January 12, 2013

Bits Bucket for January 12, 2013

Post off-topic ideas, links, and Craigslist finds here. And check out Chomp, Chomp, Chomp by a regular poster!




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133 Comments »

Comment by azdude
2013-01-12 07:04:27

what enabled wall street to turn the housing market into a casino? We did fine for quite a long time and then boom, the casino chips appeared.

Comment by polly
2013-01-12 07:39:13

Mortgage backed securities. Specifically, when the investment bankers figured out a way to sell 100% of the pool of mortgages they were turning into bonds. When the securitizers can sell 100% of the pool of loans, they don’t need to have any capital permanently at risk/dedicated to each pool. When you don’t have to keep any money in the business, there is no limit to the number of deals you can do. When you can keep doing deals with no limit, the quality is always going to deteriorate. But, as the demand for loan volume (demand from the investment banks) went up, the loans against the properties went up raising prices. As that happened, the fact that people couldn’t pay the loans long term disappeared, since they could always sell or refinance for an amount high enough to cover the old loan. Until they couldn’t. And then it all stopped.

Comment by moral hazard
2013-01-12 07:51:32

“Until they couldn’t. And then it all stopped.”

Back in 2005 on this blog it was called a game of musical chairs. Although I don`t remember anyone knowing about the Mortgage backed securities at that time, it was known that there would be lot`s of people left standing with no chair.

Down here in 2005 the people who were to become chairless were still buying, flipping and refinacing all the while proclaiming their financial brilliance and shaking their heads and laughing at the very few who could not see how smart they were.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:24:13

If we had only been able to anticipate how much the Fed and Treasury Dept would help them out after the inevitable collapse, perhaps we, too, could have fully appreciated their supreme brilliance.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:28:11

When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.

– Chuck Prince

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:19:30

“Specifically, when the investment bankers figured out a way to sell 100% of the pool of mortgages they were turning into bonds.”

Also important: That investment bank- and GSE-issued MBS turned out to be too-big-to-fail, and hence equally risk-free as Treasurys.

KC Fed’s George warns on zero rates, MBS buys
Market Pulse
January 10, 2013|Steve Goldstein

WASHINGTON (MarketWatch) — Kansas City Fed President Esther George, who this year is a voting member of the Federal Reserve’s interest-rate setting policy committee, made clear her concerns with the central bank’s purchase of mortgage securities as well as the Fed’s near-zero interest rate policy. While she supports “low” interest rates, “I also know that keeping interest rates near zero has its own set of consequences. Specifically, a prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the FOMC’s 2% inflation goal in the future.” Prices of assets such as bonds, agricultural land, and high-yield and leveraged loans are at historically high levels, George said at the Central Exchange in Kansas City. She warned that actively selling a large amount of mortgage securities may disrupt the mortgage market and said there’s a risk of “announcement shock” from perceptions policy will remain highly accommodative regardless of circumstance.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:09:11

…and then boom (2007), and then the casino chips reappeared (2012).

 
 
Comment by goon squad
2013-01-12 07:08:39

Globe and Mail - Why lower home prices are a national priority:

“If Canada wants to slay its household-debt dragon, it will have to cut down house prices at the knees. But there’s an economic price to pay for that – and it goes well beyond a cooling of the residential real estate sector.

The Bank of Canada – one of the twin forces in Ottawa, along with the Finance Department, that are working to bring runaway consumer debt loads back under control – published a study this week that found that house prices are a key catalyst both for household debt and for spending. On the surface, this seems a pretty obvious conclusion; a higher house price means both bigger mortgages and bigger outlays of consumer’s money on home purchases.

But the kicker here is that house prices appear to drive non-mortgage debt, too – the more valuable your house, the more debt you’re likely to take on outside of your mortgage. And, since close to half of all non-mortgage debt is used to finance consumer purchases, higher house prices ultimately boost our national consumption, too.

This is the wealth effect so many people talk about in relation to house prices. The more valuable your house, the more implied wealth is contained in your household – and the more you can (and, it appears, do) take advantage of the wealth by borrowing against it to buy more things.”

http://www.theglobeandmail.com/globe-investor/investment-ideas/why-lower-home-prices-are-a-national-priority/article7233016/

Comment by Combotechie
2013-01-12 07:20:07

“The more valuable your house, the more implied wealth is contained in your household …”

Hence the push to keep RE prices elevated.

There is a push to keep prices of everything else down because consumers buy these other things, but consumers don’t “consume” houses, consumers “invest” in houses.

And as long as consumers = voters the push for elevating RE prices will be with us.

Which, in the end, helps the banks - which, ultimately, is what it is all about, IMO.

Comment by Combotechie
2013-01-12 07:29:32

If most people lived in an agricultural areas then they would be rooting for high prices for whatever food products their farms produced. Same for people who owned oils wells - they would be rooting for higher oil prices.

But most people do not live on farms and do not own oil wells but most - or close to most - people do own houses and thus have an interest in keeping the prices of their houses up. And since these people are voters the politicians also have an interest in keeping the prices of houses up.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:35:42

“If most people lived in an agricultural areas then they would be rooting for high prices for whatever food products their farms produced.”

Or for high prices of the durable factors of production they own to produce food, such as land.

Land prices not in a bubble
Edited from Doane Agricultural Report | December 26, 2012

Rick Huber, risk analyst for Farm Credit Services of America, in the most recent “Doane’ Agricultural Report” provided his way of analyzing whether farmland prices are in a bubble.

He noted that the big run-up in farmland prices seen in the 1970s did in hindsight turn out to be a bubble, and, therefore, the comparison is between today and almost 40 years ago. Through an economic process of evaluation, Huber ended up with a conclusion that prices aren’t in a bubble.

His conclusion is as follows: “Farmland prices are understandable and justifiable looking at the economics, unlike in a “bubble” atmosphere where values are grossly unattached to the empirical value.

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Comment by DudgeonBludgeon
2013-01-12 10:51:34

So you’re saying we are all house farmers. And like your more typical farmers we get house farm subsidies and look towards exports as a way to support our market.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 10:57:17

I’m a house sharecropper.

 
Comment by Prime_Is_Contained
2013-01-12 14:31:40

:-)

 
 
 
 
Comment by azdude
2013-01-12 07:21:25

how are all these canadians getting back abd forth to their cribs in arizona? Are they driving or flying? Either way it seems pricey and just think of their carbon footprint in the search for cheap housing.

Comment by palmetto
2013-01-12 08:00:15

Yep, they’re here, too. They flock to the trailer parks around these parts, usually spend about 3 months. Most are nice folks, but they don’t spend much in local economy, though.

Comment by GrizzlyBear
2013-01-12 10:53:28

Not to mention, Canadians do not tip. Anybody whose livelihood is dependent upon tips, hates dealing with Canadians.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:31:26

Good Lord — why couldn’t the Canucks have paid attention to what was going on on the other side of their southern border five years ago? Instead they have to learn all the lessons the U.S. should have learned by now, but didn’t, through first-hand experience.

Experience keeps a dear school, but fools will learn in no other.

– Benjamin Franklin

Comment by In Colorado
2013-01-12 09:20:46

Good Lord — why couldn’t the Canucks have paid attention to what was going on on the other side of their southern border five years ago?

Because it’s human nature to think that one is “different”, both individually and collectively?

So we see someone else make a mistake and the adverse effects it has. Since we are different, it won’t affect us that way. After all, Canada is a natural resources powerhouse and they don’t spend a big wad on their military (same with Oz). Therefore, they are “different” and a different set of rules apply to them … until everything comes crashing down.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 10:03:33

What I believe is missed in many corners of the developed world real estate market is just how much an unprecedented top-down flood of central-bank fiat money has created ubiquitous market distortions.

This will make a great topic for somebody’s finance or economics dissertation at some point over the next half-century.

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Comment by In Colorado
2013-01-12 11:24:38

What I believe is missed in many corners of the developed world real estate market is just how much an unprecedented top-down flood of central-bank fiat money has created ubiquitous market distortions.

It’ll do that. Now throw in a bag of trillion dollar coins to the mix.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 11:42:00

“Now throw in a bag of trillion dollar coins to the mix.”

I realize you are speaking figuratively, not literally. But I feel compelled to point out that liquidity flows much more freely if denominated down to the penny, than if lumped into trillion-dollar coins, or even million-dollar homes.

 
Comment by Prime_Is_Contained
2013-01-12 14:34:28

What I believe is missed in many corners of the developed world real estate market is just how much an unprecedented top-down flood of central-bank fiat money has created ubiquitous market distortions.

I agree. Or at least, I think I do.

Is it truly unprecedented? In other words, does anyone know of any good historical bases for comparison to this?

 
 
 
Comment by GrizzlyBear
2013-01-12 10:57:25

I have already heard US citizens saying that real estate can’t fall again. Huh?

 
 
 
Comment by goon squad
2013-01-12 07:17:22

Politico - Possible NYT layoffs rattle media:

“In the news business, no one is safe - not even senior editors at The New York Times.

The media business was shaken on Friday when it was reported, first in New York Magazine and confirmed by POLITICO, that managing editor John Geddes, assistant managing editor Jim Roberts, dining editor Susan Edgerley, former Washington editor Rick Berke, and former Times Magazine editor Jerry Mazorati could all be casualties of the Times’ effort to cut costs.

“It is hard to imagine there are too many sacred cows left in any newsroom, given the general state of our industry,” Raju Narisetti, the head of The Wall Street Journal Digital Network and a former Washington Post managing editor, told POLITICO, without specifically responding to the New York Times cuts but talking about ongoing cost cutting efforts across American newsrooms.

Times executive editor Jill Abramson told staff in December that the paper had to cut 30 newsroom positions, but would be “forced to go to layoffs” if it could not secure enough voluntary buyouts. With the Jan. 24 deadline for those buyouts fast approaching, only two staffers — culture editor Jonathan Landman and reporter Jacques Steinberg — have publicly accepted the offer, though others are believed to have done so privately.”

http://www.politico.com/story/2013/01/media-rattled-by-possible-nyt-layoffs-86083.html

Comment by palmetto
2013-01-12 07:48:23

What, Carlos Slim’s investment isn’t going to save the Times?

Lol, I think his investment just masked the necrosis. Every time I see a NYT teaser column title on the google news aggregator page, it’s usually something ridiculous like “Should We Sniff Our Panties?”

Comment by SV guy
2013-01-12 08:12:18

A fat guy named ‘Slim’.

I think his ancestors must have dropped the ‘e’ from the end of their surname.

Comment by In Colorado
2013-01-12 09:27:14

I think his ancestors

When I lived in Mexico City I met a few Lebanese-Mexicans (Carlos Slim Helu is of Lebanese descent on both sides of his family). They kept to themselves and didn’t really integrate with Mexican society very much. My mother actually dated one when she was a teen. His parents put an end to that (good thing too, or I wouldn’t be here). The dude wound up marrying a Lebanese cousin.

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Comment by SV guy
2013-01-12 10:35:34

I knew he was of Lebanese descent. Good thing for you that your Mother’s teen beau parents had a tinge of racism in their makeup. I was inferring CS was slime because anybody that reaches that plateau surely has left some of their morals at the door.

 
Comment by tresho
2013-01-12 10:40:52

. I was inferring CS was slime
Carlos Slim has gone on record as ridiculing the charitable donations of Bill Gates and Warren Buffet. CS = slime.

 
Comment by In Colorado
2013-01-12 11:30:12

Yeah, I was going to say that those LebMex folks I met, while not anywhere nearly as rich as Carlos, were mostly DBags too, though at the time I thought it was more of a “circling the wagons” kind of thing. Carlos got very rich in a very crooked way, by buying government assets (TelMex) on the cheap. He must be a Koch brother from another mother.

 
 
 
 
 
Comment by moral hazard
2013-01-12 07:39:18

Does Realtor Magazine have a swimsuit issue?

Shadow Inventory Threat Wanes | Realtor Magazine
http://realtormag.realtor.org/daily-news/2013/01/03/shadow-inventory-threat-wanes - 42k - Cached - Similar pages
Jan 3, 2013 … The number of homes in “shadow inventory” dropped from 2.6 million in October 2011 to 2.3 million in October 2012, according to a new report …

Comment by Pimp Watch
2013-01-12 18:08:21

We have our own real estate professionals on the blog. Please weigh in real estate professionals.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:13:33

Relatively wealthy homeowners were the big political victors in the “fiscal cliff” deal:

Housing: ‘Cliff’ deal is providing bonus for homeowners
8 hours ago • Kenneth Harney
Washington Post Writers Group
WASHINGTON

Although it wasn’t a total win for homeowners and sellers, the patchwork legislation that emerged from the “fiscal cliff” fracas on Capitol Hill came pretty close. In fact, it even reached back and resuscitated two key tax benefits for housing that had expired more than a year ago. Now homeowners will be able to take deductions on their upcoming 2012 tax returns that they assumed were no longer available.

Here’s a quick tally sheet on what the new legislation could mean for you as a buyer, seller or owner.

• Do you, like millions of Americans, pay mortgage insurance premiums or guarantee fees on an FHA, VA, Fannie Mae, Freddie Mac or Rural Housing loan? The American Taxpayer Relief Act - the fiscal cliff compromise bill - allows you to write off the insurance premiums you paid during 2012 along with your mortgage interest, provided your household income does not exceed $110,000. Legal authorization for this deduction expired at the end of 2011. But the new bill retroactively permits write-offs for all of 2012 and 2013 for qualified borrowers.

• Did you do some energy efficiency renovations in your home during 2012, installing insulation, energy-saving windows, doors, roofing material, nonsolar water heaters and the like? Maybe you’re thinking about doing a little green rehab in 2013? For either year, you may be able to claim up to a $500 tax credit thanks to the revival of a home energy improvement incentive that lapsed in 2011. Five hundred bucks may not sound huge, but remember: It’s a credit, not a deduction, so it means $500 off the bottom line of your federal tax return.

• Are you planning a short sale of your underwater home this year or hoping to receive a principal reduction on your loan as a result of a mortgage modification by your lender? The new legislation reauthorized the Mortgage Forgiveness Debt Relief Act that had been scheduled to terminate Dec. 31, and spares you potentially punitive federal taxes on the amount forgiven. Had the debt relief exception in the tax code not been renewed, large numbers of underwater owners participating in short sales - where banks agree to accept less than the full amounts owed on a loan as part of a sale to a new buyer or investor - would have faced taxation on the full amount forgiven, as if it were regular income.

Lenders and real estate brokers say thousands of financially distressed homeowners would have been devastated by the expiration.

 
Comment by moral hazard
2013-01-12 08:20:20

$91 million in 2004 to $28.5 million in 2013

Palm Beach investor Jeff Greene snaps up downtown West Palm condos

Posted: 6:12 p.m. Friday, Jan. 11, 2013
By Palm Beach Post Staff Report

WEST PALM BEACH —
Real estate investor Jeff Greene has added to his growing portfolio of Palm Beach County properties with the purchase this week of most of the condominiums in a downtown West Palm Beach building.

Greene of Palm Beach paid $28.5 million for 166 units in The Strand, a high rise at the corner of Evernia Street and Narcissus Avenue. He is expected to rent out the condos, which are 95 percent occupied.

The building, with views of the Intracoastal Waterway, Palm Beach and the Atlantic, was sold by Boston-based Cross Harbor Capitol Partners.

North Miami Beach-based American Land Housing Group built the 15-story Strand in 2002. Condo converter Margolias Realty Group bought it a couple years later for $91 million.

Only 109 of 275 units sold to buyers, leaving the 166 Greene bought this week. In 2006, The Strand went to its mezzanine lenders, CrossHarbor Capital Partners.

In 2005, the apartments became condos, ranging in price from the mid-$200,000s to just under $1 million.

The Boca Raton office of ARA announced the sale Friday. ARA’s Avery Klann, Marc deBaptiste and Hampton Beebe represented Cross Harbor Capital Partners in the transaction.

 
Comment by Albuquerquedan
Comment by Albuquerquedan
2013-01-12 08:35:46

You ask why, because of what was reported in the new York times and not in this article. Laws should be applied equally not according to how much political power you have.

After being seized on Thursday, she could have been sent back to Mexico in a matter of hours, but Obama administration officials moved quickly to undo the arrests. Officials had been pressured by the robust response from advocates — through phone calls, e-mails and online petitions, but primarily on Twitter, where they mobilized support for Ms. Andiola, a well-known advocate for young illegal immigrants, under the hashtag #WeAreAndiola.

Comment by Albuquerquedan
Comment by palmetto
2013-01-12 09:15:08

Dan, the rule of law breaks down when criminals at the top are in charge of the laws. Illegals are but a reflection of the administration and of congress and even of the SCOTUS.

Gangbangers, all.

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Comment by tresho
2013-01-12 09:41:23

the rule of law breaks down when criminals at the top are in charge of the laws.
As in the proverb, “The fish rots from the head down.”

 
Comment by aNYCdj
2013-01-12 14:14:12

Exactly why does obewanna want gun control at gun shows but not at housing projects…

 
 
 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:39:37

Will President Obama order the Treasury to mint a $1 trillion coin? It’s possible
National Monitor, Staff | January 12, 2013

It’s the question making its way around Washington: Will President Barack Obama order the U.S. Treasury to mint a $1 trillion coin in order to avoid the debt ceiling debate.

Comment by Combotechie
2013-01-12 08:51:06

This article is something I would expect to see in “The Onion”.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 09:03:21

ft dot com
January 11, 2013 10:12 pm
Obama gets party go-ahead on debt limit
By James Politi in Washington

Democratic leaders in the Senate gave President Barack Obama the green light to sidestep Congress and take executive action to avoid a default if no agreement is reached to raise America’s borrowing limit.

“We believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis – without congressional approval, if necessary,” said Harry Reid, Dick Durbin, Chuck Schumer and Patty Murray, the party’s top brass in the upper chamber, in a letter to the president on Friday.

…the administration could consider a more outlandish plan to mint one or more platinum coins, to be deposited at the Federal Reserve, and allowing the government to continue paying its bills even without fresh congressional authority to borrow more money. Thanks to an arcane loophole, the US Treasury can mint commemorative coins worth any denomination.

Comment by Albuquerquedan
2013-01-12 09:17:49

We are a country of checks and balances, when one branch continues to use tricks to evade these balances we will suffer. Libya was not a war so military force could be used outside the war power act. Now, no need to get an increase of the debt limit. Fine but what happens when the next president decides to go to war and find tricks such as a platinum coin to finance a war.

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Comment by polly
2013-01-12 10:09:45

The defense department can only spend the money that Congress as assigned to it. Minting the coin is the equivalent of raising the debt ceiling. It allows the executive branch to spend the money that Congress has told it it must spend. It doesn’t authorize additional spending.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 10:19:23

“Minting the coin is the equivalent of raising the debt ceiling.”

I thought the Congress had to agree to raise the debt ceiling?

Do they have to agree to mint the coin?

If not, I am missing your point. But that’s probably because I am a legal ignoramus who didn’t attend NYU or Columbia and never worked for Goldman Sachs.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 10:31:04

How Obama can win a most dangerous game on debt ceiling
President should show GOP that two can play at debt-ceiling chicken
January 09, 2013|Eric Zorn | Change of Subject

President Barack Obama faces another showdown with congressional Republicans over raising the debt ceiling next month. (Jonathan Ernest, Reuters )

The way to end the recurring, preposterous fight over the debt ceiling is for President Barack Obama and the Democrats to fight crazy with crazy.

I don’t mean crazy as in ordering the minting of a $1 trillion platinum coin against which the nation can continue to pay its obligations rather than go into default next month.

I don’t mean crazy as in touching off a constitutional crisis by invoking the 14th Amendment’s provision that “the validity of the public debt of the United States … shall not be questioned” and telling the Treasury simply to ignore the debt ceiling.

I don’t even mean crazy as in refusing to negotiate the issue with Republicans — as Obama has already done — and triple-dog daring them to provoke a global economic crisis by refusing to give in.

I mean even crazier than that.

 
Comment by In Colorado
2013-01-12 10:41:11

The defense department can only spend the money that Congress as assigned to it. Minting the coin is the equivalent of raising the debt ceiling. It allows the executive branch to spend the money that Congress has told it it must spend. It doesn’t authorize additional spending.

While I agree with this, having the Treasury mint zillion dollar coins to finance the deficit, instead of having to sell bonds, does give congress Carte Blanche to balloon the budget, assuming the executive is willing to play along by ordering the Treasury to mint these “coins”.

Fundamentally what this boils down to is that the FedGov is asserting that it can also, like the Federal Reserve, conjure money out of thin air. I don’t know if this is a bluff or not, but I can’t imagine that the banking cartel is too happy about this.

 
Comment by tresho
2013-01-12 10:44:03

Do they have to agree to mint the coin?
Congress has already authorized minting such a coin. As is usual, they did not bother to consider all ramifications of their laws. And of course, bad laws are not to be repealed. Ever.

 
Comment by tresho
2013-01-12 10:45:03

I can’t imagine that the banking cartel is too happy about this. Last time I looked, FedGov = banking cartel.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 10:58:34

“And of course, bad laws are not to be repealed. Ever.”

Some times they are. As when they violate constitutional protections, such as freedom of religion.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 11:02:20

Former Missouri governor honored for rescinding Mormon ‘extermination order’
By R. Scott Lloyd, Church News staff writer
Published: Monday, May 31 2010 1:14 a.m. MDT

U.S. Sen. Christopher S. “Kit” Bond, who as Missouri governor in 1976 rescinded the 1838 “extermination order,” authorizing the expulsion of Mormons from the state, has been honored by the Mormon History Association for his action 34 years ago.

KANSAS CITY, Mo. — U.S. Sen. Christopher S. “Kit” Bond, who as Missouri governor in 1976 rescinded the 1838 “extermination order,” authorizing the expulsion of Mormons from the state, has been honored by the Mormon History Association for his action 34 years ago.

At the Friday evening awards banquet of its annual conference, the association gave Bond its Thomas L. Kane Award for outstanding service to the Mormon community by a non-Mormon.

Absent because of a scheduling conflict, the senator sent a recorded video message and acceptance of the award.

“You bet I’d do it again,” Bond declared regarding his rescission of Gov. Lilburn W. Boggs’ 1838 order. “The treatment of the Mormon people in Missouri in the 1830s and beyond was barbaric. Women were raped and tortured. Men were killed by mobs or driven out of state. Their property was stolen. The lucky ones were those who were left alive with nothing and were forced to make their way into a more hospitable state.”

What makes it especially hard to understand was that the barbarism was state-sanctioned, Bond said, adding that Boggs’ order made it legal to kill anyone who belonged to The Church of Jesus Christ of Latter-day Saints.

“What surprised me was that as late as 1976, the law was still on the books, though thankfully, it had not been enforced and nobody paid attention to it,” Bond said.

 
Comment by In Colorado
2013-01-12 11:17:13

Last time I looked, FedGov = banking cartel.

Uh .. no. The FedGov doesn’t own the banks. Which is why the FedGov has to borrow money to cover deficits, mostly from the banking cartel. Now if you were to say that the Banking Cartel controls the FedGov (as well as most governments around the world, demanding that they implement austerity programs) then I would fully agree with you.

 
Comment by tresho
2013-01-12 11:18:12

Those old time Mormons gave as good as they got.
– I was referring to Federal laws like the Gramm-Leach-Bliley act and the laws setting up the Federal Reserve, not piddling laws at the state level. See also all laws regulating US corporations and limits to liability for oligarchs.

 
Comment by In Colorado
2013-01-12 11:20:59

And of course, bad laws are not to be repealed. Ever.

This one is too convenient for them to repeal. Though I still think that the coin is a bluff. I can’t imagine that our “trading partners” will be too thrilled as these trillion dollar coins pile up over the years.

 
Comment by tresho
2013-01-12 11:24:48

I for one imagine that our “trading partners” are carrying out the same type of shenanigans, although having the world’s ‘reserve currency’ does have its privileges. Everyone is racing to debase their currency. Who will win?

 
Comment by oxide
2013-01-12 11:45:58

when one branch continues to use tricks to evade these balances we will suffer.

It is the Legislative branch which is using tricks to evade itself, actually. By refusing to raise the debt ceiling, the Republicans in Congress are effectively using the Executive Branch to enact a partial repeal of a law, without actually repealing the law. In this case, it is clear that they want to partially repeal the Medicare and Social Security laws.

By minting the coin, the Executive Branch would actually be rebalancing the branches of government by pushing back on the Legislative branch’s power grab.

 
Comment by In Colorado
2013-01-12 11:46:51

I for one imagine that our “trading partners” are carrying out the same type of shenanigans

Well, technically they don’t need to, as they run handsome trade surpluses with us and plenty of our dollars end up in their coffers.

But you are right that the last thing they want is for their currencies to appreciate against ours, or at least against the other trading partners’ currencies. Don’t want to concede trade to someone else because their slave labor is cheaper, thanks to a debased currency.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 11:48:26

“Those old time Mormons gave as good as they got.”

Due to chronology, your comparison is not quite fair. While latter-day Mormons have acknowledged the wrong of the Mountain Meadow Massacre, and even created a sight to commemorate the tragic mistake, it occurred long after Governor Boggs had issued an extermination order and chased the Saints out of Missouri. And the feds were still threatening to crack down on the Mormons for polygamy, even after Brigham Young had relocated the fold to the Utah Territory. (Libertarianism hadn’t quite caught on back in the day, despite the recent events of the American Revolution and framing of the Constitution including freedom of religion.)

It seems somewhat understandable how a tragedy could have been easily triggered, given the atmosphere of paranoia which no doubt ruled the day.

 
Comment by In Colorado
2013-01-12 12:11:53

It is interesting though, how mid 19th century Protestant America reacted to the LDS.

It was a time when many “quasi” Christian sects arose, like the neo-gnostic Christian Scientists and the neo-arian (not Aryan as Nazi, but Arian as in Arius of Alexandria) Jehovah’s Witnesses.

While hardly welcomed with open arms, these groups did not bring out the rage in Protestant America that the LDS did, and my theory as to why is not just because of the polygamy (which was a big problem) but because of the fact that the LDS introduced their own Holy Writ, which in many ways supplanted the Bible. From the perspective of fundamental Protestantism (which most Protestant were in the 19th Century) that was an unforgivable sin.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 12:47:35

“…but because of the fact that the LDS introduced their own Holy Writ, which in many ways supplanted the Bible.”

That was undoubtedly part of the story, but there are a couple of other pieces:

1) If you know any LDS church members very well, then you probably realize their doctrine claims that their church is true to the exclusion of all others. This is typical of Judeo-Christian sects — after all, one of the Ten Commandments proclaims, “Thou shalt have no other god before Me”. Competing sects who shared utter certainty in their own truths historically could easily label the members of rival sects as “heretics,” thereby legitimizing the right to exterminate them.

2) The Mormons under Joseph Smith were an economic and political force to be reckoned with. At its apex, Joseph Smith’s Nauvoo was a larger, more politically powerful city than Chicago.

3) Neither Mitt Romney nor his dad were the first LDS church member to run for the U.S. presidency.

 
Comment by In Colorado
2013-01-12 13:29:52

1) Yes, they consider themselves to be the only “true church”, and non members are “gentiles”. FWIW, a lot of fundy sects believe the same thing.

2) True, but at the time Chicago was a podunky 12,000 people. But I could see how that would have rattled the non-LDS minds.

3) True, but Mittens was the first one to actually have a chance at winning.

 
Comment by polly
2013-01-12 14:40:35

“I for one imagine that our “trading partners” are carrying out the same type of shenanigans”

I don’t know exactly which trading partners you are referring to, but in the last debt ceiling “debate” the reporting was that we are the only first world nation that has a debt ceiling. All the others simply issue additional debt as required by the spending bills passed by their governments. We are the only ones who pass a bill to spend the money, and then, when the pocket is empty and the bill is due decide not to promise to pay for it.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 14:42:23

3) Too bad he lashed his campaign to the sinking ship of right wing extremism.

 
Comment by tresho
2013-01-12 15:21:01

There were once Mormon pirates on the Great Lakes, see Chicago Tribune review 4/18/2009

In 1855, a gang from a religious sect on Beaver Island, Mich., burned sawmills and stole $1,600 worth of goods from a lakeside store, under the leadership of “King” James Jesse Strang, according to a New York Times article at the time, under the headline “Wholesale Robbery by Pirates on Lake Michigan.”

A later Times article, “Relic of a Pirate Band,” published in 1907, reported the finding of the burned hull of Strang’s boat, the Eclipse, on Beaver Island, and painted a vivid, if perhaps exaggerated, picture of the raiders:

“It was the custom to sail forth upon the great lake and lie in wait for the unlucky vessels that passed, capture the craft, and either murder the sailors or make them go to the island and conform to the peculiar faith of the inhabitants, which resembled that of early day Mormons.”

Strang moved to Beaver Island in 1847 after being expelled by Brigham Young from the Mormon church, according to Frank Boles, director of the Clarke Library at Central Michigan University in Mount Pleasant. Strang created his own sect, later known as Strangites.

The group repeatedly clashed with Irish fishermen who had inhabited the island prior to their arrival, hostility which may have led to the exaggeration of the Strangites’ exploits.

Strang was an early convert to the LDS and contested with Brigham Young for leadership after Joseph Smith was murdered. When Strang lost, he was excommunicated. In 1860 he proclaimed himself King of the Kingdom of God on Earth. Strang’s sect of course referred to themselves as the real genuine sanctioned Mormons and held the Brighamites to be the heathen / heretics. Strang and his followers were tried in federal court in Detroit in 1851 for a variety of federal charges, but were found not guilty. I have read many accounts of the Strang’s people abusing the local ‘Gentiles’. I don’t think the Strangites’ exploits were exaggerated. There were too many eye witnesses and written testimonies. People were killed & wounded on both sides in a very remote part of the US at the time. Finally disaffected former followers of Strang assassinated him in 1856 & other locals then drove the Strangites off Beaver Island.

 
 
Comment by tresho
2013-01-12 10:49:31

Thanks to an arcane loophole
Nothing ‘arcane’ about it. It is no more ‘arcane’ than the ‘housing bubble’ or Quantitative Easing to eternity. Just another of many legal land mines we don’t talk about in public or in the MSM if we can help it. ‘arcane’ is in the same class of terminology as ‘nobody could have foreseen it’.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 15:38:14

Except this one is dead in the water.

Obama administration shoots down platinum coin idea as debt ceiling solution
Published January 12, 2013
FoxNews.com

The Obama administration ended speculation Saturday that it would mint a trillion-dollar platinum coin as a way to avoid the debt ceiling.

Treasury Department spokesman Anthony Coley said the agency wouldn’t mint one and the Federal Reserve would not accept the coin.

“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” Coley said.

His statement was followed by one from White House Press Secretary Jay Carney.

“There are only two options to deal with the debt limit: Congress can pay its bills or it can fail to act and put the nation into default,” Carney said.

 
 
 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:41:16

Articles such as the one I am about to post explain the reason why I expect the Fed to suppress long-term interest rates for “longer than expected.”

But I keep coming back to the same question: Are there any exogenous factors which could force an early exit upon them?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:44:00

If the Fed does not hold long-term rates to the floor for a very long period of time, some of its key (”too-big-to-fail”) constituents stand to lose a bundle.

Investment Banking | Wall Street Earnings January 11, 2013, 8:21 am
Wells Fargo’s Mortgage Gains May Be Unsustainable
By JESSICA SILVER-GREENBERG and PETER EAVIS
A Wells Fargo branch in Philadelphia.
Matt Rourke/Associated Press
8:40 p.m.

Wells Fargo has turned its mortgage business into an enormous profit machine. The San Francisco-based bank posted earnings of $5.1 billion in the fourth quarter, a 24 percent increase from the previous year.

But its strong gains may not be sustainable, unless interest rates drop significantly or the housing market recovers substantially. Both are long shots.

“Rates really don’t have to go up very much to discourage a whole swath of people from returning to the housing market,” said Lance Roberts, chief economist at StreetTalk Advisors, an investment advisory firm.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 08:47:03

So long as all-cash Chinese investors are snapping up San Francisco properties like hot cakes, who even needs mortgages?

MARKETS
Updated January 11, 2013, 5:07 p.m. ET
Home-Loan Pipeline Shrinks at Wells Fargo
By SHAYNDI RAICE

Wells Fargo (WFC -0.85%) & Co. posted a larger-than-expected 24% rise in fourth-quarter net income despite signs that a mortgage-refinancing boom that has boosted profits at a number of large banks may be fading.

But investors focused on a second consecutive quarterly decline in a figure analysts use to gauge future gains in the lucrative home-loan business.

In addition, a surge of deposits and near record-low interest rates continued to squeeze profit margins at the fourth-largest U.S. bank by assets.

The drop in the San Francisco company’s mortgage pipeline is “likely to be a source of concern,” said Citigroup (C -1.14%) analyst Keith Horowitz.

Comment by Bill in Los Angeles
2013-01-13 08:50:25

I remember how the arrogant Japanese bought up U.S. properties in the late eighties at the height of their economic success. Then look what happened to them.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-13 19:57:29

It’s what I expect lies in store for the current wave of all-cash Canadian and Chinese investors, which is frankly great, as the fallout will land somewhere else than on the U.S. economy.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 09:07:56

There is a fatal flaw in the thinking that the end of the bond bubble will be a boon for equities. Higher interest rates can spell the kiss of death for both bonds and equities, as was learned on Black Monday (October 19, 1987).

ft.com > Comment >
Editorial
January 11, 2013 6:38 pm
Rebirth of equities ain’t necessarily so
Knowing what we do not know about where stocks will go

The cult of equity is dead; long live the cult of equity. That seems to be the rallying cry of a week in which stock price indices touched pre-crisis highs and $18.3bn flowed into equity funds in the US alone, the fourth-biggest weekly figure in 20 years.

The stock markets have not been lacking in good news recently – some of it better described as an absence of bad news. The US did not go over (all of) its fiscal cliff. Eurozone leaders have not triggered renewed market panic. There are outright positive signs, too, that things are on the right track. In the US, the housing market and the banks are returning to good health. In Europe, European Central Bank president Mario Draghi has promised to do what it takes to eliminate the risk of the single currency breaking up, and markets largely believe him.

With the financial world gradually normalising – as noted by Mr Draghi on Thursday – the case for the equity bulls is straightforward enough. For the past decade, bond returns have left stocks in the dust. What started with a popped dotcom bubble continued with the flight to the safety of sovereign bonds during the crisis and central banks’ ever more aggressive actions to keep interest rates low. But as yields shrink to nothing, bond prices cannot go on rising much higher. And one day soon – so the argument goes – what has gone up must come down. The funds that then come out of bonds will surely benefit equities.

Well, it ain’t necessarily so, as Ira Gershwin would say. Many things must go right for this scenario – the ultimate return to the old normal – to play out.

 
Comment by frankie
2013-01-12 10:24:00

Greece has given the green light to an unpopular package of tax reforms, in order to meet requirements of international creditors. Opponents say the changes will bite the less well off, without scratching the wealthy.

Greece’s Parliament early on Saturday approved controversial new tax changes designed to boost government revenues, as part of conditions laid down by foreign lenders supplying the economically-troubled country with emergency loans.

“It is a bill of fiscal necessity and responsibility, required for us to get our next loans tranche,” Finance Minister Yannis Stournaras said to lawmakers.

http://www.dw.de/greece-alters-tax-code-to-appease-lenders/a-16516868

Comment by SV guy
2013-01-12 10:46:09

Soon coming to a country near you!

 
Comment by In Colorado
2013-01-12 11:11:28

Why don’t they just mint a trillion Euro coin?

 
 
Comment by goon squad
2013-01-12 10:54:10

Obama’s socialist utopia gets out of control (linked from Drudge Report)

Section 8 Housing voucher distribution canceled after thousands waiting in line get out of control:

“A chaotic scene erupted at the Taylor Human Services Center when the crowd waiting for a Section 8 Housing voucher distribution got out of control.

Police say thousands of people from all over the area were at the center. Many were homeless, single moms, or disabled. They were hoping to get help paying for their housing from the government.

“There was elderly, disabled people, pregnant single women. They were here for help, to get their section 8 vouchers. It just shows you what a desperate need… some were here since yesterday,” said Rhianna Rodriguez.

7 Action News is being told there were 1,000 vouchers available and 5,000 people showed up trying to get one.

The crowd had grown overnight as more and more people arrived. Witnesses say the line stretched for a mile down Lange Road.

Police say, when the time came for the vouchers to be distributed, there was a mad rush for the door. Officers tried to control the crowd, but couldn’t.”

http://www.wxyz.com/dpp/news/region/wayne_county/section-8-housing-voucher-distribution-canceled-after-thousands-waiting-in-line-get-out-of-control

Hope and Change

Forward

Comment by In Colorado
2013-01-12 11:10:01

7 Action News is being told there were 1,000 vouchers available and 5,000 people showed up trying to get one.

So much for quitting one’s job and joining the Free Sh*t Army.

Comment by moral hazard
2013-01-12 11:25:47

“So much for quitting one’s job and joining the Free Sh*t Army.”

Section 8 Housing voucher distribution canceled after thousands waiting in line get out of control

Posted: 9:50 AM
Last Updated: 3 minutes ago

TAYLOR, Mich. (WXYZ) - A chaotic scene erupted at the Taylor Human Services Center when the crowd waiting for a Section 8 Housing voucher distribution got out of control.

The crowd had grown overnight as more and more people arrived. Witnesses say the line stretched for a mile down Lange Road.

Police say, when the time came for the vouchers to be distributed, there was a mad rush for the door. Officers tried to control the crowd, but couldn’t.

Officers had to shut down several lanes of Eureka Road until the situation could be brought under control. The road is now reopened.

Several people were arrested. The rest were sent home. Today’s distribution has been canceled and will be rescheduled.

Video

WXYZ.COM | Detroit, Michigan Local News, Weather, Sports from 7 …
http://www.wxyz.com/ - 110k -

 
 
Comment by tresho
2013-01-12 11:22:41

CBS News in Detroit has more info titled “Riot Breaks Out At Housing Assistance Event In Metro Detroit”. The disturbance was both predictable and preventable, but of course, “no one could have foreseen it.” Seeing several thousand people lined up in before dawn in the dead of a Detroit winter should have cause some concern among any sensible officer of the law.
I expect to read of more events like this in the months and years to come, and only pray I won’t be caught up in any.

Comment by In Colorado
2013-01-12 11:37:45

Seeing several thousand people lined up in before dawn in the dead of a Detroit winter should have cause some concern among any sensible officer of the law.

Even tony Fort Collins has to ration the section 8 vouchers. And the scene of the poor huddling overnight in the winter cold to be first in line to apply is a familiar one here too.

The notion that this stuff is handed out like Halloween candy is a myth. There’s a reason why tens of millions of people work two or more low wage Lucky Ducky jobs. They’d be homeless if they didn’t.

Comment by moral hazard
2013-01-12 11:50:17

Maybe they should let these people run the Section 8 Housing voucher distribution.

Trojan Vibrator Giveaway Brings Excitement to the South End

Long lines managed by bouncers on a Monday afternoon?

BY Bryanna Cappadona
POSTED ON 12/3/2012

Hundreds of people lined up this afternoon to get a free vibrator courtesy of Trojan, which held a giveaway at the Cyclorama at the Boston Center for the Arts in the South End Monday (not at City Hall Plaza, thanks to the protests of the Mayor’s office.)

“There were a bunch of people lined up at eight or nine o’clock this morning,” a marketing representative at the event said. “The line snaked around the block and down [Tremont] street. There was a huge turnout by 12 o’clock when the doors opened.”

A “Pleasure Cart” was set up by the doors, modeled after your average hotdog stand. (Yeah, that deserves a giant side-glance.) A “bouncer” stood at the entrance (black trench coat, Aviators, etc.) checking ID’s, as the event is 18+. By two o’clock, there were still plenty of people waiting, and the long line seemed to stay steady throughout the day. “I found out about it today on their Facebook page, so I rushed over here to get one,” one eager female said. She later exited the Cyclorama waving her vibrator in the air.

Trojan has already held similar giveaways in New York City and Washington D.C. One of the event organizers said Boston was the last stop in the giveaway tour, so it looks like the company’s need to “bring pleasure to the streets” has come to end.

http://blogs.bostonmagazine.com/boston_daily/2012/12/03/trojan-vibrator-giveaway-south-end/ - 66k -

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 12:05:50

“Trojan Vibrator Giveaway Brings Excitement to the South End”

I’m not going to delve into the question of what ‘South End’ is supposed to mean…

 
 
 
 
Comment by Anon In DC
2013-01-12 12:51:26

Single moms - usually “unwed, poor and uneducated” moms . But don’t want to hurt anyone’s feeling by stigmatizing irresponsible behavior.

Comment by ahansen
2013-01-12 13:47:40

Yet tying receipt of public benefits to mandatory birth control is somehow deemed detrimental to society.

Comment by aNYCdj
2013-01-12 14:18:41

Or mandatory English and Math classes……or questioning how they can afford that I-phone?

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 12:04:39

Ben Bernanke’s Fingerprint Is Clearly Present In The Current Rally
Lance Roberts, Street Talk Live | Jan. 12, 2013, 5:46 AM
Lance Roberts is the host of “StreetTalkLive.”

For the last four years the Federal Reserve has been actively engaged in supporting the stock market by suppressing interest rates to historically low levels, and injecting liquidity into the financial system, through a variety of different programs. The most notable, and widely discussed, of these programs has been the Large Scale Asset Purchase programs (see here and here) which have become known as Quantitative Easing or Q.E.

There are two important considerations revolving around Q.E. programs. First, the Fed is currently simultaneously involved in two Q.E. programs totaling $85 billion a month. Considering that we are more than 4 years into an “economic recovery” the need for such liquidity injections is very telling about the real strength of the economy. Secondly, each program has had a diminishing rate of return as shown in the combined chart below.

What the chart shows is the history of each program from its inception post decline to May 31st of the following year. The first QE program followed the 48% decline in the S&P 500 due to the financial crisis. From that low point the markets rallied 34% to the end of the program 2010.

Following the expiration of QE 1 the market declined by 14% which pushed the Fed to enact QE 2 in order to “stimulate consumer confidence and boost asset prices.” QE 2 worked as planned and boosted the market by 28% until its conclusion in the early summer of 2011.

As witnessed previously, as the effects of the Fed’s liquidity was extracted from the system, the market deteriorated and fell 19% as the economy slowed and the first debt ceiling debate ensued. Worried that the economy may well slip into recession the Fed acted to once again support the financial markets, and the economy, by utilizing a different approach and implementing a bond reinvestment program which became known as “Operation Twist.” From the lows of the market in the summer of 2011 the market was only able to muster a 19% increase before stalling and declining once again by 10%.

The story line changed somewhat in 2012. As the market declined in the early summer of 2012, with the Eurocrisis once again rearing its head, the markets, now very accustomed to the Fed intervening and providing support, began to advance in anticipation that Bernanke’s “printing press” would once again be unleashed. Like the sound of the bell to Pavlov’s dogs, the market rallied strongly during the summer months reaching its peak as the announcement of QE 3 was made in September. QE 4 was announced shortly thereafter to replace the expiration of the “Operation Twist.”

The recent rally has attracted much attention as the markets flirt with their highest closing levels since the 2008 stock market crash. For many individual investors they are now back to where they were five years ago. I need not remind you that getting back to even is not an investment strategy. The question, however, is how much further the advance can go? (Note: For clarity purposes I have intentionally left out Operation Twist since that program did not expand the Fed’s balance sheet.)

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 12:51:17

“…each program has had a diminishing rate of return as shown in the combined chart below.”

If the returns are already diminishing with QE running at full throttle, how will they look after the Fed takes its foot off the monetary accelerator?

This is why I don’t expect the Fed to ever wind down QE…

If you break it, you fix it.

– Colin Powell’s Pottery Barn Rule

 
 
Comment by Albuquerquedan
2013-01-12 12:28:34

I think we can all agree we do not want to live like this: tp://www.bbc.co.uk/news/world-asia-china-20998147

Comment by Albuquerquedan
 
Comment by Albuquerquedan
2013-01-12 12:52:38

Air pollution in the Chinese capital Beijing has reached levels judged as hazardous to human health.

Readings from both official and unofficial monitoring stations suggested that Saturday’s pollution has soared past danger levels outlined by the World Health Organization (WHO).

The air tastes of coal dust and car fumes, two of the main sources of pollution, says a BBC correspondent.

Economic growth has left air quality in many cities notoriously poor.

A heavy smog has smothered Beijing for many days, says the BBC’s Damian Grammaticas, in the capital.

By Saturday afternoon it was so thick you could see just a few hundred metres in the city centre, our correspondent says, with tower blocks vanishing into the greyness.

Comment by ahansen
2013-01-12 14:22:40

“…it was so thick you could see just a few hundred metres in the city centre, our correspondent says, with tower blocks vanishing into the greyness.”

Los Angeles used to be like that. And as far as I recall, the Cuyahoga River in Ohio has the distinct honor of being the only major world river ever to catch fire. Yet unlike PRC, the United States has refused to endorse the Kyoto Protocols.

To their credit, PRC is aggressively addressing their pollution issues in ways most Americans would find onerous. And unlike here, there are serious teeth in the enforcement of their regulations. (Like executives actually being executed.)

Comment by tresho
2013-01-12 14:41:29

And as far as I recall, the Cuyahoga River in Ohio has the distinct honor of being the only major world river ever to catch fire.
I think that’s true. A locally brewed beer has been named after those incidents (there were several). That river has been greatly cleaned up. Not only that, but many dams upstream are being removed, including some that used to generate electricity & power mills that employed people. City of Akron is confronting a $1 billion court-mandated upgrade of its sewage system so that heavy rains won’t wash sewage into the river, that pencils out to $3333 per sewage customer in Akron’s area.
I don’t know where that money will come from. Meanwhile the unemployed can once again fish in the Cuyahoga river.

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Comment by In Colorado
2013-01-12 13:08:09

Air pollution in the Chinese capital Beijing has reached levels judged as hazardous to human health.

And yet, every step that was taken in our country to prevent this from happening was fought tooth and nail by the “private sector” as being too much of a financial burden and being “business unfriendly’”. The situation in Beijing and other Chinese cities is proof that business won’t do what’s right if left unregulated.

Meanwhile, my Chinese colleagues from Beijing marvel at how clean the air is in Denver, even during a thermal inversion.

 
 
Comment by Albuquerquedan
2013-01-12 12:34:04

Why I think there is some serious gold manipulation going on, heavy physical demand but heavy paper selling.

http://www.mining.com/american-eagle-gold-coin-sales-set-for-best-january-since-1999-60234/

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 12:56:08

“…serious gold manipulation going on…”

And that instills confidence in future gold price gains because…?!

Seriously, aren’t you gold bugs worried that central banks may conduct financial engineering maneuvers to shift losses onto your backs in order to prop up prices in their favored asset classes (houses, stocks, bonds)? That’s what I would worry about if I were a gold investor, as I fail to see any political roadblocks to dumping losses on the backs of a politically powerless group (similar to depriving savers of safe returns on CDs and Treasurys).

Comment by Albuquerquedan
2013-01-12 13:17:40

The manipulation has gone on for decades. That is why I reject that gold could be in a bubble. Unlike housing where the government is active in propping up the market. I do not fear the manipulation since it has gone on so long and in the end the physical market does trump the manipulation. I assume and play the manipulation.

 
Comment by Bill in Los Angeles
2013-01-12 13:46:11

Marc Faber, according to A link on today’s lewrockwell.com, is buying precious metals regularly still for life. In the short term he expects gold to drop to $1550.

 
 
 
Comment by moral hazard
2013-01-12 13:09:49

CNN on Staying in Your Foreclosed Home - YouTube
http://www.youtube.com/watch?v=KP8sTMhvkaE - 208k - Cached - Similar pages
Jan 31, 2009 … CNN on Staying in Your Foreclosed Home … Many of the loans that were made in the past five years that have created so many problems …

 
Comment by moral hazard
2013-01-12 13:38:57

My brother just fought through surgery, radiation and chemotherapy. Had to take all of his vacation time for the year but made every rent payment. Right at the end of it all Sandy hit (he lives in Long Beach on Long Island) he had to move out for a couple of months and while gone still had to pay his rent to keep the appartment.

How to Stretch Out a Home Foreclosure for Years

By Laura Rowley
Posted 10:00AM 10/18/11

For Janet, a 48-year-old attorney and mother of five who asked that her full name not be used, the process has stretched out for nearly 900 days, and counting. That’s more than two years without paying a single mortgage payment.

Her story is a lesson on how to keep a roof over your head.

From Success Story to Distressed Homeowner

And she bought property: “I reinvested every dollar I was making into real estate,” she recalls. “Some were vacation rental homes, or flipped homes, but I was always reinvesting.”

In 2006, Janet was diagnosed with breast cancer. She took out home equity lines of credit on the three properties she owned to pay the bills while she underwent treatment. “I thought the worst that could happen is I would sell the properties to pay off the debt, be healthy and go on my way,” she says.

Janet fought through surgery, radiation and chemotherapy. Too sick to work, she went on Social Security disability. In 2007, she put her homes up for sale. The first two went into foreclosure.

A Short Sale Fail

In spring 2009, Janet and the kids moved into the smallest of the homes. She owed about $298,000 on the mortgage and roughly $44,000 on a second lien. In December 2009, she found a buyer willing to give her $100,000 in cash for it in a short sale. Her lender, Bank of America (BAC), didn’t respond, and the court scheduled a foreclosure auction for February 2010.

In mid-2010, Janet’s cancer recurred and she began another round of treatment. She got a fiscal reprieve in October when the bank froze all of its foreclosures while it conducted an investigation of its processes. (Bank of America is still trying to cope with the aftermath of the mortgage meltdown.)

Embracing the Delays

In the meantime, Janet tried the mortgage modification route. From September to mid-December, she called the bank more than two dozen times to request its Home Affordable Modification Program application package.

In March 2011, Bank of America wrote to say Janet wasn’t eligible for HAMP because the home wasn’t her primary residence. She sent copies of her voter ID card, electric, sewer, water, and other bills showing she lived in the house.

In June, Janet learned she’d been approved for a trial period in HAMP — but the modified payment would be $19.96 higher than her original one. “I thought, ‘What kind of crack do you people smoke?’ If I couldn’t pay the first one, I can’t pay $19.96 more,” she says. “I sent a letter in to begin the process again.”

In the letter cancelling the HAMP offer, Bank of America suggested Janet try to do a short sale.

Lesser of Two Evils

Janet says for now, she’ll continue to return the ball every time it lands in her court, and will sue if necessary. “My original loan was with Washington Mutual, which was sold to Countrywide, which was sold to B of A, and I truly believe they don’t have the requisite documentation to foreclose,” she says. “But I still have avenues I can pursue on their own crazy agenda before I pursue mine.”

Janet’s ultimate goal: Hang on for another 18 months until her youngest kids graduate high school. She concedes the dubious ethics of her quest, but argues it’s the lesser of two evils — gaming the foreclosure system versus becoming homeless.

“I get it — it’s a moral hazard, but it’s not by choice. If I could have traded cancer and the loss of my profession, I would have,” Janet says. “People should walk in each other’s shoes before they make those moral high-ground judgments.”

http://www.dailyfinance.com/2011/10/18/how-to-stretch-out-a-home-foreclosure-for-years/ - 93k

Comment by rms
2013-01-12 15:13:16

“Janet has the classic American bootstrap success story. She left a dysfunctional family at 16, got a job and an apartment, finished high school and started college. By the mid-1980s, she was married with two toddlers, going to school and bartending at night. Her husband left, but she earned her bachelor’s degree and put herself through law school.

Decades of prosperity followed. Janet established herself as a real estate attorney and opened her own firm. Her children flourished. Janet remarried and had another child. She also adopted the 5-year-old child of a client who had died of cancer and whose spouse was killed in an accident a few months later.”

I’ve lived a boring life compared to Janet.

 
Comment by aNYCdj
2013-01-12 16:15:00

I dont think so If it inhabitable the rent stops….and they cant evict

Right at the end of it all Sandy hit (he lives in Long Beach on Long Island) he had to move out for a couple of months and while gone still had to pay his rent to keep the appartment.

Comment by moral hazard
2013-01-12 17:24:11

The LL said he had another tennant and I guess it is or was hard to find a place up there after the storm. I am sure legally you are right but if he went that route he was looking for another place.

Comment by aNYCdj
2013-01-12 21:12:57

MZ:

thats what happens when you have no idea how to use the internet..

Its staggering how many people today are so freakin clueless…. and wont even try to find answers….

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Comment by moral hazard
2013-01-13 08:53:57

“Its staggering how many people today are so freakin clueless…. ”

He is pretty far from clueless. He rents a place 1 block from the beach for $1,700 a month which leaves him a reasonable commute to his job in the city. He stayed at my sisters house in Greenwich for 7 weeks and is back in his place after the utilities were restored with no first last security plus moving expenses out of his pocket. He has a lot of money in the bank after having been through a divorse from a long term marriage where his ex-wife was left very well off after having raised 2 kids and put them through college (he paid, no student loans for the kids) with the jobs he had that started in the east and ended in fly over country. He owned 3 homes from the 80s through the early 2000s each of which he sold when he had to move as he climbed the ladder in his industry selling the last when he divorced and renting since.

He has just been cleared as cancer free after going through surgery, radiation and chemotherapy this past year all the while keeping his job and paying his rent. If he is “clueless” this country could use a lot more clueless people like him.

 
 
 
 
 
Comment by Bill in Los Angeles
2013-01-12 13:53:23

Gun popularity still going strong at least in Phoenix. This morning while buying ammo for both my handguns I asked about the CCW class. The guy there says sign ups are back logged for several weeks. But he gave me a flyer and said there is a chance someone won’t show up, so I could show up before a class and try to take the place of a no show.

Pelosi and Obamarx have been the gun industry’s best friends for getting business.

Comment by Neuromance
2013-01-12 14:59:05

To be fair, it’s probably both the Obama Administration plus the massacres.

If the massacres happened during the George Bush reign, people would be at least somewhat concerned about tighter restrictions on firearms. However, the massacres during the reign of Obama, who many suspect is not fond of firearms in the first place - well, that combination leads to the current frenzy of firearms buying.

 
 
Comment by moral hazard
2013-01-12 14:25:42

Special Report: The latest foreclosure horror: the zombie title

By Michelle Conlin
COLUMBUS, Ohio |
Thu Jan 10, 2013 1:58pm EST

(Reuters) - Joseph Keller doesn’t expect he’ll live to see the end of 2013. He blames the house at 190 Avondale Avenue.

Five years ago, Keller, 10 months behind on his mortgage payments, received notice of a foreclosure judgment from JP Morgan Chase. In a few weeks, the bank said, his three-story house with gray vinyl siding in Columbus, Ohio, would be put up for auction at a sheriff’s sale.

The 58-year-old former social worker and his wife, Jennifer, packed up their home of 13 years and moved in with their daughter. Joseph thought he would never have anything to do with the house again. And for about a year, he didn’t.

Then it started to stalk him.

First, in 2010, the county sued Keller because the house, already picked clean by scavengers, was in a shambles, its hanging gutters and collapsed garage in violation of local housing code. Then the tax collector started sending Keller notices about mounting back taxes, sewer fees and bills for weed and waste removal. And last year, Chase’s debt collector began pressing Keller to pay his mortgage, which had swollen, with penalties and fees, from $62,100.27 to $84,194.69.

The worst news came last January, when the Social Security Administration rejected Keller’s application for disability benefits; the “asset” on Avondale Avenue rendered him ineligible. Keller’s medical problems include advanced liver disease, hepatitis C and inactive tuberculosis. Without disability coverage, he can’t get the liver transplant he needs to stay alive.

“I can’t make it end,” says Keller. “This house, I can’t get out.”

The Kellers are caught up in a little-known horror of the U.S. housing bust: the zombie title. Six years in, thousands of homeowners are finding themselves legally liable for houses they didn’t know they still owned after banks decided it wasn’t worth their while to complete foreclosures on them. With impunity, banks have been walking away from foreclosures much the way some homeowners walked away from their mortgages when the housing market first crashed.

Since 2006, 10 million homes have fallen into foreclosure, according to RealtyTrac, a number that in earlier, more stable times would have taken nearly two decades to reach. Of those foreclosures, more than 2 million have never come out. Some may be occupied by owners who have been living gratis. Others have been caught up in what is now known as the robo-signing scandal, when banks spun out reams of fraudulent documents to foreclose quickly on as many homeowners as they could.

And then there are cases like the Kellers, in which homeowners moved out after receiving notice of a foreclosure sale, thinking they were leaving the house in bank hands. No national databases track zombie titles. But dozens of housing court judges, code enforcement officials, lawyers and other professionals involved in foreclosures across the country tell Reuters that these titles number in the many thousands, and that the problem is worsening.

The Kellers live in their daughter’s dining room, where their queen-size bed leaves little room to maneuver. Joseph can’t sit, stand or sleep for more than 15 minutes at a time. He can’t take pain medication because of his diseased liver. Every few months, he makes a trip to the emergency room, where doctors drain his abdomen of excess fluid.

Last May, Chase’s debt collector, Professional Recovery Services, sent Keller a letter: “At this time,” it said, “we are able to offer you a settlement of $25,258.41 on this account to be paid within 15 days.” He lacks that kind of money, as well as the $11,759.08 he owes to the county in back taxes.

“He’s dying,” says Keller’s daughter, Barbara. “He needs his name off this house.”

http://www.reuters.com/article/2013/01/10/us-usa-foreclosures-zombies-idUSBRE9090G920130110 - 112k -

Comment by Cantankerous Intellectual Bomb Thrower™
 
Comment by aNYCdj
2013-01-12 16:12:19

Some people get this and some dont…..Mr Keller did not.

A Bank does not own the property until the day the title is transferred and thus cannot lock you out of your own house until they are the legal owner.

 
 
Comment by Neuromance
2013-01-12 14:55:43

I’d like to see a Congressional committee called “The Unintended Consequences Committee.”

Bills would have to be run through this committee so that members wouldn’t only be voting on the name of the bill (”The Help For Widows And Orphans of Military, Police and Firefighters Bill”) but the actual spectrum of outcomes.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 15:43:26

Even as San Diego’s housing market comes roaring back, the number of families in crisis seems to be steeply rising.

Morning Report: Crisis Calls More Than Doubled
Posted: Saturday, January 12, 2013 6:00 am | Updated: 5:49 pm, Fri Jan 11, 2013.
by Sara Libby

An assistant police chief recently said crisis calls to San Diego police — calls that involve people who are suicidal, or those who are mentally ill — have shot up more than 50 percent since 2008.

Our Lisa Halverstadt crunched the numbers and gave him a True rating:

The numbers back up Long’s claim.

Long believes a still-unstable economy may be behind the increase in calls.

California and other states across the nation have reduced mental-health funding and resources to balance their budgets in recent years.

Comment by Bill in Los Angeles
2013-01-12 19:21:39

My first observation of people who I knew had mental health issues was their common lack of planning ahead as a habit for short term and long term. Also the refusal to learn from others and the refusal to learn from older people. These are important habits to get into while you g. They require attentive parents. Some people slip through the cracks and refuse to plan ahead no matter what the parents do. I summed it up by saying these people do not take control of their own destiny. Perhaps they think it’s impossible, despite the real world experience. I never like the idea of people using drugs to “cure” depression. They need cognitive psychological counseling to rewire their brains. The mass murderers Laughner, Holmes, Lansza were all made homicidal by not having their false premises fixed at an early age by psychological counseling. Maybe some are beyond a cure and should simply be locked up for good. What about the crack babies? What horrors will they committ when they grow up? Become president?

Comment by ahansen
2013-01-13 02:33:25

Are you implying that Anne Dunham, PhD., was a crackhead, or are you just being dickish? Most “crack babies” don’t graduate magna cum laude from Harvard. Did you?

 
Comment by tresho
2013-01-13 10:39:06

Martin Seligman, former president of the American Psychological Association, had an op-ed in WaPo on 3 Jan, titled “Evil vs. crazy: What’s in the minds of mass murderers?”

Since the massacre of innocents at Sandy Hook Elementary School, calls have rung out for improving “mental health services.” This deflects from actions that would save lives. Such calls blur the distinction — and I now dispense with the euphemisms — between what is crazy and what is evil. Further, they compound our national reluctance to face facts about what can and cannot be changed…Unlike the classifying and unpacking of craziness, modern science has shied away from unpacking and classifying evil. The two are separable: One can be crazy, evil, neither or both.

Plenty of people are both. Crazy people commit somewhat more violent crimes per capita than non-crazy people, but most crazy people are not evil….we must face the facts about the possibility of changing what is crazy and changing what is evil.

I have spent most of my life working with mental illness. I have been president of the world’s largest association of mental-illness workers, and I am all for more funding for mental-health care and research — but not in the vain hope that it will curb violence.

While revising five editions of my textbook on abnormal psychology, I have found that drugs and therapy offer disappointingly little additional help for the mentally ill than they did 25 years ago — despite billions of dollars in funding. And there is zero promise that any developments I am aware of will help curb the violence that mentally ill persons commit.

As for progress on restraining or rehabilitating evil people, the past record and future promise are even more dismal. I know of no development that has much reduced recidivism or violence or done more to identify violent offenders in advance than was in place a generation ago.

I conclude from all this that progress in reducing violence through either helping the mentally ill or curbing the impulses of violent, non-crazy people will be very slow in coming, perhaps even fruitless.

— Seligman goes on to advocate stricter gun control, despite the above. My point is that the experts have a very different take on this issue than BinLA does.
— Decades ago, “running amok” was thought to be a phenomenon limited to a few cultures, but more psych experts are now saying it occurs across all cultures.
— It is a fact that the US homicide rate has been much higher in years past. At the moment it is at a very low point. The US tends to have a higher homicide rate than western Europe.
— Meanwhile the greatest theft in world history continues, driving more and more people into destitution. This will have a knock-on effect on the homicide rate, but we mustn’t talk about things like that.

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 17:18:22

This severe global warming has frozen us San Diegans to a point where our rents no longer justify the sun tax we pay to live here.

Californians Brace for Several Nights of Freezing Temperatures
Story Published: Jan 12, 2013 at 10:22 AM PST
Story Updated: Jan 12, 2013 at 10:22 AM PST

SAN DIEGO (AP) — Californians are bundling up with sweaters and gloves and stocking up on firewood as they brace for several nights of very unseasonable freezing temperatures.

The National Weather Service is forecasting morning frost on San Diego beaches. Big Sur, on the central coast, prepared for daytime highs almost 20 degrees below Boston’s. Even the snowbird haven of Palm Springs faced the possibility of freezing temperatures at night.

In addition, San Diego zookeepers turned up the heat for chimpanzees, tourists covered their hands on Hollywood walking tours, and some farmers broke out wind machines and took other steps to protect crops from freezing.

Freeze warnings were in effect in San Diego County valleys and this Saturday morning with lows in the 20s and 30s.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 17:27:04

Two of my sons somehow both survived a campout last night in subzero (Celsius) temperatures.

Comment by Bill in Los Angeles
2013-01-12 19:23:37

I am worried about my cactus on my balcony!

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 19:51:39

We’re really lucky that we don’t have global cooling!

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Comment by loca in California
2013-01-12 22:47:28

It’s crazy. I’d figured a 15 degree temperature difference when I booked my vacation and that’s what I got. It’s 15 degrees colder than Localand!

But it is beautiful here and sunny. I’m in the land of bungalows and bungalow courts (LA/Pasadena) and I’m having a great time. Next stop San Diego. Brrrr.

Oh s**t, I just read about the shooting. No place is safe, is it?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-13 00:55:37

Safety is a matter of degree in American society.

For instance, I’ve lived in SD for almost a decade now. My wife is a Neighborhood Watch captain on our block and keeps tabs on the local crime data feeds. There has been sporadic serious crime in our immediate neighborhood since we lived here, including car thefts, home invasion robberies (facilitated by car break-in to use the garage door opener to gain access to the inner garage door), and the occasional robbery at the neighborhood convenience store.

But we don’t regularly hear gun shots on the streets around our home and nobody has been murdered or carjacked within five miles of where we live, as were among the experiences we enjoyed while living in Northern CA (Richmond).

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-13 01:01:50

I also lived in the inner city of a large Midwestern urban area before moving west. For a while I lived in a beautiful old apartment with hardwood floors which was located two miles from where I worked. It was a great location, except that it was in close proximity to a high-crime area, and had some Section 8 renters. One of the Section 8 folks who lived immediately above me flooded her bathtub while I was away on vacation, which ended up destroying the ceiling in my bathroom (immediately below hers) and flooding the beautiful hardwood floor of my apartment, which ruined it. Then shortly before I moved out, a fetching young lady and urban pioneer who lived in the apartment immediately next to mine had her door broken down and all her possessions cleaned out by criminals while she was out of town.

The latter event occurred shortly before I got married and moved out to a safer area, but I had had my real-world schooling on the joys and sorrows of inner-city apartment living with criminals in close proximity.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-13 01:05:53

P.S. We also have two cops who live on our block and another who lives a quarter mile away, all LDS church members and close friends of the family. It makes me feel more secure knowing we have these outstanding public servants living so nearby.

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Comment by Bill in Los Angeles
2013-01-13 08:35:05

There is a cop supervisor whose SUV (which actually has the “police supervisor” phrase on the paint) is parked in the carport within view of my kitchen window. I cannot deny that it helps at least somehow to deter break ins when the vehicle is there. Nevertheless, I have my Alarm system and the police would be here at my door before thieves find my Glock and ammo. Also I figured how to forward my Cell phone to the lab Phone where I work. So the alarm company would call in case the motion detector picks up motion. My values are within the area the sensors can pick up. I have my cell phone on all night ready for any call too. Heard from a Canuck who is out of Phoenix for months at a time. He uses a security alarm service as well and says he sleeps easy, never had a problem. Well it depends on how fast the cops get there. My Phoenix neighborhood has a substation within half mile.

 
 
 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 19:39:41

I have no problem with responsible owners collecting guns and using them responsibly. It’s when folks like the ones in the stories posted below have ready access to guns that I get nervous.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 19:43:52

My daughter and her BF were shopping at this mall today when this incident occurred. We have attended many movies at the theater where this shooting occurred, though luckily not today.

Armed man shot by police officer inside Carmel Mountain movie theater

Carmel Mountain OIS night scene
Posted: 01/13/2013
Last Updated: 2 minutes ago

SAN DIEGO - A San Diego police officer has shot and critically injured an armed man in a movie theater in Carmel Mountain.

Officer David Stafford said police went to Reading Cinemas Carmel Mountain 12 in the 11000 block of Carmel Mountain Road in response to a domestic violence call Saturday afternoon.

Stafford said the roughly 3:50 p.m. shooting occurred inside a theater. The officer was not hurt. No other details were immediately released.

According to a dispatcher with the San Diego Fire-Rescue Department, one person with a gunshot wound was transported to Palomar Medical Center. There is no word on the person’s condition.

The incident started as a domestic dispute between a man and his girlfriend shortly before 2 p.m. across the street in the parking lot of a Best Buy.

Police told 10News that officers were looking for who they described as an Asian man with a gun. The suspect was spotted at the shopping center shortly before 2:30 p.m. and police apparently confronted him inside the theater.

Comment by Bill in Los Angeles
2013-01-12 20:46:56

A few days ago in Phoenix a homeowner shot and killed a man who was trying to break through a window in his daughter’s room, after noticing the man reach into his pocket. Good job. One less creep in the world.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-12 19:49:22

We attend this movie theater regularly, most recently last weekend. Thank Heavens the shooter (apparently) didn’t use a Bushmaster.

Employee shot at San Marcos movie theater
By Teri Figueroa and Susan Shroder
9:29 p.m.Jan. 11, 2013

A window of the Edwards 18 Cinema in San Marcos was shattered by a bullet. A concessions employee was struck. A window of the Edwards 18 Cinema in San Marcos was shattered by a bullet. A concessions employee was struck. — Don Boomer

SAN MARCOS — A concessions employee was injured Friday night when a shot fired outside a San Marcos movie theater complex went through a lobby window and struck her, a sheriff’s official said.

The woman suffered a minor arm injury that was not life threatening, said sheriff’s Lt. Mike Munsey. She was transported to a hospital.

Sheriff’s deputies check out a concession stand inside the Edwards 18 Cinema where an employee was struck by a bullet.

Munsey said the shooting apparently occurred during a fight in the parking lot at Edwards San Marcos Stadium 18 on West San Marcos Boulevard, near Las Posas Road.

It was reported at 9:08 p.m., and prompted a massive response as authorities were initially unsure if there was an active shooter inside any of the 18 theaters, which were packed with moviegoers.

Comment by nickpapageorgio
2013-01-12 21:23:53

Now we are getting back to normal chaos, gang bangers and DV.

 
 
 
Comment by nickpapageorgio
2013-01-12 21:30:16

“We need more government to pay for all of the additional government.”

- Anonymous Progressive

“Is there any activity, food, service, habit or thought that the progressives will not attack and try to eliminate?”

- Concerned freedom lover

“Chaos - When you absolutely positively have to fundamentally change a perfectly good country in just under two terms.”

- Nickpapageorgio

Comment by Cantankerous Intellectual Bomb Thrower™
2013-01-13 00:45:02

Keep feeding that progressive strawman, dude!

Comment by ahansen
2013-01-13 02:40:44

Let me guess, it’s nick hating on America again, right? Why do you hate America, nick?

 
 
 
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