February 6, 2013

Bits Bucket for February 6, 2013

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

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 05:21:33

S&P E-Mails on Mortgage Crisis Show Alarm and Gallows Humor
Published: Wednesday, 6 Feb 2013 | 1:19 AM ET
By: Mary Williams Walsh and Ron Nixon

The executive at Standard & Poor’s was clear: “This market is a wildly spinning top which is going to end badly.”

That sober assessment of certain mortgage-related investments, delivered to colleagues in a confidential memo in December 2006, is now part of a trove of internal e-mails and documents that have come to light in a federal suit against S&P, the nation’s largest credit ratings agency.

The correspondence, made public in court documents late Monday, provide a glimpse at the inner workings of an institution that the Justice Department says fraudulently inflated credit ratings, with dire consequences for the entire economy. In a series of e-mails, tensions appeared to be escalating inside the firm’s headquarters in Lower Manhattan as it publicly professed that its ratings were valid, even as the home loans bundled into mortgage-backed securities, or M.B.S., were failing at accelerating rates.

One comes from an S&P analyst in March 2007 borrowing from the Talking Heads song “Burning Down the House,” creating new lyrics: “Subprime is boiling over. Bringing down the house.” S&P said prosecutors cherry-picked e-mails and that it would vigorously defend itself from “these unwarranted claims.”

In another 2007 e-mail, an analyst responds to a question about his new job: “Job’s going great. Aside from the fact that the M.B.S. world is crashing, investors and the media hate us and we’re all running around to save face … no complaints.”

Comment by goon squad
2013-02-06 07:11:39

And the bipartisan consensus on this shall be that nobody goes to jail.

Angelo Mozilo is laughing at you :)

Comment by PeakHubris
2013-02-06 10:15:28

Right. Not one single arrest. The fatcats and their toadies, the politicians, are conspiring against the American people to steal the fruits of their labor through every means possible. Obama has proven that he is pro status quo, and will do nothing to impede this willful destruction of the American standard of living.

Comment by rms
2013-02-06 18:39:46

“Comment by PeakHubris”

Welcome aboard, PeakHubris.

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Comment by cactus
2013-02-06 09:28:41

Trailing earnings results get the headlines, but for professional investors, what happened last quarter is nothing compared to company guidance for quarters to come. From that perspective the decent earnings we’ve seen thus far are masking a grim first quarter.

“We’ve had 61 companies overall issue guidance, 50 of those have been negative,” says John Butters, senior earnings analyst at FactSet, in the attached video. That works out to more than 80% warnings versus hikes, much higher than the 61% of companies trimming estimates during an average quarter.

As always the excuses are all over the board. Weather, sales cycle and lingering effects of the fiscal cliff debate have all been cited by different companies. Butters says the theme running through most of the warnings are stubborn weakness in Europe, the global economy, and a dash of whimpering about currency exchange rates being less favorable.

Comment by oxide
2013-02-06 10:56:20

I guess they don’t want to use “customer ain’t got no mo” as an excuse?

Comment by Pete
2013-02-06 17:49:50

“One comes from an S&P analyst in March 2007 borrowing from the Talking Heads song “Burning Down the House,” creating new lyrics: “Subprime is boiling over. Bringing down the house.”

Is there something about Jeff Saturday we don’t know?

Comment by joesmith
2013-02-06 05:24:08

Why buy now when you can buy later for 65 percent less?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 06:26:09

What makes you think so, given active efforts from on high to support housing prices?

You must not believe in the sustainability of such efforts; can you offer a single scenario to support your doubt?

Comment by joesmith
2013-02-06 06:37:48

I’m just filing in for RAL.

Haven’t you read my past comments on this issue? I think there’s a chance it could be sustainable. Maybe 20 percent? Depends on many outside factors.

I do expect house prices to decrease in real terms. In nominal terms, i would bet on sideways movement. The inflation in our economy will be cost push inflation, not demand pull inflation. We are getting to be an old country and old people generally do not buy houses. Demand from my generation is also lite.

Comment by joesmith
2013-02-06 06:39:08


Jesus this swype makes me look like more of an idiot than usual.

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Comment by Albuquerquedan
2013-02-06 07:53:05

No comment on the last line but on the comment above: Platinum and palladium hitting 16 and 17 month highs suggests some growth with the inflation being some pull with the push. But that is more true outside of the U.S.

Comment by robot
2013-02-06 09:43:18

how will they handle the millions shadow inventory? Many of them stay empty. how long can an empty house last without careful maintance before it is not livable any more?

The house market has long way to go. Maybe the US is the new japan

Comment by Avocado
2013-02-06 11:51:05

With all the “Blackstone” type groups buying thousands of homes from banks for cheap in hopes of turning them into rentals, wont we see a rental glut down the line?

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Comment by Arizona Slim
2013-02-06 12:01:37

With all the “Blackstone” type groups buying thousands of homes from banks for cheap in hopes of turning them into rentals, wont we see a rental glut down the line?

Last I heard, Tucson’s rental vacancy rate was around 16%. But that sure hasn’t stopped the SFR investors from snapping ‘em up, doing a little fixup, and then hanging the “for rent” signs out front.

And don’t get me started on the student housing building frenzy. I’ve already ranted that rant once this week.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 05:24:40

February 5, 2013, 7:13 p.m. ET

Payback for a Downgrade?
The feds sue S&P but not Moody’s for pre-crisis credit ratings.

Now, this is awkward. One agency of the federal government is suing a company for fraud while another agency continues to endorse it.

On Monday in Los Angeles, the Department of Justice sued Standard & Poor’s and its parent McGraw-Hill (MHP -11.98%) for $5 billion. The claim is that S&P committed civil fraud when it issued high credit ratings on mortgage-related securities prior to the financial crisis of 2008. Sixteen states and the District of Columbia have piled on the suit.

No doubt investors who relied on the opinions of S&P and the other big credit-rating agencies, Moody’s and Fitch, suffered terrible losses during the crisis. That was in part because the federal government forced investors to rely on them. Longstanding rules at the Securities and Exchange Commission and other agencies required institutions to hold assets graded highly by these government-approved rating agencies.

And to this day, more than two years after the Dodd-Frank law ordered their repeal, SEC rules still force institutions to follow the advice of these government-anointed credit raters. Therefore the more appropriate defendant for Monday’s lawsuit would be the SEC. But as a modest first step before suing a company for $5 billion, shouldn’t the government at least stop mandating its products?

Comment by palmetto
2013-02-06 07:12:20

“Payback for a Downgrade?”

As I commented yesterday, my thoughts exactly.

Comment by Albuquerquedan
2013-02-06 07:54:30

Yes, including the line about the SEC.

Comment by Bluestar
2013-02-06 08:10:29

I hope so. It’s about time the financial sector gets some respect from OUR government. The SEC has been a captured agency for decades so the DOJ is the only leverage left. Too bad they weren’t put in charge of investigating Wall St. back when the house of cards collapsed. I hope they go after Moody’s and Fitch too.
These firms sat on their hands in the midst of the Enron scandal to downgrade the firms debt. In fact, ratings agencies have been coming under fire as far back as the New York City debt crisis of the 1970s for failing to alert investors to the true creditworthiness of certain issuers.

Comment by polly
2013-02-06 14:42:39

The entire structure of regualtion of financial institutions is based on the ratings put out by these agencies. Insurance company reserves, pension funds, bank reserves, etc all have to include a portion of triple A rated bonds in their portfolios.

There are several alternatives. You could give up and all people in the country could be required to evaluate the safety of their banks and insurance company (etc.) reserves by themselves, eliminating the federal insurance on deposits and state supervision of insurance companies. You could request new private ratings agencies be started from scratch and hope they are better than the last ones. You could set up a federal agency to do the ratings instead. Please note that a federal agency is a terrible idea because, while the private rating agencies have issues with “capture” a government one would be worse because the pay would be much less and the revolving door would lead to even more bending over backwards than attempts to gain market share do with the private ones.

Only other alternative is to invite European ratings agencies (assuming they have something similar) into the approved market.

So, what do you prefer? I, personally, don’t want to have to do an audit of all the finacial institutions I do business with every year.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 15:17:10

“The entire structure of regualtion of financial institutions is based on the ratings put out by these agencies. Insurance company reserves, pension funds, bank reserves, etc all have to include a portion of triple A rated bonds in their portfolios.”

In other words, it’s a bad, noncompetitive ratings game with an insider oligopoly on control at the top.

Why should anyone be surprised about the ratings disaster, which was systemic?

Comment by Neuromance
2013-02-06 16:34:49

It is without question payback for the downgrade. Recall the S&P CEO was forced out mere weeks after the downgrade. And now this. It’s a chest-beating thing.

But - the government is not sticking to the script. Roubini once said, when asked why there was no serious investigation of the financial crisis, “Because then they would find the culprits.” The top guys see the big picture and know what they did. But trying to stick it to S&P might get Joe SixPack - the infantry - asking questions.

On the other hand, this could be more theater if the suit fails, stating, “See? This was all just a big accident, no malfeasance involved.”

Control frauds. That’s the core of the financial debacle. The insiders know it. But, being TCTJ, everyone just winks at each other. Except with S&P. When they went off script, the CEO was instantly removed.

But, I don’t think the government is really interested in finding culprits. Because as the one finger points at the executives, the other three point back at the politicians. Who are ultimately responsible for the regulatory capture under which the country is currently operating.

Corzine can lose billions, wiping out thousands, with no consequence. However, a Michigan state supreme court justice can hide an asset from a bank when trying to do a short sale and face jail time[1]. Or the elected chairman of the DC city council can lie about his income on a loan application and be convicted of a felony and removed from office[2].

Seeing a trend? The financial sector executives are the ones who run the country. They’re not called The Untouchables for no reason. Cross the sector, even over trivial matters and your hide will be nailed to the wall.

[1] http://www.seattlepi.com/news/crime/article/Ex-Mich-justice-pleads-guilty-to-bank-fraud-4232209.php

[2] http://articles.washingtonpost.com/2012-11-12/local/35504597_1_home-detention-jail-time-federal-court

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 05:28:41

Just as we were getting accustomed to affordable gas prices…

Local News
Gas Prices Chew Average Family Budget
By Mike Wille
Story Published: Feb 5, 2013 at 9:44 PM PST
Story Updated: Feb 5, 2013 at 11:38 PM PST

SAN DIEGO (CNS) - The average price of a gallon of self-serve regulargasoline in San Diego County topped $4 for the first time since Nov. 3 Tuesday, increasing 2.3 cents to $4.018.

The average price has increased 10 of the past 11 days, rising 30.7 cents over that span, including 1.4 cents on Monday, according to figures from the AAA and Oil Price Information Service.

The average price is 27.3 cents more than one week ago, 36.8 cents higher than one month ago and 22.5 cents greater than one year ago.

San Diego County is among five regions in the state where the average price is above $4, joining Los Angeles County ($4.033), Ventura County ($4.018), Orange County ($4.015) and San Luis Obispo County ($4.012).

The price hikes result from high oil prices, Middle East tension, California refinery maintenance issues resulting in reduced supplies, and investors shifting their money into the gasoline market “earlier and earlier,” according to Jeffrey Spring of the Automobile Club of Southern California.

Comment by goon squad
2013-02-06 07:14:17

And after Lucky Ducky fills up their tank to drive to their three part-time, no-benefit McJobs, how much cash will they have left to snap up all those $350,000 starter homes?

Welcome to the recoveryless recovery :)

Comment by In Colorado
2013-02-06 08:11:03

And I’m bummed that it’s risen locally from 2.70 to 3.20 in just a couple of weeks. It could be worse.

Comment by joe smith
2013-02-06 08:32:28

3.15 to 3.45 here.

The good ol’ “socialist homosexual” train tix are still just $7 from Camden Yards to Union Station-DC, though. No car required. :-p

Comment by goon squad
2013-02-06 08:59:33

You have (gay) rainbow streamers on your bicycle and ride the Metro Red Line around D.C.

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Comment by joe smith
2013-02-06 14:21:18

Pretty much the anti-John Rocker. How’d you know?

Comment by localandlord
2013-02-06 09:01:23

Has anyone read Matt Tabbibi’s book “Griftopia”. He’s got a chapter on commodities traders and their influence on gas prices.

I don’t remember if I heard about the book from this blog or elsewhere but I highly reccomend it. The chapter on the housing bubble is nothing new. I’ve gotten to the part where Tabbibi is skewering health care “reform”.

BTW - here’s a comment from page 54: “when private banks issue new loans the essentially create money out of thin air.” I never understood why y’all gave daryll so much grief about this assertion.

Comment by Arizona Slim
2013-02-06 09:39:52

I recommend that book. If, for nothing else, Taibbi’s exquisite way with words. Especially the salty ones.

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Comment by Prime_Is_Contained
2013-02-06 11:57:00

I never understood why y’all gave daryll so much grief about this assertion.

I thought (still do, actually) that he was mostly correct; QE was the money that most obviously didn’t fit into his “all money is borrowed into existence” mantra.

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Comment by joe smith
2013-02-06 14:23:28

I think Darryl was mostly right about his money/debt rants. Just like I think RAL is mostly right about his schtick.

I always thought people ganged up on Darryl because he bought a house in PHX for his children.

Comment by Prime_Is_Contained
2013-02-06 17:21:37

I always thought people ganged up on Darryl because he bought a house in PHX for his children.

I agree—and I thought it was messed up at the time. There are a great many reasons one might buy in _spite_ of a belief that prices still have lower to go.

Life is not all about money.

Comment by polly
2013-02-06 14:46:10

Daryll had a huge “I taught it, but they didn’t learn it” problem. He thought if he kept saying the same thing over and over, that people would understand him. He didn’t ever read the responses carefully enough to figure out that the people who attacked him didn’t understand what he was saying.

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Comment by michael
2013-02-06 15:14:49

“the people who attacked him didn’t understand what he was saying.”

folks should just spend half an hour or so on youtube watching “money creation” videos.

Comment by mathguy
2013-02-06 17:31:41

We gave darryl grief because he took a perfectly reasonable statement “debt is a form of money” and tried to perform a logical fallacy with it by stating “all money is debt”. It’s like taking the statement “dogs are mammals” .. perfectly reasonable.. then trying to convince everyone that “all mammals are dogs”.

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Comment by Ben Jones
2013-02-06 19:07:30

Who’s Darryl?

Comment by Prime_Is_Contained
2013-02-06 19:11:32


Ben, did you end up banning him, or did he just wander off?

Comment by Montana
2013-02-07 07:38:11

Still insulting the guy by misspelling his name…awesome pack behavior.

Comment by Avocado
2013-02-06 12:10:46

supply and demand. no new refiners (as big oil likes it) means high prices. they always win. It has been this way for half a century.

Comment by In Colorado
2013-02-06 15:17:29

An electric car is sounding better by the minute. If they can get the Leaf to a 200 mile range, I might get one when the time comes to replace the car. The price has also dropped. A 2013 Leaf is 28K, before any subsidies.

Comment by Avocado
2013-02-06 19:09:05

$3.89 at Costco in SLO. $4.29 at Shell near Madonna Inn.

Comment by joesmith
2013-02-06 05:29:19

Maybe the msm is catching on that the m.i.d. Is a long term drag on the nation’s financial health?


I bet the NAR will invest even more money in pro-MID propaganda in the next few years.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 06:27:15

“Maybe the msm is catching on that the m.i.d. Is a long term drag on the nation’s financial health?”

Even mental retards could figure this one out…

Comment by joesmith
2013-02-06 06:41:12

You would think so but a month ago a lot of msm and j6p types were getting frothy about possible “loss” of m.i.d.

Comment by joesmith
2013-02-06 06:44:53

Even though few of these people use the m.i.d. Out could explain how it works. Or really wins/loses.

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Comment by Albuquerquedan
2013-02-06 07:59:59

But the reason many of this board want to get rid of the m.i.d. is because they know it supports house prices. So maybe j6p who owns a home is not as stupid as you make him out to be. Personally, I believe that many that laugh at j6p would not last as long as he would, should a major disaster hit the U.S.

Comment by michael
2013-02-06 09:23:31

“But the reason many of this board want to get rid of the m.i.d. is because they know it supports house prices”

not nearly as much as the federal reserve…let’s get rid of them?

Comment by Albuquerquedan
2013-02-06 09:40:18


Comment by Dale
2013-02-06 11:20:13

“many that laugh at j6p would not last as long as he would, should a major disaster hit the U.S.”

…..sing it Hank Jr.!!!!

Comment by Overtaxed
2013-02-06 11:50:21

I’d support killing the MID for a few reasons:

1) Encourages higher prices to “get the max discount”
2) Encourages borrowing against the house and not paying down the loan as much as possible
3) Is used as a “sales tool” non-stop by Realtors -but—
4) it’s not that big a savings until you get to higher income and loan values. The “average” family doesn’t see much from the MID, but they THINK they do, therefore doing the stuff in 1 and 2 (not generally a good idea).

We should do everything possible to discourage debt, not encourage it. The MID does exactly the opposite.

Comment by Carl Morris
2013-02-06 13:17:58

We should do everything possible to discourage debt, not encourage it.

Now that the whole system is based on debt, is that still true?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 05:31:23

With all of this bearish sentiment afoot, there has never been a better time to buy stocks!

6 gut checks before the stock market’s opening bell
February 6, 2013, 6:51 AM
By Shawn Langlois

Good morning.

That selloff to start the week didn’t last long as the blue chips assaulted the 14,000 level again on Tuesday.

Stocks closed a whisker away from that psychological hurdle, but they’re poised to revisit it again once trading gets underway on Wednesday.

And when they do, corporate insiders will probably be tripping over themselves to unload their positions, if the recent trend is any indication. Unlike in December, when the ratio was 6.67 to 1, we can’t blame tax-related transactions for the fact that insider selling is outnumbering buying by an alarming 9 to 1.

The last time we reached this bearish bent was in June of 2011, according to the Vickers Weekly Insider Report. The market got ugly in a hurry at that point. So, are you a sucker for being swept up in the recent wave of Wall Street optimism? Good question to ponder as we head into what looks like another strong start.

Comment by joesmith
2013-02-06 05:36:16

Do we consider the national assn. of home builders to be as bad as the n.a.r.? Is Jim Tobin as much of a liar as lereah and yun?

Or is nahb doing God’s work by creating new units and driving down the price of used houses?

How does their scummy-ness compare?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 06:28:26

“Do we consider the national assn. of home builders to be as bad as the n.a.r.?”

No. The builders are cynically political, but at least they aren’t retarded.

Comment by joesmith
2013-02-06 06:42:42

Why do you assume n.a.r. Talking puppets are retarded? Maybe they are just evil or cynical?

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 08:22:54

Maybe they just pretend to be retards in order to keep us all fooled?

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Comment by hazard
2013-02-06 05:47:53

Posted: 12:54 p.m. Tuesday, Feb. 5, 2013

Cops say West Palm woman rented out neighbor’s foreclosed home, collected more than $13,000 in rent

By Sonja Isger

Palm Beach Post Staff Writer

A West Palm Beach woman is accused of commandeering her neighbor’s empty and foreclosed-upon home, renting it through Craigslist and collecting more than $13,000 in rent before the owner discovered the ruse and called the cops.

Nathalie Heil, 30, was booked into the Palm Beach County Jail on Friday. Facing charges of grand theft and fraud, she was released Saturday after posting $6,000 bond.

But Heil said she believes she has ownership of the house, stating that she filed what’s called “adverse possession” papers. The arcane Florida law, created hundreds of years ago, states that if a person claiming adverse possession stays in a home for seven years, paying taxes and caring for the property, they can take permanent ownership.

Andre De Palma Barbosa, the 23-year-old Brazilian now known as the “Boca Raton squatter,” used adverse possession to move into an empty foreclosed 7,000-square-foot mansion in Boca Raton in December.

As for Heil, she said the owner of the property at 314 Vallette Way abandoned the home more than six years ago.

She assumed that as soon as she filed her papers with the courts, the property was hers.

“Legally, I thought it was right,” she told the Palm Beach Post.

Heil said she’s received death threats since the story first ran on the Post’s website Tuesday afternoon.


Posted by CheeseusSonofdog at 2:57 p.m. Feb. 5, 2013

Who did she defraud? The owner, Juan Cedeno, has 8 foreclosures against him. He obviously got mortgages and then refused to pay when values declined. The ultimate deadbeat. The bank is to blame as well, as like most, they are refusing to foreclose. The bank filed in 2008 and never filed for the final auction. That is five years folks. If anything, this woman saved the bank big money by having an occupant preventing copper theives to come in and strip the home, or kids to vandalize it.

This story shows the truth about the housing market we have. Banks are refusing to foreclose. Homeowners refused to agree to the mortgages they willing signed up for. Homeowners who have stolen thousands from the rest of us when they don’t pay their mortgage, insurance, hoa and taxes. The deadbeats are the ones who ripped us all off. I respect this woman for taking advantage of the situation. It is time a taxpayer got some back.

Posted by CheeseusSonofdog at 3:01 p.m. Feb. 5, 2013

Let me add, Juan says he hasn’t checked on the home in 8 months. Yet foreclosure was filed against him way back in 2008. My guess is he was renting it the whole time and not paying his mortgage. Figure he stole several times as much than this young lady did. Why isn’t he being called out as a theif?

http://www.palmbeachpost.com/news/news/crime-law/cops-say-west-palm-woman-rented-out-neighbors-fore/nWGRF/ - 93k -

Comment by Jess from upstate SC
2013-02-06 06:23:11

If you don’t check on a house for 8 months, don’t pay taxes, insurance ,or mortgage payments on it for years, you have very little claim to it,seems like . My sympathies are with the new, if unconventional landlord.

Comment by palmetto
2013-02-06 07:16:51

“My sympathies are with the new, if unconventional landlord.”

Exactly. I applaud the landlord in this instance. She put the house to a good use, and made some money in the process. It’s the American way!

And yet she gets booked into jail and the Wall Street scamsters run free.

Comment by In Colorado
2013-02-06 08:14:08

I saw this sort of thing happen in San Diego county in the early 90’s. A friend had it happen to the house next door (in Escondido). He called the police, but they told him that unless the legitimate owner filed a complaint, there was nothing they could do.

Comment by ecofeco
2013-02-06 08:30:22

“…if a person claiming adverse possession stays in a home for seven years, paying taxes and caring for the property, they can take permanent ownership.”

She must have missed the part where she can’t take possession until AFTER 7 years.

Comment by Albuquerquedan
2013-02-06 08:40:18

You have to take possession, it is the ownership that occurs after 7 years and that amount of time varies by state as well as the need to pay taxes. However, that was the common law period.

Comment by ecofeco
2013-02-06 10:57:11

Oops. You’re right. I meant ownership.

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Comment by Blue Skye
2013-02-06 08:45:14

You can’t “stay in” a home for seven years without taking possession first.

Comment by Montana
2013-02-06 10:01:56

She was renting it out, wasn’t she? So someone else actually had possession most the time.

Comment by Prime_Is_Contained
2013-02-06 12:08:10

Yeah, I do wonder to what extent that would undercut an adverse possession claim. My guess would be that it would, though she can still claim that it was in her possession, as she she was the lesser renting it out. Her possession was certainly flagrant, what with listing it for rent in a public forum.

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Comment by Prime_Is_Contained
2013-02-06 12:34:48



Comment by joesmith
2013-02-06 05:52:54

Looks like an interesting program on silicon valley tonight on pbs.


Comment by goon squad
2013-02-06 07:18:21

Speaking of Silly Valley, this from the Times discusses how Fakebook is getting stale. Only depressed, narcissistic loosers still love Fakebook.


Comment by palmetto
2013-02-06 07:29:57

ha-ha, yes! I once had a job interview in which the interviewer stated that I needed to get up to speed technologically and get a faceschnook page in order to land the gig.

I told him the interview was at an end.

Dang, that felt good!

Comment by palmetto
2013-02-06 07:35:27

And that was after the guy bellyached to me about how they had a crew of young social media mavens doing all their faceschnook and twitter and other on line stuff, but it wasn’t bringing in a dime because they couldn’t talk to clients beyond “OMG!” and “LOL”.

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Comment by goon squad
2013-02-06 07:38:41

What do you mean they couldn’t find a way to monetize 14yo girls taking “duck face” pictures of themselves on their i-phones? That’s unpossible!

Comment by joe smith
2013-02-06 07:45:23

This can actually be a good business model. See, for example, The Chive.

Comment by palmetto
2013-02-06 07:47:38

Bwahahaha, nothing more pathetic than some boomer business person who bought the whole social media meme hook, line and stinker.

As my sis has observed, some businesses went all in for social media thinking they could avoid the one thing they really have to do in order to increase sales: actually talk to someone, either face to face or over the phone.

My stock line when someone expresses (gasp!) shock that I don’t have a faceschnook page is that it was never my ambition to become one of Mark Zuckerberg’s unpaid-for assets.

Comment by joe smith
2013-02-06 07:58:22

” never my ambition to become one of Mark Zuckerberg’s unpaid-for assets.”
So you don’t want to help The Zuck fund Chris Christie’s campaign war chest?

Comment by palmetto
2013-02-06 07:59:24

Just thinking how Gropeon and Faceschnook really missed the IPO boat through Really. Bad. Timing. Got all caught up in their own mythology and held out..and out.. and out.

Worse for Gropeon than Faceschnook, of course. Zuckerberg could afford the mess-up. Even if Schnook goes into the crapper, no biggie. Zuck’s still ridin’ high and laughing at all his “assets”.

Comment by joe smith
2013-02-06 08:10:18

fb is for the olds now. the lucrative demographic (kidz + young adultz) are all about tumblr and pinterest. 2012 was the yr of instagram until they went and f***ed it up with whacked out new policies, which was not surprising because of who purchased them (using 50% cash, 50% stock, which dilluted everyone who bought the FB IPO… oops!)

yelp looked like it was going to be huge but now there’s a backlash against it because its most vociferous reviewers often act like d-bags.

Comment by In Colorado
2013-02-06 08:18:11

The few tumblr pages I have seen all look like jumbled messes.

Comment by joe smith
2013-02-06 08:36:31

“The few tumblr pages I have seen all look like jumbled messes.”

But… but… they’re “curating the future” (or somesuch).

USV and Flatiron still own most of tumblr, I think. They might have brought some West Coast VCs in last round, though. These guys aren’t idiots, their track record is staggeringly good, check their crunchbase dot com profiles. I think tumblr has the #5 traffic of any website in the world now? And they just canned their last ceo john maloney who always seemed mildly retarded to me.

The guy who runs USV has a pretty interesting blog about VC called avc dot com.

Comment by ecofeco
2013-02-06 08:37:19

“As my sis has observed, some businesses went all in for social media thinking they could avoid the one thing they really have to do in order to increase sales: actually talk to someone, either face to face or over the phone.”

They also used Facebook as a substitute for a real business website, just like they do with blogs.

Now there’s nothing wrong with blogs, but neither were made for day-to-day business operations.

Comment by aNYCdj
2013-02-06 08:40:01

I just dont get pinterest….how can it be useful for business?

FB is getting lame….you could have 5000 friends yet very few post any kind of response…And that is the most important part of the social interaction..so what to do when there is none?

Is it time to clear out unfriend the 3000 friends that never post a response and hope the next 3000 do?

My dj radio friend asked me this last week. is there a way to unfriend in bulk?

Comment by joe smith
2013-02-06 08:40:49

“jumbled messes”

to be fair, i think this too. and i don’t understand what tumblr’s plan is as far as profits in the future. but until I see the VC’s rush for the exits (by rushing into an IPO so they can get paid out) i have to assume they know what they’re doing

also, i think the “kidz” like that tumblr is customizable, whereas facebook is pretty rigid, has a ton of weird default rules, and doesn’t care about anyone’s privacy, creativity, etc.

that said, the best tumblr add-on ever, something called “the missing e”, was banned by tumblr. so it’s not like tumblr is completely open-ended. they will allow mods, but they want to retain control as much as possible too.

google up “tumblr missing e contoversy” and some interesting stuff should pop up.

Comment by palmetto
2013-02-06 08:49:13

It’s sort of dot.bomb all over again. I don’t “get” tumblr, anyway. As to pinterest, meh. Pictures of stuff. Wow.

“These are a few of my favorite things!”

Ann Romney does pinterest, so I’m not sure if the youngsters are really the demo there. Maybe it has universal appeal, I dunno.

It’s all a confused mess, as far as I’m concerned. Just got an email from ebay, they’re trying to do a pinterest thing. Poor ebay. They had a good thing going and effed it up majorly by trying to be Amazon. Now they’re trying to be pinterest. Patooie!

Comment by palmetto
2013-02-06 08:54:43

“They also used Facebook as a substitute for a real business website, just like they do with blogs.

Now there’s nothing wrong with blogs, but neither were made for day-to-day business operations.”

Nailed it, eco. Az Slim is in the business and has commented on this phenomenon. I can understand why businesses might do this, but there really is no substitute for one’s own website, unless you are in a niche in the “stuff” business. For that there are marketplace websites that give you your own store. I had hopes for this model, but less than a handful do it well. And Google Shopping took a dump and screwed it up for all the marketplaces that were depending on that search.

Comment by joe smith
2013-02-06 08:55:51

“how can it be useful for business?”

Are you kidding? Pinterest has the most potential of any of these, via promoted posts. Brands will pay to create special posts, have their “pins” displayed on boards that have matching #tags or text, etc.

Tumblr also does promoted posts on its dashboard, I think. (I have a tumblr but haven’t updated in a while… I may check later today or on the way home on train)

Gilt Groupe is another example of what is currently “hot”. Gilt is a much better model than Groupon or Living Social.

Comment by Spook
2013-02-06 09:38:51

FB is getting lame….you could have 5000 friends yet very few post any kind of response…And that is the most important part of the social interaction..so what to do when there is none?

Pay me to pretend to be your friend?


Comment by aNYCdj
2013-02-06 10:46:07

Hmmm could be a new business opportunity…..heck they pay people to post glorious reviews of your book on amazon

Must be a way to automate your posts to your paid “friends”….

Comment by joe smith
2013-02-06 11:13:09

Must be a way to automate your posts to your paid “friends”….


This is already being done. There are services that will sell you Twitter follows, twitter re-tweets, facebook friends, facebook “likes”, etc.

Just use google. Type in “buy twitter followers” etc. Prices are surprisingly low. You can get thousands of twitter follows for ~$20.

Comment by MightyMike
2013-02-06 15:52:47

I saw part of that show last night. It has some information regarding the importance of government spending in the development of the integrated circuit.

Comment by Martin
2013-02-06 06:03:12

Hello Experts,
Yesterday there was some talk on the blog about hedging against inflation. With RE still very high in many areas what would be a good hedge. Or as Combo says: Staying cash is good as Cash is King in. the next 4-5 years

Comment by joesmith
2013-02-06 06:20:01

The best inflation hedge is to buy a small business and go to town on the tax advantages. Even if you ‘lose’ money, you make money.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 06:31:53

I’ve been talking to the missus about this idea for some time, but she isn’t biting. She has the executive skills to run a business, but simply lacks the desire to deal with the headaches. Given that we live in one of the most anti-business states on the planet, perhaps she has a point.

Hats off to business folks who are willing to put up with the headaches of starting a small concern.

Comment by joesmith
2013-02-06 06:54:36

You don’t start a small biz, you buy one that has existing revenue, expenses, tax history, credit history, etc.

Its what the big boyz do. Buy for cash, document it, then let the accounting and lawyerly activities commence.

The higher your other income, the higher your incentive to do this.

you’re not buying for the potential “profits”, you’re buying for the documented history of the business to barely break even or “lose” money. Its a tax vehicle and cash generator. Romney list the election but won the tax code, trust. And the average dumb american has no idea. Koch fluffing teabillies can’t deduce the real reasons they’re wretched refuse so they blindly support this “pro business” system.

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Comment by Martin
2013-02-06 08:55:27

Joe, How about a business like a fast food franchise on lease?

Comment by joe smith
2013-02-06 11:11:25

a franchise (any) seems like the worst fit for what I’m proposing. you have an unnecessary middle man and a slew of procedures, invoices, and accounting procedures that basically prevent what i’m suggesting.

you also likely get all the fun of meeting all the franchise “goals” and keeping your business up to corporate’s “standards”.

but the real big problem is that that your business can easily be compared to a baseline of other franchises. it becomes pretty easily to see what revenues “should” be, what the value of the inventory is, how much depreciation is normal, etc.

Comment by polly
2013-02-06 14:52:50

If you lease the business you get none of the accelerated depreciation deductions (paper losses) that are the real tax advantage. If you lease, your expenses are limited to what you actually pay, and someone else is taking the depreciation against your payments to them.

Comment by Arizona Slim
2013-02-06 08:50:50

Here’s today’s business headache: An organization that can’t get its membership dues act together.

This morning’s e-mail bag brought some puzzling news from a statewide business organization. Their message informs me that they’re de-activating my membership. And I paid for that membership late last year.

Their online invoice charged me one amount, which I paid. Shortly thereafter, I received a snail-mail invoice that asked for a higher amount. So, I called their headquarters and questioned the discrepancy.

I was told that paying the lower online amount was fine, that they were working out bugs in their database, and that I was good to go.

In response to today’s dunning e-mail, I said that if they want to de-activate my membership, fine. Go ahead and do it. If you can’t figure out how much to charge me, then I have better things to do with my money.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 06:37:06

My hedging strategy thus far has been to load up on real assets:

- fully-paid off Japanese automobiles
- big-ticket durable musical instruments and related equipment
- investments in “real” assets (stock market index funds, REIT, etc)

I plan to keep building my portfolio of real stuff during the “cash is king” period in order to be fully hedged once the deflationary eye of the storm gives way to hurricane force winds of inflation.

Comment by Prime_Is_Contained
2013-02-06 12:18:28

Do you really expect “hurricane force winds of inflation“, PB?

If so, wouldn’t you be best off leveraging up on a huge house?

Comment by rms
2013-02-06 22:22:40

“If so, wouldn’t you be best off leveraging up on a huge house?”

Problem with Stagflation is that income remains static or recedes while expenses accelerate. Been there; have the tee shirt.

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Comment by Albuquerquedan
2013-02-06 08:21:34

I like gold and the platinum group but while they all are precious metals they are useful at different times. Right now you see platinum and palladium moving in a major way. That is because besides being precious metals, they are quite useful industrial metals. Gold shines the most when there is inflation but no or low growth. The metals are telling us that there will be growth this year. If you look at the last week of trading, they also seem to be suggesting that the growth will primarily be outside the U.S. How I arrive at that conclusion is that platinum has been stronger than palladium. Platinum is most useful in pollution control devices for diesel engines while palladium is most used in gasoline engines. In Europe and most of the world diesel vehicles are preferred due to their better mileage. In the U.S. we use gasoline engines. So the growth in vehicle sales will occur outside the U.S. according to the metals. If something blows up in the middle east, I expect that gold would lead the rally since that would be bad for growth.

Comment by Albuquerquedan
2013-02-06 08:47:23

BTW, this is the hedge part of your assets. I would never advise anyone to have more than 20% of their assets in precious metals including stocks. How much should be the actual metal and how much paper metals, I leave to you to figure out since it varies due to your ability to store etc.

Comment by Bill in Los Angeles
2013-02-06 20:49:58

Good point (20%).

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Comment by Blue Skye
2013-02-06 08:51:15

An alternate read of the tea leaves could be that central banks are doing more self priming in Europe than in the US.

Comment by Albuquerquedan
2013-02-06 09:02:26

But that would create more demand in Europe so it does not contradict what I said it would just explain the reason for the growth.

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Comment by Blue Skye
2013-02-06 14:23:18

There’s the rub, central banks are enabling speculation a lot more than they are enabling demand from consumption. Free money for bankers and higher taxes for consumers.

Comment by cactus
2013-02-06 10:07:05

Or as Combo says: Staying cash is good as Cash is King in. the next 4-5 years”

if there is Deflation ahead this is a good strategy.

The FED is trying hard to inflate cash is trash in inflation

FWIW I think we will have more deflation as the population ages and the Government sucks up more and more of our GDP to pay for it’s own retirement.

This does not mean things will cost less, just there will be less extra money around despite the FED holding rates low to encourage lending and money creation.

So whatever the FED makes money availible for will go up in price , all else will fall.

Comment by Rental Watch
2013-02-06 10:25:26

I personally like REITs for an inflation hedge. Their outperformance often lags recovery, since their leases are 5+ years old, so leases signed in the worst of the downturn will “roll” to higher rents in the future, therefore increasing the REIT’s cash flow and dividends (and value?) in the future. If there is inflation, the increase in cash flow will be greater in the future, as presumably rents will have risen along with everything else.

In the meantime, they (the REITs) have the scale and sophistication to take advantage of cheap interest rates today…you can look with pretty good precision what the average duration is of their debt, how much they have and how much is FIXED rather than variable interest rates. Most that I’ve been following have been fixing more of their debt and extending maturities, while at the same time lowering the overall amount of leverage.

And unlike buying a rental home, if you want out for whatever reason, it’s the click of a mouse, and a $9 sales commission, not a long marketing process, all sorts of disclosures, lack of diversification, and a 6% fee.

Comment by Bluestar
2013-02-06 11:01:57

I spotted a IRS ruling yesterday that now allows solar power plants to become REITs. I wonder what the minimum size will be? If a solar system can produce electricity at grid parity or better for 20-30 years they make good sense from a financial perspective.

The wild card is someone will come out with a better technology before you depreciate the solar plant.

Comment by Rental Watch
2013-02-06 11:29:17

I think I’d rather buy stock in a utility company.

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Comment by Bluestar
2013-02-06 11:46:02

I know you put a lot of weight on established, proven REITs but if you saw the big players moving in to set these up there might be a good play for the first few years depending on the leverage. This ain’t trading carbon credits.

As for utilities I wonder who is going to get hurt when the Energy Futures Holdings LLC blows up? They leveraged this $43 billion dollar deal with long term natural gas contracts that are 50% underwater.


Comment by Rental Watch
2013-02-06 12:32:20

I understand if you can get on the ground floor, it might make sense (you might get the yield to justify what could be less efficient dividend taxation). Otherwise, my concern really relates to tax treatment and stability of business model. If solar REITs trade at traditional utility company dividend yields, they’ll be kicking off 5% or so, which COULD be taxed as ordinary income (unless there is heavy enough depreciation to lower the tax bill). Utilities, while not having the tax efficiency of REITs (ie. double taxation at corporate and dividend levels), at least the 5% you get paid is “qualified” meaning tax to the investor at 20%, not 40% of a REIT (if they are kicking off ordinary income).

On the REIT front, while I like established well-run REITs, I actually only own one of them in any significant amount. I’ve made a lot more money (on paper) by buying REITs that were nearly driven into the ground due to too much leverage, but owned “bread and butter” real estate…industrial/distribution and basic needs retail. The other kind broadly that I own, and are performing solidly (with hopefully more improvement to come) are essentially start-up REITs with very good management, in similar “recession-resistant” product types (I don’t consider anything “recession-proof”).

Don’t have time to read the Bloomberg article, but will later…thanks for the link.

Comment by Avocado
2013-02-06 12:16:03

I am researching REIT’s, but feel that buying now might be “late for the party.”

What are your favorites? (two) (psec)??

Comment by Rental Watch
2013-02-06 12:39:44

I think most are pretty fully valued (if not a bit over NAV). My bias is toward industrial and basic needs retail.

One that I like as a big gorilla/global hedge against major currency devaluation is PLD. They have the best industrial management in the world as far as I know, and great real estate.

Smaller ones with good management that I like are TRNO (run by a couple of former AMB execs who invested a lot of their own money in the company), and ROIC (run by Stuart Tanz–built Pan Pacific from a $500MM REIT to $4B REIT).

I also like EXR (storage), run very well, but they are pretty highly priced currently from what I can tell.

A couple of recovery plays that have largely recovered, IMO are DDR and FR…although FR has yet to restart their dividend (some think that is coming soon), in which case there could be a little pop as funds that can only invest in dividend paying stocks would be buyers again.

I generally think that movement up from here will be dictated by rising rents driving up FFO, and concerns about inflation pushing people into the sector…like you, I think the low-hanging fruit has been picked.

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Comment by Rental Watch
2013-02-06 17:38:48

BTW, PLD had their earnings call today. Hamid Moghadam (CEO of PLD) is among the brightest bulbs in the world when it comes to industrial. Here is a piece of the conference call (courtesy of Seeking Alpha, who posts the transcripts).

Here’s the part from Hamid related to how the income in their portfolio lag actual increases in market rents.

“….given the nature of how this stuff rolls through the portfolio with expiration of leases, obviously in 2008 and ‘09, certainly in 2008, you’re still rolling off peak rents, and by 2009, you pretty much got to the bottom of the market and every new lease you were doing there was at a pretty low number. So when you roll out 4.5, 5 years forward of that, by ‘14 it should really pick up. But we roll 15%, 20% of the portfolio in any given year. So even the market — if the spot rents recover substantially, it still takes a while before it works through the portfolio.”

Comment by Rental Watch
Comment by Prime_Is_Contained
2013-02-06 19:15:12

So when you roll out 4.5, 5 years forward of that, by ‘14 it should really pick up.

Have their rents really increased that much on leases written since 2009?

I find that surprising… Sure, there may be some recovery relative to the rock-bottom rates they were giving out to avoid huge vacancies during the trough. But not THAT much, I wouldn’t expect. It’s not like the economy was really rockin’-n-rollin’ in 2010 or 2011.

Comment by Rental Watch
2013-02-06 22:22:20

You can see the numbers from their reports, annual rent per square foot by year of expiration:

2013: $5.31
2014: $4.97
2015: $5.00
2016: $5.38
2017: $5.40
Thereafter: $6.18

Looks like the roll up in rents (gross) will be anywhere from 5%-20%, depending on the lease/location.

For perspective, if they increased their revenues by 5%, all else equal, their core FFO would increase by 13%.

When the market does tighten though, many expect market rents to increase by upwards of 5-10% per year from where they are today as well…I think the comment from Hamid is more a comment related to the discounting they did to keep the buildings full than it was related to a booming recovery in 2010/2011–I think market recovery in rents are coming in the future.

We have a (tiny compared to PLD) portfolio of industrial assets, and we have seen significant improvement in rents over the past 6 months…it’s amazing how much a nickel per month means when your starting point is $0.30 per square foot.

Comment by joesmith
2013-02-06 07:17:22

Stocks too visible and easily valued. Really going to cost you in terms of fin aid when your kids go to college.

Comment by Combotechie
2013-02-06 07:34:17

Financial aid is one of the few areas whereby accumulated wealth gets a whack right along with income.

Usually it is income that gets whacked. Usually whatever income that gets by the whacking of the various tax men gets a free ride after it is converted into assets - converted into stored wealth.

But in the realm of financial aid not only is income looked at but stored wealth is also looked at.

Comment by joe smith
2013-02-06 07:53:50

stored wealth is also looked at.


I know polly is going to chime in here and rain on my parade, but here is the one sentence version of my explanation: It is not that simple for the government (or a college) to identify and value all of your assets, not all assets are looked at equally, and the word of your lawyer and/or accountant is very important (if not dispositive) is valuing your assets.

There are reasons that the asset owning class pays their lawyers and accountants well, first and foremost that the ROI is excellent. (Just ask Mittens! or observe is 1000 page tax returns!) For J6P, lawyers and accountants are not needed. And when they are needed, they are merely an expense.

Comment by polly
2013-02-06 17:01:40

You are assuming that there will be no increase in sophistication in valuation of assets or analysis of income or any changes in the way financial aid offices look at income and assets over two decades and, in reality, I don’t think you are really right about the way it is done now. Nobody values a company using taxable profit (after accellerated depreciation deductions) as the only metric.

Sounds like your parents and/or grandparents may have gotten away with something for your particular schooling a decade ago and now you assume that you will easily be able to play the same game. I think you are wrong, but it matters very little. If you have just one kid and stay in your $140K house and your wife stays a teacher and you are in private practice (even if you aren’t a partner) you will be able to pay tuition and expenses for your hypothetical special little star out of free cash flow with astonishing ease.

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Comment by In Colorado
2013-02-06 08:23:22

And you don’t need that much income to get whacked regarding college financial aid. The only “free” money my kids get are merit based scholarships. All other aid offered has been nothing but loans. You pretty much need to be a lucky ducky to get free money, which wasn’t the case 20-30 years ago.

Comment by ecofeco
2013-02-06 08:43:51

I am amazed, AMAZED at how many people still thought college was free just ten years, if only you were just poor enough!

They would not, often belligerently, believe me when I told them college had quit being “free” back in the early 1990s.

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Comment by ecofeco
2013-02-06 11:10:41

“ten years AGO”

Comment by joe smith
2013-02-06 08:50:36

This is because state universities a) don’t have all that much state support anymore and b) are positioning themselves as “brands” and “sports factories”. The money isn’t for your kids’ education anymore, it’s to build new amenities, parking garages, stadiums, and marketing campaigns.

Your avg state school with >10k students spends a lot more on its 3rd string free safety than it does on its Education, Nursing, or [other useful major] undergrads. Future teachers and nurses are future union-thug “takers”, why should taxpayers support their education at all?!

Meanwhile, quite the opposite of the public universities, the top colleges will fall over themselves offering full ride scholarships to any admitted student who has a combined parental income under 100k. HYP and a few others have completely eliminated loans from their needs based fin aid. If you can get a 1300 SAT (M+V), decent GPA, and show parental income <100k the world is your oyster, you will at the very least get a largely full ride to Johns Hopkins, Cornell, or similar. (Because they don’t need tuition, the endowment pays for everything. Their graduates pay to run the school, not the parents of current students. And most of the parents can easily afford full tuition anyway. Also note: these schools don’t waste money on sportz.)

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Comment by Martin
2013-02-06 09:00:07

Joe, well said. Universities nowadays are nothing more than factories, like the business schools churning our MBAs in evening, part-time, weekend, executive etc. programs. Primarily to make money for their highly paid professors and facilities in their buildings.

I wonder if MBAs are still getting jobs as they used to get. Is MBA still worth the money especially if not from a top10 school.

Comment by Carl Morris
2013-02-06 09:32:45

I wonder if MBAs are still getting jobs as they used to get. Is MBA still worth the money especially if not from a top10 school.

I don’t know about startups and finance. All I know is that for a techie who would like to move into management they are not worth it. They can be used to justify why you are on the fast track, but they will not put you on the fast track if you’re not already there.

Having said that I enjoyed learning about that side of the business world and do not regret doing it.

Comment by In Colorado
2013-02-06 09:38:56

Meanwhile, quite the opposite of the public universities, the top colleges will fall over themselves offering full ride scholarships to any admitted student who has a combined parental income under 100k.

Maybe at the well endowed Ivies. The best we were offered from regional private schools was 50% (my kids both scored in the 95th percentile on the ACT) which still left a tuition bill in the 15K+ range. At 5K (after the merit scholarships) the local State U was far, far cheaper. I did know a kid who got a full ride to the University of Denver, but his ACT score was in the 99th percentile.

Comment by In Colorado
2013-02-06 09:58:19

I don’t know about startups and finance. All I know is that for a techie who would like to move into management they are not worth it. They can be used to justify why you are on the fast track, but they will not put you on the fast track if you’re not already there.

Having said that I enjoyed learning about that side of the business world and do not regret doing it.

Agree 100%. Plus I was lucky that theMBA program at CSU was cheap at the time ($8000 for the entire program). But it never opened any doors for me. All potential employers saw was a middle aged techie who wanted to change careers.

Comment by joe smith
2013-02-06 10:45:28

The trick is that for the very top schools, the alumni are very successful and the alumni fund the school. Tuition and fees are really just bonuses for the school, a rounding error in their total budget. The only reason the top 25 schools (roughly the top 15-18 universities and top 8-10 liberal arts schools) charge tuition is because it’s basically free money. If the parents make 250k/yr and have a couple million in assets, they will cough up the money to send their kid to Amherst or Swarthmore or Hopkins instead of sending them to the local state U.

The trick is getting into one of these schools. A person from the true middle class has an uphill battle because they’re against kids from resource-rich families. Once you get in, though, the school doesn’t really need the tuition money.

Most schools today don’t really follow the traditional university model. When we think of a traditional university, we think of very prudent financial management, stockpiling of endowment money, and money being directed primarily (if not exclusively) at academic ventures and research. People like to hate on Berkeley, but they’re the only flagship state university that still does this and even their tuition is rising (almost $12k for in state tuition). Another interesting case is Northwestern vs the rest of the Big10: the difference in priorities is staggering. If you can get admitted to Northwestern, you’ll get better fin. aid than the other “sportz factory” schools.

Comment by Arizona Slim
2013-02-06 12:07:18

Another interesting case is Northwestern vs the rest of the Big10: the difference in priorities is staggering. If you can get admitted to Northwestern, you’ll get better fin. aid than the other “sportz factory” schools.

True, dat. I almost went to Northwestern so that I could attend Medill.

Comment by joe smith
2013-02-06 14:33:02

Michigan reports a total cost of $27k in state this year and over $50k out of state.

What was it like a generation of so ago? Safe to assume it was much more affordable? I wonder how much of the increase went to educational reasons.

Comment by polly
2013-02-06 17:09:19

“Maybe at the well endowed Ivies.”

Colorado, he is talking about a dozen schools in the entire country, maybe two dozen if you include the top kids at honors colleges at the very few state universities that still have them and fund them. The ivies have zero scholarship money for anything other than lack of money - not for sports, not for academic prowess, not for being the best tuba player in the country, nothing. You gotta be broke.

Actually, when I was at one of these schools, a friend was required to pay a few thousand even though her family was dead broke from rural Maine and provided her with nothing. They thought she should be married and pushing out babies, not learning anything. Her department bent over backwards to get her work related to her classes to make up for the extra her parents wouldn’t even try to cover. I’m pretty sure the financial aid office was violating its own policies because her parents wouldn’t even fill out the forms for her.

Comment by localandlord
2013-02-07 05:41:47

“What was it like a generation of so ago? Safe to assume it was much more affordable?”

Heck yeah it was more affordable. Another reason to hate us boomers. A quarter’s tuition at the state U was less than some people’s cable bill today. So 3-4 mo high end cable if you count for inflation. Out of state tuition at UGA was about the current monthly payment you’d expect on a mid size SUV with a few options.

Comment by Avocado
2013-02-06 12:18:07

Tell your kids to travel the world, then go to college at age 25, it will be nearly free then if they have zero income. Yours does not count at that point. And get a degree in Pharmacology, not History.

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Comment by Prime_Is_Contained
2013-02-06 12:33:35

Tell your kids to travel the world, then go to college at age 25, it will be nearly free then if they have zero income. Yours does not count at that point.

Back when it was relevant to me, there was one other approach that was shorter than waiting until age 25: if you were financially independent (e.g. not receiving support from your parents) for two years, then you also did not have to list your parents’ income.

That worked great for me, though it was logistically challenging at times.

Comment by Carl Morris
2013-02-06 13:20:17

I’ve heard that financial independence can be difficult to prove these days. It was easy as a married veteran in 1991.

Comment by Avocado
2013-02-06 19:17:25

Why the rush to go out and put on a tie and get a “real” job?

25 is young. you can start the junior college route at 18-23, be sure to get all A’s, be all done at 27. With high marks you will get scholarships.

Comment by goon squad
2013-02-06 07:29:31

Because invisible hand of free market, private sector, for profit, job creator, bootstrapping producers know best:

“New York’s selection of a university geologist and gas-industry consultant to study hydraulic fracturing and earthquakes prompted a drilling opponent to say conclusions of a state agency may be tainted.”


Comment by goon squad
2013-02-06 07:36:04

Because Lucky Ducky’s three part-time jobs don’t have no health insurance:

“HCA Holdings Inc. (HCA), the largest for-profit U.S. hospital chain, gave an earnings forecast for this year that was lower than analysts’ estimates as recent revenue gains become overshadowed by unpaid hospital bills.”


Comment by joe smith
2013-02-06 07:43:14

Ah, the crown jewel of the Frist family.

(BTW, whatever happened to former Senator Frist? He seemed to have a very bright future as recently as a few yrs ago)

Comment by palmetto
2013-02-06 07:50:20

“recent revenue gains become overshadowed by unpaid hospital bills.”

Jose can you see, by the dawn’s early light…

Comment by goon squad
2013-02-06 07:59:29

And after we legalize 11 million of them and import another 50 million thanks to Teddy Kennedy’s “chain-migration” policy, expect to see even more of this :)


Comment by Albuquerquedan
2013-02-06 08:02:09

But goon, if we legalize them, it is easier to hide their true costs.

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Comment by Avocado
2013-02-06 12:20:55

Bush had full control for 6 yrs and did nothing.


Getting rid of illegals is EASY, if they wanted to. Just make it impossible to rent a place or use our schools. Other countries do that.

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Comment by palmetto
2013-02-06 14:22:34

“Bush had full control for 6 yrs and did nothing.”

Sigh. The last president who really DID anything about illegal immigration was Ike. Every pres since has more or less permitted it, Reagan did the first amnesty.

Ike showed how it could be done. He also showed how to bring the non-productive parasitical rich to heel.

I Like Ike!

Comment by joe smith
2013-02-06 07:56:50

Not sure why HCA doesn’t even show up in ex Sen. Frist’s old Senate bio…


Do all similarly situated Senators omit the fact they are a scion of a wealthy WASP family?

Comment by ecofeco
2013-02-06 10:35:31

As often as possible.

Comment by ahansen
2013-02-06 11:25:13

America’s House of Lords.

Comment by Pimp Watch
2013-02-06 14:51:56

“America’s House of Lords.”

Yep. And I’m fascinated by reading “Joe’s” posts. He seems to understand a few things.

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Comment by In Colorado
2013-02-06 10:46:53

“as recent revenue gains become overshadowed by unpaid hospital bills”

And it’s only gonna get worse as more people get shoved in to HD plans with higher and higher deductibles. Many will see the $20,000+ bill, see that the insurance already paid most of it and say “screw it, I don’t have the $3000 to pay the deductible.”

Comment by aNYCdj
2013-02-06 10:53:37

Colorado it will probably spawn the barely making it generation

If you are barely making it, so you run up a $50K hospital bill….you aint got nothing to attach and might as well file for BK every few years anyway. So hiding assets,(gold coins) and serial BK will be the norm.

Comment by joe smith
2013-02-06 11:22:24

Does HP do the HD healthcare plan thing?

If so, it’s interesting considering what they pay Meg. She donates money to build this:


while she cuts jobs, freezes salaries, and changes health benefits.

“Let them eat cake” indeed.

Also, Meg Whitman… mom of the year:


“Griff was suspended for a year and forced to graduate with the class of 2009; among his alleged antics: throwing a beer in someone’s face and justifying it because he’s a “billionaire,” and beating up a girl. Will’s classy behavior allegedly includes: getting kicked out of two prep schools, throwing around the N-word, getting himself banned from Princeton’s hoity-toity eating clubs, and refusing to introduce a girlfriend to his family because she was Jewish.”

You can’t make this stuff up…

Comment by In Colorado
2013-02-06 11:48:29

When I worked at HP, several options were offered on Healthcare plans (as I suppose all big companies do).

At smaller firms, or larger firms that mostly hire lucky duckies, it’s a different story. Those usually only offer HD plans or even if they do offer other options they are too expensive for the majority of their employees.

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Comment by polly
2013-02-06 15:02:17

A lot of hospitals used to consider people with HD plans as pretty much the same as self pay (meaning, the money was essentially a loss) until the deductible was covered. That may be changing as more people with a few bucks to their name get stuck with HD plans. Back when I got my information, it was almost entirely lucky duckies who had the HD plans and they never had the money for the first few thousand bucks of coverage.

Comment by goon squad
2013-02-06 07:52:07

Some local newz about the nanny state, anti-constitution, gun grabbers

Denver Post - Colorado Democrats call for liability for makers of assault-style guns:

“Colorado Democrats on Tuesday announced a far-reaching package of gun bills that includes a measure to hold manufacturers and sellers of assault-style weapons legally liable for damage inflicted with such firearms.

Republicans called the liability proposal a de facto ban on semiautomatic rifles and “extreme,” a term also used by one Democrat. And a Second Amendment scholar said such a bill would conflict with federal law.

“It bans the legal sale of semiautomatic guns in Colorado,” said state Sen. Greg Brophy, R-Wray, a staunch gun-rights supporter. “It’s the most extreme anti-gun measure I think we’ve seen. This is the equivalent of holding Coors, the distributor and the 7-Eleven from which the 12-pack of beer was stolen responsible for the drunk-driving incident.”


Comment by In Colorado
2013-02-06 08:25:42

It’s posturing. It contradicts a Federal Law, hence it will be challenged and struck down.

Comment by ecofeco
2013-02-06 10:44:48


Comment by goon squad
2013-02-06 09:42:52

Opinion piece by Rev. Jesse Jackson endorses the nanny state gun grabbers:


Comment by aNYCdj
2013-02-06 10:49:43

So whitey wants gun control for black people to save lives and we are called racists……

Comment by Spook
2013-02-06 13:45:26

Why are so called BLACK Leaders Anti-GUN?

He deals with Jews too.

Two groups of people who got no business jumping on any anti gun bandwagon given their history of victimization


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Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 08:07:29

Bears are coming out of hibernation early this year!

Corporate insiders have gotten aggressively bearish

Commentary: Company insiders are aggressively selling their shares, and, Mark Hulbert writes, this delevoping trend should send a signal to rank-and-file stock investors.

Comment by ecofeco
2013-02-06 10:46:16

Exactly. And that message should be… SUCKERS!!!!!!

Comment by nickpapageorgio
2013-02-06 16:44:19

Corporate insiders are given shares of stock every year, the executives on the top of the food chain get substantial amounts. A lot of this selling could just be a case of JoeExecVP selling 10% of his holdings in a hot market.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 08:09:25

Enter the Neo-Malthusians!

Feb. 6, 2013, 9:56 a.m. EST
Economy can’t defy laws of nature forever
Commentary: Chris Martenson examines a toxic global economy
By Al Lewis

DENVER (MarketWatch) — When the global economy finally collapses, we might look back at the work of a neurotoxicologist named Chris Martenson and say, well, I guess that guy was right.

Meantime, it will be easier to listen to the loudest economic cheerleaders and question whether a neurotoxicologist has any business diagnosing the economy in the first place.

Martenson runs a website where he offers a compelling “crash course” explaining why the global economy most certainly will crash in our lifetimes. See Martenson’s website, PeakProsperity.com

He identifies plenty of toxins, but his basic argument goes like this: Since the 1970s, the U.S. has been accumulating debt and printing money at a much faster pace than its economy actually is growing.

Exponentially compounding debt is OK if we have an exponentially growing economy to pay it off. But our economy can’t keep growing exponentially because we are running out of cheap resources.

Comment by Albuquerquedan
2013-02-06 08:31:50

It is a variation of the bicycle theory and it is spot on. We have created a system where we either have fast growth or the system collapses. The best example of this is in pensions, we need the stock market to increase 7% a year to fund the pensions. But that means companies need to have a 7% increase in their nominal profits each year, you cannot do that for long when the GDP is growing at a rate of 4%, (2% real and 2% inflation).

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 08:10:27

Feb. 6, 2013, 7:31 a.m. EST
So God made a banker
Commentary: A commercial for the next Super Bowl?
By Brett Arends

To be read in the voice of Paul Harvey.

And on the eighth day God looked down on his planned paradise and said, “I need someone who can flip this for a quick buck.”

So God made a banker.

God said, “I need someone who doesn’t grow anything or make anything but who will borrow money from the public at 0% interest and then lend it back to the public at 2% or 5% or 10% and pay himself a bonus for doing so.”

So God made a banker.

God said, “I need someone who will take money from the people who work and save, and use that money to create a dotcom bubble and a housing bubble and a stock bubble and an oil bubble and a commodities bubble and a bond bubble and another stock bubble, and then sell it to people in Poughkeepsie and Spokane and Bakersfield, and pay himself another bonus.”

So God made a banker.

Comment by goon squad
Comment by ahansen
2013-02-06 11:32:20

And the SuperBowl

“OpLastResort @OpLastResort

Now we have your attention America: Anonymous’s Superbowl Commercial 4k banker d0x via the FED http://acjic.alabama.gov/documents/oops-we-did-it-again.html … #opLastResort #Anonymous”

Comment by Pimp Watch
2013-02-06 15:04:47

“Anonymous hacks the Federal Reserve”



Comment by Prime_Is_Contained
2013-02-06 13:15:47

Awesome!! Love this… :-)

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 08:12:42

Feb. 5, 2013, 6:01 a.m. EST
Tim Geithner: The exit interview*
Commentary: What did the Treasury secretary say on his way out?
By David Weidner, MarketWatch

SAN FRANCISCO (MarketWatch) — Treasury Secretary Timothy Geithner stepped down from his post Jan. 25. President Barack Obama has nominated Jack Lew to the job.

*In this column we imagine Geithner’s “exit interview” with President Obama. Lew, who received a $900,000 bonus from Citigroup Inc. amid the bailout, is sitting in.

President Obama: Thanks for coming Tim. What’s happening at Treasury?

Timothy Geithner: We’re winding down our investment in Ally Financial and other bailout investments and it looks like another win for taxpayers. Read full story on Ally bailout exit plan .

Obama: Really? Ally still owes taxpayers $14.6 billion. And as the bailout watchdogs have noted, you don’t really have a concrete plan.

Geithner: Well, we have our metrics. I ran it through Turbo Tax. Read related commentary on Geithner’s tax controversy .

Obama: Uh, OK. But please be cognizant of how things look. For instance, I want to make sure that you don’t make a misstep and return to Goldman Sachs too soon.

Geithner: But I never worked at Goldman!

Jack Lew: What about Citigroup? Is Citi an option, Mr. President?

Obama: We’re getting hammered in the media about the revolving door. I nominated Mary Jo [White] to be chairman of the Securities and Exchange Commission and everyone is whining that she’s been in the pocket of Wall Street for more than a decade.

Geithner: Maybe you should of thought of that when you created TARP.

Obama (looks at teleprompter): I didn’t build that. That was Bush!

Comment by WT Economist
2013-02-06 11:14:22

He gave a real exit interview to The Economist.


And he will apparently join the Council on Foreign Relations.

From the interview:

“Mr Geithner has also developed rules of engagement for a crisis. The choices that face a policymaker are almost always bad. Don’t intervene, and you risk collapse; intervene, and you reward bad behaviour and outrage the public.

“You are going to make mistakes, so you have to force yourself to decide which mistakes are easier to correct,” he told The Economist in a recent interview. “In a crisis, you get to a point where you have to decide that you’re going to risk doing too much, because it’s easier to clean that up.”

Success also requires certain character traits: an ability to make decisions quickly in the fog of war without dwelling on what outsiders are going to say. Indeed, Mr Geithner is terrible at the “theatre” of being treasury secretary: he delivers speeches badly, hates lobbying, and has trouble behaving deferentially to Congress.

Comment by Ben Jones
2013-02-06 11:23:42

‘Success also requires certain character traits: an ability to make decisions quickly in the fog of war without dwelling on what outsiders are going to say.’

Did they include some cotton candy with those softball questions at the Economist?

‘The important moment in the book for me comes conveniently after Barofsky recounts this FDL News item, one of my HAMP horror stories. Barofsky shows how HAMP’s faulty design led to all sorts of problems like this, with trapped borrowers, extended trial payments, no-doc modifications, and eventually unnecessary foreclosures. Barofsky mused that Treasury didn’t care about the suffering of borrowers under HAMP, and the issue came up in a meeting with the Treasury Secretary, which was also attended by Elizabeth Warren, then the head of the Congressional Oversight Panel, another TARP watchdog.’

‘Warren asked Geithner repeatedly about HAMP. After several evasions, Geithner said about the banks, “We estimate that they can handle ten million foreclosures, over time… this program will help foam the runway for them.”


Comment by Arizona Slim
2013-02-06 12:12:28

Your HBB Librarian highly recommends Barosfky’s book, Bailout.

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Comment by Carl Morris
2013-02-06 11:29:21

has trouble behaving deferentially to Congress.

Yeah, not everyone can keep up with such a charade.

Comment by oxide
2013-02-06 12:34:34

I suspect that Geithner is plenty smart enough to keep up with the charade. Chances are he had a mental block against charades.

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Comment by michael
2013-02-06 12:53:43

geithner’s a tool.

Comment by goon squad
2013-02-06 08:15:21

Washington Post - Scholars sketch bleak economic picture for black Americans:

“Scholars gathered for the African American Economic Summit at Howard University on Friday sketched an alarming picture of the financial ills afflicting the black community even as the nation recovers from the recession.

The white-black wealth disparity is more than 20 to 1. Black homeownership has declined. Black joblessness is up. Black income is down.

As the conferees gathered, the government released new figures showing the black unemployment rate at 13.8 percent, nearly double the 7.0 percent for whites. The overall jobless rate is 7.9 percent.”


Question for the HBB: how will the legalization of 11 million illegal immigrants and the subsequent importation of 50 million more through “chain migration” policies affect the economic status of U.S. citizen blacks?

And for the COEXIST koolaid drinkers, a repost of a heartwarming tale of “our differences only make us stronger”


Comment by Albuquerquedan
2013-02-06 08:37:11

Illegal immigrants hurt blacks, Hispanics and other low income minorities far more than they hurt white people but they continue to vote for open borders. I guess if removing white people from power is your primary goal it makes sense but we will all have to live in the society that open borders creates and none of us are going to like it.

Comment by goon squad
2013-02-06 09:13:49

Here’s one for the coastal elitist, bedwetter libtard, cultural relativists:


Comment by palmetto
2013-02-06 10:45:10

“PREGNANCY at such a young age can only occur after what is known as “precocious puberty” - where menstruation starts at an unusually early stage.”

I read about this phenomenon, and it was said that this comes about as a result of someone having been “at” the child. Frequently a family member or “friend” of the family who has access to the child. I can’t recall where I read the article, but although it’s not true in all cases, usually if you see a child with prematurely budding breasts, chances are they’ve been de-flowered, so to speak. Ever since I read that, I cringe when I see one of these little preemies among one of these “family groups” at the food or big box stores around here.

God help us all if these folks gain dominance in the US. I don’t think people have any clue as to the depth of depravity and chaos in these primitive societies that are taking root here. Complete denial.

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Comment by goon squad
2013-02-06 11:02:08

But it must have been consensual because you can’t get pregnant from “legitimate rape”, right?

And just imagine, if her kidz and their kidz and their kidz all start young too, she could be a great great grandmother at age 36 :)

Comment by ahansen
2013-02-06 11:43:33

Dad was 17 at the time and has not surprisingly “disappeared”.

Btw, palmy, my baby was born with “prematurely budding breasts” and I can assure you he wasn’t “had at” in utero. There are any number of medical and non-medical conditions that can account for premature puberty, including… puberty.

So assuming that a young pubescent girl in a “family group” has been sexually active is kind of creepy when you stop and think about it.

Comment by palmetto
2013-02-06 14:02:09

“my baby was born with “prematurely budding breasts” and I can assure you he wasn’t “had at” in utero.”

I should hope not.

“Dad was 17 at the time and has not surprisingly “disappeared”.”

“So assuming that a young pubescent girl in a “family group” has been sexually active is kind of creepy when you stop and think about it.”


Comment by palmetto
2013-02-06 14:14:58

“my baby was born with “prematurely budding breasts”

I always wondered who gave birth to Simon Cowell.

Comment by ahansen
2013-02-06 14:40:27


If only….$$$!

Comment by polly
2013-02-06 15:09:12

Could oxide please chime in with a list of sources of environmental estrogen that can lead to precocious puberty so we don’t have to listen to palmy’s absurd hypothesis. Sperm doesn’t give you breasts. Estrogen does.

Comment by albuquerquedan
2013-02-06 16:36:49

Before you personally attack Palmy you should know they are some supportive studies of Palmy’s view:


Comment by albuquerquedan
2013-02-06 16:44:11

Palmetto, there is a link coming soon that supports your view.

Comment by albuquerquedan
2013-02-06 16:46:56

An excerpt:

Survivors Of Childhood Sexual Abuse

May 22, 2009 — African-American women who were younger at menarche, or the onset of their menstrual periods, were more likely to report a history of childhood sexual abuse, according to a new study led by a researcher at Boston University’s Slone Epidemiology Center. The results suggest that a history of sexual abuse may increase the risk of early menarche (i.e., onset of menstrual periods before age 12 years

Comment by albuquerquedan
2013-02-06 16:52:21

“Could oxide please chime in with a list of sources of environmental estrogen that can lead to precocious puberty so we don’t have to listen to palmy’s absurd hypothesis. Sperm doesn’t give you breasts. Estrogen does.”

Conclusive proof no, but from from an absurd hypothesis.


Comment by albuquerquedan
2013-02-06 16:57:25

God help us all if these folks gain dominance in the US. I don’t think people have any clue as to the depth of depravity and chaos in these primitive societies that are taking root here. Complete denial.

The “prophet” of Islam had a nine year old wife. Many Imams defend the marriage of girls before puberty. With the illegals I have a problem with the subculture but with many of the Islamic countries you cannot even call it the subculture, it is the culture.

Comment by albuquerquedan
2013-02-06 16:59:03

far from an absurd hypothesis.

Comment by polly
2013-02-06 17:13:36

It never occurred to you that girls that develop secondary sex characteristics at a younger age are more likely to have had unwanted sexual encounters?

Cart, meet horse. Now get the heck behind him.

Comment by palmetto
2013-02-06 19:13:05

“palmy’s absurd hypothesis”,

B*tch, PLEASE!

Sigh. I think I prefaced my post with the information “I READ about this phenomenon, and IT WAS SAID that this comes about as a result of someone having been “at” the child.”

So, not my hypothesis, but as dan demonstrated, something published by those who have studied sexual abuse and who are far more learned in the subject than I.

With that said, I’ve recently read H.L. Mencken’s somewhat amusing but ferociously condescending screed on the “lintheads” of the South and the fate of latter day Honey Boo-boos at the hands of their male relatives. And it sort of lines up with the conclusion of the British travel author who wrote “God’s Middle Finger”, an account of his (sometimes harrowing) sojourn in the Mexican hinterlands. The conclusion being that the inhabitants of those areas are basically hillbillies, Latino version, and accordingly, act as such.

PS: Thanks, dan. I’m no fan of Rush, but I swear, getting feminazi’ed just wears out the soul, especially when said razor-toothed double breasted mattress thrashers don’t bother to READ before they react.

Comment by goon squad
2013-02-06 19:16:15

Cart, meet horse. Now get the heck behind him

And with the BPA plastics and all the hormones in the milk and meat (that Lucky Ducks who don’t shop at Whole Foods buy), expect to see many, many more “jailbait” eight year old girls tempting the horny teen Sons of Aztlan :)

Los Angeles clothing manufacturer American Apparel has normalized the sexualization of pre-teen girls (and boys:)). Having sex with eight year old girls is only the next logical step in Obama’s secret agenda to implement Sharia law in USA.

Comment by palmetto
2013-02-06 19:41:44

“Obama’s secret agenda to implement Sharia law in USA.”

Does that mean we’ll have to address Michelle as The Begum Obama Khan?

Comment by Albuquerquedan
2013-02-06 19:44:56

According to lead author Lauren A. Wise, ScD, an epidemiologist at the Slone Epidemiology Center and an assistant professor of epidemiology at Boston University School of Public Health, it is biologically plausible that childhood sexual abuse could influence age of menarche.

So Polly maybe you could read the link before commenting. Don’t think the “experts” asked whether the sexual abuse occurred prior to the menarche? Funny I can’t dispute the experts of climate change but you can dismiss this expert without even examining her methodology. Cart meet Ass, now get the heck behind me.

Comment by palmetto
2013-02-06 20:00:18

“So Polly maybe you could read the link before commenting”

Silly fellow, people who know everything, and are NEVER wrong, don’t read links.

Once again, appreciate the backup, bro’. Thanks to you, I survived the attack of the razor-toothed double breasted mattress thrashers. Felt like someone had tied me into a bag with a bunch of cats and then started beating the bag. Dang! (palmy applies some more hydrogen peroxide to the scratches) Well, none the worse for wear!

Comment by palmetto
2013-02-06 20:06:26

Anyway, it’s all goonie’s fault. He likes to get everyone going with links to provocative articles, and then steps back and enjoys the show.

goonie, you little dickens, you.

We wuz goonie’d. lol.

Comment by Albuquerquedan
2013-02-06 20:12:52

No problem. I use to ignore personal attacks but I feel that until you respond in kind they will not end. You made it very clear that it was something you read and I was able to find the study in about 5 minutes. I wish we could just stick to the facts and not attack each other on a personal basis. If she disputes the study she needs to find a study that contradicts the results. It is kind of like Obama’s attack on S & P when you think about it, shoot the messenger.

Comment by palmetto
2013-02-06 20:35:37

“I use to ignore personal attacks but I feel that until you respond in kind they will not end.”

It’s gettin’ so you almost have to wear a cup in order to post here. Chomp, Chomp, Chomp indeed.

That said, I do enjoy the give and take on this blog, it’s a heckuva lot more interesting than some of the more saccharine venues where the people post photos of their pets and post those cutesy emoticons after just about every word.

Comment by Spook
2013-02-06 09:46:28

“Scholars gathered for the African American Economic Summit at Howard University on Friday sketched an alarming picture of the financial ills afflicting the black community

Was this really necessary?

Who paid for this event?

Comment by Avocado
2013-02-06 12:26:55

Lets say Howard University supplied the coffee and room with chairs.

so what!!

Bush mailed $6B to Iraq and it all disappeared.

know your enemy

Comment by goon squad
2013-02-06 08:48:29

You are all slaves on the global plantation owned by the 0.1%

“The commoditization of global agriculture has aggravated the destabilizing effects of these large-scale land grabs. Investors typically promise to create local jobs and say that better farming technologies will produce higher crop yields and improve food security.

However, few of these benefits materialize. For example, as The Economist reported, a Swiss company promised local farmers 2,000 new jobs when it acquired a 50-year lease to grow biofuel crops on 154 square miles in Makeni, Sierra Leone; in the first three years, it produced only 50.

Many investors, in fact, use their own labor force, not local workers, and few share their technology and expertise. Moreover, about two-thirds of foreign investors in developing countries expect to sell their harvests elsewhere. These exports may not even be for human consumption.”


Comment by ecofeco
2013-02-06 10:52:02

Corporate colonialism as work for YOU!

Comment by goon squad
2013-02-06 09:23:56

Drudge link fails to mention 30+ years of failed trickle-down economics, bipartisan supported outsourcing and deindustrialization, and invisible hand of free market health care system as contributing factors to this:


Obviously part of the plan for Obama’s marxist utopia :)

Comment by ecofeco
2013-02-06 10:53:38

Who say trickle down failed? It worked exactly as advertised.

It sure as hell wasn’t a flood.

It was a trickle.

Comment by goon squad
2013-02-06 09:26:11

Another Drudge link. Note the media’s preferred terms “teens”, “youths”, “students”, etc when describing these incidents:


Comment by ecofeco
2013-02-06 10:55:43

It begins…

Oh, and these are not “flash mobs”. They are just “mobs”.

Comment by palmetto
2013-02-06 14:39:01

Amen. Political correctness be danged. If I’m at a mall, big box store, public street, meeting place, whatever:

If I see a group of hopped-up black youts suddenly appear, I’m gonna run.

If I see a group of grinning, tatooed, head-shaven Sons of Aztlan suddenly appear, I’m gonna run.

If I see a group of camouflage-clad Anglo youts with bulging eyeballs suddenly appear, I’m gonna run.

Like the wise man said, safety first.

Comment by MightyMike
2013-02-06 16:12:51

What if I switched around those three sentences? Would you react differently to hopped-up white kids or black kids with bulging eyeblass wearing camo?

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Comment by nickpapageorgio
2013-02-06 16:54:30

If I see a group of Obama Black Shirt fascist automatons suddenly appear, I would run.

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Comment by aNYCdj
2013-02-06 11:03:54

Now it makes sense to toss the animals into Fema camps in the middle of winter in Alaska…..they are away boasting survival of the fittest….

Comment by Bluestar
2013-02-06 11:10:35

Actually I think it’s oxygen starvation. Did you know that global levels of O2 have declined because we burn gigatons of fossil fuels every year?


Compared to prehistoric times, the level of oxygen in the earth’s atmosphere has declined by over a third and in polluted cities the decline may be more than 50%. This change in the makeup of the air we breathe has potentially serious implications for our health. Indeed, it could ultimately threaten the survival of human life on earth.

Comment by Albuquerquedan
2013-02-06 11:28:09

The sites name is disinformation and I am suppose to accept its conclusion? CO2 promotes plant growth which causes more oxygen to be released so the problem seems to solve itself. BTW, for any readers in the northern middle part of the country there is some very cold air heading your way in 8-14 days. As far as the globe, there is no doubt we are cooler than the average in 1998, hard to have AGW with no GW.

Comment by Bluestar
2013-02-06 11:36:43

Well Dan go find me a graph of O2 levels. The Scripps Institute has some data. scrippso2.ucsd.edu

Speaking of colder weather…
Second warmest January in past 35 years…


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Comment by Albuquerquedan
2013-02-06 12:07:05

Why not read this with that data, which the author admits has a very fluke like quality to it:


Comment by Albuquerquedan
2013-02-06 12:19:13

When the link posts you will see the fluke nature of the data. However, I will admit surprise since it is not confirmed by ocean data but the explanation in the link sounds plausible and should reverse in a major way in February. BTW, the explanation was natural event that we have talked about previously on the board.

Comment by Bluestar
2013-02-06 13:01:32

Sudden Stratospheric Warming? I read somewhere these SSW events dwarf the energy released by a hurricane and do it in a really short period of time. I think SSW events are like a boiling pot of water with a loose lid. When too much heat builds up in the atmosphere it’s nature’s way of dumping it into space. Of course just the IR heat is radiated into space, the CO2 and the rest of the gases just cool off and sink which is why the polar vortex splits when it happens.

Comment by Albuquerquedan
2013-02-06 14:07:23

While as you can read the link does not use the terminology but what they describe does sound like it. You probably have more knowledge of the phenomena since I have always considered it a weather and not a climate event. However my curiousity is peaked since it impact on the short term satellite readings is stunning. Of course, in the medium and long term it is a cooling and not a warming event.

Comment by ahansen
2013-02-06 11:49:30

I was going to reply with a tautological response, but Danny beat me to it. Except his wasn’t ironic.

Comment by joe smith
2013-02-06 12:15:12

I lol’d at this.

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Comment by goon squad
2013-02-06 12:00:15

Fail to see the connection between this and 7-Eleven getting looted, but you and Danny seem to enjoy the topic.

Comment by Albuquerquedan
2013-02-06 12:08:51

Yes and I sent a link that will post from the same site he posted.

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Comment by Albuquerquedan
2013-02-06 12:11:13

But I think I might have a link Goon. Blue areas of the country are 02 deprived hence the crime and voting patterns. Red areas are rich in oxygen so they have low crime. (sarcasm).

Comment by Bluestar
2013-02-06 12:13:30

Yeah I was pulling your leg on that one. My comment was just anecdotal evidence that urban areas suffer from us screwing up the environment. Ever wonder what would happen when you dump millions of tons of pharmacological products into municipal waste water systems? You think that stuff might seep back into the food supply?

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Comment by Albuquerquedan
2013-02-06 12:30:43

here is information from the climate emergency institute which while being a very AGW site puts this data into perspective:


Although atmospheric O2 levels are gradually declining as CO2 continues to accumulate in the air from fossil fuel combustion, fortunately an O2 crisis is not yet a likely scenario. Oxygen is quite abundant in the atmosphere that even when fossil fuel reserves (mostly coal) are exhausted, the maximum potential loss in oxygen is only small (Broecker, 1970). The oxygen decline of 0.0317% is considered not significant and should not arouse serious concern at this point. Mr. Ray Langenfelds of Commonwealth Scientific and Industrial Research Organisation (CSIRO) Australia further adds that this level of oxygen reduction actually has no impact on our breathing (Science Daily, 1999). He said that typical oxygen fluctuations indoors or in city air can actually be greater than this.

In fact, scientists agree that today, oxygen levels are even less than 20.95% in certain areas such as densely populated, polluted city centers and industrial complexes (Tatchell, 2008). According to a UN adviser, Professor Ervin Laszlo, “Currently the oxygen content of the Earth’s atmosphere dips to 19% over impacted areas, and it is down to 12% to 17% over the major cities” (Tatchell, 2008). Hence, the oxygen decline currently recorded is still not a serious environmental concern at this point.

Comment by Albuquerquedan
2013-02-06 13:24:17

BTW, if you compare January of this year to January 1998 under this set of data, January 1998 was cooler:


Comment by Bluestar
2013-02-06 13:31:09

Thanks Dan. Sometimes I like to pull your chain but I agree we are not running out of oxygen. Still the depletion of O2 is a man made side effect, just one of hundreds that are happening concurrently with natural cycles.

Comment by palmetto
2013-02-06 14:43:00

“This change in the makeup of the air we breathe has potentially serious implications for our health.”

Absolutely. I’m no scientist, but I am firmly convinced this phenomenon is at the root of various “modern maladies”, such as rampant obesity, autoimmune diseases, weird infections, etc.

Isn’t the flesh-eating bacteria anaerobic, for example?

Comment by Albuquerquedan
2013-02-06 09:44:05


Ban all metal knives now. COSTCO plastic knives are more than adequate to cut food.

Comment by Spook
2013-02-06 10:18:14

the super bowl is a pyrrhic victory for Baltimore.

Its the only place Ive ever lived where I expect I could be robbed at gun point of my coat and boots.

And Ive lived in NYC.

Comment by joe smith
2013-02-06 10:53:05

You need to move south of Lombard* or west of Greenmount :-P

It’s frat-tastic down in Canton, we can hang out @ Mama’s on the Half Shell or Bay Cafe sometime if you want?

* south of Eastern Ave would be even more preferable

Comment by joe smith
2013-02-06 10:55:07


Green - caucasian
Red - asian
Blue - black

Knowing this, it’s really easy to figure out where Eastern Avenue and Greenmount are, even if you barely know baltimore.

Comment by joe smith
2013-02-06 11:16:16

another interesting stat is the # of homicides in each district.

Northern and Southeastern Districts have basically no homicides (when they do occur, they are usually domestic situations). I could be wrong, but I think there was only 1 homicide in all of Southeastern last yr and it was a mentally deranged mother killing her child.

Meanwhile, Eastern and Western had 40 or 50 homicides each.

Comment by Albuquerquedan
2013-02-06 11:45:17

Joe, there is a “Mark of the Red Death” quality to your comments, you believe that you can ignore high crime rates because it is not in your area and I guess the victims are not of your race. It is unfortunate that such areas are ignored until someone is killed that is not from that area or race.

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Comment by Bluestar
2013-02-06 11:53:44

The Better Angels of Our Nature: Why Violence Has Declined


You may disagree with his conclusions(I do) but he has good numbers to back up his claims. But just like global climate statistics, if you want to be a skeptic you got to look at both sides.

It’s all good until somebody fires off a nuke on a population center then his theory goes poof!

Comment by joe smith
2013-02-06 12:25:48

What does stating some facts have to do with justifying the situation?

I feel bad about the situation, I am pointing out that speaking about a city as a whole isn’t really that useful. The aggregate data isn’t nearly as useful as the varied and nuanced picture.

My solutions to the problem are probably different than yours, but that’s a different issue entirely. For example, I think that we need to come up with ways to make work (labor) make sense and be preferable to welfare. We should focus on actual homeland security by discontinuing the war on drugs and watching drug prices crash. We should spend far less on the military and on medical care for the last months of life invest some of it in re-thought K-12 ed and health care for children. We should close the border and require people staying to obtain a legal status (not necessarily full citizenship). Etc. I’m sure we could argue about the details, but that’s not the point.

Comment by Albuquerquedan
2013-02-06 12:54:36

Bluestar, I think that there are three main causes for the decline of crime in the U.S. and reasonable minds can disagree on the importance:

1. Increased incarceration of habitual criminals. We have started to release more people and crime rates are inching up.
2. Taking lead out of gasoline and paints. The link between lead and violence is clear.
3. Abortion. No question that taken as a whole the a lot of the people that have been aborted are people that genetics and environmental circumstances would have led to a life of crime.

Comment by Bluestar
2013-02-06 14:17:16

I think the topic was violence not crime. The drug war is 90% crime and maybe 10% violence. Crime is a legal definition of what a society decides is moral and ethical. In the jungles of New Guinea they say there are still some tribes that practice cannibalism. To them it’s not a crime but it sure seems violent!

Comment by Albuquerquedan
2013-02-06 15:20:28

Bluestar put violence where I say crime and I stand by what I said.

Comment by Rental Watch
2013-02-06 17:15:17


The Freakonomics guys outline a lot of research on the abortion/crime link the things that stuck with me after reading that book (the gist);

1. Lots of politicians (ahem, Giuliani, ahem) took credit for “cleaning up” the streets, when the abortion link is much more clear than increased police presence; and
2. It is easy to say that with legal abortion, there are fewer kids brought up in environments without strong AND present parental figures, with stable finances, thus leading to fewer criminals. Decreased crime rates started to take hold roughly 18-20 years after Roe v. Wade. The most convincing part to me though was the research into countries where abortion was made ILLEGAL, and the converse turned out to be true…a spike in crime rates 18-20 years after abortion was made illegal in those countries.

Comment by oxide
2013-02-06 12:31:24

A couple months ago I took a wrong turn in Baltimore and wound up in the Northwestern section and had to drive down Reisterstown road back to downtown.

That northwestern section didn’t look too good.

On the way back, I took W North. Whoh, bombed out city. A lot of those houses didn’t even have boards in the windows… they were just wide open to the winter air. I drove through a few good blocks near Hilton, but it was just that, blocks. Any of the nice neighborhoods are an easy run from a bad neighborhood. No thanks.

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Comment by joe smith
2013-02-06 14:45:03

What you just described isn’t really near any of the nice neighborhoods. You were near the backdrop for The Wire.

If you went North on Reisterstown you would’ve eventually hit Pikesville, though. Which is very tony.

Comment by Spook
2013-02-06 15:28:39

Yup Oxide, some hoods look like Stalingrad circa 1942; and even if they had enough police (which they don’t) they have no legal duty to protect you from harm.

Many people are not aware of this; I know cause I was one of em.


*be advised*

Comment by Avocado
2013-02-06 12:42:05

got “camels nose” fallacy?

Comment by Rental Watch
2013-02-06 11:11:34


Ultimately, builders will want to build and sell homes and will price accordingly…sharks need to swim to live. If they can continue to sell at higher prices, they will. If they can’t sell, they will drop prices…pretty simple.

Comment by In Colorado
2013-02-06 12:44:48

It’s what they do, but without loans, they can’t build (I’m talking mom-n-pop builders). Most of the builder boyz I know of in my neck of the woods are staying alive by finishing basements.

Comment by Rental Watch
2013-02-06 14:22:19

I’ve actually started to hear of some medium sized local builders getting financing from local banks. Not a great deal of them, but I’m starting to see packages come across my desk with these smaller builders looking for the equity to match up with the debt from these lenders.

Comment by rms
2013-02-06 23:37:32

“Most of the builder boyz I know of in my neck of the woods are staying alive by finishing basements.”

+1 These guys are fighting over scraps up here.

A “flip-fixer” that I pass on the way home is empty again. In addition to the repairs “bob the builder” also added another 500+ sqft, which likely drove the price up beyond the reach of most who would consider this particular neighborhood. One of the adjacent home’s front yard has the kid’s rusting bicycles and other strewn-about toys protruding from the receding snow.

Comment by Pimp Watch
2013-02-06 15:08:07

That looks like junk you’d pen. It’s not true but we don’t expect anything you post to be truthful.

Comment by Albuquerquedan
Comment by Bluestar
2013-02-06 12:28:20

Rachel Maddow has been bitchin’ about this for years but since it’s on MSNBC everybody just assumes the progressives are giving Obama a pass. I read her book, Drift last year and it’s good.

Aren’t drones just one of dozens of black programs that technology allows us to ignore the morality of our collective actions?

Comment by ecofeco
Comment by goon squad
Comment by rms
2013-02-06 23:43:14

Didn’t see any banking executives being charged with crimes. Whew!

Comment by Housing Analyst
2013-02-06 11:36:44

“Get what you can get for your house today because it’s going to be much less tomorrow for many years to come.”

Comment by hazard
2013-02-06 13:16:11

The West Palm woman who rented out her neighbor’s foreclosed home and collected more than $13,000 in rent that got arrested yesterday should have sold it.

County home prices up nearly 9 percent in December, national increase highest since 2006

by Kim Miller

Palm Beach County home prices increased 8.7 percent in December compared to the previous year, trailing a statewide increase of 9.2 percent that landed Florida in the eighth spot nationally for price jumps.

According to a home price index report released today by the Irvine, Calif.-based CoreLogic, home prices nationally increased 8.2 percent in December, representing the biggest price jump since May 2006.

“We are heading into 2013 with home prices on the rebound,” said Anand Nallathambi, president and CEO of CoreLogic. “The upward trend in home prices in 2012 was broad based with 46 of 50 states registering gains for the year.”

The state with the highest year-over-year increase in December was Arizona, which saw a 20 percent jump in single-family prices including distressed sales. The Grand Canyon State was followed by Nevada, Idaho, California and Hawaii.

The four states that saw price declines in December were Pennsylvania, New Jersey, Illinois and Delaware.

This entry was posted on Tuesday, February 5th, 2013 at 9:35 am and is filed under Housing affordability, Housing boom, Mortgages, Real estate bust. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 18:50:51


February 6, 2013 6:39 pm
Commodity hedge funds lose 20% of assets
By Gregory Meyer in New York and Jack Farchy and Javier Blas in London

Commodities hedge funds surrendered at least 20 per cent of their assets last year after investors pulled out large sums following the sector’s worst annual performance in more than a decade, according to fund managers and investors.

The average commodity hedge fund lost 3.7 per cent in 2012, according to a closely watched index compiled by Newedge, the biggest decline since the yardstick was created more than a decade ago and substantially worse than the 1.4 per cent loss of 2011.

“It has been challenging for commodities,” said Fabio Cortes, manager of a commodities fund of funds for Oakley Capital. “The sentiment is very negative.”

The investors’ stampede has come after several multi-billion dollar commodities hedge funds, including Blenheim and Clive Capital – the two largest – posted losses for the second year running, denting a hitherto stellar record of performance.

The year also saw the closure of several prominent hedge funds, including BlueGold in crude oil, Centaurus in natural gas and Fortress Commodities across all raw materials, further lowering the assets under management in the sector.

The withdrawals are the largest since the commodities hedge fund sector become fashionable in the early 2000s, investors and fund managers said. The latter said that although investors took home about $5bn net, they also poured fresh money into several new, smaller commodities hedge funds.

Osvaldo Canavosio, head of commodities research at FRM, a unit of Man Group, said: “What we are seeing is a significant reallocation of capital within the commodities space. We have seen . . . some meaningful reductions in some funds and some significant increases in others.”

Blenheim, the world’s largest commodities hedge fund, lost roughly 5 per cent last year, and saw its assets fall from $5bn to about $3.5bn, according to two investors. The fund, founded by Willem Kooyker, former president of the seminal hedge fund Commodities Corporation, posted a double-digit loss in 2011.

Clive Capital, the second-largest commodities fund run by former Moore Capital trader Chris Levett, lost more than 9 per cent last year and saw its assets under management drop to less than $2bn, down from more than $5bn at its peak.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 18:57:36

Attribution: ft dot com

Comment by Blue Skye
2013-02-06 20:21:15

Commodities not doing so well. At least they are protection from inflation.

Comment by CRATER!!!!
2013-02-06 18:54:31


Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-06 18:55:13

Once central bankers notice housing prices are falling, you know for sure a bubble has popped.

BTW, I am working this spring with a Canadian grad student whose dad works in Vancouver real estate. I ‘m savoring the prospect of frequent updates on the developing crash.

ft dot com
Last updated: February 6, 2013 4:27 pm
Canada housing cloud cast over Carney
By Ed Crooks

Desperate times demand desperate measures. When Jordan and Russ Macnab, estate agent brothers in Vancouver, Canada, had a glamorous single-bedroom apartment, priced at over C$600,000, that was stubbornly refusing to sell, they decided on a marketing innovation: the “crib crawl”.

They rented a limo bus, stocked it with drinks and snacks, and took a party of possible buyers on an evening tour to see the apartment in question and about half a dozen others, in a mobile viewing party.

The experiment was not a complete failure: the Macnabs attracted a lot of interest, and are developing a television series based on their idea. They are planning their second crib crawl next month.

As a way to shift slow-moving inventory, however, it was a flop. Not one of the apartments they showed found a buyer. Vancouver, which until last year had Canada’s strongest growth in house prices, is now its weakest region. The number of homes sold in the greater Vancouver area dropped by 23 per cent last year.

“It’s a bit of a stalemate at the moment,” says Jordan Macnab. “Buyers are waiting for it to crash, and sellers don’t want to give it up.”

The lack of buyers is sobering evidence that Canada’s housing boom, which began in 2000 and bounced back to life after the financial crisis of 2008-09, is now over.

Nervousness about the outlook for house prices, and the effect on the economy if they slump, is casting a pall over the last few months in office of Mark Carney, the Bank of Canada governor who will take over at the Bank of England on July 1.

Mr Carney, who will appear to face questions before the British parliament for the first time on Thursday, was courted by UK Prime Minister David Cameron’s government partly on the strength of Canada’s relatively strong performance compared with other large economies. Just as he is leaving, the shine is coming off that record.

Worries about Canada’s house prices and rising consumer debt prompted Moody’s, the rating agency, to cut the credit ratings of six of the largest Canadian banks last month.

Construction is still booming. Toronto is putting up more skyscrapers over 150 metres tall than any other city in the western hemisphere. But the demand for homes is fading.

The Teranet/National Bank of Canada index of average house prices has been falling for four consecutive months; its weakest performance since early 2009. Nationally, average prices were still up by 3.1 per cent in the year to December, but in Vancouver they were down 2 per cent.

Paul Ashworth of Capital Economics, a research company, believes other cities are likely to follow.

“Everybody is hoping for a soft landing,” he says. “Maybe we’ll just get a few weak spots like Vancouver and apartments in Toronto. But I am not convinced.”

Comment by Prime_Is_Contained
2013-02-06 19:22:46

Vancouver, which until last year had Canada’s strongest growth in house prices, is now its weakest region.


Knowing that Canada was in a bubble and that it had to end eventually, it has been like watching paint dry while waiting to see the first cracks appear.

This should be really entertaining. Canadians, even with the fine example of what happens on display just to their south, apparently are not able to spot a bubble.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-06 22:30:31

Can’t wait to read the articles about the dire impacts of the sudden absence of all-cash Canadian investors on high-end West Coast housing in the U.S.

Comment by rms
2013-02-06 23:50:03

“BTW, I am working this spring with a Canadian grad student whose dad works in Vancouver real estate. I ‘m savoring the prospect of frequent updates on the developing crash.”

+1 Nothing beats stories from the trenches.

BTW, rinse out blood stains with cold water. :)

Comment by aNYCdj
2013-02-06 22:53:05

On the same day that Gameloft’s company heads boasted to investors and journalists of its 27 percent revenue growth in 2012, the entirety of its India studio was told to pack up and go home.

Over 250 game developers are out of work from Gameloft’s Hyderabad studio, Gamasutra is told. Worse, the company allegedly asked its employees to sign a note lying about their resignations being voluntary.


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