Overpriced pieces of junk.

Optimism fuels US economic recovery

By Shanaz Musafer

Business reporter, BBC News, New York


Carpet store owner Jerrold Glick has been through three recessions. So when he says he sees signs of improvement in the economy, he is talking from experience.

He set up his business, JAG Carpet and Rugs, in Jamaica in the New York City borough of Queens in 1993, and has 45 years' experience in the industry.

"I definitely see an opening up in business, though not very rapidly," Mr Glick says.

"It's happening very slowly but it has been improving over the past six months."

'Willing to relax'

JAG started off as a mainly wholesale business, but now the majority of its trade is on the retail side.

The neighbourhood of Jamaica was hit hard by the crash in the housing market with many homeowners protesting against enforced foreclosures.

"The retail stores that I used to sell to stopped buying stock because they had no business," Mr Glick says.

So he adapted and now most of his customers are members of the public, who come to him direct for their fitted carpets, or printed hallway and stairway runners.

Over the past few months, he says he's seen more customers - both in store and online - and has been helped by an improved housing market.

"I've seen real estate prices go up in the home market. People are bidding above the asking price.

"People are willing to relax more."

Hiccups

The recovery in the US housing market has gathered steam in recent months.

But among the whole array of data available on the housing sector, there have been a few contradictions.

For instance, government figures have shown housing starts to be at the highest level since 2008 and that sales of new homes rebounded in March, yet a survey by the National Association of Home Builders (NAHB) showed a drop in confidence in April.

"There have been a few signs of hiccups, such as the homebuilders' survey which was a little weakish," says David Sloan, senior economist at the research group 4Cast.

The NABH survey paused, and existing home sales seem to have lost momentum in recent months. However, I think it is just a pause, and the housing market recovery seems to be intact."

He adds that in some places prices are up 10% on the year.

'Shock' impact

That recovery helped boost consumer spending at the start of the year, though Mr Sloan also points to other factors such as car sales as being an important contributor.

But the resurgence in consumption and overall economic activity in January and February seemed to dissipate somewhat in March.

While Americans initially shrugged off higher payroll taxes introduced in the new year, by March the tax hikes had had a bigger impact on spending, leading to a drop in retail sales.

And recent confidence surveys have also seen falls as US federal budget cuts - known as the sequester - that came into force at the start of March have knocked sentiment.

But Millan Mulraine, director at TD Securities USA, believes the budget cuts may only hit confidence for a month or two: "After that [initial] shock there may be some adjustment and we may have seen that been made."

Moreover, he says there is "not necessarily a contemporaneous relationship between spending and confidence".

Just because you may be feeling a little less buoyant, does not mean you will necessarily spend less than the day before, he says. It takes time to filter in to spending.

Although we may be heading into a "soft patch" for both the overall economy and consumer spending - the so-called "spring swoon" - Mr Mulraine expects spending to remain robust throughout the year.

He highlights differences between what we've seen this year compared with previous years: "The stabilisation in the labour market and the rise in house prices is the opposite to what we've seen in the past."

Cautious optimism

The view that consumer spending, which accounts for 70% of the US economy, will hold up in 2013 is widely held.

Diane Swonk, chief economist at Mesirow Financial, wrote earlier this month that "2013 could be the strongest year (of this recovery) for consumer spending".

But she also warns that not all will benefit equally. High rent costs and the need to pay back student loans will leave young consumers feeling "left behind by this economy".

This will also result in uneven gains across spending categories, with spending on "big-ticket" household items and vehicles likely to increase more than on everyday discretionary purchases.

Back in Queens, Jerrold Glick is cautiously optimistic that things will continue to get better.

When business was really bad in 2009 he had to cut whatever expenses he could. He only had three people working for him at the time and had to reduce that to two staff working part-time.

Now he says: "Hopefully by the end of the year they will be back full-time if things keep progressing."


http://www.bbc.co.uk/news/business-22288370

And if you respond claiming to ignore my point while ranting irrelevancies, why should I pay you any attention? That's just trolling and I ignore trolls.

Is that a fact, or just an urban legend? Anyway, this is more about positive economic indicators as opposed to the usual Chicken Little stuff posted on here.

Tesla Motors Repays DOE Loan 9 Years Early

Jeff Postelwait, Associate Editor, Electric Light & Power
May 23, 2013

U.S. electric vehicle maker Telsa Motors has paid back its 2010 loan awarded by the Department of Energy. Following payments made in 2012 and earlier in 2013, the May 22 payment of $451.8 million repays the full loan amount with interest.


According to a DOE statement, this payment makes Telsa nine years early in paying off its loan.

In 2010, Tesla was awarded a milestone-based loan, requiring matching private capital obtained via public offering, by the DOE as part of the Advanced Technology Vehicle Manufacturing program.

The loan payment was made May 22 using a portion of the nearly $1 billion in funds raised in recent concurrent offerings of common stock and convertible senior notes.

Elon Musk, Tesla's CEO and cofounder, purchased $100 million of common equity, the least secure portion of the offering. “I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate,” said Musk. “I hope we did you proud.”

Secretary of Energy Ernest Moniz said in a statement that Tesla's loan and others have cost less than anticipated and succeeded in their goal of advancing clean energy technology.

"When you’re talking about cutting-edge clean energy technologies, not every investment will succeed — but today’s repayment is the latest indication that the Energy Department's portfolio of more than 30 loans is delivering big results for the American economy while costing far less than anticipated," Moniz said in a statement. "The Department first offered loans to Tesla and other auto manufacturers in June 2009, when car companies couldn’t get other financing and many people questioned whether the industry would survive. Today, Tesla employs more than 3,000 American workers and is living proof of the power of American innovation."


http://www.renewableenergyworld.com/rea/news/article/2013/05/tesla-motors-repays-doe-loan-9-years-early-with-451-8-million-cash?cmpid=rss

Fannie Mae, Freddie Mac to repay U.S. sooner


March 19, 2013|Reuters

WASHINGTON (Reuters) - Revamped terms of Fannie Mae and Freddie Mac's taxpayer-funded bailout that went into effect this year will allow the mortgage finance firms to repay the Treasury sooner than would have otherwise been the case, a federal watchdog said on Wednesday.

Fannie Mae and Freddie Mac were seized by the government at the height of the financial crisis in 2008 as mortgage losses threatened their solvency. Since then, they have drawn about $188 billion in taxpayer funds to stay afloat, while paying about $58 billion to the Treasury in dividends.

The two companies have now returned to profitability, and under the new terms, their earnings are swept into the Treasury as a dividend payment for the government's stake in the firms. If they are not profitable, no sweep is made.

Previously, the companies, which buy mortgages from lenders and repackage them as securities for investors, were required to make a 10 percent dividend payment even if they had a loss. At times, they had to borrow from the Treasury just to make the payment. Now, they simply will not be able to retain any profits.

"Ending the circularity of draws from Treasury to pay dividends will prevent the erosion of Treasury's commitment level," the Federal Housing Finance Agency's Inspector General said in a report.

"The change in the dividend structure also will affect quarterly payments to Treasury, potentially resulting in the enterprises returning more money to federal taxpayers sooner."

The two so-called government-sponsored enterprises, or GSEs, will also see changes in quarterly payments to Treasury under an accounting method where they start recording potential tax credits, known as deferred tax assets, as part of their net worth, the report concluded.

The new bailout terms, which were announced in August, were intended to move up plans to shut the companies down, but they do little to address how that might be achieved or how the government's footprint in the mortgage finance market might shrink. Fannie Mae, Freddie Mac and the Federal Housing Administration finance nine out of every ten new home loans.

Fannie Mae has already raised the possibility that it could soon be required to send about $61.5 billion to the U.S. Treasury if it begins to account for deferred tax assets. The company has delayed filing its earnings report for the fourth quarter to further study the accounting issue, but said it expects to post a significant profit.

"Indeed, because of accounting treatment, sustained profitability of the (GSEs) could result in a one-time large dividend payments to Treasury from each," the report stated.

Freddie Mac has said that in future periods it will assess the need for a reduction of its deferred tax asset valuation allowances, which could have a material effect on its financial position. The company, in its annual report, said that current conditions didn't require it to reverse any of its $31.7 billion in deferred tax assets as of the end of 2012.

(Reporting By Margaret Chadbourn)


http://articles.chicagotribune.com/2013-03-19/business/sns-rt-us-usa-housing-fanniemaebre92j04q-20130319_1_freddie-mac-fannie-mae-treasury

Fannie Mae to Pay Treasury $59.4 Billion After Record Profit
By Jody Shenn - May 10, 2013 8:36 AM GMT+1000


Fannie Mae, the mortgage-financier seized by U.S. regulators in 2008, will pay the Treasury Department $59.4 billion after reporting a record quarterly profit driven by rising home prices and declining delinquencies.

The government-sponsored enterprise, which is operating under U.S. conservatorship, had net income of $8.1 billion for the three-month period that ended March 31, according to a statement released today. The Washington-based company’s net worth, which is used to determine what it owes the U.S., was boosted by a reversal of writedowns on tax credits, which may be valuable now that it’s returned to profitability.

Even the jaded can’t blink at Fannie’s upcoming payment,” Jim Vogel, a debt strategist at FTN Financial in Memphis, Tennessee, said in a note to clients.

The profits will hurt the pace at which policy makers decide what to do with Fannie Mae and rival Freddie Mac “because they give the illusion” that mortgage finance “is a great business,” Vogel said. “Well, it’s great at this point in the cycle after you’ve wiped out years of accumulated equity and stopped taking much credit risk.”

After its latest payment, Fannie Mae will have sent the Treasury a total of $95 billion, compared with the $117.1 billion of capital infusions that the company has received. Freddie Mac, which yesterday reported a $4.6 billion profit, will have paid $36 billion, after drawing $72 billion of aid, and Chief Executive Officer Don Layton said it may release $30.1 billion of tax-credit writedowns as soon as next quarter.

Debt Ceiling
The coming large payments from the companies will probably help delay the amount of time the U.S. government has until running out of room under its debt ceiling to sometime in October, the Bipartisan Policy Center said today in a posting on its website. The Washington-based group had said April 26 that the limit was likely to be reached between mid-August and mid-October, most likely from early September to early October.

Still, based on the terms of their bailouts the companies continue to owe the Treasury the amount that they’ve been provided, and the agreements offer no way to repay.

The companies have returned to profitability as the housing market recovered and they raised mortgage-guarantee fees, with Fannie Mae’s net income last year exceeding that of companies such as Wal-Mart Stores Inc. (WMT), General Electric Co. (GE) and Berkshire Hathaway Inc. (BRK/A), according to data compiled by Bloomberg.

Prices Climb
U.S. home prices climbed at the fastest pace since May 2006, rising 9.3 percent in February from a year earlier, according to an April 30 report by the S&P/Case-Shiller index of property values.

Freddie Mac and Fannie Mae were seized in September 2008, shortly before the failure of Lehman Brothers Holdings Inc. and the rescue of American International Group Inc. (AIG), as their rising losses threatened to deepen a global financial crisis. The two companies this year ceased paying 10 percent dividends that have returned $65 billion to Treasury and will instead turn over any profits above a permitted capital reserve.

Payments to Treasury by the two companies through fiscal year 2023 are projected to exceed by $51 billion the aid they have received under conservatorship, according to President Barack Obama’s spending plan released last month. Last year’s budget saw a $28 billion loss through 2022.

Fannie Mae and Freddie Mac, which were created by the federal government before becoming publicly traded companies, buy mortgages from lenders and package them into securities on which they guarantee payments of principal and interest.

Hedge Funds
Hedge funds including Paulson & Co. have been pushing Congress to abandon plans to wind down Fannie Mae and Freddie Mac as investors buy up preferred stock that has been soaring after being considered probably worthless, people with knowledge of the discussions have said.

One series of Fannie Mae’s preferred shares rose 7.8 percent today to $4.95, the highest since the firm’s seizure. The notes, which have a face amount of $25, have tripled this year. Fannie Mae’s riskier common stock fell 3 percent to 87 cents, and is up from 26 cents on Dec. 31.

Fannie Mae executives are telling employees that the company’s future is uncertain, Chief Executive Officer Tim Mayopoulos said on a conference call with reporters. And, its strong earnings may be delaying how long it will take for lawmakers to provide more clarity, he said.

“There’s a risk that policy makers look at our profitability and conclude they don’t need to take action with respect to housing finance reform,” he said. “That would be a mistake.”

http://www.bloomberg.com/news/2013-05-09/fannie-mae-to-pay-treasury-59-4-billion-after-record-profit-1-.html

A welcome development and a good indicator for a recovering market.

So, in effect, that response indicates that the concept went over your head, got it.



I'd elaborate further, but I'm not that interested.

Double post.

Repost:

Of course, via the black market. You do realise that guns aren't illegal in the UK, just restricted? Gun running is concomitant with the drug trade, and it won't be controlled until organised crime is eradicated (if ever). That is not a cogent argument in favour of lifting controls. Wouldn't unrestricted access to weapons merely increase gun related violence to even higher levels? Furthermore, don't population increases influence the crime figures? That's a another valid point many miss in this emotionally charged debate. Statistics have been manipulated and misused throughout the entire debate.

As an example, recently on another site, in an effort to denigrate the efficacy of Australia's gun controls, a poster noted the rise in knife attacks in Australia since the legislation 16 years ago. This is an example of a red herring, as the figures did not take into account the rise in population and the general increase of violence in western society. It was then posited that if guns were freely available that violent incidents would be prevented, thus the violent crime figures would be reduced. This is, of course, poor logic and probability and causation would suggest the opposite.

The recent example of Chicago that everyone is so fond of quoting as an example for the supposed 'failure' of control legislation is merely an isolated example and not the rule. Moreover, the figures ignore many other factors, and fail to address the cultural motivations.

Of course, via the black market. You do realise that guns aren't illegal in the UK, just restricted? Gun running is concomitant with the drug trade, and it won't be controlled until organised crime is eradicated (if ever). That is not a cogent argument in favour of lifting controls. Wouldn't unrestricted access to weapons merely increase gun related violence to even higher levels? Furthermore, don't population increases influence the crime figures? That's a another valid point many miss in this emotionally charged debate. Statistics have been manipulated and misused throughout the entire debate.

As an example, recently on another site, in an effort to denigrate the efficacy of Australia's gun controls, a poster noted the rise in knife attacks in Australia since the legislation 16 years ago. This is an example of a red herring, as the figures did not take into account the rise in population and the general increase of violence in western society. It was then posited that if guns were freely available that violent incidents would be prevented, thus the violent crime figures would be reduced. This is, of course, poor logic and probability and causation would suggest the opposite.

The recent example of Chicago that everyone is so fond of quoting as an example for the supposed 'failure' of control legislation is merely an isolated example and not the rule. Moreover, the figures ignore many other factors, and fail to address the cultural motivations.

There will always be a Black Market to some extent. If they did rethink their policy wouldn't it merely increase gun related violence?

Missed the point, huh?

Using that logic, all those years I studied Greco-Roman History, Politics, Economics and Society at a university level are a waste owing to the fact that I didn't live there, or at that time. University History Departments all around the world are invalid because of that oversight.

What a load of crap!

It's a safe refuge for those who've nothing else.

One more time without the Natural News Hyperbole and hysteria.

Top IRS official will invoke 5th Amendment


By Richard Simon and Joseph Tanfani
May 21, 2013, 1:17 p.m.



WASHINGTON — A top IRS official in the division that reviews nonprofit groups will invoke the 5th Amendment and refuse to answer questions before a House committee investigating the agency’s improper screening of conservative nonprofit groups.


Lois Lerner, the head of the exempt organizations division of the IRS, won’t answer questions about what she knew about the improper screening — or why she didn’t disclose it to Congress, according to a letter from her defense lawyer, William W. Taylor III. Lerner was scheduled to appear before the House Oversight Committee on Wednesday.

“She has not committed any crime or made any misrepresentation but under the circumstances she has no choice but to take this course,” said a letter by Taylor to committee Chairman Darrell Issa (R-Vista). The letter, sent Monday, was obtained Tuesday by the Los Angeles Times.

Taylor, a criminal defense attorney from the Washington firm Zuckerman Spaeder, said that the Department of Justice has launched a criminal investigation, and that the House committee has asked Lerner to explain why she provided “false or misleading information” to the committee four times last year.

Since Lerner won’t answer questions, Taylor asked that she be excused from appearing, saying that would “have no purpose other than to embarrass or burden her.” There was no immediate word whether the committee will grant her request.

According to an inspector general’s report, Lerner found out in June 2011 that some staff in the nonprofits division in Cincinnati had used terms such as “Tea Party” and “Patriots” to select some applications for additional screening of their political activities. She ordered changes.

But neither Lerner nor anyone else at the IRS told Congress, even after repeated queries from several committees, including the House Oversight panel, about whether some groups had been singled out unfairly.


The source for Natural News opinion piece:

http://www.latimes.com/news/politics/la-pn-top-irs-official-fifth-amendment-20130521,0,6645565.story

A link to the Inspector-General's Report:

http://documents.latimes.com/inspector-general-report-irs/

“Wise men speak because they have something to say; fools because they have to say something.”
― Plato

What a silly assertion, and as if that would be any qualification. Americans are often the worst!

Conrad, Cut & Paste dude is just baiting you.

Did it ever occur to anyone that the gun laws have been implemented in an effort to limit violence in a city with a long history of it? If so, how can the efficiency of the legislation be determined? To claim the city still has gun violence, therefore gun control doesn't work is somewhat partisan to say the least. Indeed the NRA's propaganda on Chicago is a perfect example of a 'false equivalence'.