March 4, 2013

Bits Bucket for March 4, 2013

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




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369 Comments »

Comment by frankie
2013-03-04 01:27:11

Italian officials say the Bank of Italy’s governor Ignazio Visco is front-runner to take over as premier despite warnings that this will be seen as an elitist ploy. It is far from clear whether the Democrats (Pd) in charge of the lower house will back the idea.

The plans amount to a near replica of the outgoing team of Mario Monti, though one greatly weakened by the earthquake upset in the elections a week ago. Almost 57pc of the vote went to groups that vowed to tear up the EU-imposed austerity agenda.

Stefano Fassina, the Pd economics chief, said his party is vehemently opposed to “any form of technocrat government, new or old”, insisting that the election result must be respected. Mr Fassina said 90pc of the country had rejected the Monti agenda and warned that it would be a grave error to try to force through the same reviled plans a second time.

http://www.telegraph.co.uk/finance/financialcrisis/9906213/Anger-builds-in-Italy-as-old-guard-plots-fresh-technocrat-take-over.html

Send in the Central Banker, that will teach them ;)

 
Comment by goon squad
2013-03-04 03:44:47

One story worth discussing is actually a non-story, at least according to the corporate, bedwetter libtard media: the nationwide shortage of ammunition.

A Google search and Google News search on “ammunition shortage” returns a 2/17 USA Today piece, a Breitbart article (ahh, Breitbart), and numerous television/radio station web articles. On page 3 of a Google News search there are Huffington Post and Daily Caller pieces on the topic.

Scrolling through the next several pages of search results, there is no reporting on the topic from the biggest libtards, the coastal elitist, thumbsucking bedwetters, the New York Times, the Washington Post, Bloomberg, or any of the Chicago or left coast rags.

These bedwetter gun-grabbers have been churning the same anti second amendment dreck non-stop since mid-December, since the Obama’s fake crocodile tears Newtown photo op. But they refuse to touch the story that there is no cheap ammunition to be found anywhere in USA.

Regarding Mr. Jones comment on 3/2, “if the Feds want a war, they’ve got one”, it seems as if the nanny-state gun grabbers and their slobbering, servile, encopretic media truly are afraid…

Comment by Combotechie
2013-03-04 05:21:34

“… the nationwide shortage of ammunition …”

Sort of like “the nationwide shortage of houses for sale” in that the shortage of ammunition ignores the inventory.

 
Comment by SV guy
2013-03-04 05:30:55

Just picked up a Dan Wesson PM7.

Yum.

 
Comment by hazard
2013-03-04 05:44:58

“fake crocodile tears”

http://www.youtube.com/watch?v=F-t8PngHgWY - 200k -

 
Comment by alpha-sloth
2013-03-04 06:42:02

Here’s an Associated Press article on it from MSN.com.

Homeland Security wants bullets, 1.6 billion of them

AP 2/14/13 By Alicia A. Caldwell

The government says it hopes to get a good price on more than 1.6 billion rounds of ammunition it wants to buy over the next several years.

WASHINGTON — Online rumors about a big government munitions purchase are true, sort of.

The Homeland Security Department wants to buy more than 1.6 billion rounds of ammunition in the next four or five years. It says it needs them — roughly the equivalent of five bullets for every person in the United States — for law enforcement agents in training and on duty.

Published federal notices about the ammo buy have agitated conspiracy theorists since the fall. That’s when conservative radio host Alex Jones spoke of an “arms race against the American people” and said the government was “gearing up for total collapse, they’re gearing up for huge wars.”

The government’s explanation is much less sinister.

Federal solicitations to buy the bullets are known as “strategic sourcing contracts,” which help the government get a low price for a big purchase, says Peggy Dixon, spokeswoman for the Federal Law Enforcement Training Center in Glynco, Ga .

http://news.msn.com/politics/homeland-security-wants-bullets-16-billion-of-them

Comment by hazard
2013-03-04 07:38:36

If you want a “good price” on practice ammo, just buy FMJ at a fraction of the price of hollow-points.

http://www.youtube.com/watch?v=F-t8PngHgWY - 200k -

AP/ September 4, 2012, 11:43 AM

Why does Social Security need 174,000 bullets?

(AP) WASHINGTON - It didn’t take long for the Internet to start buzzing with conspiracy theories after the Social Security Administration posted a notice that it was purchasing 174,000 hollow-point bullets.

The bullets are for Social Security’s office of inspector general, which has about 295 agents who investigate Social Security fraud and other crimes, said Jonathan L. Lasher, the agency’s assistant IG for external relations.

The agents carry guns and make arrests — 589 last year, Lasher said. They execute search warrants and respond to threats against Social Security offices, employees and customers.

Agents carry .357 caliber pistols, Lasher said. The bullets, which add up to about 590 per agent, are for the upcoming fiscal year. Most will be expended on the firing range.

“For practice ammunition, they do not have to be hollow-points, but hollow-points are the normal police round used for duty ammunition due to their ability to stop when they hit an object as opposed to going through it and striking more objects,” said William J. Muldoon, president of the International Association of Directors of Law Enforcement Standards and Training.

The episode illustrates what can happen when a seemingly salacious tidbit gets amplified and embellished on the Internet.

http://www.cbsnews.com/8301-201_162-57505646/why-does-social-security-need-174000-bullets/ - 110k

Black Hawks Used In Military Training Exercise In Miami « CBS Miami
http://miami.cbslocal.com/2013/01/25/blackhawks-used-in-military-training-exercise-in-miami/ - 126k - Cached - Similar pages
January 25, 2013 8:34 AM

Attack Helicopters Let Loose with Machine Gun Fire Over … - Infowars
http://www.infowars.com/attack-helicopters-let-loose-with-machine-gun-fire-over-miami/ - 52k - Cached - Similar pages

Comment by Dale
2013-03-04 13:51:51

I think Social Security will need all those bullets to meter out the final reward to all the people for all their years of work…….and I thought Obamacare was the only place that was setting up “death panels”.

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Comment by vinceinwaukesha
2013-03-04 07:39:33

“in the next four or five years. It says it needs them — roughly the equivalent of five bullets for every person in the United States”

first of all its a round not a bullet. I’m guessing they’re not reloading or we’d have scandal report of reloading presses and brass and primers. Not even getting basic terminology correct doesn’t inspire confidence in the other facts to say less of the attached wild speculations.

The mighty GOOG reports DHS has 200K employees. Seeing as we have 400M or so people (can’t say citizens) wandering around the US, I’ll round up to 400K employees to make the math easy. In other words 1 in 1000 of “us” “work” for the Stasi… er I mean DHS.

Now 20 or so years ago I was a MOS 55R (That MOS no longer exists as of 1994, long story, look up 55B) which means I ran the computer that ran an ammo depot (aka “ASP” or “TSP”) in the USAR and I assure you that “we” blew thru about 1K M16 rounds per year per soldier for basic training. Familiarity/quals every 6 or so months used a couple magazines per soldier so lets say 250 rounds per year. Its not hard to do, if you think about it. Zero, qualify, NBC familiarization, maybe nighttime familiarization, right there you’re at over 100 rounds. Twice a year, maybe a little extra training plus the F ups who have to try 10 times to qual (what can I say, we were reserves… at least we didn’t pull the old ball point trick, at least not that I saw…) And this is for my fellow REMFs not front line troops training on a regular basis.

So using a bit of long division that’s 1000 rounds per year which is frankly not much for active front line training of new and current employees. You can check out the advice for private weapon training places like gunsight and the appleseed shoots and just one training event (one, not 52 weekends per year, not monthly, just one event) they advise a couple hundred rounds is about right.

I’m thinking monthly quals and familiarization training is probably about right for front line militarized stasi … err.. I mean defenders of freedummmmb, and “a couple hundred” rounds per training event is probably about right… Its just what it multiplies out to.

So I’m not overly impressed at the “5 rounds per american” or whatever. Its just not as much ammo as it sounds. I’m sure you can trivially make scare quotes about the entire US Army buying 100 billion rounds of ammo if you just make the time period long enough, a decade or two is probably about right. One problem with the de-militarization of the citizens unlike WWII era is the general public gets weird ideas, like weapons are only fired in end of the world shootouts (no, thats ICBMs) or training is just firing once a year or once a career (no, thats more like grenades or LAW/AT4/whatever it is now). I only threw 2 grenades in my entire “career” and got to watch a buddy fire an AT4.

Comment by polly
2013-03-04 09:03:20

“The mighty GOOG reports DHS has 200K employees. Seeing as we have 400M or so people (can’t say citizens) wandering around the US, I’ll round up to 400K employees to make the math easy. In other words 1 in 1000 of “us” “work” for the Stasi… er I mean DHS.”

So you double the number of employees listed in order to make the “math” easier and then argue that 1 in 1000 work for the department? You round up from 1 in 2000 to 1 in 1000 and then start your rhetoric from there? Do you have any idea how absurd that is?

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Comment by Obamaphone mall kiosk operator
2013-03-04 09:32:03

Math is Racist®

Ask Maxine Waters about the 170 million jobs lost from the sequester.

 
Comment by ecofeco
2013-03-04 09:43:17

:lol:

Oh Snap!

 
Comment by polly
2013-03-04 11:03:57

There isn’t much wrong with the rest of the analysis except for assuming that DHS is mostly something resembling front line troops against US citizens. I just don’t see why he would stick something silly like doubling the employees at the start.

DHS includes the Coast Guard, INS, Border Patrol and, most importantly for the number of rounds they are buying, the Federal Law Enforcement Training Center. Most federal agents (not CIA as far as I know) get trained there. They also provide training to state, local, campus, tribal, and international law enforcement agencies (this sentence from Wiki). In other words, a LOT of people who need to learn to shoot get training there.

Most people in DHS aren’t shooting or learning to shoot or planning to shoot anything, at least not on land. But a heck of a lot of people who do use guns to do their jobs get trained at a center that is part of DHS. The number of employees at DHS isn’t the number you need. It is the number of agents they train and then after that you want to know how many of their employees are in jobs where they carry guns.

Last time I talked to someone who had been at the center he said it was a pretty miserable course - 6 weeks (I think), no time off at all, away from home (Georgia), barely had a chance to phone his wife. But he wanted the dumpster diving job and they had to carry in case people got possessive about their dumpsters. So he went.

 
Comment by vinceinwaukesha
2013-03-04 12:02:16

Did not get the Polly thing at all WRT absurdity. From an order of magnitude argument a factor of two or so is irrelevant. Perhaps their qual course involves twice as many targets as the USAR qual course, or maybe half as many. But I bet its not 10 times as many or ten times fewer. Engineering sig figs … never report more digits of accuracy than you actually have. It does boil down to a vaguely reasonable number of rounds for training purposes based on experience in firearms training and lots of division / estimation.

Now if they ordered 100x as much ammo thats way beyond what they could use training. Or if they ordered a 100th as much then they’re obviously not doing “serious” training must be holding broomsticks and saying “bang” instead of rifles for “training”.

“mostly something resembling front line troops” See militarization of police, they’re the poster children for it. Do they carry a handgun? Hopefully they’re getting trained, and it looks like the purchased ammo is “about” correct.

 
Comment by polly
2013-03-04 12:15:04

You still aren’t getting it. They aren’t training their own employees. They are training tons of people who don’t even work for the federal government, nevermind DHS. Until you have the number of people who aren’t employed by DHS but do get trained at the center that is part of DHS, you have no idea whether the number of bullets is reasonable or not. They don’t bring their own amo for a multi week training course. And even after that you have to know how many people who work for agencies that are part of DHS actually carry. Secret Service is included. I bet a lot of their people carry, though hardly all. FEMA is in DHS. I bet almost none of their people carry. Employees isn’t a good measure in the first place.

Your information about how many rounds they need to do various things like train new people or maintain training for current people is interesting. But applying it to double the number of employees is dumb. They are training scads of people who don’t work for them. And lots of the people who work for them don’t carry at all.

 
Comment by vinceinwaukesha
2013-03-04 14:33:32

allll right polly. don’t try to out-estimate an engineer-type it never turns out very well. Our idea of the creative process is spend all day trying to BS ourselves and then prove why or why not that idea could work. So we’re pretty good at this estimating thing.

“you have no idea whether the number of bullets is reasonable or not”

OK lets estimate that 1/20th of them work at least part time as firearms instructors at training classes. That seems high, but at least its a believable upper bound… And then lets estimate a class size of 20 students to one instructor, which is a bit high. I think I’m still within an order of magnitude of my original estimate what with 1/20th of 20 being about 1. Back to the engineering estimate. Draw up three scenarios. The one I paint, one with 1/100th the ammo, and one with 100 times as much ammo. Estimate a “reasonableness” for all three. I think I still win that my scenario is a “realistic” explanation of their purchase. 0.2 person class size? No. 2000 person class size out on a range? No.

I was motivated to actually look up what a weekend civilian Appleseed weekend attendee is supposed to bring, and they strongly suggest 400 rounds. Lets work it another direction, rather than how many people can be trained, lets work on what kinda training you can do with 1.6 billion rounds over five years. Sounds very impressive but its only enough to shove 800K people thru an annual weekend appleseed event. Somewhat more serious training like your “miserable 6 week course” would probably involve 10 times as much ammo than one weekend, so figure 80K attendees worth of ammo annually. Are there 80K “feds” walking around with weapons? Well 100x that is bigger than my former employer the USAR. How bout 100x fewer? Well 800 gun toting feds seems utterly ridiculously small, like Elliot Ness alone in 1930 probably had more gunmen. So yeah probably DHS should be training about 80K annually.

Is 80K trainees annually reasonable for a 200K DHS at lets say 8 six week classes per year? Well, at a 20:1 student teacher ratio that means DHS has about 10K students at any given moment and 10K/20 is about 500 full time firearms instructors. Well, that’s a pretty big operation, bigger than my basic training base, which was admittedly a pretty small base by fed standards. Some eyebrow raising, but not much. Then again they might have more than one base. Can a 200K department have 500 full time instructors on staff? Sure.

Lets play the 100x bigger or 100x smaller game with staffing again, are those really reasonable? Well, no, not really. They’ve probably got more than FIVE instructors for the whole fedgov. And 50K full time firearms instructors in a 200K department seems a bit out of whack unless thats their only line of work. So again, I think it fairly reasonable. Could I be 2x off? Sure. Could I be 10x off? Maybe, but probably not. Could I be 100x off, not possible.

So coincidentally a crude analysis from multiple directions seems to converge on … Sorry but there just isn’t a “story” behind buying 5 rounds per american or whatever that story is trying to be spun up into.

I’m annoyed at the spin. I think they’re a bunch of security theater crooks and bullies wasting money, lives, basic civil rights and destroying our culture. They kind of summarize whats wrong with post 9/11 america, second only to concentration camps full of “undesirables” and invading and occupying the wrong countries. Oh and “enabling acts” from spineless politicians. Well we could list stuff all day. So yeah, they’re really “icky”. But trying to portray their training budget as proof they’re going to waste us all SS camp style is ridiculous and distracts from their REAL true, inherent icky-ness. They’re not plotting a coup, or death camps, or zombie attacks, or chinese invasion fleets. Its just “about right” for plain ole weapon training. They suck, but not because they’re buying “too much” ammo. There’s nothing to insinuate or suspect. In short, there is no story. A billion or so rounds is not enough to be a hidden agenda. Now if they bought 100 times as much or 100 billion rounds, that would immediately raise my eyebrows.

 
Comment by polly
2013-03-04 15:43:38

I’m not trying to out estimate anyone. I’m pointing out that you have to have some base line numbers to start with before an estimate makes sense. I have no idea if the federal law enforcement training center is 5% of DHS. You don’t either. Heck, I don’t even know if the main body of the Coast Guard are considered part of DHS or if they are counted in military with just the civilian employes being under DHS. You don’t either. Until then your guesses are interesting hypotheticals, but nothing more than that.

It is like trying to guess how many diapers you need to satisfy the needs of a group of people without knowing the age distribution of the group. You can say what you would need if the age distribution reflects the general population and you can say what you need if everyone is between the ages of 18 and 25 but you can’t say which one is actually true.

And I’m not trying to say it is an unreasonable number of rounds for them to purchase. I’m just saying that we can’t know, other than it is very unlikely that a federal agency would do that sort of purchase if it is way out of line with their needs. Federal budgeting gets terribly messy if you don’t keep your purchase orders fairly smooth, so it is highly unlikely that the amount bought in any given year is a lot more/less than they bought the last year or a lot more/less than they will buy next year. Your inputs are an important part of the puzzle, but until you know how many people are being trained (information not publicly available in 30 seconds or less, didn’t see a number of employees either) and how many of DHS’s employees carry weapons, you might as well be guessing.

 
Comment by vinceinwaukesha
2013-03-05 07:48:20

“I’m just saying that we can’t know,”

Its probably pointless to reply on yesterday’s thread, but my point was we can know accurately enough to know that the worst of the agitprop about “5 bullets for each american” is pure bunk.

Your claims about “unable to know” and diapers are incorrect because much like the ammo story, you can in fact do a pretty good job of estimation given just a tiny handful of stats. Given a population of (presumably non-pregnant at the time) breeders I can trivially estimate upper and lower bounds for diaper purchasing for at least the first few months/years, so if there’s a wild conspiracy theory about trillions of diapers being stockpiled to be used against us I can laugh at it with reasonably sound numerical estimation that will not be correct to more than an order of magnitude, but certainly correct enough to invalidate a conspiracy theory.

 
 
Comment by ahansen
2013-03-04 10:24:35

Thanks for the voice of clarity, vince.

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Comment by hazard
2013-03-04 12:19:47

“Not even getting basic terminology correct doesn’t inspire confidence in the other facts to say less of the attached wild speculations.”

Kinda like when the media calls a 30 roung mag a 30 round clip.

“we” blew thru about 1K M16 rounds per year per soldier for basic training.”

Hollow-points?

“For practice ammunition, they do not have to be hollow-points, but hollow-points are the normal police round used for duty ammunition due to their ability to stop when they hit an object as opposed to going through it and striking more objects,” said William J. Muldoon, president of the International Association of Directors of Law Enforcement Standards and Training.”

http://www.sportsmansguide.com/ - 142k -

Winchester® USA Pistol 9mm Luger® 115 Grain FMJ 50 rounds
$13.39
Backordered - Expected Availability: Apr 1, 2013

Winchester® U.S.A. Pistol 9mm Luger 115 Grain JHP 50 rounds
$20.09
Backordered - Expected Availability: Jul 15, 2013

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Comment by vinceinwaukesha
2013-03-04 14:50:08

“Hollow-points?”

LOL no we are (were?) too “civilized” under the Geneva convention to use HP against combatants. “humane” FMJ all the way. This was probably a trick question to see if I was really a 55R in .mil because that’s a pretty basic question. I was one of the very last few outta Ft Dix (literally right before it closed its basic training) and then spent months at Redstone Arsenal.

I don’t remember every M designator in the catalog but I don’t think we (as in .mil) even literally stocked 5.56 HPs. FMJs, tracers, blanks, that’s about it for 5.56.

I will say that any time your lot number changes you should technically re-zero. Not just NSN number changes (do they still use NSN numbers? I’m getting old I guess).

Anyway the point is if you’re carrying HP you should zero, and train, on HP. Your zero will change, in fact it’ll probably change a lot, if you switch back and forth.

A good reason to do non-accuracy related training with the same round is frankly too many weapon’s jamming performance strongly depends on which type of ammo you feed them. So if its just not gonna eat HP reliably you’d best learn that little fact on the range… if it eats FMJ perfectly reliably on the range you REALLY don’t care if you carry HP in the field.

Note that in the olden days / pre-militarization of civilian police era when they carried revolvers, this didn’t really matter. Revolvers are not terribly picky about what they’re fed therefore jamming is pretty unlikely. Then again reload training is relatively more complicated.

 
Comment by Carl Morris
2013-03-04 16:03:32

I was one of the very last few outta Ft Dix (literally right before it closed its basic training)

My wife went to Dix around the summer/fall of 88. We stopped by there a few years later and was surprised to see the area almost abandoned and the groundhogs taking over everything. They laugh at chain link fences :-).

 
Comment by hazard
2013-03-04 18:02:29

“Anyway the point is if you’re carrying HP you should zero, and train, on HP. Your zero will change, in fact it’ll probably change a lot, if you switch back and forth.”

Not for my Glock 19, as far as an AR15 I couldn`t tell you. Not a big fan of a rifle that gets dirty and goes click instead of bang. SGL21 (Saiga) for me, very accurate out to 100 yds. with any ammo that up until a couple of months ago was cheap (and available). IMHO you train with FMJ and carry HPs.

But one point nobody has made and it would be a good one. This is the government buying this ammo and they are not very good at saving money are they.

Training excercise startles locals

Published: Wednesday, January 04, 2012

LEESBURG
MILLARD K. IVES | Staff Writer
millardives@dailycommercial.com

It may have looked like they were ready for war or some deranged person looking for his late Social Security benefits.

But it was only Federal Protective Service officers with the U.S. Department of Homeland Security who were conducting a random training operation early Tuesday morning when they surprisingly showed up at the Social Security Administration office in downtown Leesburg.

With their blue and white SUVs circled around the Main Street office, at least one official was posted on the door with a semiautomatic rifle, randomly checking identifications. And other officers, some with K-9s, sifted through the building.

“I thought someone was upset about not getting there check,” said Laura Kelly, who took a friend to the office on Tuesday.

According to one Homeland official in the Washington, D.C. office, Operation Shield. is an effort that uses routine, unannounced visits by FPS inspectors to test the effectiveness of contract guards, or protective security officers — “detecting the presence of unauthorized persons and potentially disruptive or dangerous activities.”

Part of the U.S. Department of Homeland Security, FPS is the federal law enforcement agency that provides integrated security and law enforcement services to over 9,000 federally-owned and leased buildings, facilities, properties and other assets.

Officers on the scene would not speak to the press and by noon they were gone. But Thomas Milligan, district manager for the Social Security Administration office, said while the visit came as a surprise, the office was ready. He added the officers checked videos, security measures, alarm system and more.

“It was to make sure security measures are in place and properly followed,” Milligan said.

http://www.dailycommercial.com/News/LakeCounty/010412shield - 179k

 
 
Comment by hazard
2013-03-04 12:42:38

Little help here vince.

DHS Supplier Provides Shooting Targets of American Gun Owners

Company produces cardboard cut-outs of “non-traditional threats”: Pregnant women, elderly & children

Paul Joseph Watson
February 19, 2013

A provider of “realistic” shooting targets to the Department of Homeland Security and other federal agencies has created a line of “non-traditional threat” targets that include pregnant women, mothers in playgrounds and elderly American gun owners.

http://www.infowars.com/dhs-supplier-provides-shooting-targets-of-american-gun-owners/ - 101k -

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Comment by goon squad
2013-03-04 13:09:43

Hope and Change

“I am not a dictator” — Barack Obama, March 1, 2013

 
 
 
 
Comment by aNYCdj
2013-03-04 07:59:54

Hey Goon:

http://www.facebook.com/ChicksOnTheRight

Look no further than this article, written by a woman who is obviously seething with envy over how gorgeous the female anchorwomen/contributors are at Fox News.

Margot Magowan is apparently so troubled over how pretty the Fox staff is that she devoted an entire article to complaining about it. She believes that there is some sort of evil makeover conspiracy going on over there, which is turning regular women into “Foxified” versions of their former selves.

Comment by Lionel
2013-03-04 09:22:22

That’s amusing. The women on Fox always look like hookers to me.

Comment by Pimp Watch
2013-03-04 09:50:11

And hoggers.

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Comment by michael
2013-03-04 10:51:20

Very expensive hookers…but hookers nonetheless.

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Comment by polly
2013-03-04 11:06:56

Very expensive hookers are called escorts and they don’t “look” like prostitutes.

 
Comment by eight pieces of chicken
2013-03-04 11:43:35

Very expensive hookers are called escorts and they don’t “look” like prostitutes.

Someone knows what she’s talking about. :)

 
 
 
Comment by Dale
2013-03-04 13:58:12

Where are the fox studios located……..Stepford?

Comment by Montana
2013-03-04 15:20:20

Not all of us can look like Rachel Maddow or Amy Goodman.

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Comment by sfhomowner
2013-03-04 15:27:04

Rachel Maddow is a babe.

 
Comment by aNYCdj
2013-03-04 16:03:07

well to you SF……even if she was straight I would tell her let’s be friends…

 
 
 
 
 
Comment by goon squad
2013-03-04 04:00:25

Asia Times Online - A trillion-dollar concept left undefined:

“Imagine a labyrinthine government department so bloated that few have any clear idea of just what its countless pieces do. Imagine that tens of billions of tax dollars are disappearing into it annually, black hole-style, since it can’t pass a congressionally mandated audit.

Now, imagine that there are two such departments, both gigantic, and you’re beginning to grasp the new, 21st century American security paradigm.

For decades, the Department of Defense has met this definition to a T. Since 2003, however, it hasn’t been alone. The Department of Homeland Security (DHS), which celebrates its 10th birthday this March, has grown into a miniature Pentagon.

It’s supposed to be the actual “defense” department - since the Pentagon is essentially a Department of Offense - and it’s rife with all the same issues and defects that critics of the military-industrial complex have decried for decades. In other words, “homeland security” has become another obese boondoggle.

But here’s the strange thing: unlike the Pentagon, this monstrosity draws no attention whatsoever - even though, by our calculations, this country has spent a jaw-dropping $791 billion on “homeland security” since 9/11. To give you a sense of just how big that is, Washington spent an inflation-adjusted $500 billion on the entire New Deal.”

http://www.atimes.com/atimes/World/WORLD-01-010313.html

 
Comment by goon squad
2013-03-04 04:11:13

British gun-grabbers hate the USA second amendment:

“The future of guns in our society may be better understood if we knew more about what they mean to people and why people buy them.

Fear is a major factor for many firearm purchases. Recent trends in gun sales suggest that many citizens are becoming more fearful: Gallup poll data suggest that Americans are more fearful, at near-record high levels, about big government, compared to big business or big labor. This fear overlays the long-term public fear of crime and terrorism.

Reactions to mass killings, particularly the shooting of first-graders at Sandy Hook school in Newtown, Connecticut, sparked a national debate about gun control. But that, in turn, has heightened fear about government’s role in regulating assault weapons, especially popular semi-automatic models like the AK-47 and AR-15 that are bought and sold throughout both the US and the world.”

http://www.guardian.co.uk/commentisfree/2013/mar/02/cycle-fear-assault-weapon-sales?INTCMP=SRCH

Comment by AmazingRuss
2013-03-04 07:32:15

A hysterical response to hysterical people.

 
 
Comment by goon squad
2013-03-04 04:34:27

Wall Street Journal - Student-Loan Securities Stay Hot:

“Student loans are souring at a growing rate—and investors can’t seem to get enough.

SLM Corp., the largest U.S. student lender, last week sold $1.1 billion of securities backed by private student loans. Demand for the riskiest bunch—those that will lose money first if the loans go bad—was 15 times greater than the supply, people familiar with the deal said.

But while investors are piling into student loans, borrowers are falling behind on their payments at a faster clip. According to a Thursday report by the Federal Reserve Bank of New York, 31% of people paying back student loans were at least 90 days late at the end of the fourth quarter, up from 24% in the fourth quarter of 2008. The figures include federal student loans and those issued by private lenders.

Federal and private student-loan borrowing totaled $966 billion at the end of the fourth quarter, up 11% from a year earlier and 51% since 2008, according to the Fed report, part of its quarterly analysis of household debt and credit.”

“People under 30 are struggling the most. The delinquency rate jumped to 35% last quarter from 26% in 2008, according to the Fed report.”

http://online.wsj.com/article/SB10001424127887323293704578334542910674174.html

35% delinquency? Cueing NAR-scum to pimp on about “pent-up demand”

Comment by joe smith
2013-03-04 08:37:17

I’m actually surprised it’s only 31%.

Then again, lots of people are probably deferring, forebearance-ing, or having their parents pay it. The rub is, the parents assume this is a temporary arrangemetn. The reality will be that the parents will continue paying for a long, long time.

 
 
Comment by joesmith
2013-03-04 05:50:19

Anyone else see 60 minutes last night? They did a segment on Chinas coming economic downturn. Showed several ghost cities and talked to bankers and a developer who admitted a crater is coming. Portrayed it as a tremendous waste of resources, which it is.

Of course, homebuilders here in the US seem eager to have a go at another bubble here. Does no one learn, ever?

Comment by hazard
2013-03-04 05:55:51

Posted a clip of that Saturday. The sold out ghost city looked pretty cool. Like an episode of life after people.

 
Comment by Combotechie
2013-03-04 06:11:20

Here it is, for those who missed it:

http://www.cbsnews.com/video/watch/?id=50142079n

 
Comment by Overtaxed
2013-03-04 06:11:34

Here’s the segment. And yes, it’s jawdropping.

http://www.cbsnews.com/video/watch/?id=50142079n

I said, a few days ago, that the Canada RE bubble made us down here in FL look like a bunch of posers. Well, if this report on China is accurate, it makes all US and Canadian markets look downright healthy. :)

Comment by Blue Skye
2013-03-04 07:56:01

Sponsored by Viagra. How appropriate!

 
Comment by rms
2013-03-04 08:09:16

“…it’s jawdropping.”

Reminds me of the treasury auctions where 90% are purchased by the federal reserve using their hard-earned cash.

 
 
Comment by azdude
2013-03-04 06:30:56

I saw the show last night. I think we have been talking about this for years around here. I guess build it they will come isnt working out to well.

whats scary to me is how the banks are able to pretty much control the real estate market in the US. This could lead to more fleecings down the road.

 
Comment by Combotechie
2013-03-04 06:31:46

This story wasn’t official news when it began to pop up on Ben Jones’ blog beginning a year or two ago. It became official news when it popped up on 60 Minutes last night.

Comment by spook
2013-03-04 07:08:15

When I first started reading this blog people would actually come on here are argue there was no housing bubble.

Comment by Combotechie
2013-03-04 07:38:40

Ah, but now the story has been annointed as being real because it was presented to Joe Public via 60 Minutes.

Now Joe is properly “informed”. And it’s tough to manipulate a person who is properly informed.

(snark)

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Comment by joe smith
2013-03-04 08:39:27

Are you talking about me, or about the hypothetical Joe6pack?

I’ve thought China is going down down down since at least 2008, before I was a HBB reader and long before I posted here.

As detailed below, I thought the story was interesting because Chinese builders are telling US media that the Chinese RE market is going to Crater - yet Chinese continue to buy. It’s extremely LULzy!

 
 
Comment by eight pieces of chicken
2013-03-04 08:07:03

I found this blog post collapse of 2008. Like him or hate him, my voice of reason at that time was Peter Schiff. He used to get invited in these financial TV shows and get mocked by everybody. Good times.

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Comment by joe smith
2013-03-04 10:09:20

Peter S has a good new entry on his blog (at Euro Pacific Capital) today. Driving home the point about why unwinding Operation Twist would be very messy despite the Fed’s insistence that it could be done cleanly.

 
 
 
Comment by joe smith
2013-03-04 07:39:35

No one said this. Rather, I was impressed that there were a few bankers detailing why the bubble was unsustainable and how great the fall will be. They didn’t suggest some plateau, nor did they say that even centralized Chinese-style market-fluffing could prop it up. They said it will burst, it will be epic, the only question is when. One of them claimed that 3 generations of wealth will be wiped out for those who invested.

The largest developer in China also said housing is way, way too expensive. He said that housing is selling for 50x annual income or more and that it was wrong and will have to end.

You also have to consider that we here in the US appear to have learned little from our own bubble (or these other housing bubbles). We have prices artificially propped up, maybe not as badly as China, but there are still people talking about “pent up demand” as if it really a housing shortage rather than government intervention that is the problem.

Lastly, it was quite a thing to see in HD. The video they captured was very stark.

 
 
Comment by WT Economist
2013-03-04 07:43:28

The first thought that crossed my mind: this is the consequence of income inequality.

How could the Chinese manage to build so many cities so quickly? Easy. Compared with the new $billionaries overseeing the construction, and the new middle class speculating in the units, the workers who created the materials and built the buildings were paid little. So the construction was cheap.

But now who are they going to rent to? Precisely because most Chinese are paid so little, what works on the supply side fails on the demand side. As in the United States, now you have beaten down the serfs who are you going to sell to?

So what’s the big idea, $billionaire masters of the universe? Have American homeowners use cash out refis to overpay for Chinese cities? Have the U.S. federal government go into debt to buy them, and pay off the debt by eliminating Social Security and Medicare for those now under 55? Too bad — we are already doing that to preserve OUR inequality.

Comment by scdave
2013-03-04 08:34:27

So the construction was cheap ??

Yep….$2.00 a day cheap….

Comment by joe smith
2013-03-04 08:45:50

The labor thing was mentioned, so many people moving to the areas just to work on construction, but with no real hope to afford the houses. (”We’ve built the wrong kinds of housing”.) Another interesting economic distortion was that a lot of productive agricultural land (mostly rice) was ripped up to erect these ghost towns.

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Comment by Blue Skye
2013-03-04 09:04:58

“agricultural land (mostly rice) was ripped up…”

The Japanese at least were not that stupid.

 
Comment by MiddleCoaster
2013-03-04 10:14:16

Not to worry, China is buying up parts of Africa and South America for food, mineral and energy production.

 
Comment by Dudgeon Bludgeon
2013-03-04 10:38:57

And the Chinese are different from you and I. And the markets there are different than here. Don’t believe me? Just wait and see.
Oh wait, maybe the markets are more like here than I thought… It seems the DOW is at all time highs for no good reason and housing is on a tear again. Unemployment is at 8% officially but the real numbers are north of 16%.
Ok. Maybe the markets are similar.
But the culture is really different.
Really.
Right?

 
 
 
Comment by Arizona Slim
2013-03-04 10:11:58

As in the United States, now you have beaten down the serfs who are you going to sell to?

Answer: Nobody.

Which is why you end up with ghost cities like Ordos.

 
Comment by Cracker Bob
2013-03-04 10:47:22

Think about Henry Ford when he doubled his emploee’s pay to $5.00 per day. Suddenly, he no longer had a shortage of line workers, but also created a pool of consumers for his $300.00 cars.

How much would the average wage slave in China need to make to afford one of those really fine condos?

Comment by WT Economist
2013-03-04 11:09:25

Before or after the mass bankruptcies and write downs? That’s what has to happen. Most people in China would then be better off.

The alternative? Remember, this is still officially a communast country. The $billionaires there will be lucky not to be sent to re-education camps. And U.S. investors in China will be lucky not to have their assets seized.

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Comment by oxide
2013-03-04 12:39:01

The billionaires were probably smart enough to read up on the French Revolution. Why do you think they’re buying “safe houses” in California? And p-bear, do you honestly think they’ll care when/if they “take the financial bath of their lives” :roll: when/if the value of their safe house craaaaters a couple hundred $K? Potable water, breathable air, reliable electricity, and the absence of a mob is worth more than a few dollars.

 
Comment by Arizona Slim
2013-03-04 13:01:54

The billionaires were probably smart enough to read up on the French Revolution. Why do you think they’re buying “safe houses” in California?

Exactly. They want to be in a stable country when the SHTF in China.

 
Comment by Neuromance
2013-03-04 14:14:22

The Cultural Revolution in China occurred from 1966 to 1976 and anywhere from 750,000 to 20 million people died, the records being actively obscured resulting in the sketchy death numbers:

http://en.wikipedia.org/wiki/Cultural_Revolution#Struggle_sessions_and_purges

That’s not too long ago.

 
 
Comment by GrizzlyBear
2013-03-04 11:59:38

Their income would need to increase at least 10x to afford those properties. Or, those properties would need to fall in price over 90%. Which do you think is more likely? I know what I am betting on.

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Comment by Neuromance
2013-03-04 13:57:05

So what’s the big idea, $billionaire masters of the universe?

The big idea? Same as it ever was - improving one’s personal quality of life. The billionaires seem to be quite successful at that.

Just because they run huge organizations and control billions of dollars doesn’t change the fact they wipe their butts just like the rest of us. They’re the same squishy bags of organic matter.

 
 
Comment by GrizzlyBear
2013-03-04 16:29:04

I have been talking about the Chinese bubble for years. What I find so amazing is how it can continue to go on for so long. A complete price collapse should have come long ago. How it has not is beyond me. Some of those ghost cities were built out more than 5 years ago.

 
 
Comment by 2banana
2013-03-04 05:57:17

I know this is from Drudge but this is still very, very “creepy”.

How does this help the oceans levels to fall and to heal our planet?

———————–

Obama DHS Purchases 2,700 Light-Armored Tanks to Go With Their 1.6 Billion Bullet Stockpile
Jim Hoft - March 3, 2013

This is getting a little creepy.

According to one estimate, since last year the Department of Homeland Security has stockpiled more than 1.6 billion bullets, mainly .40 caliber and 9mm.

DHS also purchased 2,700 Mine Resistant Armor Protected Vehicles (MRAP).

Comment by hazard
2013-03-04 06:07:46

“This is getting a little creepy.”

And some guy fell in a “little” hole the other night.

Jeremy Bush, 35, tried to save his brother, Jeff, when the earth opened up and swallowed him Thursday night.

Comment by joesmith
2013-03-04 06:18:45

Yet another reason Floriduh real estate has further cratering in its future.

Comment by hazard
2013-03-04 06:50:54

joe your a smart guy, right?

Among many things, you might want to know about geologic features in areas where you would consider calling home.

Map of States that are Prone to Sinkholes

http://www.katu.com/news/local/Sinkhole-science-How-prone-is-the-Northwest-194408731.html - -

Sinkholes are common where the rock below the land surface is limestone or other carbonate rock, salt beds, or rocks that can naturally be dissolved by circulating ground water. As the rock dissolves, spaces and caverns develop underground. These sinkholes can be dramatic, because the surface land usually stays intact until there is not enough support. Then, a sudden collapse of the land surface can occur.

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Comment by joe smith
2013-03-04 07:54:31

@hazard - FL’s propensity for sink holes it what I was referring too. It’s one of the 5 or 6 states where sinkholes are the biggest risk.

I grew up in Pennsylvania, although not in an area with lots of sink holes (Philadelphia), but sink holes were well known in parts of the state. There was a semi-famous one near West Chester, PA. Whenever anyone in that area wanted to dispose of something, they took a trip to the sink hole.

 
Comment by ahansen
2013-03-04 10:31:41

Sinkholes can happen anywhere there is an aging sewage infrastructure. This was big news in Los Angeles a few years back when a sinkhole in Malibu swallowed a Mercedes and closed off PCH for several days.

http://www.latimes.com/news/opinion/commentary/la-oe-rooney28mar28,0,2169993.story

 
 
Comment by CRATER!!!!
2013-03-04 07:27:18

CRATERRRRRRRRRRRRRRRRRRR!!!!

……. then buy later for 65% less.

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Comment by hazard
2013-03-04 07:58:50

“CRATERRRRRRRRRRRRRRRRRRR!!!!”

The earth opened up and swallowed him.

Is there a government program for that?

I don`t think HARP will cover that (Home Affordable Refinance Program) so how about HUMP?

Homeowner Underground Refinance Program

The HUMP Program will pay the actual mortgage payment for a homeowner if he or she finds themselves underground through no fault of their own.

 
Comment by CRATER!!!!
2013-03-04 08:10:22

And most assuredly, HUMP will succeed in creating an even larger mess. So yes…. step right up all you numb skulls and sign up for HUMP.

 
 
 
 
Comment by Combotechie
2013-03-04 06:18:42

Hmmmmm … If the Defense Department budget is to be cut and the Homeland Security budget is to be beefed up then it would make sense to the PTB that Homeland Security do the purchasing of the tanks and ammo and such.

BTW, anyone ever wonder why the Department of Energy is into most things that are nuclear?

Comment by goon squad
2013-03-04 06:33:10

See also posted Asia Times piece about DHS.

 
Comment by joesmith
2013-03-04 06:38:45

Dhs spending so far looks more like items needed to quell civil unrest rather than for use in Afghanistan or abroad.

I can see why the tea people and doomsday prepper people are offended. Between domestic drones and the rest of dhs firepower, it must seem like their own government wants to take them out.

Comment by goon squad
2013-03-04 06:43:39

their own government wants to take them out

Yup. And the next 100 Wacos will create the next 1,000 McVeighs :)

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Comment by Montana
2013-03-04 07:19:09

the ‘h’ is for ‘homeland’ fwiw. but that’s creepy right there.

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Comment by joe smith
2013-03-04 08:06:42

@ Montana - I know what the H stands for. I was disagreeing with the nation that DHS is buying these things with their money since the DoD budget was cut. The RFP’s we’ve seen really look like they’re legitimately intended for use here in the U.S., not in a war situation. Thus, I totally believe DHS is preparing to take on tea people. Someone else had tried to say that they’re going to pass this stuff off to DoD.

 
Comment by alpha-sloth
2013-03-04 08:17:08

The RFP’s we’ve seen really look like they’re legitimately intended for use here in the U.S

I would assume everything the DHS buys is for use here. As Montana pointed out, the ‘homeland’ is where they operate.

 
Comment by Tea People
2013-03-04 08:25:16

Our flag has a scary looking snake on it.

 
Comment by joe smith
2013-03-04 08:47:33

@ alpha,

Yes, but someone suggested previously that perhaps DHS was buying things to make an endrun around DoD budget cuts. Like I said, no, it looks like DHS really wants to be ready if there is a teabillie insurrection.

 
Comment by oxide
2013-03-04 08:47:50

Thus, I totally believe DHS is preparing to take on tea people.

They had plenty of practice with Occupy.

 
Comment by goon squad
 
Comment by Northeastener
2013-03-04 10:07:02

Our flag has a scary looking snake on it.

+1

 
Comment by hazard
2013-03-04 10:17:36

“Thus, I totally believe DHS is preparing to take on tea people.”

“They had plenty of practice with Occupy.”

Occupy must have really given them a hard time.

HSI Using Armored Vehicles for Training (ICE)

ICE Homeland Security Investigations (HSI) special agents participate in a rigorous training exercise utilizing armored vehicles designated for Special Response Teams. Exercises like this one prepare special agents for national security events.

http://www.dhs.gov/photo/hsi-using-armored-vehicles-training-ice - 29k -

 
Comment by RioAmericanInBrasil
2013-03-04 14:33:15

if there is a teabillie insurrection.

There will be no Tea Party insurrection. (Unless you cut their Medicare and Soc Sec) That’s how they roll.

 
 
 
 
Comment by goon squad
2013-03-04 06:39:03

The Nobel Peace Prize president in action.

Perhaps the Nobel was awarded by the Euro-socialist cheese-eating surrender monkeys not for ending the Iraq war, but for Obama’s support of the UN-sponsored, globalist, one-worlder, disarmament of the USA population, especially those bitter ones clinging to their guns and religion.

Comment by eight pieces of chicken
2013-03-04 07:30:29

The whole word is banana, especially the european and north american white dominated world.

French President Hollande was awarded the Unesco “Peace” Prize for the invasion of Mali few weeks ago.

Comment by eight pieces of chicken
2013-03-04 07:34:37

That begs the question, why Poppa Bush and Son were never considered for any for their “peace making”?

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Comment by goon squad
2013-03-04 10:51:23
 
 
 
 
Comment by Carl Morris
2013-03-04 09:07:37

DHS also purchased 2,700 Mine Resistant Armor Protected Vehicles (MRAP).

I saw that. To me it just means they’re a little smarter than whoever suggested all you needed was a Humvee and a .50 cal to take on the population.

Comment by Northeastener
2013-03-04 10:16:32

I saw that. To me it just means they’re a little smarter than whoever suggested all you needed was a Humvee and a .50 cal to take on the population.

The conspiracy theorist in me says this was done because the preferred tool of the modern insurrectionist is the IED and these vehicles were specifically designed to be resistant to IED’s. When I say “resistant”, what I mean is that the occupants will most likely survive, though the vehicle is disabled in the blast. Open conflict is suicide when the government has air superiority and signals-intercept capabilities, so asymmetrical warfare will be the primary domestic threat.

The practical side of me says the Pentagon no longer has a need for these vehicles given the withdrawal from Iraq and Afghanistan so they’re being marketed/sold to DHS and Police tactical units.

Comment by Carl Morris
2013-03-04 11:11:00

No reason that both sides can’t be right.

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Comment by 2banana
2013-03-04 06:00:17

If only the republicans would leave the abortion thing alone…

———————————-

Pa. abortion doctor goes on trial in 8 deaths
AP - MARYCLAIRE DALE

PHILADELPHIA (AP) — Three years after drug agents searching a suspected “pill mill” at a West Philadelphia clinic instead found a medical “house of horrors,” an abortion doctor is going on trial on eight counts of murder.

Dr. Kermit Gosnell, 72, the clinic owner, is charged with killing a pregnant refugee and seven viable newborns.

Gosnell, who has pleaded not guilty, saw himself as a medical missionary in the blighted neighborhood where he worked and lived for 40 years. His Women’s Medical Center treated the poor, immigrants, teens and women with late-stage pregnancies who could not get abortions elsewhere.

“I feel in the long term I will be vindicated,” Gosnell told the Philadelphia Daily News in a March 2010 interview, a month after the federal drug raid. “I aspire to perfection, certainly for my patients.”

Unlicensed doctor Steven Massof of Pittsburgh told the grand jury that he used scissors to snip the spines of more than 100 babies born alive. He worked for Gosnell for a few hundred dollars a week. He pleaded guilty to third-degree murder in the deaths of two babies allegedly stabbed by Gosnell while Massof assisted with the abortions.

It’s not clear if Pennsylvania jurors have ever been asked to send a man of Gosnell’s age or occupation to death row. Philadelphia District Attorney Seth Williams called Gosnell’s macabre medical clinic - where agents found fetal body parts in glass jars and staff refrigerators, and patient rooms filthy and blood-stained - a “house of horrors.”

Comment by AmazingRuss
2013-03-04 07:37:29

Republicans wouldn’t piss on those kids if they were on fire, once they leave the womb. Filthy little welfare cheats.

Comment by ecofeco
2013-03-04 07:44:18

…is the correct answer.

Comment by Earned Income Tax Credit
2013-03-04 08:04:19

Hey turkey lurkey, tell us about Fox & Jacobs and US Homes? Tell us about how you’ve lived through the cycles?

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Comment by ecofeco
2013-03-04 10:47:55

Do you have any idea what this tells me about you?

 
Comment by Earned Income Tax Credit
2013-03-04 10:55:18

You didn’t answer the question.

 
Comment by ecofeco
2013-03-04 13:42:47

You didn’t address it to me.

 
 
 
Comment by eight pieces of chicken
2013-03-04 08:00:27

Neither would democrats. But they will talk a nice game.

Comment by AmazingRuss
2013-03-04 09:05:04

So we go from “democrats are givin our munnies to crack babies” to “democrats don’t care about crack babies”, and the circle is complete.

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Comment by hazard
2013-03-04 06:21:05

Posted: 4:00 p.m. Sunday, March 3, 2013

GL Homes offers to pay Palm Beach County $2.8 million rather than Ag Reserve land for public space

By Jennifer Sorentrue
Palm Beach Post Staff Writer

GL Homes wants to pay its way out of a requirement that it set aside land for purposes such as parks and fire stations in four of its housing developments in Palm Beach County’s Agricultural Reserve.

The move would bring the county $2.8 million and allow the sheriff’s office to open a long-planned substation in suburban Delray Beach.

Under an agreement set to be discussed by county commissioners March 12, GL Homes, one of the nation’s largest private homebuilders, would pay the county to cash out of a requirement that it reserve 25 acres for these civic projects in southern Palm Beach County.

Comment by aNYCdj
2013-03-04 08:52:19

same principle as air rights in nyc

http://en.wikipedia.org/wiki/Air_rights

 
 
Comment by goon squad
2013-03-04 06:54:00

The worst aspects of “socialized” medicine, combined with the worst aspects of for-profit health care = American Exceptionalism

“the system is predicated on a nebulous assumption that there is a real marketplace affected by supply and demand”

http://mobile.bloomberg.com/news/2013-03-03/u-s-health-care-is-even-more-broken-than-we-thought.html

Comment by vinceinwaukesha
2013-03-04 07:47:31

Two other “free marketplace” epic fails are assuming its a fully informed market rather than a bunch of bubbas guessing randomly vs highly informed secretive corps, and assuming anything is interchangeable in that it doesn’t matter from a competitive market standpoint if there exists a superior, cheaper emergency room 2000 miles away from where some dude is rapidly dying. In fact from a transport cost, if it costs $1000 for ambulance transport 10 miles, that means you need a service/cost delta in excess of $1000 before you can even consider moving a patient to a competitor. Of course massive consolidation means there might not be a “real” competitor in your area, and your insurance probably only covers one provider anyway which is epic fail #3…

In fact I’d go as far as saying medical care is not a free market in any way with possible exception for voluntary non-medically needed non-time sensitive cosmetic surgery. Like laser tattoo removal, which is likely to be a growth industry.

Comment by joe smith
2013-03-04 08:09:32

Duress, a standard defense to an inequitable contract, is a major reason U.S. healthcare bills are so high.

To me, the fact that basic contract principles are violated in our “free market” healthcare system is all the proof you need that it’s a bad system.

 
Comment by alpha-sloth
2013-03-04 08:22:44

I’d go as far as saying medical care is not a free market in any way with possible exception for voluntary non-medically needed non-time sensitive cosmetic surgery.

I’d go as far as saying you are absolutely correct.

 
 
Comment by ecofeco
2013-03-04 07:56:50

I was talking with an acquaintance from Japan and his description of his typical doctor visit would make only a psychopath unashamed and unaware of what we DON’T get for our money compared to every single 1st world country on the planet.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 08:30:23

Our health care system is FUBAR. If you don’t like it, I suggest you make yourself enough money so you can afford boutique medical care. The rest of us better make sure never to get sick…

Comment by scdave
2013-03-04 09:15:07

The rest of us better make sure never to get sick…??

Particularly if your old….

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Comment by goon squad
2013-03-04 07:04:12

The Post confirms that yes, the future belongs to Lucky Ducky:

“The vast majority of job losses during the recession were in middle-income occupations, and they’ve largely been replaced by low-wage jobs since 2010.

Mid-wage occupations, paying between $13.83 and $21.13 per hour, made up about 60 percent of the job losses during the recession. But those mid-wage jobs have made up just 27 percent of the jobs gained during the recovery.

By contrast, low-wage occupations paying less than $13.83 per hour have utterly dominated the recovery, with 58 percent of the job gains since 2010.”

http://m.washingtonpost.com/blogs/wonkblog/wp/2013/02/28/how-the-recession-turned-middle-class-jobs-into-low-wage-jobs/

Comment by azdude
2013-03-04 07:21:15

mcjobs dominate the recovery, what a surprise. bankers get millions of dollars and a guy actually working gets to scrape by on 13 bucks an hour.
you will never build a life on 13 bucks an hour. thats why millions of people are sitting at home watching tv and playing video games all day.

Comment by GrizzlyBear
2013-03-04 12:18:50

You could build a life on $13 per hour if houses were priced at $60k.

 
Comment by vinceinwaukesha
2013-03-04 12:21:30

“you will never build a life on 13 bucks an hour”

coincidentally, one local day care center is willing to charge $7/hr per kid on an ala carte basis “as a favor to her friend, aka my wife” (its slightly cheaper, although not much, if you pay for 40 hrs every week, in advance, via direct debit transfer, but it’ll still be over $200/wk) and I have two kids so I had to LOL at that. At $13/hr and two kids, you’re net is paying out $1/hr not earning $13/hr.

My wife was looking into doing some part time temp agency stuff this summer and they spec’d her $16/hr which is ridiculously high (most of their temps get the minimum $7.25/hr) but then again she did some pretty exotic IT stuff so maybe not so unreasonable to get over twice the average drone pay rate. Real IT contracting would probably pay a lot higher than “office drone temp rates”. Anyway I had to point out that during the summer, they’d be paying her $2/hr not $16/hr because the kids cost $14/hr total and at 50 cents per mile estimate and 4 working part time hrs/day she’d not earn any profit at all unless she was closer than 8 miles. Unfortunately the biggest city is 20 miles away… So she’ll hang around the house and do soccer mom stuff instead, I guess.

The kids like video games, and some educational TV isn’t so bad. So yeah, sit at home and play xbox minecraft and watch tv. It is kinda interesting that if you have two kids there is no financial point in going to work unless you make at least twice the median income.

Comment by mathguy
2013-03-04 16:03:06

What a load of crap. Find one other mother you can trust. Mom 1 watches kids MWF. mom2 watches them Tues Thurs. Mom 1 pays mom2 an extra 25 bucks for the extra day. Problem solved.

If you are lazy and have poor me syndrome, you can get stuck in this “better not to work” syndrome. If you have half a brain, you work around it. If childcare is so expensive, why not make your own home a daycare?

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Comment by polly
2013-03-04 21:08:06

Because it is so easy to find a job that only wants you to be there on Monday, Wednesday and Friday and to find another person who has found a job that is only on Tuesday and Thursday and whose kids get along with your kids. Totally easy. Yup.

 
Comment by vinceinwaukesha
2013-03-05 08:03:02

“why not make your own home a daycare”

Govt licensing to create a psuedo-monopoly, of course. An illegal daycare is easy. A legal one, intentionally not so much.

Its kind of like saying if she specializes in IP telephony network design (or used to) and there’s no work in the field of erlang trunk capacity queueing calculations today, she should merely create her own regional bell operating company in the basement complete with 150K fellow employees. After all, that’s what a true boot strapper would do, LOL.

Also the nightmare scenario with temp work does not even remotely involve a trivial fixed schedule like you describe. Suddenly, outta nowhere, both moms have to work this afternoon, starting in 3 hours, or both are fired and will “never” be assigned temp work again due to “unreliability”. Now what? Who takes the hit and gets fired so the other can have a job? This “works” with a best friend who runs a legal day care not running at 100% capacity willing to take $7/hr/kid on demand, but not so much with almost any other scenario I can imagine. I guess I could call in “sick” to my real job until I’m in danger of being fired, or … I literally donno ?

 
 
 
 
Comment by goon squad
2013-03-04 07:32:16

And the Times confirms the recoveryless recovery:

“As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966.

Corporate earnings have risen at an annualized rate of 20.1 percent since the end of 2008 … but disposable income inched ahead by 1.4 percent annually over the same period, after adjusting for inflation.”

Of the 1%, by the 1%, for the 1%

http://mobile.nytimes.com/2013/03/04/business/economy/corporate-profits-soar-as-worker-income-limps.xml

 
Comment by ecofeco
2013-03-04 07:42:17

By contrast, low-wage occupations paying less than $13.83 per hour have utterly dominated the recovery, with 58 percent of the job gains since 1985.

Fixed.

Comment by In Colorado
2013-03-04 11:11:06

Eventually … you run out of “consumers”.

But hey, the short term profits are a wet dream.

 
 
Comment by XGs-fixr
2013-03-04 07:44:55

Basically, everyone has been participating in a giant lottery.

Work for the “right” company an/or get lucky, and you get to stay in the middle class.

Get kicked out the door for any reason (usually nothing to do with your department or performance) and everybody I know ends up taking a 33 to 40% pay cut, doing the same job they were in 2007-2008.

The global 1%er class still insists on getting an 8-10% ROI. That money has got to come from somewhere. That “somewhere” is from the paychecks of the middle class and the ducks.

Comment by In Colorado
2013-03-04 10:05:55

My observation as well.

 
Comment by Northeastener
2013-03-04 11:45:22

Basically, everyone has been participating in a giant lottery.

Not to rain on anyone’s parade, but life is a giant lottery. There are no guarantees in life… ill fortune, poor decisions, sheer stupidity and the malice of others happens. This is otherwise known as $hit happens.

Comment by ecofeco
2013-03-04 13:43:51

You’re right, but why make it worse? Are we still cavemen?

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Comment by Supplemental Nutrition Assistance Program
2013-03-04 14:42:22

What happened to turkey lurkey?

 
 
Comment by RioAmericanInBrasil
2013-03-04 14:59:30

…..life is a giant lottery. There are no guarantees in life…

There is a guarantee. I guarantee you that the “lottery” has gotten much worse for most Americans the past 40 years. This is not in keeping with American’s tradition. Your “$hit happens” is bootstrap jive that ignores the downward trending reality of most of your fellow countrymen.

“As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966. nyt

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Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 20:35:39

My ex-girlfriend’s (Republican) dad shared those same words of wisdom with me over a quarter of a century ago. I agreed with him at the time, and now I agree with him a lot more.

That said, our economic policy makers don’t make life’s gambles any easier to navigate with their off-the-wall economically destructive policy remedies.

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Comment by cactus
2013-03-04 20:26:35

XGs-fixr you have yet to read best seller ” who moved the cheese” a book that my new manager gave to his team

see the rave reviews it got at Amazon

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 07:51:59

“The vast majority of job losses during the recession were in middle-income occupations, and they’ve largely been replaced by low-wage jobs since 2010.”

These people still have their God-given right to become responsible homeowners, and there is a $700,000+ federally-guaranteed, low-downpayment, low-interest rate loan available to each of them to enable them to join the Ownership Society.

 
Comment by joe smith
2013-03-04 08:14:52

At least the middle age laid-off people had a *chance* to accumulate some assets/cash (if they didn’t HELOC their house or run up their CC’s). Young people starting out in a Lucky Ducky world don’t have the same luxury of a paid off (or nearly paid off) house bought in the 80s/90s. Nor were they able to go to college for under 20k total.

Comment by In Colorado
2013-03-04 10:02:05

Nor were they able to go to college for under 20k total.

Actually, it can be done, provided you live at home and attend a State U with a small scholarship.

Comment by joe smith
2013-03-04 10:16:00

Probably depends on the state.

Regardless, it didn’t use to require living at home or being offered a scholarship. People used to be able to go to Penn State, U of Florida, Ohio State, etc etc and get some measure of independence and have a 4 year experience without it being a huge deal.

What’s changed? The federal government decided to guarantee student loans, make them exempt from normal BK rules, and require many layers of administration to promote social goals. Additionally, many schools decided to become Sportz Factories (TM) and build 80,000 seat football stadiums (which are used ~6 games per season), 100,000 sq ft “athletic training centers” that are inaccessible to regular students, and so forth. Additionally, the media just parrots whatever universities say about “a college degree guarantees a job”, with no reference to the type of degree, the level of the university, or the jobs graduates actually get.

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Comment by ecofeco
2013-03-04 10:49:03

^This.

 
Comment by In Colorado
2013-03-04 11:08:00

What has also happened is that state funding for State U’s has shriveled up. State U’s in the Centennial State get about $2K per year, per student from the state capital.

 
 
 
 
Comment by goon squad
2013-03-04 12:10:38
 
 
Comment by goon squad
2013-03-04 07:13:49

Obama is a Marxist and a Racist®

“Obama is moving quickly to change the face of the federal judiciary by the end of his second term, setting the stage for another series of drawn-out confrontations with Republicans in Congress.

The new wave of nominations is part of an Obama effort to cement a legacy that long outlives his presidency and makes the court system more closely resemble the changing society it governs, administration officials said.

Some conservatives are skeptical of the push to name more women and minorities to the bench, arguing that it amounts to unjustified affirmative action. Curt Levey, an outspoken Obama critic who runs the advocacy group Committee for Justice, said the White House may be “lowering their standards” to nominate more nonwhite judges.

http://m.washingtonpost.com/politics/obama-pushing-to-diversify-federal-judiciary-amid-gop-delays/2013/03/03/16f7d206-7aab-11e2-9a75-dab0201670da_story.html

Comment by AmazingRuss
2013-03-04 07:38:52

You’re wound up today. Maybe you should go by “loon squad” until you calm down.

Comment by Pimp Watch
2013-03-04 07:39:46

lmao

 
 
Comment by XGs-fixr
2013-03-04 07:59:46

Once again, conservatives are trying to make the case that only “they” (white, conservatives, usually men) are the only people “qualified” to serve in leadership and decision making.

“Those (heathens of color) just dont understand the Judea Christian ethics…….”

Comment by mathguy
2013-03-04 16:05:33

Then why is a push of any kind needed? Just pick the most qualified person for the job regardless of race. The article implies something other than that is what is happening.

 
 
Comment by scdave
2013-03-04 08:04:36

The face of America is changing Goon…The dominance by the “white man” is coming to an end…Even your cherished NASCAR is being integrated…

Comment by Pimp Watch
2013-03-04 08:22:17

“The dominance by the “white man” is coming to an end…”

Correct.

 
Comment by Wise Latina
2013-03-04 08:33:25

Aztlan is ours, whitey!

 
Comment by Ben Jones
2013-03-04 09:06:26

‘The dominance by the “white man” is coming to an end’

Is this the same white man that passes amnesty after amnesty for illegal immigrants? If so, the dominance wasn’t very complete. I’ve mentioned the book Death of the West. It came out in the 90’s and showed that what’s going on is white couples aren’t having many babies, while other “minorities” are. So you could say it the end of dominance by white women and their children too. Those of us who have lived in the South experienced this decades ago. When I lived in deep south Texas, the white population was about 15% of the county. I liked it. But as Joe has mentioned, the proximity to used tire shops was kinda close. And they didn’t call them used tire shops, it was llantas usadas. Have any of you white males ever bought a used tire? Maybe if you earned as much as my neighbors down south you would have.

There was another thing about that place; 85% of the health care was provided free by the government. And with so much child bearing going on in poverty, a lot of health care was needed.

So yes, big changes are coming. But they have been coming for over 30 years. And it’s not just the US. White German birth rates are really low, while the Muslim immigrant birth rates in Germany are very high. As the book I mentioned pointed out, the biggest difference in birth rates in the world was the low Jewish Israeli rates and the highest birth rate in the world; Palestinians. Big changes coming.

Comment by Carl Morris
2013-03-04 09:15:27

Have any of you white males ever bought a used tire?

I have :-). But it was long long ago and far far away. I was in the army and in over my head on a really cool car that required really expensive tires.

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Comment by Redrum
2013-03-04 10:11:10

I bought a nice, used, low mileage set of 35″ Toyo MT tires and 20″ rims. The guy I bought them from was losing his truck to a bank repo.

My thought was: you can’t make your truck payments, but spent ~$2500+ on these wheels and tires?!?

I was the beneficiary of his folly. Nice wheels and tires for my rig, well under 1/2 price (we did a swap, the bank got my used rims and worn out stock tires when they repo’d).

Come to think of it, I just bought 4 used tires for another car too. Seller claimed (and condition indicates) that they had about 50 miles on them. He upgraded wheels and tires when he bought his car (they day he bought it). He eventually sold the car, and I bought the factory tires from him. Again, less than 1/2 the retail price (and they weren’t cheap tires).

 
Comment by ahansen
2013-03-04 10:45:43

I think he meant retreads….

 
Comment by Carl Morris
2013-03-04 11:16:32

I think he meant retreads….

Maybe. But there were several places outside of Ft. Campbell that sold all sorts of used tires to young GIs who couldn’t afford to drop the cash for a new set all at once. Seemed to apply to what he was saying. Believe me, the place I got mine from was not upscale in the slightest :-). But a new set to fit my car was about $1000 at the Goodyear store in 1988, and that wasn’t going to happen considering I was spending half my takehome on the payment and insurance for the car.

 
Comment by localandlord
2013-03-04 18:11:21

Here’s a middle class WF who’s bought lots of used tires. Mostly at Reasonable Ron’s - “best place in town to take a leak”. It’s a day job for a biker gang and boy that place is a cultural experience. Recently I’ve started going to a new place called Friendly’s - much better tires but far more low key.

With my truck it is usually because I have run over a nail or debris and want something of similar vintage to what’s left. For my ancient Saturn I figure the car isn’t going to last forever so why buy new tires?

 
 
Comment by ecofeco
2013-03-04 09:16:44

Japan is having the same birthrate problems.

But I’m beginning to see why they are so immigration phobic.

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Comment by Ben Jones
2013-03-04 09:18:17

At the time that book came out, the Japanese birth rate was the lowest in the world.

 
 
Comment by Pimp Watch
2013-03-04 09:24:04

Haven’t caucasians always been outnumbered by non-caucasians?

I think Dave was referring to caucasian dominance in the US and UK.

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Comment by scdave
2013-03-04 09:24:44

Big changes coming ??

Real big…

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Comment by joe smith
2013-03-04 10:23:47

The difference I have with most people here is that I blame us white Americans for allowing this to happen. A wall could’ve been a done deal 20 yrs ago, as a natural corrolary to NAFTA (we trade more with Mexico, but take in less of their wretched refuse). Moreover, the political climate in key states was prepared — look at California under Gov Wilson, for example.

What happened is that the people who really run both parties (but especially the pro-business wing of the GOP) coveted cheap labor and the ability to break unions. Big Agriculture was another big group that wanted to keep the floodgates open.

One last point, which I mention at least once a week — white Americans are also becoming dumber over time. It used to be that more educated, more successful people had larger families. But the fertility rate for educated women in the U.S. is just as low as the Japanese fertility rate. Something like 1.3 children per woman. The only thing that prevents the white population from shrinking is that there are still a lot of poor whites (there are more whites on welfare than blacks) and there are white people who still believe in a concrete notion of God who wants them to reproduce. The best example of this is Mormons who have significantly more children than the average white person.

Whites are part of the idiocracy. I’m not saying us here at HBB, but whites in general contributed to this demographic timebomb.

Idiocracy isn’t just a theory, it’s a fact of our demographic future. Lots of white people want their children taught about “Intelligent Design” or Creationism but don’t want their kids to learn about sex ed or Evolution, etc.

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Comment by ahansen
2013-03-04 10:57:03

Women can either work at a meaningful (read: salaried) job OR have a lot of kids (I.E.; let them outnumber you and your adult partner.) The body is rarely capable of doing both — let alone the mind.

After a generation of women in the executive workforce, the correlation is now between stay-at-home wives/single mothers on government support/serial divorcees with child support income and the higher number of children per household.

 
Comment by HBB_Rocks
2013-03-04 12:32:04

Of course idiocracy is real yalls!

That’s why our intelligent riches gave our middle class jobs to the children of Indian and Chinese dirtfarmers.

That’s why our riches fight over a few bucks to ‘repair infrastructure’ publicly and build car elevators privately while theirs use excess trade surplus funds to build entire empty mothereffin’ cities! Man they dumb! Don’t they know they should be building empty sprawling suburbs (not cities silly) like our riches did?

That’s why we just overwhelmingly elected a first generation rich guy instead of the out-of-touch son of a multi-generation wealthy political family.

And we did it because he had outdated opinons about intelligent design and not because he had selfish opinions about wealth and the economy!

Man we all is dumb! I hope the riches will look out for us!

 
 
Comment by Cracker Bob
2013-03-04 10:56:48

Cannot I just rent a new set of 22’s? It’s either that or saving for my kid’s college.

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Comment by cactus
2013-03-04 10:59:49

Have any of you white males ever bought a used tire?”

you can buy them on Ebay all day long the trick is to get a tire shop to mount it

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Comment by Michael Viking
2013-03-04 12:04:25

Have any of you white males ever bought a used tire?

Bought retreads several times in the early 80s…I have a little more means now, though.

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Comment by Blue Skye
2013-03-04 09:52:49

“the White House may be “lowering their standards….”

Unposssible.

Comment by Earned Income Tax Credit
2013-03-04 10:37:17

Obama should prove he’s not a racist by appointing Harriet Miers to the Supreme Court.

 
 
 
Comment by Pimp Watch
2013-03-04 07:43:26

Looming Sequestration Cuts Will Hit D.C. the Hardest
By Roy Oppenheim
March 1, 2013

With so many federal workers living in and around our nation’s capitol, those federal spending cuts will eventually translate to job cuts and unpaid mortgages.

The dreaded sequestration deadline has arrived, and with it $85 billion in automatic spending cuts that could plunge the nation’s strengthening economy back into the depths of recession.

(For some light reading on the topic, check out the 394-page Office of Management and Budget report.)

But contrary to many media reports, the majority of spending cuts will be felt most acutely in the federal government’s hometown: Washington, D.C., a region that, ironically, suffered the least in the economic downturn.

While most of the rest of the country’s housing market suffered during the recession—with foreclosures becoming the rule instead of the exception—the Beltway has had one of the strongest housing markets in the country.

Having visited the area during the economic crisis, it always struck me as odd how little suffering there seemed to be there compared to the rest of the nation, and in particular Detroit, Arizona, Las Vegas, and of course Florida.

But with so many federal workers living in and around our nation’s capitol, those federal spending cuts will eventually translate to job cuts, unpaid mortgages and … well we all know how that story has gone.

In short, there’s some belt tightening on the way for many of those inside the Beltway.

That’s not to say others around the country won’t be impacted. Earlier this month, HUD Secretary Shaun Donovan warned if the cuts go forward, the Federal Housing Administration won’t be able to help those trying to dig their way out of foreclosures, purchase a home, and generally stabilize the housing market.

http://www.usnews.com/news/blogs/home-front/2013/03/01/looming-sequestration-cuts-will-hit-dc-the-hardest

As the next leg down resumes in cities like DC, NYC and Boston, watch for the DebtorDeniers and others who have a stake in the direction of prices come out of the wood work with their elaborate lies.

Comment by Supplemental Nutrition Assistance Program
2013-03-04 08:08:03

The losses in D.C. will be incalculable.

Comment by Pimp Watch
2013-03-04 08:12:25

Why buy in DC when CS already show prices falling there?

Comment by Blue Skye
2013-03-04 09:54:14

Bring back the “galaxy of black holes”. My most favorite ever.

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Comment by Carl Sagan
2013-03-04 10:06:23

“billions and billions and billions”

 
 
 
Comment by eight pieces of chicken
2013-03-04 08:13:01

The losses in VA and MD will be astronomical.

Comment by goon squad
2013-03-04 09:13:09

Anyone who bought in Maryland within the past year will experience incomprehensible losses.

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Comment by RioAmericanInBrasil
2013-03-04 15:04:28

Anyone who bought in Maryland within the past year will experience incomprehensible losses.

(unless their IQ is above 90)

 
 
 
Comment by joe smith
2013-03-04 08:32:04

People will be streaming for the exits if DC goes down the tubes. Plus, Virginia probably has the highest % of DoD-linked jobs of any state (DC area plus Hampton Roads area plus innumerable bases). Most people in DC area are only here for the jobs, which is why I’ve never fathomed why people moving from flyover for a job are so quick to purchase. They usually do not have other ties to the area, nor a support system if they were to lose their job. It’s like some of these people are allergic to renting.

Comment by goon squad
2013-03-04 08:37:56

allergic to renting

i.e. addicted to loosing money

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Comment by scdave
2013-03-04 08:42:11

Virginia probably has the highest % of DoD-linked jobs of any state?

I saw the other day that they receive 10.8% of the budget…Not sure of the accuracy of that…

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Comment by goon squad
2013-03-04 09:11:05

Tyson’s Corner will look like Bangladesh within five years.

 
Comment by Pimp Watch
2013-03-04 09:15:08

Housing prices falling to dramatically lower levels equates to abject poverty?

I concur that you should adopt Loon Squad.

 
Comment by joe smith
2013-03-04 09:31:18

Tyson’s Corner is already full of well-off persians so it already does have a kind of “Shahs of DC” feel to it. Bangladesh would just be the next step in a natural progression.

 
Comment by joe smith
2013-03-04 09:37:09

“Virginia probably has the highest % of DoD-linked jobs of any state?”

Yes, VA would completely fall apart without defense contractors. Not just the direct jobs, but all the accounting, research, consulting, etc. is primarily done in Northern VA. Much of it within a few miles of the Pentagon, but also Hampton Roads area (near Norfolk, the home of the Atlantic Fleet) and lots of bases and training centers. Quantico is a big example.

And we haven’t even gotten to all the industry groups and lobbyists! Again, most of these for the defense industry are not on K street in DC, they are in Northern VA.

VA is probably the kind of DoD pork by a pretty wide margin.

 
Comment by eight pieces of chicken
2013-03-04 09:45:27

Not just the direct jobs, but all the accounting, research, consulting, etc. is primarily done in Northern VA.

And it’s weird that northern VA overwhelmingly votes D party. I would have thought they were the “patriotic” Americans and voted the R party.

 
Comment by goon squad
2013-03-04 09:54:06

Arlington will look like Berlin 1945 within five years.

 
Comment by Blue Skye
2013-03-04 09:55:40

Lower food prices will undoubtedly bankrupt us all.

 
Comment by Pimp Watch
2013-03-04 10:01:21

Yes indeed Blue.

Dramatically lower housing prices will end the world.

 
 
 
 
Comment by polly
2013-03-04 13:16:15

They are calling the snow storm we are expecting Tuesday night into Wednesday the Snowquester.

Comment by Blue Skye
2013-03-04 13:35:46

Must be forecasting a lot of wind. Snowonder.

 
Comment by goon squad
2013-03-04 14:48:14

As a renter, your losses will be minimal. But for the “owners”, the inevitable losses from the Snowquester will be as inescapable and deadly as an avalanche.

Comment by polly
2013-03-04 15:46:47

At least I don’t have to shovel.

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Comment by CRATER!!!!
2013-03-04 07:52:41

I heard the Craterton family came up with another novel idea. A chain of franchise outlets called Rent-A-Crater. Made popular in Florida, Rent-A-Crater is coming to your town too. Step right up and sign the line for decades of burdensome monthly payments so you too can rent-to-own a Crater. *Head to your conveniently located Rent-A-Crater outlet for all the details*

Comment by alpha-sloth
2013-03-04 09:11:33

Rent-to-own housing will be the future. The hedge funds know a good deal when they see one. Rent-to-own makes every renter his own landlord.

Comment by Carl Morris
2013-03-04 09:36:40

In the seedy rent-to-own world of furniture and electronics, the goods are always low quality but with a high bling factor, and priced as though they were top of the line stuff. But nobody that can actually afford it ever wants those goods. I’m sensing synergy with late model McMansions at 2006 prices. And side money to be made in the endless churn of repo and rehab for the next suckers.

Comment by Arizona Slim
2013-03-04 10:13:50

There’s an R2O store within easy walking distance of the Arizona Slim Ranch. Place is like a ghost town and has been for years. Dunno how it stays in business.

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Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 17:13:53

Wouldn’t you love to know whether the builder knew about this sinkhole when the home was constructed? (California parallel: Build right on top of a landslide that has existed back through geologic time…)

House demolition reveals huge Fla. sinkhole
Doug Stanglin, USA TODAY6:34p.m. EST March 4, 2013

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 07:53:06

So long as the stock market and the housing market keep going up, nobody needs to fear the consequences of sequestration.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 07:55:34

Oops…

China and sequester set Street up for bumpy open

Stock futures point to lower start, weighed by a sharp tumble for China stocks after the government attempts to cool home prices, while the lack of progress over the sequester is also a downer.
Worst day for Chinese stocks since August 2011 | China Vanke chief sees property bubble (The Tell)

Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 11:04:04

Financial Times
March 4, 2013 12:02 pm
China property shares plunge after curbs
By Simon Rabinovitch in Beijing and Josh Noble in Hong Kong

Chinese real estate shares plunged and the stock market suffered its worst daily fall in 28 months on Monday after the government unveiled tough new policies to damp a rebound in housing prices.

The State Council, China’s cabinet, on Friday detailed a series of “control measures” to rein in the real estate sector. Housing prices, which the Chinese government had succeeded in stabilising last year, had started to surge in major cities in recent months, prompting Beijing to redouble its efforts.

In the latest announcement, the government called for strict application of a 20 per cent capital gains tax on home sales, a rule that has been in place since 2005 but only patchily enforced. It also said that cities where prices had been rising too quickly should adopt targeted measures, including higher mandatory mortgage downpayments and restrictions on the purchases of second homes.

The CSI 300, an index of the top stocks on the Shanghai and Shenzhen exchanges, fell 4.6 per cent, its worst day since November 2010. The shares of most major developers tumbled 10 per cent, the daily maximum in China.

Investors and analysts had been bracing for government action to cool the housing market after the recent rebound, but the package of policies “appears harsher than expected”, said Du Jinsong, a property analyst with Credit Suisse.

Delivered on the eve of China’s annual parliament, which formally opens on Tuesday, the announcement also signified the importance Beijing attaches to preventing a housing bubble.

Nevertheless, there was also much scepticism about how effective the latest official effort would be. Chinese media pointed out that it was the ninth set of “control measures” of the past 10 years, a decade during which housing prices surged nationwide.

Lu Ting, an economist with Bank of America Merrill Lynch, warned that the capital gains tax could have unintended consequences. “These new measures may inadvertently shift demand of existing homes to new homes, pushing new home prices to rise even faster,” he wrote in a note to clients.

Yin Bocheng, director of the real estate research centre in Fudan University, said there was also a question about whether cities would actually implement the tougher policies.

“There is a fundamental contradiction,” he said. “While the central government wants regulation, local governments want higher housing prices, which bring them land revenues.”

Chen Li, head of China equity research at UBS Securities, described the property measures as a “catalyst for a pullback”.

“We’ve seen a very strong rally in recent months, so people needed a reason to take some profits. The property measures are not the only reason for this correction,” said Mr Chen. “I don’t think investors will be fully surprised by the news.”

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 07:57:42

March 4, 2013, 9:52 a.m. EST · CORRECTED
10 reasons why the euro crisis may be incurable
Commentary: Many forces could act to prolong the agony
By David Marsh, MarketWatch

An earlier version of this column misstated the duration of Greece’s inclusion in the Ottoman Empire. It has been corrected.

BERLIN (MarketWatch) — The late German economist Rüdiger Dornbusch told us that a crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.

The point is that the euro saga can persist for a while yet. History shows how unstable equilibrium can last surprisingly long periods. During the First World War the Western Front of mud and murder was frozen into the terrain for 3 1/2 years. The Cold War between the Soviet Union and the U.S. lasted 40 years. For four centuries, Greece was part of the Ottoman Empire.

Perhaps we should give up all hope of a solution. A long period of further confusion lies before us, similar to the continuous, inexplicable, unwinnable conflict among Oceania, Eurasia and Eastasia in George Orwell’s “1984” novel of a war-torn totalitarian state.

There are 10 reasons why the crisis may be incurable.

Comment by Blue Skye
2013-03-04 09:57:19

There is one reason. Debt that cannot be repaid.

Comment by vinceinwaukesha
2013-03-04 12:36:12

“Debt that cannot be repaid.”

Maybe a side helping of debt that cannot be increased (because even the biggest BSer knows it’ll never be repaid so they get cut off?)

The EU has some issues that make it kinda laughable as an idea, although you can paper over them, temporarily, with enough debt based spending… until you can’t do more debt based spending. Then oh oh time starts.

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 08:02:40

Bulletin U.S. stocks take early cue from China’s worst day in 19 months

March 1, 2013, 7:01 a.m. EST
Easy money will end in tears, Allan Meltzer says
Commentary: Foremost expert gives a history lesson on economics
By Diana Furchtgott-Roth

PITTSBURGH (MarketWatch) — It was a cloudy day in Pittsburgh, but light streamed through the tall windows of Professor Allan Meltzer’s condominium overlooking Carnegie Mellon University, where he has taught economics for 56 years.

At 85, Meltzer’s mind is ever-brilliant, but his mood was cloudy. “We’re in the biggest mess we’ve been in since the 1930s,” he told me. “We’ve never had a more problematic future.

As America’s foremost expert in monetary policy, Meltzer should know. He’s the author of the three-volume “A History of the Federal Reserve.” For over 25 years he was the chair of the Shadow Open Market Committee, a group that meets regularly to discuss the policy of the Federal Reserve.

The Federal Reserve’s loose monetary policy — quantitative easing, purchases of bonds — is resulting in record-low interest rates, so investors are taking risks to get higher yields. The Fed spends $85 billion a month purchasing Treasury bonds and mortgage-backed securities. That’s the amount of the entire sequester for fiscal year 2013.

Older people, many of whom rely on income from savings and investments, are moving into riskier assets in order to be able keep up their standards of living. Many have no choice. Low interest rates discourage savings and encourage people to take high risks, as well as dampening bank lending. This does not lead to a healthy economy. It ends in tears and regrets.

When interest rates rise, as they will have to do at some point, the value of these risky investments will decline, and these older investors will be hurt. Plus, interest payments on the public debt will rise, increasing the budget deficit, which has been a trillion dollars a year for the past four years. And farmland is rising rapidly and unsustainably.

The question is, how high will interest rates have to go to head off future inflation? No one knows, and the Fed isn’t inclined to start raising rates anytime soon, as Fed Chairman Ben Bernanke told House and Senate committees earlier this week.

Bernanke’s position is that the economy is weak, unemployment is too high, and so he will keep interest rates at near-zero levels. But zero-interest rates have disadvantages too.

Governments by nature are more concerned about what happens today than what happens in the future, Meltzer told me. So there is little pressure on the Fed to unwind its positions and raise rates. Former Treasury Secretary Timothy Geithner believed in taking care of today’s problems today, and letting tomorrow take care of itself. The Fed suffers from the same myopia.

In contrast, George Shultz, who was secretary of Labor, director of the Office of Management and Budget, and secretary of the Treasury in the Nixon administration, and secretary of state in the Reagan administration, had a long-term objective and got there through a series of small steps. He accomplished a lot — like ending the cold war.

Meltzer recalls only one economic recovery as slow as this one, and that’s the recovery of 1938, under President Franklin Delano Roosevelt. Roosevelt attacked business, and continued to do so until the onset of World War II. Then he needed economic expansion, and appointed two Republicans to his Cabinet and stopped the anti-business rhetoric and actions. Many businessmen and women are convinced that President Barack Obama is hostile to business.

The rest of the world isn’t doing much better, Meltzer told me.

Comment by eight pieces of chicken
2013-03-04 08:08:51

Tears of joy?

 
Comment by rms
2013-03-04 08:20:06

“We’ve never had a more problematic future.”

The time is right for selling rose colored sunglasses.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 08:24:19

It’s great to hear from an 85 year old economist with a sharp mind who is perfectly comfortable giving an unvarnished opinion without regard to any possible political backlash.

 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 11:06:19

Financial Times
March 4, 2013 3:13 pm
Warning signs for US corporate bonds
By Vivianne Rodrigues and Michael Mackenzie in New York

Could the bond boom be turning? Warning signs are flashing as investors demand higher yields even on US bonds issued by the world’s largest and safest corporate borrowers.

In recent weeks, big investment grade bond issues by the likes of Philip Morris International and UnitedHealth Group have been sold at higher yields than the levels their older bonds were trading at in the secondary market.

The retreat in risk appetite comes after a frenzied period marked by record inflows into bond funds that has enabled companies to take advantage of cheap borrowing levels. Indeed, the sheer weight of money flowing into bond funds last year often resulted in companies being able to sell new bonds at a yield near or below where their existing debt was trading.

The recent emergence of a so-called price concession for big blue chip bond deals also reflects the negative performance of investment grade so far this year, as well as poor liquidity in the secondary market and a notable slowing in new money flowing into bond managers’ portfolios.

“Investors are pushing back,” says Michael Collins, a senior investment officer at Prudential Fixed Income. “The bonds will have to pay higher premiums.”

Another factor making bond managers even more discerning over paying up for bonds has been the recent run of big buyouts of companies, which can result in their balance sheets becoming loaded up with debt, leading to lower credit ratings.

“High cash flow companies issuing bonds are going to find that investors will be wary of [leveraged buyout] risk,” says Jack Ablin, chief investment officer at Harris Private Bank. “No one wants to get stuck holding bonds in that situation.”

Rising interest rates may not just reflect deal risk.

The prospect of interest rate risk, whereby yields rise and spark price losses for investors, is also uppermost in the minds of investors, contributing to a more cautious approach to low yielding corporate debt.

“The latent interest rate risk in bonds is becoming a point of recognition for corporate bond managers,” says Edward Marrinan, head of macro credit strategy at RBS Securities.

Not surprisingly, money managers and bond investors are closely monitoring the discordant music coming from the Federal Reserve as officials publicly debate the pros and cons of continuing the central bank’s bond-buying programme throughout 2013.

Also unnerving investors in the sector is the lack of liquidity in secondary trading. Wall Street dealers have stepped back from supporting the market due to higher capital costs. The amount of bonds currently held by banks is less than a quarter of their $235bn peak seen in 2007, according to Federal Reserve data.

“Buying $150m of bonds at a new issue is very easy compared to turning around later and trying to sell $75m in the secondary market,” says Mr Marrinan. “That has portfolio managers turning defensive.”

 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 12:40:25

Why would anyone even suggest the Fed might someday scale back its Treasury purchases?

Ben Bernanke’s balance sheet blues
By Peter Schiff
March 4, 2013

During his testimony before Congress this week, Federal Reserve Chairman Bernanke made it a priority to dampen the growing concern that the unprecedented growth of the Fed’s balance sheet presents great risks to the economy. There has been a heightened sense even among normally complacent members of Congress that the Fed could spark a precipitous decline in the economy and the financial markets if and when it seeks to “withdraw liquidity” by selling even a minor portion of its bond portfolio (which is projected to swell to $4 trillion by year end). This is a valid concern that I have been discussing for years.

Gentle Ben soothed these fears by his novel assertion that the Fed doesn’t actually need to sell bonds to neutralize previously injected stimulus. Instead, the Fed could simply allow its bonds to mature, thereby achieving a more natural, and potentially less disruptive unwinding of its gargantuan portfolio. Although his explanation seemed to satisfy many of the Congressman (and the vast majority of the journalists who slavishly dote on Bernanke’s assurances), the idea is completely absurd.

As a result of its previous efforts during “Operation Twist” (which was conducted to push down long-term interest rates), the Fed has already swapped hundreds of billions of dollars of short-term securities for Treasury bonds with maturities of ten years or longer. Only a small portion of the Fed’s portfolio, then, becomes due at any given time. The average maturity of the entire portfolio is now over 10 years. There may well come a time when inflation or asset bubbles become so pronounced that aggressive withdrawal of stimulus is needed. Forceful action will only be possible through active selling, not simply by passive maturation.

However, either approach will be insufficient to tighten policy without a simultaneous cessation of buying of newly issued Treasury bonds. After all, to shrink the size of its balance sheet the Fed must stop adding to it…or at least add less than it is subtracting. Even if the Fed had the luxury of holding its bonds to maturity, such a stance would not prevent a collapse in the bond market. The Treasury does not have the cash needed to retire maturing bonds if the Fed stops rolling them over. As the government will have to sell the new bonds to other buyers, one way or another additional supply is going to hit the market.

The Federal government is projected to run trillion dollar deficits for years to come. To cover that gap, the Treasury will need to continuously sell new bonds. This need will persist regardless of the Fed’s policy priorities. For the last few years the Fed has been by far the biggest buyer of Treasuries, in recent times sucking up more than 60 percent of the total issuance. According to some reports, the Fed is expected to buy up to 90 percent of Treasuries in 2013. The only other significant buyers are foreign central banks (who buy for political reasons) and nimble hedge funds. Who does Bernanke expect will fill his shoes when he stops shopping?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 21:05:30

“…However, either approach will be insufficient to tighten policy without a simultaneous cessation of buying of newly issued Treasury bonds. …”

What folks like Schiff never bother to address is, why can’t Ben Bernanke simply keep policy loose for an extraordinarily long period of time, just as Arthur F. Burns, then G. William Miller did during the Great Inflation of the 1970s?

Buy some hard assets now, or see your financial wealth inflated away to half its former value…

 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 13:32:18

March 4, 2013, 10:37 a.m. EST
Fed’s Yellen: Full steam ahead on QE3
By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — A key member of the Federal Reserve on Monday gave her clear support for continuing the central bank’s policy of buying bonds at current levels.

“At present, I view the balance of risks as still calling for a highly accommodative monetary policy to support a stronger recovery and more rapid growth in employment,” Federal Reserve Vice Chair Janet Yellen said Monday in a speech to the National Association for Business Economics.

While there are some potential costs to the purchases, “at this stage, I do not see any that would cause me to advocate a curtailment of our purchase program,” she said.

Yellen is seen as a possible replacement for Fed Chairman Ben Bernanke if he steps aside when his second term ends in January 2014.

Bernanke also endorsed the Fed’s current policy, in a speech on Friday night. See: Bernanke says hasty end to easing could backfire.

“A premature removal of accommodation could, by slowing the economy, perversely serve to extend the period of low long-term rates,” Bernanke said in a speech to a Fed research conference in San Francisco.

Yellen’s comments add weight to the idea the Fed will maintain an $85 billion-a-month bond purchase program at its next meeting on March 19-20.

There has been vocal criticism of the Fed’s ultra-easy stance, from inside and outside the central bank.

Some, like Kansas City Fed President Esther George, have expressed concern that the low rates and asset purchases will foster overheating in some markets and lead to inflation.

Yellen said that she viewed financial market stability concerns as “the most important potential cost” with current policy.

“At this stage, there are some signs that investors are reaching for yield, but I do not now see pervasive evidence of trends such as rapid credit growth, a marked buildup in leverage, or significant asset bubbles that would clearly threaten financial stability,” Yellen said.

In the question-and-answer session, Yellen stressed that ending the monthly asset purchases is not an end of easing but stopping “more and more accommodation.”

“We keep adding accommodation so long as we engage in [asset purchases], it’s as though we are putting more and more and more accommodation into the system,” Yellen said.

 
Comment by RioAmericanInBrasil
2013-03-04 15:13:45

“We’ve never had a more problematic future.”

Because we have the worst wealth and income inequality in almost 100 years. Corporate profit is at an all time high but wages are down. Production is up but wages are down. The rich are richer than ever but wages are down.

“We’ve never had a more problematic future.”

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 08:17:13

So long as Ben Bernanke is backing up Wall Street, the impacts of the sequester on the financial sector should be negligible.

Comment by eight pieces of chicken
2013-03-04 08:19:25

That’s the tooth, tooth!

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 08:20:24

March 4, 2013, 10:06 a.m. EST
Financial stocks up, budget talks stagnant

NEW YORK (MarketWatch) - Financial stocks were trading higher on Monday despite no progress over sequester cuts from Washington and budget talks looked to head for more roadblocks. The Financial Select Sector (SPDR Fund XLF -0.33%), which tracks financial stocks in the S&P 500, was up slightly. Citigroup Inc. shares were up more than 1% as Chief Executive Mike Corbat gets ready to give a major presentation on Tuesday at the firm’s financial services conference in Boston. Bank of America (BAC -0.09%) shares were up 1% in trading, but were down 1.50% for the year. Goldman Sachs (GS -0.17%) and J.P. Morgan (JPM -0.98%) shares were up slightly in trading and Morgan Stanley (MS -0.58%) shares were down. The U.K’s biggest bank, HSBC Holdings PLC (HBC -2.33%) reported a drop in profit to $13.5 billion in 2012, down 17% from the year before. The firm’s chief executive said the bank faced challenges in economic growth and regulatory changes in 2012. The firm was subject to a $1.5 billion fine by U.S. authorities over money laundering. HSBC shares were down more than 2% in trading.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 08:26:53

Those Marketwatch peops have a strange definition of “up”…

Comment by ecofeco
2013-03-04 09:12:31

As near as I can tell, Market Watch was (literally) bought out and has become useless.

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Comment by Lies
2013-03-04 09:27:16

I wonder how much MBA, NAR and builders pay Marketwatch for them to print a puff piece?

 
Comment by goon squad
2013-03-04 09:56:27

Amy Hoak fluffs for free.

 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 11:22:40

Not all their stuff is worthless:

Charts behind rising fear of a property bubble in China

These charts provide an at-a-glance summary of what is fueling what some say is a property bubble.

 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 11:56:47

“…what some say is a property bubble.”

Why does EVERY story about real estate bubbles have to use weasel words to qualify the obvious? How’s about if we just agree to call a spade a spade for a change?

 
 
 
 
 
Comment by Housing Analyst
2013-03-04 08:18:34

If you buy a house in the DC area, you’re going to lose alot of money. ALOT of money.

Comment by joe smith
2013-03-04 08:35:23

Correct.

I would also add that if you were smart and purchased in the DC area prior to 2000, perhaps now is the time to sell, then rent something small & nice for a few years, and then go back into the market once Washington, DC becomes Craterton, DC.

Comment by Housing Analyst
2013-03-04 08:37:25

Dude…. hows the harpsichord playing going? You rockin’ the house?

Comment by Pimp Watch
2013-03-04 08:52:48

Yeah…. we had a gig at the mental hospital saturday nite. It was bedlam. Here’s me on my sick ax!

http://i36.photobucket.com/albums/e22/PrimitiveScrewhead1973/hippie-trek14.jpg

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Comment by ahansen
2013-03-04 22:50:12

You lie like a dog, pimp. That’s my good friend and long-time neighbor, Charlie Napier– but he died a little over a year ago.

 
 
 
Comment by oxide
2013-03-04 13:17:51

Joe, I thought about your idea of selling now, renting, and re-buying. It may be logically sound, but practically, several years of rent and the fees for two transactions wipes out most of the gains. Not to mention the mental and physical uprooting. It’s probably better to stay in the house.

Comment by Obamaphone mall kiosk operator
2013-03-04 14:33:06

You’ll tell yourself anything to reject the inevitability of your incalculable losses.

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Comment by CRATER!!!!
2013-03-04 08:24:31

The words “crater” and “housing prices” have become synonymous.

Comment by eight pieces of chicken
2013-03-04 08:29:56

Oxford English Dictionary agrees with you.

 
 
Comment by Brett
2013-03-04 08:28:28

I just heard on the radio the US is pouring $37M USD to support Kenya’s presidential elections taking place today … I wonder what the government employees affected by the sequester think about all the $$$ continuously sent overseas

Comment by Obamaphone mall kiosk operator
2013-03-04 08:42:02

Smells like a Drudge link.

Did you know that contractors account for 70% of the Pentagon’s costs for services?

Comment by eight pieces of chicken
2013-03-04 08:51:27

Obamaphone mall kiosk operator

Congratulations on your life-time secure job.

 
Comment by Brett
2013-03-04 09:01:29

Far from it; I listened to NPR.

 
 
Comment by eight pieces of chicken
2013-03-04 08:50:05

A large chunk of the money spent on foreign aids comes back to the USA. Fees for political consultants (mostly American) and their expenses. Equipments and materials for the polls, etc. will be provided by an American company.

Another way to think is it’s a direct subsidy to US companies run by cronies of the D party. It’s not a political statement, under a R presidency, this would have to gone to R cronies.

 
 
Comment by Neuromance
2013-03-04 08:32:22

Instead of encouraging the belief in magical assets (assets which predictably go up with a significant rate of return for the foreseeable future, the kinds of assets around which bubbles form, and historically, ultimately end badly for most of society) government should be in the business of defusing them.

I realize that a lot of finance and economics deals with logical constructs and virtual products. Currency is the core logical construct on which all economies are built and it is durable over millenia because it makes life easier and makes transactions more efficient.

But magical assets - has any magical asset (predictable, significant rate of return, for the foreseeable future) ever performed according to expectations and ended well?

Now that I think about it, the whole 401K model was built around the “magical asset” which would yield 10% in perpetuity.

Comment by ecofeco
2013-03-04 10:53:49

Yes it was and was also sold as an equivalent replacement for your retirement pension.

SUCKERS!

Comment by Arizona Slim
2013-03-04 11:12:24

Now that I think about it, the whole 401K model was built around the “magical asset” which would yield 10% in perpetuity.

ISTR reading that, when it comes to real (as in, corrected for inflation) yields of any sort, anything over 5% is gravy. And very difficult to sustain over the long term.

 
 
Comment by Neuromance
2013-03-04 13:43:44

What I find curious and disconcerting is that the government has tried to encourage the mania concept of a “magical asset” in the form of houses and their related financial constructs.

Whenever magical assets materialize, the government seems to leap to promote them, instead of defusing them. They’re just time bombs.

 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 16:04:33

So long as the Fed has Wall Street’s back, I don’t understand why billionaires would get their panties in a bunch…

Billionaires Dumping Stocks, Economist Knows Why
Wednesday, 06 Feb 2013 01:59 PM
By Newsmax Wires

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks…and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.

Unfortunately Buffett isn’t alone.

Comment by cactus
2013-03-04 20:49:03

So why are these billionaires dumping their shares of U.S. companies?

After all, the stock market is still in the midst of its historic rally. Real estate prices have finally leveled off, and for the first time in five years are actually rising in many locations. And the unemployment rate seems to have stabilized.

It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.

One such person publishing this research is Robert Wiedemer, an esteemed economist and author of the New York Times best-selling book Aftershock.

never heard of it but let see what Amazon reviews say

“Let me save you some time & money by summarizing this book for you…

A guide for protecting yourself:
1) We predicted the ‘08 crash.
2) There’s another crash coming (more on that later).
3) Buy gold.
4) Go to step 1.

This is repeated throughout the whole book, in a very clumsy writing style that’s chock full of errors. There’s no data or evidence. It reads like an infomercial written by a high school student.

Their real goal for this “free” book is to get you to pay for an online newsletter which is nearly impossible to cancel. I’m surprised they haven’t been convicted of mail fraud by now. ”

and this

Among Buffett’s biggest—and most profitable—investments recently: the $28 billion deal with 3G Capital to take H.J. Heinz private. In return he’ll receive a 9% preferred cash dividend in that deal, which is “unbelievable,” says Macke.

On CNBC Monday morning Buffett said stocks are not “as cheap as they were four years ago” but still a better investment than most others and he’s still buying.

Buffett “sees deals that nobody else sees,” says Michael Santoli, senior columnist at Yahoo! Finance, and at the same time is “getting away with not paying out a cash dividend while sitting on a lot of cash for a triple-A rating.”

crap

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 20:56:41

“crap”

I look at it as entertainment, but then I admit to a weird sense of humor.

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Comment by ahansen
2013-03-04 09:40:37

It pays to be the boss. That’s an appreciation of about 1400% above inflation:

“Alioto family home in Pacific Heights asks $16.5 million

An Alioto family home has come on the market for $16.5 million…This Pac Heights property was the home of Frank and Frances Alioto, who purchased the mansion in 1973 for $225,000….”

http://blog.sfgate.com/ontheblock/2013/03/04/alioto-family-home-on-the-market-in-pac-heights/#10276-1

Comment by alpha-sloth
2013-03-04 10:11:47

Their losses will be unfathomable.

Comment by Pimp Watch
2013-03-04 10:25:52

Likely but we don’t expect you to use honest math to tabulate 40 years of year on year losses.

Comment by ahansen
2013-03-04 10:59:58

I could sure use some losses like that….

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Comment by joe smith
2013-03-04 10:26:16

I hope Pac Heights craters. Truly one of the most gorgeous urban places in the US (possibly #1).

Comment by eight pieces of chicken
2013-03-04 10:34:01

The big one?

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Comment by goon squad
2013-03-04 10:28:23

unfathomable

Anyone who bought in San Francisco in the last year will be more underwater than the Marianas Trench.

Comment by vinceinwaukesha
2013-03-04 12:25:04

Before or after the earthquake?

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Comment by goon squad
2013-03-04 13:22:21

The losses in San Francisco will go beyond the bottom of the sea. After experiencing incalculable financial losses, the city will sink into the ocean, through a fissure in the mantle, all the way to the earth’s molten core.

 
Comment by vinceinwaukesha
2013-03-04 14:35:15

Hmm so psychologically would a SFO resident prefer to admit they’ve sunk to the earths core post earthquake, or admit real estate prices could fall instead of rising. I’m about 50:50 on this one.

 
Comment by sfhomowner
2013-03-04 15:26:04

I’ll sell and rent when rents crater 65% in San Francisco.

 
Comment by RioAmericanInBrasil
2013-03-04 17:53:53

(San Francisco) will sink into the ocean, through a fissure in the mantle, all the way to the earth’s molten core.

IMO, it’s going to take a bit more than that to lower the SF comps.

 
 
Comment by Pete
2013-03-04 16:13:05

“Anyone who bought in San Francisco in the last year will be more underwater than the Marianas Trench.”

Aha, so it’s NOT incalculable!

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Comment by goon squad
2013-03-04 16:33:20

A better term may be unimaginable, like Donald Rumsfeld’s “unknown unknowns”.

 
 
 
 
Comment by eight pieces of chicken
2013-03-04 11:51:20

Per B(L)S CPI Inflation calculator this should have been $1,166,959.46 in 2013.

Comment by Rental Watch
2013-03-04 15:00:09

Assuming of course they didn’t do anything to improve the house over that 40-year timeframe…just maintained it.

 
 
Comment by MiddleCoaster
2013-03-04 15:40:11

$5,000 in property taxes on a mansion with a $16 million asking price? No wonder California is bankrupt.

Comment by Rental Watch
2013-03-04 15:49:31

Actually, it’s a major reason why income taxes are so high (they aren’t getting the revenue from property taxes).

Once the home sells, and if it sells for $16MM, the new property taxes would be $160k per year.

Comment by ahansen
2013-03-04 20:00:19

That $160K is the base tax from which additional fees and assessments are calculated. Maybe sf could give us an idea how much over 1% of purchase price she’s paying in property tax this year? San Francisco, like Berkeley, is notorious for add-ons.

(Even here in Kern Kounty I’m paying an additional 28% over the assessed value tax.)

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Comment by cactus
2013-03-04 20:53:13

why pay high taxes in CA you can pass prop 13 to your heirs but you need a lawyer

In California, Proposition 13 has revolutionized the property tax system. Parents can pass on a house to their children without any reassessment of property tax. However, one might lose the exception from reassessment if one fails to structure the transaction perfectly. In this article, attorney John Martin explores three ways that the exception from reassessment can be lost, and what to do about it.
In California, Proposition 13 has revolutionized the property tax system. Parents can pass on a house to their children without any reassessment of property tax. The effects can be significant. However, one might lose the exception from reassessment if unless the transaction is structured perfectly. In this article, we explore three ways that the exception from reassessment can be lost, and what to do about it. “

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Comment by hazard
2013-03-04 10:09:42

So You Want To Short The Student Loan Bubble? Now You Can

Submitted by Tyler Durden on 03/03/2013 14:44 -0500

http://www.zerohedge.com/news/2013-03-03/so-you-want-short-student-loan-bubble-now-you-

Comment by 2banana
2013-03-04 11:37:32

I am going to wait for the ETF.

Now that will be a mad money investment…

Comment by eight pieces of chicken
2013-03-04 11:39:56

Cramer says, BUY, BUY, BUY!

 
 
 
Comment by Housing Analyst
2013-03-04 10:29:33

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

Comment by Supplemental Nutrition Assistance Program
2013-03-04 10:45:45

The losses that will be experienced in Maryland can only be measured on a logarithmic scale.

Comment by joe smith
2013-03-04 11:02:57

I can’t wait for 65% off deals on Potomac or Bethesda. I hope you’re not just getting my hopes up. If it really does crater, it will be a windfall of sorts to those of us who save and live well below our means.

Comment by Carl Morris
2013-03-04 11:22:05

I think the rule of thumb has been mentioned as being “by the time you can, you won’t want to”. Which is why they will be so cheap in the first place…because people will stop wanting them. So they question is, what could happen that would take us from where we are now, to that?

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Comment by tresho
2013-03-04 12:25:45

what could happen that would take us from where we are now, to that?
My favorite “could happen” is a meteorite striking a Joint Session of Congress.

 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 12:26:55

Alternate rule of thumb:

“By the time you want to, you won’t be able to.”

 
Comment by joe smith
2013-03-04 12:45:10

“by the time you can, you won’t want to”

I agree with this and it’s pretty disappointing. This is what I’m trying to cultivate interests other than consuming.

 
Comment by cactus
2013-03-04 15:15:48

So they question is, what could happen that would take us from where we are now, to that?”

plague that wipes out 65% of all humans

 
Comment by Pimp Watch
2013-03-04 15:17:36

Housing prices falling to dramatically more affordable levels equals a plague? What kind of charlatan are you?

 
Comment by rms
2013-03-04 19:29:52

“By the time you want to, you won’t be able to.”

Post HUD: By the time you are able to, you won’t want to.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 20:49:41

“Post HUD: By the time you are able to, you won’t want to.”

Good point. I’ve probably mentioned my story here once or twice already about my ‘fresh off the boat’ Russian professor’s observation on housing in the Midwest city where I took her class: ‘There are plenty of good houses here, but nobody takes care of them.’

HUD’s policies are a perfect recipe for wasting away the U.S. housing stock to Slumville.

 
 
 
Comment by Pimp Watch
2013-03-04 13:50:39

“The losses that will be experienced in Maryland can only be measured on a logarithmic scale.”

The losses will be incalculable.

Comment by goon squad
2013-03-04 14:29:59

For our recent HBB Maryland buyer, yes they will be incalculable.

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Comment by Pimp Watch
2013-03-04 19:08:20

Yes…. Miss Craterton’s losses are massive. They’re incalculable.

 
 
 
 
 
Comment by hazard
2013-03-04 10:40:55

It can take up to 3 years to create a news story to advance an agenda.

Comment by goon squad
2013-03-04 10:47:19

What are you trying to tell us?

Comment by hazard
2013-03-04 10:54:03

Do You Want Me To Read The Card?

Comment by alpha-sloth
2013-03-04 13:19:44

Do You Want Me To Read The Card?

I assumed you were talking about the DHS arming up to take us over and instate communist sharia pro-gay-marriage law meme.

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Comment by hazard
2013-03-04 13:34:05

“I assumed you were talking about the DHS arming up to take us over and instate communist sharia pro-gay-marriage law meme.”

Well that`s not it.

 
Comment by goon squad
2013-03-04 13:35:32

Don’t you realize that it’s all connected?

First Obama takes all the guns away. Then he takes all the white womens away, puts them in burkhas, and redistributes them to the coloreds as 2nd and 3rd wives. All the white men are sent to FEMA camps and forced into gay marriages. USA sovereignty is eliminated, the UN becomes the governing body of the World Peoples Republic of COEXIS (the T having been eliminated as Christianity is now illegal), and within a hundred years whitey will be extinct except for in zoos.

 
Comment by alpha-sloth
2013-03-04 13:56:04

Dammit goon, it’s too soon to reveal our Grand Plan!

 
Comment by hazard
2013-03-04 14:41:01

That`s not it either. :)

 
 
 
 
 
Comment by spook
2013-03-04 11:21:40

Boomer divorce: A costly retirement roadblock

Baby Boomers are divorcing at a surprising rate, and that will have huge implications for their lives in retirement.

The number of divorces among people 50 or older doubled from 1990 to 2010. And in that year, one in four U.S. divorces was in that age group…

…it’s a problem for everyone involved. Here’s why.

That pool of money that was going to fund retirement for a couple will now be split in half, and must now fund retirement for two people living separately. That costs a lot more. And that means people must either temper those retirement lifestyle expectations or delay retirement altogether.

http://www.usatoday.com/story/money/columnist/brooks/2013/02/25/boomer-divorce-retirement-pension-401k/1936317/

Comment by eight pieces of chicken
2013-03-04 11:38:38

Good for the lawyers’ retirement…no doubt.

Comment by aNYCdj
2013-03-04 17:54:52

Think of how much lawyers can make off gay divorces….double income no kids…lawyers drool over $50-100k+ legal fees….

 
 
Comment by goon squad
2013-03-04 11:38:49

Yet another path to the kingdom of Lucky Ducky. The stories of financial ruin experienced by middle aged divorcees discussed here are particularly enlightening:

http://forums.plentyoffish.com/

Comment by eight pieces of chicken
2013-03-04 12:04:33

Like I said, the only party that’s benefiting are the lawyers. Lawyers have gamed this country in expense of everybody else.

Comment by joe smith
2013-03-04 12:48:50

I would add accountants and bankers.

And I would exempt small firm lawyers, accountants, and bankers. They don’t necessarily benefit anymore than anyon else from the fleecing of America. When most people divorce, there isn’t a ton to fight over. Contrary to the popular perception, most divorce lawyer fees aren’t that high and the lawyers have a hard time collecting the money anyway. Regardless, the rules are written by the people towards the top end of the lawyering/banking/accounting world. It’s not like your local CPA is drafting GAAP or FASB rules.

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Comment by eight pieces of chicken
2013-03-04 13:24:16

Contrary to the popular perception, most divorce lawyer fees aren’t that high and the lawyers have a hard time collecting the money anyway.

A co-worker divorced 3 yrs ago. Median household income ~150k or more. He said that the lawyer’s fees were close to 12K considering he had to pay his ex-wife’s lawyers’ fees as well. And his was a quick divorce. Talk about the fleecing of men in this country.

 
Comment by joe smith
2013-03-04 13:41:54

12k for both sides of the divorce isn’t bad at all.

6k for each lawyer but you have to remember that the divorce probably required a week or two of work and that the lawyer has overhead. In addition, the lawyers usually cover all the filing fees out of the retainer they receive.

Is it inefficient? Sure, but if you have no assets to protect, there are cheaper ways to get divorced.

 
Comment by alpha-sloth
2013-03-04 14:02:03

I know a divorce lawyer, she has bulletproof glass, cameras, and two remote-unlock electric doors to gain admittance to her office area.

I bet it’s the most dangerous area of law to practice. Probably adds to their overhead.

 
Comment by polly
2013-03-04 14:42:43

Most dangerous? Not really. Try prosecuting organized crime or high level gang members.

And Joe is right. Most divorce lawyers are not making that much off off divorces. You are about to make two people very much less wealthy. Unless they have a LOT of money, there isn’t that much to spare.

 
Comment by alpha-sloth
2013-03-04 18:26:56

prosecuting organized crime or high level gang members.

Perhaps, but I’m still dubious- the pros generally know not to mess with prosecutors etc (they’re more likely to intimidate a witness), but an angry guy with a gun who thinks he’s about to lose visitation rights with his kids is a different story.

Anyway the prosecutors have offices in buildings protected on the taxpayers’ dime.

 
 
 
Comment by joe smith
2013-03-04 12:55:13

goon, is there a way to read those forums without registering? I can just imagine I’m reading the forums on that site and my wife looks over my shoulder… it would not be funny. “I swear I’m reading about divorce not looking for a side piece.”

Comment by Ben Jones
2013-03-04 13:17:45

‘a side piece’

Piece of what?

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Comment by eight pieces of chicken
2013-03-04 13:37:29

Piece of what?

Horse meat?

 
Comment by hazard
2013-03-04 13:52:51

“Piece of what?”

http://forums.plentyoffish.com/

Must be a piece of fish. :)

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 19:54:07

To a Kazakh, of course, a horse is a course.

In Kazakhstan, No Horror At Horse Meat
by Peter Kenyon
March 04, 2013 5:06 PM
All Things Considered
4 min 18 sec
Signs advertise the type of meat sold in each section of the Green Market in Almaty, Kazakhstan.

Though the thought of horse meat in British lasagna or Ikea meatballs may be stomach-churning to some people, in some cultures the practice of eating horse meat is not just acceptable, it’s a treat. NPR’s Peter Kenyon just returned from the Central Asian republic of Kazakhstan and checked out the meat market at the Green Bazaar in Almaty. He sent back this postcard.

In a cavernous hall, I found a long counter dripping with steaks, chops and ribs. A sign at the end of each aisle advertised the animal on display: lamb, cow, goat and, toward the back, horse.

Those aisles were attracting plenty of customers, despite the fact that horse meat costs more than beef. That’s a far different situation than in Europe, where scandal erupted over cheaper horse meat substituted for more expensive beef.

In the Green Baazar, horse breast and ribs are very popular, as is a fatty part of the neck, according to Farida, one of the knife-wielding women working there.

But the ultimate delicacy is kazy, a boiled horse sausage served on special occasions and to honored guests. It’s so essential to Kazah cuisine that the country’s Olympic team begged to be allowed to bring it to London for the 2012 games.

When I asked Farida about the horse meat scandal in Europe, she made it clear that she’s far too polite to make fun of another country’s gastronomic foibles.

“The British people honor the horse, and they don’t eat it. They haven’t got the tradition,” she said. “Here in Kazakhstan, our ancestors ate horses, and it is deeply connected to our identity.”

 
 
Comment by goon squad
2013-03-04 14:06:07

Registration is not required to browse the forums, only to search and browse profiles.

And BTW, Plenty Of Fish is the absolute bottom of the barrel of online dating. It may be the largest, but being free, anyone living under a bridge can create a profile on a public library computer.

The forums are amusing reading but most of the profiles are just depressing :(

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Comment by Blue Skye
2013-03-04 14:39:33

I live under a bridge!

 
Comment by aNYCdj
2013-03-04 17:58:42

no blue please get help….. under the bridge was such a sad song:

http://www.youtube.com/watch?v=lwlogyj7nFE

 
 
 
 
Comment by Arizona Slim
2013-03-04 12:03:27

Kids I went to college with — and was closest to — fit the above story to a tee. They’ve had a horrible track record with marriage. I can’t think of one of those youthful marriages that survived.

Me? Well, you know me. Feisty as all get-out and never married.

And delaying retirement? I intend to do that as long as possible. Because I saw what happened to Mom after she retired from teaching. She went into a chronic low-grade depression — and has never recovered.

Comment by hazard
2013-03-04 13:40:00

“They’ve had a horrible track record with marriage. I can’t think of one of those youthful marriages that survived.”

I know one pretty liberal dude who says this about gay marriage….. I`m all for it, why shouldn`t they suffer too.

 
Comment by MiddleCoaster
2013-03-04 15:43:44

I think I’m gonna be in a chronic low grade depression until I DO retire.

Comment by goon squad
2013-03-04 16:39:11

That bitter about not getting accepted into Onwentsia?

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Comment by cactus
2013-03-04 21:10:03

I think I’m gonna be in a chronic low grade depression until I DO retire”

hahaha

so I asked our 2 new young engineers ( 30 something ) which IC company has the worst reputation expecting ours to be pretty bad.

Nope they say Br^com, C&*co, Max%m, etc are much worse
pretty much hiring H1B and turning them into slaves.

China has outsourced its managers to CA to run all the high tech companies

I have chronic low grade stress until I retire

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Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 16:23:17

My dad kept working into retirement, continuing what he was previously paid to do as a volunteer with full control of his workload.

Mom got back to her career as an artist as soon as she had all her kids out of the house, and is still going strong into her eighties.

FIL is still more-or-less full-time employed into his seventies; same for my MIL, just a few years younger.

None of our parents are depressed, all are engaged in life and living it, and I hope my wife and I are healthy enough into our old age to follow their leads.

 
 
Comment by Blue Skye
2013-03-04 13:46:03

Seperate but not alone, quite often.

I find living alone quite less expensive than supporting a spendthrift.

“It is better to live on the corner of a rooftop than in a house with a contentious woman” (or man).

Even better to live on a boat.

 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 12:25:11

Dennis Rodman for North Korean Ambassador?

Dennis Rodman urges Barack Obama to call his new BFF Kim Jong Un
By Meredith Blake
March 4, 2013, 10:09 a.m.

It’s a real-life scenario so bizarre and outlandish it seems like it was dreamed up by the writers of “South Park” or “30 Rock”: Retired NBA player turned C-list reality star Dennis Rodman travels to North Korea, becomes the first American known to publicly meet with dictator Kim Jong Un, then returns to the U.S. proclaiming his admiration for the leader on ABC’s “Meet the Press.”

Rodman sat down for an interview with George Stephanopoulos on Sunday, a situation that would have been mind-bogglingly weird even if the “All-Star Celebrity Apprentice” cast member hadn’t just returned from one of the world’s most isolated and oppressive countries.

Oh, but he had. Throughout his conversation, Rodman brimmed with praise for the young leader – voted Sexiest Man Alive by the satirical website the Onion last year – calling Kim a “great guy” and delivering a message to President Obama on his behalf:

“He wants Obama to do one thing: Call him. He said, ‘If you can, Dennis, I don’t want [to] do war. I don’t want to do war.’ He said that to me.”

Comment by Arizona Slim
2013-03-04 12:46:02

Recall that Red-hatin’ Richard Nixon went to China in February 1972.

 
 
Comment by joe smith
2013-03-04 12:36:59

So, this just happened:

“General Dynamics NASSCO, a major ship design, construction and repair company, mailed WARN letters to about 1,040 employees in San Diego, Norfolk and Mayport, informing them they could be indefinitely laid off at the end of April through summer,” according to White House spokesman Carney. Carney stated it was “due to the possible cancellation or delay of maintenance and repair work, an uncertainty created by sequestration.”

Comment by goon squad
2013-03-04 13:53:53

The layoffs and financial losses in Eric Cantor’s district will be incalculable.

Comment by ahansen
2013-03-04 14:09:55

Sequestration = Gerrymandering by another name. See: San Diego

 
Comment by frankie
2013-03-04 14:11:38

Do you really think this will happen?

Comment by ahansen
2013-03-04 16:38:37

Just got off the phone with a retiring Congressional Chief of Staff who is moving because his (Great Falls, VA.) landlady is being foreclosed on. He says the sense of foreboding is palpable around town, and foreclosure notices are everywhere. In his opinion, it’s the federal military and security contractors who moved in over the last 12 years since 2001 who will take the major hit, and they’re overwhelmingly Republican.

So yeah. If a lot of underwater homemoaners are forced to move to cheaper digs elsewhere, the political demographic could indeed change. Norfork and San Diego are two such cities; both heavily dependent upon federal military contracts, and heavily Republican.

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Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 17:15:13

“…and foreclosure notices are everywhere.”

Doesn’t VA have foreclosure protection laws comparable to CA’s?

 
 
 
 
 
Comment by Neuromance
2013-03-04 13:49:26

Unsure what the implications of this are, but it’s an interesting data point especially considering how securitization enables the core ill of the global debt crisis - the ability of lenders to avoid repayment risk.

Securitization Lobby in Disarray After Most Directors Quit
By Robert Schmidt & Jody Shenn - Mar 4, 2013 2:16 PM ET
Bloomberg

The main trade association for the securitization industry is in turmoil after most of the board resigned in a dispute with the group’s executive director over governance and bonuses, according to six people with knowledge of the matter.

The association was founded in 2002 as part of Sifma, Wall Street’s biggest lobbying group. In 2010, it split off from Sifma — a contentious divorce, during which Deutsch was allowed to set up the ASF as a separate entity with himself as the sole member and director of the new organization, one of the people said.

The exodus at the American Securitization Forum puts the future of the group in question, said the people, who spoke on condition of anonymity because the dispute isn’t public. Members that quit include Bank of America Corp., JPMorgan Chase & Co. (JPM), Deutsche Bank AG, Citigroup Inc. (C) and law firm Cadwalader, Wickersham & Taft LLP, the people said.

http://www.bloomberg.com/news/2013-03-04/securitization-lobby-in-disarray-after-most-directors-quit.html

Comment by hazard
2013-03-04 14:25:26

“The association was founded in 2002 as part of Sifma”

Sifma

That sounds like something you need penicillin to cure.

 
 
Comment by 2banana
2013-03-04 13:59:47

How the Student Loan Crisis Drags Down Home Prices
CNBC | 03/04/2013 | Paul O’Donnell

Pity the college graduate, burdened with shocking levels of student-loan debt and looking for a job in the worst employment market in two decades.

But save a little pity for the rest of us.

The staggering amount of outstanding student debt — nearly $1 trillion owed – is beginning to impede the U.S. economy as a whole, a new report from the New York Federal Reserve suggests, chiefly by robbing the housing market of its richest crop of new buyers: young college graduates.

The statistics in the report are dismaying in themselves. With the number of borrowers approaching 40 million nationally, including more than 40 percent of 25-year-olds, the average balance on their loans has risen to $25,000. About 6.7 million of all student borrowers, or 17 percent, are delinquent on their payments three months or more.

“Delinquent student loan borrowers have a very difficult time accessing credit and the share of those borrowers is greater today than in the past,” said Donghoon Lee, a senior economist for the New York Fed and one of the authors of the report.

For the average homeowner, the worst news is that these overleveraged and defaulting young borrowers are no longer qualify for other kinds of loans — particularly home loans. In 2005, nearly nine percent of 25- to 30-year-olds with student debt were granted a mortgage. By late last year, that percentage, as an annual rate, was down to just above four percent.

The most precipitous drop was among those who owe $100,000 or more. New mortgages among these more deeply indebted borrowers have declined 10 percentage points, from above 16 percent in 2005 to a little more than 6 percent today.

Comment by goon squad
2013-03-04 14:11:17

This is the Lucky Duck future. Live in mom’s basement. Or if you make enough at your two part-time jobs, live with roommates until you’re 35.

Forward

 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 14:19:38

“How the Student Loan Crisis Drags Down Home Prices”

The whole premise of this article is lame, as everybody knows by now that real estate always goes up.

 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 14:22:57

“For the average homeowner, the worst news is that these overleveraged and defaulting young borrowers are no longer qualify for other kinds of loans — particularly home loans. In 2005, nearly nine percent of 25- to 30-year-olds with student debt were granted a mortgage. By late last year, that percentage, as an annual rate, was down to just above four percent.”

Why is this a problem? It sounds to me like the U.S. is headed into a New Era of affordable housing, driven by new entrants who can no longer afford to pay unaffordable prices.

Cratering home prices will free up income for other forms of consumption spending, so it’s all good!

Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 14:26:12

“In 2005, nearly nine percent of 25- to 30-year-olds with student debt were granted a mortgage. By late last year, that percentage, as an annual rate, was down to just above four percent.”

Those low-sounding figures mask the percentage decline in 25-to-30-year-olds with student debt who were granted a mortgage, which was (roughly) (4%/9%-1)*100% = -56%, i.e. more than half.

The other relevant statistic is what percentage of new graduates come out strapped with student debt. Without seeing the figures, I can only assume the percentage has gone up since 2005.

Comment by Rental Watch
2013-03-04 15:47:27

However, comparing 2012 to 2005 also ignores the fact that 2005 was in the middle of the credit bubble, where anyone could get a loan. You could also say:

“In 2005, over X% of people with part-time, minimum wage jobs were given mortgages. In 2012, that number fell to 0%.”

“On Saturday night, 25% of college aged kids were drunk. That percentage fell to 2.5% by Monday at 11:00am.”

What percentage of 25-30 year olds with student debt were granted in mortgage in, say 1995? 2000? Those years would be more appropriate comparisons.

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Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 16:01:07

Nah…I’ll take the comparison to 2005, unless you expect prices to revert to 1995 levels. (Last I recall, FPSS predicted 1983 as the bottom, but I’m not sure I am that pessimistic…)

 
Comment by Rental Watch
2013-03-04 16:27:25

The data has nothing to do with price levels, and everything to do with borrower underwriting and availability of credit. The housing bubble was created by a credit bubble. In 2005, anyone who wanted a loan could get one (strawberry pickers anyone?). In 2012, underwriting was more stringent.

Ask yourself, if they applied 2012 underwriting to those borrowers in 2005, would 9% still be 9%? Or something less?

The answer seems clear to me…less.

 
Comment by Cantankerous Intellectual Bomb Thrower©
2013-03-04 17:59:28

“The data has nothing to do with price levels, and everything to do with borrower underwriting and availability of credit.”

In my realm of the universe, borrower underwriting and availability of credit are key determinants of effective demand for housing, and housing demand is a key determinant of price.

Of course, if the government is actively working behind the scenes to fix prices at the levels they decide, my realm may be quite irrelevant to actual market conduct.

 
Comment by Rental Watch
2013-03-05 00:07:54

And thus my point “the housing bubble was created by a credit bubble.”

One of the reasons that young borrowers were more likely to get a mortgage in 2005 is that EVERYONE was more likely to get a mortgage in 2005. Because of the credit bubble. That was my point.

 
 
 
 
Comment by Pimp Watch
2013-03-04 15:00:51

down down down.

 
Comment by Carl Morris
2013-03-04 16:13:13

The staggering amount of outstanding student debt — nearly $1 trillion owed – is beginning to impede the U.S. economy as a whole,

This gave me a thought. So conservatives generally know all about how if you tax people too much it hurts the economy. So what’s the difference between the government doing it and the big banks doing it in the form of oversized student loan payments or house payments? Seems pretty similar to onerous taxes to me…and I doubt that the money flowing to 0.01%ers gets spent in a way that helps the economy any more than government spending does…

 
Comment by rms
2013-03-04 23:27:49

“The staggering amount of outstanding student debt — nearly $1 trillion owed – is beginning to impede the U.S. economy as a whole, a new report from the New York Federal Reserve suggests, chiefly by robbing the housing market of its richest crop of new buyers: young college graduates.”

Shouldn’t other sectors of the economy get a slice too? Why should the home hog all disposable income?

 
 
Comment by hazard
2013-03-04 14:56:09

Another one!

$5,000 Baby-Naming Contest Was a Hoax

The woman known as Natasha Hill was an actress who wasn’t even pregnant.

 
Comment by cactus
2013-03-04 15:04:20

Washington State Senate Democrats recently produced a $10 billion transportation package which supports a raise on gas taxes, car tabs, and even a $25 tax on bicycles that cost more than $500.

In an email to Dale Carlson, owner of Bike Tech in Tacoma, Washington Rep. Ed Orcutt (R), a member of the State Transportation Committee, defended the idea of a bike tax by saying, “Sorry, but I do think that bicyclists need to start paying for the roads they ride on rather than make motorists pay.”

“When you are riding your bicycle, tell me what taxes are being generated by the act of riding your bicycle,” Orcutt said to the Seattle Bike Blog.

Yet Orcutt’s main support for the tax comes from his belief that riding a bicycle is worse than driving a car for the environment.

“A cyclists (sic) has an increased heart rate and respiration. That means that the act of riding a bike results in greater emissions of carbon dioxide from the rider. Since CO2 is deemed to be a greenhouse gas and a pollutant, bicyclists are actually polluting when they ride,” he said.

http://www.examiner.com/article/wash-state-politician-says-bicycles-bad-for-environment-need-to-be-taxed

Comment by goon squad
2013-03-04 17:06:11

The replacement of bicycles with cars on the streets of Beijing has done miracles for the air quality there.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 19:46:36

‘Yet Orcutt’s main support for the tax comes from his belief that riding a bicycle is worse than driving a car for the environment.

“A cyclists (sic) has an increased heart rate and respiration. That means that the act of riding a bike results in greater emissions of carbon dioxide from the rider. Since CO2 is deemed to be a greenhouse gas and a pollutant, bicyclists are actually polluting when they ride,” he said.’

I’m trying really hard to not infer a connection between this guy’s political affiliation and his case of mental retardation.

 
 
Comment by Englishmanin NJ
2013-03-04 15:13:20

Not quite sure what the right word is to describe this, but let’s start with “pathetic”:

http://www.nytimes.com/2013/03/05/nyregion/spurned-apartment-buyers-still-long-for-the-one.html?hp

 
Comment by hazard
2013-03-04 18:08:44

Training excercise startles locals

Published: Wednesday, January 04, 2012

LEESBURG
MILLARD K. IVES | Staff Writer
millardives@dailycommercial.com

It may have looked like they were ready for war or some deranged person looking for his late Social Security benefits.

But it was only Federal Protective Service officers with the U.S. Department of Homeland Security who were conducting a random training operation early Tuesday morning when they surprisingly showed up at the Social Security Administration office in downtown Leesburg.

With their blue and white SUVs circled around the Main Street office, at least one official was posted on the door with a semiautomatic rifle, randomly checking identifications. And other officers, some with K-9s, sifted through the building.

“I thought someone was upset about not getting there check,” said Laura Kelly, who took a friend to the office on Tuesday.

According to one Homeland official in the Washington, D.C. office, Operation Shield. is an effort that uses routine, unannounced visits by FPS inspectors to test the effectiveness of contract guards, or protective security officers — “detecting the presence of unauthorized persons and potentially disruptive or dangerous activities.”

Part of the U.S. Department of Homeland Security, FPS is the federal law enforcement agency that provides integrated security and law enforcement services to over 9,000 federally-owned and leased buildings, facilities, properties and other assets.

Officers on the scene would not speak to the press and by noon they were gone. But Thomas Milligan, district manager for the Social Security Administration office, said while the visit came as a surprise, the office was ready. He added the officers checked videos, security measures, alarm system and more.

“It was to make sure security measures are in place and properly followed,” Milligan said.

http://www.dailycommercial.com/News/LakeCounty/010412shield - 179k

Comment by 2banana
2013-03-04 18:31:26

Your papers please…

 
 
Comment by Pimp Watch
2013-03-04 18:49:01

“Escort says Menendez prostitution claims were made up”

It’s amazing how the liars created this. Stunning.

http://www.washingtonpost.com/politics/escort-says-menendez-prostitution-claims-were-made-up/2013/03/04/31299fe2-8514-11e2-999e-5f8e0410cb9d_story.html

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 19:39:52

Military veterans make easy marks for the loan sharks of Megabank, Inc. Watch out for your wallets, veterans!

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 19:43:31

Military foreclosure rate raises concerns
By Lily Leung
1:50 p.m. March 4, 2013

The issue of banks improperly repossessing homes of U.S. military members may be worse than originally expected, based on a New York Times report published on Sunday.

The Times said four major banks — Bank of America, Citigroup, JPMorgan Chase and Wells Fargo — wrongfully siezed 700-plus homes of service members during the housing crash.

That new figure, based on anonymous sources, is particularly alarming because those reported repossessions could violate the Servicemembers Civil Relief Act, a federal law that protects active members of the armed forces in situations such as foreclosures.

The new estimate is higher than previous ones that have come up in committee hearings or in court records.

Major banks self-reported 295 improper foreclosures on service members as of mid-2012, the most recent update received by the House Oversight and Government Reform Committee. The chairman of that committee is Rep. Darrell Issa, R-Vista.

Violations of federal laws designed to protect our troops serving on active duty from foreclosures are unacceptable,” said Frederick R. Hill, a spokesman for Issa.

Those subjected to such illegal practices are entitled to appropriate compensation and the federal government has an obligation to prevent this from happening again,” Hill added. “Congressman Issa remains closely engaged in this issue of great concern to military families here in San Diego.”

No geographical breakdowns were available for any of those estimates.

The new total stems from analysis via an $8.5 billion settlement between regulators and major banks, the New York Times story says. The deal was reached in January between the 10 banks, and two federal agencies — the Office of the Comptroller of the Currency and the Federal Reserve Board.

The settlement is expected to bring monetary relief to potentially wronged borrowers, including service members and veterans.

Housing advocates have argued the settlement deal is a pass for the banks and a bad deal for consumers. It replaced a costly and drawn-out process that promised free foreclosure audits to borrowers in order to determine harm and compensation.

About 4 million borrowers were eligible for those reviews. Ultimately, 16 percent, or 654,000 borrowers submitted requests.

The New York Times said the new findings have been shown to U.S regulators but it did not name names.

 
 
Comment by AnnGogh
2013-03-04 20:02:31

CBO: TAX REVENUE HITS ALL-TIME HIGH

by BEN SHAPIRO 4 Mar 2013, 5:58 PM PDT 2 POST A COMMENT
While President Obama claimed repeatedly during both the fiscal cliff and the sequestration debate that America’s problem lay just as much on the tax revenue side as it did on the government spending side, new statistics show what a lie that is. According to the Congressional Budget Office, federal tax revenue will hit $2.7 trillion in 2013, the highest number ever.
Liberals will hang their hat on the fact that tax revenue totals 16.9 percent of GDP this year, as opposed to 18.5 percent in 2007, but that is because people earn less taxable income during recessions. As we have already seen, government spending is already at record levels, in excess of 24 percent of GDP. And while in the past, government spending was largely comprised of non-mandatory program spending, now 44 percent of all federal outlays come from Medicare, Medicaid and Social Security. As the Heritage Foundation reports:
All three programs are growing faster than inflation, and—when joined with $1.7 trillion in new Obamacare spending—will drain about 18.5 percent of the nation’s total economic output by mid-century. Because that is about the historical annual average of total federal tax revenue, it means all other government programs—national defense, veterans health care, transportation, federal law enforcement, and others—would effectively have to be financed on borrowed money.
The Obama administration claim that we’re just not taxed enough simply is not true. We’re not earning enough thanks to his sluggish recovery. We cannot tax our way out of poverty, and we cannot spend our way to prosperity.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 20:16:44

Easy money is the best thing to happen to the stock market since the Roaring 20’s!

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 20:21:25

This bull cannot be stopped. Buy now, or get priced out forever.

Asian shares rebound, easy policies feed risk taking

By Chikako Mogi
TOKYO | Mon Mar 4, 2013 10:04pm EST

(Reuters) - Asian shares rebounded strongly on Tuesday after a sharp sell-off triggered by slumping Chinese stocks the previous session, as a globally accommodative monetary stance helped revive risk appetite.

The MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1 percent after tumbling 1.3 percent as Chinese shares dived on concerns Beijing’s move to tighten the housing market could weigh on growth.

The February HSBC Services Purchasing Managers’ Index (PMI) fell to 52.1 from January’s 54.0, after seasonal adjustments, in line with slower factory activity that suggests a modest rebound in the world’s second-biggest economy this year.

Outgoing Premier Wen Jiabao said on Tuesday in remarks prepared for the opening of China’s annual parliament meetings that Beijing would boost fiscal spending in 2013 in a bid to deliver economic growth of 7.5 percent for the year.

The Chinese economy will decelerate from the second quarter, but the slowdown is not significant enough to derail the economic recovery,” said Dariusz Kowalczyk, senior economist and strategist for non-Japan Asia at Credit Agricole CIB in Hong Kong, adding that Monday’s sell-off in Chinese shares was “justifiable” because markets tend to move ahead of growth direction.

As property curbs are expanded, real estate construction may well slow to the point of adding additional downward pressure on the economy. However, the 7.5 percent growth target announced today is safe,” he said.

 
Comment by rms
2013-03-04 23:51:05

“Easy money is the best thing to happen to the stock market since the Roaring 20’s!”

+1 Easy…like aerosol cheese.

The coordination by the world’s central banks reminds me of an old Japanese sci-fi movie where everyone is ordered to tune their AM radios to the same station so that. . . :)

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 20:27:22

Now the foreign equity locusts are snapping up properties in Amsterdam. How and when does this end? At what point will we read the sorry tales of AustralAsian property investors who caught themselves falling knives buying too close to the bubble peak in the EuroAmerican market?

China, Russia demand boosts Amsterdam house prices
04 February 2013, 09:21 PM

Demand from foreign investors, especially from China and Russia, boosted house prices in the Dutch city of Amsterdam by 1.9% in fourth quarter, the first pick-up after a 7% decline over the first nine months of 2012, says realtor Engel & Völkers. It expects prices to stabilise this year.

E&V expects prices to have bottomed out, following a temporary decline due to restrictive loan issuance by Dutch banks which currently stalls domestic investment. “Due to the slightly fallen prices demand from abroad has increased significantly, however,” said E&V’s Barbara van der Grijp. “Prices are still below last year’s level but we expect them to stabilise again over the next 12 months due to the increased demand from abroad.” Many foreign investors see the timing as ideal to enter the prime housing sector in the Dutch capital, said E&V in a recent report. Traditionally, UK, French and German investors were the largest foreign investor groups, last year more Russians and Chinese have joined the club, as well as a few Israeli and Australian investors.

The most sought-after locations are in the historic city centre, especially around the main channels Herengracht, Keizersgracht and Prinsengracht and tributary channels. “These prime locations were mainly exempt from last year’s price falls due to lack of supply,” said van der Grijp. Investors were not looking for bargains but for long-term value-add potential. Prices in the prime locations are at around €9,000 per sq.m., and in the museum quarter Oud-Zuid and around the Willemspark, have reached €5,000-€6,000. E&V sees attractive opportunities in the North where the price range is €2,500-€4,000. “Compared to other European cities such as London or Paris, Amsterdam prices are still relatively cheap,” said van den Grijp, who sees further price growth potential now that the corner has been turned.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 20:41:23

Beware the Eurozone’s smelly FISH economies!

Holland’s property bubble compared to Spain’s is as Canada’s to the U.S.’s.

Financial Times
February 14, 2013 6:31 pm
EU’s FISH economies unsettle US investors
By Gillian Tett
Unease on France, Italy, Spain and Holland has replaced ‘Grexit’

For the past couple of years, investors in America (along with the rest of the world) have been panicking about PIGS, or even PIIGS. For as the eurozone woes intensified, the countries of Portugal, Italy, Ireland, Greece and Spain have been in the market spotlight – amid speculation that Greece would leave the euro.

These days, the good news is that the immediate panic over a Greek exit has subsided dramatically. Last week, for example, I listened to some of the most powerful money managers in North America discuss the investment outlook. A year ago, half these investors (who collectively control perhaps $1tn) expected one eurozone member to leave in a year; now, that ratio has plunged to one in 10.

Faith that Germany will do anything to keep Greece (and others) in the euro, in other words, has soared. Little wonder, then, that some hedge funds have returned to peripheral markets such as Spain and Greece, having left two years ago in a panic. Or as one big West Coast investor says: “Many people in America completely underestimated Germany’s will to keep the euro together. That has changed.”

But while that reduction in panic is undoubtedly welcome, what is also striking is that the short-term alarm among big investors has been replaced by something else: a longer-term sense of deep unease about the fundamental growth story, not just in the periphery of Europe, but in the core eurozone too.

As a result, the focus today is not just on the “PIGS”; there is also growing debate about what some traders call the FISH – or the big nations of France, Italy, Spain and Holland.

From some perspectives, focusing on this group might seem odd. After all, bond yields suggest market anxiety about Italy and Spain has receded sharply in recent months, as a result of the European Central Bank’s promises of support: 10-year Spanish and Italian bond yields are now about 5.3 and 4.4 per cent respectively, both 200 basis points below their level last summer. And the spreads for countries such as France and Holland never really ballooned dramatically at all, because they were assumed to be so core to the eurozone.

But what worries many American investors is not the risk of short-term crisis, but the long-term structural challenges that are sapping growth, creating the potential for political and economic squalls. On Thursday, for example, it emerged that in the fourth quarter of last year the “FISH” economies shrank by 0.3 per cent, 0.9 per cent, 0.7 per cent and 0.2 per cent, respectively.

That may not look disastrous. But the Institute for International Finance, for example, is now forecasting almost no growth in France this year and further contractions in Italy and Spain. Or as Bill Blain of Mint Capital puts it: “The real danger in Spain is long term … we are looking at another three to four years of economic misery just to get the Spanish economy back into the European Union’s 3 per cent deficit to GDP groove.”

Meanwhile, the recent data from France has – as the IIF puts it – proved “very disappointing”, creating “a reason to fear that the weakness will prove to be more lasting”.

Or as one large American investor says: “The competitive problems in France are horrible and current policy is making this worse.”

Even Holland, which has hitherto escaped market attention, remains plagued with structural challenges. “Holland has a property market that is in the process of bursting and the household debt is very high (Holland is four years behind Spain),” says Stephen Jen of SLJ Macro in a recent research note. “The Netherland’s residential debt (mortgages) to GDP ratio is 107.1 per cent, compared with 52.4 per cent for Spain and 41.2 per cent for France.

 
Comment by Rental Watch
2013-03-04 20:56:24

So far, there are so many people backpedaling from their “sky is falling” prognostications about the impact of the sequester, that I’m wondering if the cuts were large enough.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 21:07:58

In retrospect, it looks far better to have understated rather than overstated sequester impacts; hence the backpedaling.

In reality, I don’t believe anyone has the slightest clue how sequestration will turn out, including whether it will continue for long or how bad the impacts will turn out in case it does. And anyone who pretends otherwise is lying.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 21:14:41

It’s amazing how well U.S. home prices are holding up, given the huge share of recent sales that were distressed!

Feb. 28, 2013, 12:08 p.m. EST
Almost half of 2012 home sales were distressed

RealtyTrac finds foreclosures and short sales accounted for 43 percent of residential sales last year, according to vice president Daren Blomquist. He joins Alisa Parenti for MarketWatch News Break.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 21:17:58

To my apparently lame way of thinking, the Fed would do better by cooling the asset purchase mania fueled by its near-ZIRP rate policies. But apparently currently pushing the pedal to the medal and figuring out how to slow down later is the game plan.

Hopefully we won’t hit any brick walls before deceleration to a more normal rate policy occurs.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 21:21:59

March 4, 2013, 5:03 p.m. EST
Stock gain lifts Dow average to 2nd highest level
By Wallace Witkowski, MarketWatch

SAN FRANCISCO (MarketWatch) — U.S. stocks closed higher Monday, with the Dow Jones Industrial Average closing at its second-highest level ever, after strength in defensive stocks shook off early morning losses following a measure to cool China’s real-estate bubble.

The Dow Jones Industrial Average (DJIA +0.27%) rose 38.16 points, or 0.3%, to its second-highest close of 14,127.82, about 37 points below its record close of 14,164.53 set in Oct. 9, 2007. The index was down as low as 14,030.37 earlier in the session.

Shares of Wal-Mart Stores Inc. (WMT +2.12%) led the index higher, rising 2.1%, followed by gains in Home Depot Inc. (HD +1.83%) and Merck & Co. (MRK +1.67%). Shares of Caterpillar Inc. (CAT -1.76%) led decliners on the Dow industrials, falling 1.8%, followed by United Technologies Corp. (UTX -1.11%) and Alcoa Inc. (AA -1.07%).

 
 
Comment by cactus
2013-03-04 21:21:19

(Reuters) - General Dynamics (GD) NASSCO, a primary constructor of ships for the U.S. Navy, warned about 1,040 employees on Monday of indefinite layoffs that may come in late April due to uncertainty created by the automatic U.S. budget cuts that took effect last week.

The warnings come as military contractors weigh uncertainties over scheduled maintenance and repair work that may be put on hold as the federal government makes $85 billion in spending cuts.

The U.S. Worker Adjustment and Retraining Notification Act (WARN) requires most companies with 100 or more employees to give notification 60 days in advance of mass layoffs or plant closings.

Military contractors appear to be the hardest hit by the cuts because a large part the reductions are expected to come from Defense Department spending.

Based in San Diego, NASSCO is a wholly-owned subsidiary of General Dynamics and the largest full-service shipyard on the West Coast.

It has built 63 ships for the U.S. Navy since the 1960s. The company’s three shipyards are in Mayport, Florida, near Jacksonville; Norfolk, Virginia; and San Diego — cities that rely heavily on the military for jobs.”

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 21:24:15

…so many people backpedaling from their “sky is falling” prognostications about the impact of the sequester…

…so many people backpedaling from their “sky is falling” prognostications about the impact of the sequester…

…so many people backpedaling from their “sky is falling” prognostications about the impact of the sequester…

…so many people backpedaling from their “sky is falling” prognostications about the impact of the sequester…

…so many people backpedaling from their “sky is falling” prognostications about the impact of the sequester…

…so many people backpedaling from their “sky is falling” prognostications about the impact of the sequester…

…so many people backpedaling from their “sky is falling” prognostications about the impact of the sequester…

 
 
 
Comment by Bill in Los Angeles
2013-03-04 21:25:47

Always like the Mogambu Guru’s articles on Kitco and wondered what happened to them. No problem LewRockwell, fellow anarcho-capitalist posts ‘em from time to time.

Summary: Buy gold, silver (more than gold) and oil.

http://lewrockwell.com/daughty/mogambo90.1.html

Comment by cactus
2013-03-04 21:44:37

Oil headed down right now I would wait to buy that one

I am watching APA I wonder how low it will go ? oil stock

would like to buy it at the bottom ;-)

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 22:19:28

This is great stuff:

And how could they NOT be buying gold, silver and oil when the evil and compliant Federal Reserve is now “monetizing the debt” — the biggest of all the Big. Bad Economic Sins Of Monetary Policy (BBESOMP) – by creating the currency and credit with which to buy new government debt? Insane!

Beyond insane! It’s diabolical!

Ben Bernanke is Satan! You heard it here first!

Well, let me say that I don’t really believer that Ben Bernanke, chairman of the evil and compliant Federal Reserve, is actually the devil, but it would sure explain a LOT of things! Hahaha!

I can hear you muttering to yourself “What in the hell is this Big Moron Mogambo (BMM) talking about? This is stupid!”

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 21:53:14

Do central bankers believe that pretending their policies don’t create bubbles make bubbles go away?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 22:02:01

I think it is great that Federal Reserve officials are now openly discussing bubbles. Half a decade ago, when many of us were posting bubble warnings here like the voice of one crying in the wilderness, Fed policy was to completely dismiss the concern.

Top fed officials’ big debate on how to deal with financial bubbles
By Neil Irwin, The Washington Post
Posted March 04, 2013, at 5:47 p.m.

WASHINGTON — Three speeches by top Federal Reserve officials offer a preview of what is likely to be the most important debate over U.S. monetary policy in the years ahead. And they set the stage for the most important single decision President Barack Obama will make this year to shape the future of the U.S. economy.

On one side of the debate there is Jeremy Stein, a Fed governor since last May. He argued in a Feb. 7 speech that there are already signs of overheating in the markets for certain kinds of securities, including junk bonds and real estate investment trusts that invest in mortgages. And if those or other potential bubbles get so large that if they popped the whole U.S. economy could be in danger, he argued, there is a case for using the Fed’s most blunt tool to combat them — raising interest rates across the economy.

Stein isn’t ready to do that just yet — he has been voting to maintain the Fed’s ultra-low interest rate policies — but some of his colleagues are taking the same logic further. Kansas City Fed President Esther George dissented at the central bank’s January policy meeting because she thought easy money policies “increased the risks of future economic and financial imbalances.”

The nub of the argument that George and Stein are making is that when financial bubbles arise, it’s hard to know with certainty where they are and how big a risk they pose, so it’s not enough for regulators to try to stamp them out. Higher interest rates may be a blunt tool, but at least you know they will be effective. If the last 15 years have taught us anything, it is that financial bubbles can wreak huge damage to the economy, so it’s worth it to try to nip them in the bud.

The two most powerful Fed officials have offered, in speeches Friday night and Monday morning, what amounts to a riposte to these arguments.

“Long-term interest rates in the major industrial countries are low for good reason,” Chairman Ben Bernanke said Friday at an event in San Francisco. “Premature rate increases would carry a high risk of short-circuiting the recovery, possibly leading — ironically enough — to an even longer period of low long-term rates.”

Vice-chair Janet Yellen chimed in Monday at a National Association for Business Economics conference.

“At this stage,” she said, “there are some signs that investors are reaching for yield, but I do not now see pervasive evidence of trends such as rapid credit growth, a marked buildup in leverage, or significant asset bubbles that would clearly threaten financial stability.”

So the Bernanke-Yellen response to the Stein-George argument boils down to a polite version of this: Are you crazy? Unemployment is really high! Inflation does not appear to be much of a threat! Why should we cripple the prospects of economic recovery just because investors may be paying too much for certain types of corporate bonds and end up losing money.

In these speeches, we have, in effect, a glimpse into the future of the U.S. monetary policy debate. Inflation has been remarkably well-contained, and even the monetary hawks have lately been emphasizing these risks of financial bubbles in arguing against easy money policies. So the debate for the coming years will likely come down to some variety of that which has played out in this round of Fed speeches.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 22:06:19

One thing is for certain: Anyone who succeeds in forcing Bernanke and Yellen to tighten policy before they say it is time will inherit Pottery Barn Rules: “You broke it, you bought it.”

Economists increasingly wary of Fed’s stimulus policy
By Don Lee
March 4, 2013, 7:04 a.m.

Even as top Federal Reserve officials continue to defend their economic stimulus, a growing number of industry and academic economists view the Fed’s policy now as too aggressive — with two-thirds of those recently surveyed saying the central bank should terminate its controversial bond-buying program this year.

The survey, of 196 members of the National Assn. for Business Economics, found that a slim majority of them consider the central bank’s monetary policy as “about right.” But 44% of them said the Fed’s policy was “too stimulative.” That is up from just 26% who gave that response in September.

The marked shift in attitude reflects the increasing concerns inside the Fed as well, in the wake of the central bank’s decision in December to keep buying a total of $85 billion in Treasury and mortgage-backed securities monthly in a bid to lower long-term interest rates to boost spending and investment.

The survey was released Monday as the association held its annual economic conference at which the Fed’s vice chairman, Janet Yellen, laid out a case for the central bank’s expansive monetary policy.

Yellen, in an address to the group meeting in Washington, D.C., said the policy was justified given the nation’s still-troubled labor market, with high unemployment and underemployment, and the outlook for continued subdued inflation.

She said she did not see indications that the Fed’s massive bond purchases had impaired the operations of financial markets. Nor was there “persuasive evidence” that the Fed’s easy-money policies had led to excessive risk-taking that was creating asset bubbles, she said, echoing remarks that Fed Chairman Ben S. Bernanke made last week in congressional testimony.

“At present, I view the balance of risks as still calling for a highly accommodative monetary policy to support a stronger recovery and more rapid growth in employment,” Yellen, considered a leading candidate to succeed Bernanke as chairman, said in her prepared remarks.

Many in the audience listening to her speech would agree that the Fed’s bond purchases have been effective in stimulating the economy; in fact, about two-thirds of the association’s members surveyed said so. Still, a similar two-thirds wanted the Fed to end the bond purchases some time in 2013, which would be earlier than what many investors see as the termination date.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 22:11:25

Financial Times
On Wall Street
Last updated: March 1, 2013 5:07 pm
Free lunch will come to an untidy end
By Henny Sender
Investors fear asset bubbles created by Fed policies

Seth Klarmen, founder of hedge fund Baupost, offered a searing indictment of the Federal Reserve’s monetary policies in his year-end letter to investors, currently circulating in the wider hedge fund community.

In the mid-January letter, Mr Klarman describes “the real downside scenario which involves the end of the free lunch of large deficits, zero interest rates and relentless quantitative easing”.

Along with the European Central Bank, Fed chairman Ben Bernanke “seems intent on buying back bonds indefinitely, whether or not their actions deliver an economic recovery and in spite of any unpleasant side-effects. It is clear that after four years and counting, their efforts have not delivered. Only a zealot would continue with a plan that is not working and massively expand it,” Mr Klarman concludes.

But as his remarks made this week underscore, Mr Bernanke does not intend to back away from his controversial policies any time soon. Indeed, he dismissed exactly the concerns that Mr Klarman enunciates, saying: “We don’t see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery.” His denial similarly rejects the objections of sceptics who believe there is no evidence the Fed’s policies are doing anything positive for the real economy.

Still, the indirect dialogue between the Fed chairman and the hedge fund manager highlights the dilemma of investors who fear all the dire consequences Mr Klarman enumerates – including distorted markets, artificial prices and asset bubbles – but have also learnt the futility of fighting the Fed.

What do you do in a world where the Fed is supporting the price of virtually every security today but will not do so in an indefinite tomorrow? The Fed has bought $2.5tn of Treasuries and mortgage securities in the past 50 months, and now accounts for about 55 per cent of the entire net supply of these bonds, according to JPMorgan research. In 2013, “net of Fed purchases there will be almost no new debt issuance”, notes Michael Cembalest of the bank’s asset management arm.

Some investors and ex-Fed staffers believe the central bank will never be able to exit its asset purchase programme. “We are looking at perpetual QE,” says one former New York Fed official. “The Fed won’t let the adjustment happen.” That is because the moment the Fed ceases to buy bonds (let alone starts selling them), prices will collapse, forcing the Fed back into the market, these people believe.

Meanwhile, others believe the Fed will be forced to back away from QE by financial asset bubbles and cite cautionary remarks by some Fed governors. A growing number of investors say returns no longer reflect the risk in many asset classes, even if the distortion has not yet reached bubble-like proportions. “A period of diminishing credit returns is upon us,” Mr Cembalest adds.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2013-03-04 22:12:53

I’m starting to think another leg down in asset valuations lies in store before the Bexit*.

* Bernanke exit

 
 
Comment by Rental Watch
2013-03-04 23:58:25

From the WSJ:

“Young Adults Retreat From Piling Up Debt”

The applicable quote:

“A typical young U.S. household—defined as one led by someone under age 35—had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data. Total debt includes mortgage loans, credit cards, auto lending, student loans and other consumer borrowing.

In addition, fewer young adults carried credit-card balances and 22% didn’t have any debt at all in 2010—the most since government tracking began in 1983.

The lower overall debt comes despite an increase in student borrowing, which ballooned to $966 billion last year from $253 billion at the end of 2003, according to the Federal Reserve. The percentage of people delinquent on their student loans is also up. Unlike most debt, student loans can’t be dumped through bankruptcy, making them more of a financial drag through life.”

AND:

“Most of the nation’s student-loan burden, moreover, is concentrated among a small number of borrowers: Roughly a quarter of young-adult households held nearly 80% of the entire young-adult group’s debt in 2010, Pew said.”

Comment by Pimp Watch
2013-03-05 05:53:59

From the wall stree journal?

LMAO. You’re pathetic.

 
 
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