February 28, 2013

Bits Bucket for February 28, 2013

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

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Comment by tresho
2013-02-28 04:52:43

Offices of Detroit short sale king are raided by FBI:

FBI agents on Wednesday raided the real estate offices of William Elias, the self-described “Short Sale Expert” of metro Detroit whose operations came under regulatory scrutiny late last year.

Detroit FBI spokesman Simon Shaykhet declined to comment on the morning raids, noting that documents in the case had been sealed.

In an interview with the Free Press Wednesday, Elias, a licensed realty broker, said he did not know the reason for the FBI’s visits, but said agents sought files on 23 properties that his firm helped sell in short sales.

Elias, 38, was until this fall a familiar presence on local radio and television, where he advertised his real estate services with a showman’s flair. He encouraged frustrated homeowners who were underwater on their mortgages to erase their debt by dialing 877-CALL-WILL.

The ads went off the air soon after Elias received notice in October that the Federal Home Loan Mortgage Corp., known as Freddie Mac, would add his businesses to its “Exclusionary List” of agents and lenders with which it will not do business because of alleged unsavory practices.

In its October letter, Freddie Mac cited several reasons for adding Elias Realty to its exclusionary list, including a claim that Elias Realty employees instructed Freddie Mac borrowers to secretly buy a new home before applying for short sale assistance on their current home’s Freddie Mac mortgage.

Freddie Mac also alleged that Elias’s short-sale consulting business — Taxfaster — charged “attorney fees” that were actually seller taxes that should have been paid to Freddie Mac.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:31:10

“…including a claim that Elias Realty employees instructed Freddie Mac borrowers to secretly buy a new home before applying for short sale assistance on their current home’s Freddie Mac mortgage.”

Isn’t that perfectly legal, and also smart?

I’m missing the problem here…is it that somebody who is clever enough to game the system doesn’t fit the Democratic party’s ’struggling homeowner’ narrative very well?

Comment by AmazingRuss
2013-02-28 07:50:38

To say nothing of morally bankrupt… The hallmark of the Jesus party.

Comment by Neuromance
Comment by Neuromance
2013-02-28 11:16:16

Oh, and my initial observation, that “Economic policy over the past several years has been directly focused on keeping Wall Street profitable, and damn the consequences” was also echoed by The Economist:

Much of current economic policy seems to be driven by the need to prop up banks, whether it is record-low interest rates across the developed world or the recent provision of virtually unlimited liquidity by the once-staid European Central Bank. The long-term effects of these policies, which may be hard to reverse, are difficult to assess.


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Comment by Paladin
2013-02-28 15:43:53

The FBI agent I talked to this week said they have many, many major cases of mortgage fraud on the docket. They are swamped. He is worried about getting them all processed given the possible furloughs due to sequestration.

It is just stupid to do mortgage fraud deals as the paper trail is public record!

Comment by Pimp Watch
2013-02-28 05:43:31

Housing is a depreciating asset and a loss, ALWAYS.

Comment by Salinasron
2013-02-28 07:25:26

So is your health, car, and everything else in this world. Anything worth having takes time and money invested in it. Life is about decisions, good decisions-better your life!

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 08:06:33

“So is your health, car, and everything else in this world.”

You point is correct on a qualitative level.

But on a quantitative level, the depreciation on a house that sold for north of $500K can easily dwarf all the other household-level depreciation allowances you mentioned.

Comment by joe smith
2013-02-28 08:36:57

The thing is, even if you’re renting, your payments go towards paying off the house, repairing the house, paying property taxes, etc. As with anything else in life–if you’re paying for it, part of what you’re paying for is repair/replacement/wear and tear.

To deny this requires a huge intellectual leap of faith, far beyond the bounds of reality.

The real story is, there is no need for an average person to spend more than 20% of gross income on housing expenses.

And if this country had its head on straigth, we would stop subsidizing people to take on 500k mortgages or encouraging/allowing builders to build 3500+ sq ft houses and then get sell them to FHA (etc) financed buyers. Some people (small %) can afford houses like that. For most, they represent an epic amount of waste.

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Comment by sleepless_near_seattle
2013-02-28 10:52:07

And if this country had its head on straight, we would stop subsidizing people to take on 500k mortgages…

Who then try to rent it out at prices that DON’T cover the things you mentioned above, all because “I was always told that you should buy a house because it’s a good investment.”

Comment by joe smith
2013-02-28 11:03:52

My point wasn’t that rent will always cover depreciation, repairs, taxes, etc. My point was that whatever you are paying in rent *is* going towards those things in one way or another, unless your landlord is in foreclosure and is holding onto the payments and not paying the mortgage/taxes/etc.

I don’t think the major problem with the housing bubble was people with an income of $80k paying 200k for a small SFH that could be built for 120k. To me, the major disconnect and dollar amounts of losses occur higher on the scale. When goon talks about “$350k starter houses” that sounds like the sweet spot for the problem. That said, the amount of $500k+ houses in certain parts of the country is staggering. Incredible amounts of waste were involved in financing, building, and occupying (or under-occuping) those albatrosses.

Comment by Pimp Watch
2013-02-28 12:37:03

“My point was that whatever you are paying in rent *is* going towards those things in one way or another”

Of course it is. But the rent doesn’t come remotely close to covering those costs at current asking prices of resale housing. At current asking prices, cap rates are negative. And you know that….. therefore;

What is really your point? Be honest.

Comment by rms
2013-02-28 13:04:42

“My point wasn’t that rent will always cover depreciation, repairs, taxes, etc.”

+1 Certainly over the long haul.

However, I have a co-worker, FBr, who has a Detroit home that is roughly $60k upside down, and he bought it as an REO directly from a bank for a great deal several years earlier. Anyway, the current market rent doesn’t cover his mortgage payment, so part of his military retirement check is being siphoned away. Meanwhile values continue to fall there. Here’s someone who really needs the FBr tee shirt.

Comment by joe smith
2013-02-28 13:46:28

“What is really your point? Be honest.”

Are you seriously going to start with the “so-and-so is a Realtor” thing again? I’m not a realtor, I agree that housing is a loss (I say expense), and I generally agree with your point (although not necessarily the 65% drop in nominal prices).

My point of disagreement is that the bigger problem was that our “system”, such as it is, was throwing tons of money at what is/was essentially waste. Rewarding people for buying 3000+ sq ft McMansions is stupid. Rewarding people for taking on $500k+ mortgages is stupid. I think people who bought modest houses are going to lose money too. I would disagree that this was the big issue. When you hector everyone who buys a house, you dillute the interest that would be better focused on larger, systemic losses.

I wish the big problem in the U.S. housing market was people paying $100/sq ft for reasonably-sized SFH’s. Unfortunately that is the least of our worries.

Comment by Pimp Watch
2013-02-28 13:53:30

Oh no you don’t.

You said….

“My point wasn’t that rent will always cover depreciation, repairs, taxes, etc.”

This is false. You know it. We know. So why are you saying it?

Comment by joe smith
2013-02-28 14:37:59

Are you mis-reading?

I said — my point was not that rent will always cover depreciation, repairs, taxes, etc.

Do I need to put the NOT in ALL CAPS?

Go up to where I originally said this and look at the entirety of the post. It’s clearly I’m saying that it’s wasteful EVEN IF YOUR RENT DOESN’T “COVER” all the payments. The size of the houses, the fact that loans were given out like candy, the fact the MID primarily benefits large mortgage balances, etc etc. Those are the big issues, in my opinion. And I said it was my opinion.

Comment by Pimp Watch
2013-02-28 16:23:22

Then WHY are you saying it?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 22:58:19

“But the rent doesn’t come remotely close to covering those costs at current asking prices of resale housing.”

Right. For instance, our landlords ‘covered’ about $150,000 in price declines that there is no way for them to charge back to us. If they tried to do it, we’d move somewhere else…

Comment by localandlord
2013-02-28 17:54:20

ALWAYS ?- I had to pay $12,625 last year in tax on my “loss”.

I paid $14,000 in 2005. Why did they call it Capital GAINS tax?

Comment by Blue Skye
2013-02-28 18:54:28

If you are realizing capital gains then I guess you are selling, or flipping some of those properties. Good for you having a good year on paper and paying taxes, but honestly, you pulling out a few large doesn’t change the analysis that the fundamentals of the housing market still don’t make sense, aren’t sustainable and are in many ways a Ponzi scheme.

When you brag about your recent track record, be sure to keep an eye on how much track lies ahead.

Comment by localandlord
2013-03-01 05:28:22

You are right that those numbers are the result of sales. A combination of very long term investments and improvements at the end aka flipping. But for the last 2 decades I’ve paid taxes every year, even in years when my only income is from rentals. Admittedly it’s a modest amount compared to the tech wizards on this board.

Where you and I and maybe PW will agree is that single family homes don’t USUALLY work out to be good investments. I’ve seen cases where they’ve been bought cheap enough they might be - but the location is far away from the PW universe.

My rentals are 2-4 family homes + one SF I bought for the lot. It’s enough to pay my bills + expenses on the rentals. Most of my houses are paid for or very close to it. Another phenomenom that doesn’t happen in the PW universe where buyers can’t afford the payment on a 15 yr note.

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Comment by Pimp Watch
2013-02-28 18:57:50


Comment by you're my boy, blue
2013-02-28 05:50:57

I love me some craterton.

Comment by azdude
2013-02-28 06:32:12

you must love jc pennies today then. when is shld going to finally admit their broke instead of draining all the shareholder equity off to insiders?

Comment by eight pieces of chicken
2013-02-28 06:55:13

And that jacka$$ CEO.

Comment by Sean
2013-02-28 08:24:52

It’s a shame about JC Penneys. I haven’t shopped at one in a while until a few months ago while on a trip to get winter kids clothes. Cleaner store, quality clothes and a good prices. Unlike a place like Kohls, which you’ll see a kids shirt for $20, but 20 percent off if you buy three plus shirts and an additional 15 percent off by using your Kohls Card, you don’t need calculus to figure out the price of JCP clothes. Simple sign: Kids shirts $7. I actually liked the shopping experience in their new store and hope they pull through.

Comment by In Colorado
2013-02-28 09:12:24

You forgot the coupons Kohls gives you when buy something. Say spend $50, get a $10 off coupon that’s only good 4 days next week.

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Comment by Sean
2013-02-28 09:20:53

But I rarely buy clothes. I’m a married guy who wears a uniform to work, and I don’t have a taste for fashion. I only buy for my kids, and only when they outgrow their stuff. I’m sure that Kohls coupon is nice if you consistently buy stuff, but for someone like me it’s worthless.

Reminds me of that old Andrew Dice Clay skit about shopping:” Red tag sale, white tag sale? Why can’t they just be honest and say ‘Hey, it’s the s**t we can’t get rid of’ sale!”

Comment by Carl Morris
2013-02-28 09:12:39

when is shld going to finally admit their broke instead of draining all the shareholder equity off to insiders?

Sounds like a metaphor for the whole country.

Comment by hazard
2013-02-28 08:41:02

“I love me some craterton.”

NFL Films “I Love Me Some Me” Terrell Owens Tribute Song …
http://www.youtube.com/watch?v=ilNWGtcdUY0 - 208k -

Comment by oxide
2013-02-28 06:27:18

From yesterday:

Comment by calcan
2013-02-27 21:16:58
I agree… fire sales in Vegas and Florida too.

As to the earlier quote that “Canada is also missing ingredients that made the U.S. market so toxic — subprime borrowers”…
I think most are forgetting that Canada mortgage rates are only guaranteed 5 years. That is (in a nutshell) a suicide loan at its core.

This is news to me, could you expand? Are you saying that there are NO fixed-rate mortgages in Canada? Is that how they afford their built-in TARP (whatever it is)?

I know the financial structure that caused the Ameican bubble. I know the bubble popped when we ran out of buyers. But I don’t get what’s going on in Canada.

Comment by Lola
2013-02-28 07:39:45

Are you saying that there are NO fixed-rate mortgages in Canada?

There absolutely are fixed rate mortgages in Canada (as well as variable rates) but the maximum length that most people can get is a 10 year term. The majority go for a 5 year term and then renew for another 5 years. The difference in interest rates right now is about 2.99 for a 5 year and about 3.69 for a 10 year.

Comment by oxide
2013-02-28 08:01:29

Thank you! This is all new info for me, and will really help me understand the Canadian bubble.

I should have asked if there were any 30-year fixed mortgages, which is the gold standard in America. I locked into a 30-year fixed. My payment will NEVER change, even if we have Zimbabwe-style inflation and 16% interest.

But now this opens a whole other host of questions.

When you say 10 years, does that mean Canadians have to pay off the mortgage in 10 years, or that you can only go 10 years before you have to renew? If you have a 30-year total mortgage, do you have to renew 10 years twice, or 5-years five times? What if the bank refuses to renew?

For the 5-year, that’s the equivalent of a 5/1 ARM in America, now considered “risky.”* That hit people huge here in 2011. You guys are in real trouble if interest rates go up.

*by the Consumer Financial Protection Bureau. That word has some teeth; “risky” is the threshold where a borrower has standing to sue the bank (not sure how this works yet).

Comment by incalculable losses in Maryland
2013-02-28 09:38:00

Your losses will be beyond comprehension.

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Comment by oxide
2013-02-28 10:20:40

Well since these posts are already beyond my comprehension, I’m not fazed. Just another day at HBB. Carry on.

Comment by polly
2013-02-28 11:05:41

This is starting to sound like Star Wars…

“The reward would be…more money than you can imagine.”

“I don’t know kid. I can imagine a whole lot.”

How could the “losses” be more than all the payments of principle, interest, property taxes, insurance, maintenance, voluntary improvements and maybe more utilities than you would otherwise use because you would rent a smaller place. I can comprehend/calculate/imagine/whatever all of that. It isn’t easy to predict perfectly, but it isn’t that hard to estimate.

And that assumes that relieving you of the need to pay rent has no value at all and that at the end of the ownership you (or your heirs) sell for zero. Very unlikely but not incomprehensible.

Comment by RioAmericanInBrasil
2013-02-28 11:23:01

I can comprehend/calculate/imagine/whatever all of that.

That’s hilarious Polly! I wrote the post below about an hour ago and decided not to send it but after reading your post which in different words says almost the exact same thing, I’ll post it.

Your losses will be beyond comprehension.

I don’t understand your word usage.

“Beyond comprehension”? I’ve lost big money in my life but I was able to comprehend the number.

Are you implying that someone can lose 50K and comprehend it but if they lose 100K all of a sudden their mind goes blank?

Or that when a loss goes over a certain level it suddenly becomes “incalculable? Like the Casio calculator will have a melt-down?

“Beyond comprehension”? I think someone here does not comprehend the meanings of the words “incalculable” and “comprehension”. (oh…and the word “liar” too)

Comment by incalculable losses in Maryland
2013-02-28 12:23:45

Her losses will be a galaxy of black holes, yes incomprehensible.

Comment by RioAmericanInBrasil
2013-02-28 13:02:24

…a galaxy of black holes…..

LOL, Well…. you are amusing sometimes. :)

Comment by joe smith
2013-02-28 13:50:14

Prince George’s County, MD is already “Craaaaterton”, still reeling from the ‘08-’10 time period.

What will we call Montgomery County? I suggest “Sequesterton”.

Comment by polly
2013-02-28 15:10:03

Maybe save that for Norfolk, VA. The pols from there seem to be just shy of apoplectic. MoCo won’t enjoy it at all, but it won’t end us.

Comment by Pimp Watch
2013-02-28 18:22:00

Polly…. does your client write this stuff for you?

Comment by Blue Skye
2013-02-28 19:03:40

The character of a mania is that any loss is “beyond

I actually owned a property once that was a “galaxy of black holes”. A very apt description.

Comment by rms
2013-02-28 09:25:35

Canada also uses quarterly or semi-annual compounding in their interest calculations.

Comment by Rental Watch
2013-02-28 09:55:43

My understanding is that this is similar around the world…a 30-year fixed loan is rare…except for in the US.

Comment by Jingle Male
2013-02-28 15:54:32

“….except for in the U.S.”

You may thank Freddie and Fannie for that nice feature. It makes the housing market much friendlier to buyers here.

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Comment by Pimp Watch
2013-02-28 18:09:33

Inflating prices through credit is “buyer friendly”?

What kind of warped reality do you live in?

Comment by Blue Skye
2013-02-28 19:06:11

The “My debt will make me rich” dimension?

Comment by Rental Watch
2013-02-28 19:09:52

Spain had a bubble, and no fixed rate financing.

The fixed rate isn’t the problem, it’s the cheap credit.

The fixed rate simply pushes interest rate risk onto the lender, instead of the borrower.

Comment by michael
2013-02-28 07:42:28

not sure about canada but i remember someone telling me some time back that fixed rate mortgages are mostly a U.S. thing.

Comment by 2banana
2013-02-28 06:31:29

What is that saying about useful idiots again?


Bob Woodward says he was threatened by White House

Veteran journalist Bob Woodward said Wednesday he was threatened by a senior Obama administration official following his reporting on the White House’s handling of the forced federal spending cuts set to take effect on Friday.

“They’re not happy at all,” he said on CNN’s “The Situation Room,” adding that an e-mail from a senior administration official - who he would not name - communicated a message which caused him great concern.

“It was said very clearly, you will regret doing this,” he said.

Woodward penned a 2012 book reporting that the idea for the spending cuts, known as the sequester, originated with the White House. It’s a claim President Barack Obama originally denied, but the White House has since acknowledged.

“[W]hen the president asks that a substitute for the sequester include not just spending cuts but also new revenue, he is moving the goal posts,” Woodward wrote.

Comment by palmetto
2013-02-28 06:45:19

The WH threatens Woodward? Meh. They threaten ordinary citizens 24/7.

Comment by Combotechie
2013-02-28 06:47:04

Never threaten someone who uses ink by the barrel.

Comment by howiewowie
2013-02-28 15:25:55

I’m not sure that applies anymore. Just look at the whole gun permit publication battle.

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Comment by joe smith
2013-02-28 06:51:20

Teabaggers are useless idiots. Get a look at the Cato Institute’s gardening crew. All Hispanic, there was NO English being spoken, there never is. Cato has a gardening crew of about 4-5 (always different guys) there roughly once a week from March-November. Remember, job creators/”bootstrappers” love cheap labor.


(Taken this morning on my way to work)

Comment by goon squad
2013-02-28 07:25:42

Koch fluffers.

Comment by joe smith
2013-02-28 08:00:28

Cato was originally called the Koch Foundation. It only changed its name to Cato later on.

Cato is libertarian with a small l. Let’s not kid ourselves, they do an awful lot of water-carrying for Republican and “pro business” economic policies.

Cato hates the American worker.

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Comment by Montana
2013-02-28 07:29:20

cato is open borders libertarian isn’t?

Comment by eight pieces of chicken
2013-02-28 07:44:59

Yes and Yes!

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Comment by joe smith
2013-02-28 07:55:31

CATO does an incredible amount of Koch Fluffing and support of Republican positions and candidates. Paul Ryan and Eric Cantor are big fans.

They do make an homage towards Hayek. In huge gold letters on the west-facing side of the building you can see that the auditorium just inside the glass edifice is the “F.A. Hayek Auditorium”, for instance.

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Comment by alpha-sloth
2013-02-28 08:10:21

Even worse, they’re doing improper, ‘volcano-style’ mulching around their trees.

Es mala para los arboles.

Comment by inchbyinch
2013-02-28 14:21:41

Isn’t CATO part of the Edward Bernays invention of shell institutes, to protect the corporate propaganda driven agenda behind the shield of “institute”?

I could swear I learned that.

Comment by alpha-sloth
2013-02-28 20:12:35


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Comment by john banner
2013-02-28 15:21:07


Be honest, how many landscape contractors use anglo workers in the DC area?

I bet when you move, you try to find the cheapest movers, right?


Comment by Ben Jones
2013-02-28 19:43:00

‘how many landscape contractors use anglo workers’

There are legal Hispanics in this country.

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Comment by eight pieces of chicken
2013-02-28 06:56:17

Woodward is a senile. He should be on the kill list.

Comment by Steve W
2013-02-28 08:31:07

Just read the actual email on HufPo. Woodward is totally overreacting, and yes, he might be senile.

Comment by Rental Watch
2013-02-28 09:59:57

Woodward understands the importance of word choice.

I think what he took most offense to was the White House trying to change what a reporter (who had conducted extensive interviews) was going to say.

You know, that whole “independent and free press” thingy.

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Comment by polly
2013-02-28 13:17:49

They weren’t forbidding him from saying it.

The e-mail didn’t threaten him with harm.
The e-mail didn’t threaten him with reduced access.

The most natural reading is that he would be embarrassed (”regret”) having said something that wasn’t supported by the rest of the article.


Comment by Rental Watch
2013-02-28 15:03:55

Regardless, the government was trying to influence, in a private way, what a member of the (presumably independent) press said to the public. That should be enough to cry “foul”.

And clearly the phone conversation was FAR more animated than the follow-up papering over of the conversation–indicating where the WH official’s head was at with respect to trying to guide the press’s message to the public.

Watching Woodward on CNN…he was clearly disturbed by the exchange.

Comment by ahansen
2013-02-28 23:31:48

“…Watching Woodward on CNN…he was clearly disturbed….”

See how selective editing works?

Comment by oxide
2013-02-28 07:17:14

I thought the sequester WAS the idea of the White House, as a drastic trigger deal to get past the debt ceiling etc. I don’t see how this is new. The fact remains that there is an impasse between not letting the rich to keep their own money and throwing grandma in the street, and until that is solved, there won’t be much movement in any direction.

As usual, the solutions are unpalatable to one half or the other:

1. single payer health care; start with a public option.
2. filibuster reform. The minority party gets to non-cloture filibuster five bills per 2-year session; the rest have to be talking filibusters.
2. tarrifs and/or environmental regulations on products shipped into the US.
3. conclusive research which could put a “black box” on anything made with dwarf hybrid wheat: “This product may cause acid reflux and increased risk of diabetes.”
4. Cap the profit that any contractor makes on a government contract. Don’t like a 7% profit? Don’t answer any RFPs. This would force contractors to either cut profit by cutting prices, or cut profit by employing more people. But this idea of maintaining profit by cutting workers and cutting corners has GOT to stop. [Free market? How is this free market? It's taxpayer money.]

And none of this even touches the tax structure.

Comment by goon squad
2013-02-28 07:27:49

Cap the profit that any contractor makes on a government contract

Commie talk!

Comment by eight pieces of chicken
2013-02-28 08:03:31

Why not cap the “things” government does in the first place? No chicken, no egg, right?

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Comment by alpha-sloth
2013-02-28 08:44:48

No chicken, no egg, right?

Well, there would be something like chicken, but whether or not it was actually chicken would be up to the company’s own inspectors (if they chose to have any).

But I’m sure we can trust big business. They’ve never bent the truth in the past.

Comment by Blue Skye
2013-02-28 19:20:12

Perhaps you haven’t noticed the partnership formed between big business and the government, not the least evidenced in the Big Ag regulation arena. Monsanto seems to have the whole place by the root hairs, and the regulators are on their side. It isn’t healthy for the people.

Comment by alpha-sloth
2013-02-28 20:16:01

I agree, regulatory capture is a big problem, but it doesn’t negate the need for regulation. It just means we need better rules on regulators going to work for the businesses they regulate.

Comment by joe smith
2013-02-28 08:09:45

I don’t think the cap on profits is a good idea. And, btw, this is already done if the government bids the job out properly and monitors the performance (doesn’t let the contractor play around with direct vs indirect costs or try to cover unrelated overhead expenses.

What would be a better idea is: identify places where we have contractors performing “core” functions that could be addressed better by having them done by active duty military or agency employees. There are many contracts where active duty mil personnel work alongside, train, and supervise private contractors personnel. Often the private contracts are making several times the money even though they have less expertise and less responsibility (for example, the contractor makes their money working in shifts and gets paid overtime for extra, whereas the active duty mil guys work longer hours, etc.)

There was a clear move towards cutting military personnel that can be replaced with certain private contractors.

Bodyguards and protecting convoys is another example. Running supply lines/logistics is another. Contractors work alongside our military guys doing this. Their performance is dubious. And when they’re in a war zone, they make many multiples of what we pay active duty guys.

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Comment by joe smith
2013-02-28 08:29:25

Here is some valuable contributions by private contractors to our U.S. military:

“Law360, New York (February 27, 2013, 7:15 PM ET) — A Maryland federal judge on Wednesday dismissed all 57 cases in multidistrict litigation alleging KBR Inc. and Halliburton Co. exposed U.S. military personnel to toxic fumes from open-air burn pits in Iraq and Afghanistan after finding that the court lacks jurisdiction over military decisions.”


Comment by goon squad
2013-02-28 08:32:21

F*ing commie. Why do you hate Invisible Hand Of Free Market?

Comment by joe smith
2013-02-28 08:19:59

1. single payer health care; start with a public option.

I can’t see this happening, because old people get Medicare and either don’t care about working people (who actually pay for the Medicare system via payroll taxes) or can be scared into believing that any changes to Medicare put them at risk (see, for example, the “death panels” meme).

Comment by RioAmericanInBrasil
2013-02-28 08:35:45

1. single payer health care; start with a public option.
I can’t see this happening, because old people get Medicare and either don’t care about working people…..

A work around public-option/single payer that would avoid that problem could be to allow anyone to buy into Medicare. This has been floated many times in DC.

It could be sold to the elderly by pointing out that the more people on Medicare, the more price bargaining power Medicare would have. This would thereby put their Medicare in a stronger position which would benefit the elderly. No?

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Comment by polly
2013-02-28 09:05:56

Making the Medicare pool younger could allow for a reduction in premiums for everyone. Problem if only very sick younger people bought in, but with fairly low overhead, it might not only be sick younger people who found the rates attractive….

Comment by oxide
2013-02-28 08:41:04

Seniors do care about working people.* If they didn’t, they would have been much more receptive to Paul Ryan’s plan to screw the under-55’s by voucherizing Medicare. And Ryan was very plain about that +- 55 demarcaction.

*Unless you believe that those working people were delivered by storks and raised by wolves.

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Comment by Montana
2013-02-28 13:23:27

The under-55 stipulation didn’t seem to matter at all to the seniors, did it. Anything relating to SS/Medicare, fuggedaboudit.

Comment by eight pieces of chicken
2013-02-28 08:45:52

If you want to lower the health cost, you have to have “death panels”. Who will that be? A “private” insurance administrator or a government bureaucrat?

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Comment by joe smith
2013-02-28 09:00:07

You’re in denial if you think that private insurance companies aren’t already making decisions like this.

To me, the only “death panel” you need is an expanded access to hospice care, more education about what is involved, etc. Paying for useless treatments does not help ANYONE.

Comment by oxide
2013-02-28 09:28:31

more education about what is involved

That’s how the Death Panel meme started. Someone wanted Obamacare to pay for 1-2 sessions of end-of-life planning. That’s reasonable. Everybody dies but few people plan for it. But it was twisted into accusing Obama of wanting people to die.

(of course, raising the Medicare age thus leaving many 63-year-olds to die for lack of insurance, isn’t a death panel, oh no. That’s reforming entitlements.)

Comment by joe smith
2013-02-28 10:25:04

The medical industrial complex would hate the idea that people would know that 6 figures of “intensive medical care” in the final 6 months of life is a complete waste for the vast majority of people. Why? Because it represents a ton of revenue to them.

Comment by polly
2013-02-28 11:10:10

Plus it would relieve the nursing shortage, so they would lose their argument for bringing in cheap ones from the Phillipines.

Comment by Montana
2013-02-28 13:24:44

raising the Medicare age thus leaving many 63-year-olds to die

Medicare age was always 65 unless you’re on SSD.

Comment by inchbyinch
2013-02-28 14:31:40

“death panels”
Like healthcare firms don’t have death panels themselves. The system is rigged and all this bickering is just that. I read Deadly Spin (author- former VP of Cigna) and just accept reality.

I have a major responsibility to eat right, exercise, and control the risks I can. I’m older and in decent shape.

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Comment by Ben Jones
2013-02-28 19:52:34

‘an impasse between not letting the rich to keep their own money and throwing grandma in the street’

This is getting amusing. Not because of the non-cuts, but how it highlights the delusion. Do you remember Oxide when I mentioned during the “fiscal cliff” how there might be a series of “crisis” episodes, like we see in the EU?

Here’s how I see it; this government is broke. Has been for along time. But can still borrow. Now the Fed is creating money and buying a bunch of this debt. Hmmm, I wonder why. What would happen if the US Govt had to borrow all this cash from somebody that actually HAD money? We’re about to find out. And these cuts aren’t even the beginning, IMO. Throw in an unprecedented global housing bubble and…

What’s ahead of us is gonna suck. But kicking the can down the road will do that to you.

Comment by ahansen
2013-03-01 00:25:37

While I don’t wish this coming denouement on anyone, there’s a part of me that thinks it’s high time the US gets a taste of its own medicine. This country has been inflicting itself on the rest of the planet throughout my entire lifetime, always justifying its uncivilized activities as “promoting liberty and freedom” or “making the world safe for democracy”.

It has derided the voices of conscience as “commies”, “peaceniks”, and most recently,”liberals” (as if that were somehow a bad thing), and branded those of us with the temerity to call out our country’s thirty-year economic war on the middle class as “unpatriotic”. All while ignoring the philosophical inconsistencies of their professed ideology courtesy of a feckless (if not criminally complicit) mass media.

I gave up playing Cassandra decades ago when I realized where Reaganomics was taking us, but there is truly no excuse for the excesses wrought by the turn-of-the-millennial cronyism and war-mongering that ruined our nation and looted our treasury while everyone was distracted by rhetoric and circuses.

I tell people who bemoan what America has become, “You wanted your war of revenge, you wanted your cheap crap from China, you wanted quick riches and easy credit. You got it. Now you get to pay for it. Not ‘the government’ and not ’someday’. You. Now.”

Welcome to the new austerity.

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Comment by 2banana
2013-02-28 06:35:21

China enslaving the world: Beijing’s ruthless leaders subjugate armies of foreign workers
dailymail | 27 February 2013 | Tony Rennell

China’s progress has entered its second phase - entry into Western markets Ongoing financial crisis in the West has opened more doors to the East

China’s businessmen are rarely troubled by conscience or consequence

They travelled in secret to many of the world’s poorest and most backward places, in Africa, Asia and South America. There, they discovered how Chinese companies, backed by state-run banks with unlimited resources, are buying up oil, minerals, precious metals and timber to fuel the economic miracle back home — leaving those countries raped of their natural resources.

Their usual trick is to offer ‘infrastructure’ in return — a few motorways, perhaps a magnificent national football stadium, smart homes for the elite — but leave the bulk of those countries untouched, their people as poor as ever.

In an act of colonialism much more oppressive and widespread than anything the British Empire was accused of, China is subjugating vast tracts of the globe to its economic dominance, and giving virtually nothing back.

Comment by ecofeco
2013-02-28 07:35:20

Corporate Communist Capitalism©®™ is the same all over the world.

Comment by palmetto
2013-02-28 08:45:05

Oops, meant to put this in here somewhere.

Bessbaw been belly, belly good to me:


Comment by palmetto
2013-02-28 08:52:57

I wonder if this is some sort of gambling deal. I don’t know if this is true, but it’s been said that the Chinese love gambling.

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Comment by MiddleCoaster
2013-02-28 08:15:31

It’s a shame that every rising society has to go through its ruthless colonial phase. I wonder if the Chinese will ever get to the remorse and guilt stage? Now that would be revolutionary. It takes a century or two for that to happen, so we will all be long gone.

The difference between this and all the conquests that came before is that the Chinese version is purely economic. When they inevitably pull out after exhausting all available resources, they will owe nothing to the exploited masses because they never established any kind of governance and thus have no responsibility, official or unofficial, for the devastation that follows.

Comment by goon squad
2013-02-28 08:36:41

remorse and guilt stage

That’s what the coastal elitist bedwetter libtards try to shove down the throats of “Real Americans” every day with their cultural relativism and Howard Zinn propaganda. PUKE!

Comment by Northeastener
2013-02-28 08:58:05

The difference between this and all the conquests that came before is that the Chinese version is purely economic.

Conquest has always been about economics. In the Roman time, it was the looting of foreign lands and the enslavement of it’s people. Foreign gold and slave labor, not to mention foreign troops forced to fight the enemies of Rome.

Japan’s Imperial conquests in the 30’s and 40’s were purely economics. They were an island nation with limited natural resources. Some blame Pearl Harbor on the US oil embargo of Japan.

Today it’s Middle East oil and African natural resources… different time, same game.

Comment by MiddleCoaster
2013-02-28 10:04:41

True. I was thinking about European countries’ past misadventures in Africa, and how they send in their armies to quell violence in their former colonies. I don’t know anything about whatever treaties may exist between these countries.

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Comment by ecofeco
2013-02-28 11:42:43

“Conquest has always been about economics.”


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Comment by Carl Morris
2013-02-28 09:18:57

It’s a shame that every rising society has to go through its ruthless colonial phase.

Perhaps you can’t get to the next phase without it. Where you can then tell everyone how sorry you are but now you’re more enlightened and it will never happen again.

Comment by alpha-sloth
2013-02-28 09:30:00

. Where you can then tell everyone how sorry you are but now you’re more enlightened and it will never happen again.

It does seem to be the pattern.

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Comment by MiddleCoaster
2013-02-28 10:05:55

And let’s not forget “telling other countries not to do what your own country did”.

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Comment by RioAmericanInBrasil
2013-02-28 08:26:34

In an act of colonialism much more oppressive and widespread than anything the British Empire was accused of, China is subjugating vast tracts of the globe to its economic dominance,


China’s big investment in Brazil raises concerns


hina is Brazil’s biggest trade partner, but not everyone in the South American country is happy about the relationship, reports the BBC’s Paulo Cabral.

With Chinese investment in Brazil now totalling $25bn (£16bn), some Brazilian school children are starting to learn Mandarin.

Yet critics of Brazil’s relationship with China, question whether Brazil should be exporting its raw materials to China, only to then buy Chinese products.

China invests $12.67 billion in Brazil
PTI Jul 5, 2011,


BEIJING: China stepped up its investments in Brazil in a big way with fresh investment of about USD 9 billion, taking its overall foreign direct investment in that country to USD 12. 67 billion as the two countries warmed up under the BRICS alliance.

China will invest USD 4.5 billion in Brazil’s technology sector this year shifting its investment in the Latin American country from agriculture and mining.

Comment by RioAmericanInBrasil
2013-02-28 08:53:44

From those two articles, it looks like Chinese investment in Brazil doubled in 2 years - 2011-2012.

And…I’m sad to say that the 2008-2013 increase in Chinese made goods into Brazil remind me of the 1998-2003 increase in Chinese made goods that flooded into America. :(

Comment by eight pieces of chicken
2013-02-28 08:41:14

leaving those countries raped of their natural resources.

Oh yeah, the raping of the natural resources should be left alone to western white men for the benefits of western societies. When other races beat you to your own game, you cry fowl.

Comment by ecofeco
2013-02-28 11:44:35

:lol: Oh so true.

For everyone.

Comment by MiddleCoaster
2013-02-28 13:51:30

If the Chinese don’t rob Africans of their natural resources, someone else will. For the poor in Africa, the only help is going to come from charities.

Comment by 2banana
2013-02-28 06:43:29

Short sales surged in 2012
CNNMoney.com - By Les Christie | 28 FEB 2013

Struggling homeowners increasingly turned to short sales to get out from under mortgage debt last year.

There were nearly three times as many short sales as there were sales of foreclosed homes in 2012, according to RealtyTrac. Foreclosures accounted for 11% of all sales, down from 13% a year before. Meanwhile, short sales rose 5% year-over-year, accounting for 32% of all home deals.

“We’re seeing fewer of the most disruptive sales, the [bank-owned foreclosures], hitting the market but there are still a lot of distressed property sales,” said Daren Blomquist, spokesman for RealtyTrac. “They’re shifting to short sales, though.”

In a short sale, homeowners sell at a price that is less than what they owe the bank, and the bank agrees to absorb the loss. Typically, a seller has to demonstrate some kind of financial hardship before the bank will approve the deal — and forgive the unpaid debt. The bank then sells the house, typically at a better price than it would have gotten had the home gone into foreclosure.

During the fourth quarter, the average discount on a foreclosure was a whopping 39%, while the average short sale sold for 23% below market, RealtyTrac found.

Many underwater homeowners were also scrambling to unload their properties before the Mortgage Forgiveness Debt Relief Act was set to expire December 31. Had the act been allowed to lapse, homeowners would have had to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.

The growing number of short sales helped buoy the housing market and push distressed home prices higher last year. During the fourth quarter, for example, homes that were either bank-owned or in foreclosure sold for an average of $171,704, an increase of 4% from a year earlier.

In Arizona, prices were 22% higher in the fourth quarter compared with late 2011. In Nevada, prices jumped 21%; and in California — where short sales comprised more than a third of all sales — they increased 14%, RealtyTrac reported.

Comment by 2banana
2013-02-28 06:44:54

Foreclosures account for 11% and short sales account for 32% of home sales.

At least 43% of all home sales are distressed.


Comment by azdude
2013-02-28 07:09:19

the media says were in a recovery.

Comment by ecofeco
2013-02-28 07:36:21

We are… if you are part of the top 10%.

Have been for several years now.

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Comment by michael
2013-02-28 07:46:22

i’m in the top 10% and my household income has been down by about $ 40k a year for “several years” now.

Comment by Carl Morris
2013-02-28 09:20:25

Perhaps 10% was a bit generous.

Comment by ecofeco
2013-02-28 15:07:14

Now just imagine what it’s been like for the remaining 90%.

Comment by Blue Skye
2013-02-28 07:56:52

Does that mean that 43% of the sales are excluded from the price stats? The Short-Ssale workaround masks and distorts Peak Foreclosure. Maybe that isn’t behind us yet in this round one of the bust cycle.

Comment by alpha-sloth
2013-02-28 09:39:24

in this round one of the bust cycle.

5+ years in, and we’re still in round one? Is this one of those darn 30 year cycles? 45 year cycle, if it’s round one? Longer?

That’s gonna be a long time to stay in cash.

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Comment by Blue Skye
2013-02-28 10:14:22

The Feds put us in suspended animation. Who knows how long it will even be before they loosen their grip, lose their grip or we all go broke. They have at least morphed an overdue credit contraction into a global sovereign debt crisis.

My cash won’t last 45 years, and neither will I!

Comment by oxide
2013-02-28 10:36:34

Considering the condition of some of these foreclosures, it would be hard to argue that the foreclosure price is legitimate. How much does it cost to clear concrete out of the sewer system, or replace stolen copper wiring, or simply get an intact but negelected house up to code? Could be 10% of the price in a high-cost region like DC (where much of the value is the land). In Oil-Cityish places, the same repairs could be a 1/3 to 1/2 cash hit on the price.

How would you compare this move-in inventory. Handicap the price to account for needed repairs? Write it off as either major Blackstone rehabs or tear-downs and simply not count them in either the price stats or the inventory?

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Comment by Pimp Watch
2013-02-28 18:20:20

30 million houses have concrete in the cast iron, no power and out of code?

Where do you come up with this stuff?

Comment by Rental Watch
2013-02-28 10:03:01

This is indicative of the lender’s desires. And so, if you are a lender, and you are banned from processing a foreclosure while also pursuing a short sale, do you:

A) Process the foreclosures at the expense of pursuing short sales and go back to where foreclosures dominated vs. short sales?

B) Process short sales at the expense of foreclosure filing?

Seems the obvious answer is “B” and explains why there was just a drop in foreclosure filings following CA’s stupid Homeowner Bill of Rights law.

Comment by Blue Skye
2013-02-28 10:17:10

If the mortgage paper gets bought by the Fed, will there ever be a foreclosure?

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Comment by Rental Watch
2013-02-28 14:57:31

My understanding is that they are buying new paper, which they will eventually re-sell. That new paper will start with low levels of default (to rise over time).

More directly to your question…if there are modest levels of defaults (ie. historically “normal” levels), I’ll bet they will allow the servicers of the debt to proceed with foreclosing.

HOWEVER, if there is a second crash, which causes a major spike in delinquency on this debt, I would be surprised if the Fed allows the servicers to foreclose in the normal course of business…they will slow things down to help prop up the market.

Comment by scdave
Comment by ecofeco
2013-02-28 07:38:06

“Crony capitalism and corporate welfare aren’t just expenses we cannot afford. They are an anathema to economic growth. They deny opportunities to aspiring people and companies who seek to better their lot. They ration opportunity based on things other than merit and hard work. They further ensure that poor children—who already are disadvantaged by failing schools, inadequate health care and little access to necessary resources—will never get the chance to break the cycle of generational poverty through education.”

- Mr. Canada is president of the Harlem Children’s Zone. Mr. Druckenmiller is the former president of Duquesne Capital. Mr. Warsh is a former Federal Reserve governor.

Comment by ahansen
2013-03-01 01:12:42

Excellent essay. Deserves to be reposted.

Comment by hazard
2013-02-28 07:02:57

NFL to investigate team asking prospect: ‘Do you like girls?’

By Larry Hartstein | CBSSports.com
February 27, 2013 10:48 am ET

The NFL said Wednesday it is looking into the questioning of Nick Kasa at the combine, where the Colorado tight end said a team asked, “Do you like girls?”

“They ask you like, ‘Do you have a girlfriend?’ Are you married?’ Do you like girls?’” Kasa said in the interview Tuesday. “Those kinds of things, and you know it was just kind of weird. But they would ask you with a straight face, and it’s a pretty weird experience altogether.”

Kasa did not identify the team he was referring to.

http://www.cbssports.com/collegefootball/blog/nfl-rapidreports/21779833/nfl-team-asks-combine-prospect-do-you-like-girls - -

They could just play this in the waiting room and save some time in the interview process.

http://www.youtube.com/watch?v=457N1m4oUZw - 120k -

Comment by Glory Hole Republican
2013-02-28 09:16:34

Lindsey Graham doesn’t have a girlfriend.
Lindsey Graham isn’t married.
Lindsey Graham doesn’t like girls.

Comment by joe smith
2013-02-28 10:26:31

What about Mark Kirk, eh? Or were you a believe in his sham marriage?

Comment by hazard
2013-02-28 14:52:28

What was Lindsey Graham`s 40 time?

Comment by hazard
2013-02-28 15:31:12

Glory Hole Republican

If you are talking to me you got the wrong guy. Talk to the NFL team that asked the question and Josie Cotton. As far as I`m concerned if you can find a 300 lb. lesbian nose tackle that can stop the run and push the pocket, I`d want her on my team. :)

Comment by goon squad
2013-02-28 07:17:12

Yes We Can

“The sense is growing around Washington, and this increasingly includes Democrats, of living in an alternate universe. Barack Obama gives his State of the Union speech, the sequester looms, and the president flies around the country giving speeches.

Mr. Obama likes to convey the impression that he doesn’t think or do business like other presidents. It’s time to take him at his word. If Washington is starting to look like an alternative universe, that’s because the president is creating an alternative universe, the Obamaian Universe.”


Comment by ecofeco
2013-02-28 07:39:58

DC has been an alternate universe long, long, long before Obama came to town.

Comment by Blue Skye
2013-02-28 07:59:04

Don’t confuse the creature with the creator.

Comment by Brett
2013-02-28 07:27:24

Immigration detainee release under fire

Federal immigration officials have released hundreds of detainees from detention centers around the country in recent days in a highly unusual effort to save money as automatic budget cuts loom in Washington, officials said Tuesday.

A spokeswoman for Immigration and Customs Enforcement, or ICE, an arm of the Department of Homeland Security, said the detainees selected for release were “noncriminals and other low-risk offenders who do not have serious criminal histories.”

They refused to specify exactly how many detainees were released, or where the releases took place. But immigrants’ advocates around the country have reported that detainees were freed in several places, including Hudson County, N.J.; Polk County, Tex.; Broward County, Fla.; New Orleans; and from centers in Alabama, Arizona, Georgia and New York.

Comment by eight pieces of chicken
2013-02-28 07:42:19

It’s a clever strategy on the Administration’s part, but backfired on them.

Release the illegals and tell the R party, see this is what happens with the Se-Questa. Usually R party would be up in arms and increase the budget to keep them mesicans deported. But the R party is just too numb these days….

Comment by 2banana
2013-02-28 07:53:34

Here is another backfire.

The released illegals go on to rape and murder US Citizens.

obama goes to play golf with Tiger Woods.

What a ready made political ad for the 2014 midterms.

Comment by Blue Skye
2013-02-28 08:13:55

Illegal immigrants are supposed to be released outside the US. JMO.

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Comment by goon squad
2013-02-28 08:17:37

Keep dreaming. As much as you’d like a “Willie Horton” saviour to revive your demographically doomed party, it ain’t happening.

“U.S. Hispanic adults are more than twice as likely to identify or lean Democratic than Republican, according to Gallup Daily tracking data collected throughout 2012.”



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Comment by 2banana
2013-02-28 09:25:14

Perhaps the democratic base is not as solid as you think it is…

Especially when the free cheese train starts to slow down.


Attack on family in Compton latest incident in wave of anti-black violence

When a friend came to visit, four men in a black SUV pulled up and called him a “nigger,” saying black people were barred from the neighborhood, according to Los Angeles County sheriff’s deputies. They jumped out, drew a gun on him and beat him with metal pipes.

It was just the beginning of what detectives said was a campaign by a Latino street gang to force an African American family to leave.

The attacks on the family are the latest in a series of violent incidents in which Latino gangs targeted blacks in parts of greater Los Angeles over the last decade.

Federal authorities have alleged in several indictments in the last decade that the Mexican Mafia prison gang has ordered street gangs under its control to attack African Americans. Leaders of the Azusa 13 gang were sentenced to lengthy prison terms earlier this month for leading a policy of attacking African American residents and expelling them from the town.

Similar attacks have taken place in Harbor Gateway, Highland Park, Pacoima, San Bernardino, Canoga Park and Wilmington, among other places. In the Compton case, sheriff’s officials say the gang appears to have been acting on its own initiative.

The attackers left, but a half-hour later a crowd of as many as 20 people stood on the lawn yelling threats and epithets. A beer bottle crashed through the living room window as the youngsters watched in horror.

The gang members were gone by the time deputies arrived, but they kept coming back, almost daily, driving by slowly until they got someone’s attention, then yelling racial insults and telling them to leave. The mother sent the children to live with relatives and is now packing up to leave herself.

“I’m floored,” she said. “That’s blatant to tell a family you can’t live in this area because you are black. That’s just shocking.”

Comment by goon squad
2013-02-28 09:47:15

That’s unpossible. My gender studies / black studies / Obama studies professor at the Chicago School of Marxism said “our differences only make us stronger”.

And anyway, gangbangers don’t vote. But their mamas and babies’ mamas do. And they will all vote Democrat.

Comment by RioAmericanInBrasil
2013-02-28 10:19:01

Perhaps the democratic base is not as solid as you think it is…

When I lived in L.A. in 86-94 the Hispanics and Blacks fought each other in South Central L.A. way more than they do now. And the Bloods and Crips were at WAR.

I once drove up upon a scene of 5 dead gangbangers lying in the street and hanging out the windows and doors of a shot up car - before the cops were even there. Blood was everywhere.

Was it Reagan and Bush’s fault? Jeezz.

Comment by sfhomowner
2013-02-28 11:15:40

In the Compton case, sheriff’s officials say the gang appears to have been acting on its own initiative.

What the heck does that mean? Do gangs take orders from somewhere higher up?

Comment by ecofeco
2013-02-28 11:49:47

Yes they do.

Gangs are VERY organized.

Comment by Wolf
2013-02-28 12:25:15

If it’s true that Hispanics and Blacks fought each other more in South LA (which I don’t doubt) back in 86-94, it’s because the Hispanic take-over wasn’t as complete. Blacks retained more territory then, so it was more of an even battle.

Who’s fault? The 1965 Immigration Act, which drastically changed our demographics….wait I’m not supposed to say that am I? Ok, I’ll keep repeating, “Diversity is a strength” like a good little obedient citizen.

Comment by MiddleCoaster
2013-02-28 13:55:58

The current wave of gang violence in Chicago began when all the top gang leaders went to prison, leaving a vacuum of authority. The ease of gun purchase (primarily from Indiana, which has essentially no checks or barriers to gun purchase; the Tribune recently did a major expose on this pipeline) added to lack of gang discipline=a major problem for the cops and anyone who lives in gang territory.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:34:31

Pete Peterson: The man who focused Washington on the national debt
Chip Somodevilla/Getty Images

Peter G. Peterson delivers opening remarks during the Peter G. Peterson Foundation 2011 Fiscal Summit at the Mellon Auditorium May 25, 2011 in Washington, D.C.

Interview by Kai Ryssdal
Marketplace for Tuesday, February 26, 2013

Pete Peterson’s long campaign against the national debt
More from Marketplace: Six degrees of sequestration

Talk of debt and deficit drag on Washington in large part because of or thanks to, depending on how you look at it the efforts of one man: Pete Peterson and his 35-year campaign that he financed himself to make debt topic number one.

We put the debate in context yesterday. Today we talked to Pete Peterson himself. And he’s not exactly thrilled with the way Republicans and Democrats in Congress have approached the deficit.

“A program like Simpson-Bowles that had about $3 of spending cuts for every dollar of revenue and wanted to tax all the aspects of the budget in which everything is on the table — and by everything, I mean entitlements, I mean tax reform, I mean defense, are all on the table — is the right way to approach this problem,” said Peterson. “And the Republicans have taken the point of view that you can’t raise taxes, and the Democrats are taking the point of view that you can’t reform entitlements are ways of blocking meaningful progress.”

Peterson says he wouldn’t be against the government borrowing more money if it meant investments in infrastructure and education, or in making social safety nets self-sustaining.

But is a long-term solution from Washington likely? “I’m going to keep working until we do, because until we do, we are not talking about the underlying problem that confronts the long-term future.”

Comment by Arizona Slim
2013-02-28 09:27:28

Here in Tucson, the Peterson road show came to town in July 2011. Let it be said that there was a bit of an uprising among those in attendance. I know this because I was there. And I was one of the uprisers.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:37:09

Nobody had anything to say about my question the other day regarding the effect of the sequester on housing markets where many area residents are federal workers, like SD and DC. I guess there is nothing to worry about?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:42:17

MAP: America Underwater
6 degrees of sequestration
Sequester could upend lives of federal workers
Win McNamee/Getty Images

President Barack Obama (L) and Speaker of the House John Boehner (R-OH) take part in a ceremony honoring the late civil rights activist Rosa Parks on February 27, 2013 in Washington, DC. Obama and Republican congressional leaders are still trying to find a solution to avert sequester cuts that could threaten wages for federal employees.

by Nancy Marshall-Genzer
Marketplace Morning Report for Thursday, February 28, 2013

Erika Townes is the breadwinner for her family of five. Erika will have to juggle bills if she has to take unpaid leave because of sequestration.

We’re just a day away from the sequester — the $85 billion worth of federal spending cuts due to kick in Friday. Unless Washington changes its mind, some federal workers stand to lose as much as 20 percent of their pay.

Erika Townes is a nurse at Andrews Air Force base in Maryland. She makes less than $50,000 a year, and has been fighting foreclosure. So when Townes heard she might have to take unpaid leave one day a week because of sequestration, her first thought was, “Will I keep my house? What bills will I be able to pay?

With the sequestration, now we’re talking about full-on juggling,” Townes says. “Let me put something on this, let me put something on that.

Ironically, Townes could lose her job if she runs up too much debt, trying to make up for the sequester pay cut. Her job requires a security clearance. She has to maintain a certain credit rating to keep her clearance and her job.

The Department of Defense is not going to say, oh well, you know, sequester, that’s OK,” she explains. “That’s not how it works.

Comment by 2banana
2013-02-28 08:03:37

“Fighting Foreclosure”

I have never understood that phrase.

I can understand “fighting a traffic ticket” or “fighting the rising river” or even “fighting for a raise”

But fighting foreclosure?

Did you make your mortgage payments or not?

Can you afford your house or not?

Comment by In Colorado
2013-02-28 09:31:09

Another one of those rare occasions when I agree with you.

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Comment by 2banana
2013-02-28 07:49:35

The word on the street is that federal contractors are going to get a 1 day/week furlough for as long as the sequester lasts. Basically a 20% pay cut.

Add in the 2% raise in Social Security taxes. Add in higher income tax rates. Add in higher gas prices.

In any NORMAL economy – housing prices would go down. Especially in those markets with lots of government workers (Northern VA and MD)

With the “free money” Feds, $1 Trillion obama deficits and the government continuing to ball out banks/Wall Street at $60 Billion/month – anything could happen.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 08:10:02

“…federal contractors are going to get a 1 day/week furlough for as long as the sequester lasts…”

Are you sure you didn’t mean full-time federal workers?

Comment by polly
2013-02-28 09:11:11

Its the DoD workers that are facing one day a week as far as I know. Other departments are still working it out.

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Comment by redmondjp
2013-02-28 17:15:05

Fed workers too, although we haven’t been told if it will be one or two days unpaid leave per (two-week) pay period.

Managers have been in meetings all week, planning . . .

Comment by oxide
2013-02-28 08:32:34

The 20% pay cut does not automatically mean that ALL house prices will go down. Here’s why:

1. The mortgage (and even more, rent) is the first bill to be paid. People will cut everything else first before the mortgage. Look for drops in cable, cars, Applesbees. Sbux should be preparing for a downturn.

2. Many of these people are in 2-income households, so there is still a cushion.

3. Many of those contractors have been here for over 10 years. Government workers have been here over 20 years. Their salaries went up while their house payments have remained the same. They can sustain the house payment on a 20% pay cut indefinitely. They would just buy fewer goodies.

4. Those who bought more recently have enough savings to make up the difference for the 6-8 months this will go on. Does anyone expect this to be permanent? I suspect Obama is playing chicken, and waiting for LMCO to start screaming at Boehner and Cantor and Ryan.

5. A job at 20% less pay is still better a job get somewhere — anywhere — else. Better to cut that vacation.

6. Even for people who DO move, house prices are still sticky on the way down.

That said, there ARE a few vulnerable areas. McMansion exurbs are vulnerable since those were bought recently. Rental properties may not get away with raising rent. Lucky duckies will suffer as always.

Comment by Carl Morris
2013-02-28 09:27:31

1. The mortgage (and even more, rent) is the first bill to be paid.

Only if they think they have equity. We’ve already seen what happens that contradicts this if they don’t. Which is why we are working so hard as a nation to preserve the illusion of equity.

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Comment by In Colorado
2013-02-28 09:33:36

Not necessarily. The overwhelming majority of people who are underwater are paying the mortgage, to protect their sacrosanct credit rating.

Comment by oxide
2013-02-28 09:33:45

Not in Maryland, Carl. Maryland, where this sequester will hit, is recourse. You try to walk, they come after you.

(anyone know about Virginia?)

Comment by Carl Morris
2013-02-28 09:35:31

What are the stats? We talk and hear so much about the deadbeats around here maybe I overestimate their numbers…especially since I know a few myself.

Comment by joe smith
2013-02-28 10:38:26

Virginia is a recourse state, as are Maryland and the District.

You also can’t just walk away from your house if you are a federal or state employee in many cases. Well, you could walk away, but you could also be walking away from your job as well as your house.

Comment by Carl Morris
2013-02-28 11:08:08

Sounds like you guys are saying that if the market were allowed to work its magic on house prices in an unrestrained manner, folks around the DC area would be the effest of all FBs.

Comment by joe smith
2013-02-28 12:17:42

I agree, many would be effed.

Comment by Pimp Watch
2013-02-28 18:18:57

The 20% pay cut does not automatically mean that ALL house prices will go down. Here’s why:

1. You live in a world of mathless suspended reality.

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Comment by sfhomowner
2013-02-28 11:21:38

The word on the street is that federal contractors are going to get a 1 day/week furlough for as long as the sequester lasts. Basically a 20% pay cut.

I would welcome this, personally. One more day to surf.

Quality of life and free time are more important to me than money. My boss just asked me this morning when I plan to go back to work full-time. “Not yet”, was my answer.

When I’m laying on my deathbed I am sure that “I didn’t work enough” will NOT be one of my regrets.

Comment by goon squad
2013-02-28 12:20:30

more important to me than money

Why do you hate America? Must be because gays are all communists too. Consider the message from your own mayor:

“A few weeks ago, we in San Francisco launched the “America: Open for Business” campaign, to let the world know that this city, and this nation, will rise from the ashes of the national tragedy and get this economy moving again.” (November 2001)


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Comment by sfhomowner
2013-02-28 12:51:16

Slick Willie is/was the epitome of “insider”.

Comment by Carl Morris
2013-02-28 13:33:03

Sometimes a cigar is just a cigar.

Comment by MiddleCoaster
2013-02-28 13:58:01

For at least three years, I have been trying to cut back to 4 days a week. Maybe this will be the year. Not holding my breath.

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Comment by scdave
2013-02-28 08:13:42

the effect of the sequester on housing markets where many area residents are federal workers, like SD and DC. I guess there is nothing to worry about ??

Ever see the spending graph going out to 2030 with current spending vs. spending after sequester ?? Its kind of scary really because it really doesn’t do much to curb the runaway spending…

As far as sequestration hurting housing in SD & DC I suppose it will have an impact but probably not that much..I would be more concerned about 2nd & 3rd tier military markets particularly that deal with boots on the ground….Higher interest rates is what would concern me more as it relates to housing prices….

With that said, we have a huge problem to solve and some hard choices to make that are many multiples of this sequester…

Comment by Sean
2013-02-28 08:38:30

My guess for the DC market: It’s gonna come from a glut of homes on the market and a ‘race to the bottom’. Older workers are going to be retiring and more importantly moving out of the area. Their house, with years of equity built up will be tossed on the MLS. You’ve seen THOSE houses: Kitchens out of date and needs everything, pictures of their grown up kids on the wall from their college graduation, old fake wood panels in the basement (I really hate those), closet doors falling out of the tracks because they have been used to it for the past 10 years…..

Mr and Ms Baby Boomer have accomplished their needs: They moved to DC for work, raised kids in a great school district and have a lot of positive equity. Do they want to stick around here? My opinion is they won’t. Move to FL or AZ, or that quaint New England town they like. You’ll see people leaving the area with many of these jobs not returning. I don’t think it will be a free fall, but the market here will soften greatly.

Comment by joe smith
2013-02-28 10:42:45

Yes, those house are ugly yet the owners will point to “comps” that “prove” their 3 or 4 BR house is “worth” ~$1MM. People are dumb.

Comment by polly
2013-02-28 13:14:03

Retiring? Yes. But not as many will move out of the area as used to. A lot the kids have come back here in the last 10 years and they might just stay put and be near the grandkids. I know too many just retired/about to retire people who have recent first hand experience with their own parents about how awful it is to try to manage an elderly person’s care from a thousand miles away. They don’t want that for their kids or for themselves. They won’t stay in their current houses forever, but another 15 to 20 years is pretty easy to imagine.

Comment by joe smith
2013-02-28 13:56:56

I can imagine scenarios where people in marginal neighborhoods or with meager savings would move to a lower COL area (FL primarily). However, if you look at a couple in a nice area with adequate savings/pension, I don’t see why they’d trade in Bethesda for Florida. It’s a major trade down in a lot of ways that matter, including health care quality and availability.

Perhaps since FL real estate is so much cheaper some of these people will be snowbirds, that would make more sense to me.

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Comment by Sean
2013-02-28 15:57:07

That’s my point. A couple bought a small house decades ago in Bethesda which is now worth $800k plus. It’s paid off, kids college is paid off, retirement is funded, but you can always use more.

So am I going to sit on my gold mine or am I going to cash out. Remember, no one is really from DC, they just migrate here for their job. When you are 70 or 80 years old what’s the point of going to the museums for the millionth time? Where is the quality of life when you are paying a ton in property taxes? Hell, for what you pay in property taxes here that could be a few months rent in a nice condo in Lauderdale with country club fees.

Besides, how many older workers have property elsewhere? I know several that own a second place: Ocean City, Rehoboth, Cape Cod, Destin, Key West…..like I said its my opinion they’ll punch out and move on.

Comment by polly
2013-02-28 16:32:40

Plenty of people are “from DC” if you include the whole region. And like I said, if their kids have settled here and their retirement is funded, there is no reason for them to leave until they can’t handle the house even with house cleaning and yard care. Do you really think people are going to leave their kids and grandkids to avoid 2 months of cold weather and a big snow storm every few years? There is tons to do here (Smithsonian is a tiny part of it). Medical care is top notch and accessible. I know one person who is definitely leaving when she retires, but her son is in CA and all the rest of her family is in TN. The ones whose kids are in the area (it is a lot of them) are all staying put. They went through the h-ll of taking care of parents/step parents long distance for a while and then bringing them back from FL once they got really sick and/or demented. They don’t want to replicate that when they get old. Why not just stay?

Comment by Northeastener
2013-02-28 09:06:14

Nobody had anything to say about my question the other day regarding the effect of the sequester on housing markets where many area residents are federal workers

A recent article on Boston.com discussed the Defense industry here in MA. Supposedly, government contractors were already issuing layoffs here and a few defense industry contractor personal who were interviewed mentioned changing jobs to industries that were more secure.

I had to laugh. The defense industry has been going gangbusters since 2001. 12 years of steady growth with the country in a constant state of war… and that wasn’t “secure” enough for some of these jokers.

Anyway, the cool-aid is still being drunk here in MA with housing prices and we supposedly have a well-diversified economy, so I don’t expect any impact to prices within 128.

Comment by ecofeco
2013-02-28 11:53:02

Eisenhower warned about the defense industry.

So I would say it’s been going gangbusters since then. The last few years have just seen an almost magnitude increase.

Comment by Northeastener
2013-02-28 11:59:51

I would say it’s been going gangbusters since then.

I’d agree it’s been a general upward trend since Eisenhower, but there have been some cyclical downturns in defense as well. Post Gulf War 1 there was a big draw-down in the military with corresponding cuts in the defense industry throughout the 90’s. Same goes for the mid-70’s post Vietnam era.

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Comment by ecofeco
2013-02-28 15:09:51

I remember a lot of aerospace engineers getting the shaft after Vietnam and the end of the Apollo program.

It was a harbinger of things to come.

Comment by rms
2013-02-28 18:57:08

“I remember a lot of aerospace engineers getting the shaft after Vietnam and the end of the Apollo program.”

Family friends got stuck in Lancaster, CA when the Berlin Wall fell signalling the end of the Cold War. Experienced engineers who had been witness to earlier defense cuts put their Antelope Valley homes up for sale at deep discounts, sold, and left town. Family friend wasn’t so wise, and ended up stuck upside down for twelve years while HUD imported the ghetto all around them. Eventually they were able to sell without having to bring any cash to the closing table, and they hauled a** outta there, “ain’t never coming back!”

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:43:58

Everybody with a used home to sell, from individual households to banks, seems to be waiting “for prices to come back” before putting their homes on the market. Makes me wonder whether Japanese households are still waiting to sell, two decades after their market crashed?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:45:21

House prices are up, but not yet bubbling
Tim Boyle/Getty Images

Sharp price increases in some regions raise concerns about a new housing bubble. But as prices rise, more sellers will appear, steadying the market.

by David Weinberg
Marketplace for Tuesday, February 26, 2013

Homeowners have reason to be a little optimistic these days. According to the latest Case-Shiller Index, property values are up 6.8 percent from December 2011. And some cities are seeing increases they haven’t seen in decades. Detroit, for example, hasn’t seen gains like this since 1991. But no one holds a candle to Phoenix. Prices there are up an astounding 23 percent. Not to spoil the good news, but here comes the question we have to ask: Are we headed for another bubble?

First of all, not every market in the U.S. is experiencing the boom. Each region has its own little ecosystem when it comes to housing. Prices in Texas and South Dakota, for example, are pretty flat compared to Phoenix and California, where prices are increasing at double digit rates.

“And that’s largely driven by the fact the banks are no longer selling homes” says Glenn Kelman, the CEO of the real estate brokerage Redfin. Those homeowners don’t want to list their houses at the banks’ prices, so they don’t put their houses on the market, either.

Comment by Rental Watch
2013-02-28 10:07:35

“But as prices rise, more sellers will appear, steadying the market.”

I agree with this entirely.

Comment by sfhomowner
2013-02-28 11:42:51

“But as prices rise, more sellers will appear, steadying the market.”

It’s bubble part 2 here in the Bay Area, and the number of houses for sale is still paltry.

A good friend sold her house in SF and moved to Portland in 2007. Born and raised in SF and she hates Portland and wants to move her family back. She’s trying to buy. So far, no luck. Even with the ability to pay 700K (cash! trust fund) she is priced out of our old neighborhood.

She sends me listings to drive by or go to open houses: everything goes pending within a week.

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Comment by Dudgeon Bludgeon
2013-02-28 14:47:33

With $700k in hand she is not “priced out” - she is just too smart to be priced in at these prices.

Comment by sfhomowner
2013-02-28 16:18:25

she is just too smart to be priced in at these prices.

Nah, she’ll buy and she has the money. I recommended renting, but with 2 kids and the chaos that moving brings is more than she can manage. I don’t think she even finished unpacking from the last move.

I’ve met more than one person who loves Portland or Seattle but couldn’t handle the rain and clouds. Huge house, big yard, half the price of living here…

…but not enough sun.

Comment by redmondjp
2013-02-28 17:30:00

True that! And full-spectrum lamps just don’t quite have the same effect either (but are better than nothing). Earlier this year there was a hilarious skit on Portlandia regarding a group of people chasing a sunlit spot around town and discussing how many anti-depressents that they are taking.

Comment by Pimp Watch
2013-02-28 18:16:31

You deluded clowns.

90% of Foreclosed Properties Held Off the Market


Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:47:04

Whad’ya know: Turns out GDP actually grew in Q4.2012 — BUT JUST BARELY.

The upshot: If GDP came in negative this quarter, we would NOT be in a recession yet.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:49:24

Like any drunk, Wall Street bulls have reason to party every day! Buy stocks now, or get priced out forever!!

Bulletin Dow industrials edge nearer all-time high in early trades
Feb. 28, 2013, 9:02 a.m. EST
Economy grew, just barely, in fourth quarter
New information shows U.S. did not shrink in final months of 2012
By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — The U.S. economy grew in the final three months of 2012 — but just barely — instead of shrinking for the first time since the end of the recession as originally reported.

The nation’s entire output of goods and services, known as gross domestic product, expanded at an annual 0.1% pace in the fourth quarter, the Commerce Department said Thursday. Initially the government said the economy contracted by 0.1%, which would have marked the first decline since the second quarter of 2009.

Comment by eight pieces of chicken
2013-02-28 09:25:07

Wait for them to revise it. They revise it mostly downwards.

Comment by RioAmericanInBrasil
2013-02-28 08:58:21

Whad’ya know: Turns out GDP actually grew in Q4.2012

As per the the last 10 years, (and longer) most of that GDP “growth” is concentrated in a very small sector of the economy - the FIRE sector and the very rich.

Most of America is still in a recession and will be for a long time IMO.

Comment by ecofeco
2013-02-28 11:54:24

Most of America has been for the last 30 years.

Comment by michael
2013-02-28 09:02:17

“If GDP came in negative this quarter, we would NOT be in a recession yet.”

well that was a convenient revision.

Comment by goon squad
2013-02-28 07:47:12

Hope and Change

“A shortage of affordable housing for larger families with four or more children is a big factor behind crowded conditions at the District’s main family homeless shelter in Southeast Washington. The shelter has been filled to capacity this winter, with more than 900 people, including a record 600 children some nights.

Such families stay far longer than average in the converted rooms of the abandoned D.C. General Hospital, creating a bottleneck at a shelter initially intended to provide only temporary respite from the cold. One mother of 13 — five of whom lived with her in the shelter — was there for more than a year.

D.C. Department of Human Services officials say the rapidly gentrifying city has lost more than half of its affordable housing in the past decade. That makes it difficult to find an affordable house or apartment big enough for larger families, even with government help, they say.

Family homelessness in the city, up 74 percent since the economic downturn, has continued to increase, even as it has stagnated or dropped in neighboring jurisdictions.

Rising poverty, unemployment and a lack of housing options among single parents who are heads of households are driving the city’s problem, experts say. The vast majority of parents living in D.C. General are single and female, according to the Department of Human Services.

In the District, 18 percent of families living below the poverty level have one or two children, compared with 38 percent with three or four children and 67 percent with five children or more.”


Comment by Montana
2013-02-28 09:38:09

it seems to be a lot of urban people.

Comment by joe smith
2013-02-28 10:50:50

Most middle or upper class people who work in the Washington DC area actually live and work in Maryland or in Northern Virginia. Even the ones who work in downtown DC usually live in MD or VA. Large swaths of DC are pretty bad, just like in any city (Philly, Baltimore, New York, etc). The segregation is crazy.

Comment by john banner
2013-02-28 15:43:30

And these folks vote overwhelmingly for the Democratic party. I thought liberals were the party of the COEXIST movement. I guess you can COEXIST if certain types don’t live in your area.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 07:56:32

Bulletin Chicago purchasing gauge hits highest level in nearly a year

Feb. 28, 2013, 7:43 a.m. EST
Danger as stock-market ‘Greedometer’ flashes red
Commentary: Key indicators look ominous for the market
By Brett Arends

“Danger, the emergency destruct sequence has now been activated. The ship will self-destruct in t-minus, ten minutes. The option to override automatic detonation will expire in t-minus, five minutes…” — Mother, “Alien” (1979)

Have you ever felt like Ripley — Sigourney Weaver — at the end of Alien? After the monster has wiped out all of her fellow crew members, she decides to kill it by blowing up her spaceship, the Nostromo. She sets the ship’s self-destruct mechanism and races for the escape shuttle — only to find the alien now blocking her way.

The next few minutes are a hair-raising race against time. As Ripley barrels back through the long corridors of the space ship, “Mother,” the voice of the ship’s computer, ominously counts down the time left until everything will go kaboom in a blinding, space-bending explosion.

The stock market feels a little like this. The higher it goes, the more euphoric the cheerleading, the more the airheaded Gamma-class humans put on the happy face and hum their way to work, the more terrifying it becomes for anyone who actually bothers thinking. (Luckily, this excludes most of Wall Street). At best we feel like Jones, the ship’s cat, getting banged around in a portable cage.

I hate to state the obvious, but stocks are just a claim on companies’ future dividends. That’s it. By definition, the higher they rise in price, the worse a deal they are. (I am amazed this is ever a subject of debate, as it is a tautology). Mom and Pop, with an instinct for self-preservation which suggests human beings are descended from the lemmings, usually pile on board at the peak.

Is it happening again?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 08:00:11

If you don’t like watery beer, just don’t buy Anheuser-Busch products. It’s just that simple!

Food and Beverage Industry
Lawsuit Says Anheuser-Busch Beers Are Even More Watered Down Than You Think
By Brad Tuttle
Feb. 27, 2013

Have Budweiser drinkers been getting less buzzed? Former employees at Anheuser-Busch breweries say that they routinely watered down popular beers such as Budweiser, Michelob, Natural Ice, and Bud Light Platinum. Class-action lawsuits have been filed in three states accusing the brewery giant of selling beers that overstated the amount of alcohol they contained.

This week, lawyers filed suits in New Jersey, Pennsylvania, and California on the behalf of drinkers who may have purchased beers that packed less punch, alcohol-wise, than their labels led consumers to believe. Each of the three suits is seeking damages of more than $5 million, and more lawsuits are expected to be filed against Anheuser-Busch, specifically in Ohio and Colorado. Lawyers say that the watering down of beers can result in beers that contain 3% to 8% less alcohol than their labels indicate.

Comment by MiddleCoaster
2013-02-28 08:20:36

And this is a problem how?

Comment by oxide
2013-02-28 08:47:12

How can a beer contain 8% less alcohol? I didn’t know there were beers that had 8% to begin with.

Comment by RioAmericanInBrasil
2013-02-28 09:04:46

How can a beer contain 8% less alcohol?

If a beer is labeled that it contains 5% alcohol but only contains 4.6% alcohol, then it contains 8% less alcohol than it is labeled. (0.4 is 8% of 5.)

Comment by oxide
2013-02-28 09:42:29

Oh bonk, sorry, I should have known.

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Comment by incalculable losses in Maryland
2013-02-28 09:07:50

5% ABV minus 8 percent = 4.6% ABV.

Comment by Arizona Slim
2013-02-28 09:29:33

I spent an hour and a half in a Tucson brewpub yesterday evening. Place was packed to the gills.

This is one of but many local breweries that is going like gangbusters.

Comment by Montana
2013-02-28 11:09:22

Yeah I can’t believe I ever drank lite beer. We have a lovely brew called Face Plant here. Someday I would like to drink it for dinner.

Comment by RioAmericanInBrasil
2013-02-28 11:35:38

Yeah I can’t believe I ever drank lite beer.

I can believe it. A lot has to do with the temperature. I think you said you worked in Vegas at one point. It’s hot there.

When I lived in NorCal (cool temps) I drank the darker micro brews.

I live in Rio now and when it’s hot (most of the time) the ice-cold watery beer tastes great. Drinking an Anchor Steam in the sun would be like eating a sandwich after a full meal.

Rio people want the coldest beer in the world. There was even a big restaurant contest where one of the categories was “Coldest Beer”. I thought that was hilarious. Only in Brazil….

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Comment by redmondjp
2013-02-28 17:35:02

Anybody else remember that episode of The Simpsons where Homer is taking a tour of the Duff Brewery, and at the end of the process, the pipe has a three-way splitter putting the same product into three tanks (Duff, Duff Light, and Duff Dry)?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 08:04:27

Why the Sequester Won’t Solve America’s Debt Problems

While Congressional leaders squabble about the sequester, scheduled to take effect March 1, Making Sense contributor Larry Kotlikoff says that the United States has bigger financial problems that could affect generations to come. Photo by Dave Reede/Getty Images.

Paul Solman: With the sequester just days away, we could have bombarded you with opinions from economists of various stripes. But everyone’s doing that. So instead, we give you the most opinionated economist we know and yet love: Making Sense stalwart Larry “Ask Larry” Kotlikoff, whose Social Security Q-and-A is published every Monday.

Larry has been warning that our national debt is unsustainable for almost as long as I’ve been at PBS NewsHour. And I started in 1985!

Personally, I think Larry is a little bit of an alarmist and we have argued about our debts and prospects in 2010 and again recently, when Larry described Congress’ deal to stop the so-called fiscal cliff the “latest victory in the war on our children.”

In short, I would read Larry’s post with a grain of salt, but I still recommend the read.

Comment by goon squad
2013-02-28 08:08:47


“Official communications in recent weeks have shown that some agencies are better positioned than others to avoid furloughs if the Friday sequester deadline passes without Congress passing an alternative deficit reduction plan.

So how have those agencies managed to avoid the likelihood of furloughs while others are talking doom and gloom?

Some union leaders and lawmakers, especially Republicans, say planners just have to put their mind to it.

“They really haven’t done their homework,” said John O’Grady, president of a Chicago region chapter of the American Federation of Government Employees.

O’Grady said most agencies haven’t yet maximized reductions in contractor spending and that some have provided five-figure bonuses to managers during the past fiscal year, despite the automatic cuts looming.

Indeed, the Pentagon, Department of Homeland Security and Federal Aviation Administration have said in recent weeks that they expect furloughs to be necessary under a possible sequester, and all dedicate a relatively high percentage of their budgets toward pay and benefits.

Lester said agencies that rely heavily on grants and contracting are less likely to depend on unpaid leave to meet their reduction targets. “They have the ability to push the cuts into their contracts — they can delay them,” he said.

Conservatives have challenged agencies to identify and trim more waste, while union leaders have urged them time and again to reduce spending on private contractors — even pressing Congress to pass legislation to that effect.”


Comment by 2banana
2013-02-28 08:22:12


“We are not slowing down giving loans to anyone,” SBA Administrator Karen Mills told reporters last week, noting that the agency aniticates a sharp decline in demand for the 504 loans that spiked last year due to a now-expired provision allowing the funds to be used for refinancing mortgages.

Comment by rms
2013-02-28 20:44:01


Your tax dollars at work. :)

Comment by hazard
2013-02-28 08:18:21

Posted: 5:00 a.m. Thursday, Feb. 28, 2013

Short sale approvals before default on the rise
By Kimberly Miller

Palm Beach Post Staff Writer

Banks are increasingly willing to approve short sales before borrowers go into foreclosure, a bright spot for struggling homeowners hoping to escape an underwater mortgage with the least damage to their finances.

About 27 percent of home sales in Palm Beach, Broward and Miami Dade counties last year were short sales where the lender had not filed foreclosure papers against the homeowner, according to a distressed property report released today by the Irvine, Calif.-based RealtyTrac.

It’s a turnaround from a time when borrowers had to default on their mortgages before persuading their bank to do a short sale, which is where the lender agrees to accept less for the home than what is owed on the mortgage. In South Florida, the average difference between the unpaid mortgage balance and non-foreclosure short sale price last year was $116,505, the RealtyTrac report said.

South Florida Realtor Joanne Epstein said the paradigm shift by banks is a reaction to federal rules that went into effect Nov. 1 allowing homeowners to qualify for a short sale even if they are current on payments. Banks also earn credits to satisfy their obligations under the $25 billion National Mortgage Settlement by approving short sales.

“Some people are so scared to not pay their mortgage because they don’t have bad credit and don’t want bad credit,” said Epstein, who works for the Keyes Company/Ragbir Team. “But they can’t afford to pay anymore and are just throwing out good money.”

The federal rule changes only affect loans backed by Fannie Mae and Freddie Mac.

Under the November changes, borrowers who are current on their mortgage but suffer a hardship such as a death, divorce, or a job change requiring them to move more than 50 miles from their home can be qualified for a short sale by their loan servicers without additional approval from Fannie or Freddie.

The RealtyTrac report notes that the number of South Florida short sales conducted in 2012 before a foreclosure was filed increased 30 percent from the previous year.

Statewide, 33 percent of all home sales last year were short sales completed before a foreclosure was filed. The average difference between the unpaid principal balance and non-foreclosure short sale price was $94,950.

Housing experts say short sales benefit homeowners and lenders. A homeowner suffers a lighter ding to his or her credit than if a foreclosure was completed. Lenders save the cost of a lengthy court proceeding.

An increase in short sales may also lead to a quicker housing recovery, said RealtyTrac Vice President Daren Blomquist. South Florida short sales had a higher average sale price last year _ $133,816 _ than bank-owned homes, which went for an average of $129,320.

“Allowing these homes to change hands more quickly will put them with new homeowners who have loans they can afford, which means they are more likely to maintain the property,” Blomquist said. “They’ll be more motivated to be responsible homeowners.”

Kevin Kent, a broker-associate with Platinum Properties in Palm Beach County, questions RealtyTrac’s numbers. He said the percentage of non-foreclosure short sales seems high and that many lenders remain stalwart about having homeowners go into default before considering a short sale.

“Until someone misses payments, the lenders aren’t paying a lot of attention,” Kent said.

But banks are more amenable in general to doing short sales because “they get hurt a lot less,” Kent said.

Comment by palmetto
2013-02-28 08:29:13

Bessball been belly, belly good to me.


Comment by palmetto
2013-02-28 08:46:10

Sorry, meant to put that up above in the China exploitation sub-thread.

Comment by hazard
2013-02-28 09:07:59

“Sorry, meant to put that up above in the China exploitation sub-thread.”

Neither do I condemn thee: go, and sin no more

Comment by Northeastener
2013-02-28 09:14:58

Calling all tech industry workers. It’s the end of February, which is typically the period when you find out what your bonus is going to be for the previous year and if you’re going to receive a raise for the current year. Just doing an informal poll of what percentage of your total bonus is being paid out (if at all) and what percentage raise if any is on the table.

I’m looking at a 3% increase in salary and 42% payout on the bonus. The company didn’t hit it’s numbers for 2012, so we didn’t get anywhere near a full payout on the bonus…

In other news, I’ve gotten a few interesting emails over the last month from corporate recruiters, so it may be time to make a move (now that the bonus is done).

Comment by Carl Morris
2013-02-28 09:34:26

Last year was a pretty good year around here, but noises are being made to lower expectations. I suspect there’s nothing coming this year. And I’m also getting interesting contact from recruiters.

Comment by cactus
2013-03-01 00:28:10

I hung up on a “recruiter” today could have been a scam I filled out no online whatever and how did they get my cell #

Comment by tresho
2013-03-01 13:38:10

how did they get my cell #
A computer probably generated the number and called it, just to see if anyone answered. There are no secret phone numbers, just unlisted ones.
If I don’t recognize the number calling me, I don’t answer my phone. Another method is to answer your phone but pretend you are an answering machine. Your friends would probably be amused & junk callers generally hang up on answering machines.

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Comment by In Colorado
2013-02-28 09:40:02

We won’t find out until summer. Prediction: bonus 0%. Raise: 0-2%

That said, Larry Ellison just bought Island Air.

The only recruiters that I hear from have crappy, no benefits “contract to hire” jobs that actually pay less than my current job.

Comment by Blue Skye
2013-02-28 09:56:38

We had a record year last year, and spent all the profits porking up middle management ranks. Go Green! Go Big! It looks like 2008 all over again.

We are getting a modest COLA increase and are told this will be the last one ever. Future increases only to the job level advancers. Targets for $$ levels of projects are way up, as is target for Price and Margin. This means in a sideways market, bonuses for the project go getters will be trimmed significantly. Basically, do more for less is the music. If Obama succeeds in killing the economy, it will get ugly (snark).

Comment by ecofeco
2013-02-28 11:58:34

Bonus? Raise? WTH are those?

Comment by Northeastener
2013-02-28 12:03:53

Just curious ecofeco, are you in the tech industry currently? By your post I’d say no, but as In Colorado stated, much also depends on the company and the location…

Comment by ecofeco
2013-02-28 15:13:37

I generally don’t give out ANY personal information. You can imagine why.

But yes, I work in tech and have for almost 20 years, but that’s all I’m willing to say.

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Comment by drumminj
2013-02-28 12:02:27

100% bonus payout. Company expecting to roughly double in size/revenue again this year.

Haven’t had my review yet to know what raises are.

Comment by Northeastener
2013-02-28 12:05:39

100% bonus payout. Company expecting to roughly double in size/revenue

Congratz! I’m glad to hear someone is hitting their numbers and sharing some of that success with the rank and file. What state is your operation based in?

Comment by drumminj
2013-02-28 12:14:25

Washington. Our sales folks obviously have a different compensation structure, but the dev org has a 10% bonus contingent on hitting our company-wide sales goals. It’s not huge, but certainly nice to have.

We’ve also traditionally gotten incentive-based options, which I assume we’ll be getting this year as well. I haven’t heard the story on that.

I don’t know that our company is representative of the industry in any way, but our market (as well as market share) continue to grow, hence the good numbers.

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Comment by joe smith
2013-02-28 14:08:04

I don’t know anything about how tech works, but for large law firms, everyone looks at whoever the first large firm to announce is (lately it has been Cravath Swaine & Moore). That is step 1.

Usually within an hour of the memo going out to the associates, it is emailed all over the place and posted online. For example: http://abovethelaw.com/2012/11/breaking-cravath-announces-year-end-bonuses-let-the-2012-bonus-season-begin/

Step 2 is, all the other major firms announce they are matching those bonuses. If a firm delays, it is a sign of financial weakness. Usually you have a week to announce you’re matching or its tantamount to an admission that your book of business and financial strength is weak, which reflects on the rates you are able to bill.

Step 3 is usually that a few firms show some weakness and try to downplay why they can’t match. On a very rare ocassion, some firms will go above the market rate, which starts the cycle back at step 1 again (news goes out, other firms forced to make a decision on matching). The prestige hit of paying “below market” is pretty significant. You’re basically resigning yourself to the fact that you won’t be able to recruit students who have federal court clerkships lined up, students on law review, Order of the Coif people, etc.

Of course, this is different because all associates in Biglaw in the major markets make roughly the same amount, depending on your graduation year. Firms can’t afford to pay less, because their recruiting takes a hit. They also don’t want to go above, because it can send the whole market spiraling higher.

The other thing is that for any major Biglaw firm, bonus is strictly based on hitting some goal for hours billed. For most firms it is 1750-1900 hrs billed, thus about 37 hrs/week billed. Pretty easy to hit, you would have to be comatose not to be able to come up with 40 billables per week and that would still allow you to take 3 weeks of vacation.

Comment by joe smith
2013-02-28 14:31:31

I guess what I’m saying is, if you guys want better bonuses, you need to make the info widely available so people can “vote with their feet” if some tech company is being stingy.

Comment by Carl Morris
2013-02-28 14:51:32

People already vote with their feet if they think they could do better elsewhere. It’s very individualized based on much more than just hours, though. A top talent (and I’m not one in any of the niches I’ve been able to try so far) can produce more than multiple average people. There is no standard like you are talking about to take advantage of.

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Comment by ecofeco
2013-02-28 15:17:38

Good advice Joe, but there is much collusion out there as well as the “superstar” effect.

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Comment by joe smith
2013-02-28 15:24:05

Well at the partner level there is definitely a “superstar” effect.

However, for associates, it’s well known what the bonuses are for things like doing a clerkship. For example, someone who clerks for the Supreme Court gets $280k bonus to sign on as an associate.

It used to be 250, but once a few firms went to 280, everyone else was forced into it. http://abovethelaw.com/2011/08/supreme-court-clerk-bonuses-are-heading-higher/#more-93675

Court of appeals and district court bonuses are smaller, obviously. But they are basically the same no matter what firm you go to.

Comment by cactus
2013-03-01 00:31:30

so people can “vote with their feet” if some tech company is being stingy.”

They run all over the place in silly valley

Down south not so much

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Comment by cactus
2013-03-01 00:26:06

3 % raise no bounus but plenty of 12 hour work days

good times I’m calling in sick to work tomorrow Fing company

Comment by cactus
2013-03-01 00:39:21

New manager, my 4th in 3 years, just gave us all a book ” Who moved the cheese” goes with “who outsourced my job” which has yet to be released ;-)

He’s in for a surprise at his new job. this place stresses people out like nowhere I have ever worked before.

The most succesful work 60 plus hour weeks and spend alot of time traveling.

Comment by tresho
2013-03-01 13:39:26

The most succesful work 60 plus hour weeks and spend alot of time traveling.
Doesn’t fit my definition of “succes”, but whatever floats your boat…

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Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-28 09:41:53

Feb. 28, 2013, 11:27 a.m. EST
U.S. consumer debt rises for first time since 2008
By Jeffry Bartash

WASHINGTON (MarketWatch) - American consumers increased their debt in the final three months of 2012 for the first time since the fourth quarter of 2008, which was during the middle of the last recession, the New York Federal Reserve Bank said Thursday. Consumer credit rose $31 billion to break a four-year downtrend. The bank said the increase mainly occurred in non-housing related debt such as student and auto loans and credit cards. Overall mortgage debt was basically flat, though new mortgage debt rose $553 billion and increased for the fifth straight quarter. All together, consumer debt edged up 0.3% to $11.34 trillion in the 2012 fourth quarter. Yet debt is 10.5% lower compared to the peak of $12.68 trillion in the third quarter of 2008, the bank said.

Comment by goon squad
2013-02-28 09:52:53

All that non-existent inflation is getting pretty expensive.

Comment by RioAmericanInBrasil
2013-02-28 09:45:30

Today’s the Pope’s last day. There is talk the next Pope could be Brazilian. I’m not Catholic but I think a Brazilian Pope would make a lot of sense for the Catholic Church. South and Central America are Catholic to the max. Brazil is the largest Catholic country in the world, but like all of South America, Catholics are leaving the Brazilian Catholic Church in droves to become Evangelicals. A Brazilian Pope (also being South American) could stem or reverse this tide in the whole of South America. This is big.

Brazilians are not Hispanic but they are Latin. The entire Latin America and all the Latin countries in the world (including Italy) would have that Latin thing in common with a Brazilian Pope.

Another reason is Africa. Africa contains 16% of the world’s Catholics and is the fastest growing region for the Catholic Church. (Many African Catholic Priests are allowed to marry) Brazil and Africa have a history and share many cultural and ethnic aspects. They are also (albeit on different levels) developing countries. I think a Brazilian Pope would strengthen the Catholic Church in Africa as well for the reasons just mentioned.

Just throwing out some thoughts for comments. (Not because a Brazilian Pope would raise the comps in Rio) :)

Comment by AZtoORtoCOtoOR
2013-02-28 12:25:24

“I’m not Catholic but I think a Brazilian Pope would make a lot of sense”

Maybe god will call a non-catholic, non-Braziian, american living in Brasil to be the new Pope!!

Comment by eight pieces of chicken
2013-02-28 12:54:09

What if the American living in Brasil is there to teach English to Brazilian prostitutes? WorldCup and Olympics are coming, so are the hobbyists, as the distinguished honorable gentleman from New Jersey would say.

Comment by Carl Morris
2013-02-28 13:37:45

Maybe god will call a non-catholic, non-Braziian, american living in Brasil to be the new Pope!!

I hear Mitt Romney is available. He’d probably even be willing to relocate.

Comment by rms
2013-02-28 20:58:53

Isn’t there a Goldman-Sachs alumnus who is willing to forge a “new world order” revolving door policy at the Vatican?

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Comment by ahansen
2013-03-01 01:43:23

LOL, Carl.

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Comment by 2banana
2013-02-28 11:00:56

Hope and change


Who will the next president blame?


Delinquencies On Student Loans Surpass Those On Credit Card Debt
Tyler Durden - 02/28/2013 - Zerohedge

Those who have been following our year-long series exposing the student debt bubble are by now well aware that this latest $1 trillion+ reincarnation of subprime will have a very unhappy ending. Which is why today’s release of the quarterly Fed report on household debt and credit will hold few surprises for them. There is however, one data point which is notable: as of December 31, 2012, the soaring delinquency rate on student loans (first reported here, and subsequently confirmed by the Fed itself), has surpassed that of credit card debt.

Comment by Carl Morris
2013-02-28 11:09:42

Who will the next president blame?

Depends on which party they are affiliated with.

Comment by goon squad
2013-02-28 12:05:23
Comment by 2banana
2013-02-28 11:04:01

Until we see this on the cover of Time magazine we have not hit the height of the obama housing bubble v2.0

“The Great American Housing Rebound”
Tyler Durden’s - 02/28/2013 - Zerohedge

When it comes to provocative financial magazine covers, until now this has been the domain mostly of the Economist and Barrons. Which is why we were not surprised to see Bloomberg do all it can (and it sure can afford to do a lot) to steal the spotlight. With this week’s cover page of “The Great American Housing Rebound” it may have done just that, for obvious reasons, or rather one politically uncomfortable reason.

Comment by Carl Morris
2013-02-28 11:10:44

But we never got a “Worst Investment Ever” cover yet.

Comment by RioAmericanInBrasil
2013-02-28 11:55:44

But we never got a “Worst Investment Ever” cover yet.

We did once for stocks:
The July 1979 BusinessWeek cover story from August 1979 entitled “The Death of Equities.

(Right before the biggest multi-decade bull market in history.)


Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-28 11:54:45


Bulletin Gold’s 5% loss in February is fifth straight monthly decline

Feb. 28, 2013, 12:36 p.m. EST
Gold falls, set for 5th straight monthly loss
By Myra P. Saefong and Sarah Turner, MarketWatch

SAN FRANCISCO (MarketWatch) — Gold futures fell for a second session Thursday, poised to suffer a fifth straight monthly loss, as mostly upbeat U.S. economic data took away some of the precious metal’s investment appeal.

A firmer dollar added even more pressure to gold prices, as the market digested news on the nomination of Haruhiko Kuroda to the post of governor at the Bank of Japan, which fanned dovish monetary-policy hopes.

Gold for delivery in April GCJ3 -1.06% dropped $18.70, or 1.2%, to $1,577 an ounce on the Comex division of the New York Mercantile Exchange. It fell $19.80, or 1.2%, on Wednesday.

Tracking the most-active contracts, prices were trading around 5.1% lower for the month. They’ve already posted monthly declines for each of the last four months.

“Good U.S. economic data is neutral to bearish for gold,” said Chintan Karnani, an independent bullion analyst based in New Delhi.

“A certain extent of good U.S. economic data has already been priced in gold prices, so there is nothing exceptional to cheer for gold bears,” he said.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-28 14:57:09

“Gold for delivery in April (GCJ3 -1.02%) dropped $17.60, or 1.1%, to $1,578.10 an ounce…”

This seems like deja vu all over again, as didn’t gold drop to $1578/oz just last week?

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-28 14:21:11

The stock market is once again falling up.

Bulletin S&P, Nasdaq notch 4th straight monthly gains even as Thursday rally fizzles
Feb. 28, 2013, 4:18 p.m. EST
U.S. stocks slip at the close; up in February
By Kate Gibson

NEW YORK (MarketWatch) — U.S. stocks on Thursday finished mildly lower after a last-minute retreat from gains that had the Dow Jones Industrial Average (DJIA -0.15%) coming within 15 points of its all-time closing high. “We’ve had a great run here, so it’s perfectly natural for a little selling to come in after such a move,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. “We have two enormous opposing forces. On the one hand we have deleveraging, which we saw in the GDP numbers with government spending down. Then we have enormous stimulus, and it’s pretty clear which side is winning,” he added. The Dow Jones Industrial Average (DJIA -0.15%) ended at 14,054.49, down 20.88 points, or 0.2%, leaving it up 1.4% for its third consecutive monthly gain. The S&P 500 (SPX -0.09%) shed 1.31 point, or 0.1%, to 1,514.68, up 1.1% for February, which extended its monthly winning streak to four. The Nasdaq Composite (COMP -0.07%) lost 2.07 points, or 0.1%, to 3,160.19, leaving it up 0.6% for the month.

Comment by joe smith
2013-02-28 14:40:39

Interesting CNBC piece on how the average person can’t afford to buy a new car.


If the typical new car costs $30,550, with an average monthly payment of $550, the five cities most able to meet - or come close - are:

1) Washington

Average Household Income: $86,680

Affordable Purchase Price: $31,940

Maximum monthly payment: $628

2) San Francisco

Average Household Income: $71,975

Affordable Purchase Price: $26,786

Maximum monthly payment: $537

3) Boston

Average Household Income: $69.455

Affordable Purchase Price: $26,025

Maximum monthly payment: $507

4) Baltimore

Average Household Income: $65,463

Affordable Purchase Price: $24,079

Maximum monthly payment: $468

5) Minneapolis

Average Household Income: $63,352

Affordable Purchase Price: $24,042

Maximum monthly payment: $470

At the other end of the scale, those five cities least able to handle a car payment are:

21) Phoenix

Average Household Income: $50,058

Affordable Purchase Price: $17,243

Maximum monthly payment: $348

22) San Antonio

Average Household Income: $48,699

Affordable Purchase Price: $17,137

Maximum monthly payment: $334

23) Detroit

Average Household Income: $48,968

Affordable Purchase Price: $17,093

Maximum monthly payment: $332

24) Miami

Average Household Income: $45,407

Affordable Purchase Price: $15,188

Maximum monthly payment: $295

25) Tampa

Average Household Income: $43,832

Affordable Purchase Price: $14,516

Maximum monthly payment: $282

Comment by Arizona Slim
2013-02-28 14:54:17

You can buy a very nice bicycle after, oh, two or three of most of these car payments.

Comment by ecofeco
2013-02-28 15:19:48

Now if there was only somewhere to ride it to and from work without getting killed…

Comment by sfhomowner
2013-02-28 16:32:27

I’d love to ditch the car, but riding a bike up the hill to my house while lugging the weekly costco haul and 2 kids is more than I can handle.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-28 14:55:29

We haven’t bought any houses over the past decade, but we (coincidentally, I’m sure) have bought three new cars. :-)

Comment by Carl Morris
2013-02-28 15:13:32

I’ve never bought a new car. It sounds fun, but painful.

Comment by ecofeco
2013-02-28 15:21:23

Yep. Welcome to the new normal.

Let me know when they drop the prices due to lower sales. (hint: that will be never)

Comment by rms
2013-02-28 21:13:29

The Phoenix and San Antonio incomes seem awfully high, IMHO. Likely using “median income” would have produced a better ranking.

Comment by Rental Watch
Comment by Rental Watch
2013-02-28 15:16:43


5.3 million non-current loans as of 12/31/12
5.2 million non-current loans as of 1/31/13

Just watching the paint dry.

State-by-state data will be out next week.

Comment by Pimp Watch
2013-02-28 18:13:45

Watching paint dry while you lie.

Comment by hazard
2013-02-28 15:18:19

According to Rep. Maxine Waters, over 170 million could lose their jobs if the sequester cuts happen. Which is troubling when you consider there are only a little over 140 million jobs in the U.S.

Rep. Maxine Waters: 170 million people could lose their jobs due to …
http://washingtonexaminer.com/rep.-maxine-waters-170-million-people-could-lose-their-jobs-due-to-sequestration/article/2522843 - -

Comment by ecofeco
2013-02-28 15:23:20

Say what?! Total BULLCRAP!!

There are only 156 million people in the entire US workforce!!

As for the rest of the world, I don’t give a damn.

Yes, you can Google that.

Comment by hazard
2013-02-28 15:33:40

I guess that touched a nerve. :)

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-28 15:40:50

Is she including jobs in China supported by U.S. consumption spending?

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-28 15:42:34

Moral of the story: If you are going to pull numbers out of your arse, at least make them plausible…

Comment by redmondjp
2013-02-28 17:42:52

That would imply that one has the intellectual capacity to understand what a plausible number is!

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 20:09:04

Beautiful point…and I seriously doubt she does.

Kind of brings to mind the Million 400,000 Man March, no?

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Comment by alpha-sloth
2013-03-01 04:11:32

Kind of brings to mind the Million 400,000 Man March, no?


Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-28 15:39:44

Financial Times
February 28, 2013 7:01 pm
Spain suffers worst corporate slide of crisis
By Miles Johnson and Tobias Buck in Madrid

Spain’s largest companies suffered the worst drop in quarterly earnings since the country’s crisis began as new data showed the Spanish economy was shrinking at a faster rate than expected.

On a day when more than a third of Spain’s Ibex 35 index reported full-year results Bankia, the nationalised lender, reported a net loss of €19.2bn, the largest in Spanish corporate history. Meanwhile, ongoing restructuring woes at Spanish carrier Iberia saw International Airlines Group swing to a near €1bn full-year pre-tax loss from a profit the year before.

“It has been the worst year for corporate earnings in Spain since the crisis began,” said Emmanuel Cau, European equity strategist at JPMorgan. “Earnings have collapsed in Spain for domestically focused businesses, which reflects a sharp fall in domestic GDP.”

With eight companies still to report, the Ibex 35 index as a whole reported a net loss of €2.7bn in the fourth quarter, according to analysis by Mirabaud, the worst since the crisis began, with banks contributing to the bulk of the losses.

But while the earnings reports highlighted the depth of the economic downturn last year, several corporate leaders voiced confidence that their companies would enjoy a better performance in 2013. The turnround is set to be especially pronounced at Bankia, which predicted it would post a full-year profit this year, while Telefonica pleased investors by showing signs that the deterioration in its Spanish business was stabilising.

Other large Spanish companies continued to be sheltered by profits from their international businesses while earnings at home were hurt by domestic woes, with one in four people jobless. Telefonica, Spain’s former state telecoms monopoly, said sales at home slumped 13 per cent over last year, while Repsol, the oil group, saw fuel sales at domestic petrol forecourts fall 9 per cent.

The flurry of earnings reports came as new data revealed that the Spanish economy contracted at a faster pace than previously thought late last year.

In a sign of the continuing weakness in the country’s credit-starved economy, output fell 0.8 per cent in the last three months of 2012 – the sharpest quarterly drop in more than three years – Spain’s national statistics office said.

Analysts said the fall highlighted the challenge faced by the Spanish economy this year. “Official forecasts for the economy look far too optimistic,” said Jonathan Loynes of Capital Economics, pointing out that the government was predicting a fall in GDP of only 0.5 per cent in 2013, about one point less than consensus forecasts.

Comment by Rental Watch
2013-02-28 15:54:13

In December 2012, 11% of sales in CA were “REO” (which I presume includes foreclosures), 25% were short sales (which most definitely do NOT include foreclosures). The rest were “equity” sales–”normal” sales.

So, back to the stupid CA law.

Dual tracking would mean that ALL 36% of the sales were in the foreclosure process, but 25 of the 36 points didn’t complete the process (ie. were sold short rather than complete the process).

If you were to keep the ratio the same, 11 foreclosures for every 25 short sales, but NOT pursue a dual-tracking strategy (as is now forbidden), you would need to decrease foreclosure filings by 25/36, or…70%.

Foreclosure filings in CA fell from December to January by 60%.

The drop is easily explained by ceasing the dual tracking.

Time will tell if the non-current loan rate in CA continues to fall as it has been.

Comment by Pimp Watch
2013-02-28 18:12:16

You’re a liar. You’re making sh*t up again. Why is that?

What’s really going on in California

California imposed a new law on banks innocuously called “Homeowners Bill of Rights” which forces banks to switch over to a judicial foreclosure process, which they can opt to do on their own, but takes a year or more to renegotiate contracts and compensation structures for the foreclosure law firms who do all the leg work for the banks. And while those changes are being made… it makes it appear that foreclosures have slowed down dramatically in the state.

The reality?

Defaults (undeclared) are spiraling upward that yet have to pass through the foreclosure pipeline.

The truth?

California is still the highest foreclosure state in sheer volume and percentage.

The low-down?

Resale housing is still massively overpriced as a result of unprecedented interference by individual states and the federal government. The market distortions will be removed and the down draft will continue allowing the market to correct.

If you play with fire, you will get burned.

Comment by hazard
2013-02-28 19:00:26

“You’re a liar. You’re making sh*t up again. Why is that?”

Priceless! :)

Comment by Rental Watch
2013-02-28 19:08:28

I guess I’ll have to re-quote from yesterday:

“Ahh, Pimpy, making sh*t up again…

Here’s the summary of CA’s stupid law.


Banks have had since July 2012 to figure out how to deal with the new law. I’m married to an attorney (who laughed at your assertion that it would take a year to negotiate some sort of arrangement with a lawfirm)…it wouldn’t take long to make new arrangements with attorneys to provide services for judicial processing…it’s not like lenders don’t have to deal with judicial processing in other states…it’s not like lawfirms have never heard of judicial foreclosure processing. They don’t need to recreate the wheel here.

If the law forced lenders to go judicial, you wouldn’t see any non-judicial filings…how then do you explain the non-judicial foreclosure filings in the state after January 1st?

The truth is that CA’s stupid law doesn’t allow dual tracking (ie. can’t pursue a short sale while processing a foreclosure). So, if a short sale is possible and preferable, the lender won’t file the foreclosure.

Here are your friends from TransUnion with the truth about CA delinquency rates:


They note CA as one of the top year on year declines in delinquency rates, from 7.14% to 5.03% (a level below the US average of 5.19%).

We’ll see in the coming months how the law slows the decline in non-current loan rates in the state.”

Comment by Housing Analyst
2013-02-28 19:22:58

And you’re lying to the public once again. The law puts defaults in a loop giving the appearance that inventory is falling when it’s not.

And you egregiously suggest a 5% delinquency rate is normal with in fact it’s 400% HIGHER than the long term trend.

You my friend are a shameless liar.

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Comment by Rental Watch
2013-03-01 00:46:11

I’ve been through this over and over. From the same group that reports the non-current loan rates today, the average delinquency rate from 1995-2005 is 4.32%, and the average rate of loans in foreclosure in that same timeframe is 0.53%. The sum total of these two is the average non-current loan rate from 1995-2005…4.85%.


Page 16.

And additionally, I’m not saying that 5% reported by Transunion is normal (although it’s getting there)…I’m saying that delinquency rates in CA are falling, not “spiraling upward”, as you EXPLICITLY state.

Comment by Pimp Watch
2013-03-01 18:53:22

And you’ve been proven a liar over and over again.

Why are you lying to the public about housing? You lied about your construction experience, you lie about default rates, you lie about inventory.

Where do the lies end?

Comment by hazard
2013-02-28 16:08:15

I guess the Blade Runner took the Joe Biden Firearms Safety course.

Joe Biden Has More Gun Advice: ‘Just Fire the Shotgun Through the Door’

Feb. 27, 2013 10:00pm Jason Howerton

BIDEN: Well, the way in which we measure it is—I think most scholars would say—is that as long as you have a weapon sufficient to be able to provide your self-defense. I did one of these town-hall meetings on the Internet and one guy said, “Well, what happens when the end days come? What happens when there’s the earthquake? I live in California, and I have to protect myself.”

I said, “Well, you know, my shotgun will do better for you than your AR-15, because you want to keep someone away from your house, just fire the shotgun through the door.”

http://www.theblaze.com/stories/2013/02/27/joe-biden-has-more-gun-advice-just-fire-the-shotgun-through-the-door/ - -

Comment by hazard
2013-02-28 17:04:04

WARNING! ALL Girl Scouts and Jehovah Witnesses: STAY AWAY from Joe Biden’s house after severe thunderstorms.

‘Blade Runner’ Oscar Pistorius shot girlfriend through door:

David Dolan and Peroshni Govender, Reuters
Tuesday, February 19, 2013 06:28 AM EST

PRETORIA - “Blade Runner” Oscar Pistorius put on his artificial legs and walked across his bedroom before firing four shots through a locked toilet door, killing his cowering girlfriend in cold blood, prosecutors said on Tuesday.

http://www.torontosun.com/2013/02/19/blade-runner-pistorius-shot-girlfriend-through-door-prosecutor - 163k

Comment by azdude
2013-02-28 17:44:50

roid rage?

Comment by hazard
2013-02-28 18:22:38


Posted On: February 28th, 2013

“A 22-year-old man found himself facing a summons after he told officers he fired his shotgun repeatedly upon finding masked suspects leaning in his window.” Huh? But the Vice President of these here U-Nited States said firing warning shots with a shotgun is the sine qua non in home defense strategy. Ol’ Double Barrel Joe even confided that he advised his own wife to do just that if she ever felt threatened in their home. Guess that doesn’t apply in Virginia. Trevor Snowden of Virginia Beach “told police his dog was acting strange. When he walked to his bedroom, he said he saw two masked suspects leaning in his open window” . . .

Snowden told police the suspects pointed weapons at him and told him to shut the bedroom door. Thinking the suspects were going to rob him, he moved into the hallway and retrieved a shotgun.

Moyers said Snowden fired through his bedroom door, then opened the door and fired several more rounds toward the window. Any suspects fled the area and could not be located by officers.

Snowden’s been charged with reckless handling of a firearm. Since this was all just a misunderstanding – Trevor was obviously just following government sanctioned advice – we’re sure the Veep will be glad to cover his attorney’s fees and any fines that may be assessed.

http://www.republicbroadcasting.org/index.php?cmd=news.article&articleID=4897 -

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Comment by Ben Jones
2013-02-28 19:23:19

‘you want to keep someone away from your house, just fire the shotgun through the door’

I’m pretty sure that’s a crime. On top of that, what if it’s a metal door? Or the if shot hits some of the doors hardware? Right back at ya babe.This guy must be an idiot; one heartbeat away from the presidency.

Comment by hazard
2013-02-28 19:44:15

Somebody need to drop this in Double Barrel Joe`s in-box.

Be Sure Of Your Target And What’s Beyond It

No one can call a shot back. Once a gun fires, you have given up all control over where the shot will go or what it will strike. Don’t shoot unless you know exactly what your shot is going to strike. Be sure that your bullet will not injure anyone or anything beyond your target.

Firing at a movement or a noise without being absolutely certain of what you are shooting at constitutes disregard for the safety of others. No target is so important that you cannot take the time before you pull the trigger to be absolutely certain of your target and where your shot will stop.

Be aware that even a .22 short bullet can travel over 1 ¼ miles and a high velocity cartridge, such as a .30-06, can send its bullet more than 3 miles. Shotgun pellets can travel 500 yards, and shotgun slugs have a range of over half a mile.

You should keep in mind how far a bullet will travel if it misses your intended target or ricochets in another direction.

Comment by Ben Jones
2013-02-28 20:17:56

Yeah, people see so much shooting indoors in movies and it has distorted their perception of what guns can do. The first time I shot a 357 magnum, outdoors, I couldn’t hear for an hour. The concussion can make you goofy. I can’t imagine what it would be like to fire a gun indoors. (Well, I’ve been to indoor gun ranges, but I had those big ear muff things on). Bullets and shot bounce like crazy; these aren’t lasers like star wars.

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Comment by Housing Analyst
2013-02-28 19:05:54

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

Comment by azdude
2013-02-28 19:21:22


Comment by Resistor
2013-02-28 20:01:48




Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 20:04:06

I still frankly don’t see why you think BB and his FOMC colleagues can’t keep housing permanently propped up on a moderately high plateau forever, especially if the Fed decides to snap up and hang on to unlimited billions in toxic MBS for an indefinite future period?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 20:06:26

Now that BB has announced the Fed may hang on to MBS forever, it will be even more devastating when the FOMC gets around to unwinding their MBS positions.

February 26, 2013, 12:24 PM

Bernanke Says Fed May Never Sell MBS
By Jon Hilsenrath

As we noted Monday, Federal Reserve officials have been considering whether to revise the exit strategy that they’ve devised for their easy money policies.

Under the exit strategy the Fed laid out in June 2011, the Fed would one day sell down its holdings of mortgage backed securities over a period of three to five years. Several officials have been wondering whether the Fed should revisit that strategy and consider taking a less aggressive approach to selling when the time comes.

Comment by Resistor
2013-02-28 20:40:30

“less aggressive approach to selling when the time comes.”

When the time comes. Whata buncha turds.

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Comment by rms
2013-02-28 21:38:27

Harry Potter’s magic doesn’t come close to Bernanke’s power.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 22:46:11

Market Sees ‘Helicopter Ben’ Coming to the Rescue
Published: Friday, 7 Sep 2012 | 10:48 AM ET
Patti Domm

Stocks initially dipped after August’s painfully weak employment report showed job growth of just 96,000, but the market was flatas traders bet the number could help push the hand of the Federal Reservetowards a new round of quantitative easing.

Market pundits, within minutes of the 8:30 am ET report, unleashed a flurry of notes raising the odds of QE3.

Fed Chairman Ben Bernanke won the nickname “Helicopter Ben” after he referred to a statement by Nobel economist Milton Friedman about fighting deflation by using a helicopter drop of money. Now, traders expect to see a money drop, with a better chance it will come when the Fed meets next week.

Goldman Sachs economists quickly put the chances at above 50 percent that the Fed would announce a plan to purchase mortgage-backed securities and Treasurys, in an open-ended program that would be dependent on the progress of the economy.

They also expect it to continue Operation Twist through the end of the year, as planned. The Fed, in that program, buys longer dated Treasurys and sells shorter dated securities, without increasing its balance sheet as QE does.

Others agree that the Fed, if it acts, will look to give an added boost to the recovering housing market and keep rates low with mortgage purchases.

“I wouldn’t say this seals the deal, but it does make it more likely they announce asset purchases next week,” said JPMorgan economist Michael Feroli. “It probably will involve some mortgages. It may be a smaller, more nimble kind of open-ended form.”

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Comment by hazard
2013-02-28 19:28:27

Obama Civilian Security - YouTube
http://www.youtube.com/watch?v=Tt2yGzHfy7s - 209k -
Jul 17, 2008 …

Why I didn`t even know we had full-time 18-24 year old FEMA Corps. Didn`t Germany have something like this in the 1940s?

Welcome to the FEMA Corps Inaugural Class

September 14, 2012
2:05 pm

The inductees are pioneers, combining the exceptional record of citizen service at AmeriCorps’ National Civilian Community Corps with FEMA’s specialized mission of supporting survivors with their recovery after a disaster. The new members, who range in age from 18-24 years old, will contribute to a dedicated, trained, and reliable disaster workforce by working full-time for ten months on federal disaster response and recovery efforts. As we announced in March, FEMA Corps sets the foundation for a new generation of emergency managers; it promotes civic engagement and offers an educational and financial opportunity for young people; and is designed to strengthen the nation’s disaster response by supplementing FEMA’s existing Reservist workforce.

I commend and thank every member of the inaugural class of FEMA Corps for their dedication to helping communities in need. Welcome to FEMA Corps!

http://www.dhs.gov/blog/2012/09/14/welcome-fema-corps-inaugural-class - 35k -

Comment by hazard
2013-02-28 20:14:49

HSI Using Armored Vehicles for Training (ICE) | Homeland Security
http://www.dhs.gov/photo/hsi-using-armored-vehicles-training-ice - 29k - Cached - Similar pages
Apr 5, 2012 … ICE Homeland Security Investigations (HSI) special agents participate in a rigorous training exercise utilizing armored vehicles designated for …

Comment by hazard
2013-02-28 20:28:25

And of couse they are going to need targets for practice.

Law Enforcement “Requested” Shooting Targets of Pregnant Women

Paul Joseph Watson
February 20, 2013

Law Enforcement Targets, Inc., a provider of shooting targets to the Department of Homeland Security, has admitted that targets depicting pregnant women were “requested” by law enforcement agencies.

LET Inc brags on its website that it is a full service provider of training targets for the DHS, the Justice Department and thousands of law enforcement agencies throughout the country. The company has has racked up $5.5 million worth of contracts with the federal government, with almost $2 million dollars coming from Homeland Security.

Law Enforcement “Requested” Shooting Targets of Pregnant Women
http://www.infowars.com/law-enforcement-requested-shooting-targets-of-pregnant-women/ - 127k -

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 22:30:01

I hadn’t realized the DHS had a “no pregnant woman, child, young mother or grand parent left behind” policy!

DHS training with practice targets featuring children, pregnant woman?
Outrage has erupted over law enforcement practice targets depicting

Photo: No Hesitation practice targets featuring armed women and children
Thursday, February 28, 2013

DALLAS, February 28, 2013 — Minnesota-based Law Enforcement Targets, Inc (LET) has been awarded $5.5 million in contracts with the federal government, including $2 million with the Department of Homeland Security.

In light of this fact, it’s no wonder that the American people were outraged last week when it was uncovered that the firm had released a series of gun practice targets featuring a pregnant woman, a child, a young mother and grandparents.

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 19:55:29

The Obama presidency has been the best thing that ever happened to gun manufacturers.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 19:58:17

Obama’s re-election drives gun sales
By Aaron Smith @CNNMoney
November 9, 2012: 11:43 AM ET

President Obama’s re-election is driving gun sales because of concerns about tighter regulations on semiautomatic rifles, like this pistol-gripped Hi-Point, pictured far-right at a Tallahassee firing range.
Gun sales are up in the wake of Barack Obama’s re-election on Tuesday, driven by fears of tighter regulations under a Democratic president, especially for firearms that might be classified as assault weapons.

“Sales are up,” said John Kielbasa, owner of Fernwood Firearms in Hankins, N.Y. “I had a guy waiting here first thing in the morning [after the election.] He came in, bought two AK-47s.”

Kielbasa said that he sells semiautomatic versions of the fully automatic Kalashnikov rifles, as is permitted by law. He said the demand for semiautomatic rifles is being stoked by memories of the assault weapon ban pioneered by another Democrat, former President Bill Clinton.

That ban, which expired in 2004, didn’t eliminate the weapons entirely, but restricted their features, limiting magazine capacity to 10 rounds and regulating pistol grips, bayonet attachments and flash suppressors.

Lawrence Keane, vice president of gun industry group National Shooting Sports Foundation, says that modern sporting rifles — a term that he prefers to assault weapons — are “the most popular type of rifles being bought today by Americans.” He says they’re used by hunters, target shooters, veterans returning from Iraq and Afghanistan, and citizens who want to protect their property from looters in the wake of recent storms.

Fears that a ban on the weapons might come back under Democratic leadership drove gun enthusiasts to buy firearms when Obama was first elected in 2008. The most reliable way to track the number of gun sales is via background checks, and they spiked after the last election.

The Federal Bureau of Investigation conducted 97,848 firearms background checks on Nov. 28, 2008, according to the National Shooting Sports Foundation. That’s the third-highest number of background checks ever recorded in a single day. The FBI conducted 12.7 million background checks during all of 2008, compared to 11.2 million the year before. They’ve been climbing ever since.

“It’s going to be good for me for business,” said Kielbasa, who specializes in “tactical firearms,” according to his web site. “But eventually, if they’re going to ban all this stuff, what am I going to sell?”

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 22:24:20

If China’s manufacturing is already slowing down, just wait until the U.S. federal workforce collectively tightens their belts to wait out the sequester. This party is just getting started, folks.

China February official PMI to dip, hurt by weak export demand

A labourer works at a steel factory in Dalian, Liaoning province December 4, 2012. REUTERS/China Daily

BEIJING | Tue Feb 26, 2013 11:08pm EST

(Reuters) - Chinese factory activity probably grew at its slowest pace in four months in February as foreign demand remained sluggish, shoring up expectations that China’s economy is set for a only feeble recovery this year.

The median forecast from a Reuters poll of 14 economists showed the official purchasing managers’ index (PMI) likely edged lower to 50.2 in February after seasonal adjustments, from January’s 50.4.

That suggests Chinese factories still grew in February on a monthly basis, but only modestly since the 50-point level separates expanding from contracting activity.

“The focal point will be new export orders, which dipped into the contraction zone in January,” said Connie Tse, an economist at Forecast Pte in Singapore.

China’s large export sector has been one of the worst-performing parts of its economy in the past two years as belt-tightening by European and U.S. shoppers slashed demand for Chinese goods, a trend analysts say should subsist in 2013 if global consumption gradually recovers.

Growth in Chinese exports averaged 8.4 percent each month last year, down sharply from monthly expansion of 20.7 percent in 2011.

In a possible sign of things to come, China’s official PMI for January showed export orders shrank on a monthly basis as the sub-index fell to 48.5.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 22:35:04

Fed food fight continues…

Feb. 28, 2013, 5:19 p.m. EST
Fed’s Fisher: Fundamentals don’t back stock levels
By Greg Robb

WASHINGTON (MarketWatch) - Economic fundamentals don’t justify the level of equity markets though “that is for the market to decide,” said Richard Fisher, president of the Dallas Federal Reserve Bank on Thursday. The Fed has been consciously helping the stock market by driving bond rates down, Fisher said. The Dallas Fed president wants the central bank to begin to scale back its $85 billion-a-month bond buying program. “I think it is time to really, perhaps, just taper this off. That doesn’t mean to stop it, we’re not going to go from wild turkey to cold turkey, but I do think we’ve run up to the limits of the efficacy of what we’re doing,” he said in an interview on CNBC. Asked if that would cause market disruption, Fisher replied: “there is a lot of momentum” and volume in equity markets, making it a good time to at least “socialize the concept” that the Fed will slow down purchases. U.S. stocks retreated Thursday from all-time highs.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 22:51:18

Being in the minority does not necessarily imply you are wrong. In fact, the history of science is rich with instances where a lone man of insight stood his ground right up until the point when he turned the dominant paradigm on its head.

Fed’s Fisher sees “overkill” risk in mortgage-bond buys

Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas, speaks during a conference before the Committee for the Republic Salon at the National Press Club in Washington January 16, 2013. REUTERS/Jose Luis Magana

By Jonathan Spicer

NEW YORK | Wed Feb 27, 2013 4:58pm EST

(Reuters) - The Federal Reserve risks “overkill” if it continues buying mortgage bonds at the current clip because the U.S. housing market is on sounder footing, a top Fed official said on Wednesday.

In a speech, Federal Reserve Bank of Dallas President Richard Fisher repeated his preference for the U.S. central bank to taper its $40 billion in purchases of monthly mortgage-backed securities.

The Fed is also buying $45 billion in Treasury bonds per month as part of its unprecedented drive to spur investing and hiring, and to help along the slow and erratic U.S. recovery from the 2007-09 recession.

Fisher, an outspoken inflation hawk whose views are in the minority among his fellow 18 Fed policymakers, pointed to a “reinvigorated housing market” as a source of concern over the extraordinary measures employed by the central bank, including its quantitative easing program.

“The fact that the housing-market gears have now begun to mesh is why I believe we are running the risk of overkill by continuing our mortgage-backed securities purchase program at the current pace, and would suggest tapering off those purchases,” Fisher told students and faculty at Columbia University.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 22:38:01

Pimco’s Gross says get ready for lower returns
February 28, 2013, 7:15 AM

With the Dow Jones Industrial Average within spitting distance – make that 89 points — of its record closing high, traders are on the lookout for signs things are getting overstretched.

For what it’s worth, Federal Reserve Chairman Ben Bernanke doesn’t think we’re in a stock market bubble
. But the question of what causes markets to overheat is an enduring one, bond firm honcho Bill Gross warned Wednesday in his monthly investment letter.

Diagnosing “irrational exuberance” isn’t easy to do, but there are signs “irrationality” is on the rise, which means lower returns may be in store from corporate bonds and, possibly, stocks, he said, while expanding on a speech by Fed Governor Jeremy Stein.

“On a scale of 1-10 measuring asset price ‘irrationality,’ we are probably at a 6 and moving in an upward direction,” Gross wrote.

So what are the implications? Gross writes:

Corporate credit and high yield bonds are somewhat exuberantly and irrationally priced. Spreads are tight, corporate profit margins are at record peaks with room to fall, and the economy is still fragile. Still that doesn’t mean you should vacate your portfolio of them. It just implies that recent double-digit returns are unlikely to be replicated and that when today’s 5% to 6% high yield interest rates are adjusted for future defaults and recovery values, that 3% to 4% realized returns are the likely outcome.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 22:55:35

San Diego is a federal hotspot
The region experienced spike in size of U.S. budget, now will see cuts
By Matt Clark7:28 p.m.Feb. 28, 2013

Wait times at the San Ysidro Port of Entry could rise from three hours at peak weekend times to five hours if sequestration cuts go through, the White House says. [U-T file] Wait times at the San Ysidro Port of Entry could rise from three hours at peak weekend times to five hours if sequestration cuts go through, the White House says. [U-T file] — John Gibbins

The federal government due for automatic budget cuts starting Friday is a large and growing operation, perhaps nowhere more so than San Diego County, home of wide-ranging Naval operations, a bustling border and vibrant biotech and drone sectors.

About $37 billion flows into the county each year, a number that includes billions of dollars for defense contracts and $500,000 for researchers to study safer sex intervention for clients of sex workers in Tijuana.

Federal spending here has grown from $19 billion at the start of the century. The county’s economy, over the same period, grew at about half that rate.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-28 23:03:05

Speaking of who bears the costs of ownership, yesterday morning some pest control guys were working in front of the other unit of the duplex we live in. I casually asked what the chances were the termites were also in our place.

The exterminator’s reply: “If I were a gambling man, I’d have it inspected.”

I told my wife to notify our landlords that they need to get a termite inspection. Since they bear the risk of loss on the property, I don’t intend to pay a dime for termite control. Been there / done that when I used to be an owner.

Comment by cactus
2013-03-01 01:02:41

Your landlord paid 600K for a duplex in Rancho Bernardo ?


Side note I will be in San Diego this weekend plus tomorrow since I am too sick to go to work Cough cough and spend anymore 12 hour days and weekends to help high paid contractor.

And why am I training a contractor anyway ?? Don’t companies hire contractors so they can get their expertise ??

the answer BTW is not in “Who moved my cheese” but more along the line “there is a actue shortage of technical workers” so companies are hiring any fool now just like in 1999 tech bubble.

Comment by rms
2013-03-02 07:57:45

“Your landlord paid 600K for a duplex in Rancho Bernardo ?”

+1 I was thinking the same thing. :)

Comment by tresho
2013-03-01 13:42:01

The exterminator’s reply: “If I were a gambling man, I’d have it inspected.”
Every time I ask a barber if I need a trim, I always get the same kind of answer.

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