KeNo's Housing and Economic Portal: Friday December 11 Housing and Economic stories

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TOP STORIES:

Obama's Economic Policies are Turning Into a Global Disaster - (www.safehaven.com) America -- like every other country -- has had its inept economic managers. No political party has a monopoly of economic incompetence. But without a doubt Obama and his crew are rapidly shaping up to be the biggest bunch of incompetent economic managers since the 1930s, irrespective of what yelping leftwing historians assert. And I do include Bernanke, Geithner and the rest of those economic geniuses. (The idea that Bernanke is some kind of expert on the Great Depression is an absolute joke.) Obama's leftwing obsession with permanently expanding the size of government, now matter how much it damages living standards, is deepening and prolonging this recession. In fact, given the official unemployment rate of 10.2 per cent (it translates into 17 to 20 per cent if we include short-time working, discouraged workers and part-time workers who want a full time job), which looks to rise even further, I think it's safe to say that the US has now moved from being in recession to being in a depression. What is the Obama's solution? More regulations and more taxation. What a genius. The capital gains tax is set to leap by 69 per cent, all the Bush tax cuts -- and I do mean all -- are going to be repealed, massive spending programs are in the pipeline, the deficit is exploding along with debt, and the most irresponsible and financially reckless Congress in American history is trying to dream up new ways to extract even more money from the hapless public. Believe you me, Americans have seen nothing yet. (Bernie Madoff must be wondering why his fellow Democrats are not sharing his cell block with him.) The costs of this economic lunacy -- if left unchecked -- will be a permanently sluggish economy, if not outright stagnation, plus a higher rate of lasting unemployment Americans will not be the only ones to suffer. The intellectually scintillating Bernanke, Geithner and their galere of economic hanger-ons have hit on the brilliant scheme of trying to export America's unemployment by depreciating the dollar. (In the 1920s and '30s this was called "exchange dumping".) If you print enough dollars you will eventually force down the exchange rate. Foreigners only have to look at Obama's spending to realize that there is no way taxation can pay for it. Moreover, the sheer scale of the Democrats' profligacy rules out sufficient borrowing. This leaves only the printing press. However, this raises a problems for those pesky foreigners. If they allow the dollar to slide then it will hit their export industries. Fewer exports means more unemployment. This they would not like. They might decide that depreciating the US dollar was a sneaky way of raising tariffs -- and they would be right. (Americans shouldn't get the daft idea that a cheaper dollar won't affect their standard of living.) This would explain why Asian countries have been buying dollars. It's an attempt to protect their exports. But they know Ol' Bernanke can churn out them dollars faster than they can buy 'em. Hello, suckers. Another problem is that some Asian countries have unofficially pegged their currencies to the dollar. What this means is that for every dollar that enters the country the central bank must print the equivalent in the local currency. Bernanke's monetary policy has led foreigners to borrow US dollars at a ludicrously low interest rate. They then use these dollars to speculate at home. Liquidity (a fancy name for the money supply) expands, fueling speculation in shares and real estate. Brilliant. Unable to spark a boom at home Bernanke and his fell economic mountebanks help trigger one in Asia. Nevertheless, these foreigners have nothing to worry about. Honest Tim Geithner -- the man who cheated on his taxes and was then given a clean slate -- assured them that he really, really, really does believe in a "strong dollar" and even "market oriented exchange rates"*. So their concerns about the incredible shrinking dollar are totally misplaced because anybody who is anybody just knows Honest Tim would never tell a fib.

Key oil figures were distorted by US pressure, says whistleblower ... - (www.guardian.co.uk) The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying. The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves. The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies. 'There's suspicion the IEA has been influenced by the US' (Link to this audio). In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production. Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this. "Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added. A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added. The IEA acknowledges the importance of its own figures, boasting on its website: "The IEA governments and industry from all across the globe have come to rely on the World Energy Outlook to provide a consistent basis on which they can formulate policies and design business plans." The British government, among others, always uses the IEA statistics rather than any of its own to argue that there is little threat to long-term oil supplies. The IEA said tonight that peak oil critics had often wrongly questioned the accuracy of its figures. A spokesman said it was unable to comment ahead of the 2009 report being released tomorrow. John Hemming, the MP who chairs the all-party parliamentary group on peak oil and gas, said the revelations confirmed his suspicions that the IEA underplayed how quickly the world was running out and this had profound implications for British government energy policy. He said he had also been contacted by some IEA officials unhappy with its lack of independent scepticism over predictions. "Reliance on IEA reports has been used to justify claims that oil and gas supplies will not peak before 2030. It is clear now that this will not be the case and the IEA figures cannot be relied on," said Hemming.

Homeowner Associations and Municipalities Continue to Manage Every Aspect of our Lives: U.S. residents fight for their rights to use outdoor clothes lines - (news.yahoo.com/s/nm) Carin Froehlich pegs her laundry to three clotheslines strung between trees outside her 18th-century farmhouse, knowing that her actions annoy local officials who have asked her to stop. Froehlich is among the growing number of people across America fighting for the right to dry their laundry outside against a rising tide of housing associations who oppose the practice despite its energy-saving green appeal. Although there are no formal laws in this southeast Pennsylvania town against drying laundry outside, a town official called Froehlich to ask her to stop drying clothes in the sun. And she received two anonymous notes from neighbors saying they did not want to see her underwear flapping about. "They said it made the place look like trailer trash," she said, in her yard across the street from a row of neat, suburban houses. "They said they didn't want to look at my 'unmentionables.'" Froehlich says she hangs her underwear inside. The effervescent 54-year-old is one of a growing number of Americans demanding the right to dry laundry on clotheslines despite local rules and a culture that frowns on it. Their interests are represented by Project Laundry List, a group that argues people can save money and reduce carbon emissions by not using their electric or gas dryers, according to the group's executive director, Alexander Lee. Widespread adoption of clotheslines could significantly reduce U.S. energy consumption, argued Lee, who said dryer use accounts for about 6 percent of U.S. residential electricity use. Florida, Utah, Maine, Vermont, Colorado, and Hawaii have passed laws restricting the rights of local authorities to stop residents using clotheslines. Another five states are considering similar measures, said Lee, 35, a former lawyer who quit to run the non-profit group. 'RIGHT TO HANG': His principal opponents are the housing associations such as condominiums and townhouse communities that are home to an estimated 60 million Americans, or about 20 percent of the population. About half of those organizations have 'no hanging' rules, Lee said, and enforce them with fines. Carl Weiner, a lawyer for about 50 homeowners associations in suburban Philadelphia, said the no-hanging rules are usually included by the communities' developers along with regulations such as a ban on sheds or commercial vehicles. The no-hanging rules are an aesthetic issue, Weiner said. "The consensus in most communities is that people don't want to see everybody else's laundry." He said opposition to clotheslines may ease as more people understand it can save energy and reduce greenhouse gases.

* Video: UCLA Students Riot as Tution Inflates 32% * - (www.dailypaul.com) Students clash with police as tuition is set to Inflate 32 percent this year. If video on Ron Paul site doesn’t work, try this video on YouTube. http://www.youtube.com/watch?v=3UBllA_-d7w

14 Arrests one student Tazered, Raw Video: UCLA Students Go Absolutely **Apeshit** And Nearly Riot over 32% inflation increase. one student Tazered are the reports I received from students.

Financial Services Committee Backs HR1207 - Ron Paul's Audit the Fed Bill - (www.nytimes.com) In a display of populist anger toward the Federal Reserve, a House panel voted on Thursday to let Congress carry out sweeping new oversights of the central bank’s policy decisions and operations. The House Financial Services Committee approved a measure proposed by Representative Ron Paulof Texas that would allow Congress to order audits of all the Fed’s lending programs as well as of its basic decisions to set monetary policy by raising or lowering interest rates. If the measure becomes law, it would expose the Federal Reserve to far more political pressure than it has faced for decades. Fed officials have adamantly opposed the measure, saying it would undermine the central bank’s political independence and gravely threaten its credibility as a bulwark against inflation. The vote on Thursday occurred despite the opposition of Representative Barney Frank, Democrat of Massachusetts, who had wanted to shield the Fed’s decisions on monetary policy from political pressures. Mr. Paul, a libertarian Republican who has called for abolishing the Fed entirely, has introduced a version of his bill in every session of Congress since the early 1980s and never made any progress. But the Fed’s trillion-dollar efforts to bail out major banks and rescue the financial system provoked a popular firestorm that ignited both right-wing Republicans and left-wing Democrats. Mr. Paul’s amendment would instruct the Government Accountability Office, the investigative arm of Congress, to carry out audits of all the Fed’s operations. Those include an array of emergency lending programs, bailouts of giant financial institutions, dealings with foreign central banks and the central bank’s efforts to drive down interest rates by intervening in bond markets. Mr. Frank had already agreed that the G.A.O. should be authorized to audit all of the Fed’s rescue programs, but he had wanted to wall off the Fed’s more basic job of setting interest rates to steer the economy.

1 in 6 Americans Is Going Hungry - (money.cnn.com) The number of Americans that have trouble putting food on the table shot up last year in an unprecedented spike to a record 17 million households, the government reported on Monday. The Department of Agriculture report, which has been released annually since 1995, said the number of Americans that were hungry rose to 14.6%. In 2007, 13 million households or 11.1% of Americans had trouble getting enough food. The one-year jump is all the more significant, given the number of hungry Americans had never been higher than 11.9% since these surveys began. Of the near-15% of the nation that couldn't secure enough food last year, the USDA said one-third of them had "very low food security," meaning they reduced the amount that they ate or disrupted their eating patterns during the year. That group made up 5.7% of all U.S. households, which was also a record high. More than 500,000 households that scaled back the amount that they ate were households with children, making up 1.3% of all U.S. homes with children. The USDA said the main cause of hunger and food insecurity in the country is poverty. Obama’s call to action: President Obama called the report "unsettling," and said more needs to be done. "My Administration is committed to reversing the trend of rising hunger," Obama said in a statement. "The first task is to restore job growth, which will help relieve the economic pressures that make it difficult for parents to put a square meal on the table each day. But we are also taking targeted steps to prevent Americans from experiencing hunger." Obama urged Congress to pass a "strong" child nutrition bill to help ensure that American children don't go hungry.

Roubini: A Tale of Two Americas: "While the United States may technically be close to the end of a severe recession, most of America is facing a near-depression." - (www.theglobeandmail.com) While the United States recently reported 3.5 per cent GDP growth in the third quarter, suggesting that the most severe recession since the Great Depression is over, the American economy is actually much weaker than official data suggest. In fact, official measures of GDP may grossly overstate growth in the economy, as they don't capture the fact that business sentiment among small firms is abysmal and their output is still falling sharply. Properly corrected for this, third-quarter GDP may have been 2 per cent rather than 3.5 per cent. The story of the U.S. is, indeed, one of two economies. There is a smaller one that is slowly recovering and a larger one that is still in a deep and persistent downturn. Consider the following facts. While America's official unemployment rate is already 10.2 per cent, the figure jumps to a whopping 17.5 per cent when discouraged workers and partially employed workers are included. And, while data from firms suggest that job losses in the past three months were about 600,000, household surveys, which include self-employed workers and small entrepreneurs, suggest a number above two million. Moreover, the total effect on labour income – the product of jobs times hours worked times average hourly wages – has been more severe than that implied by the job losses alone, because many firms are cutting their workers' hours, placing them on furlough or lowering their wages as a way to share the pain. Many of the lost jobs – in construction, finance, and outsourced manufacturing and services – are gone forever, and recent studies suggest that a quarter of U.S. jobs can be fully outsourced over time to other countries. Thus, a growing proportion of the work force – often below the radar screen of official statistics – is losing hope of finding gainful employment, while the unemployment rate (especially for poor, unskilled workers) will remain high for a much longer period of time than in previous recessions. Consider also the credit markets. Prime borrowers with good credit scores and investment-grade firms are not experiencing a credit crunch at this point, as the former have access to mortgages and consumer credit while the latter have access to bond and equity markets. But non-prime borrowers – about one-third of U.S. households – do not have much access to mortgages and credit cards. They live from paycheque to paycheque – often a shrinking paycheque, owing to the decline in hourly wages and hours worked. And the credit crunch for non-investment-grade firms and smaller firms, which rely mostly on access to bank loans rather than capital markets, is still severe.

OTHER STORIES:

WSJ Editorial: Americans Deserve a Transparent Fed - (online.wsj.com)

USA Today: Another Wave of Foreclosures Looms - (www.usatoday.com)

Is Your Bank Safe? Over 130 banks will have failed by the end of 2009. - (www.elliottwave.com)

Pontiac Silverdome sold for $583,000 - (www.csmonitor.com)

What if a Recovery Is All in Your Head? - (www.cnbc.com)

States With Most Unemployment - (www.cnbc.com)

A Taxpayer's Must Read: The Fed Waltz With AIG - (www.cnbc.com)

Newspaper Circulation May Be Worse Than it Looks - (www.cnbc.com)

Microsoft Gets Helf from NSA on Windows 7 Security - (www.npr.org)

Cyberwarfare: The Issue China Won't Touch - (www.time.com)

U.S. From Leader to Laggard in 11 Years - (www.cnbc.com)