February 13, 2013

Bits Bucket for February 13, 2013

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

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Comment by Housing Analyst
2013-02-13 04:37:18

I you buy a house today, you’re going to lose a lot of money. A LOT of money.

Comment by Avocado
2013-02-13 10:41:10

I lost $100 last night. I parked on a red curb to run into a friend’s apt for 3 mins, came out and a tow truck had their hooks in me. Had to pay $100 to have him drop it or $400+ for a tow. Felt like extortion.
Today I will call AMEX for a charge back, lets see if that sticks.
The curb was red, but on private property and no “fire lane” marking and no signs. It was dark and hard to tell the curb was red. Tow truck guy was a complete @zz.

Comment by Spook
2013-02-13 11:06:53

In some places, the police must ticket a vehicle before it can be legally towed by a tow truck.

Comment by aNYCdj
2013-02-13 11:17:19

thats on a public street …..

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Comment by Anon In DC
2013-02-13 19:54:25

It could be on private property. For example in Wash, DC if someone parks in your driveway you can have the police ticket the car. You can have towed without the ticket. But some places require the ticket before towing.

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Comment by aNYCdj
2013-02-13 11:16:19

run back and take pictures quick…….charge back was a good idea…

Its the new way of making money tow drivers get a commission for each tow so the business owners dont have to call or pay them….

I see them at McD here right next to $HitibanK banks lot full MCd lot empty….get the picture.

Comment by Avocado
2013-02-13 11:31:13

I have lots of photos, but it was at night. And this morning I found a small sign in the front of the complex, but nothing once you are in and nothing marked on the red curb or near it.

I called AMEX, funny thing is the clerk on the phone, used to drive a tow truck. Knew all about these pirates.

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Comment by michael
2013-02-13 11:26:51

the tow truck industry is the taint of the american economy.

Comment by ecofeco
2013-02-13 12:13:47

:lol: Right?

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Comment by sleepless_near_seattle
2013-02-13 11:49:37

Had that happen to me in college. On my 21st b-day, no less. (roommate drove my car) Paid and parked and came back about 10 minutes after the toll expired to find no car. I think it was about $75-100 to get it out of jail the next morning which was a lot for a college kid who regularly ate $.50 pizzas.

I about knocked the guy out, he was such a pr*ck. It was obvious he was sitting and waiting for tolls to expire so he could move as many cars as possible. In hindsight, that’s what he’s paid to do. But the “give me $100 (that I’m going to pocket 100%) or pay $400 tomorrow” is pure vulture.

Comment by sfhomowner
2013-02-13 12:17:07

Check out if your area has had any suits involving “predatory towing”. Some of those guys are not legit.

Comment by anngogh
2013-02-13 13:46:52

I checked the car fax on value of my honda and it came back with an accident in 2007. I was never in an accident. there is no claim to insurance and no way to get that off my car.

Comment by cactus
2013-02-13 14:33:47

I used to work across the street from a towing place, cops were always there as well. One day my car quit on a nearby on ramp so I walked to the towing place , 3 inches of plastic seperated me from the clerk and no they don’t tow cars that are stalled or broken down. I asked alot more questions but was told they were closing I had to leave.

IMO They were tow theives in league with law enforcement and BTW they parked some pretty nice RV type vehicles out front with the company name plastered all over.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 15:46:11

Can’t wait for your stopped-clock prediction to come to pass.

Almost every stopped-clock prediction eventually comes true.

- CIBT’s Law

Comment by frankie
2013-02-13 04:47:01

Good news; I can look forward to a pay rise

Families must endure 15 years of squeezed incomes until living standards recover to pre-crash levels, a leading think tank has warned.

It means that someone who earned £22,000 a year in 2008 will have to wait until 2023 to get back to a similar standard of living.

Had the downturn not hit, a £22,000 income would have reached around £27,500 by 2023, the Resolution Foundation said.

Read more: http://www.dailymail.co.uk/news/article-2277876/Families-endure-15-years-squeezed-incomes-return-better-living-standards.html#ixzz2KmLr4LEw
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Comment by ecofeco
2013-02-13 07:59:49

I’m still waiting for “living standards” (wages to prices ratios) to recover to 30 years ago levels.

15 years? Might as well be never.

Comment by Prime_Is_Contained
2013-02-13 08:06:54

I’m still waiting for “living standards” (wages to prices ratios) to recover to 30 years ago levels.

Move along… Nothing to see here…

HEY! Look! iPads are getting cheaper!

Comment by frankie
2013-02-13 10:09:47

Yep go well with some fava beans and a nice Chianti.

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Comment by goon squad
2013-02-13 08:10:39

Hey frankie, as the HBB’s resident UK poster, what do you think of the films of Mike Leigh?

We especially love his “Play For Today” series. That and his other films are so consistently bleak and depressing, all of his characters are so miserable, it is some of the best film/TV we have seen. Nothing in the USA comes close to it.

Comment by frankie
2013-02-13 10:01:14

Curate’s egg; good in parts. If you like Mike Leigh you’d probably like the Boys from the Black Stuff (TV series early 1980’s).


Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 08:57:22

Perhaps inflation can be used to create the illusion of rising wages before 2023?

Comment by ecofeco
2013-02-13 12:16:16

Well it’s worked before.

Comment by frankie
2013-02-13 04:52:34

Fixed broadband connections grew to 11.56 million in 2012; more than half of new connections in December were FTTH.

The number of mobile subscribers in Spain fell by 2.77 million in 2012, with the country’s biggest operators reporting declines in their customer bases.

Spain’s fixed-line market also shrank for the fifth year running, but the fixed broadband sector provided a ray of hope, according to new statistics from regulator the CMT.

At the end of last year there were 55.74 million mobile lines in service in Spain. In December alone, line losses – including voice and datacards – stood at 277,347. The prepaid sector was the hardest hit, losing 343,000 lines.

Telefonica’s Movistar and Vodafone’s local unit – the biggest two players in the market in that order – bore the brunt of the losses in December, having seen a steady decline in their customer bases throughout the year. Movistar lost 196,500 lines last month and Vodafone 195,130. Third-placed Orange lost 26,780 lines.

Fixed-line losses numbered 405,292 last year, including 20,579 in December. But there was growth in the fixed broadband market, “thanks to the efforts of alternative xDSL operators”, the CMT said.


Comment by cactus
2013-02-13 15:13:58

Cisco topped Wall Street expectations with its earnings report Wednesday, helped in part by favorable taxes. Still, shares fell as the tough economy continued to drag on the company’s bottom line.

Cisco earned $2.7 billion, or 51 for each diluted share, excluding items in the fiscal second quarter, compared with $2.6 billion, or 47 cents a share, in the same period a year earlier. Revenue was $12.1 billion, up from $11.53 billion.

“The results were pretty good. They were better than expected but, at the same time, it was expected they’d beat. It’ll pretty much going to boil down to guidance now,” said Shaw Wu, an analyst at Sterne Agee. “They did say they got a benefit from taxes. When you take that out, its 50 cents. That still beat by 2 cents,” Wu said.

Analysts had expected the company to report earnings excluding items of 48 cents a share on $12.06 billion in revenue, according to a consensus estimate from Thomson Reuters.

“We are growing in this market when peers are seeing flat growth,” Cisco CEO John Chambers told CNBC in an interview after the earnings report.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 05:36:53

Should an armed drone be dispatched to kill Christopher Dorner?
Why should the lives of law enforcement agents be risked to apprehend this suspected domestic terrorist?

Glenn Greenwald
guardian.co.uk, Monday 11 February 2013 13.25 EST

Christopher Jordan Dorner has declared ‘war’ against former LAPD colleagues and their families in a manifesto posted online. Photograph: Reuters

A major manhunt has been underway in the Los Angeles area for Chris Dorner, the former LAPD officer, Navy reservist, and trained marksman who is the prime suspect in the murder of three people, including the daughter of an LAPD captain (who previously represented him in a disciplinary proceeding) and her fiance. A lengthy Facebook message attributed to Dorner vows that he will continue to kill not only members of the LAPD but also their children and spouses until he receives a public apology for what he believes was his unfair firing:

This will be a war of attrition . . . . I will utilize OSINT to discover your residences, spouses workplaces, and children’s schools. IMINT to coordinate and plan attacks on your fixed locations. . . . HUMINT will be utilized to collect personal schedules of targets. I never had the opportunity to have a family of my own, I’m terminating yours. . . . I know your significant others routine, your children’s best friends and recess. I know Your Sancha’s gym hours and routine. I assure you that the casualty rate will be high.

Surveillance drones are now being used to try to locate him. LAPD are so apprehensive that they have already mistakenly shot at innocent people when they saw vehicles resembling the one they thought belonged to Dorner. Authorities suspect he’s hiding in “the icy wilderness” of Big Bear east of Los Angeles which, reported AP, is “filled with thick forests and jagged peaks, that creates peril as much for Dorner as the officers hunting him.”

Here’s my question: if the surveillance drones detect his location, should the lives of law enforcement agents be risked, along with other civilians, in an attempt to apprehend this highly-trained warrior? Why shouldn’t an armed drone instead be immediately dispatched once his location is ascertained and simply kill him?

Comment by ecofeco
2013-02-13 08:01:14

Moot point today.

Comment by Arizona Slim
2013-02-13 08:21:00

I’d be interested in knowing why this guy was fired from the LAPD. Can’t help thinking that he had an anger management problem.

Comment by Neuromance
2013-02-13 10:18:15

Dorner was a massively muscular guy. Gotta wonder if steroids or some chemical like it played some role in his unraveling.

I read his manifesto, it was very interesting. He was a good writer. He wrote he’d been severely depressed after his firing and hoped researchers could examine his brain. Throw steroids into the mix and voila! Psychotic breakdown.

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Comment by Arizona Slim
2013-02-13 10:21:28

Dorner was a massively muscular guy. Gotta wonder if steroids or some chemical like it played some role in his unraveling.

One of the scariest side effects of steroids is the inability to control one’s emotions.

Ever heard of ‘Roid Rage? That’s what I’m referring to.

Comment by Spook
2013-02-13 11:11:07

“I read his manifesto, it was very interesting. He was a good writer.”

That thing reads like it was written by 6 different people.

I smell roids and adderall…

Comment by Montana
2013-02-13 13:33:07

Steriods and antidepressant combo maybe.

Comment by sleepless_near_seattle
2013-02-13 16:23:32

I was hoping they’d keep him alive to hear the rest of this as well. Just because he was paranoid doesn’t mean they weren’t out to get him.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 08:58:31

The point of my post wasn’t about Dorner.

Comment by Ryan
2013-02-13 09:37:40

I got it. I brought this up a couple days back. We are already skating on the slippery slope.

1. Label him a domestic terrorist.
2. Classify him as Al Qaeda, Taliban or “associated forces” from the NDAA 2012….perhaps expand the definition to “others” (do so with a secret memo).
3. Write another secret memo adding these groups to kill lists
4. Write another secret memo clearing the use of hellfire missles on domestic terrorists from drones.

We crossed the Rubicon a long time ago. The fear and paranoia the Government is selling to us is going to be increasingly more difficult to control

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Comment by goon squad
2013-02-13 08:02:12

Too late. He already got “Waco’d” by the pigs in Big Bear.

Comment by Bill in Los Angeles
2013-02-13 08:24:52


1993 was the first time I realized the federal government started its tyranny. Waco 1993.

Jackboot Janet and the Elian deal with armed SWAT teams grabbing a kid to send back to communist indoctrination.

The “Patriot Act” of GWB.


The drive for infringing on the Second Amendment.

The state level - the shoot first, think later deal in Torrance, during which two innocent women were wounded by pigs and a surfer was also wounded (but not shot) by pigs.

How many more transgressions and usurpations will there be?

Next is gun control. After that, confiscation of 401ks and distribution to those who did not save. That will be the straw that breaks the camel’s back. I see more people on blogs talking of revolution if their 401ks are grabbed than if their guns are grabbed.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:00:26

“After that, confiscation of 401ks and distribution to those who did not save.”

I predict the redistribution will be done a lot more subtly than that. Why provoke outrage when stealth redistribution is just as effective, but without the political backlash?

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Comment by oxide
2013-02-13 09:47:26

They won’t tax/take the 401K directly. They’ll take it in higher sales and/or property taxes when seniors spend the 401K money. Then they’ll distribute that tax in the form of SNAP cards and obamaphones. Isn’t that how they do it already?

Comment by goon squad
2013-02-13 10:48:17

SNAP cards and obamaphones

The Washington Times had a piece (linked from Drudge Report) that showed if the current growth trajectory of spending for these two welfare programs continues at its current rate, by 2025 annual spending for SNAP cards and obamaphones will exceed 125% of GDP.

Comment by Dale
2013-02-13 13:43:02

They will means test social security and anyone that had a job (and paid into it) will not get anything and those that didn’t will receive the $$$s. It’s only fair……

Comment by cactus
2013-02-13 15:19:24

After passing prop 30 in CA they now want to add a tax on oil companies as they extract crude from the ground.

non stop with the new taxe ideas in CA

Like crack they can’t stop

Comment by In Colorado
2013-02-13 09:04:20

If people are that worried about their 401K accounts they can take a lump sum distribution and move it someplace else. Sure, there will be a tax hit, but that’s better than losing everything, right?

As far as 401k confiscation happening, I doubt it. The Banking Clan wouldn’t be happy with that, and as we know, they call the shots.

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Comment by Prime_Is_Contained
2013-02-13 09:11:12

The Banking Clan wouldn’t be happy with that, and as we know, they call the shots.


The Banking Clan would prefer to stick to their original 401k redistribution strategy, also known as “fees”.

Comment by Montana
2013-02-13 09:41:06

take a lump sum distribution

They can’t take a distribution or roll it over if they’re under 60 (I think) and want to stay with their employer, if that’s what you mean.

Comment by polly
2013-02-13 09:42:13

There is absolutely no reason to believe that a 401(k) account is more (or less) vulnerable to confiscation by the government than any other account you hold in the US from an IRA to a ROTH IRA to a passbook savings account. Your social security number (or TIN, if you don’t have an SS) is on that account so that money can be traced back to you. End of story.

Actually, 401(k)s are technically owned by your employer or former employer so if you believe the government is overly influenced by large corporations, they might be a little safer than your other accounts.

Now, if you think that people with lots of assets are likely to have government benefits cut because of their other assets and you consider that to be confiscation of your assets, well, that is not impossible. You can play Joe Smith games and pretend that no one will ever value an asset using numbers other than the taxable profit (rather than free cash flow or other valuation methods) or you can become mega-wealthy and really have Mitt type options for moving and protecting stuff off-shore (though no guaratee that those types of assets will really be protected from whatever you fear and besides, when you are that wealthy do you really care about your SS benefits?) or you can move stuff off-shore in ways that don’t legally protect you and fail to make your required FinCEN disclosure and risk prosecution. Those are the only options you have.

I have told you guys about FinCEN numerous times. Has anyone even googled it?

Comment by joe smith
2013-02-13 10:04:40

“Joe Smith games ”

You misrepresent me, polly. It’s not as simple as taking advantages of accounting rules, you need to avail yourself of different ways to title assets (trusts, partnerships, LLCs). There are plenty of other ways to stay ahead of the system, at least for now. The oldest trick in the book is obviously to have a small business that converts your taxable W-2 income into nontraceable cash revenues.

Learn to embrace “bootstrapping”.

Comment by polly
2013-02-13 10:43:13

“converts your taxable W-2 income into nontraceable cash revenues”

I sure hope that is nonsensical because you don’t want to take the time to explain what you really mean not because you actually think that reported W-2 income can become unreportable by investing it in a business.

Comment by Hi-Z
2013-02-13 10:43:22

“The oldest trick in the book is obviously to have a small business that converts your taxable W-2 income into nontraceable cash revenues.”

Not declaring income is not legal. You seem to be advising illegal methods.

Comment by In Colorado
2013-02-13 11:07:10

They can’t take a distribution or roll it over if they’re under 60 (I think) and want to stay with their employer, if that’s what you mean.

True, but most people change jobs every few years anyway. Another option would be to take a 401K loan and send it off to Switzerland or the Caymans.

Comment by joe smith
2013-02-13 11:15:43

“I sure hope that is nonsensical because you don’t want to take the time to explain what you really mean not because you actually think that reported W-2 income can become unreportable by investing it in a business.”

What do you not understand about how you can certain losses against your income?

I’ve explained this in more detail on HBB before (but never broken it down point by point because it would take a while). The bottom line is that businesses have completely legal ways to show “losses”. And then you have the cash aspect of certain businesses. I am not going to break that one down for you.

Hi Z, I would never advise anyone to break the law. It would be foolish to believe it doesn’t happen, though.

Comment by polly
2013-02-13 11:50:53

And I was talking about assets, not income. Yes, if you have paper losses from high depreciation on assets of an unincorporated business, you can use those paper losses to offset your other income. But the depreciation runs out and you have to keep buying more businesses to keep the paper depreciation losses coming in. And you recapture those losses if you sell the original business. And there is no reason to believe that only income (and not assets as well) would be considered in any attempt to modify SS or Medicare benefits to the wealthy. Seriously. It isn’t cost effective to trace down a car worth more than $2000 to disqualify a person for a SNAP card, but you can bet that they will find to consider that you own a business worth a few million bucks. Even if they don’t, how hard is it to modify the income calculation by adding back in the depreciation number off your schedule C?

Don’t assume that the tricks that worked for the last 20 years will work a decade from now with respect to a program that doesn’t even exist yet.

Comment by joe smith
2013-02-13 12:51:07

“Don’t assume that the tricks that worked for the last 20 years will work a decade from now with respect to a program that doesn’t even exist yet.”

I’m not assuming all of today’s techniques will work in the future. As you’ll see a few posts up, I added a proviso about what works for now.

Again, as far as owning assets, it matters a lot how they’re titled and whether or not they’re held in trusts, etc. Obviously there will be many changes in the offing. One thing that remains constant is the “innovation” of the Mittens crowd. There is still a large % of the American electorate that believes all the “job creator”/”bootstrapper” memes. This will enable lawyers and accountants to find legal loopholes, etc.

On the other hand, if our country ever really does get serious about a sensible tax structure and eliminating loopholes, I am more than OK with it. The problem now is that we don’t have a serious system - - we have loopholes, so why would anyone with knowledge and resources *not* use them?

Comment by polly
2013-02-13 15:11:35

Exactly what tax structure (with or without trusts) allows you to use the costs (paper and real) of a business to offset your personal income and doesn’t require that you also pass through the income? Or allows you to deduct the costs without actually being the owner or at least the beneficial owner? Seriously, dude, I think your family may just have been lucky, not right.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 20:31:26

“…or you can become mega-wealthy and really have Mitt type options for moving and protecting stuff off-shore…”

Time to get reborn as the scion of a state governor / CEO / presidential cabinet secretary…

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 20:34:40

“Yes, if you have paper losses from high depreciation on assets of an unincorporated business, you can use those paper losses to offset your other income.”

Bought me a violin in 2011 and a bow in 2012…looking for another, more expensive bow to buy in 2013. Section 179, baby…

Comment by 2banana
2013-02-13 09:25:07

But please keep voting for bigger and bigger government.

Because only the biggest government that can give away the most free cheese is the best government. And to make everything fair.

Next is gun control. After that, confiscation of 401ks and distribution to those who did not save. That will be the straw that breaks the camel’s back. I see more people on blogs talking of revolution if their 401ks are grabbed than if their guns are grabbed.


“Government is not reason, it is not eloquence –it is force!
Like fire it is a dangerous servant and a fearful master; never
for a moment should it be left to irresponsible action.”
–George Washington (1732-1799)

“A government big enough to give you everything you want is a government big enough to take from you everything you have.”
–Gerald Rudolph Ford (1974–1977)

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Comment by eight pieces of chicken
2013-02-13 10:18:56

But please keep voting for bigger and bigger government.

Did you not vote for Bush, Gingrich, McCain, RMoney, etc?
I don’t think these people ever were paragon of small governments, freedom and liberty for us all.

Comment by Avocado
2013-02-13 10:53:05

Obama clearly went on the record last night. We need smarter gov, not bigger. And his business plan will not add to the deficit.

did you listen or read the ideas? He is the good guy. Now it is up to congress to do something, with the great ideas (most, not all) I am against a fed min wage of $9. The states should set that as the cost of loving varies as do the taxes.

Bush had full control for 6 yrs, and we see the damage that is done, with big spending from dumb gov, and cutting revenues at the same time. We can never go back to that method.

we have to re-build America!

Comment by In Colorado
2013-02-13 11:10:21

I don’t think these people ever were paragon of small governments, freedom and liberty for us all.

Spending grew 50% under W’s watch.

Comment by Avocado
2013-02-13 13:34:55

reckless deficit spending does not count every time the GOP does it.

If we could just get banana to see his hypocrisy, our job is done. he seems smart enough to have found this blog. i wonder where the blockage is?

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 14:15:54

“Obama clearly went on the record last night. We need smarter gov, not bigger. And his business plan will not add to the deficit.”

Stop challenging 2banana’s propaganda stream!

Comment by m2p
2013-02-13 19:30:53

The states should set that as the cost of loving varies as do the taxes.

And here I thought that was only legal in Nevada.

Comment by howiewowie
2013-02-13 15:38:33

This kind of stuff has been going on for a long time. Just look at the John Dillinger story. Federal agents shot three innocent people in their quest to get Dillinger and his gang while holed up in a lodge in the 1930s. And Dillinger still managed to escape.

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Comment by Prime_Is_Contained
2013-02-13 08:34:57

Why shouldn’t an armed drone instead be immediately dispatched once his location is ascertained and simply kill him?

Do the local or state police have in their arsenal an armed drone? If so, then their normal rules of engagement would likely allow them to take him out from a distance (e.g. via sniper), so an armed drone seems no different.

If, however, they do not have an armed drone in their arsenal, then the answer would be that the military is not normally called in on police matters; the Posse Comitatus Act springs to mind.

Comment by Ryan
2013-02-13 09:01:19

I’m sure the requisitions have been written.

Comment by cactus
2013-02-13 15:29:49

Why shouldn’t an armed drone instead be immediately dispatched once his location is ascertained and simply kill him?”

replace cops with drones ? could save on retirement expenses

No they should not use drones to kill criminals just dart them and then mount them on display in court for all to see.

saves more jobs the second way and we can pay for it by taxing blogs.

Comment by San Diego RE Bear
2013-02-13 15:28:58

“Why shouldn’t an armed drone instead be immediately dispatched once his location is ascertained and simply kill him?”

Ummm, because he is an American citizen and we still have (for the moment) this pesky thing called The Constitution?

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 18:41:01

That was a Brit asking the question. I’m sure he is ignorant of the U.S. citizen’s constitutional right to trial by jury before execution…

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 05:44:17

I thought the plan was to wind down Fannie Mae and Freddie Mac years ago, after they collapsed (Fall 2008)? So why are they still in the mix of policy remedies at this point?

Here is a little prediction about housing policy over the next four years: Redistribution of wealth away from the Rentership Society and towards the Ownership Society will continue as usual, and nobody who works inside the Beltway will openly admit to the cross subsidies.

February 7, 2013, 2:36 PM

Obama Faces Pressure From Left on Housing Regulator
By Alan Zibel

Rep. Elijah Cummings (D., Md.) is among lawmakers calling on President Obama to nominate a permanent director for the FHFA.

When will the White House finally have something to say about President Barack Obama’s pick to run the FHFA?

That question is on the mind of 45 House Democrats. The lawmakers, led by Reps. Elijah Cummings (D., Md.) and John Tierney (D., Mass.), sent a letter on Thursday to President Barack Obama urging him to nominate a director of the Federal Housing Finance Agency–-the federal regulator for Fannie Mae and Freddie Mac.

We believe your re-election is a prime opportunity to put forth a new candidate who is ready and willing to implement all of Congress’ directives to meet the critical challenges still facing our nation’s housing-finance markets,” the lawmakers wrote.

The agency’s acting director, Edward DeMarco, has been criticized by Democrats on Capitol Hill, administration officials and liberal groups, all of whom have been calling on Mr. Obama to replace Mr. DeMarco.

Representatives for the White House and Mr. DeMarco were not immediately available for comment.

Why all the fuss about a seemingly obscure regulator? The most prominent area of conflict has been the FHFA’s refusal to accept the Obama administration’s offer to subsidize the cost of debt forgiveness for troubled homeowners.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 05:49:08

Who’d've thunk the Republicans would ultimately take the lead on ending too-big-to-fail plus the insane federal “affordable housing” programs that brought the U.S. financial system to the brink of collapse in 2008?

This is the most promising political development I have seen in a decade. Too bad they couldn’t figure this one out before the Fall 2012 election.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 05:50:51

Biggest Banks and Housing Top House Republicans’ Agenda
By Cheyenne Hopkins - Feb 12, 2013 11:10 AM PT

U.S. House Republicans responsible for overseeing Wall Street banks plan to focus this year on ending the notion of too-big-to-fail and overhauling housing finance, according to a draft agenda to be reviewed this week.

Federal Reserve efforts to stimulate the economy in the wake of the 2008 financial crisis and agencies implementing the 2010 regulatory overhaul will also come under scrutiny of the House Financial Services Committee, the panel’s leader said in a copy of the document obtained by Bloomberg News. The panel is scheduled to vote on the oversight plan Feb. 14.

“The Dodd-Frank Act enshrines too-big-to-fail into law, giving big financial institutions a government-guaranteed advantage over those deemed too small to save,” Representative Jeb Hensarling of Texas, the committee’s chairman, said in a statement.

Lawmakers and regulators from both parties — including Fed Governor Daniel Tarullo — have called for new efforts to limit systemic risk, arguing that the 2010 law failed to curb the growth of large banks that needed bailouts after Lehman Brothers Holdings Inc. collapsed in 2008. Representative John Campbell, a California Republican, plans to offer a bill today that would shrink the biggest lenders by requiring them to hold more capital, and other lawmakers plan to offer legislation similarly designed to end too-big-to-fail.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 15:50:36

Apparently, now that the 2012 elections are over, housing is near the top of everyones’ agendas on both sides of the aisle.

State of the Union 2013: A step forward on housing?

President Obama’s State of the Union address included a proposal to extend refinancing to a wider section of homeowners, giving the economy a boost. But such proposals have languished before, so this time Mr. Obama may resort to executive action.

By Schuyler Velasco, Staff writer / February 13, 2013

President Obama, flanked by Vice President Joe Biden and House Speaker John Boehner of Ohio, gives his State of the Union address during a joint session of Congress on Capitol Hill in Washington, Tuesday Feb. 12, 2013. The speech included a call to loosen restrictions on mortgage lending and refinancing.

Nestled early into President Obama’s State of the Union speech last night was a short bit about how the housing market and housing lenders have become a little too cautious.

After a housing disaster driven by unscrupulous lenders who handed handing out loans all too freely, the industry needed to reform its ways.

But according to the president and many economists, they’ve gone too far in the other direction, with only those with impeccable credit granted loans or refinancing. And now that the housing market is making steady gains (driven largely by investors who can pay cash), it’s time to loosen things up a bit for ordinary families who are ready to buy.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 16:50:59

Flawed analysis and bad policy goes hand in hand.

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Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 16:52:19

“…driven largely by investors who can pay cash…”

The next crash is due to occur when these fly-by-night buyers try to take their money and run.

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Comment by Pimp Watch
2013-02-13 05:52:32

The could have done that in 2001 when they owed the govt. Instead they chose to embrace it and accelerated it.

The Housing Debacle isn’t party driven. It’s fraud driven.

Comment by ecofeco
2013-02-13 08:03:02

The Housing Debacle isn’t party driven. It’s fraud driven.”

Yep. It’s “turtles all the way down.”

Comment by 2banana
2013-02-13 09:32:20

So let’s continue to reward obama and the democrats?

That is your answer?

Comment by Pimp Watch
2013-02-13 10:02:54

“So let’s continue to reward obama and the democrats?”

Still arguing about two hemmroids on the same ass?

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Comment by 2banana
2013-02-13 10:24:36

Your argument seems to change depending on which hemorrhoid is in power.

Democrats in power - Well, the republicans would be just as bad so why change? Besides, republicans were almost just as bad 12 years ago.

Republican in power - They are EVIL and want to starve children and put blacks back in chains. They MUST be voted out of office NOW.

Comment by Pimp Watch
2013-02-13 10:41:09

“Your argument seems to change depending on which hemorrhoid is in power.”

I’m not arguing. You’re arguing with yourself. Again.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 05:57:22

Before anyone flames me with libtard propaganda for suggesting “affordable housing” programs led to the Fall 2008 financial markets collapse, I urge you to read this well-written, thoroughly-documented book, then get back to us:

The Housing Boom and Bust
Thomas Sowell

Comment by rms
Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:06:44

This review is on target:

Customer Review

211 of 225 people found the following review helpful

5.0 out of 5 stars Excellent, Excellent, Excellent, Excellent -, May 18, 2009

By Loyd E. Eskildson “Pragmatist”
This review is from: The Housing Boom and Bust (Hardcover)

The current housing and economic crises are fertile grounds for slanted and one-sided accounts. Sowell’s “The Housing Boom and Bust” has none of that - it’s an honest accounting of how we all participated. Lenders, government entities Fannie Mae and Freddie Mac, builders, local government regulations, local homeowners, government regulators (HUD and bank authorities), the Congress, and presidents each played a part. Both parties were involved, though the Democrats involved outnumber the Republicans.

Prior to the rapid escalation of home prices, federal bank regulators began using the 1977 Community Reinvestment Act (CRA) to press for racial equality. The issue was the statistical difference in approval rates, not a claim that most blacks could not get mortgage loans. New regulations required that the banks not just look for qualified buyers, but make a requisite number of loans to low and moderate income buyers (quotas). Then, when legislation was proposed in 1999 to permit banks to diversify into selling investment securities, the Clinton White House urged “banks given unsatisfactory ratings under the CRA be prohibited from enjoying the new diversification privileges.” The Congress happily obliged. Another factor was HUD’s beginning legal action in 1993 against mortgage bankers that declined a higher percentage of minority applicants. HUD also set a 42% target for Freddie Mac and Fannie Mae (FM & FM) to buy mortgages for people whose income were less than an area’s median. Banks, sensing that FM & FM were implicitly guaranteed, where only too happy to not only issue these mortgages, but to buy FM & FM debt as well. (In 2003, about 3,000 banks held FM & FM debt for 100% of their capital requirements.) The “icing” was FM & FM’s creative accounting that misclassified $11 trillion of sub-prime assets. Then in 2002, Bush II urged Congress to pass the American Dream Down Payment Act, subsidizing down payments of prospective buyers with incomes below a certain level.

Bottom Line: The law of unintended consequences strikes again - helping minorities was a good intention, but backfired. We’re all to blame, though admittedly some more than others. Deregulation was not the problem, rather misguided regulation. Further, the economy is not likely to reach former levels for a LONG time, lacking the frenzy the rapidly rising home prices brought to consumer buying.

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Comment by 2banana
2013-02-13 09:30:28

Bigger and bigger government was the problem.

Buying votes was the problem.

You want to fix housing?

Pull the government completely OUT of the housing market except for enforcing fraud and generally accepted accounting practices.

Make banks EAT their bad loans.
No more bailouts or government guarantees.

Presto. Housing will become affordable and bubbles will be quickly snuffed out.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:43:16

Another sign of the apocalypse, as I once again agree with a 2banana post today!

Comment by Montana
2013-02-13 09:46:09

I dunno, it seems like there was an awful lot more going on than just that. Though if a lender has to finance the worst credit risks, why not expand the same low criteria to everyone else? Especially when the banksters were out looking for more and more mortgages to securitize, slap into CDOs and then short.

Comment by Ryan
2013-02-13 10:01:43

C’mon guys! They are trying to help!

Just like with statements about gun control: If we can enact one law that would save even just one innocent child; one more celebrated birthday or anniversary or bar mitzvah, isn’t it our duty to do so?

In this case; if they can enact one law or policy that will give a better standard of living to just one underprivileged person, isn’t it their duty to do so? They owe us that, don’t they?

Comment by oxide
2013-02-13 10:03:34

Agree. Did Sowell tell us whether CRA would have caused the same issue without repealing Glass-Steagall? Banks didn’t care who or what they lent to as long as they could sell up the food chain. If anything, they probably exceeded those quotas in their quest for fees.

Comment by polly
2013-02-13 10:50:52

“Make banks EAT their bad loans.”

That requires that the government make loan securitization illegal (and any other risk sharing schemes that anyone else comes up with) and then enforce the laws that do so. This is not smaller government. This is a huge government intervention in our capital markets. Gigantic. Overwhelming.

And, just to clarify, you mean that anyone who makes a bad loan has to eat any losses too, right? So you want to make non-bank lenders illegal now too? Or somehow also force the non-bank lenders to retain the risk of all loan losses?

How is this smaller government?

Comment by polly
2013-02-13 10:57:27

Sorry for posting the whole story. I don’t do it often.

No, Marco Rubio, government did not cause the housing crisis


In his response to the State of the Union, Sen. Marco Rubio said: “This idea – that our problems were caused by a government that was too small – it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.”

For obvious reasons, this argument is very popular on the right, but there’s precious little to back it up. The core claim can be a bit slippery, but it tends to go something like this: the existence and affordability goals of Fannie Mae and Freddie Mac (the GSEs) and the Community Reinvestment Act (CRA) were a major reason we had a subprime-driven housing bubble and then a crash. The only problem? Pretty much all the evidence on the housing crisis shows that that’s not true.

(As I don’t believe Rubio is referencing them, I’m putting to the side the complicated debate on interest rates being “far too low for far too long” and policy, or the idea that there wasn’t enough U.S. government debt in the 2000s [!] to meet the demand for safe assets. Though those are the debates people actually engaged with these questions are studying.)

Let’s go through some things we know.

1. Private markets, rather than the GSEs, created the subprime mortgage boom.

The subprime mortgage boom and the subsequent crash are very much concentrated in the private market, not the public market. Subprime is a creature of the private label securitization channel (PLS) market, instead of the Government-Sponsored Entities (GSEs, or Fannie and Freddie). The fly-by-night lending boom, slicing and dicing mortgage bonds, derivatives and CDOs, and all the other shadiness of the mortgage market in the 2000s were Wall Street creations, and they drove all those risky mortgages.

Here’s some data to back that up: “More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions… Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.”

As University of California, Irvine law professor David Min has argued, saying the government directly created either the housing bubble or subprime loans has a serious problem with the timing. “From 2002-2005, [GSEs] saw a fairly precipitous drop in market share, going from about 50 percent to just under 30 percent of all mortgage originations. Conversely, private label securitization [PLS] shot up from about 10 percent to about 40 percent over the same period. This is, to state the obvious, a very radical shift in mortgage originations that overlapped neatly with the origination of the most toxic home loans.”

2. The Community Reinvestment Act and the GSE’s affordability mission didn’t cause the crisis.

Many conservatives argue that the “affordability goals” of the GSEs, as well as the Community Reinvestment Act (CRA), which was created in the 1970s to make sure poor communities had access to credit, either directly or indirectly led to subprime loans.

Research from the Federal Reserve by Neil Bhutta and Glenn B. Canner (helpfully summarized in this Randy Kroszner speech), argues that the CRA couldn’t have been behind the subprime and housing bubbles. ”The very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis.” Only six percent of higher-priced loans (their proxy for subprime loans) were extended by CRA-covered lenders to lower-income borrowers or CRA neighborhoods.

A recent paper found that while the CRA might have introduced slightly larger risks in lending portfolios, extra loans done to meet CRA compliance weren’t more likely to have higher interest rates, lower loan-to-value, or be balloon/interest-only/jumbo/buy-down mortgages, or hold other subprime characteristics. So it is unlikely that the CRA was priming the pump for subprime, or subtly encouraging subprime mortgages to be made by private lenders.

Jason Thomas and Robert Van Order’s research argues that subprime loans were only 5 percent of the GSEs’ losses. The GSEs’ affordability mission led them to buy the highly rated tranches of mortgage bonds, for which there was already a ton of demand and were not essential to the completion of the deals.

3. There’s a lot of research to back this up and little against it.

The United States’ housing market is one of the most intensely studied capital markets in the world. What has other research found? From Min:

Did Fannie and Freddie buy high-risk mortgage-backed securities? Yes. But they did not buy enough of them to be blamed for the mortgage crisis. Highly respected analysts who have looked at these data..including the nonpartisan Government Accountability Office, the Harvard Joint Center for Housing Studies, the Financial Crisis Inquiry Commission majority, the Federal Housing Finance Agency, and virtually all academics, including the University of North Carolina, Glaeser et al at Harvard, and the St. Louis Federal Reserve [also here], have all rejected the Wallison/Pinto argument that federal affordable housing policies were responsible for the proliferation of actual high-risk mortgages over the past decade.

4. Conservatives arguments tend to blur the definition of subprime. Some, such as Ed Pinto of AEI, argue that the GSEs had huge subprime exposure if you create a new category that represents the risks of subprime more accurately. He created a new “high risk” category, which he then argues these high-risk loans were held by the GSEs. This argument blur categories together and obscures more than it reveals. David Min broke down the numbers, and there is more about this discussion here. Here’s a graphic from Min, comparing Pinto’s new “high-risk” category against subprime:

[Use the link above if you want to see the chart that should be displayed here]

Even this new “high risk” category, introduced by AEI to supposedly show what the GSEs were taking on, shows that it isn’t anything like subprime and is instead comparable to the national average. If you then take the logical step and divide it by private label, the numbers are even worse. Private label loans “have defaulted at over 6x the rate of GSE loans, as well as the fact that private label securitization is responsible for 42 percent of all delinquencies despite accounting for only 13 percent of all outstanding loans (as compared to the GSEs being responsible for 22 percent of all delinquencies despite accounting for 57 percent of all outstanding loans).” The issue isn’t this fake “high risk” category, it is subprime and private label origination.

The Financial Crisis Inquiry Commission (FCIC) panel looked carefully at this argument and also ended up finding it doesn’t work. So those who blame the GSEs can’t get the numbers to work when they make up categories.

(Fun fact: These same conservatives sang a different tune before the crash. They argued that the CRA and the GSEs were getting in the way of getting risky subprime mortgages to risky subprime borrowers. See Should CRA Stand for ‘Community Redundancy Act? from Cato in 2000 or AEI’s Peter Wallison in 2004 arguing ”study after study has shown that Fannie Mae and Freddie Mac are failing to do even as much as banks and S&Ls in providing financing for affordable housing, including minority and low income housing.”)

5. The government policy that likely made an impact were deregulatory actions.

In 2000, Congress passed the Commodity Futures Modernization Act, which deregulated the derivatives market, in a lame duck session as a rider to an 11,000 page omnibus appropriation bill. A banking capital “recourse rule” in 2001 allowed the ratings agencies and private bank risk modelers to decide what banks should hold against risk. In 2003 the OCC preempted and overruled Georgia’s new anti-predatory lending laws. Alan Greenspan refused to enforce regulations on, or even investigate the wrongdoing of, the new subprime market during the 2000s. The 2005 bankruptcy reforms in BAPCPA, widely viewed as friendly if not written by the financial industry, codified the market practice of letting derivatives go to the front of the line in bankruptcy, helping create the conditions for shadow banking runs.

These government actions all fall under the rubric of deregulation, or “letting the market decide” how to manage the rules of the financial sector, and they are more relevant to the actual crisis. Though these are government policies, and they were reckless, I doubt they are what conservatives like Rubio mean.

Comment by 2banana
2013-02-13 11:03:47

Only to a liberal is having the government enforce fraud laws and generally accepted accounting practices equal to massive government.

But somehow having the government guarantee 90% of all mortgages, forcing banks to lend to idiots, bailing out idiot banks and having trillion dollar deficits is just normal government…

How is this smaller government?

Comment by Avocado
2013-02-13 11:24:43

The end of big gov happend the day Clinton stepped in and Obama.

Reagan tripled the deficit and gave amnesty to 3 mill illegals.
Bush Doubled the deficit and cut revenues, hosing future generations with debt.

see a pattern?

know your party by what they do. dont be fooled again….no, no…

Comment by X-GSfixr
2013-02-13 11:47:36

You guys can blame the wretched refuse all you want, but poor people weren’t getting home loans (CRA notwithstanding) until the Wall Street crooks figured out a way to make a buck from it (by securitization, then turning crap into gold, then offloading the crap/gold onto someone else).

The CRA was just the excuse they needed to start handing out “fog a mirror” mortgages.

It doesn’t take a brain surgeon to figure out that an illegal/illiterate strawberry picker making $20K/year isn’t going to be able to pay for an $800K mortgage. One of the biggest crimes is that the home finance industry was taking home millions while making “guaranteed to explode” loans.

I guess you guys would blame the two year old for drinking the Drano, instead of the parents who left it on the dinner table with the cap off.

Comment by eight pieces of chicken
2013-02-13 12:17:30

Didn’t a large percentage of mortgages passed on to Fannie and Freddie in the bubble days? Banks and Mortgage brokers knew F&F and exploited it. Remove F&F from equation, may be we can argue that government didn’t cause the bubble? Also what about the Fed and Greenspan? I know I know it’s not government, right?

Get over it. Learn the real truth. THE FED IS PART OF THE GOVERNMENT.

Comment by Michael Viking
2013-02-13 12:21:03

Reagan tripled the deficit
Bush Doubled the deficit

What has Obama done to the deficit? From what I understand he’s got the pedal to the metal. I also understand that many on this board think he has to do all this deficit spending because of Bush. Maybe Reagan had to do all his deficit spending because of Carter? Nah, he’s culpable because he’s a Republican, right? Maybe Bush had to spend all this money because of the Internet bubble that Clinton created?

Just the other day PBear seemed to be liking the fact that airlines and ma bell were deregulated. Wasn’t it Nixon who started the former and Reagan the latter? Strange that those worst presidents ever did some good.

Look, the economy, politics, etc. is a lot more complicated than most of you people seem to think. It’s a giant, complicated, chaotic ball of wax and strings and levers and knobs and I don’t think anybody can understand what happens when this or that knob is pulled or pushed or twisted. There is no one person or persons to blame. Your guy is probably no better and no worse than somebody else’s guy. The system is essentially a living organism so complicated that nobody can understand it. And every change somebody tries to make has unintended consequences. Only a fool thinks they understand it all and knows how to fix things. And it’s even more foolish to cling to the fact that your guy is great and anything wrong he’s doing is because of some other guy’s mistakes.

Comment by eight pieces of chicken
2013-02-13 12:23:03

I guess you guys would blame the two year old for drinking the Drano, instead of the parents who left it on the dinner table with the cap off.

It’s funny you said that. The banksters were the kids who got drunk and the Government (Fed included) were the adults.

Comment by ecofeco
2013-02-13 12:29:04

My god. Are we blaming the poor people AGAIN?

In 2010, PRIME mortagage defaults surpassed sub-prime.

You can find the facts, links and posts right here on this board.

Comment by Montana
2013-02-13 13:43:20

Fannie Mae and Freddie Mac are failing to do even as much as banks and S&Ls in providing financing for affordable housing,

Oh god, pwned…

Anyway, why would so many private lenders make such risky loans, unless they were able to fob them off on fannie and freddie?

Comment by polly
2013-02-13 15:19:52

“Only to a liberal is having the government enforce fraud laws and generally accepted accounting practices equal to massive government.”

You aren’t talking about enforcing fraud statutes, bananas. Neither are you talking about enforcing GAAP. You said MAKE the banks eat the losses on the loans. That means the banks can’t sell the loans or they have to be required to buy them back at face value whenever they fail. That is not the way loans are generated in the US. It hasn’t been for decades. And if you only require banks to follow those rules, then you will just get non-bank loan originators to make the loans. You are talking about a HUGE regulatory structure. Is it a bad idea? Not completely if you can find a way to get the capital to the organizations that are now the source of the loans. But it isn’t even remotely small government. Not even a tiny little bit.

Comment by snowgirl
2013-02-13 15:46:21

Commenting on the Amazon review at the top of the thread: No mention of the Brooksley Born OTC derivatives debacle. No mention of the rating agency issues. There’s no way in Hades I’m writing this thing off as good intentions gone bad.


The Warning (PBS Special) Brooksley Born Documentary

“Born was appointed to the CFTC on April 15, 1994 by President Bill Clinton. Born and her team at the CFTC conducted a financial analysis which led them to anticipate a serious financial crisis due to growth in the trade of unregulated derivatives. When Born became chair of the CFTC, she sought comments on the regulation of derivatives,[6] a first step in the process of writing comprehensive regulations. Born was particularly concerned about swaps, financial instruments that are traded Over the counter on the Dark liquidity, and thus have no transparency except to the two counter-parties. Regulation was strenuously opposed by Federal Reserve chairman Alan Greenspan, United States Treasury Secretary Robert Rubin and Lawrence Summers Lawrence Summers”. [7]

On May 7, 1998, former SEC Chairman
Arthur_Levitt Arthur_Levitt
joined Rubin and Greenspan in objecting to the issuance of the CFTC’s concept release. Their response dismissed Born’s concerns off hand and focused on the possibility that discussing the regulation of swaps and other OTC derivative instruments would increase legal uncertainty of such instruments, potentially creating turmoil in the markets, and reducing the value of the instruments. Further concerns voiced were that the imposition of new regulatory costs would stifle innovation and push transactions offshore.[8]

B-b-but, no one could have seen this coming, right?

Comment by brother_jimmy
2013-02-13 16:21:54

The real problem is the lack of recourse for those who default, and the ensuing lack of a social stigma for those who lost. foreclosure should be an embarrassment but that and bankruptcy anymore don’t seem to be a big deal. Our policies regarding bailouts don’t help matters either.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 18:44:06

“That requires that the government make loan securitization illegal (and any other risk sharing schemes that anyone else comes up with) and then enforce the laws that do so.”

How about a compromise: Get the too-big-to-fail govt financial institutions (Fed, Fannie, Freddie, etc) out of the MBS purchase business and let the free market take care of loan securitization.

“This is not smaller government. This is a huge government intervention in our capital markets. Gigantic. Overwhelming.”

Are you talking about the Fed’s QE3 MBS purchase program here?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 20:37:44

“I guess you guys would blame the two year old for drinking the Drano, instead of the parents who left it on the dinner table with the cap off.”

CRA = Drano left on the dinner table with the cap off

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 21:13:34

“For obvious reasons, this argument is very popular on the right, but there’s precious little to back it up.”

Read Thomas Sowell’s book and get back to us, Polly.

Comment by palmetto
2013-02-13 06:47:10

Is this from the SOTU rebuttal? Do tell.

And is this really a “development”, or just words?

Anyway, until further enlightenment, I have no idea what you’re referring to.

Comment by oxide
2013-02-13 07:09:43

There’s probably a link waiting in moderation. Let poor Ben have his coffee in Mountain Time!

Comment by michael
2013-02-13 07:09:23

he’ll get set straight before he runs.

obama apparently was.

Comment by Avocado
2013-02-13 10:57:46

I know, lets set the house on fire, then lead a task group to figure out how to put it out, meanwhile lets keep supplying the gasoline and feed the fire (today’s GOP).

the system is so broken

Comment by hazard
2013-02-13 05:50:18

I have been thinking about the housing bubble, the shadow inventory, the bank bailouts, robo-signing, HARP, HAMP, Hardest Hit, Bernanke and his printing press, the Angelo Mozilo`s of the world walking away wealthy, people living in houses for 5 years without making a mortgage payment, all of the houses sold in the last 3 years at artificially inflated prices, the lies that are fed to the American people by the National Media (Fox included) on these and many other subjects by the PTB and here`s the thing……

http://marvel.com/images/gallery/character/1009662/images_featuring_thing - 57k -

Comment by michael
2013-02-13 08:48:11


Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:09:17

Lots of daylight robbery going on with no consequences, no?

Comment by hazard
Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 20:43:20

You nailed Itt!

Comment by 2banana
2013-02-13 09:37:37

“If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. To declare that in the administration of criminal law, the end justifies the means…would bring terrible retribution.”
–(Justice Brandeis, J., dissenting) Olmstead v. United States, 277 U.S. 438, 485 (1928)

“We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force.”
–Ayn Rand

“There’s no way to rule innocent men. The only power government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.”
–Ayn Rand

Comment by X-GSfixr
2013-02-13 11:53:51

Of course, the reason we have more laws isn’t because the crooks (and their lawyers) aren’t figuring out how to circumvent existing laws.

Comment by ecofeco
2013-02-13 12:33:10

They wouldn’t DARE do that… would they?


(Ayn Rand? Serisouly? What are you, 15?)

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 06:05:08

More Signs Of Froth
February 12, 2013

As a follow-up to yesterday’s post (see Is the credit market cruisin’ for a bruisin’?) where I detailed signs of froth in the credit market, I offer the following anecdotes of rising risk appetite.

Everyone’s bullish

Firstly, Joe Wiesenthal at Business Insider wrote that Nomura strategist George Goncalves found that when he went around the world on a marketing trip, virtually all institutional accounts were bullish:

Uniformly, he found that the view was this: The Fed had its hand on the till, and there was almost no way for risk assets to go down in light of the Fed stimulus. Virtually everyone was bullish. Even the bond managers aren’t worried about a great-rotation inspired selloff (they’re not really that worried about a shift from bonds to equities) though it is in the back of their minds.

Comment by Combotechie
2013-02-13 07:45:33

“Everyone’s bullish.”

“…virtually all institutional accounts were bullish.”

Institutional accounts = OPM.

Give me a big chunk of OPM and allow me to rake off some hefty fees and I too will become bullish.

Apparantly the more bullish I will become the more OPM I will attract.

“Never underestimate the power of incentives.” - C. Munger

Comment by ecofeco
2013-02-13 12:34:35

What do call a system that allows people to lose other people’s money without consequence?

(trick question)

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 06:06:39

Mr. Market is calling Congress’s bluff on the sequester.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 06:09:50

Wall Street likely to shrug off Obama as investors wait for budget deal
By Leah Schnurr
NEW YORK | Wed Feb 13, 2013 12:54am EST

Feb 13 (Reuters) - The U.S. stock market is unlikely to take much direction from Tuesday’s State of the Union, although President Barack Obama was less combative in his tone than some on Wall Street expected.

Obama’s speech provided little in the way of guidance as to whether the White House and Congress will come to a deal to head off large spending cuts that are set to come into effect as of March.

The broader market has not been overly concerned about the potential effect of $85 billion in automatic spending cuts that would hit the defense sector hard.

The equity market has rallied sharply in the first six weeks of 2013, in no small part as a result of the deal cut to avoid the “fiscal cliff” and the Republican House’s subsequent decision not to use the debt ceiling as a bargaining chip for spending cuts.

Comment by azdude
2013-02-13 06:52:17
Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:18:51

Feb. 13, 2013, 12:14 a.m. EST
Obama seeks to break free of budget fight
By Greg Robb, MarketWatch
U.S. President Barack Obama delivers his State of the Union speech.

WASHINGTON (MarketWatch) — President Barack Obama used his State of the State of the Union address Tuesday to urge Republicans to end “manufactured” crises over the federal budget deficit and come together to take steps to aid the middle class.

“The greatest nation on earth cannot keep conducting its business by drifting from one manufactured crisis to the next,” Obama told a joint session of Congress and a nationwide television audience.

“Let’s agree, right here and right now, to keep the people’s government open and pay our bills on time and always uphold the full faith and credit of the United States of America,” Obama said.

Obama said Democrats and Republicans should be able to come together to boost the middle class.

“A thriving middle class has always been America’s engine of economic growth. Reigniting that engine is the defining challenge of our time,” Obama said.

Comment by goon squad
2013-02-13 09:39:02

No government contractor left behind.

Comment by ecofeco
2013-02-13 12:35:36

No Banksta left behind either!

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Comment by goon squad
2013-02-13 14:43:07

Speaking of contractors, look what the nice folks at Raytheon are up to (paid for with your tax dollars, of course)


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Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 06:11:44

Feb. 13, 2013, 12:01 a.m. EST
Dow 17,000? Main Street lambs led to the slaughter
Commentary: Bullish predictions drive Wall Street’s casino
By Paul B. Farrell, MarketWatch

SAN LUIS OBISPO, Calif. (MarketWatch) — Wharton School economist Jeremy Siegel, author of two classics, “Stocks For the Long Run” and “The Future for Investors,” is one of America’s most respected financial minds. He recently told cable channel CNBC that Dow 15,000 was “definite,” with 50-50 odds of Dow 17,000 by year-end 2013.

He even doubled down in Kiplinger’s: “My Dow 17,000 projection may turn out to be too timid.” Now that’s real bull, a 20%-plus gain for 2013.

Dow 15,000? Dow 17,000? Irrational exuberance? DNA flaw? Delusional? Or are these predictions just typical marketing hype calculated to drive Main Street’s 95 million investors into Wall Street casinos for another end-of-a-bull-market slaughter?

Comment by azdude
2013-02-13 07:47:15

I guess they wheeled out the squid on CNBC yesterday talkn about the next bull run, lmfao.

Comment by ecofeco
2013-02-13 08:07:22

He might be right. Twice in the last 10 years the DOW has pushed past 14,000.

15,000 may happen… one day, but don’t hold your breath.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:16:36

So far, Mr. Market and Prof. Siegel are in disagreement. But perhaps a sequester head fake can get the rally back on track later this month.

Feb. 13, 2013, 9:56 a.m. EST
U.S. retail sales growth slows after tax hike
Consumer purchases in January edge up 0.1%
By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — U.S. consumers increased their purchases of retail goods in January at a slower pace, suggesting that a beginning-of-the-year tax hike partly restrained spending.

Taxes on working Americans went up 2% last month after the end of a tax break put in place two years ago to spur the economy. The nation’s richest citizens were also required to pay higher tax rates.

The increase in taxes appeared to have a mild dampening effect. Retail sales rose a scant 0.1% last month following a 0.5% gain in December, the Commerce Department said Wednesday. Sales rose a somewhat faster 0.2% excluding the large auto sector.

Normally people reduce their savings when their tax rates go up,” said Steve Rick, senior economist at Credit Union National Association in Wisconsin. “It looks like consumers did drop their spending a bit. It may be signs of stress on lower and middle-income people. They don’t have much savings to begin with.

Comment by polly
2013-02-13 09:54:19

I believe that some of the retail spending that happens in January is attributable to redemption of gift certificates/cards from Christmas. The stores take in the money when the card is purchased, but they can’t take it into revenue until the amount is redeemed because of accrual accounting rules.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:28:57

Interesting to see the DJIA and gold tanking on the same day, no? What goes up when both gold and stocks take a hit?

Comment by ecofeco
2013-02-13 12:36:48


Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 15:39:17

Anxiety is supposed to make gold go up and stocks go down.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:33:09

Feb. 13, 2013, 8:53 a.m. EST
Nowhere to go but down?
By John Nyaradi

After a sharp New Year’s run-up, major U.S. stock indexes have stalled at significant resistance levels and multiple fundamental and technical indicators suggest that perhaps there is now nowhere for equities to go but down.

Over the last couple of weeks, we’ve all read a steady stream of overly-bullish headlines and listened to media commentators celebrating Dow 14,000 and the possibility of a new, eternal bull market. However, overhyped headlines and a series of fundamental and technical factors point to the possibility that, as usual, such enthusiasm tends to mark market tops rather than bottoms.

Starting with technical indicators, a chart of the S&P 500 dating back to 1998 demonstrates how the index has established a triple-top over the period from 1998 through the present. This is an enormous resistance level and one that will need to be convincingly broken before one can declare eternal life for the bulls.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:45:34

The 1% peops who own almost all the stocks will not be happy about this news:

Bulletin Treasury nominee Lew calls lowering U.S. corporate tax rate to 25% a challenge

Comment by michael
2013-02-13 11:13:07

…but doesn’t he have offshore bank accounts?

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 16:08:32

It’s a given the sheep will be willingly led to slaughter.

P.S. In many respects, buying a single-family home is similar to buying junk bonds.

Financial Times
February 13, 2013 7:39 pm
Big investors lead bets against junk bonds
By Henny Sender and Vivianne Rodrigues in New York

Some of the world’s most sophisticated credit investors have been ramping up their bets against junk bonds even as retail investors have been pouring money into the asset class.

The list of junk-bond bears includes GSO, the credit arm of Blackstone; Apollo Global Management; Centerbridge Partners; Oaktree Capital; and a host of credit and so-called “macro” hedge funds, according to executives familiar with the firms’ investment activities.

These investors began paring their junk-bond holdings during late 2012. In more recent weeks, some have been taking short positions in the market, betting that the price of junk bonds will decline and their yields will go up.

The pessimism of the big alternative investment firms has been stoked by the recent ravenous retail appetite for junk bonds. During 2012 and the early days of 2013, massive inflows into funds buying these securities led to a narrowing of the spreads between the interest rates on junk bonds and those on Treasury securities.

As the spreads came in, many of the big funds looked to get out, fearing that junk bond prices could suffer in any economic scenario. If the economy deteriorates, the rising probability of default could cause spreads to widen. If the economy improves, yields would rise – and prices fall – for all manner of fixed-income securities.

“To be long fixed income – and particularly high yield – doesn’t make a lot of sense,” said a senior executive in the credit arm for a major New York alternative investment firm. “If you miscalculate on either side you lose. You lose if things are bad and there is a sell-off and you lose if things are better and there is a sell-off. The balance beam is very narrow.”

Comment by oxide
2013-02-13 06:13:56

From yesterday:

“Comment by jane
2013-02-12 21:35:57
Respectfully, DC proper is not a good place to be during expos!

Any locals know if Georgetown / American U / Catholic U / Marymount / George Washington U rent out any dorm space as tourist slots during the summer? That might be the sanest alternative, pricewise, for Slim. She could still walk around in Georgetown/DC. I’m not sure you could slip a bike through the crowds, what with the conventioneers and tourists, though.”

There’s always some expo or another going on in DC; not like we can avoid it. Dorms generally rent out space, but possibly not during May, and I thought they mainly rented to groups. (I’ve heard that GW does rent to individuals, but they book up fast b/c of the locale). Polly has offered Slim sleeping space, and I have a lumpy futon if anyone is interested in staying in an ugly house and long subway rides downtown.

You can barely walk on those skinny sidewalks in G-town, much less bike. The best place to bike is actually right on the Mall, especially the southern side.

Comment by polly
2013-02-13 07:43:20

DC colleges try to rent out their extra dorm space to students from other schools doing internships in DC. They claim that since the renters are students someplace else and doing something related to their education that the money the university gets from rent isn’t unrelated to its own educational purpose. It is a tax thing.

Comment by Arizona Slim
2013-02-13 08:23:44

When Slim can afford a trip to DC, the polly option will be at the top of my list of crashes.

Comment by palmetto
2013-02-13 06:44:25

This guy makes some excellent points. I’ve lived in a couple of areas where gays really set to work and gentrified neighborhoods and made them desirable.


Comment by goon squad
2013-02-13 08:19:21

That happened over the last 30 years in the Short North area (south of Ohio State main campus and north of downtown) of Columbus. It was a gang-ridden sh*thole before the rainbows moved in and cleaned it up.

Comment by ecofeco
2013-02-13 08:26:15

Gays usually move in after the bohemien artsits.

Where I live, it’s roughly about 10 years from when artists movie in to when the gays/hipster move into the area and another 10 until it’s gentrified and now unaffordable for the original artists.

Comment by michael
2013-02-13 11:15:10

gays? oh no…here comes the neighborhood.

Comment by Combotechie
2013-02-13 06:52:04

Frontline aired last night:

“FRONTLINE investigates Washington’s failure to solve the country’s debt and deficit problem.”


Comment by joe smith
2013-02-13 07:39:07

Pretty good program. The very short version of what I took away: Boehner seems reasonable, Eric Cantor is a gigantic a**hole (tried to backstab Boehner & still wants to), and the GOP was stupid not to cut a deal before the election. They turned down a deal they’ll never see again, given that Obama proceeded to batter them in the election.

Comment by 2banana
2013-02-13 09:42:08

Ok - so let me understand your logic.

The republcian tried to get the budget under control. They failed. They are the bad guys.

However, the demorats who control 2/3 of houses of power, get a free pass to do ANYTHING on the budget.

Back in the day, there were democrats who cared about an out of control government. Now there is not a single one who cares if we end up like greece. And they get a pass from all media.

Comment by In Colorado
2013-02-13 10:20:37

The republcian tried to get the budget under control.

They did no such thing. When they control the purse strings the budget and deficits grow by leaps and bounds. Always.

The beginning of the end for me as a Republican was watching the budget and deficit swell under W’s watch. He inherited a balanced budget and turned over a trillion dollar deficit to his successor.

The GOP talks “responsibility” but when they get the chance they NEVER deliver.

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Comment by eight pieces of chicken
2013-02-13 10:29:29

Deficits don’t matter. Reagan proved it.

–Dick “the real president” Cheney

Comment by 2banana
2013-02-13 10:29:51

So your answer is “The GOP had bad budgets so I will support a party and an administration that will give even WORSE budgets?”

That is your logic?


I still remember the liberals on this board screaming about the Bush $250 billion yearly deficits.

Obama’s $1 Trillion+ yearly deficits? Not a peep.

Comment by joe smith
2013-02-13 11:18:35

Your boy Reagan raised taxes several times, grew the size of government tremendously, and ran large budget deficits.

You need a reality check.

BOTH parties have a spending problem. They simply pimp themselves out to different people.

Comment by michael
2013-02-13 11:18:52

didn’t bush’s trillion dollar deficit include a one time $ 700 billion bank bailout that has been all paid back according to the obama administration?

Comment by In Colorado
2013-02-13 11:24:41

My logic is that the GOP is not the answer. Under our current system it’s either GOP or Dems. If you have a VIABLE solution. I’d love to hear it.

I still remember the liberals on this board screaming about the Bush $250 billion yearly deficits.

I screamed and stopped voting GOP because at the end of his 2nd term Bush left us a 1T deficit. The CBO has estimated that this year’s deficit will be 800B. I’m not happy with that, but at least it’s getting smaller. IIRC, deficits under the GOP always grew.

As a former Republican, watching the deficit grow from 0 to $1T in eight years was the unforgivable sin.

Comment by X-GSfixr
2013-02-13 12:10:47

The Democrats tend to spend money. Even the Republicans say so, and the Dems don’t deny it.

The Republicans profess to be the adults who can manage a budget. Except (since Reagan) they don’t. They pizz away even more money than the Democrats, on stuff like bankster bailouts, military spending and overseas wars/interventions/police actions/nation building/protecting MNC market share. Very little of which provides any “trickle down” benefit.

So who are the liars?

Watch what they do, not what they say.

Comment by ecofeco
2013-02-13 12:41:15

Republicans are liars, hypocrites, spendthrifts and aggressive.

In short… scum. Criminal scum.

The Dems ain’t choirboys, but the Repubs are definately criminals.

Comment by eight pieces of chicken
2013-02-13 13:34:46

The CBO has estimated that this year’s deficit will be 800B. I’m not happy with that, but at least it’s getting smaller.

You made me laugh. Has CBO ever been right on its projections? Don’t they always paint the rosy pictures completely devoid of any reality?

Comment by Bill in Los Angeles
2013-02-13 21:56:00

The Democrats and Republicans are ALL SCUM. The blame game on one or the other is just preaching to your favorite choir.

The politicians from both parties have generously redistributed taxpayer wealth.

So STFU and be like me - drop out of politics because it’s rigged for bigger and bigger government and tyranny.

Comment by Neuromance
2013-02-13 10:37:55

The problem is that the Republicans talk a good game, but they then do the same thing the Democrats do.

“As anyone with a functioning memory should know, the Republicans under the leadership of Armey and his cronies Newt Gingrich and Tom DeLay proceeded to rack up excesses in spending and boodling that made the old Democratic Congressional leaders look quite stingy. When he was asked once why he and his GOP comrades were chomping so much more federal pork than the Democrats ever did, he replied bluntly: “To the victors go the spoils.”


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Comment by Avocado
2013-02-13 14:44:23

Huh? Republicans had full control for 6 yrs under babaBush… they are the problem!

ya cant borrow your way to prosperity, son.

reagan tripled the deficit, bush doubled it…

know your party

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Comment by goon squad
2013-02-13 07:22:39
Comment by Spook
2013-02-13 08:18:06

BTW, when people use the term “liberty” I suggest they include a definition of the word because many people don’t have one so they use the term “freedom” instead.

Ive been using “the power/ability of choice” as my definition of liberty.

anybody got a better one?

Comment by goon squad
2013-02-13 09:05:54

Let’s review:

“They attacked us on 9/11 because they hate our freedoms.”

“The only way we can protect USA is to take away your civil liberties.”

Comment by ecofeco
2013-02-13 08:28:13

You have all the rights… you can afford.

“A society that puts a price on everything values nothing.”

Comment by goon squad
2013-02-13 07:24:37

Mike Whitney nails it yet again. The money quote:

“Everything about the US housing market is fake”


Comment by azdude
2013-02-13 07:49:43

since there are no jobs everyone lookn for the next asset to flip. stocks, homes, oil, gold etc. When the bagholder is left standn they go cry to the govt about how they were duped.

Comment by Avocado
2013-02-13 14:48:06


Every notice all these reality shows on tv with the same theme?

quick $$

this does not end well

Comment by ecofeco
2013-02-13 08:29:24

RE has been a con game in this coutnry long before any of us were born.

Google “1st and 2nd bank of the united states”

Comment by Pimp Watch
2013-02-13 10:38:40

Oh my goodness Martha….

From the article;

Repeat: “There remain over 10 million vacant housing units” and that does not include the “shadow supply”.

Again….. if you bought a house 1998-2013, you’re going to lose a lot of money. ALOT of money.

Comment by mikeinbend
2013-02-13 08:20:13

My animosity is that he pissed away 500k. More like1.2 mil but whatever; it costs a lot to live. The rest of this TL;DR. A lot of the money I pissed away needed to be spent regardless. What with the escalation of random acts of violence I think we should keep things in perspective and be grateful for each other. And not harm each other’s feelings as life and health are too often taken for granted. Not everyone here agrees with that even.

Oxide, have you done the math on what it takes to provide for 4 people for almost 20 years? Do you know I had a job when I bought my first home? I was remarkably naive to things financial before I read about it here. I was not speculating until I started making money faster than I could spend it and 30k per year as a teacher was laughable. I fell for the meme that housing only goes up based upon my one experience. Now I know about securitization and why my wife was loaned money at 60x times income. Among other terms thanks to reading this blog. It is the only blog I indulge in.

When I had kids I had a job and had no idea I would be stricken with something that had me pleading with my maker that I could just survive seeing my kids grow up to their teens. I learned to hate the sound of ambulances as they were all coming for me.

We were the last holdouts getting cell phones. Our texters are not smart phones. I have not taken out much in loans and have squelched on exactly one debt in my life. It felt funny but I did it upon advice from a lawyer. Next time I buy it will be with a mortgage though as I need some of the money I have tied up in my last home.

I used to make 50-75k as a vegetable broker/truck farmer in Goleta. I worked 60hrs/wk. I could have kept that job forever; but I got hurt. Spent at least a decade on the couch; spent two years in school when it was very uncomfortable. Went to every doctor under the sun. Counting my blessings that my wife could do my job for awhile and I could at least watch my kids. But eventually I had to get out of CA, knowing I would likely never be able to return to the land I loved; the good land. I also learned that “teaching is not exactly a desk job” Had to resign from more than one job due to pain issues and was laid off from another. Moved out to the coast of our state to ply my trade; moved back when I heard my son had packed his knapsack and was trying to get to me in third grade.

I paid out of pocket for my first failed surgery (50k) Thanks a lot Dr. Chiu; the insurance approved, then denied that surgery. But those pathetic pain patients will clutch at almost anything just to hope that things can get better. I was taken advantage of by the California Spine Center in TO. He would keep his patients waiting for hours in waiting rooms then offer up his cure.

Three more surgeries later 30k more out of pocket; I have paid 30k for medication that my “insurance” has not covered.
I also paid 20k on re-education so I could have a professional license to accompany my BA in pre-law.
I have kept my kids privately insured(only recently do they have OHP); I have kept myself and my wife in vehicles that never had to go into debt for; never took out a heloc. I put 20% down on a home(80k); paid cash for the rest of em.

Selective readers might call that pissing away; but trust me, a lot of those expenses were fixed and my wife lives like a pauper, bless her heart. We lived as a family of 4 in 440 sq feet for a few years. I was a minimalist for sure. I did take my kids to Spain once and blew 10k. I also bought ski passes one year and broke my ankle and pissed that money away as well. Working or not; ya gotta “piss away” a goodly sum each year just to live.

My wife is a good lady; I paid for her surgery about 10k last year. Insurance premiums and deductibles have been on the rise. Pissed away huge money there. Considering they stvis only for the meds Blue Cross/Blue Shield decides they want to pay for. Have paid at least 30k in meds that allowed me to go back to work.

I had my teaching license in 2003, 5 years after getting hurt. I lived three winters at the coast in a crappy travel trailer so I could work at teaching. It hurt to find I could not sustain that level of exertion just yet and gave up that job. I waited 7 years to get added to our local sub list so I could both work and live with family.

I have never taken a loan for a car. Pissed away almost 80k so we could all drive around. I never got the how much a month crowd and paid cash on the barrelhead for almost everything. Yes I have saved one paid off house that I am currently selling. Tried living in Utah for a change of pace. No amount of money could have made me stay and that was a stupid move.

My strategy of endearing myself at my local school means I get to teach my own kids every week. I love it. I hate that the cutting teacher is back in the classroom so soon after counselling the girls regarding cutting two weeks ago. I had a sneaky feeling that something was amiss when asked to fill in last week for him.

Which brings me to the topic of the cutting teacher. He was TIC(Principal was out of building; and I was there that day witnessing him counsel girl after girl). Then I heard he was hospitalized. His dad, another sub, told the kids he did not sleep for 4 days(manic episode?) but noone really knows about the hospitalization besides a few. I had a gut feeling about this; he has guages and tattoos. He is “goth”. Now he is back at work with scores of cuts on the tops of his hands. I will be subbing for him the last two days this week while he takes care of appointments and stuff.

My daughter is among the cutters. F’ing breaks my heart cuz I want to help so bad. We are getting her help but the whole concept is so foreign. At my wits end. But I know I am an adult and can not injure myself as too many see me as a role model.

Don’t like me or my ramblings or ventings? Use the extension. I see some have left rather than endure abuse. Maybe I can be next, you all may appreciate my absence.

Re: cutting. This guy has always taken on the problems of his classes to a fault. I heard yesterday that he told the eighth graders he got in an epic battle with his cat. He is wearing buttoned down long sleeve shirts. I am shocked he is back, he took the cutting kids and was like” Cutting? I’ll show you cutting!” My daughter feels pretty guilty over this. I am way more broken up over my personal life than some folks I don’t know taking shots at me.

I’ll admit that I like playing the devils advocate and that I have brought this treatment on myself. But I am an adult and will not resort to cutting to relieve my pain. I do want to understand that phenom. Thanks to those who read my stuff with open minds. I don’t care that some don’t like me here. I know those IRL do; that is what really matters. I know regarding cutting that self-mutilation lines have been blurred with guage earrings and body art, which used to be considered self mutilation is now accepted. And that artists like Marilyn Mansen glorify it by cutting onstage.

Yes I have put my counterpoint out there time and time again. Yes I get flogged. Maybe that is my form of self mutilation? Cuz I keep coming back for more. I have gotten lots of good advice from some here and I appreciate that more than I do being called a liar.

I like writing though so I practice on you guys. Also looking for good ideas with regards to investing as I got lucky with housing and don’t want to squander all I got left. I know that the average lucky ducky could not handle a $2000 blow so consider myself lucky to have some savings after 20 years of mostly not working save for landlording. Lots of boomers who have jobs have mortgages that are brand new and car payments. I dont have these burdens. I also don’t have adequate savings, but at least I have a couple years worth. I am selling into this dead cat bounce because I believe RAL’s mantra. It did not help my disclipline making 300k per year in appreciation but I do appreciate it. Not so much the ad hominem attacks. Sometimes I post just to piss him off. Guilty pleasures, I guess.

If it wasn’t for the occasional comment I read that some peeps enjoy my posts I probably would not still be here. And Ben, bless his heart, has not banned me just yet. I do take personal offense at being called a liar; I appreciate that Oxide and Ben et al don’t like me; at least they give me the human decency of telling me why without resorting to potshots.

OK off to work. Peace and hostility to y’all.

I remember Ben asking to keep it civil. That ral gets away with assaulting nearly everyone (Oxide, Awaiting, me, SF, Rental Watch) get me a little riled up Ill admit. He is mean spririted and I guess its somehow alright. Also posting “data” with nothing behind it.

I am sorry to offend any of you. But my stories are true and are about the housing bubble.

Comment by Prime_Is_Contained
2013-02-13 09:09:43

mikeinbend, you don’t owe anyone an explanation of where your money went.

We all have earned and spent a LOT of money over the past ten or twenty years. All of us. And we all spent it on whatever we needed to, or wanted to. It’s our own business.

The fact that your primary source of income was from RE flipping is fine. Many flippers prospered during the up-swing. I’m happy for you that you did. I never flipped, but did sell out in 2003 for a profit, so I also profited from the bubble (though there have been costs as well); many here similarly sold out pre-bust, and thus profited from the bubble, so you are in good company on that front.

The only thing you can’t do is complain about the fallout of having been a RE investor/flipper. That includes the foreclosure. Live by the sword, die by the sword—right?

Frankly, I’m mostly shocked that you finally did sell your $100K house. When you bought it, you agonized over it here, and I gave you my input. But what you said back then was that you were buying it so that your family would always have a place to live—even if you rented it short-term, you could always ask the tenant to move out if you needed to in order to deal with a future loss of income.

Are you so sure that your income is safe now, in light of the potential for your physical maladies to worsen and make it impossible for you to work?

If not, why the H-E-double-hockey-sticks would you sell the place you wanted to own so that your family would always have a place to live?

The fact that you didn’t stick with your plan makes me think that you were rationalizing it to yourself, but that on some level it was still a flip to you. Please tell me if I’m wrong on that.

Comment by ecofeco
2013-02-13 12:43:27

“We all have earned and spent a LOT of money over the past ten or twenty years. All of us.”

Speak for yourself.

Comment by Pimp Watch
2013-02-13 10:06:21

Quit yer howling and grow up.

Comment by mikeinbend
2013-02-13 14:14:24

you do more name callin than the 4th graders I was babysitting today.
If you don’t like what I am burning stay away from my fire.

PIC- yes I wanted to keep house for place to live. However wife had surgery last year and I want to finish paying for it and I need liquid $$. Thought about a loan but the lady who has been living in it wanted to buy it and I will be able to get my money back out, without much time or 6% on transaction fees. Plus I need more “reeducation” to keep working as a teacher. Which takes more money. Not sure if I can work indefinitely but I want to believe I will be able to.

So I sold it without it having to be marketed. House is 30 miles east of where we have settled plus my parents live in the same hood where house is and they have offered up the upstairs to us if we ever need it. And they are gone 7 months per year snowbirding in Green Valley AZ. Although they are asking the same question as the house provides $10k/yr income stream. Thanks for yr advice/question. I guess I just don’t like being in debt.

Comment by Pimp Watch
2013-02-13 15:04:35

You do more howling and whining than a politician.

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Comment by Montana
2013-02-13 13:50:05

My animosity is that he pissed away 500k. More like1.2 mil but whatever; it costs a lot to live.


Comment by oxide
2013-02-13 14:22:08

I was the one who said that Mike “pissed away $500K.” “More like 1.2 mil but whatever; it costs a lot to live” is Mike’s clarification. (Mike, I hope you don’t teach English.)

I’m sorry to hear about the medical problems. You’re why we need some kind of public option.

Comment by Arizona Slim
2013-02-13 15:10:59

Seconded on the public option.

Speaking of tough times on the medical front, I was accosted in the parking lot of the credit union. Lady wanting to know who my primary care doctor was. Apparently, she had just parted ways with her.

My reply: Haven’t been to a doctor in five years. They’re too plumb expensive for my slender budget.

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Comment by mikeinbend
2013-02-13 19:47:46

From k to calculus. Although I scored 760 on math SAT; I did only get 660 in Engrish.

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Comment by cactus
2013-02-13 22:46:15

I wrote a piece on Dr Chiu but used alot of swear words so it maynot post.

I hope it does though and I hope he lost big time on RE speculation in Moorpark

I turned him in too but nothing came of it

Comment by cactus
2013-02-13 22:37:36

I paid out of pocket for my first failed surgery (50k) Thanks a lot Dr. Chiu; the insurance approved, then denied that surgery. But those pathetic pain patients will clutch at almost anything just to hope that things can get better. I was taken advantage of by the California Spine Center in TO. He would keep his patients waiting for hours in waiting rooms then offer up his cure.”

I know that asshole I walked out of his operating room when he wanted me to put 15K on my credit card for L5 S1 surgery because Blue cross was not paying enough.

I went to Abu samra in ventura about a year later, foot still numb,
insurance paid everything and thats the way it goes.

Chui billed me year’s later for a bunch of made up stuff went to bill collectors I had to write a bunch of letters and was told to “govern myself accordingly” by some asshole laywer like he would ever win in court.

My FICO was 800 when I bought my house F%^ U Chiu

BTW that guy bought up a bunch of old houses in Moorpark to make apartments right before the bubble burst hahahahahaha

Comment by cactus
2013-02-13 23:03:49

bad luck MIKEinBEND probably made you worse with his laser

What did he do low back surgery ?

Dr Chiu the idiot


Noncompliance with a Board Order (4/27/2012)
Action Taken: Probation
Allegation of Complaint: Please reference the following Document
State: California

Disciplinary action in another state (1/3/2010)
Action Taken: Surrender
Allegation of Complaint: Dr. John Chiu; License # 95-205Nature of Complaint:

The physician has been the subject of disciplinary action in another state. The physician’s license is on inactive status and he does not currently reside or actively practice medicine in the State of New Mexico.
Action Taken:

The physician has agreed to voluntarily surrender his inactive license to practice medicine in the State of New Mexico.

State: New Mexico

Substandard Care, Incompetence or Negligence (7/21/2008)
Action Taken: Probation
Allegation of Complaint: Dr. John Chih Chiu; License # C31784Nature of Complaint:

The physician committed gross negligence with one patient, repeated acts of negligence with two patients, and failed to maintain adequate and accurate records for two patients.
Action Taken:

The board has Revoked the physician’s license to practice medicine in the State of California. The revocation is Stayed and the physician is placed on Probation for a period of three years subject to the following terms and conditions:

1.The physician shall provide a copy of the Decision and Accusation at every hospital where the physician has privileges and every facility where the physician engages in the practice of medicine.
2.The physician shall not supervise physician assistants.
3.The physician shall obey all laws and all rules governing the practice of medicine in the State of California.
4.The physician shall submit quarterly declarations confirming probation compliance to the board.
5.The physician shall appear before the board upon request.
6.The physician shall complete forty hours each year for the duration of the physician’s probation of an educational program or course directed at correcting any deficient areas of practice or knowledge.
7.The physician shall successfully complete a medical record keeping course within six months of probation.
8.The physician shall complete all phases of a clinical training or education program equivalent to the PACE Program and comply with the program’s recommendations.
9.The physician shall not engage in the solo practice of medicine

Comment by eight pieces of chicken
2013-02-13 08:20:16

If you own house now, sell and take some profit.

3 yrs and 21 days later, you will be able to buy the same house for 69% less.

Comment by joe smith
2013-02-13 08:38:15

You must have the paid subscription to the RAL app.

I only have a free version and have not received this update yet. :(

Comment by nine pieces of horsemeat
2013-02-13 08:47:34

Your losses will be incalculable.

Comment by joe smith
2013-02-13 09:07:13

Not sure what you mean by my “losses”, but I have a fairly good idea what my expenses for shelter will be for the rest of my life.

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Comment by ten pieces of dogmeat
2013-02-13 09:35:02

Perhaps if you were a renter, yes.

As a homeowner, your losses are infinite.

Comment by Ryan
2013-02-13 10:04:26

No they aren’t. In 3 years and 21 days, the losses will be 69%.

69, haha!

Comment by Ryan
2013-02-13 09:09:10

Yes, they will. Look above, you will lose 69%. haha, 69.

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Comment by Pimp Watch
2013-02-13 10:12:39

“Your losses will be incalculable.”

Correct. Why? Because leverage goes negative. Losses on leverage depreciating assets in incalculable.

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Comment by eight pieces of chicken
2013-02-13 10:31:15

What’s this “incalculable” stuff? I calculated last night and it’s exactly 69.

Comment by Pimp Watch
2013-02-13 10:50:05

Then you better dump it while you still can. You must have bought it in 2005?

Comment by rms
2013-02-13 08:25:23

Turbotax comes through again in record time!

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:24:39

Outgoing Treasury Secretary Timothy Geithner is fairly upbeat about the economy in a leaving

Friday, January 18, 4:22 AM ET

This news story has 3 comments:

Tony Petroski Comments (6237)

His dream job would probably be with Turbotax as a “consultant.” Imagine the commercials they could make?

“Hi. I’m Timothy Geithner and I used to be in charge of collecting all the taxes for the country. I’ve been a Turbotax customer all my life. We’ve now corrected all the mistakes in prior products that produced so much heat for some of us…”

Comment by goon squad
2013-02-13 08:41:11

Coastal elitist, bedwetter libtard, propaganda from the New York Times:


Comment by Avocado
2013-02-13 14:34:54

Remember, we are elitist, we don’t care what you think. We haven’t cared since 6th grade. ;)

Comment by Ben Jones
2013-02-13 08:45:16

I heard a new one:

‘the professional threat inflation complex’


That’s pretty good. We hear about ‘threats’ almost every day, even financial ones. Now we can jot them down to the PTIF.

Comment by goon squad
2013-02-13 08:57:07

Be afraid. Be very afraid.

Just curious how many people still have their houses/apartments sealed with duct tape and saran wrap as we were instructed to do back circa 2001-2002?

Comment by Ben Jones
2013-02-13 09:11:03

I didn’t watch the state of the whatever speech, but I understand it was proposed that the minimum wage be raised for homeowners. I want to go on the record supporting this measure, as we will suffer serious terrorist attacks should it fail. We should also bomb LA to prevent any further shootings of newspaper delivery people.

Comment by eight pieces of chicken
2013-02-13 10:02:03

It’s just Ron Burgundy reading from a teleprompter…except not funny at all. I don’t listen to political speech of any kind. Political speech should be used by CIA as torture tool instead of Rock-n-roll music.

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Comment by eight pieces of chicken
2013-02-13 10:21:18

Interviews with politicians or interviews with athletes?

Can’t say which one is worse?

Comment by Avocado
2013-02-13 14:37:03

“great ideas, but who will pay for the bombings.”

my imitation of a fox news correspondent. Step over a dime to save a penny.

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Comment by joe smith
2013-02-13 09:03:46

David Brooks nails it: the U.S. government has become a machine for ripping off/stealing from the younger people to protect the interests of older generations by reinforcing their “values”, funding their health care, and paying their social security.

“Today, Americans have inverted this way of thinking. Instead of sacrificing the present for the sake of the future, Americans now sacrifice the future for the sake of the present.

Federal spending is the most obvious example. The federal government is a machine that takes money from future earners and spends it on health care for retirees. Entitlement spending hurts the young in two ways. It squeezes government investment programs that boost future growth. Second, the young will have to pay the money back. To cover current obligations, according to the International Monetary Fund, young people will have to pay 35 percent more taxes and receive 35 percent fewer benefits. ”


Comment by michael
2013-02-13 09:10:30

“the U.S. government has become a machine for ripping off/stealing from the younger people”

the younger people have already been tapped out, bent over a barrel and flat busted.

they are going for the unborn now…and i ain’t talkin’ bout abortion.

Comment by goon squad
2013-02-13 09:18:08

David Brooks

Did you read “Bobos In Paradise” yet?

Another recommendation from the squad’s Bureau of Cultural Affairs are the films of Todd Solondz. To say they are disturbing would be quite an understatement.


Comment by joe smith
2013-02-13 09:36:28

I am about 50 or 60% through Bobos In Paradise. I like how Brooks examines the underpinnings of the bo/bo dichotomy, beginning in Europe, then here in the U.S. starting with the transcendalists, etc. culminating in BoBo USA (Main Line Philadelphia, Boulder CO, Bennington VT, etc).

Bobos consume a lot more than I ever would, but at the same time all of us get to “free ride” on the “system” that bobos produce. For example, I don’t want to spend entire weekends looking for the perfect hardware for my kitchen cabinets or the “perfect” latte machine. But I love that other people are out there driving those types of retail, because someone like me (or you, perhaps) can come along and cherry-pick from the variety and quality available.

I have not seen proof of your point that all bobo’s are coexist-y types imbued with a lot of naive assumptions and crazy priorities. I also don’t think bo/bos are hung up on race all that much. Of course, living in certain areas you are going appear to be “avoiding” blacks or Mexicans, but the reason you’re living in the area is proximity to jobs & people with similar interests/values.

BTW - If anyone else wants to read this book when I’m finished with it, let me know, I’ll ship it to you gratis when I’m finished.

Comment by WT Economist
2013-02-13 09:19:42

He mentions government and business. What about the family?

Sticking together for the sake of the kids is a lot less popular than it used to be. So is getting together to begin with.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 09:21:07

‘David Brooks nails it: the U.S. government has become a machine for ripping off/stealing from the younger people to protect the interests of older generations by reinforcing their “values”, funding their health care, and paying their social security.’

Does he read here? Because I have been pointing this out for years, already.

And don’t forget that the effort to reflate housing prices back up to unaffordable heights fits right in with the pattern.

Comment by 2banana
2013-02-13 10:09:54

The young and unborn do not vote.

So government could care less. Better to give free cheese to those who vote.

To BUY their votes.

Who cares if we end up like Greece anyways? That will happen long after I am out of office.

Cut government? Reduce spending?

But kids will starve and grandma will be thrown out into the street.

Comment by joe smith
2013-02-13 11:23:50

So you agree we should spend far less on defense and health care for old people while investing far more in K-12 education and infrastructure programs that will produce benefits for decades in the future?

Interesting. It’s almost like you’re starting to get it.

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Comment by 2banana
2013-02-13 11:35:00

So you agree that government should live within in its means?

Interesting. It’s almost like you’re starting to get it.


Entitlements are 58% of federal spending
The military is 19% of federal spending

The government borrows 45 cents of every dollar it spends.


Comment by aNYCdj
2013-02-13 11:37:09

Joe as a lawyer tell me why can’t I decide when I want to end my life peacefully with a Dr Kevorkian DR, and no one gets sued or arrested.

Shooting your bedridden spouse and then yourself is no way to exit this world.

Comment by Avocado
2013-02-13 11:40:09

I wish everyone “got it”

so simple, once they pay attention

Comment by Michael Viking
2013-02-13 12:24:23

I wish everyone “got it”

so simple, once they pay attention

Yep, you get it! You get everything. You’re flat out omnipotent!

Comment by In Colorado
2013-02-13 13:21:39

The government borrows 45 cents of every dollar it spends.

That wasn’t even true in 2009 when the deficit hit 1413B and the budget was 3.5T (that would be forty percent).

In 2012 it was 1.3/3.8 (34%)

And this year it is projected to be .9/3.8 (23%).

So enough with the “45%”. That’s not true and you know it.

Comment by 2banana
2013-02-13 13:50:39

So enough with the “45%”. That’s not true and you know it.

Yeah, I just made those numbers up.

Funny thing - the CBO just made it the SAME EXACT numbers too.

And I guess the CBO is wrong about the yearly deficits of Bush and obama too.

You can have your own opinions but not your own facts.

And you know the REAL facts - and you just can’t spin them. So you just make up your own.


The federal government borrowed 46 cents of every dollar it has spent so far in fiscal 2013, which began Oct. 1, according to the latest data the Congressional Budget Office released Friday.

The government notched a $172 billion deficit in November, and is already nearly $300 billion in the hole through the first two months of fiscal year 2013, underscoring just how deep the government’s budget problems are as lawmakers try to negotiate a year-end deal to avoid a budgetary “fiscal cliff.”

The agency, Congress’s nonpartisan budget scorekeeper, releases preliminary estimates of the government’s fiscal position each month. Final figures will come later this month from the Treasury Department.

The government is poised to post another $1 trillion deficit in fiscal year 2013, which would mark the fifth straight year. Before that, the record was $438 billion, which came in 2008, President George W. Bush’s last full year in office.


Comment by Avocado
2013-02-13 14:39:43

I wish the GOP would make the cuts and stop spending so much blowing up rocks.

We deserve a vote!
We deserve a vote!
We deserve a vote!
We deserve a vote!

O schooled ‘em with that line! loved it!!

Comment by Avocado
2013-02-13 14:53:01

love to see the details: (2nd request)

“Entitlements are 58% of federal spending”


Comment by Pimp Watch
2013-02-13 16:39:51


You should let liars spin you up into such a frenzy.

Comment by Pimp Watch
2013-02-13 16:43:02


Comment by polly
2013-02-13 17:27:22

“The federal government borrowed 46 cents of every dollar it has spent so far in fiscal 2013, which began Oct. 1, according to the latest data the Congressional Budget Office released Friday.”

You can’t draw any conclusions from the numbers on a partial fiscal year, for pete’s sake. The government gets money in fits and starts. The revenue stream isn’t remotely even. For example, a lot of money is paid in around April 15th.

Comment by Avocado
2013-02-13 11:37:00

Where do you get all these freebies you keep mentioning? Any specifics and dollar amounts?

My tenant had been unemployed for 2 yrs. He has a BS, a pd for car, and a 401k from his past job. He is living off his past success and savings. He has no health insurance, and he cant get any freebies. He said even if and when he runs out of money, he can only get about $185 a mo in food stamps, and a discount at the medical clinic ($50 a visit). Gee, sounds like he is bankrupting America.

If you are worried about gov cheese, go after the big guys on wall st. they got trillions.

know your party.

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Comment by In Colorado
2013-02-13 13:23:25

Agreed. I know people who sleep in their cars. Free goodies for everyone my butt.

Comment by Avocado
2013-02-13 11:46:10

cuts need to start with military, foreign aid, handouts to millionaires, wall st bailouts, …. then grandma and baby Mikey.
Not old people and babies first. get it?

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Comment by X-GSfixr
2013-02-13 12:22:46

That’s what I’ve been saying. Go after the 1%er/Wall Street class crooks. Because that’s where the money is.

Some of them will threaten to take their balls any play elsewhere. Good. Maybe they will take their Vampire Squid act with them.

Any can anyone tell me why foreign governments/businesses/individuals are allowed to spend even ONE CENT lobbying US government officials?

Comment by oxide
2013-02-13 11:47:54

The young and unborn do not vote. So government could care less. Better to give free cheese to those who vote.

To hear Paul Ryan tell it, you don’t even have to be young or unborn. You just have to be under 55.

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Comment by ecofeco
2013-02-13 12:49:08

I AM the (almost) older generation and NOBODY is looking out for my interests.


The only, ONLY, interests being look out for are the wealthy of every age.

Blaming seniors is just another distraction/deflection game.

Comment by Michael Viking
2013-02-13 13:16:11

Comment by ecofeco
2013-02-11 10:17:26

Oh wait…


Carry on.

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Comment by ecofeco
2013-02-13 13:56:32

Fact. As I prove here everyday.

Do try and pay attention.

Comment by Michael Viking
2013-02-13 16:43:04

Fact. As I prove here everyday.

Do try and pay attention.

I pay attention. I think you’re a hypocritical, self-righteous, arrogant blowhard full of empty bluster and blather.

Where’s the link to this “fact”: I AM the (almost) older generation and NOBODY is looking out for my interests.


Where’s the links to prove The only, ONLY, interests being look out for are the wealthy of every age. is a fact?

You’re an idiot, plain and simple, who confuses his opinion with fact.

Comment by ScallyWag
2013-02-14 09:29:49

” I think you’re a hypocritical, self-righteous, arrogant blowhard full of ..”

”You’re an idiot..”

You forgot ‘cloven hoofed poopy head.’

Comment by eight pieces of chicken
2013-02-13 10:07:49

The problem with people like David Brooks is it took them this long to figure this out. I was in my early 30’s and an economic zombie when the 2008 collapse happened. Few months of reading on my own and getting diverse views from sites like this and others were enough for me to understand how corrupt the system was/is.

Too late Mr. Brooks. We are doing fine without you. Now go back to being a cheerleader to the fraudulent system and its corrupt leaders. You know it very well why you are getting paid.

Comment by WT Economist
2013-02-13 11:00:49

I saw this coming as a 22-year-old in the early 1980s.

Comment by rms
2013-02-13 13:29:19

“I saw this coming as a 22-year-old in the early 1980s.”


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Comment by Rental Watch
2013-02-13 10:10:57

@Prime is Contained: Yesterday you posted:

“For us to be “normal”, this 3.25 million needs to get to 500k or less.

RW, if you’re right about this…

Doesn’t the trend-line in that semi-annual data you posted suggest approximately 7 more years would be required at that rate to get to 500k or less? Except for the last data-point, the rate is fairly constant.”

My thoughts:

“PIC, that’s where looking state by state matters. It very well could be 5-7 years (or longer) before all the distress has been flushed through the system.

However, some states are on track to be done in a year or less.

Others much longer.

Many of those that are on pace to take a long time seem to have picked up the pace recently, as many of the FBs in court have delayed as much as they can.

Again, I think it will be YEARS before all the distress has been washed through the system (no less than 3-5, but could be a fair bit longer). HOWEVER, when we get to the last years of this run, the bulk of the distress will be located in relatively few states.”

Comment by aNYCdj
2013-02-13 10:24:39

Do any of you follow Howard Bloom or read any of his books?



Comment by frankie
2013-02-13 10:31:48

Clothing chain Republic has confirmed widespread fears, announcing that it has called in the administrators.

The Leeds-based retailer, which has 121 stores and about 2,500 staff, said it had appointed accountants from Ernst & Young to take over running of the firm.

Republic is owned by private equity firm TPG, which bought the company in 2010 in a deal thought to be worth about £300m, and now stands to lose much, if not all, of its investment.

Some private equity firms have been accused in the past of taking a gamble with the companies they buy up, by loading them up with debt - something that allows them to reduce the amount of cash they need to invest themselves, and which allows them to deduct the interest payments from their tax bill.


This is starting to become a trend, companies bought in the noughties by private equity firms going bust.

Comment by Neuromance
2013-02-13 10:42:46

Spending money brings quite a lot of power. The federal budget defines the priorities of the duly elected representatives of the nation.

I wonder what priorities Bernanke has with his spending.

Comment by Avocado
2013-02-13 10:45:15

Great business plan layed out last night (Obama’s speech). I hope congress gets to work.
The sweaty Rubio’s speech seemed like he did not even read Obama’s first. Rubio just kept to the false idea that Obama wants big gov. Even though Obama made it clear, this is about smart gov (that we all want).

what a joke Congress is.

Comment by michael
2013-02-13 10:55:04

pro choice is something we all want too.

Comment by aNYCdj
2013-02-13 11:22:16

OHbewanna actually said something worthwhile? Thats news to me.

The only thing i heard was America made a big mistake re-electing me and now y’all R gonna to pay for it.

Comment by eight pieces of chicken
2013-02-13 18:04:16

smart gov

Does Obama not know better than to spout pedestrian stuff like this? What happened to hope and chain?

Smart gov sounded a lot exciting when I first heard it 10000 yrs ago.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 20:52:42

Hope and chains was missin from last night’s SOU address…

Comment by 2banana
2013-02-13 11:23:59

FHA = the New Subprime Bubble

Mortgage Burden Grows, but Federal Role Is Shrinking
Wall Street Journal | 13 February 2013 | Nick Timiraos

The Federal Housing Administration has played a major role supporting housing markets through the downturn, but there are signs that the agency is beginning to cede market share back to the private sector.

Data from CoreLogic underscores the first point. In the aftermath of the housing bust, private lenders have required down payments of 20%, while loans to the most creditworthy borrowers can have down payments of 10% if borrowers purchase mortgage insurance. For borrowers with less money to put down, government insurance programs are the best bet.

The FHA, for example, allows borrowers to make down payments of just 3.5%. Loans for veterans through the Department of Veterans Affairs and for rural borrowers through the Department of Agriculture allow borrowers to put no money down.

Demand for those low-money-down programs has surged in recent years, and CoreLogic data show that average loan-to-value ratios for home purchases are near the highs witnessed during the bubble.

CoreLogic measured the average combined loan-to-value, which includes second mortgages that were often taken out during the go-go days to substitute for a down payment. The result: average combined loan-to-value ratios, or CLTVs, peaked at 87.8% in late 2006 before declining in 2007 as lenders tightened up. But then they rose back in 2010 to a new high of 89.7% amid a surge in FHA lending. They stood off that high, at 88.2%, last March, the most recent month for which data is available.

Comment by 2banana
2013-02-13 11:25:49

Mortgage Applications Fall, Sequestration and How Obama Won’t Raise The Deficit By One Dime
Confounded Interest | 02/13/2013 | Anthony B. Sanders

The Mortgage Bankers Association applications indices were released this morning. Mortgage purchase applications fell -9.45% from the previous week while applications for refinancing fell -5.51%.

President Obama did mention that housing is improving in the State of the Union Address last night, but failed to mention that it is a largely investor-driven recovery rather than a household-driven recovery. You can see that mortgage purchase applications are not really recovering since 2010.

Between tight credit, the increasing likelihood of sequestration, and continuing fear of a slowing economy, the household recovery is somewhat thwarted. And raising the minimum wage to $9 per hours (as Obama promised in the SOTU Address) won’t help either.

Here is a chart of non-farm labor and expectations of hiring. Combine the massive Obamacare tax increases and other taxes/regulations and the hiring scene is less than optimistic.

Here are the looming sequestration spending cuts. Wow, the military bears the brunt of the spending cuts (or more accurately, the slowdown in the rate of government spending).

My favorite line in last night’s State of the Union address was how all this new spending Obama proposed wouldn’t raise the deficit by one dime.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 14:13:57

Everyone who was qualified and interested in refinancing has already done so by now. Hence the push to weaken qualification standards for refis to include every underwater borrower…

Comment by 2banana
2013-02-13 11:28:43

Fact-checking Obama’s State of the Union
MSN News | 2/13/13 | Eugene Keily

The president spins his accomplishments on jobs, health care and deficit reduction in annual address.

President Obama put a rosy spin on several accomplishments of his administration in his 2013 State of the Union address.

The president claimed that “both parties have worked together to reduce the deficit by more than $2.5 trillion.” But that’s only an estimate of deficit reduction through fiscal year 2022, and it would be lower if the White House used a different starting point.

Obama touted the growth of 500,000 manufacturing jobs over the past three years, but there has been a net loss of 600,000 manufacturing jobs since he took office. The recent growth also has stalled since July 2012.

He claimed that “we have doubled the distance our cars will go on a gallon of gas.” Actual mileage is improving, but Obama’s “doubled” claim refers to a desired miles-per-gallon average for model year 2025.

Obama said the Affordable Care Act “is helping to slow the growth of health care costs.” It may be helping, but the slower growth for health care spending began in 2009, before the law was enacted, and is due at least partly to the down economy.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 14:12:29

“…but there has been a net loss of 600,000 manufacturing jobs since he took office.”

Bush certainly did leave him with a steaming pile of feces.

Comment by CRATER!!!!
2013-02-13 11:29:25


Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-13 12:06:58

What would happen if the Fed lost its monopoly rights to the virtual printing press technology? For instance, is there a chance the Wall Street Megabank, Inc. cartel would lose its death grip on the U.S. financial system?

A guy can hope…

Feb. 13, 2013, 8:45 a.m. EST
With Amazon minting currency, Fed at risk
Commentary: In future, good money could drive out the bad
By Matthew Lynn

LONDON (MarketWatch) — Central banks are not exactly short of things to worry about right now.
Best of MarketWatch
The 5 most and least affordable U.S. cities for housing
Here’s the one other story that you can’t afford to miss today

The euro may well be on the road to a chaotic collapse, taking some of the world’s biggest banks with it. A currency war may break out between Japan, the U.S. and Europe. Printing money has run out of steam, but there is still little sign of the global economy returning to the kind of growth rates it saw before the credit crunch.

But in the long term what they should perhaps be most worried about is losing their monopoly on issuing money. A new breed of virtual currencies are starting to emerge — and some of the giants of the web industry such as Amazon.com Inc. (AMZN +3.53%) are edging into the market.

Gresham’s law famously stated that bad money would drive out the good. In the 21st century, it is now possible the law might be turned on it head. Good money might drive out the bad. If so, that matters to investors — for the simple reason that investing in the right currency makes a lot more difference to the kind of returns you can expect than what you actually put your money into.

Comment by X-GSfixr
2013-02-13 12:44:51

I wonder how bad the SHTF, if the body in the burned out cabin is NOT the crazed cop-killer……….

“……..you’ve managed to kill everyone else, but like a poor marksman, you keep missing the target……..”

Much like our local “cop-killer” chase of a month ago. Police were busting down the doors all night, of everyone in their database who knew the guy, until they tracked him down and killed him.

Lots of cops attending funerals.

Nobody seems to be asking the question of exactly how he was able to get out of the back seat of a car during a traffic stop, kill two cops, and drive away from the (unwounded) third cop.

I guess this is to be expected, of a police force where they get drunk off duty, look for a fight with the neighbors when they think the neighbors music is too loud, and end up shooting two of them when it turns into a fistfight……..in the neighbor’s house and front yard.

Comment by hazard
2013-02-13 14:17:20

Biden: We’re counting on the ‘legitimate news media’ to help spread our message on guns

By Doug Powers • February 11, 2013 11:17 PM

During a press conference on new gun laws in Philadelphia on Monday, Vice President Joe Biden spoke extemporaneously about what President Barack Obama’s administration hopes will be a push by the media to advance new gun safety measures. He said that, in an era when a variety of new and social media outlets can disseminate misinformation, it is the job of the “legitimate news media” to cover the gun control debate and identify inaccuracies.

“The president and I are going to continue to travel the country,” Biden explained, “so that what we’re proposing can’t be misrepresented.”

“To be very blunt with you, we’re counting on you – the legitimate news media — to cover these discussions because the truth is that times have changed,” Biden added.

http://michellemalkin.com/2013/02/11/biden-legitimate-news-media/ - 74k -

Sandy Hook Hoax Theories Explained: Why Newtown ‘Truther’ Arguments Don’t Hold Up

Posted: 02/11/2013 10:25 am EST

There Were Multiple Shooters

While it’s true that law enforcement and the media reported the possibility of multiple shooters in the immediate aftermath of the massacre, people who still believe this are willfully ignoring information to the contrary.

To support their claims, theorists point to police audio obtained by the New York Post in which an officer says he had “reports that a teacher saw two shadows” running past the gym. They also point to aerial footage obtained by the Associated Press that appears to show police catching a man in the woods near the school. Truthers also point to an interview CBS News did with a bystander who said he saw a man wearing “camo pants and a dark jacket” being walked out of the woods in handcuffs by police — likely the same man from the aerial footage of the woods.

As many other outlets have already pointed out, that man was probably Chris Manfredonia, the father of a 6-year-old who attends Sandy Hook, who was on his way to the school when he heard “popping sounds,” according to the Los Angeles Times. The newspaper reports that Manfredonia was briefly handcuffed by police after running “around the school” trying to find his daughter. Manfredonia confirmed that fact to CNN’s Anderson Cooper.

Also, as Salon points out, the Newtown Bee reported that a local law enforcement official told them there was an off-duty tactical squad police officer in the woods with a gun that day, so it’s possible he was mistaken for an additional gunman.

http://www.huffingtonpost.com/2013/02/11/sandy-hook-hoax-theories-explained-debunking-newtown-truther_n_2627233.html - 420k -

Sandy Hook DA cites ‘potential suspects,’ fears witness safety

By Ralph Lopez
Feb 5, 2013

Connecticut State’s Attorney Stephen Sedensky has argued that unsealing warrants in the Sandy Hook case might “seriously jeopardize” the investigation by disclosing information known only to other “potential suspects.”

Sedensky said that unsealing the warrants would also:

“identify persons cooperating with the investigation, thus possibly jeopardizing their personal safety and well-being.”

The statement by the CT prosecutor’s office is the first indication from state authorities that Adam Lanza may have not acted alone. The statement was made in support of a motion to continue the seal on the results of five search warrants for 90 more days.

CT State Police Public Affairs Officer Lt. Paul Vance said in an official press release on December 16th that:

The male subject identified as the shooter at Sandy Hook Elementary School has been identified as ADAM LANZA DOB: 04/22/92; he resided at 36 Yogananda Street. His cause of death was gunshot wound and his death is ruled a suicide.

However, neither Vance nor the CT Attorney General’s office have ever ruled out the possible presence of other suspects. The New Haven Register reports Vance as having said: “Whenever you conduct an investigation you don’t speculate as to where it’s going to take you, as I said, we’re going to look at every single thing, every piece of material and we’ll take it from there.”

http://digitaljournal.com/article/342829 - 40k -

Comment by goon squad
2013-02-13 17:41:51

Sandy Hook = the Reichstag is on fire.

Cueing up “Clampdown” by the Clash.

Comment by hazard
2013-02-13 18:25:50

There are a fair number of young believers.

Comment by Pimp Watch
2013-02-13 16:22:56

The Great Mania
Reinflating the collapsed housing bubble, as many desire, would likely yield the same disastrous result. What’s needed are lower, fairer prices, and more investment in more productive sectors of the economy.


Comment by hazard
2013-02-13 17:11:29

“THE INEVITABLE BUT UNEXPECTED RESULT was a wave of mortgage defaults and a catastrophic decline in housing values.”

Au contraire mon fraire I am a dumb @ss and I knew this puppy was gonna blow. That`s how I found this blog like 7 years ago. Looking for someone or something to tell me I was not crazy and that people who made $40k could not afford $500k houses, especially when they had sold for $150k four years earlier.

“During the 1970s and 1980s, as the large baby-boom generation grew to adulthood and formed households, housing markets were distorted.”

I think it was about 1977 and I can remember my parents looking puzzled while they were talking about the house next door that had just been sold for $250k. I think the puzzled look came partly because they almost bought that house 17 years earlier but bought the house we lived in. They were both new houses at the time but the house next door had one more bedroom and was a little bigger. My parents passed on it because it was $34k and our house was $32k and from what they said they were not sure how they were going to afford that.

Comment by Rental Watch
2013-02-13 17:13:56


I noted the other day that Hughes (formerly of Public Storage) is a guy who previously aggregated a formerly mom/pop business into an institutional asset class, and has now set his sights on single-family rental.

Here is a timely article on just this topic.

And a link to his company’s website.


They are currently formed as a private REIT (information that I didn’t know before reading the article)…small step to become publicly traded…

Time will tell whether this will be a giant bomb, or whether Mr. Hughes does it again (and creates a monster of a public entity).

Comment by Pimp Watch
2013-02-13 17:28:22

Ron Paul

Rand Paul

Ru Paul

Any of the 3 would be better than the douchebaggery in the WH.

Comment by goon squad
2013-02-13 17:43:14

We would prefer Billy Paul, thank you.


Comment by Pimp Watch
2013-02-13 18:02:31

Well…. if you’re going to select Pauls… I’ll take Paul Stanley.


Comment by eight pieces of chicken
2013-02-13 18:00:16

My vote is on Ru Paul.

Ron Paul, RIP.
Rand Paul, Sellout.

Comment by Bluestar
2013-02-13 18:05:47

TXU Bondholders Burn as $500 Million Lost in a Single Day.


Energy Future Holdings Corp. (TXU) bonds lost almost a half-billion dollars of value in a single day last week as the electricity provider and owner KKR & Co. hire restructuring advisers and the firm’s ability to defer interest nears an end.

Bonds of Texas Competitive Electric Holdings Co., Energy Future’s unregulated unit, plunged as much as 9.25 cents to a record low of 15 cents on the dollar Feb. 8 while a secured loan fell to a two-month low. Energy Future hired law firm Kirkland & Ellis LLP, and KKR, which helped take the power producer private in the largest leveraged buyout, retained Blackstone Group LP to help restructure the $47.2 billion of total debt.

^If they go bankrupt the natural gas futures contracts they used to leverage this will be next to worthless. I wonder which oil & gas companies will have to write down their assets? It could look like Cliffs Natural Resources today… Ticker CLF: 29.29 -7.32(-19.99%) Feb 13

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 21:08:05

No worries on the Japanese economy’s never-ending recession, as they are no longer the world’s number two economy, anyway.

Financial Times
Last updated: February 14, 2013 3:47 am
GDP data reveal Japan mired in recession
By Jonathan Soble in Tokyo

Japan remained mired in recession in the last three months of 2012, government data showed on Thursday, as the economy defied experts’ expectations for a mild rebound in a development that could help insulate Tokyo against criticism surrounding the recent plunge of the yen.

The data indicated that Japanese gross domestic product fell 0.1 per cent between October and December, or 0.4 per cent on an annualised basis, in the third contraction in as many quarters. That compared with a median forecast of 0.4 per cent annualised growth in a survey of 32 economists conducted by Bloomberg News.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 21:18:08

Clearly the global economy has nowhere to go from here but UP! Buy stocks today, or get priced out forever as green shoots of global economic growth rapidly mature into mighty oak trees!

Euro zone seen dropping deeper into recession as Germany slips

The logo of the European Union and the word recession are displayed on the screen an iPad and a LCD monitor in Zenica November 16, 2012. REUTERS/Dado Ruvic

BRUSSELS | Thu Feb 14, 2013 2:18am GMT

(Reuters) - The euro zone probably slipped deeper into recession in the final quarter of last year as a Chinese slowdown led even the robust German economy to contract, but a modest pick-up may already have begun.

Economists expect the EU statistics office Eurostat to say on Thursday that the bloc’s output shrank 0.4 percent in the fourth quarter, after contracting 0.1 percent in the third quarter and 0.2 percent in the second.

Given that the euro zone economy stagnated in the January to March period, the Q4 figures should confirm the bloc recorded its first calendar year with no growth at all.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 21:19:36

True confession: I have been watching the global economy for upwards of a quarter of a century, and cannot recall a point when the gap between stock market performance and real economic performance was wider.

Which way the divergence reverts is anyone’s guess…

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 21:27:43

Oh wait, I take that back — I had similar thoughts going into Fall 2008, just before the U.S. stock markets all dropped by, what, 50% or so?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 21:24:23

A stopped-clock watched pot never boils over.

Republicans predict sequester will happen

By SEUNG MIN KIM | 2/13/13 8:51 AM EST Updated: 2/13/13 9:44 AM EST
Pompeo: Sequester will be ‘home run’
Van Hollen: Sequester is ‘totally reckless approach’

Top congressional Republicans predicted Wednesday that the sequester will hit at the end of the month – the latest chapter in the series of budget battles that have stymied Washington in the last few years.

Missouri Sen. Roy Blunt, a member of Senate Republican leadership, said “I think the sequester’s gonna happen” and said the Pentagon needs more discretion to target the budget cuts so they don’t hit defense programs indiscriminately.

“The right thing to do is reduce spending,” Blunt said at POLITICO’s post-State of the Union event. “The wrong way to do it is with across-the-board cuts.”

And Rep. James Lankford (R-Okla.), the chairman of the Republican Policy Committee, said at POLITICO’s event that there is a “greater chance that they’ll be implemented than not at this point.” He argued that the GOP-led House has been out front on the sequester conundrum, noting that it twice passed legislation in the last Congress to avert the budget cuts.

“Obviously nothing was done” by the Senate and the White House, Lankford said. “We’re in the same boat now.”

The sequester – a collection of automatic, across-the-board budget cuts enacted into law in 2011 – is set to go into effect after this month unless Congress passes a solution to avoid it. Democrats are demanding more revenue to offset those cuts while Republicans – still smarting from tax hikes included in the deal to avert the so-called fiscal cliff – have said tax increases are now completely off the table.

In his address, President Barack Obama warned of the grave consequences of letting the sequester – which affects domestic and defense spending equally – hit government programs, and called for a “balanced” solution to reducing the deficit that combines both revenues and spending cuts.

“We can’t ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and the most powerful,” Obama said.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-13 21:26:18

Marco Rubio’s drinking problem
By KATIE GLUECK | 2/12/13 11:03 PM EST
Updated: 2/13/13 12:04 AM EST

Twitter exploded during Sen. Marco Rubio’s Republican response to the State of the Union, as the Florida senator appeared a little sweaty and dry-mouthed at mid-speech, taking an awkward swig from a bottle of water that had been placed off-camera. Rubio handled the hullabaloo with some humor, later tweeting a picture of the water bottle.

Comment by Avocado
2013-02-14 00:23:04

I wonder what would happen to Banana if you watched a week of The Daily Show?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-14 00:23:46

While these central bankers may fail to ever fix a single element of the global economy as long as they are in power, but nobody can rightfully accuse them of a lack of effort!

But at least they have the MSM financial journalists all fooled!

German Economy Contracted More Than Forecast in Fourth Quarter

Activism Shows Rise of Whatever-It-Takes Central Bankers

By Simon Kennedy - Feb 13, 2013 4:19 PM PT

Call them the “whatever-it-takes” central bankers.

As the world’s advanced economies grow at half the speed of the pre-crisis years amid persistently high unemployment, governments are turning to a new set of monetary-policy makers who in word — and they hope deed — are more aggressive than their predecessors.

A revolution that began with the arrival in November 2011 of Mario Draghi at the European Central Bank now is gathering speed as Canada’s Mark Carney joins the Bank of England and the Bank of Japan awaits a new governor. The shift could culminate a year from now if Federal Reserve Chairman Ben S. Bernanke is succeeded by someone even bolder.

The changing of the guard reflects both a need for central banks to offset fiscal paralysis and a bet that monetary policy remains a potent force. At the same time, investors are increasingly weighing the costs and benefits of quantitative easing, while suggesting too much is expected of central banks.

The appointments of activists “reflect the case that economies are still struggling to sustain solid recoveries and there’s pressure from political quarters to be more stimulative,” said Nathan Sheets, a former adviser to Bernanke and now global head of international economics at Citigroup Inc. in New York. “Central banks have stuff in the bag, but it’s largely untried and may generate unwelcome side effects.”

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