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- The relationship of U.S. net worth to GDP appears to have reached unsustainable heights recently, by historical standards.
- American consumers have about $14 trillion in debt and a net worth of over $80 trillion, according to the Federal Reserve. Net worth is the sum of the values of all assets, real and financial, that consumers own, less their debt, including mortgage debt, leases, credit cards and the like.
- The wealth we hold is a way of storing purchasing power. You can sell your shares of Apple and buy “stuff”, goods and services. Ultimately, for most consumers, that’s what our wealth is used for, to acquire “stuff”. Some of our assets provide services directly, such as our houses and cars.
- The broadest measure of “stuff” is the gross domestic product,the total value of final goods and services produced in a given period. Constructing the ratio of net worth to GDP illustrates the fluctuation of claims on output per dollar of output produced.
- Not surprisingly, this was a fairly steady series for 25 years (maybe longer) from 1970 to the mid-1990s, as gains in nominal wealth were matched with gains in nominal output, averaging about 3.5 dollars in claims on output for every one dollar of GDP. Then came the dot-com boom and Fed bubble-blowing…
- Each peak in this relationship was followed by a recession, the last one the worst in modern history. And now the ratio has once again reached 4.7 dollars. History suggests that the ratio will collapse again, probably toward the 3.5 dollar level. This can be accomplished by a massive increase in GDP (unlikely) or a massive decline in the value of assets, net worth (more likely).
- The adjustment might be accelerated because of widespread short covering and record high margin credit and other leverage.
- Logically this seems unavoidable, unless you believe that we are truly wealthier now, even with an economy that is delivering a rather poor performance (historically weak output and sales growth) in real terms. It would seem not to be “whether” we will adjust but when.
03.04.15 – 6 NATO ships to stage war games in Black Sea
- Six NATO warships arrived in the Black Sea on Wednesday to take part in exercises with the Bulgarian, Romanian and Turkish navies, the Alliance’s Maritime Command (MARCOM) said in a statement.
- The six vessels in the exercises are assigned to Standing NATO Maritime Group Two (SNMG2), which is headed by US Rear Admiral Brad Williamson.
- SNMG2 currently consists of flagship US cruiser guided missile, the USS Vicksburg, as well as Canada’s HMCS Fredericton, Turkey’s TCG Turgutreis, FGS Spessart of Germany, Italian frigate ITS Aliseo and ROS Regina Maria of the US.
- “The training and exercises we will conduct with our Allies in the Black Sea prepares us to undertake any mission NATO might require to meet its obligations for collective defense,” Williamson is cited as saying by the MARCOM’s website.
- “We are here at the invitation of the Turkish, Bulgarian and Romanian governments and look forward to enhancing our interoperability with their navies,” the Rear Admiral added.
- The drill will include simulated anti-air and anti-submarine warfare exercises, simulated small boat attacks and basic ship handling maneuvers.
- The deployment of NATO vessels in the Black Sea is a scheduled visit, conducted “in full compliance with international conventions,” MARCOM stressed.
- The group is expected to leave the Black Sea and make its way back to the Mediterranean later in March, it added.
- Yeah but apart from that, US-China relations are excellent. Following President Obama’s barbed comments aimed at China’s new counter-terrorism laws (and their implications for US tech companies – as NSA spying ‘facts’ reduce China’s appetite for American-made IT products), Beijing has blasted back. In one of the least holds-barred undiploatic statements in recent times, China (speaking through its official mouthpiece Xinhua), calls Obama’s criticism “utterly groundless and another piece of evidence of arrogance and hypocrisy of the U.S. foreign policy.” And with that they are just getting started…
- Full statement (via Xinhua)
- U.S. President Barack Obama’s criticism of the upcoming counterterrorism law of China is utterly groundless and another piece of evidence of arrogance and hypocrisy of the U.S. foreign policy.
- Although the enactment of a Chinese law is an entirely internal affair of China, Obama insisted that the measure, which would require technology firms to give Chinese authorities surveillance access in order to collect intelligence about terrorists, is “something they are going to have to change if they are to do business with the United States”.
- To begin with, the provisions are written for and solely for acquiring more and better counterterrorism intelligence, as China is facing severe threats from various domestic terrorists, for instance, the so-called “East Turkestan Liberation Organization.”
- Terrorists nowadays use more and more modern technologies for communications and collaboration. And it has become a common practice in many Western countries, including the U.S. itself, to keep a close watch on the Internet and telecommunication networks for possible hints of terrorism and other criminal activities.
- The U.S. Federal Bureau of Investigation (FBI) and the National Security Agency both have access to the equipment of major U.S. technology firms.
- FBI Director James Comey publicly warned companies like Apple and Google in 2014 against using encryption that the law enforcement authorities cannot break.
- While defending the legitimacy and necessity of similar behaviors in his own country, Obama’s criticism of Chinese counterterrorism law obviously shows selfishness and hypocrisy of the U.S. foreign policy.
- Secondly, the surveillance of terrorism actions on equipment of the Internet and telecommunication companies in China will be carried out strictly in accordance with the law.
- And with transparent procedures, China’s anti-terrorism campaign will be different from what the United States has done: letting the surveillance authorities run amok and turn counterterrorism into paranoid espionage and peeping on its civilians and allies.
- In fact, the same paranoid and narrow-mindedness, as demonstrated by the over-action of Obama and his cabinet members to the provisions in the Chinese anti-terrorism law, has also denied Chinese technology companies’ access to the U.S. market.
- Contrary to the accusations of the United States, China’s anti-terror law will put no unfair regulatory pressures on foreign companies, because the provisions will apply to both domestic and foreign firms.
- Moreover, to win the global fight against terrorism, Obama and his government should treat China on equal terms and stop making foreign policies based on realpolitik and the short term pursuit of its own unilateral interests.
- Less than three weeks after Obama held the “counterterrorism summit” in Washington and referred terrorism as one the greatest threats in this generation, the president has begun to slam the counter-terrorism efforts of another country, which makes people naturally question the real intentions of such accusations.
- China’s new counterterrorism law can help fight terrorism in a better and more effective way. Any setback of terrorists is a victory of all countries.
- The sooner Obama and his government understand this, the better will the world benefit.
- The head of the US Federal Communications Commission defended its historic vote in support of net neutrality, casting the agency as a “referee” for a free and open internet, not a regulator.
- Speaking at the Mobile World Congress in Barcelona – the largest telecommunications trade show on the globe – FCC Chairman Tom Wheeler maintained that reclassifying internet providers as utilities under the Communications Act will ensure that no company – or government, for that matter – will be able to block or slow down internet services for consumers.
- However, he dismissed complaints often lodged by internet providers and other data carriers such as Verizon or AT&T, which claim that tighter regulations will stifle innovation and investment by private companies. In fact, Wheeler fought the idea that the FCC’s new rules were even regulations, arguing that they had more in common with the free speech protections enshrined in the First Amendment.
- FCC adopts net neutrality rules endorsed by open internet advocates
“This is no more regulating the internet than the First Amendment regulates free speech in our country,” Wheeler said, as quoted by the Guardian. “If the internet is the most powerful and pervasive platform in the history of the planet, can it exist without a referee?
- “There needs to be a referee with a yardstick, and that is the structure we have put in place. A set of rules that say activity should be just and reasonable, and somebody who can raise the flag if they aren’t.”
- Wheeler pointed to similar regulations that were installed for the wireless industry back in the 1990s, which have since been deemed a success.
- “We built a model for net neutrality that has been wildly successful for mobile,” Wheeler said, according to Computer World. “We took Title II and modernized it…In 1993, the wireless industry asked the FCC to regulate them as a common carrier but to forebear all the monopoly-era regulations, and that is what has resulted in $300 billion in investments, which has been wildly successful.”
- Meanwhile, he added that concerns over the private sector’s willingness to invest in its networks in an era of net neutrality are overblown, Gigaom reported. Wheeler said that new open internet rules in 2008 didn’t stop Verizon from spending substantially on 4G spectrum, and even now with the net neutrality vote looming, this year’s 4G auction saw a record $41.3 billion raised.
- Additionally, the FCC chair said Sprint, T-Mobile and Google Fiber have all said they will keep spending money on improving their networks after the net neutrality rules go into effect.
— Ars Technica (@arstechnica) March 3, 2015
- “Our goal is to specifically not impose restrictions or order on how [the internet] should work,” Wheeler said, as quoted by Computer World. “We want operators to be as innovative as possible and to have a revenue stream that is unchanged. It’s with that revenue stream that they will build the networks of the future.”
- Some telecoms companies continue to insist that they should be able to offer faster speeds for some data, such as heart monitors or internet-enabled vehicles, according to the Guardian. They also believe that offering faster networks should be permissible as long as they don’t obstruct or interfere with “normal” internet speeds.
- But even though this proposal would not technically slow down internet service for typical consumers, internet advocates have displayed resistance to the idea anyway.
- Despite the recent FCC vote, Vodafone CEO Vittorio Colao said Wheeler has not come out against specialized services or even fast lanes.
- “I have asked explicitly to the chairman of the FCC, ‘So, are specialized services, fast lanes and quality of service forbidden or not?’ The answer is no, they are not forbidden. We understand that they will be there. Are they explicitly authorized? No, they are not.”
03.03.15 – Financial Collapse Leads To War
- Scanning the headlines in the western mainstream press, and then peering behind the one-way mirror to compare that to the actual goings-on, one can’t but get the impression that America’s propagandists, and all those who follow in their wake, are struggling with all their might to concoct rationales for military action of one sort or another, be it supplying weapons to the largely defunct Ukrainian military, or staging parades of US military hardware and troops in the almost completely Russian town of Narva, in Estonia, a few hundred meters away from the Russian border, or putting US “advisers” in harm’s way in parts of Iraq mostly controlled by Islamic militants.
- The strenuous efforts to whip up Cold War-like hysteria in the face of an otherwise preoccupied and essentially passive Russia seems out of all proportion to the actual military threat Russia poses. (Yes, volunteers and ammo do filter into Ukraine across the Russian border, but that’s about it.) Further south, the efforts to topple the government of Syria by aiding and arming Islamist radicals seem to be backfiring nicely. But that’s the pattern, isn’t it? What US military involvement in recent memory hasn’t resulted in a fiasco? Maybe failure is not just an option, but more of a requirement?
- Let’s review. Afghanistan, after the longest military campaign in US history, is being handed back to the Taliban. Iraq no longer exists as a sovereign nation, but has fractured into three pieces, one of them controlled by radical Islamists. Egypt has been democratically reformed into a military dictatorship. Libya is a defunct state in the middle of a civil war. The Ukraine will soon be in a similar state; it has been reduced to pauper status in record time—less than a year. A recent government overthrow has caused Yemen to stop being US-friendly. Closer to home, things are going so well in the US-dominated Central American countries of Guatemala, Honduras and El Salvador that they have produced a flood of refugees, all trying to get into the US in the hopes of finding any sort of sanctuary.
- Looking at this broad landscape of failure, there are two ways to interpret it. One is that the US officialdom is the most incompetent one imaginable, and can’t ever get anything right. But another is that they do not succeed for a distinctly different reason: they don’t succeed because results don’t matter. You see, if failure were a problem, then there would be some sort of pressure coming from somewhere or other within the establishment, and that pressure to succeed might sporadically give rise to improved performance, leading to at least a few instances of success. But if in fact failure is no problem at all, and if instead there was some sort of pressure to fail, then we would see exactly what we do see.
- In fact, a point can be made that it is the limited scope of failure that is the problem. This would explain the recent saber-rattling in the direction of Russia, accusing it of imperial ambitions (Russia is not interested in territorial gains), demonizing Vladimir Putin (who is effective and popular) and behaving provocatively along Russia’s various borders (leaving Russia vaguely insulted but generally unconcerned). It can be argued that all the previous victims of US foreign policy—Afghanistan, Iraq, Libya, Syria, even the Ukraine—are too small to produce failure writ large enough to satisfy America’s appetite for failure. Russia, on the other hand, especially when incentivized by thinking that it is standing up to some sort of new, American-style fascism, has the ability to deliver to the US a foreign policy failure that will dwarf all the previous ones.
- Analysts have proposed a variety of explanations for America’s hyperactive, oversized militarism. Here are the top three:
- 1. The US government has been captured by the military-industrial complex, which demands to be financed lavishly. Rationales are created artificially to achieve that result. But there does seem to be some sort of pressure to actually make weapons and field armies, because wouldn’t it be far more cost-effective to achieve full-spectrum failure simply by stealing all the money and skip building the weapons systems altogether? So something else must be going on.
- 2. The US military posture is designed to insure America’s full spectrum dominance over the entire planet. But “full-spectrum dominance” sounds a little bit like “success,” whereas what we see is full-spectrum failure. Again, this story doesn’t fit the facts.
- 3. The US acts militarily to defend the status of the US dollar as the global reserve currency. But the US dollar is slowly but surely losing its attractiveness as a reserve currency, as witnessed by China and Russia acting as swiftly as they can to unload their US dollar reserves, and to stockpile gold instead. Numerous other nations have entered into arrangements with each other to stop using the US dollar in international trade. The fact of the matter is, it doesn’t take a huge military to flush one’s national currency down the toilet, so, once again, something else must be going on.
There are many other explanations on offer as well, but none of them explain the fact that the goal of all this militarism seems to be to achieve failure.
- Perhaps a simpler explanation would suffice? How about this one:
- The US has surrendered its sovereignty to a clique of financial oligarchs. Having nobody at all to answer to, this American (and to some extent international) oligarchy has been ruining the financial condition of the country, running up staggering levels of debt, destroying savings and retirements, debasing the currency and so on. The inevitable end-game is that the Federal Reserve (along with the central banks of other “developed economies”) will end up buying up all the sovereign debt issuance with money they print for that purpose, and in the end this inevitably leads to hyperinflation and national bankruptcy. A very special set of conditions has prevented these two events from taking place thus far, but that doesn’t mean that they won’t, because that’s what always happens, sooner or later.
- Now, let’s suppose a financial oligarchy has seized control of the country, and, since it can’t control its own appetites, is running it into the ground. Then it would make sense for it to have some sort of back-up plan for when the whole financial house of cards falls apart. Ideally, this plan would effectively put down any chance of revolt of the downtrodden masses, and allow the oligarchy to maintain security and hold onto its wealth. Peacetime is fine for as long as it can placate the populace with bread and circuses, but when a financial calamity causes the economy to crater and bread and circuses turn scarce, a handy fallback is war.
- Any rationale for war will do, be it terrorists foreign and domestic, Big Bad Russia, or hallucinated space aliens. Military success is unimportant, because failure is even better than success for maintaining order because it makes it possible to force through various emergency security measures. Various training runs, such as the military occupation of Boston following the staged bombings at the Boston Marathon, have already taken place. The surveillance infrastructure and the partially privatized prison-industrial complex are already in place for locking up the undesirables. A really huge failure would provide the best rationale for putting the economy on a war footing, imposing martial law, suppressing dissent, outlawing “extremist” political activity and so on.
- And so perhaps that is what we should expect.
- Financial collapse is already baked in, and it’s only a matter of time before it happens, and precipitates commercial collapse when global supply chains stop functioning. Political collapse will be resisted, and the way it will be resisted is by starting as many wars as possible, to produce a vast backdrop of failure to serve as a rationale for all sorts of “emergency measures,” all of which will have just one aim: to suppress rebellion and to keep the oligarchy in power. Outside the US, it will look like Americans blowing things up: countries, things, innocent bystanders, even themselves (because, you know, apparently that works too). From the outside looking into America’s hall of one-way mirrors, it will look like a country gone mad; but then it already looks that way. And inside the hall of one-way mirrors it will look like valiant defenders of liberty battling implacable foes around the world. Most people will remain docile and just wave their little flags.
But I would venture to guess that at some point failure will translate into meta-failure: America will fail even at failing. I hope that there is something we can do to help this meta-failure of failure happen sooner rather than later.
- Only hours ago, Gallup released a new poll showing that only a small minority (just 17%) of Americans still view the US as the world’s economic superpower.
- Echoing former US Treasury Secretary Larry Summers’ quip, “There is surely something odd about the world’s greatest power being the world’s greatest debtor,” it appears that economic reality is finally beginning to set in for Americans.
- Yes, it turns out there are consequences when you habitually indebt future generations in order to buy bombs, drones, and body scanners.
- There are consequences when you regulate every aspect of society, from how much people can earn on their savings, to what they can/cannot put in their own bodies.
- The decline of the United States as the world’s dominant superpower was always inevitable. No nation or empire can hold the top spot forever.
- History is full of examples of once-dominant superpowers that have declined (and even collapsed altogether).
- Italy was the center of power and wealth in the world, not once but twice. France. Spain. England. Many nations have had their time as #1. The US is no different.
- While many Americans are starting to realize that this is happening, what many probably don’t realize is what else happens as a result.
- The last 2,000 years of global finance shows that the dominant superpower generally sets the global reserve currency.
- Early civilizations used the Byzantine gold solidus for centuries given that the Byzantine Empire was the dominant power at the time.
- But as Byzantium’s power rapidly faded, the government played dangerous games with their currency, prompting the rest of the world to find an alternative.
- Italy rose to the occasion. As the most prominent rising power in Europe’s early renaissance, ducats and florins quickly replaced the solidus as the dominant reserve currency.
- Spain’s later rise to power saw the ‘real de ocho’ dominate global trade. Britain’s rise to power in the 19th century saw the pound sterling become the supreme global currency.
- And for the last seventy years, the US dollar has been the world’s dominant reserve currency.
- Make no mistake—as US power shifts, so will the dollar’s reserve status. And this changes everything.
- The dollar’s reserve status is why so many foreigners buy US government debt despite its extreme level.
- It’s why the Federal Reserve’s balance sheet can explode by 500% without hyperinflation gripping the nation.
- It’s why Americans can borrow at absurdly low interest rates in order to finance a higher standard of living that they wouldn’t otherwise be able to afford.
- All of this goes away as US power wanes. And folks who don’t see the trend coming will probably see their lives turned upside down.
- But this doesn’t mean the world is coming to an end. It’s not. The world is changing. And rapidly.
- This is not some doom and gloom scenario. On the contrary, it’s ridiculously exciting. Great change brings about great opportunity for anyone who is willing to look at the big picture.
- On one hand, it’s important to protect what you’ve got. A major change in the reserve currency will bring about significant turmoil in the financial system.
- We could easily see multiple currency crises, bank failures, and capital controls.
- But there are some simple, rational steps you can take to ensure you’re not a victim.
- If your country is flat broke, then move a portion of your savings offshore to a strong bank in a country with no debt. Simple.
- Likewise, move a portion of your retirement funds abroad to a safe place where your insolvent government can’t “help you” manage it.
- Definitely put on your seatbelt. Develop a Plan B.
- But then once your livelihood is secure (here’s the best part), look forward to the incredible business, investment, and lifestyle opportunities that will come from this great change.
- Just imagine how prosperous you would have become if you had known what was to come in Rome before 476? Or France before 1789? Or the US before…?
- There will be chances to build generational wealth betting on these big trends… for those who are willing to be a few years early rather than a minute too late.
- The Central Bank of Ukraine is raising its benchmark interest rate to 30 percent from 19.5 percent, the biggest increase in 15 years. It reflects the bank’s attempt to save the collapsing economy from hyperinflation that some estimate at 272 percent.
- The new refinancing rate becomes effective from Wednesday, Ukraine’s Central Bank said Tuesday.
- This is the second rate increase this year, as the bank raised it in February to 19.5 percent from 14 percent.
- The decision was taken because the bank saw the “threat of inflation had risen strongly due to negative consequences from currency market panic,” the Central Bank chief Valeriia Gontareva said in a media briefing.
- The bank also kept in place the requirement for companies to sell about 75 percent of their foreign currency earnings, which is also hoped, will stabilize the hryvnia. Gontareva hopes it will return the currency to a level of 20-22 to the US dollar “quickly”.
Hryvnia Rallies To 1-Month Highs After Ukraine Raises Benchmark Rate To 30%pic.twitter.com/a65CkE6Ond
— Play Resilience (@PlayResilience) March 3, 2015
- The domestic currency, the hryvnia, has lost about 70 percent since the start of the Maidan unrest a year ago. On Tuesday it was trading at 26 hryvnia to the Dollar, while a year ago a greenback bought 8 hryvnia.
- This is pushing up inflation, with official numbers showing prices are rising by 26.8 percent in annual terms. However, separate research by the Cato Institute suggests the real inflation rate is 272 percent, the world’s highest, and well above Venezuela’s 127 percent rate
- Are we at the tail end of the stock market bubble to end all stock market bubbles? Wall Street was full of glee Monday when the Nasdaq closed above 5000 for the first time since the peak of the dotcom bubble in March 2000. And almost everyone in the financial world seems convinced that things are somehow “different” this time around. Even though by almost every objective measure stocks are wildly overpriced right now, and even though there are a whole host of signs that economic trouble is on the horizon, the overwhelming consensus is that this bull market is just going to keep charging ahead. But of course that is what they thought just before the last two stock market crashes in 2001 and 2008 as well. No matter how many times history repeats, we never seem to learn from it.
- Back in October 2002, the Nasdaq hit a post-dotcom bubble low of 1108. From there, it went on an impressive run. In late 2007, it briefly moved above 2800 before losing more than half of its value during the stock market crash of 2008.
- So the fact that the Nasdaq has now closed above 5000 is a really big deal. The following is how USA Today described what happened on Monday…
The Nasdaq Composite capped its long march back to 5000 Monday, eclipsing, then closing above the long-hallowed mark for the first time since March 2000.
The arduous climb came on the heels of a 10-day winning streak that ended last week, Nasdaq’s longest since July 2009. That helped fuel the technology-heavy market index to a 7% gain in February, the sixth-largest monthly climb since its 1971 launch.
- The chart below shows how the Nasdaq has performed over the past decade. As you can see, we are coming dangerously close to doubling the peak that was hit just before the last stock market collapse…
- By looking at that chart, you would be tempted to think that the overall U.S. economy must be doing great.
- But of course that is not the case at all.
- For example, just take a look at what has happened to the employment-population ratio over the past decade. The percentage of the working age U.S. population that is currently employed is actually far lower than it used to be…
- So why is the stock market doing so well if the overall economy is not?
- Well, the truth is that stocks have become completely divorced from economic reality at this point. Wall Street has been transformed into a giant casino, and trading stocks has been transformed into a high stakes poker game.
- And one of the ways that we can tell that a stock market bubble has formed is when people start borrowing massive amounts of money to invest in stocks. As you can see from the commentary and chart from Doug Short below, margin debt is peaking again just like it did just prior to the last two stock market crashes…
Unfortunately, the NYSE margin debt data is a month old when it is published. Real (inflation-adjusted) debt hit its all-time high in February 2014, after which it margin declined sharply for two months, but by June it had risen to a level about two percent below its high and then oscillated in a relatively narrow range. The latest data point for January is four percent off its real high eleven month ago.
- So why can’t more people see this?
- We are in the midst of a monumental stock market bubble and most on Wall Street seem willingly blind to it.
- Fortunately, there are a few sober voices in the crowd. One of them is John Hussman. He is warning that now is the time to get out of stocks…
Unless we observe a rather swift improvement in market internals and a further, material easing in credit spreads – neither which would relieve the present overvaluation of the market, but both which would defer our immediate concerns about downside risk – the present moment likely represents the best opportunity to reduce exposure to stock market risk that investors are likely to encounter in the coming 8 years.
Last week, the cyclically-adjusted P/E of the S&P 500 Index surpassed 27, versus a historical norm of just 15 prior to the late-1990’s market bubble. The S&P 500 price/revenue ratio surpassed 1.8, versus a pre-bubble norm of just 0.8. On a wide range of historically reliable measures (having a nearly 90% correlation with actual subsequent S&P 500 total returns), we estimate current valuations to be fully 118% above levels associated with historically normal subsequent returns in stocks. Advisory bullishness (Investors Intelligence) shot to 59.5%, compared with only 14.1% bears – one of the most lopsided sentiment extremes on record. The S&P 500 registered a record high after an advancing half-cycle since 2009 that is historically long-in-the-tooth and already exceeds the valuation peaks set at every cyclical extreme in history but 2000 on the S&P 500 (across all stocks, current median price/earnings, price/revenue and enterprise value/EBITDA multiples already exceed the 2000 extreme). Equally important, our measures of market internals and credit spreads, despite moderate improvement in recent weeks, continue to suggest a shift toward risk-aversion among investors. An environment of compressed risk premiums coupled with increasing risk-aversion is without question the most hostile set of features one can identify in the historical record.
- Everyone knows that the stock market cannot stay detached from economic reality forever.
- At some point the bubble is going to burst.
- If you want to know what the real economy is like, just ask Alison Norris of Detroit, Michigan…
When Alison Norris couldn’t find work in Detroit, she searched past city limits, ending up with a part-time restaurant job 20 miles away, which takes at least two hours to get to using public transportation.
Norris has to take two buses to her job at a suburban mall in Troy, Michigan, using separate city and suburban bus systems.
For many city residents with limited skills and education, Detroit is an employment desert, having lost tens of thousands of blue-collar jobs in manufacturing cutbacks and service jobs as the population dwindled.
- Sadly, her story is not an anomaly. I get emails from readers all the time that are out of work and just can’t seem to find a decent job no matter how hard they try.
- It would be one thing if the stock market was soaring because the U.S. economy was thriving.
- But we all know that is not true.
- So that means the current stock market mania that we are witnessing is artificial.
- How long will it last?
- They’re back!!
- BBVA Compass helping low- and moderate-income borrowers overcome barriers to homeownership
– New HOME program helps qualifying borrowers meet down payment, closing costs
– It’s part of bank’s effort to support low- and moderate-income individuals, neighborhoods
- BBVA Compass announced today the launch of its Home Ownership Made Easier, or HOME, program, which helps low- and moderate-income borrowers overcome one of the most significant barriers to homeownership — saving enough cash to cover down payment and closing costs.
- HOME allows qualifying borrowers to finance up to 100 percent of a home’s value, with the bank contributing up to $4,500 toward certain closing costs. The program is part of BBVA Compass’ recent pledge to put $11 billion in lending, investments and services toward supporting low- and moderate-income individuals and neighborhoods, and will also include a free online homebuyer education course to help prepare borrowers for the responsibility of managing a home loan.
- “We’ve built a comprehensive program that will help many people across our footprint realize the dream of homeownership — something that may have seemed unattainable to them in the past,” said Eduardo Castaneda, executive director of real estate lending for BBVA Compass. “The financing and closing cost assistance, and the essential homebuyer education, will help ensure they enjoy the benefits of their new home for years to come.”
* * *
- Other benefits of the bank’s HOME program:
- Borrowers can move into a new residence with as little as $500 of their own funds.
- The HOME mortgage is also available to borrowers with higher incomes if they’re financing properties in low- or moderate-income census tracts.
WTF! – $500 buys you a house (on massive leverage) AND rich people can fund 100% if the houses they are slumlording buying are in relatively poor areas.
- * * *
- How do you qualify for a 100% LTV mortgage…
- To qualify for the HOME Program, certain eligibility requirements must be met. Those eligibility requirements include, but are not limited to
- 1) the property must either be located in a low-to-moderate income census tract (https://www.ffiec.gov/geocode/), or
- (2) the applicants on the loan cannot have an income greater than 80% of the HUD median income for the area.
So to be clear… BBVA will lend you 100% of the valkue of your home (and pay you $4500) if you are relatively poor and live in a relatively poor area…
- White House grounds were breached again overnight ‒ twice, in fact. This time, however, Secret Service police arrested two men, who attempted to gain access to the executive mansion, before they were able to get very far.
- One person was arrested at about 11:30 p.m. on Sunday after climbing over a bicycle rack set up outside the White House’s main fence and charged with unlawful entry, Secret Service spokesman Brian Leary said.
- At about 6:45 a.m. on Monday, a second person was stopped after trying to enter the grounds through a White House gate as a construction worker was exiting through the security checkpoint. The man became violent and was arrested, Leary said.
- The White House was briefly locked down after both incidents as part of Secret Service protocol, Reuters reported.
- The security agency in charge of protecting the president, First Family, vice president and others came under intense scrutiny in the latter half of 2014, after a series of breaches at 1600 Pennsylvania Avenue. In October, Secret Service Director Julia Pierson resigned a streak of fence-jumpers and prostitution scandals.
- Some of the breaches could be regarded as cute ‒ such as when President Barack Obama’s press briefing was delayed by a toddler, who squeezed through the iron bars of the White House fence and set out on a walk across the lawn.
- Others set security on high alert. In mid-September, Omar Gonzalez, a 42-year-old military veteran, hopped the fence along the north lawn of the White House with a knife. He made it all the way across the lawn, through the main entrance and into the mansion’s reception rooms before being apprehended by the Secret Service. The breach happened 10 minutes after president Obama and his family had left for the Presidential Retreat at Camp David, Maryland.
- Less than 10 days prior to the Gonzalez incident, Jeffrey Grossman, a 26-year-old man with mental disabilities, scaled the 7.5-foot fence and was detained for trespassing on White House grounds. He was trying to reach out to President Obama for help with his health care, the man’s mother said.
- She said her son had gone to an out-of-state hospital to admit himself for mental health treatment, but he was unsuccessful due to limits in his healthcare coverage. Upon further inquiry as to why he could not get care, he was told that is not how the healthcare system in the US worked, and that he should talk to the president about it. He then traveled to Washington, she said.
- The Secret Service responded to the incidents by erecting a second fence and increasing its presence around the White House. The series of temporary metal crowd-control barricades runs parallel to the permanent wrought-iron fence for about 400 feet along Pennsylvania Avenue, creating an eight-foot buffer between the two defensive barriers.
- But the second fence didn’t stop the intruders. A month later, another man leaped over the barriers and kicked a Secret Service dog sent to attack him, before he was finally arrested.
- The White House wasn’t the only location during September and October where security was breached. An armed man, who has been convicted of assault and battery three times, was somehow able to slip past the Secret Service and ride in an elevator with the president at the Centers for Disease Control and Prevention in Atlanta, Georgia. Then a man pretending to be a congressman managed to get into a secure backstage area at an event where Obama was speaking.
- Intelligence thought to have been derived by torture in Saudi Arabia helped to foil a terror attack on UK soil, it has emerged. Reflecting on the revelation, the ex-head of MI6 said torturing terror suspects produces “useful information.”
- In his first interview since stepping down as MI6 chief, Sir John Sawers made the controversial statement to the BBC.
- He said UK security services refrain from engaging in torture because it breaches British values. But he argued torture can be effective in the short term.
— markhughes (@markhughes) March 1, 2015
- Sawers’ remarks were condemned by director of human rights group Liberty Shami Chakrabarti.
- “The one thing I could never have predicted is in 2015 we would be having to talk about torture in the UK,” she told the Independent.
- Britain’s security services have also come under fire from UK human rights group Cage.
- The human rights organization warns MI5 and MI6’s use of torture directly contributed to the radicalization of Michael Adebolajo and Mohammed Emwazi.
- Emwazi was identified yesterday as the true identity of Jihadi John, an Islamic State (IS, formerly ISIS) militant thought to be responsible for slaughtering hostages in Syria, while Adebolajo was convicted of murdering British soldier Lee Rigby in 2013.
- Speaking to the BBC, Sawers strongly rejected the argument secret service practices are radicalizing young Britons. He stressed torture has been deployed for “thousands of years in order to extract useful information.”
— Moazzam Begg (@Moazzam_Begg) March 2, 2015
- Sawers’ remarks come as new details of a foiled Al-Qaeda terror plot targeting British and American citizens surface.
- According to an exclusive Independent report, the attack was intercepted in 2010 by a dramatic “real time operation” spanning continents.
- Al-Qaeda had conspired to attack two separate airliners as they travelled over the eastern United States.
- UK authorities uncovered a bomb disguised in a printer cartridge on a UPS cargo plane at East Midlands Airport, following a tip-off by Saudi Arabian officials.
- The tip-off prompted a frantic search operation, with security officials battling against the clock to detect the device. UK officials subsequently disarmed the bomb at an airport cargo hub. A second similar device was also uncovered on board a freight plane in Dubai. Both planes reportedly originated in Yemen.
- An intelligence source, who wished to remain anonymous, told the Independent: “The people in London went back on the phone two or three times to where the interrogation was taking place in Riyadh to find out specifically where the bomb was hidden.”
- “There were two Britons there, in immediate communication with where the interrogation was taking place, and as soon as anything happened, they were in touch with the UK.”
— Hodan YusufPankhurst (@hyfreelance) March 1, 2015
- Another inside source told the Independent the majority of Britons would say torture is “defensible” in a “ticking bomb scenario.”
- He said while it is publicly claimed UK officials do not engage in acts of torture, they are “very happy beneficiaries of it.”
- A third source, with knowledge of the East Midlands bomb operation, said British officials attempted to dissociate themselves from torture happening in Saudi Arabia. He added, however, that the intelligence aided in the successful disarming of the 2010 bombs was undoubtedly derived “under duress.”
- “Of course we use intelligence from torture. We take it from wherever we can get it, but we are never ever going to say ‘we don’t want that,’” he said.
- The source told the Independent that intelligence officials rarely ask too many questions about where tip-offs come from. That is the “difference between intelligence and evidence,” he said.
— Spy Blog (@spyblog) February 28, 2015
- Prime Minister David Cameron alluded to the foiled terror attack earlier this month when he referenced “a piece of information” from Saudi Arabia that potentially saved “hundreds of lives.”
- Earlier this month, it was revealed a suspected terrorist is arrested every day in Britain in connection with Islamic extremism.
- Metropolitan Assistant Commissioner Mark Rowley said the growing threat from returning fighters who have joined the IS means that extremists are being detained on a near daily basis, with attacks from “misfits and criminals” feared.
03.02.15 – Everything Will Be Monitored On The Internet
- Can you imagine a world where your home, your vehicles, your appliances and every single electronic device that you own is constantly connected to the Internet? This is not some grand vision that is being planned for some day in the future. This is something that is being systematically implemented right now. In 2015, we already have “smart homes”, vehicles that talk to one another, refrigeratorsthat are connected to the Internet, and televisions that spy on us. Our world is becoming increasingly interconnected, and that opens up some wonderful possibilities. But there is also a downside. What if we rapidly reach a point where one must be connected to the Internet in order to function in society? Will there come a day when we can’t even do basic things such as buy, sell, get a job or open a bank account without it? And what about the potential for government abuse? Could an “Internet of Things” create a dystopian nightmare where everyone and everything will be constantly monitored and tracked by the government? That is something to think about.
- Today, the Internet has become such an integral part of our lives that it is hard to remember how we ever survived without it. And with each passing year, the number of devices connected to the Internet continues to grow at an exponential rate. If you have never heard of the “Internet of Things” before, here is a little bit about it from Wikipedia…
Things, in the IoT, can refer to a wide variety of devices such as heart monitoring implants, biochip transponders on farm animals, electric clams in coastal waters, automobiles with built-in sensors, or field operation devices that assist fire-fighters in search and rescue. These devices collect useful data with the help of various existing technologies and then autonomously flow the data between other devices. Current market examples include smart thermostat systems and washer/dryers that utilize wifi for remote monitoring.
- But there is also a dark side to the Internet of Things. Security is a huge issue, and when that security is compromised the consequences can be absolutely horrifying. Just consider the following example…
It is a strange series of events that link two Armenian software engineers; a Shenzen, China-based webcam company; two sets of new parents in the U.S.; and an unknown creep who likes to hack baby monitors to yell obscenities at children. “Wake up, you little ****,” the hacker screamed at the top of his digital lungs last summer when a two-year-old in Houston wouldn’t stir; she happened to be deaf. A year later, a baby monitor hacker struck again yelling obscenities at a 10-month-old in Ohio.
Both families were using an Internet-connected baby monitor made by China-based Foscam. The hacker took advantage of a weakness in the camera’s software design that U.S.-based Armenian computer engineers revealed at a security conference in Amsterdam last April.
- The Internet allows us to reach into the outside world from inside our homes, but it also allows the reverse to take place as well.
- Do we really want to make ourselves that vulnerable?
- Sadly, we live at a time when people don’t really stop to consider the downside to our exploding technological capabilities.
- In fact, there are many people that are extremely eager to connect themselves to the Internet of Things.
- In Sweden, there are dozens of people that have willingly had microchips implanted under the skin. They call themselves “bio-hackers”, and they embrace what they see as the coming merger between humanity and technology. The following is what one of the founders of a Sweden based bio-hacking community had to say during one recent interview…
“The technology is already happening,” says Hannes Sjoblad, one of the founders of BioNyfiken. “We are seeing a fast-growing community of people experimenting with chip implants, which allow users to quickly and easily perform a variety of everyday tasks, such as allowing access to buildings, unlocking personal devices without PIN codes and enabling read access to various types of stored data.
“I consider the take-off of this technology as another important interface-moment in the history of human-computer interaction, similar to the launches of the first windows desktop or the first touch screen. Identification by touch is innate for humans. PIN codes and passwords are not natural. And every additional device that we have to carry around to identify ourselves, be it a key fob or a swipe card, is just another item that clutters our lives.”
- And of course this is happening in the United States as well…
In America, a dedicated amateur community — the “biohackers” or “grinders” — has been experimenting with implantable technology for several years. Amal Graafstra, a 38-year-old programmer and self-styled “adventure technologist”, has been inserting various types of radio-frequency identification (RFID) chips into the soft flesh between his thumbs and index fingers since 2005. The chips can be read by scanners that Graafstra has installed on the doors of his house, and also on his laptop, which gives him access with a swipe of his hand without the need for keys or passwords.
- But you don’t have to have a microchip implant in order to be a part of the Internet of Things.
- In fact, there are a whole host of “wearable technologies” that are currently being developed for our society.
- For instance, have you heard about “OnStar for the Body” yet? It will enable medical personnel to constantly monitor your health wherever you are…
Smart, cheaper and point-of-care sensors, such as those being developed for the Nokia Sensing XCHALLENGE, will further enable the ‘Digital Checkup’ from anywhere. The world of ‘Quantified Self’ and ‘Quantified Health’ will lead to a new generation of wearable technologies partnered with Artificial Intelligence that will help decipher and make this information actionable.
And this ‘actionability’ is key. We hear the term Big Data used in various contexts; when applied to health information it will likely be the smart integration of massive data sets from the ‘Internet of things’ with the small data about your activity, mood, and other information. When properly filtered, this data set can give insights on a macro level – population health – and micro – ‘OnStar for the Body‘ with a personalized ‘check engine light’ to help identify individual problems before they further develop into expensive, difficult-to-treat or fatal conditions.
- If that sounded creepy to you, this next item will probably blow you away.
- According to one survey, approximately one-fourth of all professionals in the 18 to 50-year-old age bracket would like to directly connect their brains to the Internet…
According to a survey by tech giant Cisco Systems, about a fourth of professionals ages 18 to 50 would leap at the chance to get a surgical brain implant that allowed them to instantly link their thoughts to the Internet.
The study was conducted on 3,700 adults working in white-collar jobs in 15 countries.
“Assuming a company invented a brain implant that made the World Wide Web instantly accessible to their thoughts, roughly one-quarter would move forward with the operation,” the study found.
- In the end, they are not going to have to force most of us to get connected to the Internet of Things.
- Most of us will do it eagerly.
- But most people will never even stop to consider the potential for abuse.
- An Internet of Things could potentially give governments all over the world the ability to continually monitor and track the activities of everyone under their power all of the time.
- If you do not think that this could ever happen, perhaps you should consider the words of former CIA director David Petraeus…
“Items of interest will be located, identified, monitored, and remotely controlled through technologies such as radio-frequency identification, sensor networks, tiny embedded servers, and energy harvesters — all connected to the next-generation Internet using abundant, low-cost, and high-power computing”
- Are you starting to get the picture?
- They plan to use the Internet of Things to spy on all of us.
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