Stocks Finish in the Red

By ALEXANDRA SCAGGS

Blue chips charged to within striking distance of their record, but a late dive meant the celebration would have to come another day.
The Dow Jones Industrial Average swung to a loss in the final minutes of trading. At the session's high, it was up 74 points, barely 15 points from an all-time closing high. Other indexes slipped into negative territory late in the day as well.
The Dow industrials lost 20.88 points, or 0.1%, to 14054.49. The Standard & Poor's 500-stock index fell 1.31 points, or 0.1%, to 1514.68, and the Nasdaq Composite Index declined 2.07 points, or 0.1%, to 3160.19.
Still, the indexes rose for the month, with the Dow advancing 1.4%, its third consecutive month of gains. The S&P 500 and Nasdaq Composite both marked their fourth monthly gains in a row, up 1.1% and 0.6%, respectively.
Before the blue chips retreated, the mood was upbeat on the floor of the New York Stock Exchange. Traders kept an eye on the Dow's progress, noting that achieving the record could provide a boost to stocks in the short term.
"It's a huge psychological number," said Matthew Cheslock, a trader at Virtu Financial, a firm with a post on the NYSE floor.
But with under five minutes to go in the trading session, stocks swung into the red. Traders said stocks often can experience volatility at the end of the month, particularly when indexes revamp components and funds that track them adjust their holdings.
In economic news, a second reading of fourth-quarter gross domestic product was revised into positive territory as expected, to 0.1%, falling short of the 0.5% growth economists had anticipated. Initial claims for jobless benefits in the latest week dropped to 344,000, while 365,000 claims were expected.
"The GDP was mediocre but moved in the right direction," said Mark Spellman, portfolio manager with Value Line Funds, which oversees about $2 billion. "It's not the pace [of growth] everyone wants to see, but it's the slope of the line that's important."
The Institute for Supply Management's Chicago-area purchasing managers' index for February posted a surprise increase.
Another focus is on Washington. President Barack Obama and congressional leaders are scheduled to meet on Friday, when the deadline for $85 billion in mandatory spending cuts goes into effect.

European markets traded higher for a second session, with the Stoxx Europe 600 up 1%, as concerns over Italian politics continued to fade and a pair of firms reported better-than-expected quarterly results. Renewed confidence that the European Central Bank and Federal Reserve would continue their stimulus policies helped offset data showing unemployment in Germany increased in February.
Asian markets climbed, fueled by gains in U.S. and European markets on Wednesday and as concerns eased over potential policy tightening in China. Japan's Nikkei Stock Average rose 2.7% to snap a two-session losing streak, China's Shanghai Composite climbed 2.3%, and Australia's S&P/ASX 200 rallied 1.3% to close at a 4½-year high.
Crude-oil prices lost 0.8% to settle at $92.05 a barrel, while gold dipped 1.1% to settle at $1,577.70 a troy ounce. The dollar gained ground against the euro and yen. The yield on the 10-year Treasury note fell to 1.889% as prices rose.
Five investment-grade companies, including Coca-Cola, KO +0.70% sold a combined $12.5 billion of debt in the third-busiest high-grade session of the year. The biggest deal, valued at $6.5 billion, came from miner Freeport-McMoRan Copper & Gold FCX -1.10% .
In corporate news, Groupon GRPN -32.05% plunged $1.45, or 24%, to $4.53, after the online-coupon company late Wednesday reported a fourth-quarter loss, compared with expectations of a profit and provided a first-quarter revenue outlook that was short of forecasts. After the close of trading, the company said it ousted Chief Executive Andrew Mason. Shares jumped after hours.

Is the Dow's record a sign of U.S. recovery or a just an arbitrary number? Paul Vigna and Steve Russolillo discuss on Markets Hub. Photo: Getty Images.

J.C. Penney JCP -16.97% slid 3.59, or 17%, to 17.57, after the department-store chain late Wednesday reported a wider-than-expected fourth-quarter loss and revenue that fell short of expectations.
Kohl's KSS -1.09% fell 51 cents, or 1.1%, to 46.10, after the department-store operator's earnings outlook for the quarter and full fiscal year were below analyst estimates, offsetting better-than-expected earnings and an increase in its quarterly dividend.
Limited Brands LTD +2.29% gained 1.02, or 2.3%, to 45.52, as the retailer beat estimates for its revenue and unadjusted earnings, though the owner of the Victoria's Secret brand provided a first-quarter and full-year outlook below Wall Street expectations.
Gap GPS +1.26% rose 41 cents, or 1.3%, to 32.92, ahead of earnings, which it reported after the market's close. Shares gained after hours after the company's results exceeded analyst expectations.
Broadsoft BSFT -32.06% slumped 9.91, or 32%, to 21, after the software company reported earnings that topped expectations but provided a first-quarter and full-year outlook that was well below analyst projections.
—Chris Dieterich and Patrick McGee contributed to this article.

Civil Unrest Inevitable? Maxine Waters: ‘Over 170 Million Jobs Could Be Lost’ Due To Sequestration…Sarah Palin: Feds Are Stockpiling Bullets For Civil Unrest

Maxine Waters: ‘Over 170 Million Jobs Could Be Lost’ Due To Sequestration

Congresswoman Maxine Waters (D-CA) claimed today that “over 170 million jobs” could be lost due to sequestration. Later in the presser, Rep. Waters corrected herself, saying it was only “750,000 jobs” that could be lost.
…
Yesterday we did have Mr. Bernanke in our committee and he came to tell us what he’s doing with quantitative easing and that is trying to stimulate the economy with the bond purchases that he’s been doing because he’s trying to keep the interest rates low and jobs – and he said that if sequestration takes place, that’s going to be a great setback. We don’t need to be having something like sequestration that’s going to cause these jobs losses, over 170 million jobs that could be lost….

Sarah Palin: Feds Are Stockpiling Bullets For Civil Unrest

“Sarah Palin says America will eventually default on its debt and claims that the federal government is “stockpiling bullets in case of civil unrest” to prepare.
If we are going to wet our proverbial pants over 0.3% in annual spending cuts when we’re running up trillion dollar annual deficits, then we’re done. Put a fork in us. We’re finished. We’re going to default eventually and that’s why the feds are stockpiling bullets in case of civil unrest,” Palin wrote in a Facebook message Tuesday.”
….
She continued: “The real economic Armageddon looming before us is our runaway debt, not the sequester, which the President advocated for and signed into law and is now running around denouncing because he never had any genuine intention of reining in his reckless spending.”

Civil War 2: The economic imperative for mass social unrest

Every indication clearly suggests that authorities in the United States are preparing for widespread civil unrest. This trend has not emerged by accident – it is part of a tried and tested method used by the banking elite to seize control of nations, strip them of their assets, and absorb them into the new world order.

There is a crucial economic imperative as to why the elite is seeking to engineer and exploit social unrest.

As respected investigative reporter Greg Palast exposed in 2001, the global banking elite, namely the World Bank and the IMF, have honed a technique that has allowed them to asset-strip numerous other countries in the past – that technique has come to be known at the “IMF riot.”

In April 2001, Palast obtained leaked World Bank documents that outlined a four step process on how to loot nations of their wealth and infrastructure, placing control of resources into the hands of the banking elite.

One of the final steps of the process, the “IMF riot,” detailed how the elite would plan for mass civil unrest ahead of time that would have the effect of scaring off investors and causing government bankruptcies.

DEBT BATTLE ROYALE: Santelli Vs. Dean Baker: ‘We’re The NEXT Greece!’

We’re already Greece, the bond market just doesn’t know it yet.
Friday on CNBC. Great clip. Transcript is below.
The U.S. Debt Machine rolls on, borrowing $50,000 per second.

Detroit Announcement Tomorrow – THE STATE IS TAKING THE CITY OVER!

Detroit Mayor Dave Bing says he spoke by phone with Michigan Governor Rick Snyder today. He says the governor will announce his decision regarding the possible appointment of an Emergency Financial Manager for the city of Detroit on Friday.

The mayor said, “Everybody’s got a pretty good idea of what the announcement is going to be.”
http://www.wxyz.com/dpp/news/region/detroit/detroit-mayor-dave-bing-says-governor-rick-snyder-will-announce-a-state-takeover-on-friday
Usually, when the administration needs a distraction from just how broke and insolvent in reality the country is, it sends the stock market soaring higher. As such it is beyond ironic that as the S&P is set to hit an all time high, Detroit – that shining symbol of the Obama administration’s bailout of General Motors – effectively goes broke.

• MICH. GOV SNYDER TO ANNOUNCE STATE TAKEOVER OF DETROIT
  

http://www.zerohedge.com/news/2013-02-28/detroit-be-taken-over-state
The money-strapped municipality, the state’s largest city, has been running deficits since 2005, and a state-appointed review team determined last week the city is in a financial emergency. The dire situation includes more than $14 billion in long-term debt and underfunded pensions.
“Too many people think the city can come out of this by itself,” Bing told the conference Thursday. “I’ve never been one who’s thought like that. I’ve never fought help. I’ve never pushed back. I’m a team player.”
A state-appointed emergency financial manager would work to come up with a plan to pull the city out of financial distress.

Slovenia government falls

Slovenian PM Janez Jansa's year-old centre-right government has fallen in a no-confidence motion. Source: AAP

SLOVENIAN Prime Minister Janez Jansa's year-old centre-right government has fallen in a no-confidence motion following weeks of political turmoil in the small Eurozone country.

The job of forming a government amid the country's worst crisis since independence from Yugoslavia in 1991 now passes to political newcomer Alenka Bratusek of the centre-left, as Slovenia's first female premier.
Bratusek says her top priorities will be "normalising" life by softening "excessive" austerity measures imposed by the outgoing government and stimulating growth.
"We have to boost economic development," the former finance ministry official said, announcing plans for a revised budget shortly after taking over.
"We will stabilise public finances and agree with social partners over the necessary wage cuts and the very likely temporary increase of some taxes," she added.

Jansa became prime minister in February 2012 after his centre-left predecessor Borut Pahor himself lost a confidence vote, triggering early elections in Slovenia which has a population of two million.
Jansa has struggled to implement structural reforms and austerity measures seen as vital for putting what was once a model newcomer to the European Union and the Eurozone in 2007 back on the road to growth.
The death blow came when the corruption watchdog in January accused him of tax irregularities, prompting three parties to quit his five-way coalition and leaving his government with only a third of seats in parliament.
The charges, which also toppled the leader of the largest opposition party - Zoran Jankovic of Positive Slovenia - prompted large protests across the country among ordinary Slovenians fed up with austerity and corruption.
An opinion poll earlier this week showed that Slovenians wanted Jansa out, with 21 per cent backing him and 77 per cent opposed.
More than 50 per cent also backed the creation of an interim technical government, raising the prospects of new early elections for the second time in 14 months.
Bratusek, who only became an MP at the last election and says she'll seek a vote of confidence after a year in office, is facing a tough task, political analyst Vlado Miheljak warns.
"A much bigger uncertainty is whether Bratusek will manage to form a new government since the People's Party (SLS) and the Civil List (DL) might not be ready to collaborate in it," he told AFP.
The two centre-right parties were the first to leave Jansa's coalition government but after the last election in December 2011 they baulked at teaming up with Positive Slovenia.
Slovenia's economy grew between 2004 and 2007 at about five per cent per year but the global financial crisis found the export-dependent country badly exposed.
The national debt more than doubled between 2007 and 2011 and the new government will inherit a banking system saddled with bad debt and possibly needing outside help.

Wal-Mart Struggles to Restock Store Shelves as U.S. Sales Slump

From the Trenches Predicted This in an article a Week Ago – Looks like Cracks Are Starting to Surface for the Largest Wholesaler in the World. No longer can hide from the inevitable.
Bloomberg – by Renee Dudley
Wal-Mart Stores Inc (WMT), already struggling to woo shoppers constrained by higher taxes, is “getting worse” at keeping shelves stocked, the retailer’s U.S. chief told executives, according to minutes of an officers’ meeting obtained by Bloomberg News.
“We run out quickly and the new stuff doesn’t come in,” U.S. Chief Executive Officer Bill Simon said, according to the minutes of the Feb. 1 meeting. Simon said “self-inflicted wounds” were Wal-Mart’s “biggest risk” and that an executive vice president had been appointed to fix the restocking problem, according to the minutes.
Once a paragon of logistics, the world’s largest retailer has been trying to improve its restocking efforts since at least 2011, hiring consultants to walk the aisles and track whether hundreds of items are available. It even reassigned store greeters to replenish merchandise. The restocking challenge emerged as Wal-Mart was returning more merchandise to shelves after a previous effort to de-clutter its stores.
Wal-Mart’s inability to keep its shelves stocked coincides with slowing sales growth. Same-store sales in the U.S. for the 13 weeks ending April 26 will be little changed, Simon said in the company’s Feb. 21 earnings call.
Comparable sales increased 1 percent in the fourth quarter, compared with an average of 1.4 percent from analysts surveyed by Bloomberg. This year the shares gained 5 percent through yesterday, compared with a 6.3 percent advance for the Standard & Poor’s 500 Index. Wal-Mart fell 0.3 percent to $71.47 at 9:35 a.m in New York.

Personal Notes

“These are personal notes from one participant in the meeting and are not official company minutes,” David Tovar, a Wal-Mart spokesman said in a telephone interview. “There are a number of significant misinterpretations and misleading statements that do not accurately reflect the comments by Bill Simon or any other participant in the meeting.”
When Simon said things were “getting worse” he was referring to “modular changes,” the process of replenishing merchandise to keep up with customer demand and changing seasons, Tovar said. Wal-Mart is working to “manage this in the most efficient way possible,” he said.
“We’re very pleased with our in-stock position,” he said, adding that products audited by the company and its consultants match or exceed historical levels. He declined to disclose what those levels are.
Tovar declined to make Simon available for comment.

‘Dead On’

Evelin Cruz, a department manager at the Wal-Mart Supercenter in Pico Rivera, California, said Simon’s comments from the officers’ meeting were “dead on.”
“There are gaps where merchandise is missing,” Cruz said in a telephone interview. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”
Tovar said Cruz’s “comment appears to be national in scope. I doubt she had been to other Wal-Mart stores. I take issue with the quote.”
Cruz, 41, who has worked at Wal-Mart for nine years and oversees the photo and wireless sections at her store, said it can take weeks or months for merchandise to be replaced after it sells out.
“My camera bar hasn’t had cameras since early January,” she said. “They let the merchandise phase out but nothing new comes in to replace them. We’re supposed to have 72 cameras but we maybe have 12. What are customers supposed to buy?”

Working Conditions

Cruz, a member of OUR Walmart, a labor-backed group seeking to improve working conditions at the discount chain, also said the number of photo and wireless employees she oversees has decreased from about 13 people to seven since the beginning of 2012.
“We haven’t reduced staff,” Tovar said. “People may have been shifted.”
In her section at the store, the remaining workers have struggled to clear out old displays and quickly replace them with new merchandise, Cruz said. Meanwhile, they’re supposed to help customers with things like mobile phone contracts, a transaction that can take up to 45 minutes, she said.
“All of this is affecting customers,” Cruz said. “You see people walking out because they’re looking for anyone to help them and there’s no coverage.”
Simon said at the Feb. 1 meeting that he is trying to improve operations.
“We need to start with the intent that our shelves will be full,” he said, according to the minutes.
John Aden, executive vice president of general merchandise for Wal-Mart U.S., will be put in charge of addressing the issues, according to the minutes.

Logistics Master

For much of its history, Wal-Mart has been considered a master of logistics, persuading suppliers to set up shop near its operations. Yet in 2011, Wal-Mart hired consulting firms Acosta Inc. in the U.S. and Retail Insight in the U.K. for advice on how to keep its shelves stocked. Paul Boyle, the CEO of Retail Insight, didn’t return phone calls seeking comment. Meredith Rovine, a spokeswoman for Acosta, said representatives were unavailable for comment.
At that time, Wal-Mart’s struggle to keep shelves stocked stemmed from the return of about 8,500 items to stores, following a failed effort to streamline its merchandise. At an investor conference in June of that year, Simon said he was focused on improving the company’s restocking operations.
“The only thing that really matters to us is whether the product is on the shelf or not,” he said at the time.
According to the Feb. 1 meeting minutes, Simon said: “We have to get better and remain laser-focused every day because momentum can turn against you in a second.”

Cramer: 'Why Every Portfolio Should Own Gold'

For once, Cramer gets it right.
'Consider it stock insurance.  If you can own physical, all the better.'
Gold discussion begins at the 1:10 mark.  Aired Feb. 15.
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This is a must see:

How Central Banks Lease Their Gold

UK to fight EU plan to cap bankers' bonuses

David Cameron and Boris Johnson concerned that capping bonuses at basic salary will scare banks away from London

Watch Video guardian.co.uk/business/2013/feb/28/uk-fight-eu-cap-bankers-bonuses …

Link to video: David Cameron on EU cap on bankers' bonuses
Britain is to challenge an EU agreement to slash bankers' bonuses at a meeting of European finance ministers next week after Boris Johnson condemned the proposal as a "deluded measure".
Amid fears that the EU agreement could deal a hammer blow to the City of London, David Cameron said EU regulations needed to be flexible enough to allow international banks to operate in Britain and the rest of the European Union.
George Osborne or the Treasury minister Greg Clark will represent Britain at the meeting next week to relay what No 10 described as real concerns about the proposal.
The agreement in Brussels came as the Royal Bank of Scotland posted losses of more than £5bn after paying out more than £600m in bonuses. No 10 said it had imposed cash limits of £2,000 on bonuses at RBS and Lloyds and was giving a greater say to shareholders in all banks.
The prime minister's spokesman said: "Bonuses are very significantly down on where they were in 2010. So you are seeing real responsibility and restraint."
Johnson highlighted deep British unease about the bonus agreement hammered out in Brussels on Wednesday night between officials from the EU's 27 member states, MEPs and the European commission by dismissing it as the most preposterous idea in Europe in two millennia. Under the agreement, bankers' bonuses would be capped broadly at a year's salary, although they could be doubled if a majority of shareholders agreed.
The London mayor said: "People will wonder why we stay in the EU if it persists in such transparently self-defeating policies. Brussels cannot control the global market for banking talent. Brussels cannot set pay for bankers around the world.
"The most this measure can hope to achieve is a boost for Zurich and Singapore and New York at the expense of a struggling EU. This is possibly the most deluded measure to come from Europe since Diocletian tried to fix the price of groceries across the Roman empire."
Diocletian, the 51st Roman emperor, introduced the edict on maximum prices in AD 301.
The prime minister made clear the government's unease at a meeting of Nordic leaders in the Latvian capital of Riga. "We do have in the UK – and not every other European country has this – we have major international banks that are based in the UK but have branches and activities all over the world, and we need to make sure that regulation put in place in Brussels is flexible enough to allow those banks to continue competing and succeeding while being located in the UK. So we'll look carefully at what the outcome of the negotiations was before working out the approach we'll take at Ecofin [the meeting of EU finance ministers] next week."
Downing Street made clear Britain was prepared to water down the proposal at the meeting, though any final decision will be made by qualified majority voting in which no member state has a national veto.
Cameron's spokesman said Britain had taken important steps to rein in remuneration, such as deferred payments, which has seen £300m clawed back from Barclays bonuses and 3,000 RBS employees also experiencing "clawback" as a result of the Libor investigations.
He said: "The UK believes it has some of the toughest remuneration requirements in the world. They are incentivising long-term behaviour – the idea of deferred payments, with a significant proportion in shares that can be clawed back over a period of time. At the heart of this is aligning the incentives with long-term performance and stability.
"Alongside that we of course also want a successful financial sector in the UK. There are very successful UK-based firms that compete across the world. They are an asset to the UK. When we are looking at what further regulations may be appropriate we will want to consider the impact on competitiveness.
"This idea of a cap – one of the things we have been pointing out as a potential consequence of this type of approach, if you cap variable pay – bonuses – you can see big increases in basic pay. And of course basic pay is not subject to clawback because it is paid out straight away."
Cameron said Britain was taking a responsible approach because it was implementing the Vickers proposal to ringfence the retail side of banks away from the investment side.
"We are absolutely clear that we must be able to implement the Vickers plan in the UK, which in some ways is tougher than regulations that are being put in place in other European countries. We want to have this proper ringfence between retail banks and investment banks, and the rules must allow that to happen – I think that is very important."
The spokesman added: "We do continue to have real concerns about them [these proposals] and we will continue to be discussing them with EU partners in the coming days ahead of the Ecofin."

Beijing War Prep

BY: Bill Gertz

United States intelligence agencies recently detected China’s military shifting road-mobile ballistic missiles closer to its southern coast near the disputed Senkaku Islands amid growing tensions between Beijing and Japan over the islands dispute.
U.S. defense officials said the movements are being watched closely as China’s military is also holding large-scale military exercises that some fear could be a trigger for a conflict with Japan that could involve U.S. forces.
The officials did not provide details of the missile movements that were tracked by U.S. aircraft, ship-based, and satellite surveillance systems in the region.
Disclosure of the missile movements comes as White House national security adviser Tom Donilon on Monday met in Seoul with China’s state councilor Liu Yandong. The two were in South Korea to attend the inauguration of South Korean President Park Geun-hye.
Tensions remain high between Japan and China over Tokyo’s nationalization last year of several uninhabited islands between Okinawa and Taiwan called the Senkakus. China claims the islands as its territory. At issue are large undersea oil and gas deposits sought by both energy-poor countries.
The officials confirmed the missile movements near the provinces of Zhejiang and Fujian after Chinese press outlets first reported them.
The most recent report appeared in the Hong Kong newspaper Oriental Daily News, a non-Chinese owned outlet that quoted a military source as saying the missile deployments included new solid-fueled DF-16 road-mobile missiles.
The Feb. 21 report said the People’s Liberation Army Second Artillery Corps, which operates missile units, were preparing to target the disputed Senkaku Islands as well as U.S. military bases in Okinawa.
The Daily News stated that the missile movements were signs the PLA is “preparing for the worst regarding the territorial dispute between China and Japan over the Senkaku Islands.”
The report also stated that the DF-16 is capable of defeating U.S.-made Patriot missile batteries that are deployed at U.S. and Japanese military bases in the region. The DF-16 is said to be armed with multiple warheads.
According to the report, the PLA navy near the Senkakus is part of China’s “trump card” weaponry—niche military capabilities that could allow a weaker force to defeat a stronger one.
The U.S. newsletter East-Asia-Intel.com reported Feb. 13 that China’s military appeared to be making war preparations by holding large-scale exercises around the Lunar New Year, including live fire artillery and air force bombing runs.
The newsletter said state media also reported large-scale troop movements and maneuvers near the coastal Fujian and Zheijiang provinces, the areas closest to the Senkakus.
John Tkacik, a former State Department specialist on China, said Chinese television recently reported that PLA missile forces practiced saturation bombing exercises that used for the first time an automatic launch system that could fire 10 warheads accurately on one target.
“The Pentagon and the Japanese defense ministry already take the PRC ballistic missile threat to U.S. forces in the Taiwan Strait and Ryukyus seas very, very seriously,” Tkacik said. “If U.S. surveillance and reconnaissance assets show significant redeployments of road-mobile missiles, including DF-16s on China’s east coast, U.S. and Japanese forces have to respond with far higher levels of threat readiness, and that sort of thing can put the gathering crisis in the Senkakus area on a hair-trigger.”
Regarding China-Japan tensions, a Chinese warship aimed weapon-targeting radar at a Japanese warship, drawing protests from Tokyo. Such radar illumination at sea is often regarded as a hostile act in military parlance.
U.S. officials fear the dispute could lead to a small-scale military confrontation that might spiral into a major conflict.
The U.S. military is committed to defending Japan in any conflict despite Obama administration assertions that it takes no sides in territorial disputes.
China has been building up its short- and medium-range missile forces in the region for at least a decade. U.S. intelligence agencies estimate the total number of missiles in the region is between 1,200 and 1,500 missiles.
They include mainly DF-15 and DF-11 short-range missiles. Taiwan government sources have reported that China also has deployed longer-range DF-21s in the region.
A variant of the DF-21 is a special anti-ship ballistic missile designed by Beijing to sink U.S. aircraft carriers and it is one of the main reasons for the Pentagon’s buildup in Asia to counter what it calls anti-access and area-denial weapons.
A Pentagon spokesman declined to comment on the recent missile movements.
Richard Fisher, a Chinese military affairs specialist, said the deployment of DF-16s is in its third year and indicates the PLA “has deployed up to three brigades of this reported 800-kilometer to 1,000 kilometer-range missile.”
“The DF-16 is a development of the DF-11 short range ballistic missile; it simply places the modular warhead section of the DF-11 on a much larger booster stage,” said Fisher, who is with the International Assessment and Strategy Center.
“This means it could be armed with many types of warheads, including nuclear, electromagnetic pulse, fuel-air explosive, and anti-airfield submunitions. It should be expected that it eventually will have a maneuverable anti-ship warhead as well.”
Fisher said China is also moving toward deployment of a new, nuclear or conventional-tipped 3,000-kilometer range missile dubbed the DF-25.
“China’s goal is to overwhelm the United States and its democratic allies with new missiles, much as it has overwhelmed Taiwan with shorter range missiles,” Fisher said.
The growing Chinese missile threat comes as the Obama administration unilaterally retired its theater-range nuclear Tomahawk cruise missiles even as China is moving ahead with new missiles of that range.
“It is now imperative that the United States get back into the medium- and intermediate-range missile business and to help some of our allies to do the same, in order to deter China,” Fisher said.
“Only when the U.S., Japanese, and South Korean navies have enough long-range anti-ship ballistic missiles to take out China’s shiny new navy will Beijing wake up and reconsider its course of increasing aggression,” he said.
Meanwhile, China’s state-controlled media has been ramping up rhetoric indicating China is preparing for a conflict over the Senkakus. Large-scale military exercises have been held in recent weeks and Chinese leaders have been reported as telling troops to prepare for combat.
Chinese leader Xi Jinping said during a visit earlier this month to a military command that Chinese forces should be “expanding and deepening” combat readiness. Xi in December also called for intensifying “real combat” skills.
The United States and Japan held combined military exercises that ended Feb. 15 called “Exercise Iron First.” Chinese state media reported the war games were practice for “island seizure” operations and preparations for a conflict with China over the Senkakus.
More than 1,000 Marines and 280 Japanese Self-Defense Forces troops took part in the maneuvers at Camp Pendelton, Calif.
China on Monday announced that its navy has deployed the first of a new generation of radar-evading stealth warships, called a Type 056 frigate.
The official Chinese military newspaper PLA Daily stated that the new frigate will be deployed in large numbers and features low radar observability and electromagnetic signatures.
The new warship will be used for escort and anti-submarine missions.
The PLA navy also announced that it would conduct military exercises in the northern Yellow Sea near the major military port of Dalian beginning Wednesday.
Chinese state television CCTV reported Feb. 13 that PLA air force units in northeastern China carried out an “emergency war preparedness exercise.”
Three PLA warships completed a major open-ocean exercise Feb. 15 after 18 days at sea. The ships, a missile destroyer and two frigates, sailed in the East China Sea, where the Senkakus are located, as well as the Yellow Sea.

Former Mayor Of Second Largest Greek City Sentenced To Life For Embezzling €17 Million

SOURCE
Now here is a headline one will never find in the US: “Former mayor, local officials sentenced to life for embezzlement.”
This headline comes from Greece, which due to the country’s insolvency, is finally back to the anachronistic practice of holding elected officials in positions of power accountable for their actions because the people are understandably angry and seek justice. Other “developed” countries have the luxury of distracting the public with such trivial sideshows as the Criss Angel school of levitating wealth effects and other illusions which have managed to delay the day of comparable reckoning for now. Hopefully Bernanke can continue his wholesale assault against savers for years and years, or else one may just get the US mainstream media reporting of such atrocities against the status quo in the US.
From AP:

A court in the northern Greek city of Thessaloniki has convicted three of the city’s former top officials, including a former mayor, and sentenced them to life imprisonment for embezzling more than €17 million from the municipality.
Former mayor Vassilis Papageorgopoulos, who was also previously a junior government minister, insisted he had not been involved in any embezzlement. The municipality’s former general secretary, Mihalis Lemousias, and former treasurer Panagiotis Saxonis were also given life sentences.
All three are to be jailed later Wednesday.
Two former financial directors were sentenced to 10 and 15 years each, and were released pending their appeal.

Why Congress Will Never Cut Spending

'We'll fight it tooth and nail!'  Under no circumstances!'
A textbook example of why Washington will never cut spending.
One minute highlight clip.  K Street lobbyists own Capitol Hill.
On Squawk Box this morning, David Crowe CEO of the National Association of Home Builders insists that the mortgage interest deduction not be eliminated.
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Full interview:
 

Housing rebound not so strong.
Housing Market May Not Be as Healthy as It Appears
David Crowe, National Association of Home Builders, sifts through the data and explains why the housing market may not be as healthy as it appears, and why he believes there will be no real momentum in the sector for the remainder of the year.

Warning: Stocks Likely to Crater from Here

Losses of over 50% (!) may be in store

by Chris Martenson

I don't relish the job of constantly pointing out the risks to the equity markets. But since few on Wall Street seem willing (or able) to do this, I'm "making the call" for a market correction, as enough variables have aligned to indicate a high likelihood of stocks heading downwards from here.

I've only given one other such warning about equities before, and that was in March of 2008, when I warned of the possibility of a 40% to 60% decline in stock prices by Fall. I am making a similar call today, with the understanding that I am usually a bit early to the game with my views.
Before I get into the details, the broad outline is that I see a case where speculative fevers, propelled by the Fed's $85 billion thin-air money printing program, have more or less run their course, with the Dow and S&P indexes stalled near their all-time highs. That is, $85 billion a month is what it takes to merely keep the Dow near 14,000 and the S&P 500 near 1,500.
On a fundamental basis, I see numerous signs of consumer weakness, political in-fighting and paralysis in DC, high insider selling, and the return of the retail investor (a.k.a. "greater fool") to the stock market.
On a technical basis, there are numerous tell-tale signs of a market top, including too much bullish sentiment, waning momentum on multiple timeframes, and too many NYSE stocks being above their 200-day moving average (at least until recently; that's begun to correct).

(Source)

Triple Top?

The S&P 500 and Dow Jones are both once again near all-time highs…for the third time. The old saying third time’s a charm can work both ways when it comes to the stock market. Sometimes an index will bust through to new highs, and other times it will fail spectacularly crashing to new lows.
We should all be watching the behavior of the major indexes here, because the possibility of a major triple-top failure is quite high, for reasons outlined below.
If the S&P 500 fails at the triple top and breaks down, from a charting perspective the next thing for it to do is revisit the bottom and then make up its mind as to what it wants to do next. The implication here is that a major failure of the S&P 500 will open the possibility of it revisiting the 600-800 level, or some 45% to 60% lower from the 1,500 level where it currently churns.
It will take some time to get to that level, typically 3-6 months, unless there’s some sort of financial accident to hasten things along, in which case it could all be over in a month or two.

Assuming a failure at the triple top, we’ll just have to watch and see what the market wishes to do once it plumbs the bottom once again. For now, the daily and weekly charts of the S&P 500 show waning momentum, and the weekly chart remains in overbought territory (green lines and circles):

These overbought and slumping momentum indicators are headwinds to the Fed’s efforts to keep the stock market elevated.
From a historical standpoint, stocks are cheap when they sport a collective p/e in the high single digits. Currently they are anything but cheap on that basis.

(Source)
With a current p/e of 22, the S&P 500 is on the expensive – rather than cheap – side of things, and is roughly 35% above its long-term average and more than 100% above what we could legitimately call 'cheap.'
The summary here is that if stocks do indeed retreat from here, a triple-top failure will deliver quite a punishing blow to the current efforts to repair the public’s trust in the stock market as a place to send their hard-earned savings to grow. It would be quite difficult to engineer a run at a fourth top, given the importance of retail participation in providing fuel for the rise of stocks – especially given that the boomers are retiring at the rate of 10,000 per day and drawing upon their investments instead of adding to them.
The younger generation(s) have been the main victims of the high unemployment and general wage stagnation that have been the hallmarks of the Great Recession. It is not likely that they will be able to save and invest at a rate equal to the boomer's withdrawals, creating one more equity headwind for the Fed to overcome.

Sell in May and Go Away

Of course, another old adage that applies to the stock market is sell in May and go away, which has proven to be a remarkably effective strategy over the years. The average return between May and September is -0.5%, while it is over 12% for the rest of the year.

(Source)
Why this yearly vacillation of returns occurs is open to speculation, but a betting person would have to think long and hard about buying stocks here – with May approaching and the Dow and S&P at all-time highs – rather than staying on the sidelines and then buying back in September or October if one was so inclined.
However, given the macro forces at play at this time, this May-to-September period could easily offer much more dramatic losses than 0.5%. I am personally thinking as much as two full orders of magnitude greater, as -50% is right in the middle of my target window for losses.
As always, the best time to begin repositioning one’s portfolio is before any big moves get underway, so I personally would not wait until May to make adjustments, assuming one was of a mind to do so.
Whether or not you forego selling stocks, lighten up your positions, or take on some form of portfolio protection in the form of puts or inverse ETFs, these seem like good things to do before April is over.

Danger Ahead

Technically stocks are overbought. Fundamentally, the picture is even worse: they are facing a litany of economic drags (including weakening GDP growth, higher taxes, the impact of Obamacare, sequester cuts, high gasoline prices, chronic unemployment, etc.) and robust insider selling. We explore these fundamental risks and their likely impact in great depth in Part II.
For all of these reasons, equity markets face a very high chance of falling over 40% between now and fall of 2013. (Yes, I'm aware of how extreme a price prediction this is.)
While there’s always a chance that the Fed can keep things magically elevated – and they’ve done a very good job so far – it is my view that they cannot do this for much longer without a serious correction to justify an even larger program of overt and covert intervention.
In Part II: How the Market Failure Will Happen, I detail how the pattern I expect to see will play out – and why I expect the fall in equity prices to happen within the May-September window. This downdraft will be characterized by lots of volatility, formed by market routs and Fed-inspired rescues, alternating until some form of bottom is reached. Along the way there will likely be a flight for "safety" into the dollar and Treasury paper, but only during the first stage of the next crisis.
Once a bottom is reached – again, this might be anywhere from 40% to 60% lower than the current ~1500 level on the S&P 500 – the process will begin to be dominated by rising government borrowing, which will cause interest rates to begin to rise.
When that happens, expect capital to flee the paper market for hard assets. In particular, that's when the upwards price revolution in the gold and silver markets will kick into high gear.

by Chris Martenson

- See more at: http://www.peakprosperity.com/blog/81049/warning-stocks-likely-crater-here#sthash.rjHx9SJx.dpuf

Losses of over 50% (!) may be in store

by Chris Martenson

- See more at: http://www.peakprosperity.com/blog/81049/warning-stocks-likely-crater-here#sthash.rjHx9SJx.dpuf

Meet The Million Dollar Government Employee

Banker Admits “We Engineered the Global Financial Crisis”

The Sequester: Budget Crisis or Manufactured Crisis?

Our government is set to spend $3.5 trillion this year and we are having a “budget crisis” over $85 billion in cuts and even if these cuts were to be made, they would not be from existing programs. They will be cut from money guaranteed to agencies. For example, if the Department of Agriculture was supposed to receive five billion dollars, but only received two billion, that would be considered a cut for the sequester. So does the Obama administration want to make a big deal out of this sequester? Because they have a created a country in which they must keep them in a constant state of worry and fear. If they did not the American people would be able to look into the sequester, and see that it was not a big deal.

“The Sequester was Obama’s idea.” – Bob Woodward

What is the craziest part of the entire idea of the sequester is that the president wants to blame republicans for the looming sequester. However, the idea of the sequester originated from the White House. How does the president keep his name out of it?  Obama keeps campaigning for his ideas and if he maintains to the public that the republicans are to blame, then the media will back him and so will the American people. However, they need to understand that they are being brainwashed into becoming a part of the Obama tragedy. This tragedy is where the government tries to legislate prosperity to those who are not as ‘lucky’ as those who have money. Then he passes laws into affect that lead the people on to believe one thing, but then another happens. Must I remind you about Obamacare? “This is not a tax,” Obama emphatically stated. However, what did the Supreme Court rule? They ruled that Obamacare was a tax and it did not do anything close to what they president wanted! We now see that the program is under-funded. Now they are asking for money!
In this country we do not have an income problem, we have a spending problem. While the president says that we need to tax the rich more and make them pay their fair share, which would not solve the problem. According to multiple sources, if the government were to tax the top two percent of Americans at 100%, it would run the government for less than a month. So, how is it that we cannot find somewhere to cut spending? Why can’t we cut some of the president’s vacations? He seems content on taking multiple trips on the taxpayer’s dime. I am not content with him spending time golfing with Tiger Woods. He should be spending time in the White House, not spending my money, but working on reducing the debt.
Finally, how can he blame republicans? The senate has not passed a budget since Obama has become president. Maybe the sequester is the kick that Obama needs to make some compromise with republicans on the topic of spending cuts.

New Cars Increasingly Out of Reach for Many Americans

Yahoo News – CNBC 
Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle.
According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year. At the other extreme, Tampa, Fla., was at the bottom of the 25 large cities included in the study, with a median household income of $43,832.
The study looked at a variety of household expenses, such as food and housing, and when it comes to purchasing a new vehicle, it considered more than just the basic purchase price, down payment and monthly note, factoring in such essentials as taxes and insurance.
Bottom line? A buyer in the capital can purchase a car with a sticker price of $31,940, slightly more than the new vehicle average for the 2013 model year and about what it would cost for a mid-range Ford Fusion sedan or a stripped-down BMW X1 crossover. The buyer in Tampa? They’ll just barely cover the cost of a basic Kia Rio, with $14,516 to spend.
“If you live in New York City or San Francisco, you’re probably going to have to pay a lot for housing, but you don’t have to pay a lot for a car,” said Mike Sante, the managing editor of Interest.com, a financial decision-making website.
Affordability has been a matter of growing concern for the auto industry in recent years as prices have continued to move upward. Even the most basic of today’s cars are generally loaded with features that were once found on high-line models a few decades back – if they were available at all – such as air conditioning, power windows, airbags and electronic stability control, as well as digital infotainment systems. They also have to meet ever tougher federal safety, emissions and mileage standards that have added thousands to the typical price tag.
“The average compact car of today has the features of a midsize model somebody might be trading in – but it may be just as expensive,” said David Sargent, director of automotive operations for J.D. Power and Associates.
That is one reason why many buyers have been downsizing in recent years, said Bill Fay, general manager of Toyota, though he added that “there is still a lot of affordability in the marketplace.”
Perhaps, but industry planners have come to recognize that they are targeting a much smaller segment of the American public than in decades past. That’s one reason why most manufacturers are offering more downsized models.
They also are working with their dealers to offer certified pre-owned programs where buyers can stretch their budget by purchasing a two- or three-year-old vehicle that has gone through an extensive inspection and, if necessary, repairs and replacements. Such vehicles may cost slightly more than a conventional used model but usually include a like-new warranty.
While the typical new vehicle will likely nudge up this year, Interest.com editor Sante stressed that car costs are one of the most controllable parts of a household’s budget. “You’re better off driving something more affordable and saving or investing the difference.”
If the typical new car costs $30,550, with an average monthly payment of $550, the five cities most able to meet – or come close – are:
1) Washington
Average Household Income: $86,680
Affordable Purchase Price: $31,940
Maximum monthly payment: $628
2) San Francisco
Average Household Income: $71,975
Affordable Purchase Price: $26,786
Maximum monthly payment: $537
3) Boston
Average Household Income: $69.455
Affordable Purchase Price: $26,025
Maximum monthly payment: $507
4) Baltimore
Average Household Income: $65,463
Affordable Purchase Price: $24,079
Maximum monthly payment: $468
5) Minneapolis
Average Household Income: $63,352
Affordable Purchase Price: $24,042
Maximum monthly payment: $470

At the other end of the scale, those five cities least able to handle a car payment are:
21) Phoenix
Average Household Income: $50,058
Affordable Purchase Price: $17,243
Maximum monthly payment: $348
22) San Antonio
Average Household Income: $48,699
Affordable Purchase Price: $17,137
Maximum monthly payment: $334
23) Detroit
Average Household Income: $48,968
Affordable Purchase Price: $17,093
Maximum monthly payment: $332
24) Miami
Average Household Income: $45,407
Affordable Purchase Price: $15,188
Maximum monthly payment: $295
25) Tampa
Average Household Income: $43,832
Affordable Purchase Price: $14,516
Maximum monthly payment: $282
http://finance.yahoo.com/news/cars-increasingly-reach-many-americans-145957880.html

JPMorgan Chase Hid Mortgage Flaws From Investors, Emails Suggest

JPMorgan Chase CEO Jamie Dimon has tried his best to suggest that the financial crisis was someone else's fault. But a batch of court documents released this week undermine this claim, indicating that the bank knew the mortgage investments it sold were seriously flawed.
According to the documents, which include emails and transcripts of employee interviews filed in an investor lawsuit, JPMorgan hired independent analysts to review the quality of the home loans it was packaging for sale prior to the collapse of the housing market. That review found that 20 to 80 percent of the mortgages did not meet underwriting standards, Bloomberg reports. These documents show that JPMorgan bundled these mortgages into complex securities anyway and then sold them to investors without disclosing their problems, according to Bloomberg and the New York Times.
Flaws identified by the reviews included loans made to overstretched borrowers, missing documentation and fraudulent home appraisals, according to Bloomberg and the NYT. The court documents make clear that JPMorgan employees were well aware of these flaws and even exchanged emails about them. For example, after a review finding that at least 1,154 mortgages were delinquent, JPMorgan told investors that only 25 loans were delinquent, according to court documents reviewed by the NYT.
These allegations echo those that have plagued other Wall Street banks, including Goldman Sachs. In the lead-up to the financial crisis, Goldman sold mortgage-backed securities while secretly betting that the housing market would crash, according to news reports and a lawsuit from the Securities and Exchange Commission. Goldman and the SEC settled the charges in 2010.
Dimon has tried to differentiate JPMorgan from the rest of Wall Street. In a recent appearance, he lambasted "big dumb banks" that "virtually brought the country down to its knees," according to American Banker. JPMorgan, which recently surpassed Wells Fargo as the country's most valuable bank, has maintained a relatively good reputation, at least by Wall Street standards. It bought Washington Mutual and Bear Stearns at the government's urging in 2008, a sign that it was in stronger shape than other banks and willing to help the country, albeit with government support.
But JPMorgan's reputation recently has taken a hit. The bank lost more than $6 billion on one set of trades in the "London Whale" scandal, which Dimon first revealed last year. Its stock price tumbled after the announcement but has since recovered. In October, New York Attorney General Eric Schneiderman also sued the bank, alleging that it "kept investors in the dark" about the quality of the mortgage bonds it sold.

RBS boss admits 'chastening' year as losses breach £5bn

• Stephen Hester says the privatisation is getting closer
• £607m paid out in bonuses, £215m to investment bankers
• £450m extra charge from PPI scandal
• Plans to spin off part of US arm Citizens

Royal Bank of Scotland's losses have widened. Photograph: David Cheskin/PA

Royal Bank of Scotland declared on Thursday it was on track for a partial privatisation next year but sparked a fresh row over bonuses at the scandal-hit institution.
The bank posted an annual loss of more than £5bn and Stephen Hester, its chief executive, admitted 2012 had been a "chastening" year after its £390m Libor rigging fine. Its total losses since the 2008 bailout have now topped £34bn. However, the bank is still paying out £607m in bonuses in the coming weeks.
The shares were among the biggest fallers on the stock market, losing more than 6% to 323p – which amounts to a near £15bn loss on the taxpayer's 82% stake.
Hester, however, said "the light at the end of the tunnel" toward privatisation was "coming much closer" while Sir Philip Hampton, RBS's chairman, hoped the bank would start to pay a "token" dividendto shareholders – the first since the banking crisis – "as soon as possible". He said: "Our objective is to give the government options to sell its stake as soon as possible and it would be very good if we could make that 'as soon as possible' 2014."
A government spokesman insisted that "there is no timetable for a disposal" although ideas for a free distribution of shares to 46m voters had been floated as recently as a fortnight ago.
George Osborne claimed credit for the decision by RBS to "accelerate" its focus on UK retail and corporate banking. It announced further streamlining of the investment bank and a plan to spin off part of its US operation, known as Citizens, in two years. Hester described UK Financial Investments, which looks after the stakes in the bailed-out banks, as becoming "more activist in trying to present its views".
Asked what form any share sale would take, Hampton said he expected taxpayers to be able to "participate in the availability of shares" although he warned about the number of football stadiums that would be needed for shareholder meetings.
Hester said the privatisation of RBS would be a "seminal" moment, appearing to indicate that he intended to stay on to see the task through.
Despite the loss, RBS has paid out £607m in bonuses, £215m of which went to its investment bankers whose division was behind the Libor scandal. The bank, which said bonuses would have been £500m higher without the Libor fine, risked inflaming the row over City pay further by indicating that its annual report in March could disclose how many of its staff take home more than £1m.
Labour Treasury spokesman Chris Leslie said: "We need radical change in the culture of our banks and that must include reining in bloated bonuses, which are a device for keeping traders focused on the weeks ahead, rather than years ahead."
Ian Gordon, analyst at Investec, said that RBS was "starting 2013 in a weaker financial position than the market had anticipated". The bank insisted it would meet international targets for capital before the deadline in 2019.
Hester stressed that the bank's assets had been reduced by £906bn since their peak in 2008 but acknowledged the cost of the payment protection insurance scandal, for which the bank took a further £450m charge to take the total cost to £2.2bn, and the interest rate swap mis-selling scandal had required a further £650m charge. The computer meltdown in June cost £175m.
He said: "2012 saw landmark achievements for RBS. It was also a chastening year. Along with the rest of the banking industry we faced significant reputational challenges as we worked with regulators to put right past mistakes."
Osborne, who this week rejected calls for RBS to be fully nationalised, said: "I have been very clear that I want to see RBS as a British-based bank, focused on serving British businesses and consumers, with a smaller international investment bank to support that activity rather than to rival it."
The chancellor added: "The government's strategy is for RBS be a stronger and safer bank, which in time can be returned to full private ownership." But he did not give any clues as to his preferred route for when a share sell-off can begin.
Hester acknowledged the influence of the government and also the regulators which have been conducting a review of bank capital. There had been an "important accommodation" over the bank's capital, Hester said.
"The two revisions to our strategy that go with that are a further shrinkage of our markets business, with the capital there coming down significantly further over the next couple of years" and the intention to start selling Citizens.
On bonuses, Hester said that while the figure looked a "big number", it was below the £1.8bn being paid out at Barclays and sums handed out by rivals UBS and Deutsche Bank.
RBS was forced to sell off its insurance business Direct Line by Brussels in return for the taxpayer bailout in 2008 and spun off a third of the operation last year, for which it has already been forced to take a goodwill writedown of £394m.
• This story was amended on Thursday 28 February to correct the figures for the amount being paid in bonuses

Breakdown of Law and Order: “We Can’t Depend On the Police Department”

Budget cuts across the country have stripped local police departments of personnel at an alarming rate. So much so that Americans from coast-to-coast are now being forced to fend for themselves.
Our latest example comes from East Oakland’s Arcadia Park, where law and order have broken down to such an extent that residents have been been left with no other choice but to band together to police their own streets.
According to one member of this neighborhood watch on steroids, it’s turning into the Wild West.
With criminals running rampant, when seconds count, police are often minutes away:

KPIX 5 cameras caught up with a half dozen neighbors in East Oakland’s Arcadia Park neighborhood Monday as they walked the streets on the lookout for crime. The vigilance has never seemed more necessary than now; 25 homes in the neighborhood have been burglarized over the last two months alone.

In a neighborhood that has started to feel like the wild west, people have even started posting “wanted” signs.

“You have to walk around in your house with a gun to feel safe here,” said Alaska Tarvins of the Arcadia Park Board of Directors.

…

The people who live in the area are nothing if not gutsy, but they need help. A plan to gate their community has been stalled. With the police force stretched painfully thin, they may be forced to follow other Oakland neighborhoods and hire private guards.

“We don’t have a choice. Either die or we hire some security ourselves, because we can’t depend on the police department,” said Tarvins.

Source: KCBS San Francisco

 

But Oakland is not alone.

With cities, towns and their respective state governments having overspent billions of dollars over the last decade, many are so broke they have no choice but to lay off emergency services employees that include cops and medical first responders.

It’s gotten so bad in some parts of the country, that there are areas of major cities where police refuse to go.

The city of Chicago, in an effort to save money and deploy officers to more critical areas, has literally stopped taking 9-1-1 calls for crime reports such as armed robberies, car thefts, and burglaries.

 

With anti-gun politicians at all levels of government now attempting to disarm Americans and restrict their access to personal defense weapons, and police departments running so thin that they can no longer respond in any reasonable amount of time, criminals will only be more empowered to target law abiding Americans who are left with no means to defend themselves.

The economic malaise that includes millions of unemployed will only further add to the problem, as those with nothing left to lose will do whatever it takes to put food on the table.
We are witnessing the slow but steady degradation of law and order in this country, and it’ll soon be coming to a neighborhood near you.
The end result will be a citizenry so terrified that they will call for military intervention to help police our streets. In fact, in Illinois state representatives have already called on the governor to deploy the National Guard and residents in Detroit have followed suit.
We have yet to experience a full scale fiscal crisis on the state and local level, but it’s coming. When it does, you can fully expect nationwide crime waves to spread like wildfire.

Our latest example comes from East Oakland’s Arcadia Park, where law and order have broken down to such an extent that residents have been been left with no other choice but to band together to police their own streets.
According to one member of this neighborhood watch on steroids, it’s turning into the Wild West.
With criminals running rampant, when seconds count, police are often minutes away:

KPIX 5 cameras caught up with a half dozen neighbors in East Oakland’s Arcadia Park neighborhood Monday as they walked the streets on the lookout for crime. The vigilance has never seemed more necessary than now; 25 homes in the neighborhood have been burglarized over the last two months alone.
In a neighborhood that has started to feel like the wild west, people have even started posting “wanted” signs.
“You have to walk around in your house with a gun to feel safe here,” said Alaska Tarvins of the Arcadia Park Board of Directors.
…
The people who live in the area are nothing if not gutsy, but they need help. A plan to gate their community has been stalled. With the police force stretched painfully thin, they may be forced to follow other Oakland neighborhoods and hire private guards.
“We don’t have a choice. Either die or we hire some security ourselves, because we can’t depend on the police department,” said Tarvins.
Source: KCBS San Francisco

- See more at: http://www.shtfplan.com/headline-news/breakdown-of-law-and-order-we-cant-depend-on-the-police-department_02272013#sthash.ZAf3OVuq.dpuf

Is it time for markets to panic? Gasoline prices are approaching the “danger zone”, Copper prices indicate a more precipitous decline in risk assets, Consumers are clipping coupons at a rate not seen since before the 2007 recession… Warning signs are all over the place!

Report shows gasoline prices could be approaching the “danger zone”

From PragCap:
… Watching the Daytona 500 from the “danger zone,” where cars whip by at high speeds of around 175 mph to 200 mph — but can also burst through the walls in a crash — can be a thrill.
But gasoline’s “danger zone” may be just plain scary.
At $3.75, retail gasoline prices are nearly back in the “danger zone” marked by the highs of around $3.85 to $4.10 per gallon seen over the past five years, as you can see in Figure 1. This range has marked a “danger zone” for market participants.
When gasoline prices reached this range in the past, it preceded the stock market slides experienced in…

What Does Dr. Copper Think?

I think Copper is a good tell here. We’ve been seeing some weakness unfold, no question, but this one could either foreshadow a more precipitous decline in risk assets, or hang on to that key multi-year trendline support and offer more of a “stay long” signal.

- See more at: http://investmentwatchblog.com/is-it-time-for-markets-to-panic-gasoline-prices-are-approaching-the-danger-zone-copper-prices-indicate-a-more-precipitous-decline-in-risk-assets-consumers-are-clipping-coupons-at-a-rate-not-see/#sthash.1HT4ceR2.dpuf

Read more at http://investmentwatchblog.com/is-it-time-for-markets-to-panic-gasoline-prices-are-approaching-the-danger-zone-copper-prices-indicate-a-more-precipitous-decline-in-risk-assets-consumers-are-clipping-coupons-at-a-rate-not-see/#QeLCvj1vxOxdxxqY.99

Mortgage interest to double for thousands of borrowers as banks impose huge tracker rate hikes

Thousands of Bank of Ireland and Bristol & West borrowers customers face a doubling of interest on mortgage interest payments this year after the banks decided to ramp up tracker rates.
Buy-to-let borrowers are being hit by a bigger hike than residential customers: they will see their mortgage rate jump to 4.49 per cent on top of Bank of England base rate - or 4.99 per cent compared to the current rate of 2.25 per cent (base rate plus 1.75 per cent).
Residential customers were also paying 2.25 per cent but face a smaller hike, to 2.99 per cent (base rate plus 2.49) on 1 May 2013. But the tracker rate will then increase again to 4.49 per cent (base rate plus 3.99 per cent) from 1 October 2013.

Bank of Ireland: Hiking tracker mortgage rates for both buy-to-let and residential borrowers

The move will add £240 per month, or £2,850 year on a £200,000 mortgage. Some 15,000 customers in total will be affected.

 

In a letter to customers, the lenders – which are part of the same bank - state: ‘Currently banks are required to hold more capital reserves, as part of measures to protect the banking system from the type of scenarios seen during the banking crisis.

'OUTRAGED' AT THE MOVE

Jane Clemetson, a lawyer from London, has had a mortgage with the Bank of Ireland since 2004 for a buy-to-let property she owns and rents out in Grimsby, Lincolnshire.
She is ‘outraged’ that this hike has been administered, but does concede that after reading through her terms and conditions that it does say it can do this – if they need to ‘shore up its business’ – although her attention wasn’t drawn to it at the time.
She said: ‘It’s outrageous and will cost me, I estimate, over £1,000 a year although they haven’t told me yet how much it my new monthly payment will be.’

‘In addition, the cost of funding mortgages has increased significantly for Bank of Ireland and the market as a whole in recent years.
‘Your loan agreement has a special condition which allows us to change the tracker differential for a number of valid reasons including the ones mentioned above.’
The letter goes on to state that if you choose to remortgage to another lender, early repayment charges will be waived.
Tracker mortgages are meant to remain fastened to the official Bank of England base rate, which has been sat at its historic 0.5 per cent low since March 2009, or another official index.
The moves comes after it emerged earlier this week that the Bank of England have been mulling over the idea of negative interest rates.
The bank says the City watchdog, the Financial Services Authority (FSA), is fully aware of the changes to the tracker mortgages.
This time last year, it raised its standard variable rate (SVR) from 2.99 per cent to 4.49 per cent in a move that affected 100,000 customers.