September 25, 2013

Bits Bucket for September 25, 2013

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

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Comment by 2banana
2013-09-25 05:11:40

I know some people here absolutely luv Telsa.

I call it insanity. Government massively subsidizing $100,000 cars for the wealthy.

And where have I heard this accounting fraud before?

Tesla must buy back the car and sell it for $46,000 dollars in order to repay the bank. If it is unable to find a buyer willing to pay that price, the car company must pay the bank out of its own pockets.


Electric car maker fueled by tax subsidies
The Daily Caller | 9/25/2013 | Breanna Deutsch

Tesla Motors has been basking in praise ever since the company became profitable in the first quarter of 2013, but critics point out that the company’s success would not exist without accounting gimmicks and massive government tax credits.

Forbes reported that the electric vehicle is overvalued partly because much of Tesla’s earnings come from zero emission vehicle tax credits (ZEV). The ZEV awards a hefty $7,500 tax credit to anyone who purchases a zero emissions car.

California, the location of Tesla’s headquarters, gives buyers up to $12,500 of tax credits if they take home one of these cars.

If the company sells an $80,000 Model S sedan in California, over 15 percent of the profits could potentially come from tax subsidies.

This penalty is the foundation of Tesla’s earnings. An auto-industry analyst at Gartner Group, Thilo Koslowski, estimated that Musk’s company will make $250 million by the end of the year selling these credits to other car makers.

At the end of its second quarter in 2013, Tesla had a revenue of $747 million, with $119 million of its earnings coming from tax credit sales. Almost 16 percent of its total profit came from selling ZEV credits to other auto makers.

Tesla earns around $25,000 to $35,000 dollars from tax credits on every car that it sells.

When a person leases a $90,000 Model S for a three-year time period, the bank sends Tesla a check for the full amount. After the three year lease expires, Tesla must buy back the car and sell it for $46,000 dollars in order to repay the bank. If it is unable to find a buyer willing to pay that price, the car company must pay the bank out of its own pockets.

Comment by Whac-A-Bubble™
2013-09-25 06:55:25

“I know some people here absolutely luv Telsa.”

Show us one post as a reminder.

Comment by goon squad
2013-09-25 07:32:10

Joe Smith loves Tesla and was posting a few months ago about how popular they are in metro D.C.

I can count the number of Teslas I’ve seen around here on one hand.

Comment by Housing Analyst
2013-09-25 07:35:00

Was Liberace being chauffeured in any of your Tesla sightings?

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Comment by In Colorado
2013-09-25 07:55:37

I can count the number of Teslas I’ve seen around here on one hand.

Ditto. Even in the Broomfield/Boulder corridor. Maybe if Subaru made an all electric we’d see more EVs.

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Comment by Suite Joey Blue Eyes
2013-09-25 07:57:23

It is an awesome car, I test drove one. They are not 100k, even fully loaded it’s more like 85k I think? Their show room on K St. is a 3 minute walk from my office. Fiskers are better but the company isn’t as well run.

To be honest, electric cars just don’t make sense right now. It’s definitely a show off purchase. But there is no denying it’s a great automobile. Me? I ride a bike to the train and bought my wife a Honda. Call me the East Coast Money Mustache.

I also turned down the solar panel offer I got because insulating and reducing power use overall is much more effective than buying an EV system in the northeast, plus natural gas heat blows electric out of the water.

Not everything billed as “green” really is. In fact, the “green” and “efficient” labels (e.g. LEED design) have been highly marketed and politicized to the point that really green things don’t qualify (e.g. a skyscraper in NYC with no parking garage built over top of a subway line) whereas truly wasteful things (Sprint’s sprawling headquarters in suburban Kansas City) get LEED certification.

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Comment by Housing Analyst
2013-09-25 08:00:20


Are you gonna gig with your tricked out harpsichord this weekend?

Comment by oxide
2013-09-25 08:48:18

LEED is a bit of a farce. You get points for x% “reduction” in the use of electricity, lighting, wastewater, etc. Reduction from what? Average? What if everyone did LEED? Do you need the same % reduction from the lower average?

Comment by Suite Joey Blue Eyes
2013-09-25 09:38:08

The reasons that LEED is b.s. are explained pretty well in a book called “Green Metropolis”. I highly recommend reading it. I read it in a few hours, it was better than anything else I’ve seen on the topic.

You get more LEED points for using a reflective roof on a sprawling 1-floor office park (thus lots of roof to heat up in the first place) 25 miles from the city center (that therefore requires huge fossil fuel expenditures bc it can only be accessed by driving) than you do for building a tall building (almost no roof for heat gain) where 95%+ of the workers commute by walking or subway. For example, the NYTimes and Hearst buildings in midtown NYC are not LEED but are far, far more energy efficient than almost any LEED structure.

The book talks about LEED projects such as the Chesapeake Bay Foundation (Annapolis, MD) and the Aspen Institute (CO) where the HQs of “pro environment” organizations are very inefficient.

A distinction between LEED design and Energy Saver appliances is interesting. LEED is all about making “green” seem like a luxury, something that builders have to pay tons of money for outside verification, etc. Energy Saver is a federal program that set clear apolitical standards for making basic appliances use less energy and help consumers make clear choices. (”This dishwasher uses xxx kwh/yr. A standard dishwasher uses yyy kwh/yr. The range of comparable appliances is zzz-www kwh/yr.”) By contrast, LEED just makes your project much more expensive and makes you use materials that cost much more even if they save no money and impose externalities.

Comment by Rental Watch
2013-09-25 15:17:59

LEED is a boondoggle for consultants. If you pay enough, you can get someone to make your project LEED certified with minimal changes to the project.

You know what works? New technology that drives costs lower.

Perfect example: We need to replace the exterior lights for a self-storage facility. The math on using LEDs vs. traditional lighting provides a payback in an estimated 2 years for the marginal extra cost. And beyond that, we have lower expenses (higher NOI) that we can apply a cap rate to and get value…and the lights last longer.

Boy, how “green” of us, huh? We’re just trying to make more money, and energy efficiency is the path to do so. In a similar vein, we just underwent a massive energy efficiency project at an office building…similar story: Capital investment leads to lower operating costs, which leads to an increase in capitalized value that is greater than the cost of the investment.

Funny how that works.

Comment by samk
2013-09-25 07:34:15

8/8/2013 Bits Bucket.

Comment by Strawberrypicker
2013-09-25 07:52:52

The usual suspects. Pushing pudgressive ideology with other people’s money, benefiting the metrosexual intelligentsia class at the expense of the working man.

Quick, to the art gallery! There are only two charging stations left.

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Comment by ahansen
2013-09-25 13:22:46

I thought only Democrats, liberals, Obama and Pelosi loved Tesla, yet I don’t see one mention of either in your post — only buzzword implications.

You’re slipping nannerz.

Comment by AmazingRuss
2013-09-25 16:43:26

The liberals he talks to every day told him. They live behind the water heater, and only come out in the very early hours of the morning.

Comment by Carl Morris
2013-09-25 08:15:42

I know some people here absolutely luv Telsa.

I like them because they are the first plug-in car company to actually make a decent car. Whether they can survive without the subsidies is a valid question. My personal opinion is that the technological progress is worth the subsidy as long as it’s temporary. If we’re going to have cheap electric cars someday, first we have to incentivize people to build the first ones, and they will be expensive.

Now of course we could wait until they make sense economically without subsidies, but odds are high that will be in the middle of an oil crisis. It might be nice to already have some infrastructure and technology in place before that. Depends on how much value you put on being more prepared for the next crisis.

Comment by RioAmericanInBrasil
2013-09-25 08:21:30

the technological progress is worth the subsidy as long as it’s temporary. If we’re going to have cheap electric cars someday, first we have to incentivize people to build the first ones, and they will be expensive.

I agree. This is the type of thinking on a national level that can lead to energy independence as Brazil did, but as the USA is politically incapable of.

Comment by michael
2013-09-25 08:27:02

want to subsidize new tech with taxpayer money? fine…people just shouldn’t become frackin’ billionares off that shit.

makes me sick.

Comment by Carl Morris
2013-09-25 08:35:41

Has anybody become a billionaire off of Tesla yet? I’m honestly curious, because I’d be really surprised unless it’s all owned by one person. Even then I’d be a little surprised.

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Comment by michael
2013-09-25 08:51:38

compare tesla’s market cap to GMs…then compare Tesla’s sales to GM. Ten compare the PEs.

plenty of people getting filthy ass rich off this taxpayer subsidized pig in lipstick.

Comment by Carl Morris
2013-09-25 09:07:50

Oh, so it’s the stock price you’re mad about? I didn’t even realize they had gone public yet. Yeah, a 22B market cap seems a little fluffy for how much money they actually make, but that happens a lot with the leader in a new technology that could be world-changing.

Comment by RioAmericanInBrasil
2013-09-25 08:43:03

want to subsidize new tech with taxpayer money? fine…people just shouldn’t become frackin’ billionares off that shit.

Ross Perot?

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Comment by michael
2013-09-25 08:47:43

him too


Comment by oxide
2013-09-25 09:59:35

I dunno if I like the taxpayer subsitides to Big Ag either. Does Pink Slime count as new tech?

Comment by samk
2013-09-25 14:29:15

Good thing Tesla isn’t how Musk got his money.

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Comment by MightyMike
2013-09-25 16:57:32

people just shouldn’t become frackin’ billionares off that shit.

It’s interesting that you should mention frackin’ billionaires. I saw an article that said researcd by the Department of Energy is behind the boom in fracking.

I’m conservative as hell,” Dan Steward, the former Mitchell Energy geologist whose company pioneered shale gas in Texas, told us. But when asked about the role of government, Steward told us, “They did a hell of a lot of work, and I can’t give them enough credit for that. [The Department of Energy] started it, and other people took the ball and ran with it. You cannot diminish DOE’s involvement.”

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Comment by 2banana
2013-09-25 05:15:17

Do they have Womyn Studies and Ebonics Degrees there?


Japan losing competitive edge due to poor practical training, expert warns
Japan Times | 09/24/2013 | Saiyuri Daimon

DALIAN, CHINA – There may be many unemployed young people in Japan, but there are also a lot of companies that can’t fill their vacancies due to a shortage of talented applicants, Darryl Green, president of major staffing and workforce solution service company ManpowerGroup, said in a recent interview.

Warning about Japan’s labor market, Green told The Japan Times there are plenty of openings for technical positions in Japan, such as engineers and in sales, but most people who have recently graduated from Japanese universities have no practical skills to qualify for those jobs.

“The needs of corporate Japan are not met by the young people that are being produced by Japanese education and society,” Green said, adding that unless Japan acts now to address these problems, it’s competitive edge will continue to erode.

Comment by In Colorado
2013-09-25 07:58:08

But I thought we had to be MORE like them.

As I mentioned not too long ago, I was chatting with a dude from Singapore. From what he told me, they see our STEM grads as being 10 feet tall.

Comment by AbsoluteBeginner
2013-09-25 21:44:57

‘As I mentioned not too long ago, I was chatting with a dude from Singapore. From what he told me, they see our STEM grads as being 10 feet tall.’

Tom Vu is 12 feet tall.

Comment by oxide
2013-09-25 09:21:34

plenty of openings for technical positions in

Now where have I heard that before? Oh right, the American IT market, where they manipulate the listings so they can beg for cheap H1-B workers from India.

Notice that this was a newspaper in China quoting an exec from a staffing group. Does this mean that China wants to export cheap rote-learner workers to Japan?

Comment by ahansen
2013-09-25 13:27:25

Ahh, here we go, “Womyn” and “ebonics”. Much better, nannerz, I thought you’d lost your edge there for a minute.

Comment by AmazingRuss
2013-09-25 16:44:38

His factoid feed must have picked up.

Comment by Housing Analyst
2013-09-25 05:24:07

“housing makes you poor. Very poor.”

It certainly does at current massively inflated asking prices of resale housing considering prices are 250% higher than long term trend. If you buy a house in this environment, you’ll be deep in debt for the rest of your life.

Don’t do it.

Comment by AZGolfer
2013-09-25 13:21:25

HA where do you live? My tenant is moving out on October 30th. The house is located in the north west Phoenix area.

Comment by Housing Analyst
2013-09-25 18:57:47

You should have lowered your rental rate. Your loss.

Comment by azdude02
2013-09-25 05:36:58

a house is the best meal ticket you will ever find.

Comment by goon squad
2013-09-25 05:42:43

because you’ll be picking up free food from the food pantry when you’re broke after paying for overpriced housing

Comment by 2banana
2013-09-25 06:16:14

You mean like eating ramen noodles on the granite countertops?

Comment by Carl Morris
2013-09-25 08:18:53

Ramen On Granite. Sounds like a band name for after the real crash.

Comment by oxide
2013-09-25 11:31:20

Pergraniteel would be a good death metal band.

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Comment by AmazingRuss
2013-09-25 16:46:53

They could cover The Descendent’s “Suburban Home”

I wanna be stereotyped
I wanna be classified
I want a big loan
I want a suburban home
Suburban home
Suburban home
Suburban home
I wanna be masochistic
I wanna be a statistic
I wanna be a clone
I want a suburban home
Suburban home
Suburban home
Suburban home
I don’t want no hippie pad
I want a house just
Like mom and dad
I wanna be stereotyped
I wanna be classified
I wanna be masochistic
I wanna be a statistic
I wanna be a clone
I want a suburban home
Suburban home
Suburban home
Suburban home

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Comment by goon squad
2013-09-25 17:40:20

+1 for the Descendents, nice to see other people here have selective taste in music

Comment by Combotechie
2013-09-25 06:20:31

A college education may be the best meal ticket you will ever find - IF you are an employer.

Hire ‘em when they are deep in debt and hungry for work and you may just end up owning their souls. If they get all uppity and start demanding a raise or a promotion or better working conditions then fire them and replace them with another batch.

Act as if there is an unlimited supply of them because this appears to be the case.

(This might have something to do with a trillion-or-so dollars of student debt that steadily grows as interest is relentlessly added on to principle.)

Tick, tick, tick, tick, tick …

Comment by Whac-A-Bubble™
2013-09-25 06:58:02

Employers are definitely entering a new Golden Era of indentured servitude offered from a beaten down workforce of highly-qualified debt slaves.

Comment by Combotechie
2013-09-25 08:03:06

“… highly-qualified debt slaves.”

There it is! Don’t spend you own money to train them, convince them they should spend their own money, money they (either themselves or their family or both) actually have and all the money that they can borrow, in order for them to train themselves!

Convince them that they should extend their childhood a bit from the late teens to the early twenties and convince them they should do this all on credit! Then, after they fail to get a good paying job after graduation, convince them that they should GO BACK TO SCHOOL and get even more education and extend their childhood for a few more years and rack up even more debt.

Then you will really have them where you want them!

Select out the ones you want to hire at the terms you care to offer (maybe get them for free if you can convince them that they should be interns) and discard the rest.

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Comment by Carl Morris
2013-09-25 08:19:58

“… highly-qualified debt slaves.”

But wait, I thought there was a shortage of qualified applicants?

Comment by oxide
2013-09-25 09:28:59

This is a great comment, Combo, but I take issue with this:

convince them they should spend their own money

Pah, that’s so-o-o-o-o 1985. :roll: The new fashion is to get the government to pay for it.

Comment by AmazingRuss
2013-09-25 16:48:02

“But wait, I thought there was a shortage of qualified applicants?”

If their debt service is too high, they can’t work for the 20k/annum qualifying rate.

Comment by Bill, just South of Irvine, CA
2013-09-25 18:28:49

All my training is On-The-Job at my new job. Moreover we use a lot of open source. I would say 90% of what we do is using open source.

The profit is in how the myriad components of open source stuff is put together, licenses done up properly when applicable to the writers of the open source, and then sold in our products. We have a big car manufaturer, a big software IDE company, and a big medical device mftr as some of our customers.

Comment by cactus
2013-09-25 09:13:57

Act as if there is an unlimited supply of them because this appears to be the case.”

Only if you can keep H1B visa’s up otherwise big Corps are fracked at least in high tech

Comment by scdave
Comment by Housing Analyst
2013-09-25 07:19:07

“Considering rental rates are less than 50% of buying at current grossly inflated asking prices, you’d have to be an idiot not to rent.”

Exactly. Asking prices have a long way to fall in order to get to long term trend or roughly mid 1990’s prices.

Comment by oxide
2013-09-25 13:46:59

Asking prices have a long way to fall in order to get to long term trend or roughly mid 1990’s prices.

Indeed they do!

So, how long is it going to take for buyers* to stop buying at current asking prices in order to force said asking prices to fall? More importantly, how much will prices fall before those buyers get all uppity and start buying again? Do you seriously think prices will make it all the way to 1995? Heck, prices didn’t even get to 2003 before those pesky bottom feeders arrived to crash the craaaater par-tay.

*Please note: Just because J6P can’t buy houses doesn’t mean that houses won’t be bought.

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Comment by Housing Analyst
2013-09-25 15:24:22

More OxyMath?

Demand is already at 1997 levels…. and decelerating rapidly.

Comment by Oxide
2013-09-25 16:23:17

If demand is low, then why aren’t asking prices low?

Comment by Carl Morris
2013-09-25 16:24:25

Because every time sellers are about to capitulate we “save” them?

Comment by goon squad
2013-09-25 05:41:11

i hope it stays illegal in all the other states so the stoner tourists spend all their moneys here and fill our tax coffers

Comment by In Colorado
2013-09-25 07:59:57

Imagine if Jerry was still alive and touring with the GD. I can only imagine the size of the concerts here in the Centennial State. ;-)

Comment by AmazingRuss
2013-09-25 16:53:38

Phish still gets together now and then.

Comment by Mike in Carlsbad
2013-09-25 16:53:54

you are delusional. Here in California we had more pot shops then McDonald’s. Then in 2011 the Fed’s, who said they would “let states decide,” shut them down. The same exact thing will happen in Colorado. A shame really, decriminalization and taxation was working out great here.

Comment by goon squad
2013-09-25 05:55:41

wall street journal - u.s. home prices climb at fastest pace in 7 years:

‘prices in 20 major cities increased 12.4 percent in july compared to the same month last year, according to the standard and poor’s/case-shiller index.’

it’s a good thing all u.s. workers are getting 12.4 percent raises and cost of living increases, otherwise housing could be unaffordable.

Comment by azdude02
2013-09-25 06:50:03

I wonder how much money cuban is willing to lose before he sells out:

JCP is bleeding shareholder value off at a rapid pace. Bankruptcy is around the corner. You are better off taking your money to the indian casino.

Comment by rms
2013-09-25 07:21:32

The garment industry is going robotic, so those over-paid sweatshop workers are on their way out, and profits will increase. Cuban likely knows something that Joe Sixpack will realize later.

Comment by azdude02
2013-09-25 07:27:50

cubans bet on the facebook ipo was a loser too. he bought hoping to flip it real quick and took a beating. maybe he should have just held onto it for a bit n hindsight.

I think cuban bought pennys around 13. just got a quote and quickly approaching 10.

1 million shares @ 13 = 13,000,000.00

Looks like the loss is around 3 million so far. maybe he should stick to basketball?

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Comment by HBB_Rocks
2013-09-25 07:46:57

He should have just held. Facebook is currently way above it’s IPO price. It’s barely been a year.

Comment by oxide
2013-09-25 10:01:27

Trying to figure out which is worse: underpaid foreigners working in sweatshops to sew clothes, or unpaid foreigners not working at all.

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Comment by goon squad
2013-09-25 06:06:19

The $1.1+ trillion elephant in the room cannot be ignored

I correctly predicted that there will be bailouts

“Starting next month, the Department of Education will contact borrowers who are struggling to repay their federal loans to make sure they know all the options available to them.

Once enrolled in a program, low-income borrowers with high debt pay a percentage of their discretionary income every month, and after a certain time period — 20 years in the new program, 25 years in older plans and 10 years for those in public service jobs — the remaining federal debt is forgiven.”

Comment by Whac-A-Bubble™
2013-09-25 07:03:23

I see nothing there about bailouts. Please elaborate.

Comment by goon squad
2013-09-25 07:16:34

graduates with women’s studies, black studies, latino studies, lgbt studies, insert-victim-class-here studies, degrees are unemployable and broke. obama will forgive all of their student loan debt (and give them a snap card and obamaphone and free healthcare and free abortions) and they will vote democrat for life.

and the evil rich white stem majors (who love to comment on online wall street journal articles about education that everyone should have majored in stem) that vote republican will be taxed to death to pay for it.

Comment by rms
2013-09-25 07:26:26

“…and the evil rich white stem majors…”

You’re on a roll this morning, goon. Slash ‘em.

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Comment by azdude02
2013-09-25 06:13:22

i got an email earlier n the week for stated loans @ 70% ltv 7.99% rate

Comment by oxide
2013-09-25 09:35:05

Sounds like the terms that the mob would offer. Meet the new subprime, same as the very old subprime.

Comment by Rental Watch
2013-09-25 15:20:10

Except with 30% down, the risk is far less than with 100% financing.

Comment by goon squad
2013-09-25 06:19:42

Joe Smith correctly summarized this in yesterday’s bits bucket

“Democrats are working hard to exploit massive unrest in the Republican Party over the looming government shutdown, which many see as one of their best chances of holding the Senate or even gaining the House in next year’s midterm elections … many Democrats welcomed Tuesday’s filibuster-style floor speech by conservative Sen. Ted Cruz (R-Tex.), who pledged to talk for as long as he could in an attempt to slow Democratic plans to advance a bill that would keep the government open while also funding President Obama’s signature health-care law.

The Cruz demonstration — which was opposed by many leading Senate Republicans and was set to end by Wednesday morning — plays into a Democrat strategy to ensure that the GOP is blamed for a shutdown if it occurs.

Comment by 2banana
2013-09-25 06:54:53

Like there was any other strategy for the democrats and the MSM?

Comment by Strawberrypicker
2013-09-25 07:42:32

Screw blamed. I think they should take CREDIT. Look at the doom and gloomers from the sekester. None of which happened.

Comment by RioAmericanInBrasil
2013-09-25 08:00:33

Screw blamed. I think they should take CREDIT.

They will be blamed. The general public is becoming aware of the Repubs’ lies and BS.

Obamacare is the law-of-the-land. Deal with it Repubs. There is no Constitutional basis or prescribed Constitutional procedure to de-fund a law-of the-land using a threat to shut down the government or default on our debts. None. So of course they will be blamed most. It’s in the bag.

And it was settled by elections.

Pres. Obama is the first president since Reagan and only one of a handful of U.S. presidents in history to win both times with over 50% of the popular vote.

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Comment by 2banana
2013-09-25 10:20:55

Obamacare is the law-of-the-land.

So are immigration laws
So was DOMA
So are bank fraud laws (see John Corzine)
So are bankruptcy laws (see GM)
So are gun laws (or lack there of)
So are privacy laws (see NSA)

So are…

obama showed us another way…

Comment by Strawberrypicker
2013-09-25 10:27:53

Hahaha Rio is so mad. I guess two can play at the “no rules” game.

Comment by oxide
2013-09-25 11:33:16

“So was DOMA”

Maybe they can take Obamacare to the Supreme Court?

Oh wait.

Comment by AmazingRuss
2013-09-25 16:57:16

I’d be with you if they were drawing the line about debt… but all they’re doing is trying to score political points killing obamacare, which in the grand scheme only slows down the inevitable debt trainwreck a bit.

They should be saying “We will NOT raise the debt ceiling.” That would show they have the interest of the country in mind. Instead they’re saying “Kill obamacare or we’ll kill the economy.”

They could be heroes, but they choose to be terrorists.

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Comment by goon squad
2013-09-25 06:30:29

linked from drudge:

‘president barack obama casually lied about his smoking today at the united nations in a hot mic moment. the news quickly went viral, but few commentators have noted that obama was flagrantly misstating his smoking history.’

Comment by Strawberrypicker
2013-09-25 07:56:24

He’s a politician.

Comment by In Colorado
2013-09-25 08:03:00

Never mind Syria, he lied about quitting smoking.

The new boss, same as the old boss … sigh!

Comment by 2banana
2013-09-25 06:37:44

Hope and change for everyone with student debt!

obama will contact you to let you know exactly how much student debt you have and the options you have to pay it back…

How about we we stop the insanity of government guaranteeing student loans and having them not discharable in bankruptcy?

Nah. That would shrink government. And we can’t have that.

F*ck You - Pay Me


U.S. to Contact Borrowers With New Options for Repaying Student Loans
New York Times | September 24, 2013 | TAMAR LEWIN

When President Obama last month announced proposals to make college more affordable, many critics focused on his plan to rate colleges based on measures like tuition, graduation rates, and the debt and earnings of graduates, and eventually to link financial aid to those ratings.

Largely overlooked was a more immediate change that could make a dent in the rising number of student-loan borrowers going into default. Starting next month, the Department of Education will contact borrowers who are struggling to repay their federal loans to make sure they know all the options available to them.

“We think there are lots of people who could benefit from our income-based repayment programs but haven’t signed up, and we want to get to them before they default,” said Arne Duncan, the education secretary. “The challenge is getting the word out.”

Efforts to rein in student debt, now at more than $1.1 trillion, and make college more affordable have been central issues for the Obama administration. It has expanded debt relief for low-income borrowers with a Pay as You Earn program for recent graduates, and simplified enrollment by putting the application online and allowing applicants to import information from their tax return.

Of course, income-based programs have a downside: because the repayment period is longer than the standard 10 years

Comment by Whac-A-Bubble™
2013-09-25 07:06:22

“Starting next month, the Department of Education will contact borrowers who are struggling to repay their federal loans to make sure they know all the options available to them.”

Sounds more like a friendly effort to make sure no dollar of student debt goes unpaid than a bailout. But at least there is a veneer of civility to the outreach.

By contrast, if you owe the I.R.S. a nickel in back taxes, you can safely bet a nasty gram is on the way to your mailbox.

Comment by azdude02
2013-09-25 07:29:34

you cant get blood out of a turnip!!!

Comment by Whac-A-Bubble™
2013-09-25 22:15:31

That never stops the I.R.S. from trying, though.

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Comment by Suite Joey Blue Eyes
2013-09-25 08:04:22

PAYE and IBR are sort of like bailouts for borrowers. I’ve linked to these programs on here before.

I just copped PAYE for my wife’s loans from getting her M.A.T., plus the unpaid portion of her loans will be discharged after 10 yrs of repayment. The repayment formula only takes into account “discretionary income” which is a game you can play with them on the application if you know how (I do).

Comment by oxide
2013-09-25 09:53:05

Is it financially better to pay off the loan (if you can afford it) and avoid the interest payments, or stick with paying interest for 15 years and letting the government forgive the balance?

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Comment by Suite Joey Blue Eyes
2013-09-25 10:19:21

Obviously this depends, but paying off the loan rarely makes sense. The best thing to do is keep your discretionary income low so they don’t require much in the way of payments. In my wife’s case, she’ll basically just be making interest payments for 10 yrs and then, poof, the loans are forgiven.

Comment by oxide
2013-09-25 11:39:16

Keep my discretionary income low? Isn’t that like quitting your job and working at McD’s just to avoid paying income taxes? Talk about a Pyhrric victory. I think I would have paid it off, just to avoid dealing with a payment every month.

Comment by Suite Joey Blue Eyes
2013-09-25 12:21:32

Incorrect, oxide. As usual, you jump to conclusions. There’s a formula for what can be considered discretionary income. This formula gives you some room to play around. And, in any case, under PAYE, monthly payments are capped at 6 or 7% of your discretionary monthly income. LOL. So even if you don’t play around with discretionary income, you’re still paying a paltry sum.

The main ways to play with discretionary income are maxing out retirement contributions and putting your house in the name of the spouse who is doing PAYE. Suddenly, 4k of monthly post-tax, post-benefits income becomes more like $1500 or 2000 (you get the idea). As my wife’s income increases, I might have to get more aggressive and let her take some depreciation on rental houses or something.

Remember, to be PAYE-eligible, your student loans have to be from 2007 or later. My wife qualifies, but this will not work for you. Fear not, you can do IBR, but IBR isn’t nearly as lenient and they can make you pay more like 15% of discretionary income. PWNED.

Comment by Strawberrypicker
2013-09-25 20:03:15 defines discretionary income for PAYE as “Your income minus the poverty guidelines for your family size.”

I think you are in trouble.

Comment by Strawberrypicker
2013-09-25 10:31:19

Sounds like a little fraudy-fraudy. But what’s a little lie between friends like you and Uncle Sam.

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Comment by Suite Joey Blue Eyes
2013-09-25 10:57:29

Why are you mad, brother? Just cop that PAYE and set off into the sunset.

Comment by oxide
2013-09-25 06:39:05

Nevermind the price: Nirvana legend Kurt Cobain’s childhood home goes on sale

” The childhood home of legendary Nirvana frontman Kurt Cobain, complete with the mattress he slept on, was this week put on the market by his mom…

…The home, last assessed at less than $67,000, is being listed for $500,000.

…Cobain’s parents bought it in 1969, when Kurt was 2. He lived there until they separated when he was 9, and again with his mom during his later teen years.

…Cobain lived in about 20 houses in his life, Cross said, and this isn’t the first one offered for sale based on its connection to rock history. In 2002, an Oregon couple bought a home in nearby Montesano for $42,500. When they learned that Cobain had lived there with his father from 11 to 15, they sold it for $210,000.”

Comment by goon squad
2013-09-25 07:39:29

Who the hell wants to sleep on Kurt’s grungey old mattress?

Liberace’s house just sold and it is faaaaabulous!

Comment by oxide
2013-09-25 09:57:18

I thought it was significant that there are 20 houses with Kurt’s grungy old mattresses. No wonder the kid was screwed up.

btw, I tried to zillow Aberdeen WA and couldn’t find the exact house. But there are plenty of Oil City-ish fixer uppers sub-$50K.

Comment by sleepless_near_seattle
2013-09-25 10:47:52

Aberdeen (as well as nearby Hoquiam) is more accurately described as Depression City. That’s a pretty beat up area.

They do have not one, but two, SBUXs in town, so maybe things are lookin’ up.

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Comment by AmazingRuss
2013-09-25 16:59:48

There’s no fixing a house in Aberdeen without putting it on a truck and hauling it somewhere else.

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Comment by oxide
2013-09-25 10:31:51

By today’s standards, that’s pretty modest. The clueless Millenial newlywed househunters on HGTV would turn up their perky little noses up at it for sure.

Comment by goon squad
2013-09-25 06:39:33

welcome to the recoveryless recovery

‘americans are losing faith in the nation’s economic recovery even as forecasters expect growth to accelerate, according to a bloomberg national poll.

forty-four percent of poll respondents say they expect the economy, which has expanded for nine consecutive quarters, to remain the same, while 28 percent see it weakening.

‘we’re still in a recession; i don’t know why they say it’s over,’ says chris sams, a disabled navy veteran from dangerfield, texas. ‘it may be over in washington, d.c., where the per capita income is higher than anywhere else, but down her the minimum wage is the highest wage.’

Comment by azdude02
2013-09-25 06:46:41

this has been a recovery for asset prices. If you don’t have any your scr@wed. Its a big club and if you don’t have any assets you are SOL.

Comment by In Colorado
2013-09-25 06:48:56

It depends on where those assets are located. I really doubt house prices are soaring in Salina, KS.

Comment by Whac-A-Bubble™
2013-09-25 07:10:43

I couldn’t find any articles which specifically mentioned Salinas, but I am pretty sure it is not far off from Kansas City.

Sep 17, 2013, 2:33pm CDT
KC-area home prices go up; supply goes down

The price of a single-family home is up, and the supply of single-family homes is down in Kansas City, according to a new report from the Kansas City Regional Association of Realtors.

In August, the average sale price of new and existing homes in Jackson, Johnson, Clay, Platte, Wyandotte, Miami, Leavenworth, Cass and Ray counties was $191,574, the report said. Compared with August 2012, when homes sold for an average price of $173,643, it’s a jump of about 10 percent.

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Comment by In Colorado
2013-09-25 08:04:12

KC is not Salina.

Comment by In Colorado
2013-09-25 08:12:02

The price of a single-family home is up, and the supply of single-family homes is down in Kansas City

They say the same thing in Denver, but your mileage may vary. Prices are rising in some nabes, like Westminster, Broomfield, Arvada or Highlands Ranch. But in places like Brighton … not so much.

Comment by Carl Morris
2013-09-25 08:25:40

One of those groups looks commutable to where the jobs are.

Comment by Whac-A-Bubble™
2013-09-25 08:47:42

“KC is not Salina.”

That doesn’t mean prices aren’t also rising in Salina; it is just too far off the map for their housing market situation to resonate in the MSM.

Absence of evidence is not evidence of absence.

Comment by AmazingRuss
2013-09-25 17:01:11

They’re allegedly soaring in Seattle, but a look at the zillow map shows a flood of listings, a good 25% of them foreclosures.

Bidding wars indeed. They must be damn slow bidding wars.

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Comment by Whac-A-Bubble™
2013-09-25 07:24:35

“this has been a recovery for asset prices.”

Conversely it has been a write down of the numeraire (i.e. the dollar).

Comment by azdude02
2013-09-25 07:34:20

yep thats why the poor are hurting so much. everything they buy to just scrape buy has gone up in price.

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Comment by Whac-A-Bubble™
2013-09-25 08:48:59

They also generally receive payment for their labor market services in dollars, if they are lucky enough to have jobs.

Comment by In Colorado
2013-09-25 06:47:43

but down here the minimum wage is the highest wage

I thought the streets in Texas were paved with gold.

Comment by goon squad
2013-09-25 06:52:33

I love that quote too.

He may be a broke ass looser, but at least there aren’t any goons around!

Comment by In Colorado
2013-09-25 08:13:32

But no doubt there are “alot” of households who have SNAP cards and vote GOP.

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Comment by goon squad
2013-09-25 08:22:52

median household income $28,333

23.5% of the population under the poverty line,_Texas

Comment by sleepless_near_seattle
2013-09-25 11:34:33

But no doubt there are “alot” of households who have SNAP cards and vote GOP.

You should have seen the automation firm I visited yesterday. By what I saw in the parking lot I can guarantee they didn’t vote for hope nor for change but, given the projects/end customer we discussed, government teat suckage is what keeps the doors open. I doubt they even note the connection.

I’ll be sucking that teat too…if I get the order. :-)

Comment by HBB_Rocks
2013-09-25 07:55:00

I thought the streets in Texas were paved with gold.
Yeah, Rome, Hong Kong, Daingerfield are all towns you’d say in the same breath.

That town gets no respect.

Comment by Blue Skye
2013-09-25 06:51:45

People generally do not know what the government means by a “recession”. It is when the officially published happiness indexes dive like a rock. Once the government stabilizes these indexes, decoupled from reality or not, the recession is over. Conditions do not have to improve (recover) for it to be an official recovery.

Comment by MightyMike
2013-09-25 09:35:25

You’re right, a lot of people don’t know what a recession is. The guy should have just said, “The recession may be over, but the economy still sucks around here.”

Comment by Blue Skye
2013-09-25 10:22:46

Yes, we remain recessed.

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Comment by MightyMike
2013-09-25 16:17:52

That’s not useful either. There’s no need to coin new terms.

Comment by 2banana
2013-09-25 06:48:29

It is always funny to watch liberals reference the Bible and Jesus for bigger and bigger government and more and more government programs. Pelosi did the same things a few days ago. They really think they are doing God’s work.

“Thou shall go out and form huge government bureaucracies. And they will take money from some and give to others at the point of a sword and as a government worker sees fit. This is the word of the Lord…”


Rep. Charles Rangel: Republicans risk eternal damnation with welfare cuts | September 24, 2013 | Jessica Chasmar

Rep. Charles B. Rangel, appearing on MSNBC’s “The Ed Show” on Monday night, suggested that Republicans who oppose federal welfare may face eternal damnation.

Host Ed Schultz said that according to his faith leader, there is no biblical scripture that backs up Republican votes against Social Security and food stamps.

“Anyone that’s familiar with the Bible, anything like that, Jesus said that you’re going straight to hell if you don’t treat the lesser of his brothers and sisters,” Mr. Rangel, New York Democrat, said.

Speaking of the downtrodden, Mr. Rangel continued: “He said he was hungry, you didn’t give him food stamps. He was thirsty, you didn’t purify the water. He was naked, you didn’t give him Social Security. And God knows he was sick and you gave him no comfort.”

Comment by Blue Skye
2013-09-25 06:57:45

Mental disability is never funny, and it does not have a political party to itself.

Comment by rms
2013-09-25 07:30:30

“Mental disability is never funny, and it does not have a political party to itself.”

Are you saying Rep. Charles Rangel is mentally disabled? :)

Comment by Blue Skye
2013-09-25 08:41:23

I’m thinking he is saying that himself, judging by the quotes.

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Comment by goon squad
2013-09-25 06:59:24

“A Tennessee congressman who supports billions of dollars in cuts to the food stamp program is one of the largest recipients of federal farm subsidies … Representative Stephen Fincher, a Republican and a farmer from Frog Jump, Tenn., collected nearly $3.5 million in subsidies from 1999 to 2012.

During debate on the farm bill in the House Agriculture Committee last week, Mr. Fincher was one of the biggest proponents of $20 billion in cuts to food stamps in the legislation. At times he quoted passages from the Bible in defending the cuts.”

Comment by goon squad
2013-09-25 07:23:02

more about rep. stephen fincher

‘tea party favorites such as stephen fincher of tennessee were swept into congress on a wave of anger over government-funded bailouts of banks.

now those incumbents are collecting thousands of dollars for re-election campaigns from the same wall street firms whose excesses they criticized. they have taken no significant steps to curb them or prevent future taxpayer-financed rescues.

fincher, a gospel musician from frog jump, tennessee, has received $11,500 from the political action committees run by bank of america, goldman sachs, jpmorgan chase and wells fargo.’

Comment by Strawberrypicker
2013-09-25 08:05:13

I think pretty much all the right sided partisans on this site agree that these should be cut.

Comment by oxide
2013-09-25 12:48:32

At times he quoted passages from the Bible in defending the cuts.

ThinkProgress (warning, liberal website) commented on Fincher’s use of the Bible:
“As House members discussed slashing the budget for the Farm Bill, which funds SNAP, Rep. Stephen Fincher (R-TN) took issue with some Democrats who cited Jesus Christ’s call to care for “the least of these” when describing the government’s need to assist the hungry. Instead, Fincher explained his support for the proposed cuts by quoting a very different Bible verse – 2 Thessalonians 3:10: “For even when we were with you, we gave you this command: Anyone unwilling to work should not eat.”

But while 2 Thessalonians is a convenient tool for those who want to justify ignoring the poor, Fincher’s lukewarm Biblical argument doesn’t hold up under scrutiny. As many religious bloggers have already pointed out, the author of 2 Thessalonians was actually referring to ancient Christians who had stopped working in anticipation of Jesus’ Second Coming. The verse is concerned with correcting a theological misunderstanding (i.e., don’t just wait around for Jesus, live an active faith), not passing judgement on the poor.”

Comment by the golden boy
2013-09-25 07:17:56

He was naked, you didn’t give him Social Security.

Social security - clothes?

Comment by the golden boy
2013-09-25 07:19:14

He was naked, you didn’t give him Social Security.

What? Is that some kinky stuff?

Comment by AmazingRuss
2013-09-25 17:02:36

Bible Jesus was the libbiest of the libs. The new improved Supply Side Jesus is an invention of the megachurches.

Comment by Whac-A-Bubble™
2013-09-25 06:54:08

The Fed handed the Wall Street bulls a gift last week with the taper postponement, and stocks have dropped steadily ever since.

What gives?

Comment by 2banana
2013-09-25 06:57:37

That gift was already baked in.

Wall Street is part of the free sh*t army.

The need more and more free sh*t or they won’t behave…

Comment by azdude02
2013-09-25 07:32:34

wall street will know the party will end way before anyone else. thats why they make so much money. make it on the way up, and then on the way down.

Comment by Whac-A-Bubble™
2013-09-25 07:01:57

Could the problem be that not only prices recently hit records, but also corporate profits and dividends? By their nature, records are ephemeral.

Jack Bogle says investors should ignore ‘nonsense’ of record market highs
September 24, 2013, 4:56 PM

Jack Bogle, founder of The Vanguard Group and president of Vanguard’s Bogle Center for Financial Markets Research, said that investors should ignore the idea of the stock market being at “record highs,” and not let such “nonsense” affect their long-term decision making.

Appearing on MoneyLife with Chuck Jaffe, MarketWatch senior columnist, Bogle noted that the market’s moves over the last few years haven’t changed his expectations, and said they should not change anyone else’s for the long haul.

In a series of 2010 interviews with Morningstar Inc., Bogle suggested that investors expect a total return of 7% to 7.5% on stocks, and roughly 4.5% on bonds; while the market has risen much faster than that since then, Bogle said his long-term forecast is unchanged.

“I think stocks are in a general range of reasonable value, and by ‘reasonable value’ we’re talking about price/earnings values,” Bogle said. “They are much higher than what Wall Street gives you — they have their own way of working the numbers … they will tell you it’s 15 times [earnings], but I will tell you 20 times — but I don’t see that a dramatic change will have too much effect on that 7% long term return, either increasing it or reducing it.

“I don’t know exactly what to say about a record high,” he added. “Yes, it’s at a record high, there’s no question about that. But dividends are at a record high …. and corporate earnings are at a record high, so it’s the inter-relationship between the fundamental value and that ephemeral market price that is the important thing to think about. So record highs, I don’t think about that.”

Comment by Steve W
2013-09-25 07:57:08

Nah, it’s down because of the potential govt shutdown, debt default. Long term is a different story.

Comment by Rental Watch
2013-09-25 08:19:50

I like Bogle.

He’s an investor, not a trader. Too often people mistake the two as being the same.

Comment by Combotechie
2013-09-25 08:37:19

Interesting concept:

Stock prices are at a record high so this is a good reason for me to go out and buy stocks?

If this is true then I suppose the opposite should also be true: If stock prices were at a record low then I should sell any stocks that I may happen to own?


Comment by mathguy
2013-09-25 14:54:47

Record high *prices* literally means nothing, due to inflation. A stock with a “normal” 15 p/e ratio will experience consistent growth in earnings and consistent growth in share price due simply to inflation should all other factors like sales volume remain the same. The 15 p/e will remain constant, and even though prices will be setting record highs basically every day, the value will remain relatively stable. When the P/E swings up, and the earnings have followed inflation, yes, then record prices will still be being set, but high P/Es will also be potentially breaking records. This is when you don’t want to buy.

Also, prices can be very low historically, but if earnings are miniscule, or negative, the P/E can still be very high (or infinite/negative). You can’t look at price alone as a
gauge of the health of a company stock. Fluff pieces like this are basically that, fluff.

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Comment by Strawberrypicker
2013-09-25 08:07:47

I and many others said at the time. No taper. Just more bailing out and propping up. Every action done with the goal of saving housing. It is their big psychology card and they will keep playing it until it stops working.

Comment by Whac-A-Bubble™
2013-09-25 08:54:07

At 10am this morning, Wall Street share prices on all headline indexes summarily began steadily climbing from losses to gains.

Did somebody ring a bell to alert everyone the post FOMC meeting weakness is over?

Comment by cactus
2013-09-25 09:18:13

Short sellers are selling ( shorting ) high dividend paying stocks

why ?

Comment by Combotechie
2013-09-25 09:53:34

An observation:

Stop losses are maybe good to use if you re a trader but not such a good idea to use if you are an investor. But nevertheless many investors use them.

And when they use them - when they place their stops - they all place them at the same place on the chart - which is just below some recent price low.

Shorts know this and they also know that if they can force down prices by their selling to a point the triggers the stops then they can use this triggering of stop-loss sell orders to cover their short positions. They sell high and buy low at the expense of those who buy high and sell low.

INVESTORS (not traders) who buy high and sell low may not plan on doing this when they initiate their positions but this may be what they end up doing when they place their stops. And this is crazy, this using stops, if one is an investor (not a trader) because as an investor he should be looking to BUY stocks on price dips, not SELL them.

If Price is seperate from Value (the mentality of an investor, not a trader) then the investor who is looking to buy value at a good price should welcome lower prices and buy when prices drop, not sell when prices drop.

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Comment by Rental Watch
2013-09-25 21:06:07

They expect yields to rise (the prices to go down) without a commensurate rise in dividends.

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Comment by Whac-A-Bubble™
2013-09-25 07:12:20

Did the Wall Street Megabanks safely escape the Fall 2008 financial meltdown without legal repercussions?

Comment by Whac-A-Bubble™
2013-09-25 07:22:30

There are plenty more articles where this one came from (for a sampling, check out the tail end of yesterday’s bits bucket).

Luckily for top managers, the shareholders are taking the hit for fines.

Investment Banking September 23, 2013, 10:00 pm
JPMorgan’s Legal Hurdles Expected to Multiply

A Washington Mutual branch in 2008 in New York. JPMorgan Chase bought Washington Mutual during the financial crisis, inheriting its mortgage problems.Josh Haner/The New York Times A Washington Mutual branch in 2008 in New York. JPMorgan Chase bought Washington Mutual during the financial crisis, inheriting its mortgage problems.

JPMorgan Chase paid $1 billion to resolve an array of government investigations last week. But its biggest battles with federal authorities may still lie ahead.

The nation’s largest bank is bracing for a lawsuit from federal prosecutors in California who suspect that the bank sold shoddy mortgage securities to investors in the run-up to the financial crisis, according to people briefed on the matter.

The case, expected as soon as Tuesday, could foreshadow other actions stemming from the bank’s crisis-era mortgage business. Federal prosecutors in Philadelphia, the people briefed on the matter said, are also investigating JPMorgan’s sale of mortgage securities.

Underscoring the breadth of the scrutiny, the people said, the Justice Department and the Department of Housing and Urban Development have discussed the possibility of striking a wide-ranging settlement to conclude many of the looming mortgage investigations from federal authorities and state attorneys general. A proposed settlement figure of about $20 billion was discussed at the bank, according to people briefed on the matter, but it is not clear who proposed that number.

The looming legal threats are not isolated to the bank’s mortgage business. After JPMorgan recently resisted a settlement with the nation’s commodities trading regulator, the people briefed on the matter said, the agency began drafting a lawsuit connected to the bank’s multibillion-dollar “London whale” trading loss last year. The agency, which argued that the London trading position was so large that it manipulated the market for financial contracts known as derivatives, sought an approximately $100 million fine and an acknowledgment of wrongdoing from the bank.

Comment by Whac-A-Bubble™
2013-09-25 17:30:23

JPMorgan in talks to settle mortgage probes for $11 billion
By James O’Toole @jtotoole September 25, 2013: 6:54 PM ET
JPMorgan has faced a cascade of legal problems in the last few months.

JPMorgan is in talks to settle a number of government investigations related to mortgage-backed securities for a whopping $11 billion, according to a source familiar with the situation.

The proposed deal would include $7 billion in penalties and $4 billion in consumer relief of some kind, according to the source, who was not authorized to speak publicly on the matter. Those numbers aren’t final, however, and it’s unclear if or when the two sides may come to an agreement.

Comment by the golden boy
2013-09-25 07:33:50

Yes they are absolved of all crimes past, present and future.

There are 2 bigger abusers of laws and constitution than the big banks; the gobmint and the fed. Don’t expect the corporations and the powerful people to follow the law in a society entrenched in “legal terrorism.”

Comment by jose canusi
2013-09-25 08:03:12

This is all unsustainable, although I have to say that we got this far is amazing.

When the end comes, it comes “suddenly”, even when it was on the way for a long time.

I wonder what will step in to the vacuum when the collapse comes. Military coup? NSA backed strongman? Or just a sort of breakup and dispersal like the Roman Empire?

I don’t want to see it, but I have a feeling we’re almost there.

Comment by RioAmericanInBrasil
2013-09-25 08:07:45

“This is all unsustainable, although I have to say that we got this far is amazing.”

There have been people saying that every decade the past 50 years.

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Comment by sleepless_near_seattle
2013-09-25 12:11:35

Which is why I think we could be “almost there” for another 100 years. Maybe more. Didn’t the Roman Empire last 500 some-odd years?

Comment by Strawberrypicker
2013-09-25 08:17:30

Is. It unsustainable ? I’d like to think so, but I constantly hear references on this blog to Japan and how they’ve propped it up there for decades. Their society doesn’t seem to have collapsed.

On the other hand 8000 people are turning 65 every day. That’s 3 million a year. 15 million more in 5 years.

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Comment by Combotechie
2013-09-25 09:07:51

“On the other hand 8000 people are turning 65 every day. That’s 3 million a year. 15 million more in 5 years.”

And most of these people are going to retire and some of them will retire well before they turn 65 and then - after they retire - many (the ones who are very bad at math - which are most of them) will discover the hard way that they just cannot make it on retirement income so they will be forced to come back into the workforce. And when they come back to work they will be taking jobs that pay a mere fraction of what the jobs they retired from paid but they will work at these jobs anyway because they will have no other choice.

I have seen this many times.

Life’s a bitch and then you die. Life shouldn’t have to be this way but this is how many people choose to live it.

Comment by MightyMike
2013-09-25 09:52:12

That phenomenon may change a bit. A lot of people in their early 60s must have friends and family members in their late 60s and early 70s. Many of them will probably observe what you have described and just decide to stay at their original jobs a few more years.

Comment by Happy2bHeard
2013-09-25 16:28:49

This boomer intends to keep working until forced to retire for precisely the reasons stated above. We are in a period of financial uncertainty now and I expect it to continue to be uncertain for most of the rest of my life.

I have never trusted that Social Security would be there for me and I still don’t. Medicare may be bankrupt just when I need it the most.

Comment by goon squad
2013-09-25 08:27:39

‘i wonder what will step into the vacuum when the collapse comes’

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Comment by Carl Morris
2013-09-25 08:40:30

I learned something about myself during the floods last week. I always thought in a crisis my instinct would be to get out there and help and take charge of fixing things as needed. What I found was that I actually wanted to curl up in a corner and surf the internet and pretend it wasn’t happening. I compromised and forced myself to contact some people to make sure they were OK and volunteer for a couple of things that didn’t end up doing much. But I was surprised at how strong that instinct to lie back and think of England was.

Comment by jose canusi
2013-09-25 09:47:16

Interesting piece of literature, thanks for posting. Of course, he calls it “Alas, Brave New Babylon” and as I was reading it, I was struck how in some ways it reminded me of the book from the 1950s, “Alas, Babylon”, by Pat Frank. I re-read it about once every two years and it still holds up today, in many ways. I imagine Bracken got his inspiration from that book, and his Babylon is many times bleaker than Frank’s.

Comment by MightyMike
2013-09-25 09:55:02

Are these Western Rifle people going to be disappointed if the collapse never happens?

Comment by Dale
2013-09-25 10:02:51

“….. lie back and think of England.”

LOL - I have not heard that saying in a long time. For the yunguns, this is what mothers in England told their daughters who were war brides and moved to Canada/US to that farm which did not turn out to be like the pastoral calendar pictures.

I wonder if they have a similar saying at the “ranches” in Las Vegas?

Comment by Carl Morris
2013-09-25 10:40:10

Just got bored and read the article. All the disaster porn reads the same…seems like conservative/survivalist fantasy to me. If it were ever to get that bad the odds of the author surviving in the manner written about are extremely low. Much more likely for a strong man to kill off his rivals and take over and “save civilization” like a more bloodthirsty Hank Paulson. Then you can work for him or die…or perhaps survive on crumbs at the fringes. But in the fantasy there are no crumbs, you’re dead.

Comment by goon squad
2013-09-25 10:52:40

“these Western Rifle people”

It was HBB poster spook who first posted a link to one of Bracken’s short fiction pieces. I don’t agree with every thing on the westernrifleshooters site, but am an avid fan of dystopian, societal-collapse lit.

Comment by spook
2013-09-25 13:48:37

Ive had the opportunity to visit Detroit several times and meet people of all ages who live there.

The “dystopian, societal-collapse” scenario is already playing out there.

Here are 2 docs which are accurate based on my experiences as a visitor in the last several years:

BTW — What do you call a criminal without a gun?

An arsonist.

Comment by Carl Morris
2013-09-25 13:55:01

Back in my Libertarian days maybe I’d have liked it a little more. But now I can see how much more powerful groups are than individuals. Seems like odds are high of groups forming for security and production in those circumstances rather than everyone getting wiped out and eating each other.

Comment by MightyMike
2013-09-25 15:35:00

You remind me of a movie that I saw many years ago called A Boy and His Dog. From what I remember of it, it was pretty amusing. That was decades ago when dystopian stories usually took place in the aftermath of nuclear war. Since the collapse of the Soviet Union, fear of nuclear war has declined dramatically. I imagine that interest in these sort of stories is also much less than it used to be among the general population.

Comment by MightyMike
2013-09-25 15:41:38

Would it be safe to assume to that there was a big increase in these stories when Obama was relected?

Comment by MightyMike
2013-09-25 15:45:15

oops - meant to write elected, not relected

Comment by goon squad
2013-09-25 18:01:17

Comment by spook
2013-09-25 13:48:37

“The “dystopian, societal-collapse” scenario is already playing out there”

I saw it living in Cincinnati 2004-2006 and living in Cleveland 2006-2009.

We didn’t need a Hurricane Katrina to destroy the city. NAFTA did it.

Comment by Resistor
2013-09-25 18:15:31

“avid fan of dystopian, societal-collapse lit”

If you enjoy listening to music, I recommend the band Grandaddy. They are the soundtrack of the pre-apocalypse.

A sample of their songs:

Comment by Whac-A-Bubble™
2013-09-25 07:13:54

Sept. 25, 2013, 10:00 a.m. EDT
New U.S. home sales rise to 421,000 rate in August

By Ruth Mantell

WASHINGTON (MarketWatch) — Sales of new U.S. homes rose 7.9% to a seasonally adjusted annual rate of 421,000 in August, rebounding after a large drop in July, as three of four regions posted gains, according to government data released Wednesday. That 7.9% growth was the fastest sales pace since January. Economists polled by MarketWatch had expected sales to climb higher in August to a rate of 420,000, compared with an original July estimate that pegged the rate at 394,000. On Wednesday the U.S. Department of Commerce revised July’s rate to 390,000. Pent-up demand and relatively low interest rates are supporting sales, though there’s concern that rising mortgage rates are cutting into the housing market’s recovery. Looking longer-term, new-home sales in August were up 12.6% from the year-earlier period. The median price of new homes was $254,600 last month, up 0.6% from the year-earlier period. The supply of new homes on the U.S. market fell to five months at the current sales pace from 5.2 months in July.

Comment by Housing Analyst
2013-09-25 07:22:05

And we’re going to keep adding excess inventory until prices until resale prices are driven into the dirt.

Comment by Housing Analyst
2013-09-25 07:27:21

“I’d rather spend a year in a cell with Jerry Sanduski than a pay a grossly inflated price for a house in California from a scumbag realtor.” ~Underwater California Homeowner

Comment by the golden boy
2013-09-25 07:39:45

Is a house is a new iphone?

Comment by azdude02
2013-09-25 08:08:51

a house makes you money, can and iphone do that? an iphone is a depreciating gadget.

Comment by Housing Analyst
2013-09-25 08:11:19

Got cash? ;)

Comment by Combotechie
2013-09-25 08:43:37

For years many people were predicting that our society was heading toward the direction of become a cashless society, and I’ll be damned if their predictions weren’t right on.

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Comment by Housing Analyst
2013-09-25 16:59:53

Got cash?

Comment by 2banana
2013-09-25 10:38:08

Sounds like a plan.

Where have I this heard this faulty logic before…?


The Obamacare Premium: The One Group of Americans That Can Expect to Pay More
Nicole Goodkind - - 9/25/2013

These 2.7 million young, healthy Americans between the ages of 18 and 34 are being dubbed the young invincibles and are necessary to the ongoing success of Obamacare. If the healthy don’t subsidize the ailing, premiums become too high and the whole system falls apart.

Some of these young invincibles, however, aren’t too happy about bankrolling the older generation. Some don’t think they need health care at all and resent that it will be mandatory.

Comment by Resistor
2013-09-25 16:27:55

Here’s a sign: my realtor/teacher friend, who took a leave of absence for 2013-14, has already reached out to the school he worked at to return early.

Comment by azdude02
2013-09-25 16:35:50

maybe he isnt capable of selling?

Comment by Housing Analyst
2013-09-25 16:46:58

Makes sense considering housing demand is at 1997 levels…. and falling.

Comment by Resistor
2013-09-25 17:58:18

It does makes sense Analyst. I appreciate your analysis.

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Comment by Resistor
2013-09-25 17:54:49

By my calculations from his site (@3%), he cleared about $120k since going on leave (a little over a year).

Nice try though.

Comment by sleepless_near_seattle
2013-09-25 18:36:36

It’s more like 1.5% for the agents. They have to split commissions with the brokerage.

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Comment by Whac-A-Bubble™
2013-09-25 17:42:43

8 ways a government shutdown will make D.C. residents’ lives worse
By Lydia DePillis, Published: September 25 at 9:00 am

Government shutdowns are bad for lots of reasons. Visas don’t get processed. Federal workers don’t get paid. Though nowhere near the pain of potentially defaulting on the national debt, shutting down the government could even cost more money than it saves when all’s said and done.

If you live or work in the District of Columbia, however, the downside is much more pronounced (unless, as Matt Yglesias points out, you’re a bar owner or a rodent). Since the non-state is the only jurisdiction prohibited from spending its local funds in the event of Congress not coming to an agreement, the city government becomes a lot less functional. Here’s what you should expect to wake up to on October 1, if there’s no deal.

Comment by Prime_Is_Contained
2013-09-25 18:00:32

PB, care to be more specific regarding positions to accomplish this:

Comment by Whac-A-Bubble™
2013-09-21 22:19:37

1) Buy stuff that goes up with real estate.

2) Buy other stuff that goes up when real estate drops.

Comment by Whac-A-Bubble™
2013-09-25 22:06:38

1) REITs

2) Inverse Bond ETFs

Comment by phony scandals
2013-09-25 18:16:57

Cyprus-Style Wealth Confiscation Is Now Starting To Happen All Over The Globe

Michael Snyder
Economic Collapse
September 25, 2013

Now that “bail-ins” have become accepted practice all over the planet, no bank account and no pension fund will ever be 100% safe again. In fact, Cyprus-style wealth confiscation is already starting to happen all around the world. As you will read about below, private pension funds were just raided by the government in Poland, and a “bail-in” is being organized for one of the largest banks in Italy. Unfortunately, this is just the beginning. The precedent that was set in Cyprus is being used as a template for establishing bail-in procedures in New Zealand, Canada and all over Europe. It is only a matter of time before we see this exact same type of thing happen in the United States as well. From now on, anyone that keeps a large amount of money in any single bank account or retirement fund is being incredibly foolish.

Let’s take a look at a few of the examples of how Cyprus-style wealth confiscation is now moving forward all over the globe…


For years, there have been rumors that someday the U.S. government would raid private pension funds.

Well, in Poland it just happened.

According to Reuters, private pension funds were raided in order to reduce the size of the government debt…

Poland said on Wednesday it will transfer to the state many of the assets held by private pension funds, slashing public debt but putting in doubt the future of the multi-billion-euro funds, many of them foreign-owned.

The Polish government is doing the best that it can to make this sound like some sort of complicated legal maneuver, but the truth is that what they have done is stolen private assets without giving any compensation in return…

The Polish pension funds’ organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation.

Announcing the long-awaited overhaul of state-guaranteed pensions, Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings.

He said that what remained in citizens’ pension pots in the private funds will be gradually transferred into the state vehicle over the last 10 years before savers hit retirement age.


European finance ministers have agreed to a plan that would make “bail-ins” the standard procedure for rescuing “too big to fail” banks in the future. The following is how CNN described this plan…

European Union finance ministers approved a plan Thursday for dealing with future bank bailouts, forcing bondholders and shareholders to take the hit for bank rescues ahead of taxpayers.

The new framework requires bondholders, shareholders and large depositors with over 100,000 euros to be first to suffer losses when banks fail. Depositors with less than 100,000 euros will be protected. Taxpayer funds would be used only as a last resort.


As Zero Hedge reported on Tuesday, a “bail-in” is now being organized for the oldest bank in Italy…

Recall that three weeks ago we warned that “Monti Paschi Faces Bail-In As Capital Needs Point To Nationalization” although we left open the question of “who will get the haircut including senior bondholders and depositors…. given the small size of sub-debt in the capital structures.” Today, as many expected on the day following the German elections, the dominos are finally starting to wobble, and as we predicted, Monte Paschi, Italy’s oldest and according to many, most insolvent bank, quietly commenced a bondholder “bail in” after it said that it suspended interest payments on three hybrid notes following demands by European authorities that bondholders contribute to the restructuring of the bailed out Italian lender. Remember what Diesel-BOOM said about Cyprus - that it is a template? He wasn’t joking.

As Bloomberg reports, Monte Paschi “said in a statement that it won’t pay interest on about 481 million euros ($650 million) of outstanding hybrid notes issued through MPS Capital Trust II and Antonveneta Capital Trusts I and II.” Why these notes? Because hybrid bondholders have zero protections and zero recourse. “Under the terms of the undated notes, the Siena, Italy-based lender is allowed to suspend interest without defaulting and doesn’t have to make up the missed coupons when payments resume.” Then again hybrids, to quote the Dutchman, are just the template for the balance of the bank’s balance sheet.

New Zealand

The New Zealand government has been discussing implementing a “bail-in” system to deal with any future major bank failures. The following comes from a New Zealand news source…

The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will seesmall depositors lose some of their savings to fund big bank bailouts, the Green Party said today.

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

“Bill English is proposing a Cyprus-style solutionfor managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts,” said Green Party Co-leader Dr Russel Norman.

“The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.

“Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat.”



Incredibly, even Canada is moving toward adopting these “bank bail-ins”. In a previous article, I explained that “bail-ins” were even part of the new Canadian government budget…

Cyprus-style “bail-ins” are actually proposed in the new Canadian government budget. When I first heard about this I was quite skeptical, so I went and looked it up for myself. And guess what? It is right there in black and white on pages 144 and 145 of “Economic Action Plan 2013″ which the Harper government has already submitted to the House of Commons. This new budget actually proposes “to implement a ‘bail-in’ regime for systemically important banks” in Canada. “Economic Action Plan 2013″ was submitted on March 21st, which means that this “bail-in regime” was likely being planned long before the crisis in Cyprus ever erupted.

Comment by phony scandals
2013-09-25 18:32:41

Well, that’s life in the big Urb.

Comment by Happy2bHeard
2013-09-25 20:30:44

I saw this tidbit today.

Wal-Mart Stores Inc. (WMT) is cutting orders it places with suppliers this quarter and next to address rising inventory the company flagged in last month’s earnings report.

Comment by rms
2013-09-26 00:15:49

Walmart stores are fortunate to have Point Of Sale technology, so they can quickly respond to the slowdown in sales activity. Many businesses die for this exact reason, and their inventory is auctioned-off for pennies on the dollar.

Comment by Carl Morris
2013-09-26 08:14:34

However, the lack of pennies on the dollar auctions have removed on of the most common ways that a prudent average Joe could get his back in the day. You don’t see screaming deals on other people’s mistakes like you used to on anything. Including houses. But that could still change if the tsunami overwhelms the system.

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