Florida

In a nutshell:

• Relatively low unemployment rates for the “Western Leaders” aren’t just an artifact of recent strength in, say, energy production and commodities. These states have consistently outperformed the rest of the country.
• Abysmally high unemployment rates for the “Eastern Super-laggards” have also persisted for over two decades, exceeding all other parts of the country.
• The “Northern Coastal and Great Lakes Laggards” and “Western Laggards and Southeast” fall somewhere between the other two regions, but always favoring the southern states over the northern states.

Not surprisingly, California, Nevada and Florida are more volatile than the other regions, cycling well above and then back toward the Western Leaders in each of the past two decades. Also, the unemployment problems in California and Nevada have been consistently worse than Florida’s unemployment. These trends may or may not persist in coming years. But if your goal is to anticipate the next Stockton, San Bernardino or Detroit, watch the unemployment data closely and pay particular attention to the cities listed here.

On August 6th, the small town of Deer Trail, Colorado is set to vote on an ordinance that will permit the hunting of unmanned surveillance drones. The author of the ordinance, Phillip Steel, claims the gesture is “symbolic.” A handful of other American states are pursuing measures to limit the spying operations of Uncle Sam’s unmanned aerial vehicles. One has to be either lying or painfully ignorant to believe government will not abuse surveillance drones. State officials have rarely failed to use their capacity to terrify the populace. The prospect of around-the-clock surveillance is a chilling thought and one that should not be taken lightly. Unfortunately the only means to achieve some semblance of privacy requires a luddite approach to technology and a hermit’s approach to community. Otherwise, you avail yourself to the terror of visibility in what should otherwise be, in Thomas Paine’s words, the blessing of society.

Today, the wealth redistributor par excellence came to us live from an Amazon warehouse in Chattanooga, TN where with dramatically rolled-up sleeves, Obama praised a vision of a full-time middle class to a fulfillment center gathering of racially diverse, part-time workers, thereby concluding "America's Transformation To A Part-Time Worker Society" first observed here in 2010.

• More Doctors Steer Clear of Medicare (WSJ)
• Syrian Looters in Bulldozers Seek Treasure Amid Chaos (BBG)
• Siemens CEO Peter Löscher Is Set to Leave His Post After Series of Earnings Misses (WSJ)
• Silver Vault for 200 Tons Starts in Singapore as Wealthy Buy (BBG)
• Omincom and Publicis merger shows that advertising is now firmly in the business of Big Data: collecting and selling the personal information of millions of consumers (NYT)
• Apple supplier accused of labour violations (FT)
• 'BarCap was the Wild Wild West – that’s what we called it’ (Telegraph)
• P&G chief seizes opportunity in era of three-day stubble (FT)
• Federal Reserve 'Doves' Beat 'Hawks' in Economic Prognosticating (WSJ) - LOL: Fed "hawks"

When Standard & Poors is not engaged in "Puffery" (a defense which admits "our entire business model is worthless") it pretends to analyze credits and assign ratings, usually with both humorous and systematically catastrophic results. Just as it has done in the chart below. In the aftermath of the Detroit filing, one may be interested to see just how the rating agency, which had Greece rated at "A" months before the Eurozone's bananaest-republic member had its first bailout, evaluated America's various states since the start of the 21st century through 2012. Among the best: Florida. Worst: California. Michigan, whose main city just went bankrupt: AA-. And with countless cross-default provisions and collateral waterfalls upon a multi-notch downgrade, one can be certain that as reality finally comes to the muni space with roughly a 3 years delay, that this too will have a happy ending.

The Obama "Better Bargain for the Middle Class" roadshow continues. We can only assume in it he desperately tries to find a representative of said class, so far without success. We will spare readers the repetitive oratory streamed by the teleprompter which is a carbon copy from yesterday and cut straight to the money shots.

"One thing he apparently for sure doesn’t talk about is retirement."

• Humans Beating Robots Most Since ’08 as Trends Shift (BBG)
• Easing of Mortgage Curb Weighed (WSJ)
• European Banks Face Capital Gap With Focus on Leverage (BBG)
• Signs Suggest China Warming to Idea of Stimulus (WSJ)
• China Coal-Fired Economy Dying of Thirst as Mines Lack Water (BBG)
• Jeans and shoes show criminal underbelly of China-EU trade (Reuters)
• How U.S. drug sting targeted West African military chiefs (Reuters)
• Japan scrambles jets after China plane flies by southern islands (Reuters)
• Apple Plots Return to Growth After Coping With Aging Lineup (BBG)
• AT&T Falls Shy of Analyst Estimates as Discounts Hurt Margins (BBG)
• SAC insider trading case takes twist (FT)

It wasn't exactly like rubbing salt into the wounds of a US population that over the past month has learned it has no electronic communication privacy left, but it was close, when last night the US government's Office of the Director of National Intelligence announced that it was granting the secret FISA court - the same 11 people who decide behind closed doors whose email, phone or browser history is of national interest and thus subject to further "examination" - an extension of its telephone surveillance program. This is one of the two data surveillance efforts by the US (in conjunction with all major private telecom and internet companies) that Snowden leaked about. Why do we know this? Because the Obama administration is suddenly serious about being the most transparent ever: "The ODNI said in a statement it was disclosing the renewal as part of an effort at greater transparency following Snowden's disclosure of the telephone data collection and email surveillance programs." In short: "we will continue spying, but at least we are fully transparent about it."

The grotesque days of the first housing bubble are now being flatly trounced by the surreal second coming of the housing bubble, where courtesy of RealtyTrac we find that the old gross maximum profit potential of 63% realized in Orlando, FL house flipping, has two short months been eclipsed by flipping a house in Daytona Beach, generating a mindblowing 82% "flip that house" return! In brief: in the first half of 2013 there were 136,184 single family home flips — where a home is purchased and subsequently sold again within six months — in the first half of 2013, up 19 percent from a year ago and up 74 percent from the first half of 2011. Real estate investors made an average gross profit of $18,391 on single family home flips in the first half of the year, a 9 percent gross return on the initial purchase price. That was up 246 percent from an average gross return of $5,321 in the first half of 2012 and an average loss of -$13,206 in the first half of 2011.

• Detroit ‘Gut Kick’ Poses New Test for Long Suffering City (BBG)
• Florida lawmakers urge overhaul of 'Stand Your Ground' law (Reuters)
• Investors pour huge sums into US equity funds (FT)
• Snowden Standoff Threatens Obama-Putin Moscow Summit (BBG)
• China, U.S. companies' great hope, now a drag (Reuters)
• Morgan Stanley stock traders rebuild burned bridges (Reuters)
• Huawei spied for China, claims ex-CIA head Michael Hayden (FT)
• Gorilla Flipping Homes as Rebound Revives Rapid Trades (BBG)
• BRICS joint action at G20 summit may be wishful thinking (Reuters)

Banks are NOT looking to hang onto REO property.  Read Basel III.  150% risk weight for distressed... 

For the second time in a week, a Drone has been destroyed at Tyndall Air Force Base in Florida. This morning's crash - and later self-destruction - of the unmanned QF-4 drone ( a modified F-4 Phantom apparently used for target practice) on the east-side of the base caused Highway 98 to be closed "as a precaution," for the next 24 hours due to fires resulting from the crash and a small self-destruct charge carried on board the drone. The charge is used to destroy the drone if it leaves its pre-approved flight plan. The last drone crash was last Wednesday morning when Tyndall destroyed a drone over the Gulf of Mexico south of Cape San Blas in Gulf County.

US AG Eric Holder, who it appears is not busy committing perjury before Congress, or failing to prosecute one single TBTF bank due to their systemic nature, or eavesdropping on the AP, or recording every American electronic communication, or selling weapons to Mexican drug cartels, or generally using the constitution as one-ply toilet paper, has found some time to peddle his thoughts on the Trayvon Martin shooting at an NAACP convention in Orlando. So what did the head of the US department of justice say? He proceeds to blast "Stand your ground" laws, because, you see, having the right to self-defense is dangerous and may lead to escalations. No really: "Separate and apart from the case that has drawn the nation's attention, it's time to question laws that senselessly expand the concept of self-defense and sow dangerous conflict in our neighborhoods." In other words, Holder is spreading a very christian message: when slapped, present the other cheek.

A quick look at job creation on a state by state basis shows some very distinct losers, and one very obvious winner: Texas.