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Tuesday, December 29, 2009

Hardtimes Roundup

Worst Decade Ever for U.S. Jobs:


Empty Chinese Skyscrapers



Abandoned Detroit Skyscrapers



CNN Money:
Can farming save Detroit? -- Yes, a farm. A large-scale, for-profit agricultural enterprise, wholly contained within the city limits of Detroit...

This is possibly not as crazy as it sounds. Granted, the notion of devoting valuable city land to agriculture would be unfathomable in New York, London, or Tokyo. But Detroit is a special case...

The massive Renaissance Center office and retail complex, built in the 1970s, mostly served to suck tenants out of other downtown buildings. (Today 48 of those buildings stand empty.)...

Virginia Pilot:
FBI deluged by fraud cases from real estate bubble -- The criminal cases against Brian W. King and Ronnie E. Brodie are typical of what the FBI is seeing as a result of the rise and fall of the real estate market.

King, 42, of Virginia Beach, pleaded guilty this month to falsifying mortgage applications, obtaining more than $700,000 in loans he never should have qualified for by inflating his income.

Brodie, in an unrelated case, will be arraigned Wednesday on similar charges of lying on her mortgage papers. Like King, the 36-year-old from Virginia Beach is accused of inflating her income.

Cases such as King's and Brodie's have become commonplace in U.S. District Court in Norfolk, as the FBI and other federal agencies begin seeing the fruits of mortgage fraud investigations that started three years ago just as the real estate market began deteriorating...

James Howard Kunstler / CF Nation:
Forecast 2010 -- The Long Emergency is officially underway. Reality is telling us very clearly to prepare for a new way of life in the USA. We're in desperate need of decomplexifying, re-localizing, downscaling, and re-humanizing American life. It doesn't mean that we will be a lesser people or that we will not recognize our own culture. In some respects, I think it means we must return to some traditional American life-ways that we abandoned for the cheap oil life of convenience, comfort, obesity, and social atomization...

Kevin Depew / Minyanville:
Five Themes for 2009: The Final Reckoning --

Sunday, December 27, 2009

China Launches World's Fastest Train


China Daily:
'Fastest in the world' -- The Wuhan-Guangzhou high-speed railway, arguably the world's fastest train journey at a speed of 350 km/h (217 mph), started operation on Saturday...

China will build 42 high-speed passenger rail lines with a total length of 13,000 km in the next three years, covering more than 90 percent of the population.

By 2012, trips from Beijing to most provincial capitals would only take between one and eight hours, said Wang Yongping, the Railway Ministry spokesman.

High-speed rail services from Beijing to Hong Kong are expected to open in three years, cutting the journey from 23 hours to eight. The one-way trip from Shanghai to Hong Kong will be shortened to six hours from the current 18, he said.

High-speed trains not only shorten the distance between cities but also change the speed of China's economic growth, said Wang Xiaoguang, a professor with the Chinese Academy of Governance.

China, a vast country that is often worried about the wide income gap between its highly developed coastal areas and the lagging interior, is looking to the railways to help spread the wealth, he said...

A kid enjoys the ride on the new high-speed Wuhan-Guangzhou rial line on Saturday.

Wikipedia:
Wuhan–Guangzhou High-Speed Railway -- a 968-kilometre (601 mi) high-speed rail line, operated by China Railway High-speed (CRH), connecting Wuhan (Hubei) and Guangzhou (Guangdong), in the People's Republic of China. It is the world's fastest nuclear powered train service...

The first commercial trains left Wuhan and Guangzhou North at 9:00 am on December 26, 2009, and reached their destinations in three hours, compared with ten and a half hours for the previous service...

...during test runs, a train achieved a top speed of 394.2 kilometres per hour (244.9 mph)...

Saturday, December 19, 2009

Morgan Stanley's Financial Advice to Underwater US Homeowners: Consider Just Walking Away

It looks like many U.S. homeowners will follow the lead of Morgan Stanley and walk away from their mortgages (called a strategic default) if they are too far under water. Morgan Stanley will walk away from 5 San Francisco office buildings in bought for $6.5 billion in 2007. The properties may have lost half of their value. What's good for the bank is good for the borrower.

Bloomberg:
Morgan Stanley to Surrender 5 San Francisco Towers -- Morgan Stanley, the securities firm that spent more than $8 billion on commercial property in 2007, plans to relinquish five San Francisco office buildings to its lender two years after purchasing them from Blackstone Group LP near the top of the market.

The bank has been negotiating an “orderly transfer” of the towers since earlier this year, Alyson Barnes, a Morgan Stanley spokeswoman, said yesterday in a telephone interview. AREA Property Partners will take over the buildings, which have been held by the bank’s MSREF V fund. Barnes declined to say when the transfer will occur...

discussion:
Zero Hedge:
Morgan Stanley Abandons 5 San Francisco Office Towers -- What do the five buildings below have in common:

One Post, 201 California St., Foundry Square I, 60 Spear St., 188 Embarcadero, commercial buildings in San Francisco that Morgan Stanley walked away from.If you answered these are the 5 San Francisco office towers which, top tick mogul Morgan Stanley bought at the very peak of the housing market from Blackstone, and just abandoned earlier today, you win 10 shares of Federal Reserve Capital LLC, (the 33 Liberty Strategic Onshore Value Loss Fund)...

Calculated Risk:
Does Morgan Stanley "Walking Away" from CRE Contribute to Strategic Defaults? -- ... Note that Morgan Stanley is current on the loan and is not in foreclosure. They are simply "walking away" because the buildings are worth less than the amount owed...

One of the greatest fears for lenders (and investors in mortgage backed securities) is that it will become socially acceptable for upside down middle class Americans to walk away from their homes.... I wonder if hearing about "rich" banks that are paying "large" bonuses walking away from commercial buildings also weakens the social pressure? ...

Huffington Post:
If Morgan Stanley Walks Away, Why Shouldn't You? Firm Walks Away From 5 Properties -- To the extent that Morgan Stanley is leading by example, the securities colossus is sending an unlikely message to underwater homeowners: Walk away...

The Big Picture:
Morgan Stanley’s Commercial Jingle Mail -- Good luck making moral arguments against homeowners doing just that in the future . . .

Seeking Alpha:
The Golden Rule of Defaults: Banks vs. Consumers -- Morgan Stanley is walking away from five office buildings it bought two years ago at the height of the market for $6.5 billion (that's "B"... not "M"), which have since lost as much as 50% in value. The reason, says a corporate spokeswoman, "This isn’t a default or foreclosure situation... we are going to give (the lender) the properties to get out of the loan obligation.” ...

The Agonist:
Morgan Stanley Defaults-- This is just a beautiful example of how the morality that applies to the corporate world is so different than the morality expected of you as a homeowner....
----
See data on strategic defaults -- homeowners who choose to default on their mortgage even though they could still afford to pay it.Wall Street Journal:
Debtor's Dilemma: Pay the Mortgage or Walk Away -- In Down Real-Estate Market, Homeowners Are Deciding to Abandon Their Loan Obligations Even if They Can Afford the Payments

Should I stay or should I go? That is the question more Americans are asking as the housing market continues to drag.

In good times, it would have been unthinkable to stop paying the mortgage. But for Derek Figg, a 30-year-old software engineer, it now seems like the best option.

Mr. Figg felt trapped in a home he bought two years ago in the Phoenix suburb of Tempe for $340,000. He still owes about $318,000 but figures the home's value has dropped to $230,000 or less...

Another risk for defaulters is that banks could sell the rights to pursue claims to collection agencies or other firms, which could then dun the borrowers for up to 20 years after a foreclosure. Such threats appear to deter some borrowers. A recent study from the Federal Reserve Bank of Richmond found that under-water borrowers were 20% more likely to default in a state where mortgage lenders can't pursue claims on other assets than in those where they can....

Friday, December 18, 2009

Tuesday, December 15, 2009

A Well Researched Housing Bubble

Kevin Depew / Minyanville:
Real Estate Bubble Explained in 30 Seconds -- Do we really need another explanation of the real estate bubble? You bet we do! Especially when the explanation comes to us from a 30-second circa 2005 national advertising spot...

Wednesday, December 9, 2009

U.S. Dollar is living in an Alternative Financial Reality

The greenback is a glorious old brand that's looking more and more like General Motors.The Coinage Act of 1792 affirmed the dollar as the U.S. currency unit and specified that each was to equal the value of the Spanish milled dollar and was to contain 371 4/16 grains of pure, or 416 grains of standard, silver. The problem today is that the greenback is a glorious old brand that's looking more and more like General Motors.

James Grant / Wall Street Journal:
Requiem for the Dollar -- Ben S. Bernanke doesn't know how lucky he is. Tongue-lashings from Bernie Sanders, the populist senator from Vermont, are one thing. The hangman's noose is another. Section 19 of this country's founding monetary legislation, the Coinage Act of 1792, prescribed the death penalty for any official who fraudulently debased the people's money. Was the massive printing of dollar bills to lift Wall Street (and the rest of us, too) off the rocks last year a kind of fraud? If the U.S. Senate so determines, it may send Mr. Bernanke back home to Princeton. But not even Ron Paul, the Texas Republican sponsor of a bill to subject the Fed to periodic congressional audits, is calling for the Federal Reserve chairman's head.

I wonder, though, just how far we have really come in the past 200-odd years. To give modernity its due, the dollar has cut a swath in the world. There's no greater success story in the long history of money than the common greenback. Of no intrinsic value, collateralized by nothing, it passes from hand to trusting hand the world over. More than half of the $923 billion's worth of currency in circulation is in the possession of foreigners...

The greenback is a glorious old brand that's looking more and more like General Motors...

There's one more thing: Return to the statute books Section 19 of the 1792 Coinage Act, but substitute life behind bars for the death penalty. It's the 21st century, you know.

22% Unemployment Reality

US Unemployment rate: 3 measuresThe SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.
----
related:
The Onion:
Labor Dept: Available Labor Rate Increases To 10.2% -- In what is being touted by the Labor Department as extremely positive news, the nation's available labor rate has reached double digits for the first time in 26 years, bringing the total number of potentially employable Americans to an impressive 15.7 million.

"This is such an exciting time to be an employer in America," said Labor Secretary Hilda Solis, adding that every single day 6,500 more citizens join America's growing possible workforce. "There's such a massive and diverse pool of job-ready Americans to choose from. And each month the number only gets higher." ...

Though Labor sources said the new figures were encouraging, officials were quick to point out that the exact number of those now possessing the capacity to be offered work someday is actually much higher.

"Our findings don't take into account all the men and women who are available for work but haven't applied for a job in the last month," Solis said. "That's another 2.4 million Americans out there who can proudly say they wake up every day, get their kids ready for school, and then sit in their living rooms praying for the phone to ring." ...

Tuesday, December 8, 2009

Food Stamps Feed 1 in 8 Americans

A GROWING NEED FOR A PROGRAM ONCE SCORNED
NY Times:
Food Stamp Use Soars, and Stigma Fades -- With food stamp use at record highs and climbing every month, a program once scorned as a failed welfare scheme now helps feed one in eight Americans and one in four children.

It has grown so rapidly in places so diverse that it is becoming nearly as ordinary as the groceries it buys. More than 36 million people use inconspicuous plastic cards for staples like milk, bread and cheese, swiping them at counters in blighted cities and in suburbs pocked with foreclosure signs.

Virtually all have incomes near or below the federal poverty line, but their eclectic ranks testify to the range of people struggling with basic needs. They include single mothers and married couples, the newly jobless and the chronically poor, longtime recipients of welfare checks and workers whose reduced hours or slender wages leave pantries bare...

Thursday, December 3, 2009

Goldmanites Infest Obama White House


TheHuffingtonPost:
Matt Taibbi's 'Obama's Big Sellout': How The White House Is Caving To Wall Street --
"[Bob] Rubin probably more than any other person was responsible for the financial crisis by deregulating the economy [while] in the White House. And he had a major role in helping destroy one of the world's biggest company in Citigroup. He has one of the worst tack records you can find, but he was basically the guy who was the architect of the entire Obama policy. Obama put him in charge of everything. "
Zero Hedge:
Matt Taibbi Exposes Obama's Wall Street's Inner Circle, Pays Particular Homage To Robert Rubin -- Matt Taibbi gives an in-depth presentation unmasking the Wall Street crony advisors that whisper in the President's ear daily, the political push-pull that ended up gifting Tim Geithner his current job, as well as an analysis of the brains behind it all- former Goldmanite, Robert Rubin...
----
On Bob Rubin's Watch:
----
Crooks And Liars:
Matt Taibbi: Obama's Big Sellout to Wall Street (MSNBC, Morning Meeting, with Dylan Ratigan video) -- Rolling Stone's Matt Taibbi and the Financial Times' Chrystia Freeland discuss Matt's recent article at Rolling Stone and the divide between the recoveries on Wall Street and Main Street. Their analysis about what's wrong with the economic team Obama has surrounded himself with is spot on and until he starts listening to some different voices on how to fix our economy, Matt Taibbi is correct, the cycles of bailouts are going to continue to repeat themselves.
----
related:
Bethany McLean / Vanity Fair:
The Bank Job -- One of the biggest disconnects on Wall Street today is between the way Goldman Sachs sees itself (they’re the smartest) and the way everyone else sees Goldman (they’re the smartest, greediest, and most dangerous). Questioning C.E.O. Lloyd Blankfein, C.O.O. Gary Cohn, and C.F.O. David Viniar, among others, the author explores how their firm navigated the collapse of September 2008, why it has already set aside $16.7 billion for compensation this year, and which lines it’s accused of crossing...

Goldman Sachs C.E.O. Lloyd Blankfein and C.O.O. Gary Cohn, in the boardroom of Goldman’s headquarters, in New York City.

Monday, November 30, 2009

Dark Dubai

A modern city-state built with slave labor.

Dubai: Workers wait for a busIndependent.co.uk:
The dark side of Dubai -- Dubai was meant to be a Middle-Eastern Shangri-La, a glittering monument to Arab enterprise and western capitalism. But as hard times arrive in the city state that rose from the desert sands, an uglier story is emerging. Johann Hari reports.

The wide, smiling face of Sheikh Mohammed – the absolute ruler of Dubai – beams down on his creation. His image is displayed on every other building, sandwiched between the more familiar corporate rictuses of Ronald McDonald and Colonel Sanders. This man has sold Dubai to the world as the city of One Thousand and One Arabian Lights, a Shangri-La in the Middle East insulated from the dust-storms blasting across the region. He dominates the Manhattan-manqué skyline, beaming out from row after row of glass pyramids and hotels smelted into the shape of piles of golden coins. And there he stands on the tallest building in the world – a skinny spike, jabbing farther into the sky than any other human construction in history.

But something has flickered in Sheikh Mohammed's smile. The ubiquitous cranes have paused on the skyline, as if stuck in time. There are countless buildings half-finished, seemingly abandoned. In the swankiest new constructions – like the vast Atlantis hotel, a giant pink castle built in 1,000 days for $1.5bn on its own artificial island – where rainwater is leaking from the ceilings and the tiles are falling off the roof. This Neverland was built on the Never-Never – and now the cracks are beginning to show. Suddenly it looks less like Manhattan in the sun than Iceland in the desert.

Once the manic burst of building has stopped and the whirlwind has slowed, the secrets of Dubai are slowly seeping out. This is a city built from nothing in just a few wild decades on credit and ecocide, suppression and slavery. Dubai is a living metal metaphor for the neo-liberal globalised world that may be crashing – at last – into history...

----

Monday, November 16, 2009

Pesos Meander North

Amigo can you spare a peso?

Mexicans send money to USSirenia Avendano wept as she spoke of sending money to her sons in the United States.

NY Times:
Money Trickles North as Mexicans Help Relatives -- MIAHUATLÁN, Mexico — During the best of the times, Miguel Salcedo’s son, an illegal immigrant in San Diego, would be sending home hundreds of dollars a month to support his struggling family in Mexico. But at times like these, with the American economy out of whack and his son out of work, Mr. Salcedo finds himself doing what he never imagined he would have to do: wiring pesos north...

Monday, November 9, 2009

Goldman Sachs: "Doing God's Work"

Items of Interest:

Times of London:
I'm doing 'God's work'. Meet Mr Goldman Sachs -- Number 85 Broad Street, a dull, rust-coloured office block in lower Manhattan, doesn’t look like a place to stop and stare, and that’s just the way the people who work there like it. The men and women who arrive in the watery dawn sunshine, dressed in Wall Street black, clutching black briefcases and BlackBerrys, are very, very private. They walk quickly from their black Lincoln town cars to the lobby, past, well, nothing, really. There’s no name plate on the building, no sign on the front desk and the armed policeman stationed outside isn’t saying who works there. There’s a good reason for the secrecy. Number 85 Broad Street, New York, NY 10004, is where the money is. All of it...

discussion:
WSJ:
Goldman Sachs’ Blankfein on Banking: ‘Doing God’s Work’
Reuters:
Is Goldman Sachs “doing God's work”? Its CEO thinks so
Seeking Alpha:
May the Lloyd Be with You: Blankfein Doing 'God's Work'?
----
Really, Goldman Sachs? [SNL clip] Seth Meyers & Amy Poehler Go Off On Goldman Sachs:

Friday, November 6, 2009

Make Mine Freedom (1948)



Directors: William Hanna & Joseph Barbera
Release Date: 25 February 1948
Genre: Animation/Short

Saturday, October 31, 2009

The Future of Banking


Financial Times:
Banking with Bird & Fortune [full 10 min video] via Calculate Risk

Monday, October 26, 2009

The Times They are a Change'n

Items of Interest:

James Howard Kunstler:
Marching Toward Zombieland --

The sense that Wall Street has pulled off a coup d'etat and taken over the machinery of the United States is the most powerful meme out there now, and its power is growing in magnitude every day among all classes of Americans...
----
The Mess That Greenspan Made:
More reasons to hate big banks --
numerous people who have been notified by Citibank in recent days that the interest rate on their credit cards is soaring to almost 30%...
----
Naked Capitalism:
Guest Post: Capitalism, Socialism or Fascism? -- Consider:
  • The government has given trillions in bailout or other emergency funds to private companies, but is largely refusing to disclose to either the media, the American people or even Congress where the money went
  • Congress has largely been bought and paid for, and two powerful congressmen have said that banks run Congress
  • The head of the Federal Reserve Bank of Kansas City, the former Vice President of the Dallas Federal Reserve, and two top IMF officials have all said that we have – or are in danger of having – oligarchy in the U.S.
  • Economist Dean Baker says that the real purpose of bank rescue plans was “A massive redistribution of wealth to the bank shareholders and their top executives”
  • The big banks killed any real chance for financial reform months ago
----
Tent cities growing:

----
Bloomberg:
Marc Faber, publisher of the Gloom, Boom & Doom Report, talks with Bloomberg's Deirdre Bolton and Erik Schatzker about the performance of the dollar and U.S. economic outlook.

Faber also discusses the outlook for equities, the correlation between the dollar and the stock market and the fiscal position of the U.S. which he describes as a "complete disaster" and "Dollar Will Go To A Value Of Exactly Zero" ...

Tuesday, October 20, 2009

Rosy Scenarios

Items of Interest:

Wall Street Journal:
Employers Hold Off on Hiring -- Companies across the economy are holding off on hiring even as the profit outlook improves, amid economic uncertainty and their own success at raising productivity in rough waters.

Hiring always lags behind in economic recoveries, but the outlook this time is worse, many economists say. Most forecasters now expect a prolonged period of high unemployment, even though the government is expected to report next week that the economy grew in the third quarter, after four quarters of contraction. That is sure to frustrate the jobless and could be a problem for the Obama administration...

Even if the job market started spitting out jobs as fast as it did during the 1990s boom, adding 2.15 million private-sector jobs a year, the U.S. wouldn't get back to a 5% unemployment rate until late 2017...

----
CNN Money:
Foreclosures: 'Worst three months of all time' -- Despite signs of broader economic recovery, number of foreclosure filings hit a record high in the third quarter - a sign the plague is still spreading.

Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.

"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.

During that time, 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008...
----
Housing Wire:
2.7m Distressed Properties in Market Pipeline: RBS -- Recent months of “nascent” housing recovery remain overshadowed by the delinquency pipeline that threatens to put as many as 2.7m distressed sales on the market, according to weekly commentary on US economics by Royal Bank of Scotland (RBS) economists.

Single-family housing starts jumped 38% from February to July, while new home sales jumped by 28% from March to July and existing home sales rose 15% over the same time frame, RBS said. The heavy use of the first-time homebuyer tax credit in summer ahead of its November 30th deadline may have contributed to the rise in sales...
related:

John Mckinnon / WSJ: Home-Buyer Credit Is Focus of Inquiry --

The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break ...
----
ProPublica.org:
Four Banks in Govt’s ‘Healthy Bank’ Bailout Struggle to Survive -- The government has doled out billions to 687 banks over the past year through a program meant to bolster already “healthy” banks. But an increasing number of those are troubled. Four banks in particular are foundering, including one that has acknowledged its executives cooked its books...
----
Frank Rich / NY Times:
Goldman Can Spare You a Dime -- Even as we wait for Congress and its inquiry to produce results, the cultural toxins revealed by our economic crisis remain unaddressed by the leaders in the private and public sectors who might make a difference now. Blankfein may be giving $200 million to “education,” but Goldman is back to business as usual: making money by high-risk gambling, with all the advantages that the best connections, cheap loans from the Fed and high-speed trading algorithms can bring. As the Reuters columnist Rolfe Winkler wrote last week, “Main Street still owns much of the risk while Wall Street gets all of the profit.”

The idea of investing in the real economy — the one that might create jobs for Americans — remains outré in this culture. Credit to small businesses remains tight. The holy capitalist grail is still the speculative buying and selling of companies and the concoction of ever more esoteric financial “instruments.” The tragic tale of Simmons Bedding recently told in The Times is a role model. This successful 133-year-old manufacturing enterprise was flipped seven times in two decades by private equity firms. Investors made more than $750 million in profits even as the pile-up of debt pushed Simmons into bankruptcy, costing a quarter of its loyal workers their jobs so far...
----
Calvin Trillin / NY Times:
Wall Street Smarts -- “IF you really want to know why the financial system nearly collapsed in the fall of 2008, I can tell you in one simple sentence.”

The statement came from a man sitting three or four stools away from me in a sparsely populated Midtown bar...

“O.K.,” I said. “Let’s hear it.”

“The financial system nearly collapsed,” he said, “because smart guys had started working on Wall Street.” He took a sip of his martini, and stared straight at the row of bottles behind the bar, as if the conversation was now over.

“But weren’t there smart guys on Wall Street in the first place?” I asked...
----
Technology Review:
Natural Gas Changes the Energy Map -- Vast amounts of the clean-burning fossil fuel have been discovered in shale deposits, setting off a gas rush. But how it will affect our energy use is still uncertain.

This formation is the edge of vast deposits of black shale that stretch under tens of millions of acres below western New York, much of western and northern Pennsylvania, and parts of Ohio, West Virginia, Maryland, and Kentucky. The oldest and deepest layer is called the Marcellus shale, and if geologists like Lash are correct, it holds enough natural gas to help change the way the United States uses energy for decades to come.

Experts now believe that the country has far more natural gas at its disposal than anyone thought three or four years ago. The revised estimates are largely due to advanced drilling techniques that make it economically feasible to extract the fuel from shale ...

Thursday, October 15, 2009

New FHA Rules will Flush Condo Values

Items of Interest:

Arizona Republic:
Experts: Plummeting prices have rendered condos nearly worthless -- New federal loan-guarantee rules imposed to fend off future government losses from plummeting condominium prices have rendered condos utterly worthless, Valley real-estate experts said.

The Federal Housing Administration rules, which took effect Oct. 1, prohibit any new FHA-backed loans on condo units in projects that include more than 25 percent commercial space.

In addition, no single investor - including the developer - may own more than 10 percent of the units in a particular project. That particular restriction alone creates a catch-22 from which condo builders most likely cannot escape, said mortgage originator Jill Hoogendyk of Wallick & Volk in Glendale.

Another rule that has sellers and brokers scratching their heads prohibits FHA loans in condo developments that aren't "primarily residential," which could be taken to mean the FHA won't guarantee loans in future mixed-use projects.

"I'm predicting that what we'll see is whole condominium complexes sitting empty," Hoogendyk said...

discussion:
Mish's Economic Analysis: FHA Rules Render Condos Utterly Worthless
SquareFeet: New FHA Rules Make Life Tough For Condo Sellers
RealtyTrac: New FHA Rules Doom Condo Values

Monday, October 12, 2009

What part of the cycle are we in?

Items of Interest:

Zero Hedge:
Goldman Increases Ten Year Deficit Estimate To $10.5 From $9 Trillion, Sees Output Gap At 10% -- A comprehensive analysis by Goldman Sachs of the long-term US economic forecast discloses some rather unexpected pessimistic observations.

Last week the US Treasury closed the books on fiscal year (FY) 2009, a year that will go down as a gamechanger in modern US budget history. According to estimates by the Congressional Budget Office (CBO), the Treasury will report next week that the FY 2009 deficit was just over $1.4 trillion (trn). This is more than triple the FY 2008 shortfall and, at 9.9% of GDP, by far the largest relative to the size of the economy since World War II. Both revenues and outlays reached extremes not seen in more than 50 years (15% and 25% of GDP, respectively)...
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The Big Picture:
Getting Better ?

----
Reuters:
U.S. states suffer "unbelievable" revenue shortages -- The U.S. economy may be creeping toward recovery after the worst slowdown since the Great Depression, but many states see no end in sight to their diving tax revenues.

Tax revenues used to pay teachers and fuel police cars continue to trail even the most pessimistic expectations, despite the cash from the economic stimulus plan pouring into state coffers...
----
Kevin Depew / Minyanville.com:
Five Things: The Credit Cycle Begins Again -- So how will this cycle end? Exactly like the last one: in tears, perhaps even worse if the cycle of risk-seeking behavior doesn't penetrate the consumer, as I believe it won't. While that could be wrong -- we'll see -- the bottom line is this cycle will continue to play out over a period of time. Because the consumer will be less of a participant this time, the duration of this credit bull market may be shorter than some credit market watchers expect. But the end result will, again, be exactly the same...
related:
Mr. Practical:
The Credit Cycle Is Not Over
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Nick Paumgarten / New Yorker Magazine:
The Secret Cycle -- Is the financier Martin Armstrong a con man, a crank, or a genius?

[...] I was told, time and again, that some of the biggest investors out there view even the wackier cycle theories with respect, and factor cycles into their allocations. This may say less about the viability of cycle theory than it does about the chimerical folly of market divination—which may be why such investors are loath to discuss it. “You don’t talk to people about it, because they don’t understand," one trader told me. “It’s not something you can share openly with colleagues. It’s not accepted.”

“I’ve studied cycles for years,” Dimitri Chalvatsiotis, a London-based trader at a global hedge fund, told me. “It’s part of the methodology. It’s an overlay that defines the way I look at the world. These cycles govern the planet. That’s where you start. Some people believe news drives markets. I don’t.”

“The way I think about cycles in general is that they provide a great approach to offsetting human biases,” Laeeth Isharc, a hedge-fund manager in London and previously a trader at the giant investment firms D. E. Shaw and Citadel, said. “We tend to think that the future will be like the last few years, only more so. Cycles are a good way of reminding oneself that there is mean reversion.” ...
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David Goldman / Asia Times / Inner Workings:
Gold Arithmetic: Why the Gold Price Has No Ceiling -- What’s the price of the last ticket on last train out of Paris on the night the Germans march in? Whoever is carrying the most cash will get it, and that will be the price. Robert Merton, the great finance theorist, showed that in a multi-time-period model, investors hedge against the prospective change in the investment opportunity set. If sufficient hedges are not available the price of such hedges can be arbitrarily high. As I have tried to show in several recent articles, most recently this Sept. 15 essay at Asia Times, gold is a hedge against the collapse of America’s central role in world affairs.

What is the correct price? Central banks alone own about 4.8 million tons of gold. The world produces about 2,200 tons. Suppose that central banks wished to increase their gold holdings by 1 percent. That’s 48,000 tons or so, or more than 20 times annual mining production. What’s the price elasicity on that sort of thing? How badly do you need that ticket out of Paris?
related:
AsiaTimes:
Gold a hedge and no more - yet

Safe Haven:
Gold and Saving -- It is very likely that two ultra-long-term trends reversed direction over the past two years, the first being the expansion of private-sector credit in the US and the second being the contraction of the US savings rate. The trend reversals are, of course, inter-related, in that the new trends towards less debt and more savings are being driven by economic hardship in the present and the revelation that the economic future will not be as rosy as previously thought....

Friday, October 2, 2009

How bad will unemployment get? How bad is it now?

Items of Interest:

Bloomberg:
U.S. Job Losses May Be Even Larger, Model Breaks Down -- The U.S. economic slump earlier this year was so severe it short-circuited the government’s model for calculating payrolls, raising the risk that today’s jobs report may be too optimistic.

About 824,000 more jobs may be subtracted from the payroll count for the 12 months through last March when the figures are officially revised early next year, a Labor Department report showed today. The revision would be the biggest since at least 1991...

discussion:
Tyler Durden / Zero Hedge:
BLS Discloses It Has Overrepresented Payroll Data By 824,000 Or 15% -- A part of today's BLS (Bureau of Labor Statistics) announcement that has not received much attention is the BLS' own disclosure that it "may" have lost an additional 824,000 jobs in LTM period ended March 2009, in addition to the already disclosed 4.8 million job losses...

All this simply means is that once the full extent of the collapsing employment picture is revealed on February 5 next year, the market will explode to record highs: after all the worse the economic news are, the better for the stock market...
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Mike Mish Shedlock / Minyanville:
Prepare for Huge Downward Revision in Job Numbers -- Once again, today's job numbers show Collectively, Economists Are a Perpetually Optimistic Lot. Payrolls were expected to drop 175,000, the median of 84 estimates in a Bloomberg News survey of economists. Forecasts ranged from decreases of 260,000 to 100,000.

Jobs losses this month totaled 263,000, worse than even the most pessimistic economist projection.

Actually, economists missed by another 13,000 because revisions subtracted 13,000 from payroll figures previously reported for August and July...

the BLS is going to revise the number by 824,000 . . . that's an extra 68,666 jobs per month the BLS was off between March 2008 and March 2009 . . .

Mish's Global Economic Trend Analysis:
Jobs Contract 21th Straight Month; Unemployment Rate Hits 9.8%
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John Williams / shadowstats.com:
Commentaries --
BLS Revision Nightmare: March 2009 Payrolls Overstated by 824,000
Birth-Death Model Falsely Boosting Jobs Reporting in Recession Environment
Monthly Jobs Loss of 263,000 (Payroll Survey) versus Monthly Employment Decline of 710,000 (Household Survey)
September Unemployment Rates: U.3 = 9.8%, U.6 = 17.0%, SGS (Shadow Gov't Statistics) = 21.4%
related:
Wikipedia:
United States Bureau of Labor Statistics -- The Bureau of Labor Statistics measures employment and unemployment (of those over 15 years of age) using two different labor force surveys[32] conducted by the United States Census Bureau (within the United States Department of Commerce) and/or the Bureau of Labor Statistics (within the United States Department of Labor) that gather employment statistics monthly. The Current Population Survey (CPS), or "Household Survey", conducts a survey based on a sample of 60,000 households. This Survey measures the unemployment rate based on the ILO definition. The data are also used to calculate 5 alternate measures of unemployment as a percentage of the labor force based on different definitions noted as U1 through U6:
  • U1: Percentage of labor force unemployed 15 weeks or longer.
  • U2: Percentage of labor force who lost jobs or completed temporary work.
  • U3: Official unemployment rate per ILO (International Labour Organization) definition.
  • U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
  • U5: U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
  • U6: U5 + Part time workers who want to work full time, but cannot due to economic reasons.
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CNBC:
US Unemployment May Hit 15% in 2010: Strategist -- Unemployment can go as high as 12 to 15 percent in the United States next year, as the economic situation will get worse and more banks will go bankrupt, Nicu Harajchi, CEO at N1 Asset Management, told CNBC Friday...
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The Big Picture:
The Mother of All Jobless Recoveries? -- You can see why the Rutgers study showing a full jobs recovery not taking place until 2017 is very possible...
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update:
The Big Picture:
The More You Dig Into the Numbers, the Worse They Get -- Barron’s Alan Abelson calls the September employment report “An absolute horror.” ...

“As Doug Kass, our hedge-fund-manager friend, who was a whiz at arithmetic when he was 10 years old and still can do his sums, totes it up, there are 2.2 million of these marginally attached souls, who would like to work but haven’t been able to land a job and aren’t receiving benefits. Add in some 9.2 million involuntary part-timers and the aforementioned 15.1 million formally unemployed, and the jobless total swells to over 26 million.

A compassionate portfolio manager (if there is such an animal), Doug tries to fathom in flesh-and-blood terms what those dry-as-dust dry statistics mean. And what he envisions are 26 million people not going to malls for extras, or taking the kids to the movies, hunting the cheapest victuals they can find at the supermarket and who are denying themselves the pleasures of travel, eating out, upgrading to Windows 7 or buying iPhone apps...
related:
Alan Abelson / Barron's: Downright Scary
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Famous last words:
"At this juncture...the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained." — Ben Bernanke, March 28, 2007.

"From a technical perspective, the recession is very likely over at this point." — Ben Bernanke, the Brookings Institution, September 15, 2009.

Sunday, September 27, 2009

Is Deflation Really Coming?

Items of Interest:

Ambrose Evans-Pritchard / Telegraph.co.uk:
Money figures show there's trouble ahead -- Private credit is contracting on both sides of the Atlantic. The M3 money data is flashing early warning signals of a deflation crisis next year in nearly half the world economy. Emergency schemes that have propped up spending are being withdrawn, gently or otherwise...

Western central banks will have to "monetize" deficits on a huge scale to stave off debt deflation. The longer they think otherwise, the worse it will be.

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Mr. Practical / Minyanville:
The Lowdown on Deflation -- Deflation is the contraction (reduction) of money and credit. It occurs when the economic system is carrying too much debt to be supported by the level of income generated by economic activity. It occurs because too much debt has been incurred to create unproductive assets that don’t generate income. Deflation is a corrective process, it’s simply the market (you and I) not being able to service debt, so we must forfeit...
related:
Mr. Practical / Minyanville:
Government's Money-Manipulating Wizardry -- There's great debate about inflation versus deflation...

In order to clarify my position, I want to describe to you some mechanics of Federal Reserve operations, the wizardry behind the curtain...

The first red flag is this then: A government, which has no capital of its own, which produces nothing on its own, cannot lend money unless it borrows that capital from another or takes that capital in the form of taxes (but taxpayers must have capital to pay taxes)...
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Greg Feirman / SeekingAlpha.com:
The Inflation/Deflation Forces Battles On -- There is a great debate raging between students of monetary economics. On the one hand, there are the deflationists who point to the massive deleveraging in the housing, mortgage, credit and stock markets. The fall in prices in these asset markets, at least through March 2009, was devastating and destroyed trillions of dollars of wealth and credit.

On the other hand, there are the inflationists who focus on Fed policies and the money supply...

This has been a very thorny debate, with good arguments and respected voices on both sides. But little ground has been given and little progress made as participants of both camps seem unimpressed by the arguments of the other side...
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Peter Coy / Business Week:
"This Time Is Different": Reinhart and Rogoff worry about future financial crises
-- When you've studied "eight centuries of financial folly," as international economists Carmen Reinhart and Kenneth Rogoff have, patterns begin to emerge. The most striking pattern they've found is that people never learn. We gullible humans make the same mistake time after time, which is believing that the laws of financial physics have been repealed for us.

Thus, Americans proclaim confidently that there's no chance the U.S. will get caught in Japanese-style stagnation. Sure, deflation became entrenched in Japan starting after the stock-market crash that began in 1990. But this time is different, right?

Don't be so sure. Reinhart says Americans seem to be unwittingly repeating the mistakes of the Japanese, including propping up "zombie" banks that aren't healthy enough to make new loans and get the economy growing again. Americans kid themselves, she says, by saying, "These are not zombie loans. They're just non-performing."

Summarizes Reinhart: "We're speaking Japanese without knowing it." (I love that quote.) ...
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David Goldman / Inner Workings:
All New! Dave’s (additional) 10 Reasons Why the Recession Will Last Forever -- There just isn’t any way to square the circle within the US as such: households have lost too much wealth at the cusp of a gigantic retirement wave, so that demand for savings is virtually limitless. That’s one reason why bond yields remain so low (another is that the cheap dollar makes them attractive to foreign investors). Americans are locked into a vicious cycle: as their wealth collapses, they must save more; that reduces sales and output, and leads to unemployment; unemployment causes more home foreclosures and keeps the housing market weak; wealth continues to fall; returns to prospective retirement assets decline, forcing households to save more; and so on, ad infinitum, or at least as far as the eye can see.

The only way to break out is globally, and Obama is getting colder rather than hotter.

Thursday, September 17, 2009

Blood Sucking Parasite Watch

Items of interest:

More evidence the world’s creatures are just waiting to feast on you.

Rare tongue-eating parasiteDiscoveryOn.com:
Rare tongue-eating parasite found -- A rare parasite which burrows into host fish before eating and replacing their tongues with itself has been found off the Jersey [English Channel] coast.

Fishermen near the Minquiers - islands under the jurisdiction of Jersey - found the isopod, a type of louse, inside a weaver fish.

Marine researcher Paul Chambers, from the Société Jersiaise, was one of the fishing party and identified the find.

He said he was surprised to find the isopod away from the Mediterranean sea.

Isopods are normally about 2cm (1in) long and live in fish, surviving on the animal's blood, in warm waters...

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Goldman Sachs updates:

Goldman Sachs: A Vampire On The Jugular of AmericaTheDailyBail:
Ron Paul: The Fed Works In Collusion With Goldman Sachs (MSNBC Ratigan Video)

MissTrade:
Ron Paul: “Goldman Sachs Has A Lot Of Influence In Our Treasury And A Lot Of Influence In Our Federal Reserve

Reuters:
US Rep Frank bars Goldman Sachs lobbyist-aide

The Big Picture:
Is Goldman Sachs Trustworthy? -- ... given their history of saying and selling one thing and then doing another, can anyone trust what comes from them?

Should hedge funds be setting their Outlook to auto-delete anything from GS.com research department? How can you tell what is a real research report versus disinformation or some bizarre Psy-ops strategy?

All of this raises the more basic question: Can their clients trust what GS generates, when they don’t know if they are a) trading the opposite side of the report for their own accounts; or b) HFT front running ?

The question isn’t whether Goldman Sachs is Taibbi’sgreat vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

It is much more simple than that — the more relevant question is “Can Goldman Sachs be trusted by their own clients ?” ...

Laugh Lines / NY Times:
Jay Leno Monologue | Aired Wednesday night on NBC --
And a year after the economy collapsed, Goldman Sachs executives gave each other over $11 billion in bonuses. See, what gets me, whenever these Wall Street guys get these huge bonuses they always spend it on something useless, like Senator Chris Dodd. Buy a boat! Get a car...
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Thursday, September 10, 2009

Today's Troubled Times — September 10, 2009

Items of Interest:

American Banking News:
Proposed Debit Card Regulations Could Cause 1,000 Banks and 2,000 Credit Unions to Fail -- Proposed legislation by Rep. Carolyn Maloney (D-NY) would require notice be given to customers at the ATM or point-of-sale terminal when a purchase is about to trigger an overdraft – and would give consumers at the transaction point a choice of whether to accept or reject the overdraft service and the associated fee. "According to Michael Moebs, an economic advisor for many banks and credit unions, Rep. Maloney’s legislation would effectively kill overdraft services, which could cause up to 1,000 banks and 2,000 credit unions to fold within the next two years," American Banking News reported. Why? Because 45% of banks collect more in overdraft fees than they make in profits...

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Bloomberg:
U.S. Foreclosure Filings Top 300,000 for Sixth Straight Month -- oreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments.

A total of 358,471 properties received a default or auction notice or were seized last month, according to data provider RealtyTrac Inc. That’s up 18 percent from a year earlier, and down 0.5 percent from July, the Irvine, California-based company said in a statement. One in 357 households received a filing...
discussion:
Minyanville: Why the Foreclosure Crisis Won't End
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MarketWatch:
As boomers pull out funds, will they pull down markets? -- CBO says financial markets won't suffer as millions retire, but some disagree

Many wise men have predicted the stock and bond markets will go into a free fall for decades once baby boomers start withdrawing money from their retirement accounts, but a new report this week by the Congressional Budget Office suggests that won't happen when boomers retire...
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NY Times:
Tavern on the Green Files for Chapter 11 -- Nearly four months before Tavern on the Green, the landmark restaurant in Central Park, is to yield its license to another operator, the landmark restaurant in Central Park has filed for Chapter 11 bankruptcy protection.

In a statement, the current license holder, Jennifer Oz LeRoy, chief executive of Tavern, said that the filing was “our only alternative given the current situation.” She said the decision was the result of “two factors — the extreme financial distress brought on by the current financial crisis and the City of New York’s decision not to renew our license.”
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NY Times:
In Maine, Tensions Over Ailing Lobster Industry -- MATINICUS, Me. — This tiny island, 22 miles out at sea, is generally so quiet that it is hard to imagine the chaos that descended one midsummer day.

Early that morning, one veteran lobsterman shot and seriously wounded another on the Matinicus wharf, the peak of a dispute over whether the gunman’s son-in-law — a mainlander — could fish in the waters surrounding the island. The feud had been escalating for months, a symptom of the economic crisis battering lobstermen up and down Maine’s coast...

Saturday, September 5, 2009

The Crisis Cluster

Some light end of summer reading.

Cecchetti, Kohler & Upper / Bank for International Settlements:
Financial Crises and Economic Activity [36 page .pdf]-- Abstract:

This paper studies the length, depth and output costs of a sample of 40 systemic banking crises in 35 countries since 1980 to assess the likely real impact of the current crisis. Most, but not all, systemic banking crises in our sample coincide with a sharp contraction in output from which it takes several years to recover. The current financial crisis is unlike any others in terms of initial conditions, industrial and institutional structures, levels of development, degrees of openness, policy frameworks and external conditions. Simply averaging outcomes of past crises to get a reading on the current one is therefore likely to be misleading regardless of the sample or subsample. With this in mind we go on to study the determinants of the output losses from past crises.

Our findings suggest that the costs are higher when the banking crisis is accompanied by a currency crisis or when growth is low immediately before the onset of the crisis. Furthermore, when it is accompanied by a sovereign debt default, a systemic banking crisis is less costly. The final part of the paper takes a longer-term view and study the impact of crises on potential output several years down the road. We find that many systemic banking crises have had lasting negative effects on the level of GDP. And even in those cases in which trend growth was higher after the crisis than it had been before, making up for the output loss resulting from the crisis itself took years.

August 2009 marks the second anniversary of the start of the first global financial crisis of the 21st century. World output has experienced its sharpest drop since the Great Depression of the 1930s, with most economies contracting in late 2008 and early 2009. The severity of the crisis has surprised nearly everyone....

Our objective here is not to explain the causes of the current crisis. Instead we study the consequences...

Cluster analysis
Cluster analysis allows us to assign sets of observations to subsets that are similar, given a set of characteristics. Apart from the choice of the characteristics, however, the technique allows the investigator to remain agnostic. It groups observations into clusters by minimising differences within clusters and maximising differences across clusters. Cluster analysis is widely used in quantitative social research to analyse datasets with a large number of variables. For example, it allows firms to group clients that may be receptive to particular ways of marketing, and it helps authorities sort through immigration files in their hunt for terrorists.

The results of the cluster analysis are represented in a dendrogramme (Graph 7)...

Crisis cluster graph - click to enlargeOne of the most striking conclusions we draw from this way of looking at the data is that
current events are unique. While some of the countries suffering from the current crisis cluster fairly close together – the United Kingdom and the United States appear close – they are very dissimilar from all other episodes.19 In fact, the cluster analysis joins the current crises only after almost all previous crises have joined. The implication is that the current crisis is less similar to all of the crises in our database than, say, the Japanese financial crisis of the 1990s is to the crisis experienced by Ecuador in 1998 or than it is to the crisis that occurred in Bulgaria during the transition!

The uniqueness of the current crisis is an important, if discouraging, result...

Econometric analysis
Can we predict the length and depth of the current crisis given historical experiences? The analysis in the previous sections suggests that crises are very dissimilar and that the current financial crisis is especially different from those that have come before it. As a result, it is difficult to use (unconditional) average past experience to draw conclusions about how deep and long the current contraction of the real economy is likely to be...

Thursday, August 27, 2009

Rise of the Parasitic Anarchists

The new world order is becoming infected with parasitic anarchists.

Minyanville:
Anarchists Give Wealthy a Run for Their Money -- One a night, almost every night, for six months.

This is the pattern Berlin police have been following since the spring in a bizarre series of arsonist attacks on area luxury vehicles, particularly Mercedes (DAI), BMWs, and Porsches.

With 170 luxury vehicles reduced to burnt-out auto carcasses, Berlin police are estimating conservatively that at least 93 of these attacks were politically motivated. Particularly in Europe, it’s just the latest and most high-profile attack on symbols of wealth. And with the backlash against the rich -- and a Michael Moore film about Wall Street from Paramount Vantage (VIA) on the way -- it could just be the beginning...

related:
ana-mpa.gr:
Self-styled anarchists claim responsibility for firebombs against Greek embassy in Belgrade
riverfronttimes:
St. Louis Police Apologize to "Anarchists"
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Is Maurice Schwenkler a vandal, a radical leftist, a progressive, or simply an anarchist?

Maurice SchwenklerGawker:
Trans Anarchist Punk Arrested In Attack On Democratic Party HQ -- Either because they wanted conservatives blamed or because of the natural antipathy radical young leftists have for establishment liberals, two anarchists reportedly smashed up the Colorado Democratic party headquarters...
discussion:
Talking Points Memo:
UPDATED -- Attack On CO Dem HQ May Not Be What It Seems -- given that the person arrested has anarchist ties and is on the record as a vocal left-wing opponent of Obama, it looks like that interpretation was wrong. It now seems more likely that the goal was more straight-forward: to express anger at Obama and the Democrats...
Jessica Fender / Denver Post:
1 suspect in custody following Dem HQ vandalism in Denver — A 24-year-old arrested this morning on suspicion of smashing 11 windows at Colorado Democratic Party headquarters tried to conceal his identity while allegedly committing the crime, according to police descriptions.
discussion:
Conn Carroll / The Foundry: Morning Bell: A Sobering Wake Up Call
related:
Michelle Malkin:
Fake hate crime alert: Leftists vandalize Denver Democrat HQ; Dems smeared Obamacare foes — Nabbed: Left-wing Obamacare supporter Maurice Schwenkler, not Obamacare foes, arrested in attack on Denver Democrat HQ — I called out GOP fake hate crime perpetrator Ashley Todd last year …
discussion:
Jared Jacang Maher / The Latest Word: Is alleged Colorado Democratic Party headquarters window-smasher …
Amanda Terkel / Think Progress:
Colorado Democratic headquarters vandalized.
discussion:
John McCormack / Weekly Standard: Beware of Fake Hate Crimes, Cont.
GottaLaff / The Political Carnival: Once again, David Shuster listens
Elpresidente / Peoples Press Collective:
Smash-troturfing Vandal's Connections, No Apology from Dems' Waak …
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Global Guerrillas:
The US, GLOBALIZATION and the RED QUEEN -- [...] So, what are the parasites to this homogenous global system? Networks. They range from financial/corporate networks (per the recent financial crash) to terrorist networks (al Qaeda, etc.) to criminal networks (narco-gangs, MEND, etc.). All of these parasites are post-modern in that they don't adhere to any meaningful ideology that can replace the state (even al Qaeda envisions a decentralized feudal Caliphate as an end game). They all are in the process of co-opting global system functions (host functions) to achieve operational space for the advancing their evolutionary advantage. Unfortunately, per the Red Queen hypothesis, a rapidly evolving parasite's competition against a static, non evolving, homogenous host likely results in extinction of the host...
related:
Global Guerrillas: JOURNAL: Deviant Globalization
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Wired:
Exclusive Interview: Pirate on When to Negotiate, Kill Hostages --
Under what conditions would you kill the hostages?

Hostages — especially Westerners — are our only assets, so we try our best to avoid killing them. It only comes to that if they refuse to contact the ship’s owners or agencies. Or if they attack us and we need to defend ourselves...
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Calculated Risk

MishTalk - Mike Shedlock

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