The Housing Bubble

Spain’s debt levels will increase further next year, the government has predicted, putting Madrid under more pressure as it continues efforts to trim spending.

Treasury Minister Cristobal Montoro said debt would likely reach 85.3% of the country’s annual economic output this year, increasing to 90.5% in 2013.

His comments come after more cost-cutting plans were unveiled last week.

Many analysts consider it only a matter of time before Spain needs a bailout.

http://www.bbc.co.uk/news/business-19777114

The beat goes on.

If you pay current asking prices for resale housing, you’re going to lose money. Alot of money.

57 Previously Undiscovered Fast and Furious Guns Used in Mexican Crimes

Fifty seven previously unidentified firearms linked to Operation Fast and Furious were recovered in sites associated with murders, kidnappings, and at least two gruesome massacres.

http://abcnews.go.com/ABC_Univision/News/57-previously-undiscovered-fast-furious-guns-mexican-crimes/story?id=17361775#.UGkGzfl27u0

“If” this were a Republican Administration, this news story would be leading all of the MSM broadcasts every day.

How can Holder keep his job??? Only through the blessings of the compliant Obama lapdogs, the MSM.

This article seems to explain our current situation pretty well…

http://www.businessinsider.com/heres-the-problem-with-our-economy-2012-9

http://www.breitbart.com/Big-Government/2012/09/30/U-S-Drowning-In-Unemployment-Says-Federal-Reserve-Member

Is 9 years old too young?

According to BikyaMasr, cleric Yassir Barhami cited the Koran in stating that once a girl begins menstruating, usually around 14-years-old, she should begin having children.

Therefore, he reportedly explained, “it is permissible for the girl at the age of 9 or 10 to marry.”

The question shouldn’t be ’should the 9 year old girls be _ALLOWED_ to marry. The real question is should the Egyptian people be allowed to _FORCE_ 9 year old girls to be married so they can be legally raped?

Its a good thing they had Eleana Kaagen’s advice so they will hopefully ignore the US constitution as a model and follow an example from Islam.

From yesterday:

“Barely one in five, in other words, scores high enough to meet today’s FICO score averages at Fannie and Freddie.”

Sounds alarming doesn’t it? But no, it means 40% of Americans have FICO scores high enough to secure a Fannie/Freddie loan. Considering the state of the economy and the number without health insurance it’s not too bad.

It is fundraising time for my niece’s NYC public school (so they don’t have 28 five year olds with only one teacher in the room among other reasons). So, what dead tree edition magazine should I go for? I’m thinking about Current World Archeology. It looks interesting and as near as I can tell, only a few paragraphs of their main articles are available for free on-line. Plus, it only shows up 6 times a year, which I consider a feature, not a bug. However, if anyone would like to try to convince me that some well known magazine is also worth it (really interesting and can’t be read on-line) for a year or whatever, I’m willing to listen.

I thought about getting a few of the shelter/decor magazines just to see what lists it puts me on, but I’m not sure it is worth the hassle.

Scientific American is good if science is your bent.

“We have to do something now in terms of reducing obesity as a risk factor if we’re going to manage health costs into the future,”

Although I got run into the ground for saying this a couple of weeks ago it seems pretty obvious that this falls under the No sh#t column.

Study: Baby Boomers’ Health Very Poor, Getting Worse

October 1, 2012 4:42 AM

WASHINGTON (CBSDC) – The Baby Boomer generation’s overall health has been on a sharp decline.

Australian researchers from Adelaide’s three universities have completed the first stage of a report on the generation born between the end of the Second World War and the mid-1960s.

Obesity among baby boomers is more than double the rate of their parents at the same age, and boomers with three or more chronic conditions was 700 percent greater than the previous generation.

Professor Graeme Hugo from the University of Adelaide said the findings were alarming and evidence that new public policies were needed.

“We have to do something now in terms of reducing obesity as a risk factor if we’re going to manage health costs into the future, but I think more importantly if baby boomers are going to be able to lead active and productive lives in their later years,” he told ABC.

http://washington.cbslocal.com/2012/10/01/study-baby-boomers-health-very-poor-getting-worse/ -

Euro zone September factory data flags “new recession”: PMI
By Jonathan Cable
LONDON | Mon Oct 1, 2012 5:33am EDT

(Reuters) - Euro zone manufacturing put in its worst performance in the three months to September since the depths of the Great Recession, with factories hit by falling demand despite cutting prices, a business survey showed on Monday — pointing to a new recession.

Factories helped lift the 17-nation bloc out of its last recession but the survey suggests a downturn that began in smaller periphery countries has taken root in core members Germany and France.

“Despite seeing some easing in the rate of decline last month, manufacturers across the euro area suffered the worst quarter for three years in the three months to September,” said Chris Williamson, chief economist at data collator Markit.

“The sector will act as a severe drag on economic growth. It therefore seems inevitable that the region will have fallen back into a new recession in the third quarter.”

Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) rose to 46.1 in September from 45.1 in August and above the preliminary reading of 46.0. But that was its 14th month below the 50 mark that divides growth from contraction.

The output index rose to 45.9 from August’s 44.4 but chalked up its seventh month of decline.

The euro zone escaped from the last recession in 2009 but a debt crisis that began in Greece almost three years ago has wreaked havoc across the region and threatened to bring the whole currency union crashing down.

A slew of weak data has convinced many economists that the bloc fell into another recession in the quarter just ended and will not grow again until early next year.

In its battle to support a struggling economy the European Central Bank is now widely seen in a Reuters Poll cutting interest rates to a new record low of 0.5 percent before the end of the year.

However, inflation jumped more than expected in September, flash data showed on Friday, which may discourage the ECB from acting this week although the PMI survey showed factories cut the prices of their products for the fourth straight month.

New orders have fallen since June 2011 and factories were forced to generate some of their activity by running down backlogs of work.

The new orders index fell to 43.5 from the previous 43.7. Manufacturers have cut staffing levels for all but one of the last 11 months, giving an indication of their pessimism.

Official data due later on Monday is expected to show unemployment rose to 11.4 percent in August.

Earlier figures from Germany, Europe’s largest economy painted a picture of sustained contraction. In France the situation worsened dramatically with its PMI seeing one of the biggest one-month falls in the survey’s 14-year history.

“France is perhaps the new worry, with its PMI slumping to the lowest for three-and-a-half years,” Williamson said.
…

Does the Fed pump extra liquidity into the stock market on days when BB gives speeches?

ISM’s September target: 49.7
October-fest on Wall Street

Stocks to begin the fourth quarter solidly higher. Investors take worrisome European data in stride ahead of the Institute for Supply Management’s September manufacturing data and later, a speech by top U.S. central banker Ben Bernanke.

October 1st is here. It’s the start of the 2013 federal government fiscal year. Is there a federal budget in place yet?

From the Denver Post - Colorado among national leaders in uptick for home equity loans:

“Colorado is among the states showing a possible turnaround in mortgage demand as a key indicator of home equity lending rose in August for the first monthly increase in almost five years.

Equifax reported Monday that national home equity installment balances rose 0.3 percent in August, the first increase since November 2007.

“The residential real estate market finally seems to be finding solid ground,” Equifax chief economist Amy Crews Cutts said in a statement. “The environment has been set for growth for a while — now it looks like it may finally be happening.”

Keep pimping the Recovery®, debt-whores. Note the language in the headline, “national leaders”, YAY debt! RAH RAH debt slavery! We’re Number One! Appropriately supported with quotes from the Credit Score Industrial Complex. Because the foundation of this Recovery® will be borrowing our way to prosperity!

Stock market is up nicely today, and while no one was looking Faceplant stock has crept back up to $22.45. That’s better than a 20% pop. Did anyone here buy while everyone else was selling?

France’s Socialist 75 percent tax rate is economic suicide
The Telegraph (UK) | September 28, 2012 | Nile Gardiner

Back in May I wrote a piece describing Francois Hollande’s election victory as emblematic of the EU’s decline, noting that “his government promises to be a symbol of everything that is wrong with Europe today.” True to his election campaign promise, the new French president, together with his prime minister Jean-Marc Ayrault, has outlined his plans for a 75 percent marginal income tax rate tax on anyone earning more than €1 million Euros a year.

This is economic suicide for the second biggest economy in Europe, a supreme act of financial har-kiri for a country whose public debt has now risen to 91 percent of GDP, a growth of 30 percent in five years. This is part of €20 billion Euros worth of new taxes, mainly on businesses and high earners, unveiled by a backward-looking Socialist government seemingly intent on economic self-destruction. As Jean-Paul Agon, chief of L’Oreal told The Financial Times earlier this week, it will now become “almost impossible” for France to attract leading business talent.

The end result is all too easy to predict. The steady flow of entrepreneurs and businesses out of France, which has already been taking place for some time, will now turn to a flood of money leaving Paris and en exodus of high wealth individuals, who will flee to the promised land of Britain, Switzerland, Singapore – anywhere they don’t have to hand over three quarters of their hard-earned money to the government. Paris’s loss will of course be London’s gain. With good reason, there has been a significant increase in recent months in the number of French citizens buying expensive properties in the UK. London is already home to hundreds of thousands of French exiles, with Chelsea and South Kensington dubbed “the 21st arrondissement.”

For a faltering country facing rising unemployment and mounting economic stagnation, the impact of these latest tax rises will be disastrous, with government revenues likely to fall rather than increase. It will also have a chilling effect on foreign investors, who are additionally nervous about the forthcoming European Union Financial Transaction Tax, which Hollande is strongly backing.

When they elected Hollande in the Spring, France’s voters knew what they were getting. A big government administration hell-bent on implementing failed socialist dogma regardless of the economic damage it would inflict. Hollande’s France should serve as warning to other countries that may be tempted to take the same path.

California News

Illegal immigrant licenses bill signed by Gov. Jerry Brown

Monday, October 01, 2012

SACRAMENTO, Calif. (KABC) — California Gov. Jerry Brown announced Sunday he has signed a bill making hundreds of thousands of young undocumented immigrants eligible for driver’s licenses.

AB2189 was proposed by Assemblyman Gil Cedillo (D-Los Angeles) and it will let the Department of Motor Vehicles issue licenses to illegal immigrants eligible for work permits under a new Obama administration policy.

The bill allows people who are granted deferred action to apply for a driver’s license and requires the DMV to accept as proof of legal residence whatever document the federal government provides to the participants in the deferred action program.

Cedillo has long been a champion of securing driver’s licenses for undocumented immigrants so they can drive legally. He praised Brown for choosing “public safety over politics” by signing the bill.

The Associated Press contributed to this report.

http://abclocal.go.com/kabc/story?section=news/state&id=8830868 -

Wow. CUT government spending, the size and scope of government and the economy actually GROWS…

And they didn’t even turn into Somalia.

————————

The Swedish Model: Government Austerity. They are the exact opposite of a “socialist success story”
American Thinker | 10/01/2012 | Randall Hoven

Sweden, like Norway, consists of a small, not very diverse, mostly white and Christian people. Its population is 9.1 million — a bit less than North Carolina’s. (There are 13 cities in the world with bigger populations.) Not only are native Swedes white, but so are most of Sweden’s immigrants. The CIA World Factbook lists its immigrants as “Finns, Yugoslavs, Danes, Norwegians, Greeks, Turks.” And 85% of that population is Lutheran; 85% live in cities — 22% in the Stockholm area itself.

But unlike Norway, which is swimming in oil, Sweden is not richer than the U.S. On a GDP per capita basis (Purchasing Power Parity), the U.S. is 20% richer than Sweden. So Sweden has enjoyed somewhat faster growth than the U.S., at least over some cherry-picked periods of time, but it has not caught up to us in over three decades.

The real story of Sweden is the exact opposite of a “socialist success story.”

In short, government spending in Sweden had the effect that free-market types always predict: slow growth and high debt. Government spending does not stimulate; it stifles, and it sticks our kids with the bill

Around 1993, Sweden’s government changed its behavior: it started spending less. By 2011 it was spending “only” 49% of GDP. While that is still pretty high, that represents a cut of 19% of GDP, or about what the entire federal government of the U.S. spent each year in most of the Clinton and Bush

The most transparent and honest government EVER…

Just ignore the laws you don’t like.

It is good to be a tyrant.

————————————

After Obama guidance, Lockheed won’t issue layoff notices this year
The Hill | October 1, 2012 | Jeremy Herb

Lockheed Martin said Monday it will not issue employee layoff notices this year, ending an election-year showdown with the Obama administration.

The company said it based its decision on new guidance issued Friday by the Office of Management and Budget and the Pentagon.

The guidance said the Pentagon did not anticipate killing any contracts on Jan. 2, the day automatic spending cuts are set to begin hitting defense spending. The guidance also said federal government would cover severance costs that are mandated under a federal layoff notices law.

The decision by Lockheed means thousands won’t get layoff notices weeks or days before Election Day, which might have cast a crucial blow against President Obama’s reelection chances. But Republicans are likely to argue last week’s guidance was a politically-motivated effort by the administration to protect Obama.

Greece is predicting that its economy will shrink for a sixth year in 2013 as it continues to feel the effects of austerity measures.

The economy will contract by 3.8% next year, it said in a draft budget submitted to parliament.

Greece also predicts its economy will shrink by 6.5% this year, worse than a previous estimate of 4.8%.

http://www.bbc.co.uk/news/business-19791050

Obama USDA met 30 times with Mexican gov’t to promote food-stamp use among Mexican immigrants

Published: 2:15 AM 10/01/2012

Department of Agriculture personnel in the Obama administration have met with Mexican Government officials dozens of times since the president took office to promote nutrition assistance programs — notably food stamps — among Mexican Americans, Mexican nationals and migrant communities in America.

In his letter, Vilsack asserted that USDA does not pressure people to enroll in the program or is attempting to boost its rolls. President Obama, too, has said that “people do not come here looking for handouts.”

“We do not pressure any eligible person to accept benefits, nor is our goal to simply increase the number of program participants, but we are determined to help people in need make informed decisions about whether or not to seek assistance for which they may be eligible,” Vilsack claimed.

The mission USDA articulates on its website is to “increase participation in the Supplemental Nutrition Assistance Program” — food stamps. The agency has been engaged in aggressive advertising campaigns and issuing guidance to state and local offices about how to enroll more beneficiaries.

Eighteen years ago yesterday, I left the last FT job I’ve ever had. Year 19 as a freelancer is starting with bill-paying and prospecting.

Mean ole David Dayen is dumping the Firedoglake-hate all over Mark Zandi. Again. Article:

Mark Zandi Doesn’t Understand Housing Very Well

Fun quote:

Court jester economist for power Mark Zandi tried to pull a fast one by readers of the Washington Post, by actually making the argument, in the face of all evidence to the contrary, that the Obama Administration successfully fixed the foreclosure crisis. He has to make a mental leap in order to do this, claiming that the state of the housing market in 2012 is directly related to foreclosure mitigation and housing market programs from 2009. Of course, we know the causes of the housing market “recovery” and they have nothing to do with those programs, and everything to do with over-speculation by institutional investors who have bought up massive amounts of foreclosed properties.

[Boldface added by Yours Truly.]

80,000 dollars? For an ultra-high-net-worth individual? What a farce. But I guess even a slap on the wrist allows the administration to say they are prosecuting cases related to the financial crisis.

Ex-IndyMac CEO Michael Perry Settles With SEC for $80,000
By Edvard Pettersson on October 01, 2012

http://www.businessweek.com/news/2012-10-01/ex-indymac-ceo-michael-perry-settles-with-sec-for-80-000

This tells you everything about who our gov works for. Let’s see if the tax cuts for the top 0.1% die as well. My guess is not.

WASHINGTON — Regardless of who wins the presidential election in November or what compromises Congress strikes in the lame-duck session to keep the economy from automatic tax increases and spending cuts, 160 million American wage earners will probably see their tax bills jump after Jan. 1.

That is when the temporary payroll tax holiday ends. Its expiration means less income in families’ pocketbooks — the tax increase would be about $95 billion in 2013 alone — at a time when the economy is little better than it was when the White House reached a deal on the tax break last year.

Independent analysts say that the expiration of the tax cut could shave as much as a percentage point off economic output in 2013, and cost the economy as many as one million jobs. That is because the typical American family had $1,000 in additional income from the lower tax.

I’d be shorting the market when this comes to pass.

Digital Age overload: ‘Internet addiction’ to be classified as mental illness

Published: 01 October, 2012, 14:21
Edited: 01 October, 2012, 21:19

Think twice the next time you play a videogame or surf the Net: ‘Internet-use disorder’ is set to be added to the list of mental illnesses in the worldwide psychiatric manual. Kids are identified as being especially at risk.

The international mental health encyclopedia known as the ‘Diagnostic and Statistical Manual of Mental Disorders’ (DSM-IV) will include Internet-use disorder as a condition “recommended for further study” in its forthcoming May 2013 edition.

Psychologists believe that Internet addiction should be categorized like other addiction disorders as it has similar symptoms, including emotional shutdown, lack of concentration and withdrawal.

Parents have noted their children becoming angry and violent when their electronic gadgets are taken away from them, the Sydney Morning Herald reported. In other instances, kids preferred to play a videogame over eating or social interaction.

One step closer to mental illness

The listing is another step towards classifying Internet addiction as a mental illness: The DSM-IV’s new inclusion demonstrates that there are risks posed by overusing technology and that more research is required, which could lead to formal diagnoses of the disorder in the future.

Psychologists are pushing to broaden the diagnoses of Internet-use disorder to include more than just gaming addictions, which could expand the age group of those affected by the illness.
”With kids, gaming is an obvious issue. But overall, technology use could be a potential problem,” Director of the Brain and
Psychological Sciences Research Centre Mike Kyrios told the Sydney Morning Herald.

Australia was one of the first countries to recognize the problem and offer public treatment, and established clinics to treat video game addiction.

That such widely used technologies can cause deep harm to children has lead to further examinations of adults habits surrounding devices used 24/7 for reading, gaming, and social interactions.

When addiction borders on insanityAddiction to online games is not a new phenomenon, with some cases grabbing international headlines over the past few years.

In a 2009 incident, 17-year-old Daniel Petric of Ohio shot his mother and injured his father after they confiscated his Halo 3 videogame because they feared he was playing it too much.

Chris Staniforth, 20, suffered a blockage to his lungs and died while playing his Xbox for up to 12 hours in 2011.
A year later, another gaming addict died after playing an online videogame for 40 hours straight at an Internet café in Taiwan.

Similar behavior has also been exhibited by adults: A Korean couple was arrested in 2010 after their infant daughter starved to death while the pair played an online game for hours. The videogame the two were playing involved raising a virtual baby.

http://rt.com/news/internet-use-mental-illness-389/ -

Polly

How did your Canadian vacation go? Did you see the forest of building cranes in Toronto?

Breaking news:

Suit Alleges Misconduct by Bear Stearns on Mortgage Securities

link: http://www.nytimes.com/2012/10/02/business/suit-accuses-jpmorgan-unit-of-broad-misconduct-on-mortgage-securities.html?_r=1&hp

Tease (but, as usual, I suggest you read it all):

The complaint contends that Bear Stearns and its lending unit EMC Mortgage defrauded investors who purchased mortgage securities packaged by the companies from 2005 through 2007. The firms made material misrepresentations about the quality of the loans in the securities, the lawsuit said, and ignored evidence of broad defects among the loans that they pooled and sold to investors.

Moreover, when Bear Stearns identified problematic loans that it had agreed to purchase from a lender, it was required to make the originator buy them back. But Bear Stearns demanded cash payments from the lenders and kept the money, rather than passing it on to investors, the suit contends.

Unlike many of the other mortgage crisis cases brought by regulators such as the Securities and Exchange Commission, the action does not focus on a particular deal that harmed investors or an individual who was central to a specific transaction. Rather, the suit contends that the improper practices were institution-wide and affected numerous deals during the period.

Athens Journal
Dread and Uncertainty Pervade Life in a Diminished Greece
Eirini Vourloumis for The New York Times

Pensioners at a favorite gathering spot in central Athens. Many Greeks wonder whether they and their country will emerge from the economic downturn with a secure future.
By RACHEL DONADIO
Published: June 13, 2012

ATHENS — Anyplace else, they might be signs of progress: Traffic moves faster on once clogged streets. Cigarette smoking has dropped sharply. Far less garbage heads for landfills each day.

But this is Athens, and the statistics are grim reminders of a middle-class society in rapid decline. Many fear that elections, including voting scheduled for Sunday, offer no clear route out of a deepening political and economic crisis. From its wealthy northern suburbs to the concrete blocks of downtown, there is a sense of an endgame in Athens.

“It’s the last days of Pompeii,” said Aris Chatzistefanou, a co-director of “Debtocracy,” a provocative 2011 documentary about the Greek crisis, as he stood, drink in hand, outside a cafe in Exarchia, a thrumming graffiti-filled neighborhood whose night life remains a rare pocket of defiant joy amid the unremitting gloom.

For many Greeks, the question is not which party will win. The next months and years will be difficult no matter which government is in charge. Increasingly, they wonder whether they themselves — and their country — will emerge from the crisis with a secure future. Giorgos, a 27-year-old economics major who did not want to reveal his last name, said the sense of uncertainty was oppressive.

“There is a depression in the Greek people, in all my friends,” said Giorgos, who has put off plans to open a frozen yogurt shop. “They keep saying: ‘I can’t take it. There’s depression about our jobs, depression on the news, depression about the economic situation, depression in our family, depression and fighting among friends.’ ”

He had just returned from a day trip to Munich, where like many people in the heavily indebted countries, he had opened a bank account. “I don’t want to transfer all my money, but if something goes wrong here, I don’t want to be poor just in one day,” he said.
…