Detroit

All yu need to read.

A Guide for Those with Much Money and Very Little Patience Whom Want to Prepare for Zombie Apocalypse But Are Afraid to Google It For Fear of DHS Labeling Them A Terrorist.

Today it was widely reported that the CIA thwarted a “plot by al Qaeda’s affiliate in Yemen to destroy a U.S.-bound airliner using a bomb.”  This bomb, which was to be concealed in a pair of underwear, was designed as an improvement over what Umar Farouk Abdulmutallab attempted to use to blow up an airliner over Detroit on Christmas Day of 2009.  This bomb was upgraded and designed to specifically avoid metal detectors. At first glance it would appear to be a job well done by the world’s leading domestic affairs meddlers. The truth was finally revealed as the would-be bomber was, in fact, a double agent of the CIA. When considering the nature of the state, this new instance of government supported terrorism is unsurprisingly comparable to previous cases. The alleged Yemen “underwear” bomber was just another fabricated spook in the long line of mounting justifications to keep the war on terror and its profiteers going; no matter the cost.  As long as the American people are still easily whipped into a frenzy over forged menaces from afar, their blood and treasure will go on to be squandered on military boondoggles and redundant intelligence agencies.  War and fear end up becoming a way of life.  And so does the state’s command over what could be a life of peace and tranquility for the nation it supposedly protects. This isn’t conspiracy theory; just a recognition of the various hobgoblins, as H.L. Mencken described them, invented to justify encroaching totalitarianism.

• It just get worse and worse: After McClendon's trades, Chesapeake board gave blessing (Reuters)
• Iran Accepts Renminbi for Crude Oil (FT)... which is not news: recall China and Iran Bypass Dollar from July 2011
• As Gas Prices Fall, a Sigh of Relief  (WSJ)... so now people can direct their disability payments to where they belong: extra fries
• Greece Braces for a Repeat of Elections (FT), as first predicted by Zero Hedge, this will be a recurring affair
• China dissident Chen says officials must face justice (Reuters)
• Merkel Urges Athens to Stick With Reform (FT)
• Hollande’s Win is a Chance for Change (FT)
• U.K. Manufacturers Expect Exports to Rise (WSJ)
• U.S. Says Bomb Plot Disrupted Before Public Threatened (Bloomberg)
• Santorum Endorses Romney as Republican Nominee (Bloomberg)
• Beijing May Host OTC Market (China Daily)
• India Delays Tax Avoidance Laws (FT)

US home prices have once again made a post-bubble low in spite of all the artificial intervention and massive bailouts to financial institutions.  The bottom line unfortunately is that US household incomes have been strained for well over a decade.  You can slice it up by nominal or inflation adjusted data but household incomes have been moving in a negative direction during the 00s and continuing into this decade.  Keep in mind there is a massive pipeline of problems still in the housing market with over 5.5 million mortgage holders in some stage of foreclosure or simply not paying on their mortgage.  This is more than a housing crisis but a crisis of quality job growth.

9 Torture Myths DeBUNKED

When they see you as a chicken breast, you know your vote matters little and your life even less.

A once shockingly expensive and insular country, forced to open its doors a tiny bit.

Housing is improving! Housing is improving! Housing is improving!

if I say it enough will someone believe it?

This post has a link to a Bloomberg story about a revival in Seattle where house bidding wars are in progress: Date March 27, 2012. You won't believe it. It reads like a story from the heart of the days of the bubble market.

Despite January being the first of 3 record warm winter months, which saw virtually all other economic indicators boosted on the heels of 'April in February', today's incomplete Case Shiller data (Charlotte, NA was missing), indicated that in the first month of the year, prices across the top 20 MSAs dropped once again, posting a 9th consecutive decline, declining by 0.04% to 136.60. The Seasonally Adjusted print brings the average home price to December 2002 levels. And just to avoid Seasonal Adjustment confusion which courtesy of a record warm winter is all the rage, the NSA data showed a -0.84% drop in January.

Housing remains a mess and recovery continues to be something found best in Disneyland at fantasy land (although not in Disney's movie-making business). The sector is showing only feeble growth as the American nightmare continues to chip away at the American dream. Or If every man's home is his castle, what am I doing in the moat,and why won't my banker lower the drawbridge?

All you need to read.

On Thursday, we were the first to expose GM's latest strong car sales data as nothing more than the latest in a long series of accounting gimmicks known as 'channel stuffing' when excess inventory is offloaded to a vendor channel, in this case GM dealers, while allowing the company to book revenue, and, of course, profits (most likely on a FIFO basis thus further making numbers a complete myth in a time of once again surging input costs). The problem with channel stuffing is it can only go on for so long before the intermediary collapses under its own weight due to so much excess inventory the only next possible step is wholesale dumpin, in the process destroying the brand. Sure enough, it took about 24 hours for this latest speculation to be proven right as GM announce it was "temporarily" halting production of its Volt electric car. Per The Hill: "We needed to maintain proper inventory and make sure that we continued to meet market demand," GM spokesman Chris Lee said in a telephone interview." Translated into English, this means that GM has flooded dealer floors with so many of the spontaneously combusting cars that it has managed to bring demand to zero.

Regular readers are all too familiar with the saga of Goldman Sachs, which back in December 2010 called for a new American golden age, only to crash and burn as the economy not only slid right back into its depressionary glidepath but had to be bailed out by the Fed yet again. Sure enough, back in December of last year, the same firm made a surprising forecast, being the first of many (as others naturally jumped on the Goldman bandwagon), calling for an imminent housing bottom. Naturally, we scoffed at said proclamation. Two months later, which have seen two months of deteriorating conditions and declining prices, Goldman is out, saying that it may have just been kidding. From Goldman's Hui Shan: "In December 2011 we published a new house price model for 147 metro areas that pointed to a decline of around 3% from mid-2011 through mid-2012 before stabilizing in the year thereafter. Excess supply and negative house price momentum were the main drivers of the projected decline over the subsequent four quarters. In the year thereafter, the model suggested that house prices would stabilize as the negative momentum faded. Our model also pointed to substantial variation in house price appreciation across metro areas. Although city-by-city house price dynamics are particularly difficult to model, we projected increases in Detroit, Miami and Cleveland, but significant declines in Portland, New York and Atlanta during the next two years. Since publication of this forecast--which was based on Case-Shiller house price data up to 2011Q2--house prices have weakened anew....The implications of these changes are threefold: First, we now see a somewhat weaker near-term house price outlook. Specifically, we forecast that house prices will decline by 3.3% from 2011Q3 until 2012Q3, and by an additional 1.1% between 2012Q3 and 2013Q3. Second, the expected bottom in house prices is pushed out from end-2012 to mid-2013. Third, the long-run outlook for house prices is not significantly affected by our update." So for anyone basing their housing recovery call on Goldman, sorry - Goldman was only kidding. Again.

Growth. It's what every economist and politician wants. If we get 'back to growth', servicing debts both private and sovereign become much easier. And life will return to normal (for a few more years). There is growing evidence that a major US policy shift is underway to boost growth. Growth that will create millions of new jobs and raise real GDP. While that's welcome news to just about everyone, the story is much less appealing when one understands the cost at which such growth comes. Are we better off if a near-term recovery comes at the expense of our future security? The prudent among us would disagree.