Thursday, February 27, 2014

Friday February 28 Housing and Economic stories


Chart: What’s the real unemployment rate? - (www.cnbc.com) The U.S. Labor Department said Friday that the unemployment rate fell to 6.6 percent in January—but does that rate tell the real story? A number of economists look past the "main" unemployment rate to a different figure the Bureau of Labor Statistics calls "U-6," which it defines as "total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers." In other words, the unemployed, the underemployed and the discouraged — a rate that still remains high.

Robber gangs terrorize Colorado pot shops  - (www.cnbc.com) One thief, posing as a delivery man, pulled a can of bear mace on employees and ransacked their marijuana shop, fleeing in a defensive cloud of "ultra-pepper" spray. Another opened the wall of a dispensary with an ax and attacked the store's safe with a circular saw. Still another stuck to the basics. He kicked in the front door and pointed his gun at the counterman. An accomplice kicked in the back door and filled a duffel bag with more than $10,000 worth of high-quality cannabis. For weeks now, the Mile High state has allowed the sale of recreational pot to adults, and so far the Rockies still stand. But crimes like the ones above, all of which occurred in Colorado in the last six months, have produced an acid-drip of anxiety in the industry, highlighting the dangers faced by those hoping to drag America's most popular illegal drug into the light. Because marijuana remains banned by Congress, banks and security firms deny services to most dispensaries. That leaves them cash-based and vulnerable, a magnet for criminals who like the idea of unguarded counting rooms and shelves lined with lucrative horticulture. "Everyone in the industry is having nightmares," says Michael Elliot, executive director of the Marijuana Industry Group, a powerful young lobby in Colorado. "You hit a 7-Eleven, you'll get 20 bucks. You hit a dispensary, you'll get $300,000 on a good day," adds Mitch Morrissey, District Attorney for Denver. "It's only a matter of time before someone gets shot."

"F**k The EU" - US State Department Leaked Recording on EU Unrest Fuels Accusations of Meddling - (www.zerohedge.com)  A leaked recording of a telephone conversation allegedly between US assistant secretary of state Victoria Nuland and the US envoy to the Ukraine, Geoffrey Pyatt discussing who should be in Ukraine's next government has, according to The FT, threatened to fuel east-west tensions over the troubled nation's future. In apparent frustration with the EU – which has failed to join the US in threatening sanctions against Ukraine’s leaders if they violently crush the protests – the voice resembling Ms Nuland at one point exclaims "Fuck the EU". As the two US diplomats decide whether "Klitsch" or "Yats" should be 'in' or 'out', listeners will be reminded (uncomfortably) that the governments of Ukraine and Russia previously alleged that the protests are being funded and orchestrated by the US. The authenticity of the recording has not been confirmed (though comparisons to Nuland's recent media appearances provide some confidence) - the FT reported that the US embassy in Kiev declined to comment, which is a tacit admission: if the clip was a fake, the US would immediately make it clear. 

Writeoffs for Mortgage Debtors, Then the Tax Bill - (www.cnbc.com) Come tax time, JPMorgan Chase will be able to write off the $1.5 billion in debt relief it must give homeowners to satisfy the terms of a recent settlement. But the homeowners who receive the help will have to treat it as taxable income, resulting in whopping tax bills for many families who have just lost their homes or only narrowly managed to keep them. They are not alone. A tax exemption for mortgage debt forgiveness, put in place when the economy began to falter in 2007, was allowed to expire on Dec. 31, leaving hundreds of thousands of struggling homeowners in financial limbo even as the Obama administration has tried to encourage such debt write-downs. Congress routinely allows tax breaks to expire and then reinstates them, usually retroactively, as it did last year. But the stakes are high for families dealing with large declines in their home values, and reinstatement of the tax breaks is more uncertain because of a movement in Congress to broadly overhaul the tax code, which, despite its long-shot prospects in an election year, could end up eclipsing smaller tax issues.

The housing recovery is a bank-promoted pump-and-dump scheme - (www.ochousingnews.com) Lenders engage in a pump-and-dump scheme to recover more on their bad loans and REO. Future buyers must pay bubble-era peak prices and endure a much higher cost of ownership, and they risk submerging beneath their mortgages if prices turn south again. Lenders manipulate market supply to create market excitement and momentum so they can resolve bad loans and sell REO at higher prices in a massive pump-and-dump scheme. Pump-and-dump schemes usually involve thinly traded penny stocks, but the same principal applies to any asset class where the holder of an asset manipulates the market to later sell at a higher price. When its done with penny stocks, the Securities and Exchange Commission cracks down on scammers, but when its done by the too-big-to-fail banks with housing, lenders are aided by government officials and the federal reserve, the SEC looks the other way, existing homeowners don’t complain, and new buyers get screwed with higher prices and the risk of another downturn.




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