Month: December 2011

SUBURBAN SPIRAL OF SUFFERING

Everyone knows about the poverty in our urban war zones. I’ve detailed the squalor of West Philly for three years on this blog. What you don’t hear too much about is the rapidly spreading poverty in suburbia. You need to look closer to find it, but it is there. I’m always observing while driving around my community. The hottest new retailers in the suburbs are SPACE AVAILABLE and VACANCY. Strip malls across suburbia have more empty stores than operating stores. You notice large single family homes with overgrown front lawns. You notice that home repairs are being deferred. You see nice houses sitting vacant for years.

There are millions of people still living in homes while not having made a mortgage payment in two years. A million people fell off the unemployment rolls after using up their 99 weeks in the past year. Food banks are booming. Manna on Mainstreet in Lansdale, near my home, had to move to a location three times the size of its former location. I do feel sorry for people who have caught a bad break. My favorite Christmas gift from Avalon was a note saying that a contribution to Manna on Mainstreet had been made in my name.

The people I don’t feel sorry for are those who bought twice as much house as they could afford and now are reaping what they sowed. I don’t feel sorry for those who borrowed against their houses so they could take exotic vacations and drive the latest BMW. In suburbia it is virtually impossible to distinguish between those who deserve help and those who deserve to get it good and hard. We have a stealth depression, as food stamps, unemployment compensation, and welfare payments are all done electronically. No lines. No evidence of suffering. We’ve really improved our depressions.

America’s Dirty Little Housing Secret Is Rocking The Suburbs

Michelle Hirsch, The Fiscal Times

For years, the food pantry in Crystal Lake, Ill., a bedroom community 50 miles west of Chicago, has catered to the suburban area’s poor, homeless and unemployed.

But Cate Williams, the head of the pantry, has noticed a striking change in the makeup of the needy in the past year or two.

Some families that once pulled down six-figure incomes and drove flashy cars are now turning to the pantry for help.

A few of them donated food and money to the pantry before their luck soured, according to Williams.

“People will shyly say to me, ‘You know, I used to give money and food to you guys. Now I need your help,’” Williams told The Fiscal Times last week. “Most of the folks we see now are people who never took a handout before. They were comfortable, able to feed themselves, to keep gas in the car, and keep a nice roof over their head.”

Suburbia always had its share of low-income families and the poor, but the sharp surge in suburban poverty is beginning to grab the attention of demographers, government officials and social service advocates.

The past decade has marked the most significant rise in poverty in modern times. One in six people in the U.S. are poor, according to the latest census data, compared to one-in-ten Americans in 2004. This surge in the percentage of the poor is fueling concerns about a growing disparity between the rich and poor — the 99 percent versus the 1 percent in the parlance of the Occupy Wall Street movement.

But contrary to stereotypes that the worst of poverty is centered in urban areas or isolated rural areas and Appalachia, the suburbs have been hit hardest in recent years, an analysis of census data reveals. “If you take a drive through the suburbs and look at the strip mall vacancies, the ‘For Sale’ signs, and the growing lines at unemployment offices and social services providers, you’d have to be blind not to see the economic crisis is hitting home in a way these areas have never experienced,” said Donna Cooper, a senior fellow at the Center for American Progress, a progressive think tank.

In the wake of the Great Recession, poverty rolls are rising at a more rapid pace in the suburbs than in cities or rural communities. Between 2000 and 2010, the number of suburban households below the poverty line increased by 53 percent, compared to a 23 percent increase in poor households in urban areas, according to a Brookings Institution analysis of census data.

Last year, there were 2.7 million more suburban households below the federal poverty level than urban households, according to the Bureau of Labor Statistics. That was the first time on record that America’s cities didn’t contain the highest absolute number of households living in poverty. There are many reasons for the dramatic turnabout in the geographic profile of poverty.

While many once depressed urban areas are being revitalized in an effort to draw in more affluent residents, other areas are attracting lower-income families who have moved to the suburbs in search of more affordable housing and better schools. This shift in low-income families to the suburbs coincided with a move of low-wage, low-skilled jobs to those same suburban areas between the 1970s and early 2000s, experts say.

Meanwhile, the introduction of new commerce and high-cost housing in the urban neighborhoods pushed overall prices upward, providing added incentive for low-income people to head for the suburbs.

“These are families that were living on the edge in the city, but in many cases over the last 20 to 30 years, regained some stability when they found affordable housing in the suburbs,” said Cooper. “Now, the economy tanks, they lose their jobs, they’re poor, and they’re out in the suburbs on the edge once again.”

Both urban and suburban America were badly hammered by the financial meltdown and recession, leading to stubbornly high unemployment, widespread foreclosures and “underwater” homes, high food and gas prices and sharp cutbacks in government and private social services. But the overall impact has been worse in suburban areas, because many low-skilled jobs disappeared along with the plants and businesses that once provided employment. Other companies shifted their business strategy towards developing a high-skill, high-tech labor force.

To be sure, the picture of poverty in American suburbs is an uneven one. According to the census analysis, some suburban regions took bigger economic hits than others. Poverty rolls increased 121.8 percent in the Atlanta suburbs between 2000 and 2010, compared to a 6.8 percent increase in the city. Chicago and Seattle saw similarly large suburban-urban splits in poverty. The poverty rate increased by 76.3 percent in the Chicago suburbs compared to only 9.7 percent in the city during that period. In Seattle, the number of people living below the poverty line rose 74.4 percent in the suburbs versus 26.1 percent in the city proper over the decade.

The 10-year surge in suburban poverty is putting enormous budgetary pressure on county and local governments and non-profits, which are struggling to meet a rising demand for social services, counseling and financial assistance. The number of students qualifying for subsidized lunches in Conyers, an Atlanta suburb, grew by 63 percent this year, compared with a 46 percent increase in 2006. Many suburban areas of Columbus, Ohio have also seen their subsidized lunch enrollment more than double over the past five years, the Columbus Post Dispatch reported earlier this year.

This post originally appeared in The Fiscal Times.

Read more: http://www.thefiscaltimes.com/Articles/2011/12/27/Americas-Best-Kept-Secret-Rising-Suburban-Poverty.aspx#page1#ixzz1i3ikOb8K

2011 – CATCH-22 YEAR IN REVIEW

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” – Mark Twain

 

I published my predictions for 2011 on January 3, 2011 in my article 2011 – The Year of Catch-22. Humans evidently enjoy being embarrassed by how pitiful they are at predicting the future, because we continue to do it year after year. The mainstream media pundits don’t dare look back at their predictions or the predictions of the Wall Street shills that parade on CNBC and get quoted in the Wall Street Journal, eternally predicting 10% to 15% stock market gains. The multi-millionaire Wall Street strategists like the spawn of the squid, Abbey Joseph Cohen, have used all of their Ivy League brain power to predict at least a 10% stock price gain every year since 1999. The S&P 500 stood at 1,272 on January 6, 1999. As of this writing it currently stands at 1,261. ZERO appreciation over the last twelve years.

The Wall Street mantra of stocks for the long run is beginning to get a little stale. If Abbey Joseph Cohen had been right for the last twelve years, the S&P 500 would be 4,000. For this level of accuracy, she is paid millions. Her 2011 prediction of 1,500 only missed by16%. The S&P 500 began the year at 1,258 and hasn’t budged. The lowest prediction from the Wall Street shysters at the outset of the year was 1,333, with the majority between 1,400 and 1,500.

The same Wall Street clowns are now being quoted in the mainstream media predicting a 10% to 15% increase in stock prices in 2012, despite the fact we are headed back into recession, China’s property bubble has burst, and Europe teeters on the brink of dissolution. They lie on behalf of their Too Big To Tell the Truth employers by declaring stocks undervalued, when honest analysts such as Jeremy Grantham, John Hussman and Robert Shiller truthfully report that stocks are overvalued and will provide pitiful returns over the next year and the next decade.

I will take my chances with a few predictions for 2012 after reviewing my lack of foresight regarding 2011. I declared 2011 the year of Catch-22 because no matter what happened, it would not translate into a positive result for the American people. This was my thesis:

The United States and its leaders are stuck in their own Catch 22. They need the economy to improve in order to generate jobs, but the economy can only improve if people have jobs. They need the economy to recover in order to improve our deficit situation, but if the economy really recovers long term interest rates will increase, further depressing the housing market and increasing the interest expense burden for the US, therefore increasing the deficit. A recovering economy would result in more production and consumption, which would result in more oil consumption driving the price above $100 per barrel, therefore depressing the economy. Americans must save for their retirements as 10,000 Baby Boomers turn 65 every day, but if the savings rate goes back to 10%, the economy will collapse due to lack of consumption. Consumer expenditures account for 71% of GDP and need to revert back to 65% for the US to have a balanced sustainable economy, but a reduction in consumer spending will push the US back into recession, reducing tax revenues and increasing deficits. You can see why Catch 22 is the theme for 2011.

My predictions for 2011 were as follows:

  • The first half of 2011 is guaranteed to give the appearance of recovery. The lame-duck Congress ”compromise” will pump hundreds of billions of borrowed dollars into the economy. The continuation of unemployment benefits for 99 weeks (supposedly to help employment) and the 2% payroll tax cut will goose consumer spending. Ben Bernanke and his QE2 stimulus for poor Wall Street bankers is pumping $75 billion per month ($3 to $4 billion per day) directly into the stock market. Since Ben gave Wall Street the all clear signal in late August, the NASDAQ has soared 25%. Despite the fact that there are 362,000 less Americans employed than were employed in August 2010, the mainstream media will continue to tout the jobs recovery. The goal of all these efforts is to boost confidence and spending. Everything being done by those in power has the seeds of its own destruction built in. The Catch 22 will assert itself in the 2nd half of 2011.

The payroll tax cut, extension of unemployment benefits and Bernanke’s gift to Wall Street criminal banks did nothing to help real Americans in the real world. The government manipulated GDP has languished between 0.4% and 1.8% in the first three quarters of 2011. Using a true measure of inflation, as detailed by John Williams at www.shadowstats.com, GDP has remained at a recessionary level of -2% to -3%.

 

Easy Ben accomplished his goal of pumping up the stock market with his QE2 gift to Wall Street bankers during the first six months of 2011, with the S&P 500 peaking at 1,364 in late April. The market began to fall the second Ben stopped handing Jamie Dimon and his friends $4 billion per day, with the market dropping 18% in three months. The market has risen back near the breakeven level for the year based on Ben’s promise to keep interest rates at zero forever and the hope of QE3.

  • A new perfect storm is brewing for housing in 2011 and will not subside until late 2012. You may have thought those bad mortgages had been all written off. You would be wrong. There will be in excess of $200 billion of adjustable rate mortgages that reset between 2011 and 2012, with in excess of $125 billion being the dreaded Alt-A mortgages. This is a recipe for millions of new foreclosures.

The brainless twits on CNBC will dutifully report the number of completed foreclosure sales plunged by 24% in 2011, giving the impression to their non-critical thinking viewership that all is well on the housing front. What they will fail to point out is that the number of foreclosures in process went up in 2011 and now stands 59% ABOVE the level in 2009 at the height of our recession. The reason that completed foreclosures have fallen is twofold. The criminal Wall Street banks can’t prove they hold the mortgage notes on hundreds of thousands of homes and they have a few legal issues related to the massive robo-signing fraud they committed. Kicking old ladies and Iraq War veterans out into the street using fraudulent documentation has caused the Wall Street Too Evil To Believe Banks some public relations issues. Secondly, the Wall Street Plutocrats have these mortgage loans valued at 100% on their balance sheets due to the FASB gift of mark to fantasy accounting rules. Foreclosing actually reveals their assets to be overvalued by at least 50%. This may explain why millions of Americans are still in their homes after not making a mortgage payment for two years, as detailed by economist Tom Lawler:

Given the number of loans either seriously delinquent or in the process of foreclosure at the beginning of the year, the number of completed foreclosure sales in 2011 is almost absurdly low, reflecting the complete screw-up of the mortgage servicing industry, and the resulting dramatic slowdown in foreclosure resolutions. As of the end of October, 2011 LPS estimated that there were 1.759 million seriously delinquent loans with the average number of days delinquent at 388 (compared to 192 days in January 2008), and there were 2.210 million loans in the foreclosure process that had been on average delinquent for 631 days.

Completed Foreclosure Sales And Short Sales/DILs (thousands, estimates)
  2008 2009 2010 2011(E)
Completed Foreclosure Sales 914 949 1,070 815
Owner-occupied N.A. N.A. 785 608
Non-owner-occupied N.A. N.A. 285 207
Short Sales/DILs 105 270 354 380
Foreclosures plus Short Sales/DILs 1,019 1,219 1,424 1,195
Outstanding first liens: Jan-08 Jan-09 Jan-10 Jan-11
Seriously Delinquent (90+) 1,016 1,983 3,061 2,168
In Process of Foreclosure 860 1,386 2,110 2,203
 
The concerted effort to not complete foreclosures did nothing to slow the continued descent in home prices. As you can see in the chart below from http://www.calculatedriskblog.com/, real home prices will have fallen another 5% in 2011. Obama and his minions threw $50 billion of your tax dollars at the housing market in 2009 – 2010 with tax credits, loan modification programs, homebuilder tax loss carry-backs, and a myriad of other Keynesian claptrap solutions. They succeeded in pissing your tax dollars down the toilet as prices have declined another 12% in the last 18 months. Prices have fallen 42% nationally since 2006. I wonder who missed the boat on that development?
 
“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit.” – Ben Bernanke – July 2005
 
 

There are approximately 48.5 million homes with mortgages in the United States and 10.7 million of them have negative equity. Another 2.4 million have less than 5% equity. Considering it costs more than 5% in closing costs to sell a house that means 27% of home occupiers with a mortgage are trapped like rats in a cage. With 2.2 million foreclosures still in the pipeline and a looming recession, home prices will continue to fall another 10% to 20% over the next two years and one third of all home occupiers will be underwater. That sounds like a recipe for 10% to 15% stock market gains.

  • Quantitative easing has benefited only Wall Street bankers and the 1% wealthiest Americans. The $1.4 trillion of toxic mortgage backed securities on The Fed’s balance sheet are worth less than $700 billion. How will they unload this toxic waste? The Treasuries they have bought drop in value as interest rates rise. Quantitative easing’s Catch 22 is that it can never be unwound without destroying the Fed and the US economy.

Bennie and his Inkjets did a bang up job in 2011. He was able to expand his balance sheet from $2.47 trillion to $2.95 trillion in twelve short months. According to Ben and his Federal Reserve friends, increasing your balance sheet by $480 billion isn’t really printing money out of thin air and handing it to their Wall Street owners for free, so they can prop up the stock market and enrich their executives. Ben is now leveraged 57 to 1. He should move to Europe, where this level of leverage is commonplace. In comparison, Lehman Brothers and Bear Stearns were leveraged 40 to 1 when they went belly up.

There is absolutely no way that Ben Bernanke could ever reduce the Federal Reserve balance sheet to the pre-crisis level without destroying the U.S. economy. He knows that and will never sell off those toxic mortgage assets. Not only won’t he reduce the Fed balance sheet, but by mid-2012 he will institute QE3 and buy another $600 billion of mortgage debt. His hubris knows no bounds, as his reckless illegal actions thus far have not driven interest rates sky high – YET. He has only destroyed the finances of senior citizens, savers and people who eat food and use gasoline. He will surely go down in history, but not the way he envisions.

  • The rise in oil to $91 a barrel will not be a top. The Catch-22 of a declining dollar is that prices of all imported goods go up. If the dollar falls another 10%, the price of oil will rise above $120 a barrel and push the economy back into recession.

As Bernanke printed like a drunken sailor during the first six months of 2011, the USD fell by 9% and the price of oil did exactly as expected, rising to a peak above $125. The NATO “intervention” in Libya also added a few bucks to the price of a barrel of sweet crude.

                  DXY

One-Year Chart for DOLLAR INDEX SPOT (DXY:IND)

The complete implosion of Europe and the ensuing weakness of the Euro have given the false impression that the U.S. dollar is a safe haven. The USD has regained its losses and will end the year exactly as it started versus a Euro heavy basket of world currencies. With annual deficits equaling 10% of GDP, a national debt now exceeding 100% of GDP, and Ben Bernanke in perpetual printing mode, the USD is destined to reach its intrinsic value of zero. With Brent crude still above $108 a barrel, employment still weak, and double digit food and energy inflation slowing consumer spending, the ECRI knows a recession during 2012 is baked in the cake.  

 

  • The imminent collapse of the European Union as Greece, Ireland, Portugal and Spain are effectively bankrupt. Spain is the size of the other three countries combined and has a 20% unemployment rate. The Germans are losing patience with these spendthrift countries. Debt does matter.

It seems I was wrong about Europe. It turned out to be much worse than anyone envisioned, with Italy now the likely fuse that blows the whole thing sky high. The ECB has made Ben Bernanke look like a lightweight by increasing their balance sheet by 44% to over $3.5 trillion in a futile effort to solve a debt crisis with more debt. It seems central bankers are programmed to print until the very end (see Weimar). The European Union will not survive 2012. Too many countries, too much government debt, too many zombie banks, too many bureaucrats, too much austerity rammed down the throats of citizens, and not enough honesty or reality based solutions.

  • State and local governments were able to put off hard choices for another year, as Washington DC handed out hundreds of billions in pork. California will have a $19 billion budget deficit; Illinois will have a $17 billion budget deficit; New Jersey will have a $10.5 billion budget deficit; New York will have a $9 billion budget deficit. A US Congress filled with Tea Party newcomers will refuse to bailout these spendthrift states. Substantial government employee layoffs are a lock.

State and local governments have laid off 535,000 workers since 2008. With borrowed Federal government stimulus handouts evaporating into thin air during 2011 – 2012, this total will reach 800,000 by the end of the next year. The U.S. Postal Service will do their part by cutting 28,000 jobs in 2012, even though they need to cut 100,000. States and municipalities based their budgets on the revenues produced by the fake debt driven housing boom from 2003 – 2007. The tax revenue dried up, but the union jobs added are a gift that keeps on costing taxpayers billions. States and localities can’t print, so layoffs will continue.   

 

  • There is a growing probability that China will experience a hard landing as their own quantitative easing has resulted in inflation surging to a 28 month high of 5.1%, with food inflation skyrocketing to 11.7%. Poor families spend up to half of their income on food. Rapidly rising prices severely burden poor people and can spark civil unrest if too many of them can’t afford food.

According to official government statistics China’s economy continued to boom in 2011. But, of course Chinese government reports make the BLS look honest. The fact is the Chinese stock market has fallen 28% since April as the property bubble deflates. If their economy has truly grown at an annual rate of 8% to 10% over the last five years, why is their stock market down 62% from its 2007 high?

   SHANGHAI INDEX

One-Year Chart for Shanghai Stock Exchange Composite Index (SHCOMP:IND)

The price inflation in food and energy prices, along with the property bubble bursting has led to breakouts of civil unrest across China. China’s two biggest markets – Europe & the United States – are in or near recession and are buying less of their crap. They can only build so many vacant cities and shopping malls to create the appearance of growth. The hard landing is about to get harder in 2012.

  • The Tea Party members of Congress are likely to cause as much trouble for Republicans as Democrats. If they decide to make a stand on raising the debt ceiling early in 2011, all hell could break loose in the debt and stock markets. 

It seems I got the timing wrong on this prediction, but the August showdown was a doozy. The threat of a government shutdown resulted in the stock market collapsing by 18% in a matter of weeks in August. Our beloved politicians then came up with another bullshit non-solution by creating a commission which, after months of negotiations, failed to do anything. The $1.2 trillion of automatic spending cuts will never happen. The slime that inhabit the hallowed halls of Congress will pretend to cut, while actually increasing spending. And so it goes. The stock market has risen from its October low based on Easy Ben’s assurances to keep interest rates at zero forever and the anticipation of QE3 in the new year.

  • Will the consensus forecast of a growing economy, rising corporate profits, 10% to 15% stock market gains, 2 million new jobs, and a housing recovery come true in 2011? No it will not. By mid-year confidence in Ben’s master plan will wane.

Corporate profits did rise, mostly due to Ben Bernanke providing free money to the Wall Street Mega-Banks so they could generate risk free profits on the backs of senior citizens getting .15% on their savings. It also helps when the same Wall Street banks can make accounting entries declaring that future loan losses will be minimal and the toxic mortgages on their books aren’t really worthless. Who knew accountants could do so much for America? Abbey Joseph Cohen only missed her stock market projection by a smidgeon. The S&P 500 is essentially unchanged for the year, while the NASDAQ and Russell 2000 will finish in the red.

The country did not add 2 million new jobs. It added 1.4 to 1.5 new jobs. Too bad the working age population went up by 1.7 million people. But our friends at the BLS, when they aren’t manipulating away the inflation that real people in the real world experience every day, have the gall to declare the unemployment rate has fallen from 9.8% to 8.6% in the last twelve months. How could this be you might ask, since the working age population went up by more than the number of people who found jobs. Easy if you are a BLS government drone. Everyone knows that things are so good out in the real world that 1.8 million Americans decided to kick back and enjoy the good life by leaving the workforce. It wasn’t because they gave up looking for the jobs that were shipped to the Far East by the mega-corporations making record profits and paying record bonuses to their executives. It’s just a rumor that those long lines at food banks around the country have a few of these “lucky” non-members of the workforce in them.

The housing recovery is just around the corner. Larry Yun, chief liar for the National Association of Realtors, assures us that it’s the best time to buy. We all know that the NAR is a bastion of honesty and truth. Just because they reported 3 MILLION more home sales than actually occurred between 2007 and 2010, you can’t scorn, ignore and treat everything they say as a bald faced lie. If Larry says the housing recovery has arrived, it must be true.

  Revised Previous % Change
2007 5,022,000 5,652,000 -11.1%
2008 4,124,000 4,913,000 -16.1%
2009 4,334,000 5,156,000 -15.9%
2010 4,182,000 4,907,000 -14.8%

When the pundits on CNBC sum up the year, they will not be touting the fact that gasoline prices went up 10% in the past year and the average price for a gallon of gas was the highest in U.S. history. They will not be proclaiming that even the government manipulated CPI shows food prices up 6% and clothing prices up 5% in the last year. I’m sure glad Ben Bernanke doesn’t see any inflation on his radar. Maybe he should ask his chauffer about his inflation. Lastly, the stocks for the long run crowd will not be yakking about the fact that gold finished up 10% for the year and has been up for TEN consecutive years. I wonder whether the numbskulls on CNBC can look at the chart below and figure out why gold is up ten years in a row. The national debt reaching $20 trillion by 2015 is a given. I wonder whether the price of gold will be higher. Maybe I’ll give Abbey Joseph Cohen a call and ask for her prediction.

Overall, my assessment of what would happen in 2011 wasn’t too far off. But, it was the things that I and virtually everyone on the planet missed that will reverberate in 2012 and for the next ten years. Our 20 year Crisis deepened, became more violent, and clearly revealed that the establishment will use all their power to put down protests and crush opposition to their corrupt crony capitalistic policies. The major developments I missed regarding 2011 included:

  • The self-immolation of a young Tunisian man set off revolutions around the globe, toppling U.S. supported dictators in Tunisia and Egypt. Dictators attempted to retain power by killing citizens by the thousands. The self-immolation of a man in New Hampshire in front of a courthouse was completely ignored by the mainstream media. I wonder why.
  • The Arab Spring has resulted in revolutions in Yemen, Bahrain, Syria and Libya. Depending upon how much oil was at stake, the U.S. has supported the dictator or the people whenever it suited them. This is called democratic principles.
  • Young people across the U.S. were inspired by the Arab Spring and began to Occupy Wall Street and many other streets in 97 other U.S. cities this past Fall. The spirit of these protests was against Wall Street criminality, Washington corruption, and corporate malfeasance. Peaceful civil disobedience by citizens of this country was met with beatings, tear gas, mass arrests and bulldozing their encampments. Students were maced while sitting in front of a college building. Ultimately a Department of Homeland Security coordinated attack on all the protests squashed the movement. The American people were too distracted by Dancing With the Stars and the latest iGadget to notice. The corporate media did their part by spewing misinformation and propaganda about the Occupy Movement, while the Wall Street Elite giggled with delight from their NYC penthouse suites.
  • Shockingly, no bankers were prosecuted despite clear unequivocal evidence of the greatest financial fraud in world history. The former head of Goldman Sachs, U.S. Senator, and NJ Governor continues to eat caviar and drink champagne in his glorious mansion after stealing $1.2 billion directly from customers’ accounts. These funds now reside in the pocket of Jamie Dimon and his upstanding JP Morgan institution.
  • The Federal government methodically moved closer to a totalitarian regime by passing legislation that will enable them to imprison U.S. citizens without charges. The only remaining area that has allowed critical thinking Americans to find the truth – the Internet – is on the verge of being locked down by the Feds. Pending legislation will allow them to shut down any website that may inconvenience their agenda. We inch ever closer to Orwell’s vision of the future.
  • No one in the MSM or government anticipated that the only truthful, honest, forthright politician in Washington D.C. – Ron Paul – could possibly win the Iowa caucus. His message of freedom, liberty, self reliance, and non-interventionism has struck a chord with young people and those capable of distinguishing between MSM propaganda and reality. The establishment is terrified of Ron Paul and is now on a mission to destroy him. What they don’t realize is their time is coming to an end. The existing social order will be swept away in a violent manner. The youth of this country will lead the charge. 2012 should be a real doozy.

I’ll take another shot at predicting the unpredictable with my next article:  2012 – The Year of Living Dangerously.

SEARS – I TOLD YOU SO

Anyone remember my SEARS = TOAST post from May of this year? Here is a snippet:

Jesus Christ himself couldn’t save Sears. Has anyone on TBP actually bought anything at a Sears/Kmart in the last five years? They are the worst run retailer in America. They are dead and don’t even know it. These morons have added 247 new stores since 2006 but have managed to decrease their annual sales by $10 billion. Eddie Lampert is truly a retail genius. Over the next five years you will see a battle of retail zombies. Every big box retailer is part of the walking dead.

Sears will be the first victim and the stronger zombies – Home Depot, Lowes, and Wal-Mart will destroy them by underpricing appliances and tearing their heart out. Target, Kohls, and Wal-Mart already destroyed their apparel and general merchandise business.

A forward thinking realist would take a look at his 4,038 stores and close the 1,000 worst performing stores and try to conserve cash for the rough years ahead. They will not do this. They will go out in a blaze of glory with the biggest retail bankruptcy in history. There will be 4,038 rat infested vacant hulks rotting in our communities for decades.

You know I hate to tell people I told them so, but after yesterday I’m afraid I have to do it again. The demise of Sears is baked in the cake. Remember the stories in the MSM about Eddie Lambert being the new Warren Buffett. They were right. Buffet and Lambert have both proven to be dumbasses. Buffet’s brilliant investments in Goldman Sachs, GE and Bank of America have all sucked.

Eddie Lambert bought K-Mart and Sears as asset plays. One problem – the asset values of the properties have been cut in half. The fact that Sears and K-Mart are the worst managed retailers in America hasn’t helped. Sears started the year with $1.3 billion in cash and has burned through $600 billion in twelve months. This Lambert is a fucking genius. He is butt brothers with Jimmy Cramer. They worked together at where else but – GOLDMAN “THE VAMPIRE SQUID” SACHS. Cramer has been pumping this stock for years. Let’s assess his brilliance as an investment guru.

The stock traded at $192 per share in early 2007. Jim Cramer rated it a buy at this level. Today it trades at $34 a share. That is a NEGATIVE 82% return in just under five years. That is about par for the course for Jim Cramer. It traded at $95 earlier this year. It dropped 27% yesterday alone.

Here’s the deal. These bozos opened 247 new stores since 2006 and now they announced they are closing 120 stores. That is a piss in the ocean. If they really got serious and closed their 1,000 worst stores, they would have a chance to survive. But the ego of Eddie Lambert will not allow that decision to happen. He thinks he is smart. He’s a graduate of Goldman University for Christ’s sake. His reluctance to accept the facts will result in the bankruptcy of this piece of shit retailer and will leave the rotting carcasses of 4,000 rat infested hulks across suburbia. This stock is going to zero.

Thanksgiving Day Massacre: Sears Slaughtered On Collapsing Margins, To Shutter Hundreds Of Stores, Provides Revolver Update

Tyler Durden's picture

Submitted by Tyler Durden on 12/27/2011 06:24 -0500

That retailer Sears, aka K-Mart, just preannounced what can only be described as catastrophic Q4 results should not be a surprise to anyone: after all we have been warning ever since the “record” thanksgiving holiday that when you literally dump merchandize at stunning losses, losses will, stunningly, follow. Sure enough enter Sears. What we, however, are ourselves stunned by is that as part of its preannouncement, Sears has decided it would be prudent to provide an update on its credit facility status as well as availability. As a reminder to anyone and everyone – there is no more sure way of committing corporate suicide than openly inviting the bear raid which always appears whenever the words “revolving credit facility” and “availability” appear in the same press release. Just recall MF Global. And here, as there, we expect shorting to death to commence in 5…4…3…

From Sears:

Sears Holdings Corporation (“Holdings,”  “we,” “us,” “our,” or the “Company”) (Nasdaq: SHLD – News) today is providing an update on its quarter-to-date performance and planned actions to improve and accelerate the transformation of its business. 

Comparable store sales for the eight-week (“QTD”) and year-to-date (“YTD”) periods ended December 25, 2011 for its Kmart and Sears stores are as follows:

K-Mart

QTD  -4.4%

YTD  -1.8%

Sears Domestic

QTD  -6.0%

YTD  -3.3%

Total

QTD  -5.2%

YTD  -2.6%

Kmart’s quarter-to-date comparable store sales decline reflects decreases in the consumer electronics and apparel categories and lower layaway sales.  Sears Domestic’s quarter-to-date sales decline was primarily driven by the consumer electronics and home appliance categories, with more than half of the decline in Sears Domestic occurring in consumer electronics.  Sears apparel sales were flat and Lands’ End in Sears stores was up mid-single digits.

The combination of lower sales and continued margin pressure coupled with expense increases has led to a decline in our Adjusted EBITDA.  Accordingly, we expect that our fourth quarter consolidated Adjusted EBITDA will be less than half of last year’s amount.  For reference, last year we generated $933 million of Adjusted EBITDA in the fourth quarter ( $795 million domestically and $138 million in Canada ). 

Due to our performance in 2011 we expect that we will record in the fourth quarter a non-cash charge related to a valuation allowance on certain deferred tax assets of $1.6 to $1.8 billion .  Although a valuation adjustment is recognized on these deferred tax assets, no economic loss has occurred as the underlying net operating loss carryforwards and other tax benefits remain available to reduce future taxes to the extent income is generated.  Further, we may recognize in the fourth quarter an impairment charge on some goodwill balances for as much as $0.6 billion .  These charges would be non-cash and combined are estimated to be between $1.6 and $2.4 billion . 

“Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model. These actions will better enable us to focus our investments on serving our customers and members through integrated retail – at the store, online and in the home,” said Chief Executive Officer Lou D’Ambrosio.  Specific actions which we plan to take include:

  • Close 100 to 120 Kmart and Sears Full-line stores.  We expect these store closures to generate $140 to $170 million of cash as the net inventory in these stores is sold and we expect to generate additional cash proceeds from the sale or sublease of the related real estate.  Further, we intend to optimize the space allocation based on category performance in certain stores.  Final determination of the stores to be closed has not yet been made.  The list of stores closing will be posted at www.searsmedia.com when final determination is made.
  • Excluding the effect of store closures, we currently expect to reduce 2012 peak domestic inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter as a result of cost decreases in apparel, tighter buys and a lower inventory position at the beginning of the fiscal year.
  • Focus on improving gross profit dollars through better inventory management and more targeted pricing and promotion. 
  • Reduce our fixed costs by $100 to $200 million .

In addition to the specific store closures listed above, we will carefully evaluate store performance going forward and act opportunistically to recognize value from poor performing stores as circumstances allow.  While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment.  We intend to accentuate our focus and resources to our better performing stores with the goal of converting their customer experience into a world-class integrated retail experience.

We currently expect the store closure and inventory reduction actions to reduce peak inventory in 2012 by $500 to $580 million and reduce our peak borrowing need by $300 to $350 million in 2012 from levels that may have resulted in 2012 without such actions. 

At December 23rd , we had $483 million of borrowings outstanding on our domestic revolving credit facility leaving us with over $2.9 billion of availability on our revolving credit facilities ( $2.1 billion on our domestic facility and $0.8 billion on our Canadian facility).  There were no borrowings outstanding last year at this time.

During the fourth quarter through December 23, 2011 , we have not repurchased any of our common shares under our share repurchase program.  As of December 23, 2011 , we had remaining authorization to repurchase $524 million of common shares under the previously approved programs.

Money in America, Part Two

In our last exciting episode, we saw barter, foreign coinage, fiat money, the rise of a banking system and systematic efforts to fiddle the system, by both banks and government. From one Turning to the next …

When the War Between the States ended, federal expenses had doubled, to $130 billion. The United States notes called the “greenback” arose from the Legal Tender Act of 1862, especially useful for all debts, public and private when there was already not enough specie to support the banking system.

The old state banking operations were supplanted by a system of banking entwined with the federal government. This new scheme led to the establishment of the Federal Reserve System.

First, of course, the government had assured the people that only $150 million greenbacks would be issued. Alas, they made two more issues, reaching a total of $415 million in 1864, all of which depreciated in real terms. Secretary Salmon P. Chase had tried unsuccessfully to manipulate the gold market to stem the depreciation along with other ‘tricks’. He ended up losing office.

Meanwhile, the state banks were still operational, and quite happy with the new fiat currency.

Needless to say, price inflation increased significantly. In the South, the Confederate fiat money issuance was far worse.

In 1865, Congress legislated a 10 percent tax on existing state banks notes. After that, the federal national banking system that had arisen had the legal monopoly on fiat money.

Much argument about the large public debt which existed after the war, and what to do about it and the greenback question. A federal debt of about $65 million in 1860 had blown out to $2.3 billion in 1866. The greenback issue was finally ruled unconstitutional in 1870 by Chief Justice Salmon P. Chase. Yes, he was for it before he was against it. Chase had become a born-again sound money supporter.

The Republicans of the day loved the legal tender laws; Democrats supported specie resumption. The railroads weren’t happy at the thought of paying their massive debts in gold. President Grant had two vacancies on the Supreme Court – and judiciously filled them with a pair of railroad lawyers. A 5-4 revisit to The Law in 1871 established paper money in accordance with the Constitution. All the banks, state and national, were happy, too, and the money supply more than doubled in seven years.

The Panic of 1873

Easy money led to easy loan, to individuals and companies. When the growth levelled off after their period of prosperity, the money supply did not decrease, nor productivity. Prices fell because costs were down and output up.

So where, really, was the panic? Yes, with a bloated banking system and railroads fat with subsidies from the federal government and the inevitable boom time speculation. Then Jay Cooke’s Northern Pacific railroad crashed and burned – hoist on his own petard of inflationary policy.

The U.S. Mint ratios, as determined by the Constitution, undervalued silver. As a result, silver coinage left for better climes where the value was respected. That’s the flaw of a bimetallic system. Also, European countries were shifting from silver to a gold standard. Add the discovery of silver mines in the American West and a government intervention.

February 1873, Congress passed a bill discontinuing further minting of silver dollars. Further legislation in June, 1874, demonetized silver for good. The GSR reached 18-1 in 1876 and was 32-1 on 1894!

The lack of transparency regarding silver had not been unnoticed by those who called for the free coinage of silver at the traditionally accepted ratio, and in unlimited quantities. This faction carried on throughout the century. Really, this movement was essentially the people vs. eastern bankers …

In 1875, the ubiquitous greenbacks still circulated, albeit discounted by 17% against gold. Grant’s administration determined to resume specie resumption in 1879. The next decade experienced great productivity, gold flowed into the country, prices were still edging downward, yet wages were up by 23 percent. Goodbye greenbacks.

Even the great Panic of 1873 had GDP growth of 6.8 perent a year. Prices going down is a signal for some economists to shriek “deflation”. Ordinary people hardly noticed; maybe the main deflation was that of fatcats whose greed brought them down.

(1877 – The Department of the Treasury’s Bureau of Engraving and Printing started printing all U.S. currency, A year later, they issued Silver Certificates in exchange for silver dollars. The last issue was in the Series of 1957. )

The Gold Standard Era, 1879 –1913

The NBER identifies a Long Depression from October 1873 to March 1879. At 65 months, this was a bigger record than the Great Depression of the 20th Century, which contraction was 43 months.

Some economists see price deflation over a long span and interpret that as the Great Depression of 1873 – 1896. While this period was most noticeable in Great Britain, in the U.S. after the inevitable correction to the panic, Main Street nor farmers hardly noticed any problem.

Productivity through 1897 continued to grow at 3.7% each year, average. Prices crept downward one percent a year. The change in money supply made the difference. A small panic hit in 1884 due to a minor contraction in the money supply.

Foreigners noted the increase of silver reserves at the Treasury and wondered if the U.S. would stay on the gold standard. The domestic agenda actually had to do with favors to the pro-silver bugs, including the western miners.

This was a tremendous period of growth – real wages climbing, prices declining slightly, savings up, inflation modest. High employment, significant investment activity, and continued rise in productivity created a period seldom equalled in American history. In real terms.

Like some say, no good deeds go unpunished.

The Devils in the Details

In the real world, one cannot separate politics and economy – it’s a symbiosis. Only academics can do this, as though it is meaningful. Back before Lincoln’s War, we saw the Whig Party implode, and Lincoln seeking his destiny with the new Republican party.

He did say, however, “I will always be a Whig in politics” which meant following his idol, Henry Clay, with internal improvements, high protectionism by tariff, a strong central government, and a national bank predicated on inflationary money policy.

In other words, mercantilism, cronyism, central control. And regionalism. For decades, tariffs had been based on the bulk of the costs borne by the South and the expenditures by the federal government primarily in the North.

The new Republican party in 1854 grew from a coalition of Whigs in disarray, “Free Democrats”, the Liberty Party, “Free Soilers” and abolitionist Democrats. Everybody had an agenda and none of it amounted to “the party of limited government” and the rest of the hype.

After Andrew Johnson’s one term, there were Republican administrations: Grant, Hayes, Garfield, Arthur – and in 1885, the first term of Democrat Grover Cleveland.

The Republicans’ nomination of James G. Blaine of Maine, former Speaker of the House, for president dissatisfied many partisans who considered Blaine as immoral. Democrats seized the day by nominating Cleveland, whose reputation of opposing corruption in government appealed to voters generally.

Cleveland’s first term was marked by significant government reform. He repudiated the ‘spoils system’ in which an incoming president appointed party cronies and turfed out the opposition. Cleveland said Republicans doing their jobs well would not be fired, merit ruled. He also diminished government departments staffed by chair warmers. Even worse, from some points of view, he attacked railroad robber barons who had not extended rail lines in accordance with agreement – those land grants were forfeit.

Cleveland was also the master of the presidential veto.

He also believed in a gold standard as opposed to bimetallism, which won him more enemies of the silver persuasion. And he also advocated tariff reform, as the beloved Republican high tariffs had actually created a government surplus. The Republic Senate, however, defeated the reform bill. The tariff question became a significant issue in the 1888 election.

Republican candidate Benjamin Harrison won two swing states, narrowly defeating Cleveland yet slightly behind the national popular vote – another victory for the Electoral College.

The advocates for free silver resurrected. The Sherman Silver Purchase Act of 1890 required the Treasury to buy 4.5 million ouces of silver each month. To pay for this increase in reserves, wait for it … a new issue of greenbacks although these were redeemable, with Treasury deciding whether gold or silver would be used.

1890 – Inflation is good!

Harrison, of course, had supported the Sherman Silver Purchase Act of 1890. Add the McKinley Tariff Act of 1890 and the supporters of high tariffs and an inflationary policy were happy.

Also, in August of that year, the New York Subtreasury used old greenbacks and the new greenback (silver) Treasury Notes. The result was paper replacing gold for settling customs charges. Cause and effect thus yielded gold outflows to foreigners, decreased imports, and growth declined.

Interventions beget interventions.

With foreigners already concerned about the U.S. honoring the gold standard, the Treasury imposed a fee on exported gold bars. As a result, all gold leaving the country was by American gold coin! Then the Senate put the cat among the pigeons in 1892 by passing a free-silver coinage bill.

Inevitably, gold exports increased. The gold-backed dollar was untrusted.

Banks submitted $6 million in Treasury notes for redemption. Treasury, worried about their declining gold reserves, implored the banks to exchange the gold for paper.

But as imported goods became more expensive, formerly Republican voters, particularly in the western states, opted for the new Populist Party. The election of 1892 was a curious and quiet affair: Harrison’s wife was dying of tuberculosis and he elected not to actively campaign. Cleveland followed in deference.

Nonetheless, much activity by the free silver factions opposing the Republican agenda, and others, led to a strong victory for Cleveland’s second term, with a significant margin in both electroal and popular vote.

He was inaugurated during this period of uncertainty and money crisis. In May 1893, the stock market collapsed. And in June, a run on the banks caused failures across the land. Many remaining banks suspended specie payment with government permission. The full-blown Panic of 1893 rocked the country. The total money supply diminished over 6 percent.

Cleveland, a sound money advocate, strongarmed the repeal of the Sherman Silver Purchase Act in November.

The gold-standard was reaffirmed.

Even so, silver advocates continued to press their case in 1895. The Treasury actively bought gold from a cartel of banks, including J.P. Morgan, and reassured everyone that gold was king.

Meanwhile, the fight against the McKinley Tariff continued. A revision bill passed the House with a large margin, after much debate. The Republican Senate, however, felt compelled to add over 600 amendments, all protectionism for cronies. The tariff, especially on raw materials was decreased, but to make up the revenue shortfall, a compromise income tax of 2% on earnings over $4,000 was added. Cleveland was not wholly satisfied with the reform but let the bill become law without his signature.

Gold and Party Politics in 1896

The once-and-forever two-party political system as we know it simply did not exist in the 19th Century.

As mentioned earlier, the Whig party effectively shot itself in the foot. Whigs became new Republicans. Four political parties contested the 1860 election. After the unCivil War, several special interests coalesced: farmers wanting lower railroad freight charges and higher crop prices, silver miners and silver bugs, prohibitionists and factions for certain populist changes to the system.

A People’s Party began in the Utah Territory in 1870 and expired in 1891. More concerned with local issues, they purported to represent the majority of Utah residents; supporting women’s suffrage helped the party. The dissolution of the party as such was an aid to gaining statehood in 1896.

The People’s Party of 1887 – 1908 is more commonly know as “the Populists” and became formally organized in 1893 with the adoption of the “Omaha Platform.” This resolution included:

  • free silver (and bimetallism!)
  • a graduated income tax
  • direct election of senators
  • public ownership of railroads and communication
  • women’s suffrage
  • eight-hour work day
  • restricted immigration

Everyone knows the phrase “the man behind the curtain” and the metaphor gets wide use in our time. L. Frank Baum’s 1900 “The Wonderful Wizard of Oz” may well contain political imagery, though it is unclear if Baum himself intended this or if later commentary reads the story as allegory.

Most people in our time are probably more familiar with the movie version. Perhaps a significant clue, Dorothy’s silver shoes in Baum’s story became ruby slippers, courtesy of Technicolor.

The movie departs from the story significantly, as Baum wrote Oz as a real place, not a dream. Another clue might be that a later Baum Oz book mentioned Aunt Em and being unable to pay the mortgage on the new house which replaced the carried-away one.

If the symbolism was intended, then the characters represent:

  • Dorothy – the American people
  • Scarecrow – western farmers (backbone of Populist movement)
  • Tin Woodman – industrial workers
  • Cowardly Lion – William Jennings Bryan (lost elections)
  • Wicked Witch of the East – eastern banking interests
  • Yellow Brick Road – gold leads to Washington, DC
  • Oz – abbreviation of ounce (gold or silver?)
  • the Wizard – possibly William McKinley

Baum supported women’s suffrage, and had known a Populist advocate who later was an elected People’s Party senator.

The Panic of 1893

Haven’t we seen this movie before?

Well, yes, we did skim it above – but 1893 is a reprise of 1873. The usual suspects: Treasury mistakes undermining the greenback, their gold reserves declining, railroad speculation, national and state banks suspended specie payments. McKinley’s Tariff of 1890 contributed rising import prices and gold outflow from the U.S.

The Philadelphia and Reading Railroad went bankrupt ten days before Grover Cleveland’s second inauguration. Then, the National Cordage Company went into receivership – it had been the most active stock on the exchange. Several other railroads went bankrupt. The stock market crashed completely. Unemployed soared to near 20%.

Distrust of the banking system caused runs on banks all across the country. The money supply diminished over 6% in less than a year.

By November, Cleveland had killed the silver purchase act, the Treasury acted to restore confidence in the gold standard, and the panic was over.

But there was yet no joy on Main Street Unemployment remained high. Ohio congressman Jacob Coxey led a “petition in boots” march from Massillon in March, 1894. Coxey’s Army of over 500 reached Washington, DC and were arrested – don’t walk on the grass at the Capitol!

Another faction out west had commandeered a Northern Pacific train, avoided detainment by Federal marshalls as they headed east. They were stopped most of the way across Montana, at Forsyth, by the army. This action foreshadowed the military breaking the Pullman Strike later in the year.

The Populist movement thought they had a win by getting Lincoln’s income tax resurrected. “Curse you, robber barons,” they might have said. But the Supreme Court had the last word in 1895 and struck down the measure.

Needless to say, with Republicans and Democrats blaming each other for everything, the 1894 election was a bloodbath for Democrats. And the Populist movement was marginalized and thus had to support the Bryanite Democrats in the 1896 election.

The election of 1896

It was a year that the political party system in the U.S. changed for the fourth time. For the Populists, every cloud had a silver lining and William Jennings Bryan was one.

This election was about money in more than one way: bimetallism and free silver, the gold standard, the tariff – and who could spend the most.

1896 truly ushered in modern campaigning. Republican campaign manager Mark Hanna commanded $3.5 million, easy when your candidate, McKinley represents the moneyed classes. Bryan appealed to the Rocky Mountain states, rural Midwest, and the South.

And so much for the two-party myth: there were nominations from the Democrats, National Democratic Party (pro-gold), the Populist Party, the Socialist Labor party, and the Prohibition Party and the Silver Party of Nevada.

Bryan appeared to be an outside chance at the nominating convention of the Democratic party but had the final word on the third day of the debate: his “Cross of Gold” speech turned the tide. Having begun with humility, and illustrated the equivalence of all walks of life as kinds of business; praised bimetallism, invoked an early ‘trickle-down’ concept as a bad idea, and finished with the killer quote:

“Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests, and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold.”

He walked back to his chair, in silence, thinking he had failed. Only then, the crowd exploded in praise, a frenzy that took nearly a half hour to quell.

It took five ballots the next day but Bryan carried that day.

Alas, his rhetoric did not carry the election. This key aspect of the Democratic platform more than anything:

We demand the free and unlimited coinage of both silver and gold at the present legal ratio of 16 to 1 without waiting for the aid or consent of any other nation. We demand that the standard silver dollar shall be a full legal tender, equally with gold, for all debts, public and private, and we favor such legislation as will prevent for the future the demonitization of any kind of legal tender by private contract.

killed Democratic aspirations and McKinley reigned. The free silver enthusiasts built a castle of dreams and good intentions, failing to understand that they could not impose their GSR on the rest of the world.

The real outcome of 1896 was the death of any support for the quaint Democratic party belief in small government, sound money, and laissez-fare ‘mind your own business’ attitudes. The wowsers won and the drive for Prohibition would not go away.

Old-time Democrats had voted Republican for the first time in their lives.

The McKinley campaign also succeeded because “those men behind the curtain” were the Morgan and Rockefeller banking groups; $3.5 million war chest had to come from somewhere! One of the stipulations for McKinley was to agree to support the gold standard.

The Populists were down but not out. Another Reform movement began, to solve the problems they perceived in monetary police and their dislike of the gold standard. A grassroots currency reform in the Midwest was suggested in a letter to the Indianapolis Board of Trade – by Mark Hanna, businessman, political manager and also friend of President McKinley, and U.S. Senator from Ohio from 1897 to 1904.

The Indianapolis Monetary Convention began in 1897 with representatives from 26 states and the District of Columbia. The Yale Review noted it was an assembly of “businessmen in general” and not “bankers in particular”.

One of their resolutions suggested a new and improved system of elastic bank credit. Do you see where this is heading?

Meanwhile, the economy had recovered in 1897 and the Progressive Era would soon remake the society.

*

Money in America, Part One « The Burning Platform

How Does Your Personal Capital-To-Income Ratio Stack Up with This Recommendation?

Today I’m highlighting the capital to income ratio, which I’d heard about before, but hat tip to White Coat Investor (good new finance blog I found which you should check out) for making me rethink it and share again here.  Basically, this is one of the many ratios that Charles Farrell focuses on in his book Your Money Ratios.  The capital to income ratio is a basic measure of your retirement savings divided by your current income.  Why does this ratio matter?  Because it gives a good measure as you progress through your life where you should be.  Too many Americans coast through life enjoying life in the moment without regard for “saving for a rainy day” (retirement).  Some of the drawbacks of the measure, as I see it, include the following:

One-size-fits-all approaches are usually flawed.  This is the case when…

Continue Reading Capital to Income Ratio

IRAN IS BIG

Another good article from http://www.theoildrum.com/. Some interesting charts and maps. The first chart shows that Iran produced 6 million barrels of oil per day in the 1970s. The Islamic revolution and the brutal war with Iraq resulted in a collapse of their oil production. It has barely reached 4 million barrels per day since the early 1990s. They are unable to ramp up production due to sanctions and the lack of technological expertise. More than 60% of their exports go to the far east. China, Japan and India will not be happy if Israel and the U.S. decide to teach Iran a lesson.

I’ve always been geographically challenged. I never realized the size of Iran. Take a really good look at that map. Iran dominates the Middle East. Take a long hard look at the Persian Gulf and the Strait of Hormuz. Approximately 15 oil tankers per day, carrying 34% of the world’s oil supply, must traverse a 6 mile wide traffic lane. Imagine what would happen to worldwide oil prices if this Strait was shutdown. The Iranians aren’t stupid. This is their trump card.

Imagine how many soldiers it would take to subdue a country this large. Cruise missiles and B1 bombers aren’t going to defeat Iran. We’d just be killing thousands of innocent Iranians. The neo-cons like Gingrich and Romney act like taking out Iran will be a piece of cake. When have the neo-cons ever been wrong? The sanctions and embargoes are designed to force Iran to do something stupid. They will be attacked no matter what they do. The unintended consequences will likely lead to the next phase of this Fourth Turning.

Iran – Possible Implications of an Oil Embargo

Posted by Euan Mearns on December 6, 2011 – 6:30am
Does Thursday’s announcement that the EU is considering to ban oil imports from Iran epitomise the draining of power from west to east? The big winners here will be China and India, who do not fear rising Iranian influence and who will gladly soak up any additional oil exports they may have to offer. However, ending this small dependency upon Iranian oil imports in Europe (Figure 2) does clear the way for military action without the need to ponder the immediate consequences on oil imports.

 


 

Figure 1 Iran displays export land traits where growing domestic consumption is eating into the oil available for export that has been declining slowly since 2003. Data from BP. Y-axis is barrels per day (1000s). Balance = production less consumption which is a proxy for net exports. Production = crude+condensate+NGL whilst consumption may include refinery “gains” and bio-fuel. In many countries there is also an active two-way trade in crude and refined products. 

In a week where the UK embassy in Iran was overrun and the two countries are breaking off diplomatic ties, on the back of heightened concern about Iran’s nuclear weapons program and an unexplained explosion at an Iranian missile launching site, the EU has decided to flex its muscles and to ban Iranian oil imports. The big winners here are the other countries importing oil from Iran – Japan, China, India and South Korea. Does the EU really believe that in today’s extremely tight oil market that oil sanctions against Iran will worry them in the least? 


 

Figure 2 Table from a worthy article on Iranian oil and demographics posted on Crude Oil Peak details the countries importing oil from Iran in 2008. The four EU countries to be affected by any embargo will be Italy, Spain, Greece and France. Given that Greece and Spain are already in recession and that Italy and France are heading in that direction, it seems likely that their oil consumption will already be on the wane and that losing these relatively small amounts of Iranian imports will have little consequence. 


 

Figure 3 OPEC net exports (production consumption balance from BP) showing the importance of The Gulf states. 

With the risks of armed conflict against Iran increasing with every week that passes it is important to grasp what this may mean for global oil markets. Two end points seem to exist. The first is where “the West”, i.e. NATO or some other looser alliance ± Israel launches a cruise missile attack (conventional) against Iran’s nuclear facilities. destroying them. In that eventuality Iran, with current leadership, would be unlikely to ever again export oil to “the West”, but since at that point The West will not be importing any oil from Iran this would not matter. 


 

Figure 4 Iranian oil infrastructure, setting in the Arabian or Persian Gulf and the linch pin location of The Straights of Hormuz. Map from Wikipedia. 

The second more extreme scenario is that armed conflict spreads, compromising oil exports through the Straights of Hormuz. Oil exports from Saudi Arabia, Kuwait, The United Arab Emirates (UAE), Qatar, Iraq and Iran all pass through Hormuz. Data is not available for Iraq, but exports from Saudi, Kuwait, UAE and Qatar stood at around 12,805,000 bpd in 2010. The global net export market stood at around 35,173,000 and so these 4 countries alone account for around 36.4% of the global export market (excluding Iraq and Iran). Should these exports cease, albeit temporarily, the oil price will go through the roof, causing severe trauma to the global economy, including China. 

In addition, there are significant liquefied natural gas exports from Qatar that pass through Hormuz on a daily basis. According to BP, Qatar exported around 96 BCM of gas in 2010 (Figure 5) to the countries shown in Figure 6. In Europe, the UK, Spain, and Belgium would be most affected by disruption to LNG supplies from the Gulf whilst in Asia, India, S Korea, and Japan would be most affected. This highlights the increasingly exposed nature of OECD energy supplies where electricity supplies may be threatened by armed conflicts on the other side of the world. 


 

Figure 5 Production / consumption balance for natural gas in Qatar. 


 

Figure 6 Destinations of LNG exports from Qatar in 2010. 

IT’S GOOD TO BE A MEGA-CORPORATION

The 30 mega-corporations in the chart below generated $164 billion of profits in the last three years and paid no taxes. Not only did they pay no taxes, they received $10.6 billion in tax refunds. Not a bad return on their $476 million lobbying investment. This was all done legally. You see when their lobbyists right the laws for Congress and the tax rules for the IRS, things tend to fall in your favor. I’d love to see the compensation amounts for the CEOs of these organizations.

Did you pay any taxes between 2008 and 2010? If so, you paid more in Federal taxes than 29 of these 30 mega-corporations. You should fire your lobbyist.

Remember this information the next time you hear Gingrich or Romney declare that corporate tax rates are too high.

Country’s Largest Corporations Spend More Money On Lobbying Than Taxes

 

120711flag.jpg

In a “remember me, three years ago?” speech in Kansas yesterday, President Obama told the crowd, “This country succeeds when everyone gets a fair shot, when everyone does their fair share and when everyone plays by the same rules.” A new report [pdf] from the non-profit organization Public Campaign shows that 30 of the country’s largest corporations—including GE, Wells Fargo, Verizon, and Fed Ex—paid more to lobby Congress from 2008 through 2010 than they did in federal income taxes. What country was the president referring to?

Of the 30 companies, only one actually paid any federal income taxes: FedEx. The rest received nearly $11 billion in rebates. And even FedEx only paid 1%, 34% less than the statutory rate. As for lobbying, the 30 corporations spent a combined $476 million—or $400,000 a day every single day of the year, to ensure their interests were represented in Congress. GE led with way with $84 million in the three-year period (wonder why?) Verizon spent $54 million, and Boeing spent $52 million.

We can hear Eric Cantor crying now: “But these companies create jobs!” Of the seven companies that would make their employment records public, the report shows that over 50,000 Americans were laid off by these corporations, despite them turning a profit.

If you’ve been weeping uncontrollably if you even attempt to pick the paper up from your stoop following the news, the results of this report shouldn’t surprise you. But hey, a few more speeches in Kansas should straighten things out.

A COUPLE FASCINATING HOURS WITH NEIL HOWE

I had the pleasure of spending two hours with Neil Howe today. On his way back to Washington DC from a meeting with a client in NYC he stopped at 30th Street Station and we grabbed a bite to eat and chatted for a couple hours. Neil’s background is fascinating. His grandfather was astronomer Robert Julius Trumpler. His father was a physicist and his mother was a professor of occupational therapy. I know there has been a dominant opinion on this site that liberal arts degrees are worthless. I don’t think any college degree is worthless. I realize we need more engineers and scientists, but many people are not wired for these professions. We need writers, historians, and thinkers too. Neil Howe is a perfect example. His undergraduate degree from Berkley was in literature. He then earned graduate degrees in economics and history. His well rounded education has given him a much broader view of the world. And he’s a Boomer. Proof that all Boomers aren’t bad.

I had never met Neil. We have had occasional email correspondence and he was the star of Generation Zero, in which I had tiny part. He is a famous man. He’s written or co-written 15 books.  He runs a very successful company called Lifecourse Associates. Based on my two hours in his acquantance you would never know he was a famous person. He is extremely down to earth. He is a nice guy. I never felt intimidated, even though his brain power is out of my league. He was actually interested in my background and my opinions.

But enough small talk. You want to know what he thinks about our current Fourth Turning. He was proud that some distinguished institutions had agreed with the Strauss & Howe dating definitions for Boomers, Xers, and Millenials. His starting point for this Fourth Turning is 2007. We are only four years into this Turning and haven’t reached regeneracy yet. I asked him why regeneracy had begun in the last two Fourth Turnings by year four, but hasn’t begun yet. He said that each Turning has its own flow. We agreed that something huge would need to happen in order to create a regeneracy in this country. It could be an economic collapse or it could be war.

He believes the situation which has the biggest potential to blow up the world is Iran. He thinks people are underestimating the implications of a conflict with Iran. He thinks Israel will act unilaterally to keep Iran from getting a nuclear bomb. I asked him if he thinks there will be a world war during this Fourth Turning. He doesn’t think it will be a world war. He expects regional conflicts in the Middle East.

I asked him why the Boomers didn’t seem to be supporting and leading the Millenial generation. He said that within families Boomers and Millenials are very close. This will ultimately exhibit itself. He thinks Boomers will eventually choose to sacrifice some of their entitlements in order to give Millenials a fighting chance at a future. We discussed the upcoming presidential election. He had some nice things to say about Ron Paul. He has been surprised by Newt Gingrich’s rise in the polls. Neil has known Gingrich for 20 years since he has worked on public policy in DC. He believes his past will come back to haunt him. He thinks Romney is likely to win the Republican nomination by default. If the economy stays in the dumper, Romney will be our next President. He is a Prophet/Boomer leader. Neil doesn’t think Bloomberg could win as a 3rd party candidate because of his association with Wall Street. Anyone associated with Wall Street is toxic.

His opinion about OWS was interesting. He says that the movement is made up of 50% Millenials. He thinks the creators of the movement are actually anarchist Boomers trying to use the Millenials for their own purposes. He thinks the movement has a lot of passion but not a lot of depth. His firm has done surveys and he found that most Millenials don’t even know there is an OWS movement. I asked him whether libertarians are likely to be happy with this Fourth Turning. He said that libertarians have an impact early in a Fourth Turning (Ron Paul, Tea Party), but once the regeneracy occurs people rally around the central authority and government is likely to take on more power and control. Not a happy thought.

Neil lamented what a great opportunity was missed in early 2009 by Barack Obama. The situation in the country was awful. He had both Houses in Congress. His popularity was at its peak. He could have done anything. The country could have accepted short term pain and began to fix our structural problems. He could have had an orderly liquidation of the Wall Street banks. He could have combined short term stimulus with a long term fix for our entitlement programs. But instead he rolled over for Wall Street and dished out Keynesian pork to his supporters. A once in a lifetime chance was missed.

He believes the Federal Reserve policies are disastrous. Zero percent interest rates have sucked the vitality from our economy. The policies are exacerbating our debt problems. People have no incentive to save with zero interest rates. I told him that TBP members are anxious to know what happens next. Here’s where you’ll be disappointed. Neil doesn’t make predictions of events. There will always be dramatic events as time passes, but it is how generations react to those events that matter. There is no doubt that it will take a dramatic event to create a regeneracy of spirit in this country. The triggers for this Crisis were clearly visible in 1997 when Strauss and Howe wrote their classic book – debt, civic decay, and global disorder. The toxic combination is still roiling the world. We can only guess at the timing and specific events that will push us into the next phase of this Crisis. 

I told Neil that I end many of my posts these days with, “Fourth Turnings sure are interesting.” He thought that was funny. With Neil’s train due to arrive in a few minutes we got up to say our goodbyes. We agreed that we are living in interesting times. He joked that at least we know how this will end, which is more than most people. He is going to revive his Fourth Turning blog and asked if I would contribute articles. I told him I’d be honored.

All in all, it was a fascinating and enlightening two hours having a great discussion with a brilliant man.

Shorting Treasury Options: Profit, Rinse, Repeat

Every few months, I’ve been repeating the same pattern of shorting out of the money leveraged ETFs on US Treasuries and keeping the premiums when the options expire.  It’s been a nice way to supplement largely flat market returns with recurring income, and in my view, without taking on an inordinate amount of risk.  Since that was a mouthful, I’ll explain.  In my latest post on the matter, I laid out the case and specific trade for shorting treasuries in September.  The key facets of that particular trade were the following:

Continue Reading: Shorting Treasury Options

HMMM. HOW CONVENIENT – DEBT, DRONES & DEMAGOGUES

So Iran shoots down one of our drones. Now the questions. Are we flying spy drones over Iran in order to provoke them into doing something stupid? Did we purposely allow it to be shot down? Will Iran’s blustering and threats to retaliate allow the U.S. to create a foreign conflict in order to take the focus off our imploding economy? China declared last week that they would be willing to go to war in support of Iran. Are we approaching an Archduke Ferdinand moment when countries are forced to choose sides in order to not lose face? Could our Fourth Turning War be just over the horizon? If conflict starts with Iran, what will happen to the price of oil? How many more liberties and freedoms will be sacrificed when the oligarchs lead us into another undeclared war of choice?

If you don’t fly spy drones over foreign countries that we are not at war with, they can’t get shot down. How would we react if China or Russia was flying spy drones over the U.S.?

The ignorant masses will be convinced that Iran is at fault and deserves to be obliterated. Comfortably numb.

Iran Military Shoots Down US Drone, Threatens Response

Tyler Durden's picture

Submitted by Tyler Durden on 12/04/2011 10:05 -0500

From PressTV:

A senior Iranian military official says Iran’s Army has shot down a remote-controlled reconnaissance drone operated by the US military in the eastern part of the country.

The informed source said on Sunday that Iran Army’s electronic warfare unit successfully targeted the American-built RQ-170 Sentinel stealth aircraft after it crossed into Iranian airspace over the border with neighboring Afghanistan.

He added that the US reconnaissance drone has been seized with minimum damage.

The RQ-170 is a stealth unmanned aircraft designed and developed by Lockheed Martin Company.

The US military and the CIA use the drone to launch missile strikes in Afghanistan and in Pakistan’s northwestern tribal region.

The unnamed Iranian military official further added that “due to the clear border violation, the operational and electronic measures taken by the Islamic Republic of Iran’s Armed Forces against invading aircraft will not remain limited to the Iran’s borders.

The report comes as the United States has beefed up its military presence in and around the Persian Gulf region in recent months in the wake of popular uprising in Bahrain.

The US Department of Defense says Washington is closely monitoring the developments in Bahrain, which is the headquarters of the US Navy’s Fifth Fleet and holds some 4,200 US service members.

From Reuters:

Iran’s military said on Sunday it had shot down a U.S. reconnaissance drone aircraft in eastern Iran, a military source told state television.

“Iran’s military has downed an intruding RQ-170 American drone in eastern Iran,” Iran’s Arabic-language Al Alam state television network quoted the unnamed source as saying.

“The spy drone, which has been downed with little damage, was seized by the Iranian armed forces.”

Iran shot down the drone at a time when it is trying to contain foreign reaction to the storming of the British embassy in Tehran on Tuesday, shortly after London announced that it would impose sanctions on Iran’s central bank in connection with Iran’s controversial nuclear enrichment programme.

Britain evacuated its diplomatic staff from Iran and expelled Iranian diplomats in London in retaliation, and several other EU members recalled their ambassadors from Tehran.

The attack dragged Iran’s relations with Europe to a long-time low.

Washington and EU countries have been discussing measures to restrict Iran’s oil exports since the United Nations nuclear watchdog issued a report in November with what it said was evidence that Tehran had worked on designing an atom bomb.  

And from AP:

Iran’s semiofficial Fars news agency says the country’s armed forces have shot down an unmanned U.S. spy plane that violated Iranian airspace along its eastern border.

The report says the plane was an RQ170 type drone and is now in the possession of Iran’s armed forces. The Fars news agency is close to the powerful Revolutionary Guard.

Iran is locked in a dispute with the U.S. and its allies over Tehran’s disputed nuclear program, which the West believes is aimed at the development of nuclear weapons. Iran denies the accusations, saying its nuclear program is entirely peaceful.

It appears Iran plans to retaliate:

Iran’s response to the downed U.S. drone’s violation of its airspace will not be limited to the country’s borders, a military source told state television.

“The Iranian military’s response to the American spy drone’s violation of our airspace will not be limited to Iran’s borders any more,” Iran’s Arabic language Al Alam television quoted the military source as saying, without giving details.

Iran said in July it had shot down an unmanned U.S. spy plane over the holy city of Qom, near its Fordu nuclear site.

As a reminder from Stratfor, here is how the US navy was deployed most recently as of Wednesday. Looks like life for the Stennis boys is about to get exciting.

FESTIVUS FOR THE RESTIVUS – ADMIN RUBBING ELBOWS WITH 1%

I’ll be pretty much out of touch until Sunday afternoon. Avalon & I are headed to NYC tomorrow for a couple days. We’ll be rubbing elbows with some of the 1% tomorrow night at the annual Minyanville Festivus shindig at the Hill Country Barbecue Market at 30 West 26th Street.

I’ve been to this annual charity event two out of the last three years. It benefits Todd Harrison’s Ruby Peck Foundation for children – https://rpfoundation.org/donate.asp

I get to attend for free since I’m an occasional contributor to their Minyanville website. It’s a laid back country and western themed party. Free beer and grub from 7:00 until 3:00 am. There will definitely be some 1%ers at this party. I’ve met John Mauldin at a previous party. They have cover bands playing rock and roll all night long. It should be fun.

We’ll be checking out Zucotti Park on Saturday. I think they plan a protest in Times Square on Saturday. Hopefully it gets out of hand. If they fire tear gas, I’ll be sure to duck.

Maybe we’ll replay our engagement by taking a carriage ride in Central Park just like we did in December 1989 when I proposed to Avalon. She said yes the last time.

NYC is really fun to visit at this time of year. Hopefully seeing the Christmas tree at Rockerfeller Center will get me in the Christmas spirit.

And of course we’ll have to get the won ton  soup at Ruby Foos.

Hopefully, some people can step up and make some posts in the next few days. We might have sporadic internet access and can release the posts that people want to make.

ANOTHER KICK IN THE NUTS OF FREEDOM

Someone please explain to me why corporations, if they are ‘people’ according to the Supreme Court and Shit Romney, cannot be imprisoned for activities such as this? Please, do tell.
5 Free Handjobs from Smokey to anyone who can post the physical address of the company responsible and a list of executives for public review.

Your Smartphone Is Spying on You

By Adam Clark Estes | The Atlantic Wire – 18 hrs ago

An Android developer recently discovered a clandestine application called Carrier IQ built into most smartphones that doesn’t just track your location; it secretly records your keystrokes, and there’s nothing you can do about it. Is it time to put on a tinfoil hat? That depends on how you feel about privacy.

[Related: Facebook and Google Join Forces to Oppose Privacy Bill]

The reason for this invasive Android app seems reasonable enough at face value. Even though it’s on most Android, BlackBerry and Nokia devices, most users would never know that Carrier IQ is running in the background, and that’s sort of the point. Described on the company’s website as software to gain “unprecedented insight into their customers’ mobile experience,” Carrier IQ is ostensibly supposed to help mobile carriers and device manufacturers gather data in order to improve their products.

Tons of applications do this, and you’re probably used to those boxes that pops up on your screen and ask if you want to help the company by sending your data back to them. If you’re concerned about your privacy, you just tap no and go about your merry computing way. As security-conscious Android developer Trevor Eckhart realized, however, Carrier IQ does not give you this option, and unless you were code-savvy and looking for it, you’d never know it was there. And based on how aggressive the company has been in trying to keep Eckhart quiet about his discovery, it seems like Carrier IQ doesn’t want you to know it’s there either.

[Related: Did Eric Schmidt Step Down Because He ‘Screwed Up’ on Social Media?]

Eckhart first raised a red flag about Carrier IQ about two weeks ago when he started investigating reports that a software update on the HTC EVO 3D included “user behavior logging” code. The code had worried some geek bloggers when it showed up a couple months ago, but HTC and Sprint insisted that it wasn’t much different than normal error-logging software and certainly didn’t gather granular data like “contents of messages, photos, videos, etc.” Eckhart wrote an exhaustive blog post about his startling findings — CarrierIQ collected lots data, including keystrokes, and there way for the user to opt out “without advanced knowledge” — and CarrierIQ flipped out. The company sent Eckhart a cease-and-desist letter demanding that he keep his mouth shut and threatening legal action. But after the Electronic Frontier Foundation (EFF) took a look at the case and determined that Eckhart was working within his First Amendment rights, it backed off but still denied that they recorded keystrokes.

[Related: Google’s Ice Cream Sandwich Will Make Android All Better]

This week, Eckhart fired back with a 17-minute long video showing in painstaking detail how much data CarrierIQ collects, effectively undercutting the company’s denial. It was even logging contents of text messages! Wired posted the video on Tuesday night and cemented its status “as one of nine reasons to wear a tinfoil hat.” The magazine explains how CarrierIQ even undercuts other companies’ security measures:

The video shows the software logging Eckhart’s online search of “hello world.” That’s despite Eckhart using the HTTPS version of Google which is supposed to hide searches from those who would want to spy by intercepting the traffic between a user and Google. … It’s not even clear what privacy policy covers this. Is it Carrier IQ’s, your carrier’s or your phone manufacturer’s? And, perhaps, most important, is sending your communications to Carrier IQ a violation of the federal government’s ban on wiretapping?

Oh, we’re definitely in tinfoil hat territory now. CarrierIQ and the carriers have yet to respond to the latest claims — we’re doing our best to chase them down — but if past smartphone tracking scandals are any precedent, they could end up answering to Congress.

Related: The First Signs of Mutiny in the Android Brigade

Like many things in life, there are a couple of different ways to think about smartphone tracking. One way approaches privacy from a forward-thinking, technology-trusting and, heck, even progressive perspective. GPS-equipped smartphones are incredibly powerful tools that enables mankind to do all kinds of amazing things, thanks to the perpetual stream of data from the Internet. However, that stream runs both ways, and sometimes, the folks that build and maintain the network sometimes need to monitor your data in order to improve the technology. Who wouldn’t want better service?

[Related: The Great Facebook Privacy Disconnect ]

This brings us to the second approach. Tracking is creepy. In an Orwellian kind of way, it makes people nervous — especially Americans — that the government or the corporations or the system is closing in on them and stealing their freedom. Of course, not everybody feels so strongly about privacy, but as long as you can opt out, it’s fine. Last week, Sen. Charles Schumer spoke out about a program at some malls in Virginia and Southern California that were anonymously tracking shoppers’ movements by tracking their cell phone signals, and the only way to opt was by not going to the mall. Schumer did not approve. “Personal cell phones are just that — personal,” the New York senator said in a statement. “If retailers want to tap into your phone to see what your shopping patterns are, they can ask you for your permission to do so.”

The CarrierIQ software is not dissimilar to the shopper tracking program. In fact, it’s arguably worse since it follows you everywhere. In the age of social media, everybody is becoming increasingly aware of and often angry about the amount of private data companies are scooping up with or without their consent. This week, the Federal Trade Commission and Facebook came to an agreement that the social network must make all of their new programs opt-in so as not to break the law by violating users’ privacy. Even Mark Zuckerberg admitted in a sincere-sounding blog post that his company had “made a bunch of mistakes” on the privacy front in the past. He went on to detail how “offering people control over the information they share online” was a top priority. This is Mark “Privacy is Over” Zuckerberg we’re talking about here. With Facebook reportedly building its own mobile phone platform, wouldn’t it be super ironic if people started defecting from the Android army and switching to the Facebook phone in the name of privacy?

Your move, Google.

SURPRISE! MY REAL ESTATE INVESTMENT ROI JUST SHIT THE BED

A few months back, I’d shared the details on a real estate investment I made with a partner where the overall deal seemed quite favorable.  The cash on cash return was estimated at ~15-20% conservatively, we had a good property manager staying on from the prior seller, the prospects in the area looked good for continued capital appreciation and low vacancy, and there didn’t appear to be any imminent repairs/upkeep required outside of routine maintenance.  The first month and a half was fine and we were cruising right along.  The property manager hadn’t flaked out, the college kids hadn’t destroyed the properties entirely (they do have this thing about kicking in doors which is annoying, but if they want to piss away their security deposits, more power to them), and no major repairs crept up.  Then came the email last week.

Blindsided

The email came from a completely unexpected source and wasn’t something we’d even contemplated when purchasing the property – but perhaps you can learn from this story about how to avoid a similar outcome.

Continue Reading How My ROI Just Shit the Bed