The Housing Bubble

is anyone interested in a counter argument to the ‘printing money’ meme? (this is going to ruffle everyone’s feathers).

here is a recent series of posts by the guy i consider to be the foremost authority on the FED. he’s more than a little arrogant, but that’s easy to put up with for accurate info. i’ve been reading him for over 6 years, and i can assure you he covers more things in economics than peter schiff even thinks about, or knows about.

everyone says we’re ‘printing money’. he claims the net effect is zero. you’ll see his logic below.

there’s useful and accurate information in there for those that want to explore it. (there also a little entertainment mixed in). he tries to explain that no, or at least not much FED money ‘printing’ is getting into the economy. there were 2 or 3 questioners (i call them reluctant students) and i didn’t differentiate them as it would make no difference. you’ll see the depth of his knowledge in his answers. as a side note, he’s also a theoretical physicist and a mathematician. i suspect his IQ is off the charts. and as far as knowledge of FED operations go, he has no peer.

i made a couple side comments and naturally they’re preceded by “my comment:” one more minor thing.. he insists that saying just ‘FED’ is proper, not ‘the’ FED.. aaand a couple translations:

obama=babs, or DM
bernanke=berdoo, or gentile

===

12/12/2012

CNBC survey : 64% of investors say FED needs to stop easing and let the economy reset.

It should be pointed out that FED is doing absolutely nothing. FED doesn’t set the ff rate because there’s no demand for reserves. The free market, such as it is, sets the rate at zilch.

On the money creation front FED hasn’t created a damn dime. They buy long and sell short, which results in zero reserves created. Doesn’t matter anyway since the reserves aren’t needed.

It astounds me why no one except me states these obvious facts. They’re obvious because the conclusions can be reached easily by anyone who examines the FED data publicly available. Instead, the most astute financial hohums, and everyone who ought to know better, buy into this mass of silly myths circulated by media.

We know why FED doesn’t admit these elementary truths. They want the myth to run as long as possible because the myth provides them with some kind of cover. Most FOMC members who have no clue about how things got to where they are now, that is, no fine knowledge of FED history, buy into the myth. I suspect Berdoo has himself hoodwinked too.

The question is this. Until recently “withdrawing liquidity”, selling fed funds to reduce the reserve base wouldn’t have much of an effect. No doubt the dealers driven by media hysteria would be able to get ff rate up to maybe 1%, but it would take a sustained period of selling probably a year in length before the string got taught.

—

same day:

questioner: “The Fed is buying mortgage securities and long term treasuries. The economy is not getting better.”

Whether it was in the past or recently FED hasn’t been buying MBS or Tpaper because the economy is not getting better. It’s all just a charade to fool the financial markets into believing that FED is there with accommodation. Proof: No money is being created and FED doesn’t “set” the fed funds rate. Unfortunately, you can’t see how that constitutes proof.

When I make that provable statement on Yahoo boards, or anywhere else for that matter, they all think I’m daft, or playing devil’s advocate. I’m not. It’s an overt truth that you can confirm by merely reviewing the data at research.stlouisfed.org/publications/usfd/

In some quarters the economy is getting better and others, it isn’t. The problem here is referring to the economy as an aggregate. That academic approach won’t work. If the aggregate is getting worse, how could there be rising strike activity? Germany is doing fairly well although trouble is coming for her. If things were not improving everywhere, Germany would not be doing as well as it is.

I said “recently” because FED can no longer push accommodation. Why? The cost of labor is rising. Today FED, Berdoo, said they’re specifying a labor rate target below which accommodation may have to be seriously removed. They made this change because they need long lead time and they see what I see, rising demands for compensation among those who don’t add value.

questioner: “It does seem like there will be a decrease in projected budget deficits when some type of cliff deal is made in the next few weeks.”

You’re not even in the city where the ballpark resides.

questioner: “But I am not connected the dots if any of the above is contributing.”

I provided that ditty about a price being determined by capital because I wanted to show that there’s a chasm between understanding what’s going on and what the media tells you. The media, Berdoo, have no economic capital. When I tell you that FED is feckless you don’t know what that means. You have no context to understand it in spite of the millions of words I’ve written over the years trying to explain how our CB machinery works. You haven’t assimilated the lessons.

—

later same day:

Germane to my previous post I happened to listen to Berdoo’s Q&A today. Usually, I don’t.

He didn’t answer any of the questions he was asked. He wasn’t dodging but rather, he was getting muddled in his own words which caused him to derail from the question. This was similar to the delayed effect that comes from smoking weed. The word fumbling was completely unacceptable for a public figure. It was embarrassing.

Also, he hid behind strict Keynesianism which ironically has miserably failed which he knows. That fact has left FED feckless, useless, and possibly counter productive. Control freakdom has failed. Berdoo is trapped in a liquidity trap of his own creation. He doesn’t know how to get out and this has shattered his confidence in a theory which he keeps embracing while rejecting the obvious alternative. Berdoo is finished, will soon quit, maybe before his 2014 stated retirement, although he’s determined to jump start the machine one more time.

Berdoo will jump back to academia and disappear into the ivy halls. Do you think anyone in academia at symposiums on finance at the graduate level or higher are discussing the significant fact that Temporary has been closed for 4 years? Hell, most of them don’t even know what Temporary is. What do they discuss? The same stuff you hear from Berdoo, the media, etc., that is, whether FED is going to raise interest rates or not. What imbeciles.

—

all the rest of the following posts were on 12/13/2012

questioner: “I don’t have the desire to try to navigate the stlouisfed site.”

You should go to that web page and enter to see how silly you sound. It’s merely a collection of monetary data charts that you might find very interesting.

questioner: “Of course Fed has been feckless for a long time now.”

No one at Berdoo’s Q&A today thinks that. That was evident in the nonsensical questions they asked. Of course, they always ask nonsensical questions. It’s part of the mass myth that passes as an economic dialogue.

questioner: “Who doubts that? Even if they WERE buying MBS what would that do?”

It would assure big boys that Fed is still in charge (of something).

—

you should go to that website..

questioner: “Fine but you’re a pain in the ass.”

Don’t post here if you can’t clean up after yourself.

—

http://research.stlouisfed.org/publications/usfd/20121207/usfd.pdf

questioner: “Ok it wasn’t so bad. I really didn’t think I’d be able to decipher anything.
Page 8 and 9 are what demonstrate no change in Treasuries or MBS over the past year.”

Well…pg 7 shows you Permanent changes(dark purple),e.g. QE2 pump from Oct 2010 to June 2011. MBS is the “operations focused on longer term credit conditions”. For the last 1 1/2 years FED has done nothing but sit on their balance sheet. No net transactions although you can see on pg 9 furious twisting activity. You can see there that they sold short term, 1 - 5 year Tpaper and bought the long term Tpaper. Shows how they ran out of 1 year paper.

questioner: “M2 and bank loans, on the other hand, are going straight up. What is the significance of that?”

M2 has risen $600B in one year, about 7% rate. It is composed of currency + demand deposits. Currency rose about $100B, so $500B is mostly deposits and savings since the other factors of M2 don’t contribute much. People prefer to keep their dough on deposit rather than invested in stocks, bonds, RE. Can you blame them? Where does M2 come from? People get up everyday and go to work. They get paid. They put the money in the bank, called demand deposits. One should note that according to my calculations labor productivity is zero. With 7% money growth we have 7 - 0 = 7% inflation potential.

C&I loans is up $100B. It looks more impressive than it is, or than it should be, but it’s proceeding normally. The demand deposits and currency sit under the loans. M2 is outside of FED. The C&I loan growth shows that the economy has been fully recovered for more than a year.

Earlier I was mentioning strike activity. You don’t get strikes during recessions. You get them during a late part of an expansion. That’s where we are now. The expansion has been muzzled by the damn devil ‘crats. However, Babs can’t be blamed for the unemployment which is in equilibrium, that is, at a proper level. To get it down the US corporate tax rate must be cut in half. Babs prevents investment and low grade employment, but that’s not so bad because with low grade employment, higher grade employment strikes for higher wages, and then you have inflation, the real deal, at 7%, and the market raises the cost of money.

my comment: although he seems to be making a contradiction about ‘the economy’ (in the first instance, not getting better, in the second, getting better) he really isn’t. in the first instance i believe he was talking about the USA economy, and in the second he was talking about the world economy.

—

questioner: “So in your opinion what should Mr B(ernanke) be doing now?”

Playing poker. Stop the facade. Say nothing. Or, if you must beat the gums, say, “I’m not giving out any money to anybody. If you want wealth, you’ll have to earn it”. Corporations have to think that they’re all alone, which requires them to be prudent. Materially, which is far less important than posture, since FED can do nothing except push on a string, stop the phony accommodation by taking a scrooge posture. Use this opportunity to get out of the disastrous eternal prosperity economic engineering game that so far has evolved to a point where FED’s actual constructive aspect is undermined. It’s all about the captains of industry anyway. Not about the paper tiger illusions of a magician.

questioner: “And what should Mr Investor be doing now?”

I already told you several months ago, and then have reinforced this with comments like those about FXI. There is no entity “the economy” in the aggregate sense of the past. There’s only individual corporations some of which are doing well and some, not so. Consider the DAX. It has broken out to an all time new high. All the other world stock markets have either done that, are bottoming, or are near to doing the same. This is no trading market. It reminds me of the markets of the ’50s. Same tension on the slow grinding way up. Hard to believe, isn’t it. Why is this occurring? No coordinated unproductive labor driven inflation(+rocGPL).

my comment: he said ‘unproductive’ labor driven inflation, because he knows that productive labor doesn’t cause inflation.

questioner: “Does your explanation explain why gold has traded sideways over the past 18 months?”

Gold is in a primary bull market. It’s just real slow, and like stocks, on the way up, it loses most of what it has gained. One should notice that if Berdoo had announced pumping yesterday instead of more charades, gold would be up strongly yesterday and today. Instead, the opposite has occurred. Gold can’t be fooled by a song and dance man.

The president takes credit for nominal economic gains, but they have nothing to do with his antics. His demolitionism has accomplished nothing but gradually drive people, individuals, away from government. Demolitionism does bring about an interesting phenomenon: smashes Lil Guy so the propensity to inflate is bottled, at least for now.

If FED wanted good economy, all they need to do is stay out and target zero inflation. Forget unemployment. They can’t control that to any degree. This was learned during the ’70s but was forgotten for many reasons, all of which have been given at this place. Employment improvement can’t be an objective of right economic policy. It occurs naturally and without side effect when the central bank insures integrity of money. What we have now is a circumstance(thank the grid locked monkeys in Washington) where default integrity is returning. FED can do nothing to ruin this circumstance, much to the chagrin of Berdoo. Berdoo’s prayer: “Oh please, let me wreck it, ONE MORE TIME”. Temporary has been closed for 4 years. Phenomenal. Don’t remember when I used to rant about stopping the interventionism, do you? It has been stopped by FED’s own persistent stupidity in abusing their tools. A little drink never hurt anybody, but if one keeps on drinking, one gets to a point where no more drinking is possible.

—

questioner: “Well you really made it worth my whille…your post is packed with information and explanation and I will save this and study further.”

You should study and cook up questions to ask me. For example, some of money or money like quantities feed back into each other. For example, deposits are used by banks to make loans which is part of leveraged money supply. Then the loans promote commerce whose outcome, income, is then put in the bank adding to the loan base. This process is outside FED and obviously existed centuries before advent of FED. So all by itself, not exacerbated by FED, it sounds like some fractional banking Ponzi a la 19th century. Why doesn’t this mechanism naturally evolve to chaotic transition to break down?

Further, wiki “money supply”. They have a concise discussion of what these quantities mean, if uninspired. One could go to Economagic and get longer term charts of these money like quantities, and charts of employment, prices, etc. Then one gets the right perspective. Everything that occurred before WW2 is unimportant. The application of eternal prosperity economic engineering started in the ’60s.

—

questioner: “In an unprecedented and surprising move, the Federal Reserve announced on Wednesday that it will keep interest rates near zero and will purchase $85 billion in bonds every month until unemployment falls from its present 7.7% to 6.5%.”

It is neither surprising nor unprecedented. Under Dual Mandate FED has labor rate targets, but in the past, prudently, they haven’t widely stated any particular one, and neither did they today. Berdoo said the 6.5% tipping point was tentative, dependent on conditions when and if it arrived. It could be 5.3% before they start removing. That’s hardly a target. Thus, they’re just jawboning, charading. FED is NOT in control of the unemployment rate. That was proved when QE2, unsterilized Permanent, failed to do anything except create a lot of idle reserves in the T accounts of members at their fed reserve banks.

When AG pumped in 2003 FED said they wanted to get unemployment down at least 2%, but AG knew they couldn’t waive a magic wand and realize it so they didn’t want to put out a specific target that may not be achieved. AG knew the ‘crats would be crying bloody murder and threatening FED independence if he set a specific target and missed.

questioner: “The new plan will maintain the $40 billion a month of mortgage-backed bond buying it began in September while adding another $45 billion in Treasuries.”

They had to go to MBS because they were running out of 2 year notes to sell.

questioner: “Where will the cash to bankroll the $85 billion-a-month bond-buying binge come from? The Fed plans to expand it’s $2.8 billion balance sheet.”

($2.8 trillion.) This statement is misleading. There is no monetary consequence from buying unsterilized MBS. You could think of it as moving dead bonds denominating nothing from one reserve bank to another. MBS is an asset that a bank can recognize as a reserve to meet reserve requirement, but it can’t be used as a reserve upon which to base a new loan. Within the parlance an asset must be qualified to be monetized.

questioner: “The new round of so-called “stimulus” is meant to replace the soon to expire “Operation Twist” program that shoveled $45 billion a month into long-term Treasuries funded by the sale of short-term debt. Since that effort failed to create economic growth, and the Fed has no more short-term securities left to sell, the Wall Street Journal says the Fed will “effectively print more money” out of thin air to fund the scheme.”

Notice how WSJ sidesteps the issue by using “effectively” when in actuality there will be no “printing”. Remember QE1? FED bought MBS without a twist. There was no monetary effect because it created unqualified reserves. FED said, “we’re going to move these assets off your balance sheet onto ours in order to free you up”. Why would the MBS be confining? Because it was both an asset(for reserve purposes) and a liability(for transaction purposes). That is, it was worthless as money. No bank would exchange money for the MBS given they representing non performing CRA unredlined loans.

questioner: “Why is the Fed foisting this newest round of “stimulus” on the American economy?

Because economists predict that last quarter’s anemic 2.7% economic growth figure will slide down to a near lifeless 1.2% this quarter.

Didn’t I, in an earlier post, point out that Berdoo, in spite of the fact that his eternal prosperity Keynesianism is a miserable failure, continues to apply it? It’s insane, or it’s hollow.

questioner: “Fed Chairman Ben Bernanke believes printing and pumping billions of new dollars into the U.S. economy while holding interest rates near zero until joblessness falls (unless inflation exceeds 2.5%) will help interest rates remain low and will jump-start investment and job creation. But mortgage rates and other loan rates are already at historic lows, and job creators have signaled that they have few plans to boost hiring.”

Earlier I said Berdoo isn’t doing that and didn’t say that. Please explain what “while holding interest rates near zero” means. Is FED preventing them from rising? If so, how? Temporary is closed. Temporary is closed. To prevent fed fund rate from rising (from demand by commercial banks) FED would have to increase the supply of reserves. This is done by buying short term bonds in the Temporary market. That isn’t happening. Temporary is closed. I might add, it’s unclear that FED can reopen Temporary under any circumstances. Commerce has adapted to not needing that kind of facility.

questioner: “Since 2008, the Fed has more than tripled the size of its portfolio of assets to $2.861 trillion.”

So what? Means nothing. You guys don’t seem to be able to comprehend that FED only influences reserves. Not money supply. Money supply is determined by the private sector, by commerce, by individual preference. Money supply is actually outside of the fed reserve system.

my comment: if you’d like to confound peter schiff, call his talk radio show and tell him the above. i’m sure he’d say you’re nuts.

Reserves only change the degree that commerce may stretch the buying power of available money supply(basically, demand deposits + vault cash). If there’s no stretching going on, FED is helpless. They’re outside.

Over the last 5 years they’ve proven that in spades. Temporary is closed. Permanent is feckless. The only reason FED doesn’t just shut down the FOMC because they have to go on with the myth, the charade, or else financial entities will lose their confidence in Big Boy, reincarnated JPMorgan, and then no one will be there to bail out those socialist entities. Oh dear. They’d be stuck with the RISK of free market capitalism. That’s what’s going on now. Lo and behold, they’re making money, and they’re making more than they were under l’ancienne regime.

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“Collectivism doesn’t work because it’s based on a faulty economic premise. There is no such thing as a person’s fair share of wealth. The gross national product is not a pizza that must be carefully divided because if I get too many slices, you have to eat the box. The economy is expandable and, in any practical sense, limitless.”

– P. J. O’Rourke

I could easily see that Ben wrote this article with all the research data that he has…From 2009 but about as comprehensive analysis of what happened in the housing debacle that I have read…

http://www.city-journal.org/2009/19_2_homeownership.html

Life will be as usual. RE will not drop significantly for another 3-4 years in metro areas like DC as fiscal cliff will be pushed down the road. I was hoping to buy something next March in DC area but hopes are dimming now.

10 priciest cities for renters

By Polyana da Costa · Bankrate.com
Tuesday, December 18, 2012
Posted: 3 pm ET

Would you be willing to pay nearly $5,000 per month in rent? If not, don’t plan on raising your family in North Miami Beach, Fla. You might want to stay away from some Southern California cities as well, such as La Jolla, Santa Monica and Newport Beach.

These are some of the most expensive cities in the U.S. for renters looking for a three-bedroom house. In more affordable parts of the country, a three-bedroom home generally is considered standard for a family. But in some of these affluent cities, a three-bedroom house is a privilege the average renter can’t afford.

In North Miami Beach, the median rent for a three-bedroom, single-family home is $4,489, according to Rent Range, which compiles and analyzes rental market data nationwide.

The company provided Bankrate with a list of the top 10 most expensive rental markets for a three-bedroom, single-family houses:

Top 10 most expensive rental markets
North Miami Beach, Fla.: $4,489

La Jolla, Calif.: $3,922

Santa Monica, Calif.: $3,658

Newport Beach, Calif.: $3,550

Dana Point, Calif.: $3,446

Miami Beach, Fla.: $3,421

New York, N.Y.: $3,247

Rancho Palos Verdes, Calif.: $3,240

Bethesda, Md.: $3,225

Sherman Oaks, Calif.: $3,089

San Francisco, which normally tops the list of most expensive cities to rent in, ranks 16th on the list of three-bedrooms, says Wally Charnoff, chief executive officer of Rent Range. For one-bedroom homes, San Francisco ranks as the most expensive city, followed by New York, he says.

Why are these cities so expensive? As usual, when it comes to real estate, it’s all about location.

“They have geographic appeal, more economic stability, and they attract wealthier people,” he says.

Read more: http://www.bankrate.com/financing/mortgages/10-priciest-cities-for-renters/#ixzz2FVJZCTky
Follow us: @Bankrate on Twitter | Bankrate on Facebook

So I heard an interview with the makers of Zero Dark Thirty, who casually mentioned that we (the U.S.) packed people on ice and froze them to death, “though that isn’t in the movie.”

Really!? Yeesh…

If 99.81% of Americans are gonna be protected from a tax hike, why not just go all the way to 100%? Soaking the top 0.19% with a tax hike will do nothing to solve the ‘fiscal crisis,’ so why not just fuggetaboutit?

New York Times - Suit Seeks to Overturn a City Drilling Ban in Longmont, Colorado:

“An industry group representing oil and gas companies has sued a city in Colorado that outlawed hydraulic fracturing, saying voters had no right to ban the drilling practice.

The measure, the first of its kind in the state, still allows oil and gas drilling within city limits, but it prohibits hydraulic fracturing, which has lifted energy production across the country but has raised concerns about water contamination.

The oil and gas association said the ban amounted to a prohibition on all efforts to tap the estimated $500 million in oil and gas resources locked in the rocks deep beneath Longmont.

City officials had been bracing for a lawsuit challenging Longmont’s right to make rules for an industry regulated largely by the state and federal authorities. Colorado officials opposed the city’s ban but have declined to sue to overturn it.”

More Gun debates….

http://www.bustedinacadiana.com/2012/12/14-year-old-boy-shoots-armed-intruder-while-babysitting-siblings/

Mon, Dec 17, 2012

One person was shot following a home invasion at 55th Avenue and Baseline Road.

Police say a 14-year-old boy shot a suspect who was trying to break into his house.

The boy was with his siblings when he heard rattling at the door and people attempting to break in. He went upstairs to retrieve a handgun and as he was coming down the stairs, the door broke open.

The boy became face to face with a burglar, who pointed a gun at him.

The 14-year-old fired at the suspect, critically wounding him. The suspect was taken to an area hospital and released a week later.

Police are also looking for a woman who may have been involved and had come to the door prior to the invasion.

The suspect, Richard Fiore, was charged with aggravated assault and burglary.

This is from a Reuter’s story Feb. 13, 2011:

Swiss voters have rejected a proposal to tighten the country’s relaxed gun laws.

With final official results yet to be released, a majority in at least 18 of Switzerland’s 26 cantons voted against the proposal to ban army rifles from homes and impose new requirements for buying other guns.

The proposal would have ended the Swiss tradition of men keeping their army rifles at home – even after completing their military service. Supporters of the reform argued this would have reduced incidents of domestic violence and Switzerland’s high rate of firearms suicide.

“This is an important sign of confidence in our soldiers,” said Pius Segmueller, a lawmaker with the Christian People’s party and former commander of the Vatican’s Swiss Guard.

The government had argued that existing laws were sufficient to ensure some 2.3m weapons in a country of fewer than 8 million people are not misused.

Opposition against the proposal was strongest in rural and German-speaking parts of the country, which tend to be more conservative and where shooting clubs are popular.

French-speaking cantons in western Switzerland backed the plan, but women and young people – who according to opinion polls favour more restrictive gun laws – failed to turn out in sufficient numbers.

“Women in Switzerland have only had the vote for 40 years, and yet they aren’t engaging in politics, even when the issue concerns them,” said Martine Brunschwig-Graf, a national lawmaker with the left-of-centre Social Democratic party.

Doctors, churches and women’s groups launched a campaign four years ago to force ex-soldiers to store their military-issued firearms in secure army depots. They also want the Swiss government to establish a national gun registry and ban the sale of fully automatic weapons and pump action rifles.

Gun enthusiasts say limiting the right to bear arms would have destroyed a cherished tradition and undermined the citizen army’s preparedness against possible invasion by hostile neighbours.

Dora Andres, president of the Swiss Sport Shooting Association, told the Associated Press this week that the measure would have killed off many of Switzerland’s 3,000 gun clubs, which she said are a pillar of community life in many villages.

Both sides used graphic images to make their point, with proponents producing posters showing teddy bears oozing blood below the slogan “Protect families”. Opponents’ posters have featured muscular cartoon criminals threatening the nation’s law-abiding citizens.

About a quarter of Switzerland’s 1,300 suicides each year involved a gun, according to federal statistics. The exact number of military-issued weapons involved is disputed, but those calling for tighter rules claim they account for between 100 and 200 suicides a year, mostly among men.

Advocates for tighter gun control noted that since Switzerland cut the size of its army in 2004, the number of firearms suicides among men aged 30-40 has been halved.

It is not known how many military-issued guns are involved in homicides each year, though Switzerland’s gun murder rate is relatively low – just 24 in 2009, or about 0.3 firearms homicides per 100,000 inhabitants. By comparison, the US rate in 2007 was 4.2 per 100,000 inhabitants.

Swiss referendums require a majority of both votes and cantons to pass.

Huh, the Big Mac goes for how much? I have not eaten one of those suckers in decades. I opt for the el cheapo value menu meal stuff instead when I go to MCD about 3 times a year at most:

http://tinyurl.com/cc57vez

Honest question:

If the FED is buying any MBS anytime, anywhere then why would lending standards not deteriorate rapidly? Isn’t a lender’s only worry that of being able to sell the paper?

News Flash: Obama States that He has Offered $2 Trillion in Spending Cuts

He did this during his news conference to announce that Joe Biden is going to repair the nutcase problem in this country.

Finally, he’s seen the light!!!

Anyone have any idea what he’s planning to cut or how he figured he could say this?

He did this during his news conference to announce that Joe Biden is going to repair the nutcase problem in this country.

Joe Biden is going to ban Hollywood?

The importance of tax credits to wind power, the graphs you will need to find on the government website:

Source: U.S. Energy Information Administration, Monthly Update to the Annual Electric Generator Report (Form EIA-860M).
——————————————————————————–

Many wind projects are planning to come on line before the end of 2012, in advance of the possible expiration of a federal incentive, the wind production tax credit (PTC). It appears that wind developers are pushing to complete projects in 2012 to qualify for the PTC. Under current law, projects that begin operating prior to the end of 2012 are eligible to receive a 2.2-cent PTC for each kilowatthour of generation over a 10-year period. Similar behavior in the face of previous PTC expirations was discussed in an earlier Today in Energy article describing the history of the wind PTC.

EIA collects monthly updates on modifications, retirements, and additions to the nation’s fleet of power plants, including the planned date of commercial operation for new generators.

Wind plant developers reported increasing amounts of new capacity scheduled to enter commercial operation in 2012 as the year progressed. Even as completed projects accumulated during 2012 (see chart, dark blue bars), the amount of capacity expected to come on line before the end of the year continued to increase (light blue bars plus dark blue bars). As of November 30, 2012, the wind capacity planned to come on line by the end of December would account for approximately half of the total 2012 wind capacity additions.

Wind generators accounted for a significant portion of capacity additions since 2007 (see chart below), and were the largest source for generating capacity additions in 2008 and 2009. If all planned wind generators for 2012 come on line, as reported by industry participants, wind capacity additions could top 12,000 MW for this year. This would account for 45% of total additions and exceed capacity additions from any other fuel source, including natural gas, which was the leading fuel source for electric generating capacity additions in 2010 and 2011.

If you pay current inflated asking prices for a house today, you’re going to lose alot of money. A LOT of money.

From Politico, what a weather vane:

West Virginia Sen. Joe Manchin, who suggested earlier in the week that the time had come for some gun control restrictions, said on Wednesday that he’s “not supporting a ban on anything” and he repeatedly defended and praised the NRA.

“I’m not supporting a ban on anything. I’m supporting a conversation on everything,” Manchin said on West Virginia MetroNews.

Read more: http://www.politico.com/story/2012/12/joe-manchin-im-so-proud-of-the-nra-85311.html#ixzz2FWvN8PaY

Let’s arm the school kids!

Police say an 11-year-old boy pulled a .22-caliber handgun on an elementary school classmate on Monday after his parents allegedly encouraged him to carry it for protection after last week’s shooting in Connecticut.
Sixth grader Isabel Rios said that it was during morning recess at West Kearns Elementary outside of Salt Lake City that the boy placed the unloaded gun to her and her friend’s head. Its ammunition was found in his backpack.
‘I told him I was going to tell, but he said, “If you tell, I’m going to kill you,”’ Isabel told KSL.

While I was looking for the SLC case, I found this, how come we never heard about this?

UPDATE: We spoke with Nick, Casey, and Ashley late Sunday and got the entire, amazing story of Nick’s actions stopping the gunman in the Clackamas Town Center shooting.

Click here to read the full story of Nick’s heroic actions based on first person accounts

On Tuesday night 22-year-old Nick Meli went to the Clackamas Town Center mall with his friends Casey and Ashley as well as Ashley’s four month old son***. They were walking through the mall when a masked man, now known to be Jacob Tyler Roberts, opened fire.

Nick’s reaction? “I heard three shots and turned and looked at Casey and said, ‘are you serious?’”. Nick told Casey to get down with the baby and positioned himself behind a pillar in the mall. Oh yeah, Nick is a licensed concealed carrier in Oregon.

When Nick looked around the pillar he drew his concealed handgun. When the shooting suddenly stopped, what we now know was Roberts weapon jamming Nick saw him trying to clear the malfunction, “He was working on his rifle, he kept pulling the charging handle and hitting the side”, Nick told reporters.

Click here for the amazing full story of Nick’s actions that night based on interviews with Nick, Casey, and Ashley

Roberts and Nick clearly saw each other and as Nick lined up the shot, he knew there was a problem, “As I was going down to pull I saw someone in the back of the (shooter) move and I knew if I fired and missed I could hit them”.

Unable to safely take the shot without risking innocents (Colonel Jeff Cooper’s Firearms Rule #4 for those counting), Nick took cover inside a store. He stands by his choice not to pull the trigger, saying “I’m not beating myself up cause I didn’t shoot him, I know after he saw me I think the last shot he fired was the one he used on himself”.

That’s right… even though Nick never fired a shot, Roberts knew that he was no longer the only armed man in the mall. Roberts retreated into the stairwell, cleared his weapons malfunction and committed suicide rather than continue attacking and killing any more innocent civilians.

There is a famous saying that the only thing that can stop a bad man with a gun is a good man with a gun. On Tuesday night, Nick Meli was that good man with a gun. Even without the shot being fired, he managed to change Jacob Roberts plan and help to save lives.

Let me just say thank you Nick.

The item I think I posted is from a blog the “Easy Bake Gun Club” so I cannot confirm accuracy but it might just explain on why the Portland Oregon shooting has so few victims.

I have confirmed it with a credible source:

http://www.kgw.com/news/Clackamas-man-armed-confronts-mall-shooter-183593571.html

What is $12.75 billion among friends anyways? Especially when it bailed out the biggest obama supporters - the unions.

And this figure does not include the billions in the bailout of GMAC.

“Osama is dead, GM is alive, the U.S. Taxpayer is screwed.”

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GM buys back stock; taxpayers may lose billions
nbcnews.com | December 19, 2012 | Paul A. Eisenstein

General Motors will repurchase 200 million shares of its own stock currently held by the U.S. Treasury, with the White House announcing plans to sell off its remaining 300 million shares within the next 12 to 15 months.

The automaker will pay $27.50 for the shares it will acquire, a 7.9% premium over the $25.49 closing price on December 18, 2012 – but that is also a sharp discount from the $33 price set during GM’s initial public offering in November 2010. And it means taxpayers will lose billions on the sale.

Industry analysts had estimated a sale price of $53 would be needed to recoup the government’s full investment in General Motors, however.

But the likely loss of billions of dollars by the time all government stock is sold off – at the $27.50 share price, the ultimate loss would amount to around $12.75 billion – will continue to fuel debate.

“The Second Wave of Foreclosures”

http://www.forbes.com/sites/morganbrennan/2012/12/01/the-foreclosure-crisis-isnt-over-just-yet/

Wow…. just ate three quarters pounders with cheese, a fillet-0-fish and 2 supersized fries.

http://articles.marketwatch.com/2012-12-18/finance/35880098_1_fixed-rate-mortgages-mortgage-scene-rate-loan

Increasing use of the 15-year mortgage…this is good.

Feds temporarily halt seizure of Michigan Supreme Court justice’s home
Detroit — A federal judge Wednesday temporarily halted attempts by the government to seize Michigan Supreme Court Justice Diane Hathaway’s home in Florida, a possible sign Hathaway is considering resigning and pleading guilty to criminal charges stemming from a controversial land deal.
Hathaway is facing challenges on several fronts. The FBI is investigating Hathaway’s real-estate transactions, the state Republican Party has called for her resignation and the government is trying to seize the Florida home.
Hathaway and her husband were accused last month of committing bank fraud by hiding an asset to dodge $600,000 of mortgage debt on a $1.5 million Grosse Pointe Park home on Lake St. Clair.
It’s been nearly four decades since a sitting Supreme Court justice faced this type of legal scrutiny. In 1975, former Gov. John Swainson was indicted for bribery and lying to a federal grand jury while he was a justice. He later beat the bribery charge, but served a brief sentence for a perjury conviction.

To get a short sale, banks typically require homeowners to prove they are suffering a financial hardship and check for other assets, such as second homes.

Hathaway, who makes $164,610 annually as a justice, and her husband did not inform the bank they transferred the Windermere, Fla., home to a relative before applying for a short sale in 2011 on a $1.5 million Grosse Pointe Park home on Lake St. Clair, according to the federal forfeiture complaint.

Hathaway, a licensed real estate broker, has been under political scrutiny since May when questions were raised in a WXYZ-TV report about why she and her husband transferred two homes to Kingsley’s children before the short sale.

Reuters: education is no longer the “great equalizer”
Americans came to believe over time that education could ensure that all children of any class had a shot at success. And if any state should be able to make that belief a reality, it was Massachusetts.

Over the past 20 years, America’s best-educated state also has experienced the country’s second-biggest increase in income inequality, according to a Reuters analysis of U.S. Census data.

Between 1989 and 2011, the average income of the state’s top fifth of households jumped 17 percent. The middle fifth’s income dropped 2 percent, and the bottom fifth’s fell 9 percent.

Since the recession started in the U.S. in 2007, the number of jobs needing a college degree has risen by 2.2 million, according to a recent Georgetown University study. The number of jobs for mere high-school graduates fell by 5.8 million.

Just to stay even, poorer Americans need to obtain better credentials. “Now, we’re in a situation where we need to educate everyone at the level of the elite in the past,” said Paul Reville, Massachusetts secretary of education. “We don’t have a system to do that.”

Between 2000 and 2010, Massachusetts ranked just 37th in job creation. “The best educated states were overwhelmingly mediocre in job creation,” a study found last year.

Between 1989 and 2009, the per capita income in Gardner, Mass., slipped 19 percent to $18,000. Gardner High School graduate Curtis Dorval dropped out of his university studies this year after his father, a Walmart worker, ran short of money. He’s working at a Walmart now, too, and then heading off to the military. Father David Dorval, 47, was laid off in 2009 from his job at an area hospital. Dorval, who has an associate’s degree, struggled to find work, and he and his wife divorced. Today he takes home $1,000 a month at Walmart in Gardner and pays half of his earnings to his ex-wife in child support. He goes to his 79-year-old mother’s house for lunch each day.

“I don’t feel like I am able to do what my parents were able to do,” he said. “My parents were able to support eight kids.”

When son Curtis Dorval was a senior at Gardner High School, He was class president. He was accepted by Northeastern University, a private school in Boston.

PRICED OUT

But Northeastern cost $50,000 a year, which Curtis, then 17, felt he couldn’t afford. Instead, he enrolled last year at the state-run University of Massachusetts Amherst, studying mechanical engineering. With the help of a scholarship for graduating in the top quarter of his class, Curtis paid $10,200 a year.

He got some help from his father, who had saved up $10,000 in stocks and bonds from his days in the hospital job. This summer, that money ran out and Curtis left UMass to enlist in the Air Force. He will serve as an airman - and hopes to use military benefits to pay for parttime university classes.

As earnings fell in Gardner they soared in Weston. In 1990, Weston residents made 3.5 times more than Gardnerites. By 2009, it was 12 to 1.

Harvard economist Ed Glaeser calls the widening economic and geographical divide in Massachusetts the new reality of a knowledge-based global economy. More than ever, innovation, growth and opportunity are clustered in large cities such as Boston. Let decaying factory towns become ghost towns. Instead of building better transportation links, Glaeser believes their inhabitants should be encouraged to move to the closest economic hub.

Weston town leaders say they are struggling to keep the town from becoming even wealthier. “We have three selectmen who are trying to find ways to diversify our population with affordable housing,” said Michael Harrity, chairman of the board of selectmen. “It’s difficult when lots are selling for $700,000 for teardowns.”