The Housing Bubble

“The night of 13-14 October 1942 was known simply as “The Night” to the Americans who lived through it………marked the nadir of the campaign for the Allies.”

“Determined to knock out Henderson Field and protect their soldiers landing west of Koli Point, the enemy commanders sent the battleships “Kongo” and “Haruna” into Ironbottom Sound to bombard the Marine positions. The usual Japanese flare planes heralded the bombardment, 80 minutes of sheer hell which had 14 inch shells (973 rounds)exploding with such effect, that the accompanying cruiser fire was barely noticed. No one was safe. No place was safe. No dugout had been built to withstand 14 inch shells.

One witness…opined that there was nothing worse than helplessly being on the receiving end of naval gunfire. He remembered “…huge trees being cut apart, and flying around like toothpicks.”

The airfield and it’s environs were a shambles when dawn broke. The shelling …..had left General Geiger with a handful of aircraft still flyable …..and a death toll of 41 (including the squadron commander executive officer and all of the Section leaders of a newly arrived dive bomber squadron VMSB-141, and 26 out of 29 of their aircraft).

Will The Election Results Cause Massive Riots To Erupt All Over America?

“Will the most divisive campaign in modern American history culminate in massive riots in our major cities? Right now, supporters of Barack Obama and supporters of Mitt Romney are both pinning all of their hopes on a victory on November 6th. The race for the presidency is extremely tight, and obviously the side that loses is going to be extremely disappointed when the election results are finalized. But could this actually lead to violence? Could we actually see rioting in communities all over America? Well, the conditions are certainly ripe for it.

The election is nearly four weeks away, and many Obama supporters are already threatening to riot if Obama loses. The following are some very disturbing messages that were posted on Twitter recently that have been reposted on Twitchy.com….

“If Romney wins I’m Starting a Riot….Who’s WIT ME???”

“I Hope The USA Is Well Aware That If In The Event This Character Romney Wins The Election, The People Will Start A Country Wide Riot! #Power”

“If Romney is elected president, its gon be a riot its gon be a riot.”

“If ROMNEY GETS IN THE WHITE HOUSE …U MIGHT AS WELL KILL ME NOW …..CAUSE ITS GONNA BE A ************ RIOT !!!”

“If Romney became President and took away welfare Downtown Cincinnati would become a riot”

“If Romney takes away food stamps 2 Chainzz in this bit IMMA START A RIOT”

“If Romney wins. (which i highly doubt) THERE WILL BE A RIOT—”

The following are a few more tweets that I found which threaten a potential riot if Obama loses the election….

From @joecools_world….

“Need 2 come up wit a game plan if Romney win…. Riot all thru Newark”

From @killacate….

“I swear on everything I love if Romney wins ima riot. I don’t even care if its just me.”

http://www.infowars.com/will-the-election-results-cause-massive-riots-to-erupt-all-over-america/

anybody out there making any cash flipping houses? Please share your story.

Questions From a Bailout Eyewitness
By GRETCHEN MORGENSON
Published: October 13, 2012

http://www.nytimes.com/2012/10/14/business/sheila-bairs-big-questions-about-bank-bailouts.html?ref=business

Tease (but you seriously want to read the whole thing - trust me on this):

But perhaps the most telling anecdote is from early October 2008, when Henry M. Paulson Jr., the Treasury secretary, summoned Ms. Bair to his office. No reason was given for the meeting. When she arrived, Ben S. Bernanke, the Federal Reserve chairman, was already there. Timothy F. Geithner, then the president of the New York Fed, was on the phone.

Handed a piece of paper, Ms. Bair saw that she had been ambushed. It was a script, prepared for her by the Treasury and the Fed, stating that the F.D.I.C. was moving to guarantee all the liabilities in the financial system. Astonishingly, the guarantee would cover all bank depositors and even protect unsecured claims against institutions. In short, the F.D.I.C. was being asked to back “everybody against everything in the $13 trillion banking system,” Ms. Bair writes.

Dumbfounded, she told the men she had to discuss the plan with the F.D.I.C. board. Over a few days, they came up with a better, less costly plan.

If she had gone along, Ms. Bair said in an interview last week, “everyone who held bank debt would have immediately gotten a windfall profit,” as their bonds and other bank securities rose in value on the F.D.I.C. backing. “Of course, I wasn’t going to do that,” she adds, “and we ended up with a program that only guaranteed the renewal of expiring debt, which is where the problem was. And we charged a fee.”

Ms. Bair didn’t know it at the time, but this was the first of many situations when the Treasury and the Fed hoped to leave the F.D.I.C. holding the bag. She objected as often as she could, viewing these moves as attempts to assign responsibility for egregious behavior to hundreds of smaller institutions that did nothing to bring about the crisis.

From the Denver Post - GOP presidential hopeful Romney sways voters in Colorado:

“GOP presidential hopeful Mitt Romney’s fortunes have shifted in the past five weeks in Colorado.

After an affecting debate performance at the University of Denver and more commanding stump speeches across battleground states, Romney has picked up additional Colorado voters and has seen a bounce in a new Denver Post poll that puts him 1 percentage point ahead, 48 percent to 47 percent, of President Barack Obama.

The candidates are still effectively tied, as the results fall within the poll’s 4-percentage-point margin of error. The poll was conducted Tuesday and Wednesday by SurveyUSA for The Post using automated calls to homes and cellphones. Pollsters reached 614 likely voters. Five percent of those polled said they were undecided.

Adding Libertarian candidate Gary Johnson into the mix didn’t alter Romney’s small lead in Colorado. Poll respondents still picked Romney over Obama by a single percentage point, 46 percent to 45 percent.

Johnson, who will be on Colorado’s ballot on Election Day, took 2 percent of the votes in The Post’s poll.”

Spent a portion of yesterday applying stucco patch to the south wall because of numerous cracks. Only the south wall, because the direct sun does a number on stucco after thirty years, apparently. Kudos to the contractor who pointed that out, and who agreed that a coat of primer would be a useful stopgap to a full new paint job. (It’s a timing thing.)

It was actually kind of fun aside from the “sitting in full sun” bit. Stucco patch is like spackle, except that the surface you’re applying it to is rough, so it’s not too hard to get it to look right.

We’re battling deflation right now. Methinks those hoping and expecting inflation to bail out homeowners will be sorely disappointed.

From Asia Times Online - Overwrought empire:

“Americans lived in a “victory culture” for much of the twentieth century. You could say that we experienced an almost 75-year stretch of triumphalism - think of it as the real “American Century” - from World War I to the end of the Cold War, with time off for a destructive stalemate in Korea and a defeat in Vietnam too shocking to absorb or shake off.

When the Soviet Union disintegrated in 1991, it all seemed so obvious. Fate had clearly dealt Washington a royal flush. It was victory with a capital V. The United States was, after all, the last standing superpower, after centuries of unceasing great power rivalries on the planet. It had a military beyond compare and no enemy, hardly a “rogue state,” on the horizon. It was almost unnerving, such clear sailing into a dominant future, but a moment for the ages nonetheless. Within a decade, pundits in Washington were hailing us as “the dominant power in the world, more dominant than any since Rome.”

The US has 1,000 or more bases around the world; other countries, a handful. The US spends as much on its military as the next 14 powers (mostly allies) combined. In fact, it’s investing an estimated $1.45 trillion to produce and operate a single future aircraft, the F-35 - more than any country, the US included, now spends on its national defense annually.

The US military is singular in other ways, too. It alone has divided the globe - the complete world - into six “commands.” With (lest anything be left out) an added command, Stratcom, for the heavens and another, recently established, for the only space not previously occupied, cyberspace, where we’re already unofficially “at war.” No other country on the planet thinks of itself in faintly comparable military terms.

When its high command plans for its future “needs,” thanks to Chairman of the Joint Chiefs of Staff General Martin Dempsey, they repair (don’t say “retreat”) to a military base south of the capital where they argue out their future and war-game various possible crises while striding across a map of the world larger than a basketball court. What other military would come up with such a method?

The president now has at his command not one, but two private armies. The first is the CIA, which in recent years has been heavily militarized, is overseen by a former four-star general (who calls the job “living the dream”), and is running its own private assassination campaigns and drone air wars throughout the Greater Middle East. The second is an expanding elite, the Joint Special Operations Command, cocooned inside the US military, members of whom are now deployed to hot spots around the globe.

The US Navy, with its 11 nuclear-powered aircraft carrier task forces, is dominant on the global waves in a way that only the British Navy might once have been; and the US Air Force controls the global skies in much of the world in a totally uncontested fashion. (Despite numerous wars and conflicts, the last American plane possibly downed in aerial combat was in the first Gulf War in 1991.) Across much of the global south, there is no sovereign space Washington’s drones can’t penetrate to kill those judged by the White House to be threats.

In sum, the US is now the sole planetary Top Gun in a way that empire-builders once undoubtedly fantasized about, but that none from Genghis Khan on have ever achieved: alone and essentially uncontested on the planet. In fact, by every measure (except success), the likes of it has never been seen.”

http://www.atimes.com/atimes/Global_Economy/NJ12Dj01.html

I can think of lots of advantages.

No ever increasing property taxes to pay for insane public unions is a big one.

And if other costs go up - easy to “move your house”

———————————————

Rambling Retirees Trade Home for Boats, RVs, Sofas
Reuters | October 12, 2012 | Lou Carlozo

At 68, Barbara Miller Elegbede is living proof that flower children need not grow up.

A self-described hippie, she attended a San Francisco college at psychedelia’s height and remembers friends constantly crashing on the couch of her apartment, just a block away from Janis Joplin’s pad in the hip Castro neighborhood.

Now retired from teaching and secretarial work, Elegbede, 68, has become a full-time “couchsurfer” herself, living in other people’s guest quarters all over the world. (She has a temporary apartment in Tempe, Arizona.)

Call Elegbede one of the “rambling retirees”: folks who give up the senior community or a comfy house for a life of constant travel. And they’re not all hippies.

Then there’s the financial angle. Today’s retirees have limited budgets and long life expectancies. Living on the road for a year or five can be a way to spend less than hanging on to the big house or moving into a service-heavy retirement community.

Morton, 51, is semi-retired and lives on a houseboat six months out of the year in Montreal, Canada. (He also travels in an RV and has an apartment.) His major annual costs are insurance ($2,000 for a $200,000 boat) and docking ($3,000 and up).

A marine survey for your floating home to ensure its shipshape can run $1,500 to $2,000. First-year costs typically run $25,000, including maintenance and fuel, says Morton, citing the survey and improvements to a newly acquired boat. Annual costs may drop 20 percent or more in subsequent years, assuming a lack of weather damage or major repairs.

Morton, who’s saving thousands of dollars annually compared to a land-based life with a mortgage, plans to live on a houseboat as long as he’s able.

Another day without discussing the economy, the debt and/or the fed is a WIN for obama.

——————————–

Obama camp tips hand on debate, hints president will attack Romney on Bain
Fox News - October 14, 2012

As President Obama began to hunker down at a plush resort here for three full days of debate prep, his campaign team signaled the incumbent may steal a page from Vice President Joe Biden and show a more aggressive tone in Tuesday’s second face-to-face showdown with Republican Mitt Romney. “Gov. Romney has been making pitches all of his life and he knows how to say what people want to hear whether that was during his time at Bain or during the dozens of town halls he did during the primary,” said Obama campaign spokeswoman Jen Psaki said Saturday.

Quote of the day;

Kishore Mahbubani: Dean, Singapore’s Lee Kuan Yew school of public policy.

“There is a sense of incredulity that America still thinks it can be a white knight and save other countries…The era when America could go out and change the world is ending”…..

To which I would say, Amen….Close our bases and bring everyone home…You want our defense protection, you pay for it and sum…cut the boots/hardware on the ground from the military budget…Focus on Air & Sea defense…Should be able to cut the military budget by 40%…

For anybody who is holding out hope to recover money from this Western Financial Planning Corp. land investment deal, I’d like to also interest you in buying some Florida swampland.

LAND INVESTORS’ UNEASY TERRAIN
San Diego firm’s alleged scheme illustrates how consumers’ stakes can be jeopardized
Written by Lily Leung
12:01 a.m., Oct. 13, 2012
Updated 6:21 p.m. , Oct. 12, 2012

When you hear about a chance to invest in land, do you think gold mine or land mine?

The answer depends on the deal on the table and whose advice you’re seeking.

Some investors who bought interests in undeveloped land in California and parts of the Southwest through a San Diego-based investment firm as far back as 20 years ago wonder if they had made a horrible mistake or took a risk at the wrong time. Investors began to ask questions after they learned that a U.S. district judge OK’d a freeze of Western Financial Planning Corp.’s assets in September and chose a receiver to control its money. Authorities said the alleged scheme raised $50 million from hundreds of investors.

The Securities and Exchange Commission, or SEC, has accused the company of grossly overpricing land, and keeping investors in the dark about their purchase prices and the fact that some of the parcels were not owned outright. The federal agency also alleges that the company, owned by Louis V. Schooler, 61, failed to register securities and of violating securities laws.

After settlement talks broke down in late September, U.S. District Judge Alan Burns last week granted the SEC’s motion for a preliminary injunction and kept the asset freeze in place until the court OKs the receiver’s proposal. The judge also backed the SEC’s argument that the investments completed are securities, something Western Financial vehemently denied in public documents.

As the case works itself out, investors wonder if the money they put in, in some cases tens of thousands of dollars, is in jeopardy. The fate of their money is unclear and depends on how the case is resolved.

Investors became hooked once they heard raw land parcels in potentially high-growth areas in the Southwest were bought at discounted prices and could eventually be sold for big profits when resold to a developer, SEC officials stated in court records. Some clients who invested up to two decades ago told one former First Financial worker that they still hadn’t seen any returns, one piece of testimony shows.

“My reaction?” said Brent Lindberg, a 60-year-old local who invested in vacant land in Nevada. “’Hey, they’re talking about my investment. Is the owner doing less than what they promised they were going to be doing?’ I don’t know. Maybe it’s just been tough years.”

U-T San Diego interviewed three people who said they invested in undeveloped land endorsed by Western Financial within the past 10 to 15 years. All three saw the opportunity as a way to diversify their investments and get better returns after learning about the firm’s expertise in this field. One was referred by a friend, one heard about the deals through a media ad and the third doesn’t recall.

In fact, all three consumers had trouble recalling basic information about their investments because they were made some time ago. It appeared to be a set-it-and-forget-it mentality.

“I was told they have the land and they sell the land for a profit hopefully,” said David Reiter, a 46-year-old software engineer who invested with Western Financial. “I don’t remember being given a time frame … I was not too worried. I felt that they should keep (the land) and wait for the prices to go back up.”
…

Corker Says QE3 Shows Bernanke Has ‘Stayed Too Long’ at Fed
Craig Torres and Cheyenne Hopkins
Updated 4:33 p.m., Tuesday, September 25, 2012

(Updates with comments from Fed officials on quantitative easing in paragraphs 12-16.)

Sept. 25 (Bloomberg) — Bob Corker, a member of the Senate panel with Federal Reserve oversight authority, said the central bank’s decision to embark on a third round of quantitative easing shows Ben S. Bernanke has “stayed too long.”

Corker said the Fed’s asset purchases have alleviated pressure on Congress to come up with a credible fiscal plan that in his view would provide a basis for long-term economic growth.

“I know Ben Bernanke, I respect him tremendously,” the Tennessee Republican said today at a Bloomberg Government breakfast in Washington. “My criticisms of the Fed in large part are about pressure being taken off us.” He added: “If you saw markets swooning downward because we weren’t acting, I think you would see us acting.”

Corker, a Senate Banking Committee member who voted to confirm Bernanke for another term ending in 2014, praised the chairman’s actions during the financial crisis and said the second round of bond purchases, announced in November 2010, was appropriately aimed at halting deflation.

“Ben did a great job during the crisis,” Corker, 60, said in a separate Bloomberg Television interview. “I think he has stayed too long, yes, I am very despondent about much of what he is doing recently.”

Fed spokesman David Skidmore declined to comment.

Bernanke, who has been Fed chairman since 2006, was first nominated by President George W. Bush and picked for a second term by President Barack Obama.

Bernanke’s Future

Republican presidential candidate Mitt Romney has said he wouldn’t reappoint Bernanke, 58. Obama hasn’t said whether he would nominate the former Princeton University professor for a third term, and the Fed chairman has declined to discuss his future.

The policy making Federal Open Market Committee announced a third round of quantitative easing Sept. 13, committing to $40 billion in monthly purchases of mortgage-backed securities. The FOMC said the buying would continue “if the outlook for the labor market does not improve substantially.”

“If you focus on the Fed’s role as it relates to price stability, you can understand QE2,” Corker said. “I do think we have gotten out of bounds now.”
…

Too big to exist? Fed’s regulation czar backs limits on bank size
By Pedro da Costa
October 11, 2012

Regional Federal Reserve Bank presidents who oppose quantitative easing have made little way in convincing the central bank’s dovish core. Apparently, not so on the cause célèbre of policymakers like Richard Fisher at the Dallas Fed, who have called for too big to fail banks to be broken up.

In a speech this week, Fed board governor and regulation czar Daniel Tarullo stopped short of calling for outright break-ups. But he did take the unprecedented step of backing size limitations on banks that would be linked to overall U.S. economic output.

In his own words:

In these circumstances, however, with the potentially important consequences of such an upper bound and of the need to balance different interests and social goals, it would be most appropriate for Congress to legislate on the subject. If it chooses to do so, there would be merit in its adopting a simpler policy instrument, rather than relying on indirect, incomplete policy measures such as administrative calculation of potentially complex financial stability footprints.

The idea along these lines that seems to have the most promise would limit the non-deposit liabilities of financial firms to a specified percentage ofU.S.gross domestic product, as calculated on a lagged, averaged basis. In addition to the virtue of simplicity, this approach has the advantage of tying the limitation on growth of financial firms to the growth of the national economy and its capacity to absorb losses, as well as to the extent of a firm’s dependence on funding from sources other than the stable base of deposits.

…

My question is, how long can you keep flooding the bathtub with water before it overflows and damages the surrounding floor?

Goldman Sachs’s Cohn Sees Pain When Fed Ends Bond Purchases
By Sara Eisen and Simon Kennedy - Oct 11, 2012 1:53 AM PT

The Federal Reserve will struggle to end its quantitative easing program, said Gary D. Cohn, Goldman Sachs Group Inc. (GS)’s president and chief operating officer.

Oct. 11 (Bloomberg) — Gary Cohn, president and chief operating officer at Goldman Sachs, talks with Bloomberg’s Sara Eisen about the European debt crisis and the current state of Goldman Sachs. He speaks in an exclusive interview on Bloomberg Television’s “Bloomberg Surveillance.”

“I understand what they’re trying to do and I will tell you this, this is going to be difficult to stop or to exit,” Cohn told Bloomberg Television today in Tokyo. “At the end of this — there will be an end to quantitative easing — we will have to go through the pains of stopping quantitative easing.”

The Fed last month announced its third round of large-scale asset purchases since 2008, with no limit this time on the ultimate amount it would buy or the duration of the program. Fed Chairman Ben S. Bernanke says that stimulus will be expanded until policy makers see “sustained improvement” in the labor market and that the strategy works in part by boosting the prices of assets such as equities.

“We know the Fed wants to create job growth,” Cohn said. “We know that the Fed wants to create asset appreciation.”

Bank of America Corp. Chief Executive Officer Brian T. Moynihan said in a separate interview that the U.S. central bank is “working hard” to boost demand that’s less than potential and that its exit plan “is something to worry about down the road.”

Confidence Deficit

“Right now we’ve got to make sure we continue to push confidence,” he said. “That’s a problem that we’ll face more in the future than we face today.”
…

China central bank chief wary of QE3 inflation risk: paper
China’s Central Bank Governor Zhou Xiaochuan arrives for a group photo taking session with other REUTERS/Jonathan Ernst
BEIJING | Sat Oct 13, 2012 9:23am EDT

(Reuters) - China’s central bank governor has warned that quantitative easing policies worldwide could cause inflationary risks, state news agency Xinhua said on Saturday.

The remarks by People’s Bank of China (PBOC) Governor Zhou Xiaochuan come even as analysts credit policy easing from G4 central banks - the U.S. Federal Reserve, the European Central Bank (ECB), the Bank of Japan and the Bank of England - in the third quarter of the year as underpinning business confidence.

Chinese data on Saturday offered a sign that G4 policy easing was being felt in the world’s second biggest economy, with trade numbers showing exports grew at roughly twice the rate expected in September while imports returned to the path of expansion.

“The data shows both imports and exports are improving - especially a rebound in export growth reflects a rising confidence after the U.S. and European countries launched further easing policies last month,” said Xue Hexiang, an analyst at Guotai Junan Securities in Shanghai, after the trade numbers were released.

Across Asia, central banks are wary about the potential inflationary impact of the Fed’s latest quantitative easing, dubbed QE3, as well as policy stimulus unveiled by the ECB.
…

Breaking: Space Jump live on Discovery Channel.

Caller in to local real estate show is asking why he should be responsible for those folks walking away from mortgages that “they signed on the dotted line, saying that they would pay it.”

“The solution that they’re pushing is to reward irresponsibility.” “If somebody can’t pay, the solution is to let somebody else buy it who can pay.”

Sound familiar? This is in the public consciousness and this is on the air. Biggest radio market in the region.

To the Winner: Good Luck—You’ll Need It
By BRETT ARENDS

The presidential election is heading down to the wire. With three weeks to go, the polls show Mitt Romney and Barack Obama within a few points. The swing states are in play. Somewhere close to $2 billion will be spent in total on the final outcome.

It’s time to look ahead. What sort of agenda will the winner inherit? How will he deal with a bitterly divided and partisan political system, a weak recovery, and a raft of pressing crises at home and abroad?

Here’s what the email from his chief economic adviser might look like on Nov. 7.

Dear Mr. President/President-Elect,

Congratulations on your victory. I’m sorry to butt in on your celebrations, but you asked for a summary of the economic problems ahead. I’m afraid you face five major ones.

1. The fiscal cliff

On Dec. 31 the U.S. federal government is going to hit a potentially disastrous so-called fiscal cliff. Under current law, taxes are set to jump and spending will be cut.
…
2. Jobs

According to the Labor Department, about 15% of the workforce, or one worker in seven, is either unemployed or stuck working part-time because he or she can’t get full-time work. And 23% of prime working-age men—about 14 million ages 25 to 54—lack a full-time job. Think about the lost output in the economy—and lost taxes to the government.
…
3. Retirement

If you think the jobs crisis is bad, look at the looming retirement crisis.
…
4. Debt

You’ve probably heard that Americans have been paying down debts and shoring up their balance sheets. You’ve probably heard that corporations are meanwhile sitting on a ton of cash. It all sounds promising.

The trouble is that it’s mostly a mirage.
…
5. China

In the short term, you face the risks of a “hard landing” for the Chinese economy.
…
This poses enormous economic, political and strategic challenges. Yes, our military is still No. 1—but you can’t run a first-class empire with a second-class economy, as the British and the Soviets learned years ago.

Sorry about all this doom and gloom, Mr. President/President-Elect, especially on the morning after your big triumph.

But look on the bright side. The Electoral College doesn’t meet till Dec. 17. Maybe they’ll pick the other guy instead.

Someone / everyone please virtually b*thch slap me. Getting seriously tempted to buy a house here in suburban Boston. There is one that has everything I want. One level, solidly built, small and less expensive than neighboring houses, garage, unrenovated and “improved”, quiet street, walking distance to shopping and the T, etc…But at last my hard headiness will prevail. Whew… close call.

My wife and I can start giving to charity again if the mortgage interest deduction is replaced with a more general ‘use it as you see fit’ tax deduction. The thing I like about Romney’s proposal is that it includes the middle class; by contrast, the mortgage interest deduction primarily benefits those with mortgages in amounts north of $500,000.

TAX REPORT
October 12, 2012, 12:26 p.m. ET

Protecting Your Deductions
By LAURA SAUNDERS

Never mind your income-tax rate for next year—what will happen to your deductions?

Presidential candidate Mitt Romney twice has raised the possibility of imposing caps on tax benefits to help lower tax rates. Instead of simply cutting the home mortgage-interest deduction or the write-off for charitable donations, lawmakers could allow each taxpayer one overall allowance to use as desired. Mr. Romney suggested options ranging from $17,000 to $50,000.
…

EU Leaders Gird for Summit as Nobel Glow Fades on Greece, Spain
By Simon Kennedy, Jana Randow and Patrick Donahue - Oct 14, 2012 9:00 AM PT

European leaders, basking in the glow of a Nobel Peace Prize and praise for their rediscovered crisis-fighting skills, meet this week as Greece seeks to justify renewed aid and Spain holds out on tapping a bailout.

The European Union’s leaders convene for an Oct. 18-19 summit in Brussels after a weekend in which international finance chiefs expressed some optimism that a firewall is in place to contain the euro’s turmoil and urged further action to quell the main threat to global growth.

German Chancellor Angela Merkel spoke of the euro as “more than a currency” and said the monetary union’s leaders had finally established the mechanisms to hold the members together for the long term. Photographer: Jock Fistick/Bloomberg

With German Finance Minister Wolfgang Schaeuble today ruling out a Greek exit, the 17-nation euro area faces the challenge of harnessing positive sentiment by resolving differences on aid for Greece and Spain before investors pounce again. Also contentious is how to knit euro nations more closely together amid spats over the timing and depth of a banking union.

“The summit will highlight how much remains to be done,” said Alex White, an economist at JPMorgan Chase & Co. in London. “Our concern is that the removal of acute financial market stimuli may reduce the political incentive to deliver.”

That respite is the result of the European Central Bank’s bond-buying pledge last month and the enactment of a 500-billion euro ($647.5 billion) permanent rescue fund, the European Stability Mechanism. Nerves are returning to markets as Spain’s 10-year bonds advanced for a second week after Standard & Poor’s cut the nation’s debt rating to one level above non-investment grade.
…

After six years pointing out how flawed the global warming computer models were and how global warming was primarily caused by natural causes and being attacked by many on this board, I have now been vindicated. This quote from an article identified below:

The new data, compiled from more than 3,000 measuring points on land and sea, was issued quietly on the internet, without any media fanfare, and, until today, it has not been reported.

This stands in sharp contrast to the release of the previous figures six months ago, which went only to the end of 2010 – a very warm year.

Ending the data then means it is possible to show a slight warming trend since 1997, but 2011 and the first eight months of 2012 were much cooler, and thus this trend is erased.

More…
Wettest start to autumn for 12 years as South West continues to be battered by torrential rain

Some climate scientists, such as Professor Phil Jones, director of the Climatic Research Unit at the University of East Anglia, last week dismissed the significance of the plateau, saying that 15 or 16 years is too short a period from which to draw conclusions.

Others disagreed. Professor Judith Curry, who is the head of the climate science department at America’s prestigious Georgia Tech university, told The Mail on Sunday that it was clear that the computer models used to predict future warming were ‘deeply flawed’.

Even Prof Jones admitted that he and his colleagues did not understand the impact of ‘natural variability’ – factors such as long-term ocean temperature cycles and changes in the output of the sun. However, he said he was still convinced that the current decade would end up significantly warmer than the previous two.

Read more: http://www.dailymail.co.uk/sciencetech/article-2217286/Global-warming-stopped-16-years-ago-reveals-Met-Office-report-quietly-released–chart-prove-it.html#ixzz29JWVajdC
Follow us: @MailOnline on Twitter | DailyMail on Facebook

My previous post has not posted by some evidence of the bubble

According to Serasa Experian, many of those accessing new credit are from the emerging middle class. In 2011, around 9 million Brazilians received credit for the first time. Many are under the age of 35, part of the so-called Generation Y looking to buy a car or smartphone. Credit growth was especially strong in retail stores outside of major cities, with rising credit in the North and Northeast. But some are finding they’ve bitten off more than they can chew. The new middle class has a high debt burden, a June study by FGV found. Nearly a quarter of those who earned up to $1,030 and nearly a quarter of those who earned between $1,30 and $2,360 a month said they spend at least half of their salary to pay off debt.

Would the bought-and-paid Republican propagandists who post here please reveal yourselves now? I’m sick of reading you drivel.

I’m frankly amazed the 99% are increasingly willing to support the anti-47% candidate in light of the ever-growing concentration of American wealth in the hands of the 0.1%.

Romney’s etch-a-sketch caught the Obama campaign flatfooted. It’s working much better than expected!

Ozymandias
By Percy Bysshe Shelley

I met a traveller from an antique land,
Who said—“Two vast and trunkless legs of stone
Stand in the desert. . . . Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.”

…
The story of Venice’s rise and fall is told by the scholars Daron Acemoglu and James A. Robinson, in their book “Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness.

The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish.

That was the future predicted by Karl Marx, who wrote that capitalism contained the seeds of its own destruction. And it is the danger America faces today, as the 1 percent pulls away from everyone else and pursues an economic, political and social agenda that will increase that gap even further — ultimately destroying the open system that made America rich and allowed its 1 percent to thrive in the first place.

You can see America’s creeping Serrata in the growing social and, especially, educational chasm between those at the top and everyone else. At the bottom and in the middle, American society is fraying, and the children of these struggling families are lagging the rest of the world at school.
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Thinking about a VA loan?

- 0 percent down
- Federally guaranteed
- Borrow up to $1M+

I’m warning you right now: Don’t blame me when you find yourself the proud owner of a home with an underwater mortgage!

Oct. 14, 2012, 11:35 p.m. EDT
Asia stocks mostly lower after China data
By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) — Asia stocks traded mostly lower Monday, with Chinese data giving investors mixed signals about the health of the economy there, and Europe’s debt troubles also weighing on sentiment.

Hong Kong’s Hang Seng Index lost 0.3%, while the Shanghai Composite Index declined 0.5%.

South Korea’s Kospi fell 0.3%, and Australia’s traded down 0.1%. Japan’s Nikkei Stock Average traded flat.

Data out Monday showed that Chinese consumer prices rose 1.9% year in September, in line with economist expectations, while producer prices dropped a sharper-than-forecast 3.6%. Read: China September consumer prices rise

“Inflation data continue to point to slack demand, with industrial prices contracting at a rapid pace. There’s no argument about it, the economy is yet to stabilize,” said Alistair Thornton, senior China economist at IHS Global Insight.
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How’s that ole’ BRICs decoupling theory holding up these days?

Global Economy Distress 3.0 Looms as Emerging Markets Falter
By Simon Kennedy - Oct 14, 2012 5:03 PM PT

The global economy is facing its third major brake on expansion in five years as emerging markets slow from China to Brazil, provoking debate about how much policy makers should respond.

Three years after industrializing nations led the world out of the U.S. mortgage meltdown-induced recession, the reliability of the power source is waning as Europe’s debt crisis persists. The International Monetary Fund sees them growing an average 5.8 percent in the half-decade through 2016, almost two percentage points less than the five years before the 2009 slump.

Finance chiefs at the IMF and World Bank annual meetings left Tokyo this weekend at odds over how to address the issue, with South Korea’s central bank chief urging Asia to add stimulus as Russia and Brazil called on rich nations to fix their own challenges. At stake is a world economy Bank of Israel Governor Stanley Fischer calls “awfully close” to recession.

“There is a concern that in the near term the engine of growth that provided such a great support seems to be slowing,” said Jacob Frenkel, chairman of JPMorgan Chase International and Fischer’s predecessor in Israel. “They still continue to grow, but we’re seeing a slower pace than anticipated all over the world.”

Europe’s Steps

The IMF meetings ended yesterday with both expressions of optimism that Europe now has a policy infrastructure to quell its turmoil, and a clash between Germany and the fund over what lies next for cash-strapped nations such as Greece.

Developed economies including Switzerland and Japan joined Brazil in sounding the alert on excess currency strength, while delegates disagreed over the right degree of budget austerity as they pushed the U.S. to avoid tumbling over its fiscal cliff.

“Ministers discussed a short-term response for the global economy, but their opinions weren’t harmonized in one direction,” South Korean Finance Minister Bahk Jae Wan told reporters in Tokyo. “The world has a leadership problem.”

Investors may still not be fully tuned into the risks, said Barry Eichengreen, an economics professor at the University of California, Berkeley. While U.S. stock benchmarks last week fell the most since June, the Standard & Poor’s 500 Index (SPX) is still up 19 percent from a year ago. By contrast, the MSCI Emerging Markets Index has risen less than 6 percent the past 12 months.

“I’m worried that stock markets in the United States in particular have gotten ahead of economic growth,” Eichengreen said in an interview in Tokyo.

China Growth

The size of the latest shock may be underscored this week, when China will report its economy probably grew 7.4 percent last quarter, according to the median estimate in a Bloomberg News survey. Such a pace would be the slowest in three years.

If unchecked, the fading could deal a blow to already-weak rich nations, warn economists. Slackening Chinese demand led Alcoa Inc. (AA), the largest American aluminum producer, to last week cut its forecast for worldwide consumption of the metal by 1 percentage point. The U.S. last week reported a widening trade gap for August as diminished global demand caused exports to fall to the lowest level since February.

China, the world’s second-largest economy, alone accounts for 65 percent of seaborne iron ore demand and 40 percent of copper consumption, leaving producers such as Australia, Brazil and Chile vulnerable, Gustavo Reis, a Bank of America Merrill Lynch economist in New York, said in an Oct. 5 report.
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Oct. 14, 2012, 7:23 p.m. EDT
IMF’s Lagarde urges Europe to deploy bailout
By Ian Talley

TOKYO–The head of the International Monetary Fund Friday urged euro zone authorities to deploy the currency union’s bailout funds and the European Central Bank’s bond-buying program as part of an aggressive plan to tame its debt crisis.

Although IMF Managing Director Christine Lagarde didn’t refer to any particular country when prodding the EU to wield its crisis-fighting weapons, Spain is the only country in the euro zone that’s currently mulling whether and when to tap the bailout funds.

The EU this week came under renewed pressure from the world’s finance ministers and central bankers at the IMF’s annual meetings to act more quickly to tame a financial crisis threatening to slam the brakes on the global growth.

The ECB has said it’s prepared to pull the trigger on new program to buy bonds of ailing member countries, but only if they apply for a conditional bailout loan from the EUR500 billion European Stability Fund, which came online earlier this week.
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October 13, 2012, 2:52 a.m. ET
IMF, Europe Remain Deadlocked Over Greece
By COSTAS PARIS

TOKYO—The International Monetary Fund and Europe remain deadlocked over how to tackle Greece’s debt crisis, with Europe willing to consider only lower interest rates and longer debt repayments, while the IMF is pushing for a debt restructuring, according to senior European officials.

“We are still apart. Time is tight and there is a need for a common line,” a senior European official with direct involvement in the matter said.

The official said that a number of euro-zone countries, led by Germany, see the Greek problem “as one of adjustment and structural reforms over time; the IMF sees it more as a debt issue, which must be addressed at once.”

While the IMF is prepared to examine various ways that could eventually lead to debt reduction, including yet another bailout package by the euro zone that will help Athens return to growth and cut its debt level, its preferred method is a reduction in the amount of debt outstanding—what is referred to as a “haircut.”

But a haircut is anathema in the euro zone because of political repercussions.

Officials said that the IMF has made it clear to the Europeans that it isn’t prepared to extend more money to Athens without a move that leads to a cut in the debt level first. Apart from the limits imposed on it by its statutes, the IMF is unwilling to risk its credibility before possibly being asked to take part in a much larger bailout of Spain.

Greece’s debt sustainability is among the top matters discussed at the IMF’s annual meetings under way in Tokyo. The second bailout agreement in March defined debt sustainability as 120% of gross domestic product by 2020. But the Fund’s fiscal monitor said Tuesday that ratio would climb to 170.7% of GDP this year, and a whopping 181.8% of GDP in 2013, because of the recession being worse than expected. That suggests the 120% target is out of reach. Officials said the IMF believes that by 2020, the debt-to-GDP ratio will be close to 150%.

“This means that the IMF won’t sign off the next loan payment until the other creditors take the necessary action to cut the debt level,” a second European official said. “While they are debating on what is the best course of action, Greece will run out of money some time in November.”
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More
Greek Euro Exit Looms if IMF, Euro Zone Can’t Agree

Robert Shiller: Canada Is Becoming A Slow-Motion Version Of The US Housing Bust
Mamta Badkar | Sep. 21, 2012, 12:36 PM

For some time, there has been talk of a growing housing bubble in Canada.

Robert Shiller, the economist who famously predicted the U.S. housing bubble, has told CBC News’ Neil Macdonald, “I worry that what is happening in Canada is kind of a slow-motion version of what happened in the U.S.”

Macdonald writes that Shiller and other economists are most worried about household debt, which has ballooned from 75 percent of household income in 1990, to 150 percent today.

And most of this debt is held by the most “vulnerable households—defined as those devoting 40 percent or more of household income to paying interest charges.”

While these debt levels are said to be about the same level of U.S. household debt around the time of its bubble, Shiller does clarify that if the Canadian housing bubble were to burst, Canada’s experience would be quite different from America’s.

This is in part because Canadian banks aren’t neck-deep in a subprime lending debacle, and because the mortgages are insured by the government via the Canadian Mortgage Housing Corp.

Rosenberg doesn’t think Canadian home prices are sustainable
Gluskin Sheff’s David Rosenberg has previously warned “Canada is carving out a top, while the United States is seemingly carving out a bottom.”
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Are any FBs out there buying FB stock these days?

Oct. 14, 2012, 6:01 a.m. EDT
Facebook earnings targets are going down
Commentary: Momentum is yielding to fundamentals
By John Shinal

SAN FRANCISCO (MarketWatch) — When Facebook Chief Executive Mark Zuckerberg publicly acknowledged for the first time that the company’s post-IPO stock performance was a real bummer, this columnist predicted that his long-overdue candor would present a short-term opportunity for traders taking long positions on the stock.

It did just that, with Facebook shares rising by 20% within two weeks of Zuckerberg’s mid-September remarks, which signaled that the idealistic Harvard dropout would be more attuned to the profit demands of Wall Street.

But with the company’s third-quarter earnings report now looming on Oct. 23, that momentum-trading party is over, as Facebook shares have dropped back near their levels of early September.
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