign an economic slowdown is bottoming out.

An industry group, the China Federation of Logistics & Purchasing, said Monday its monthly purchasing managers’ index stood at 49.8 points on a 100-point scale on which numbers below 50 indicate a contraction. That was up 0.6 points from August’s numbers and the first improvement in four months.

The data added to signs China’s deepest economic downturn since the 2008 global crisis might be stabilizing but officials including President Hu Jintao have warned conditions might deteriorate further before growth rebounds.

China’s economic growth fell to a three-year low of 7.6 percent in the quarter ending in June. That is strong by Western standards but has hurt Chinese manufacturers and construction companies that depend on high growth.

Analysts are forecasting a turnaround late this year or in early 2013 but have pushed back their time frame due to weakness in key European and U.S. export markets. They say a Chinese recovery is likely to be too weak to drive a global rebound without improvement in developed economies.

Some forecasters point to higher bank lending in recent months as a sign of an impending uptick in growth but other indicators have yet to show improvement.

A separate PMI released Saturday by HSBC Corp. showed activity rose slightly to 47.9 on a similar 100-point scale, still showing a contraction but improved from August’s 47.6.

China’s slowdown is due largely to government lending and investment curbs imposed to cool inflation and steer rapid growth to a more manageable level, but the country also has been hurt by the unexpectedly sharp decline in export demand.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 21:42:16

A watched pot never boils.

POLITICS
September 30, 2012, 7:50 p.m. ET

Facing ‘Fiscal Cliff,’ Obama Would Quickly Fill Treasury Job

By DAMIAN PALETTA

WASHINGTON—If re-elected, President Barack Obama is expected to move quickly in November to nominate a new Treasury secretary, and that person could play a key role negotiating with Congress about the looming “fiscal cliff” of tax increases and spending cuts, people familiar with the planning said.

The two people most frequently mentioned by current and former administration officials as likely successors to Treasury Secretary Timothy Geithner, who wants to leave the post, are White House Chief of Staff Jacob Lew and Clinton administration Chief of Staff Erskine Bowles.

Both are steeped in the minutia of the federal budget and have worked extensively on tax and spending negotiations with Republicans. Mr. Lew served as White House budget director in the Clinton and Obama administrations. Mr. Bowles was co-chief of the White House’s 2010 deficit-reduction commission, which won bipartisan support for a plan to reduce the budget gap by roughly $4 trillion over 10 years.

Mr. Obama didn’t embrace the commission’s full conclusions, which Mr. Bowles continues to promote among corporate and political leaders.

If Republican candidate Mitt Romney wins, negotiations on the “fiscal cliff” could be pushed off until 2013. Both Democrats and Republicans have said Congress is expected to postpone the spending cuts and tax increases until after Mr. Romney’s would- be inauguration in late January and once he has time to put an economic team in place.

Among the Republican’s possible candidates to lead the Treasury are Columbia University Graduate School of Business Dean Glenn Hubbard, former World Bank President Robert Zoellick and executives from the business world, such as CIT Group Inc. Chief Executive John Thain and former Wells Fargo & Co. CEO Richard Kovacevich, say people who have spoken to Romney advisers.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 21:44:49

Goldbug optimism tends to get out ahead of the fundamental impact of QE on the gold price.

Gold follows euro’s downward lead

October 1, 2012 - 2:06PM

Gold drifted lower after posting its biggest quarterly rise in more than two years, tracking a weaker euro as Spain’s struggle to control its finances worried investors.

Dollar-priced gold closed last week barely changed, despite a 0.8-per cent rise in the dollar index, showing bullion’s resilience, he said. Euro-priced gold hit a record high of €1381.15 an ounce last Friday.

Spot gold inched down 0.4 per cent to $1764.19 an ounce after finishing the last quarter up nearly 11 per cent, its biggest quarterly rise since the second quarter of 2010. US gold fell 0.4 per cent to $1,767.20.

Caution has returned to the market after central banks’ stimulus measures greatly cheered gold bugs and sent bullion up for four straight months. Investors are now seeking fresh catalysts amid the still-grim picture in the euro zone.

Spain’s debt levels are set to rise next year, piling pressure on the Madrid government to apply for aid as it pours funds into cash-strapped regions, an ailing banking system and rising refinancing costs, its budget showed on Saturday. The euro fell to its lowest in nearly three weeks on uncertainty over Spain’s bailout plan, while the dollar index rose to its highest since mid-September, making dollar-priced gold less attractive to buyers holding other currencies. “In the short term, the weaker euro/dollar does have an impact on gold prices,” said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.

“While structural change in Europe will take years, the short-term solution to the debt crisis is money-printing, which will support gold.”

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 23:04:15

It’s amazing how much panic one honest man can spread among a multitude of hypocrites.

― Thomas Sowell

Comment by Cantankerous Intellectual Bomb Thrower™
2012-09-30 23:05:37

Bailing out people who made ill-advised mortgages makes no more sense than bailing out people who lost their life savings in Las Vegas casinos.

― Thomas Sowell

 
 
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