CBS News Joins the Attack on Public Employees

AIA: Architecture Billings Index shows expansion in November – This index is a leading indicator for new Commercial Real Estate (CRE) investment.  From the American Institute of Architects: Firm Billings Rebound in November  At 52.0, the AIA’s Architecture Billings Index (ABI) recorded a three point gain from the previous month, and reached its strongest level since December 2007. With ABI scores above the 50 level in two of the past three months, the prospects of a sustainable recovery in design activity are enhanced. This graph shows the Architecture Billings Index since 1996. The index showed expansion in November (above 50) and this is the highest level since December 2007. Note: Nonresidential construction includes commercial and industrial facilities like hotels and office buildings, as well as schools, hospitals and other institutions.
 
A Higher Frequency CPI – Not content with a monthly CPI, an article in Slate looks at the prospects for an even higher frequency CPI in the US. According to the article, the US CPI costs $US234m a year to compile at a monthly frequency, which works out at about US$0.75 per capita. The ABS tells us that a monthly CPI in Australia would cost $A25m a year compared to the $A10m it spends compiling the existing quarterly release, which works out at around $A1.11 per capita.  There must be economies of scale in compiling the CPI. Otherwise, the ABS quote looks expensive, even at PPP exchange rates. I recall a certain market economist in the late 1990s who would embarrass the ABS by pointing out the above-CPI increases in the cover price of the ABS CPI publication.
 

Please Visit StopServicerScams.com to Stop Servicer Fraud – Yves Smith – As readers may know, the banking industry is trying to prevent the FDIC from moving forward with its proposed reforms on securitizations and is also attacking related SEC reforms, namely amendments to Rule A/B. To further the effort to curb servicer abuses, please visit the website, StopServicerScams, and sign the petition. As we have written, and as experts and foreclosure defense lawyers have reported in Congressional testimony, and as pending lawsuits by attorneys general in Arizona and Nevada allege, servicer abuses are a significant cause of foreclosures. These include including delaying and misapplying payments, using false hopes of pending mods to extract more payments from consumers, and applying compounding junk fees.  We will submit the signed petition in early January. Thanks for your support in this important effort.

Blogger gets 33 months for threatening Chicago judges on Internet – A former Internet radio talk show host and blogger was sentenced to 33 months in federal prison on Tuesday for inviting readers of his blog to assassinate three federal judges. Hal Turner of North Bergen, N.J., was convicted in a federal court in Brooklyn of threatening to assault and murder three judges of the Chicago-based Seventh US Circuit Court of Appeals as retaliation for upholding a ban on guns in Chicago, a ruling with which he disagreed. Federal prosecutors presented evidence that after the ruling in the Chicago gun case, Mr. Turner posted statements on his website including, “Let me be the first to say this plainly: These judges deserve to be killed.”

The $20,000 Pet – It’s no secret that Americans love their pets. But these days, all that love is leading to an unprecedented level of expense for millions of owners, who are only beginning to understand the pet-world concept of sticker shock. Caught up in a wave of new medical options and lured by an increasingly sophisticated cadre of veterinarians, pet owners across the country are forking over thousands — and even tens of thousands — of dollars to treat illnesses that would have gone undiagnosed or untreated just a few years ago. And then doing it again if they have to. Of course, pet owners and most vets have the animals’ best interest in mind. But that doesn’t make it any easier: With health insurance covering the humans in many families, it’s not unusual for pet owners to spend far more money on health care for their cats and dogs than for their sons and daughters. Even the Great Recession failed to take a bite out of Fido’s health care tab. According to a report by market-research company Packaged Facts, Americans spent $20 billion on veterinary bills in 2010 — an 8.5% increase from a year earlier and more than double the amount spent just a decade ago.

 
  Dennis Kucinich: Delete The Fed – I’m stunned. Really. Dennis Kucinich, which many people have (properly) labeled as one step removed from a communist in the past, and who has a reputation as having a hard-core left slant in his politics, has just written up and introduced a bill that will fundamentally restore the free market – for real – to banking and credit. We’re about to find out if people like Ron and Rand Paul really stand for what they claim, or if they’re empty suits. If they do, then I expect to see them on the Tee Vee within hours demanding passage of this bill, and joining with Mr. Kucinich in making sure that it is immediately reintroduced in the new Congress – and passed. If that does not happen then these two claimants of a demand for "sound money" have been immediately and permanently exposed as FRAUDS, as will any so-called "Tea Party" members of Congress. This is a bill that must become law.

The 2% (non) Solution: Part Two – In Part Two I want to discuss a quite different threat. In this scenario the employee share of the payroll tax is allowed to reset to it 6.2% but as a seeming sweetener taxpayers will be allowed or perhaps required to divert it into a Personal Savings Account with the explanation that it really wasn’t a tax increase at all! Nope the money is still ‘yours’, just tucked away for your own future use rather than being co-mingled in the Trust Funds where you don’t have an ownership interest at all, why the Supreme Court said so in Flemming .v. Nestor. Well a visit to the link shows that this doesn’t mean what opponents often take it to mean, but the idea that the PRAs would be in any fundamental sense different is illusory, but before getting to that I want to point out a curious coincidence (or not). The 2% payroll tax holiday is the same amount of diversion proposed in most straight PRA proposals out there. Cynical people might suggest that this number was not just plucked out of the air, or back computed to approximate the typical effect of the expiring Make Work Pay tax credit which it is replacing, but instead to put in place elements of say Obama advisor Jeff Liebman’s Liebman-MacGuineas-Samwick Non-Partisan Social Security Reform Plan or even the more recent Galston-MacGuineas Plan which has a mandatory diversion of exactly this amount.

 
Is Japan the next major world economy to tank? – When the financial world tries to anticipate the next meltdown, all eyes turn to Europe. Greece needed a bailout, then Ireland did. Talk is that Spain will follow, though the country denies that it has a problem. But a few contrarians think everyone is looking in the wrong direction. Forget Europe, they say. Check out Japan instead. "A global fiasco is brewing in Japan," . "It’s like the Titanic has already hit the iceberg and you know it’s going to sink, you just don’t know how long it will take to go down," Today the popular perception is that Japan is stagnant but stable. After the economy slowed down, the Japanese government lowered taxes and increased spending, sending deficits, and also government debt, way up. But the debt hasn’t been a problem, because Japan’s risk-averse populace—which became even more risk averse after the collapse of the technology bubble a decade ago—has sunk its considerable savings into government bonds, known colloquially as JGBs. What could be safer than government debt?
 
Cuomo Sues Ernst & Young Over Lehman – The New York attorney general on Tuesday sued Ernst & Young, accusing the accounting firm of helping Lehman Brothers, its client, “engage in a massive accounting fraud” by misleading investors about the investment bank’s financial health. The lawsuit, filed more than two years after Lehman collapsed and the global economy buckled, is the first major legal action stemming from Lehman’s demise. Ernst & Young, Lehman’s longtime outside auditor, certified the bank’s financial statements from 2001 until it filed for bankruptcy in September 2008. The suit focuses on Ernst & Young’s approval of a much-criticized accounting maneuver that shifted debt off the books before the close of financial quarters. The transactions involved “the surreptitious removal of tens of billions of dollars of securities from Lehman’s balance sheet to create a false impression of Lehman’s liquidity, thereby defrauding the investing public,” the complaint said. The lawsuit seeks the return of more than $150 million in fees that Ernst & Young collected for work performed for Lehman from 2001 to 2008, plus investor damages.
 

CBS News Joins the Attack on Public Employees – On Sunday night, the CBS News show 60 Minutes joined this campaign. The piece begins by telling viewers that: "in the two years, since the "great recession" wrecked their economies and shriveled their income, the states have collectively spent nearly a half a trillion dollars more than they collected in taxes." That’s not what the data show. If we look to the Commerce Department’s National Income and Product Accounts we find that in total state and local government spent $45 billion more than they took in (line 27). CBS does not give a source for the "nearly half a trillion" number. It is also worth noting that any shortfall is due almost entirely to the recession caused by the collapse of the housing bubble. If revenue had increased in step with normal growth (2.4 percent real growth, plus inflation), state and local governments would have had an additional $290 billion since the start of the downturn.

 In a Sign of Foreclosure Flaws, Suits Claim Break-Ins by Banks – When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.  The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand.  In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing. And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed.  “Every day, smaller wrongs happen to people trying to save their homes: being charged the wrong amount of money, being wrongly denied a loan modification, being asked to hand over documents four or five times,”

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