BREAKING BAD (DEBT) – EPISODE ONE

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Posted on 27th February 2015 by Administrator in Economy |Politics |Social Issues

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“At this juncture, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.”Fed chairman, Ben Bernanke, Congressional testimony, March, 2007

“Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich.”James Grant, Grant’s Interest Rate Observer

The Federal Reserve issued their fourth quarter Report on Household Debt and Credit last week to the sounds of silence in the mainstream media. There were minor press releases issued by the “professional” financial journalists regurgitating the Federal Reserve’s storyline. Actual analysis, connecting the dots, describing how the massive issuance of student loan and auto loan debt has produced a fake economic recovery, and how the accelerating default rates in auto loans and student loans will produce the next subprime debt implosion, were nowhere to be seen on CNBC, Bloomberg, the WSJ, or any other status quo propaganda media outlet. Their job is not to analyze or seek truth. Their job is to keep their government patrons and Wall Street advertisers happy, while keeping the masses sedated, misinformed, and pliable.

Luckily, the government hasn’t gained complete control over the internet yet, so dozens of truth telling blogs have done a phenomenal job zeroing in on the surge in defaults. The data in the report tells a multitude of tales conflicting with the “official story” sold to the public. The austerity storyline, economic recovery storyline, housing recovery storyline, and strong auto market storyline are all revealed to be fraudulent by the data in the report. Total household debt grew by $117 billion in the fourth quarter and $306 billion for the all of 2014. Non-housing debt in the 4th quarter of 2008, just as the last subprime debt created financial implosion began, was $2.71 trillion. After six years of supposed consumer austerity, total non-housing debt stands at a record $3.15 trillion. This is after hundreds of billions of the $2.71 trillion were written off and foisted upon the backs of taxpayers, by the Wall Street banks and their puppets at the Federal Reserve.

The corporate media talking heads cheer every increase in consumer debt as proof of economic recovery. In reality every increase in consumer debt is just another step towards another far worse economic breakdown. And the reason is simple. Real median household income is still below 1989 levels. The average American family hasn’t seen their income go up in 25 years. What they did see was their chains of debt get unbearably heavy. Non-housing consumer debt (credit card, auto, student loan, other) was $800 billion in 1989.

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Bill O’Reilly busted: Falklands war exaggerations, JFK murder witness lies

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Posted on 26th February 2015 by Administrator in Economy |Politics |Social Issues

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LATEST OBAMACARE F#@K UP

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Posted on 20th February 2015 by Administrator in Economy |Politics |Social Issues

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Obamacare is the biggest government clusterfuck in history. It is proving beyond a shadow of a doubt that anything the government touches or tries to control turns into a big steaming pile of shit that will cost trillions of dollars. Their shit for brains website is still a disaster. Obama changes the law as he goes. Like most of Obama’s initiatives, they are making it up as they go along. This was about as well thought out as Nancy Pelosi’s plastic surgeries.

They announced earlier today that they are extending the sign up period to April 15. Deadlines are meaningless. We are now about to experience the massive losses from the fraud that has occurred in the last year. Billions in subsidies have been paid out in error or due to fraud. How much do you think will be paid back by the Free Shit Army brigades? How long before Obama issues a proclamation telling the IRS to not enforce the penalties or to try and collect the fraudulent subsidies paid out?

And amazingly, most of the ignorant masses think Obamacare is a wonderful new program and is helping millions of poo people. Luckily the iGadget addicted, math challenged masses don’t remember that Obamacare was going to cover the 30 million uninsured Americans, not add one dime to the national debt, and save the average family $2,500 per year in insurance premiums. How are those promises working out?

Wrong tax information sent to 800,000 HealthCare.gov customers

By Robert Schroeder

Published: Feb 20, 2015 12:12 p.m. ET

WASHINGTON (MarketWatch) — About 800,000 HealthCare.gov customers got tax forms from the government with incorrect information, a Treasury Department spokesperson said Friday. The errors were on 1095-A forms that HealthCare.gov sent to consumers who get coverage through the federal insurance marketplace. Treasury said those who have not filed taxes should wait to do so until they have received a corrected form. Treasury said corrected forms will go out in early March.

What Do We Call Media Fraudsters And Hucksters?

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Posted on 13th February 2015 by Administrator in Economy |Politics |Social Issues

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 Guest Post by Karl Denniger
Time to increase my long pitchforks, torches, lamposts and boiled rope trade, I suspect.

The words are hurled around like epithets.

People who reject the findings of climate science are dismissed as “deniers” and “disinformers.” Those who accept the science are attacked as “alarmists” or “warmistas. ” The latter term, evoking the Sandinista revolutionaries of Nicaragua, is perhaps meant to suggest that the science is part of some socialist plot.

In the long-running political battles over climate change, the fight about what to call the various factions has been going on for a long time. Recently, though, the issue has taken a new turn, with a public appeal that has garnered 22,000 signatures and counting.

The petition asks the news media to abandon the most frequently used term for people who question climate science, “skeptic,” and call them “climate deniers” instead.

Yes, and the so-called “climate denier” label is intended to evoke The Holocaust, which is an outrageous and intentional appeal to a factually-known act of mass-murder that left a few million skeletons behind as evidence.

The problem with so-called “climate science” is that it’s not science at all; it’s hucksterism and fraud.  Let’s look at a few (and only a few!) of the problems that the so-called “climate change” people peddle.

1. It was called “global warming”, but when the warming stopped and failed to verify against the claims of their computer models for 15 years running they changed their name.  That’s fraud.

2. Only something like 3% of the surface of the earth has a temperature probe covering a place in the immediate vicinity.  That’s a lack of data.

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BRIAN WILLIAMS – PUPPY SAVER & CHRISTMAS TREE BANDIT VICTIM?

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Posted on 9th February 2015 by Administrator in Economy |Politics |Social Issues

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When did misremember become a real word?

 

Via The New York Post

Brian Williams also told iffy tales of rescuing puppies from fires

Long before he was caught lying about his chopper being forced down by enemy fire in Iraq, Brian Williams boasted how he bravely rescued a terrified puppy from a house fire.

Or maybe it was two puppies.

The truth-challenged NBC anchor told dueling versions of his supposed heroics as a teenage volunteer firefighter with the Old Village Fire Company in Middletown, NJ.

In October 2011, Williams waxed rhapsodic about how his dad took him to fires.

“I remember one such house fire . . . conducting a search on my hands and knees, when I felt something warm, squishy and furry on the floor of a closet,” Williams said.

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Whahhhh Whahhhh! I’m Black! (And NOT an Adult!)

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Posted on 31st January 2015 by Administrator in Economy |Politics |Social Issues

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You need to read the sob story bullshit propagated by the liberal rag Washington Post to make your head explode. Six fucking years without making a mortgage payment and you are supposed to feel sympathy for these lowlife parasites.

Guest Post by  Karl Denninger

 

Look, play that race card well…..

On a cold Sunday afternoon 10 years ago, Comfort and Kofi Boateng stood with Comfort’s mother and their three children before a quarter-acre parcel in a brand-new subdivision in the center of Prince George’s County.

The place was called Fairwood. They stepped onto Lot 71, an empty stretch of gravel, and closed their eyes and bowed their heads. Comfort raised her hands to the sky.

$617,000 worth of house on approximately $110,000 in gross income, living in one of the highest-tax areas of the nation.

If you read Leverage you know that the historical “safe” leverage limit for home buying is 28% of one’s gross.  This purchase was close to double that safe limit.

Of course this is called a “plight”, never mind that the two have not made a mortgage payment in over 2,000 days, or more than six years.

That’s right — these folks are “plighted” and “horribly damaged” and it’s all someone else’s fault despite living for free in a $600,000 house for more than six years.

Why six years?  That’s kind of obvious — the banks do not wish to recognize the loss on resale of the house that is worth far less than was lent on it, and if they foreclose and then resell it, they’ll have to do that.  So they “let” the couple live there for free because it makes their balance sheet look better. 

In other words this couple gets a “free ride” by aiding and abetting fraud at the lender who “granted” them the loan!

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FACEBOOK FRAUD

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Posted on 28th January 2015 by Administrator in Economy |Politics |Social Issues

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The proof that mainstream media outlets like Marketwatch, Bloomberg and CNBC are nothing but mouthpieces for the corporate fascist states of America is the blaring headlines about the tremendous profit growth just reported by Facebook. 

Here’s the deal. There is no such thing as Non-GAAP earnings. That is a made up number. Corporations in America are required to use GAAP to record their books.

The idiots in the mainstream media are dutifully regurgitating the FALSITY that Facebook earnings went up 48% over last year.

The TRUTH is that Facebook earnings went up 0% over last year.

Just a slight variance.

Keep waiting for anyone beside Zero Hedge to report this inconvenient fact. Jim Cramer says buy, buy, buy.

The Most Ridiculous Charts From Facebook’s Quarterly Earnings

Tyler Durden's picture

Facebook may still be able to fool most people most of the time, with gullible investors ready to believe that there were 1.393 billion monthly active addicts who just have to tell the world how their day went, of which 208 million were in the US and Canada, which is more than every single working-age American and Canadian, but where the magic of Facebook’s just reported earnings of $0.54 can truly be appreciated, is in the absolutely magical breakdown between GAAP and non-GAAP for the net income microblogging service.

The punchline: Facebook reported $1,133 billion in GAAP earnings: exactly the same as a year ago. What happened to non-GAAP income from operations during the same period? It rose from $1.5 billion to $2.2 billion. Again: this is in a period in which GAAP income remained unchanged!

As for real, GAAP EPS, it was… drumroll… $0.25, or less than half of the mark-to-unicorn number that only FB shareholders, if not advertisers, can love.

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FUNDAMENTALS

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Posted on 28th January 2015 by Administrator in Economy |Politics |Social Issues

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Stock manipulation – not just for Wall Street anymore.

“New Normal” Fundamentals Hit Chinese Stocks

Tyler Durden's picture

Fun-durr-mentals…

 

 

h/t @TomOrlik


PIN MEET HOUSING BUBBLE 2.0

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Posted on 16th January 2015 by Administrator in Economy |Politics |Social Issues

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Housing bubble 2.0 just met Pin 2.0

The 30 Year U.S. Treasury bond yield hit 2.35% yesterday. That is the lowest rate in U.S. history for the 30 Year Treasury. During the deepest darkest depths of the recession in March 2009, after the stock market had fallen over 50%, the yield was 3.5%. One year ago it was yielding 4.0%. Long term interest rates are not controlled by Yellen. They reflect the economic prospects of the country. When they are rising it means the economy is doing well. When they are plummeting to all time lows, the economy is either in recession or headed into recession. Take your pick. No amount of government data manipulation, feel good propaganda spewed by the captured mainstream media, or Ivy League educated Wall Street economist doublespeak, can change the fact this economy is in the dumper and headed much lower. The Greater Depression is resuming its downward march toward inevitable war.

ust30low

  • KBH SEES 1Q BOTTOM LINE ABOUT BREAK-EVEN (against expectations of a 17c rise!)
  • KB HOME CFO SAYS FIRST-QUARTER MARGINS EXPECTED TO BE DOWN
  • KB HOME PULLED OUT OF `COUPLE’ HOUSTON LAND DEALS, CEO SAYS
  • LENNAR CFO SAYS MARGINS ARE POISED TO NARROW ON LESS PRICING POWER
  • LENNAR GROSS MARGIN DECLINED & SALES INCENTIVES GREW
  • LENNAR CEO SAYS “ACROSS THE BOARD, WE’RE SEEING INTENSIFIED COMPETITION AS BUILDERS GO OUT AND CHASE VOLUME”

KB Home had revenues of $2.4 billion in 2014. They are one of the largest home builders in the country. It’s stock has dropped 30% in the last few days. It’s down 40% from its February 2014 high. It’s down 85% from its 2005 high. It had $9 billion of revenues and delivered 60,000 homes in 2005. Then Pin 1.0 popped the first bubble. Revenues collapsed to $1.3 billion and they lost hundreds of millions from 2007 through 2012.

Lennar had revenues of $7.0 billion in 2014. They are the largest home builder in the country. It’s stock has dropped 9% this week. It had been trading at a seven year high, but is still trading 33% below its 2005 bubble high. It had $14 billion of revenues and delivered 42,000 homes in 2005. Then Pin 1.0 popped their bubble. Revenues imploded to $3 billion and they also lost hundreds of millions from 2007 through 2012.

Their admissions earlier this week are proof Bubble 2.0 has met Pin 2.0. KB Home’s 85% increase in revenue and Lennar’s 130% increase in revenue since 2011 have been nothing but a Federal Reserve/Wall Street/U.S. Treasury engineered scheme to repair the balance sheets of the insolvent Too Big To Trust Wall Street banks. The financial industry oligarchs and their servile lackey puppet politicians decided an easy money, Wall Street created scheme to boost home prices would benefit the .1% and restore some of their fraudulently acquired wealth. It isn’t a coincidence home prices rose in parallel with the Fed’s QE programs. And it isn’t a coincidence the bubble is rapidly deflating now that QE3 is over.

The fraudulent nature of the supposed housing recovery can be deciphered by analyzing a few pertinent data points. 30 year mortgage rates were in the 5% to 6% range during the first bubble. Mortgage rates have been consistently below 4% for the last three years. In a healthy market driven economy, these low rates should have brought in first time home buyers and led to a sustainable long-term recovery.

Instead, the number of homes bought by first time buyers has languished at record low levels. The majority of homes sold in 2011 and 2012 were distressed foreclosures and short sales, and the vast majority of sales in the last two years have been to Federal Reserve financed Wall Street investors, Chinese billionaires and fast buck flippers. New home sales of just above 400,000 five years into an economic recovery are at previous recession lows, despite record low mortgage rates. They languish 65% below 2005 levels, when KB Home and Lennar were minting money. Existing home sales of 5 million are back at 1999 levels and 30% below the 2005 highs. This pitiful result is after $3.5 trillion of QE, extremely low mortgage rates, and tremendous hype from the NAR and the corporate MSM (It’s always the best time to buy).

The falsity of the housing recovery storyline can be seen in the fact that mortgage applications linger at 1995 levels, even though mortgage rates are 400 basis points lower than they were in 1995. A critical thinking individual might ask how home prices could rise by 20% since 2012 even though mortgage purchase applications are 20% lower than they were in 2012 and 65% below 2005 levels. The answer is they couldn’t have risen by 20% without massive monetary manipulation and insider deals between Wall Street banks, Wall Street hedge funds, FNMA, Freddie Mac, The Fed, and the U.S. Treasury.

gt10mbap

You see, average Americans buy houses not as an investment, but as a place to live. They save enough for a down payment by spending less than they earn, and then make monthly payments for 30 years from their rising household income. Of course, that was the old days. Real median household income is exactly where it was in 1995. It is currently below the level of 1989. Average Americans have made no headway in 20 years. The median price of a home in 1995, according to the Census Bureau, was $128,000. The median price of a home today is $281,000. When prices go up 120% and your real income remains stagnant, even record low mortgage rates is just pushing on a string. With real wages continuing to fall, young people saddled with a trillion dollars of student loan debt, the full impact of the Obamacare neutron bomb (kills small business, doctors and jobs, but not insurance conglomerates or government bureaucracy) just detonating, and an economy clearly going into the tank, there is absolutely no possibility of a real housing recovery in the foreseeable future.

nnnnffffff

The Too Big To Trust banks have consistently accounted for 35% to 55% of all mortgage originations in the U.S. over the last four years. Wells Fargo is the undisputed leader. All of these banks have reported dreadful financial results this week, with plunging revenues and profits, even with accounting shenanigans like relieving loan loss reserves and marking their balance sheets to fantasy rather than true market values. In the midst of a supposed housing recovery, with mortgage rates at historic lows, the largest mortgage originator in the world, saw their mortgage originations FALL by 12% over last year. They are down 65% from two years ago. JP Morgan and Citigroup also saw their mortgage businesses contracting. These banks have been firing thousands of people in their mortgage divisions. This is surely a sign of a healthy growing housing market. Right?

Essentially, the entire housing recovery storyline has revolved around the Federal Reserve providing free money to Wall Street banks, who then withheld foreclosures from the market, sold them in bulk at inflated prices to Wall Street hedge funds like Blackstone, who then created a nationwide rental business, driving prices higher. FNMA and Freddie Mac did their part by selling their bulk foreclosures to the same connected hedge funds. The average person had no opportunity to bid on foreclosed homes and reap the benefits of lower prices. Blackstone has since created a new derivative, by packaging their rental income streams into an “investment” to sell to muppets. Their rental properties are concentrated in the previous bubble markets of Arizona, California, Florida, and Nevada. What a beautiful business concept. Free money from their Federal Reserve sugar daddy, kicking people out of their homes and then renting their houses back to them, driving prices higher by restricting supply and stopping new household formations, double dipping by creating a new exotic subprime investment opportunity, and then exiting stage left before it all blows sky high again.

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THE GREATEST DECEPTION EVER TOLD

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Posted on 23rd December 2014 by Administrator in Economy |Politics |Social Issues

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The American Dream and government statistics – you’d have to be asleep to believe either. The blatant disregard for the truth and the utter contempt for the common man by the ruling class in NYC and DC is breathtaking to behold. The lies, obfuscation, misinformation and propaganda issued by the government and mindlessly regurgitated by their MSM lackey brigade has approached hyper-speed as this shitshow we call America descends into an epic clusterfuck of  deception, corruption and fraud. 

Exposing The Deception: How The US Economy “Grew” By $140 Billion As Americans Became Poorer

Tyler Durden's picture

This is simply stunning.

Regular readers will recall that last month, at the same time as the US Bureau of Economic Analysis reported was a far better than expected 3.9% GDP (since revised to 5.0% on the back of the previously noted Obamacare spending surge), it also released its Personal Spending and Income numbers for the month of October, or rather revised numbers, because as we explained exactly one month ago “Americans Are Suddenly $80 Billion “Poorer“” thanks to (upward) revised spending data and (downward) revised income. What this meant a month ago is that as a result of a plunge in the imputed US savings rate, some $80 billion in personal savings was revised away from the average American household and right into the US economy.

After all, something had to grow the US GDP by a massive amount in order to give the Fed the green light it needs to hike rates eventually, just so it can then ease when the global dry powders from all the other central banks is used up.

And sure enough, this is how just one month ago, personal income was revised lower…

 

… Even as personal spending was revised higher:

 

Leading to an $80 billion revision lower in personal saving, and by mathematical identity, a comparable growth in US GDP.

 

* * *

Fast forward to today when we find that… absolutely nothing has changed, and in order to boost US GDP some more, the BEA engaged in precisely the same data revision trick!

On the surface, today’s Personal Income and Spending data were inline to a little bit better than expected:

  • Personal Income supposedly rose 0.4% in November, up from a 0.3% revised growth in October, and in line with expectations.
  • Personal Spending supposedly also rose, this time by 0.6%, up from an upward revised 0.3%, and just above the 0.5% expected.

So far so good: nothing abnormal, and in fact, in isolation this data would be good, suggesting the US consumer is spending more as the year closes.

And then we looked at the Personal Savings number: it was reported at 4.4% in November, down from 4.6% in October. Which is odd because last month, the October savings rate was disclosed as 5.0%, in turn down from a downward revised 5.6% in September.

Wait, could the BEA be engaging in precisely the same deception in November as it did in October.

Why yes, Virgina: not only did the US Department of Economic Truth completely fabricate its GDP numbers earlier, but the way it got to said fabrication is by fudging – for the second month in a row – both the entire Personal Income and Personal Saving data series.

Behold what the original data looked like in October, in November, when the extensive and already documented data revision took place, and just now, when the December data shows that the BEA once again revised everything just as it had previously.

To wit: here is Personal Income, revised substantially lower yet again, for every single datapoint of Q3 and then some, from July until October!

 

Sure enough, here is the revision to Personal Outlays: once again, a reduction in income magically meant that US household spent more in retrospect. As the chart below shows, Personal Outlays (Spending) was revised higher from July until October as well. What is most impressive is how the revision shifted the slope of US personal spending from one of Slowdown as reprted in October, to a literal explosion based on the latest data.

 

So how was all this spending funded? Simple: Americans “supposedly” dug massively into their savings, and as the following chart shows, Personal Savings have now crashed from what was originally an “unrevised” 5.6% in September, subsequently revised to 5.0% in November and 4.5% currently, and all the way down to 4.4% in November. Incidentally, this is the lowest savings rate since 2013, and the lowest savings rate for the month of November since 2006!

 

So what do all these revisions mean numerically? Luckily we can put absolute numbers alongside the savings rates, and as the following chart show, as of September 30, or the end of Q3, when US GDP supposedly soared by 5% annualized we now know that data revisions of personal income and spending alone generated…

 

… A whopping $140 billion in GDP!

So what does this mean? Well, as we learned earlier US GDP grew in Q3 by a nominal $272 billion to $17.6 trillion. We now know that more than half of this increase came from, drum roll please, data revisions!

In other words, US GDP, using pre-revision data, would have been less than 2.5%. But that woul dhardly lead to the euphoric blow-off top rally we have seen today which sent the DJIA for the first time ever above 18,000, which in turn is so critical to boost consumer confidence so Americans will, in real life, do what the BEA hopes they have already done at least on paper, and that is reduce their savings by a whopping 20% at the end of September, or by some $140 billion, to $593 billion in order to spend, spend, spend.

And the other irony: as the BEA also reported, what did Americans allegedly spend the bulk of their savings on?

Obamacare.

So in short, today the market is euphoric and hitting all time highs because Americans dug into their savings and spent billions on the “Affordable” Care Act.

And that, ladies and gentlemen, is the short answer why the US is “growing” when the rest of the world is mired in a triple (or quadruple if one is Japan) recession.

Source: Bureau of Economic Analysis