iftttwall

When it comes to mocking president Obama, there is no easier or more effective way than focusing on his vacation/golfing schedule. The conservative Washington Examiner did just that last week, before the latest Malaysian Airlines disaster, when it reported that “It’s going to be hot tubs, basketball, tennis and golf for the first family this summer, having set plans for a 16-day vacation in Martha’s Vineyard, Mass., on a $12 million, 10-acre forested estate on the southwestern corner of the island.

Reports from the Bay State indicate that President Obama and his family will vacation August 9-24 at the 8,100-square foot, beachfront home of a Democratic donor that includes a pool, hot tub, basketball and tennis court. It will be new digs for the first family, who have summered on tony Martha’s Vineyard every year of Obama’s presidency, except in 2012 when he was running for reelection. The Vineyard Gazette reported that the White House has no major or public events planned for the almost three weeks, typical at this stage of a presidential vacation.

That and golf of course.

 

However, all of that is to be expected, and sure enough, Obama can and will parry such mockery as political attacks coming from the right, while remarking how strong the US economy has become under his watch, how many millions of waiters and bartenders thousands of manufacturing jobs he has created, and of course, how the stock market hits a record high now on a daily basis.

Things get dicier, however, when Obama is mocked and virtually attacked for his vacation plans by none other than that flag-bearer of leftist ideology, the New York Times itself. Which is precisely what just happened in “Sticking to His Travel Plans, at Risk of Looking Bad“

As smoke billowed from the downed Malaysian jetliner in the fields of eastern Ukraine on Thursday, President Obama pressed ahead with his schedule: a cheeseburger with fries at the Charcoal Pit in Delaware, a speech about infrastructure and two splashy fund-raisers in New York City.

 

The potential for jarring split-screen imagery was clear. Reports of charred bodies and a ground-to-air missile attack from Eastern Europe dominated television screens while photographers snapped pictures of a grinning Mr. Obama holding a toddler at the restaurant. The presidential motorcade was later filmed pulling up to Trump Place Apartments, the Riverside Avenue venue for his first fund-raiser.

 

And yet, White House aides said no consideration was given to abandoning the president’s long-planned schedule, even during the hourlong flight from Delaware to New York, when word suddenly arrived that Israel had begun a ground invasion of the Gaza Strip, providing the day’s second international challenge.

 

Instead, White House officials simply made sure to describe the president’s on-the-road management of the crises: calls to world leaders from Air Force One, telephone briefings from Secretary of State John Kerry and a secure-line meeting of his national security staff from a room in the Trump Place Apartments before his fund-raiser.

 

“It is rarely a good idea to return to the White House just for show, when the situation can be handled responsibly from the road,” said Jennifer Palmieri, the White House communications director. “Abrupt changes to his schedule can have the unintended consequence of unduly alarming the American people or creating a false sense of crisis.”

Actually, that is somewhat correct: it has gotten to the point where seeing Obama actually work in the White House, instead of golfing of shaking hand with the same Wall Street bankers his DOJ pretends to prosecute, would create a “sense of crisis” among the American people. Not so sure about be “false” part.

And this is where things got rough:

For an administration in its sixth year, juggling presidential optics is nothing new. And with some rare exceptions, the public relations team around the president has remained consistently stubborn about refusing to let the never-ending stream of political, economic or international crises affect Mr. Obama’s daily schedule.

 

The current myriad incidents are no exceptions: Moments after making a grim statement about Ukraine on Friday, the president popped into the East Room, where the first lady, Michelle Obama, was holding a mock state dinner for children to promote her Let’s Move nutrition initiative. “My big thing,” he confessed to the kids, “chips and guacamole!” There was plenty of laughter all around.

To be sure, conservatives promptly ridiculed the president for what he does best: put on a great show before the teleprompter then quietly disappear in the golf cart. As noted above, this is nothing new and the administration felt no need to defend itself.

“Instead of responding to multiple international crises, the president apparently thought it was a better use of his time to attend a set of fund-raisers in New York,” Representative Kevin McCarthy, Republican of California and the incoming majority leader, said in a statement. “While the president is out on the loose and having a good time, he should remember that his responsibilities as commander in chief don’t stop when he’s out of the office.”

However, by now even the ubiquotous social media is starting not only to noticed, but to comment:

Administration officials shrug off that kind of organized Republican criticism. But social media users noticed, too. Twitter was filled with snarky mentions of the president’s activities on Thursday. One noted that Mr. Obama “interrupts busy fund-raising night to check in with team on two crises. Then back to business.” Another wrote: “Nice he could take a moment to check on those meddling world events.”

Obama won’t be the first president to see his reputation tarnished by his vacation plans:

Veterans of previous administrations recalled that the political damage could be serious if the American people concluded that the president was politically tone deaf or insensitive, especially to the suffering of others during an emergency.

 

Scott McClellan, who served as George W. Bush’s press secretary during Hurricane Katrina, recalled that Mr. Bush, on a trip through Western states, was photographed strumming a guitar with a country music artist even as the storm began to bear down on New Orleans, flooding streets and stranding residents.

 

“When those moments are placed side by side with a crisis that’s worsening, it creates a perception problem that the White House can’t ignore,” Mr. McClellan said in an interview.

 

In his book “What Happened,” Mr. McClellan recalls with horror seeing the “image of a seemingly carefree President Bush pursuing his original schedule and disregarding the plight of Katrina’s victims — the dead, the homeless, the lost.”

 

Later, Mr. McClellan writes: “With 20/20 hindsight, it’s clear that President Bush should have canceled his two-day western trip and headed back to Washington on Saturday or Sunday, before Katrina unleashed its fury.”

The NYT’s punchline:

“There is a total lack of symmetry from what the American people are seeing from the president and what is going on in the world,” Mr. Schmidt said. He acknowledged that no president should be captive to events or hunkered down in the White House. And he said presidents, like other people, deserved downtime. But he said White House occupants had to abandon those moments when the situation demanded.

Will this time be any different for the tone deaf president, and will the first observation of Obama’s vacationeering by a liberal outlet force him to change his ways? Or does the world have to finally succumb to at least one mushroom cloud beside the countless fires raging across the globe, before someone in the White House notices? We should find out… but not before Obama comes back from Martha’s Vineyard on August 24. Let’s just hope that no major wars break out over the next month.

via Zero Hedge http://ift.tt/Wxbkqm Tyler Durden

It has been over six months since we first highlighted the growing deterioration in the quality of auto loans and mentioned the 's' word (subprime) as indicative that we learned nothing from the financial crisis. Since then, auto loans (and especially subprime in the last few months) have surged to record highs; and most concerning, recently has seen delinquencies and late payments spike. The reason we provide this background is that, thanks to The NY Times, this story is now hitting the mainstream media as subprime-quality car buyers (new and used) realize the burden they have placed on themselves thanks to exorbitantly high interest rates (and a rapidly depreciating 'asset'). As one car 'owner' exclaimed, "buying the car was the worst decision I have ever made."

 

As The NY Times reports, Auto loans to people with tarnished credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered subprime — people with credit scores at or below 640.

 

Deja vu all over again…

And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.

Exorbitant interest rates… (but still demand?)

The New York Times examined more than 100 bankruptcy court cases, dozens of civil lawsuits against lenders and hundreds of loan documents and found that subprime auto loans can come with interest rates that can exceed 23 percent.

 

The loans were typically at least twice the size of the value of the used cars purchased, including dozens of battered vehicles with mechanical defects hidden from borrowers. Such loans can thrust already vulnerable borrowers further into debt, even propelling some into bankruptcy, according to the court records, as well as interviews with borrowers and lawyers in 19 states.

Will we never learn…?

In another echo of the mortgage boom, The Times investigation also found dozens of loans that included incorrect information about borrowers’ income and employment, leading people who had lost their jobs, were in bankruptcy or were living on Social Security to qualify for loans that they could never afford.

 

“It appears that investors have not learned the lessons of Lehman Brothers and continue to chase risky subprime-backed bonds,” said Mark T. Williams, a former bank examiner with the Federal Reserve.

One painful example…

Rodney Durham stopped working in 1991, declared bankruptcy and lives on Social Security. Nonetheless, Wells Fargo lent him $15,197 to buy a used Mitsubishi sedan.

 

“I am not sure how I got the loan,” Mr. Durham, age 60, said.

 

Mr. Durham’s application said that he made $35,000 as a technician at Lourdes Hospital in Binghamton, N.Y., according to a copy of the loan document. But he says he told the dealer he hadn’t worked at the hospital for more than three decades. Now, after months of Wells Fargo pressing him over missed payments, the bank has repossessed his car.

It's different this time…(worse)

Autos, of course, are very different than houses. While a foreclosure of a home can wend its way through the courts for years, a car can be quickly repossessed. And a growing number of lenders are using new technologies that can remotely disable the ignition of a car within minutes of the borrower missing a payment. Such technologies allow lenders to seize collateral and minimize losses without the cost of chasing down delinquent borrowers.

 

That ability to contain risk while charging fees and high interest rates has generated rich profits for the lenders and those who buy the debt. But it often comes at the expense of low-income Americans who are still trying to dig out from the depths of the recession, according to the interviews with legal aid lawyers and officials from the Federal Trade Commission

Who is to blame? Nefarious dealers?

The dealers have an incentive to increase both the size and the interest rate of the loans.

 

The arithmetic is simple. The bigger size and rate of the loan, the bigger the dealers’ profit, or so-called markup — the difference between the rate charged by the lenders and the one ultimately offered to the borrowers. Under federal law, dealers do not have to disclose the size of the markup.

Or The Fed's financial repression money printing forcing demand into these risky securities?

Investors, seeking a higher return when interest rates are low, recently flocked to buy a bond issue from Prestige Financial Services of Utah. Orders to invest in the $390 million debt deal were four times greater than the amount of available securities.

 

What is backing many of these securities? Auto loans made to people who have been in bankruptcy.

 

The average interest rate on loans bundled into Prestige’s latest offering, for example, is 18.6 percent, up slightly from a similar offering rolled out a year earlier. Since 2009, total auto loan securitizations have surged 150 percent, to $17.6 billion last year, though some estimates have put the total volume even higher.

The end-result…

In another sign of trouble ahead, repossessions, while still relatively low, increased nearly 78 percent to an estimated 388,000 cars in the first three months of the year from the same period a year earlier, according to the latest data provided by Experian.

 

The number of borrowers who are more than 60 days late on their car payments also jumped in 22 states during that period.

 

As a result, some rating agencies, even those that had blessed auto loan securitizations with high ratings, are starting to question the quality of the loans backing those securities, and warn of losses that investors could suffer if the bonds start to sour. Describing the potential trouble ahead, Kevin Cole, an analyst with Standard & Poor’s, said, “We believe these trends could lead to higher losses and weakened profitability in a few years.”

Read the full disaster here…

*  *  *

One quick question… (rhetorical of course) – Why did the Federal Reserve stop reporting auto-loan LTVs in February 2011? After 40 years of doing so!!

Bloomberg has reported the average loan to value (LTV) for subprime auto loans has increased to 114.5% this year and the average loan-to-value on new cars rose to 110.6% (which would be the highest ever according the Fed's data… way beyond the 100.4% previous peak in Sep 2006)

*  *  *

As we concluded previously, it is so bad that even Morgan Stanley now gets it:

“Perhaps more than any other factor, easing credit has been the key to the U.S. auto recovery,” Adam Jonas, a New York-based analyst with Morgan Stanley, wrote in a note to investors last month. The rise of subprime lending back to record levels, the lengthening of loan terms and increasing credit losses are some of factors that lead Jonas to say there are “serious warning signs” for automaker’s ability to maintain pricing discipline.

And who gets to eat the losses? Well, as we have previously explained, the bulk of consumer credit issuance in the past year, a massive 99%, has been sourced by the government to go straight into auto and student loans.

Which means you, dear US taxpayer, will once again be on the hook when the music ends.

via Zero Hedge http://ift.tt/1jQ6qyO Tyler Durden

via Zero Hedge http://ift.tt/1ljEezm williambanzai7

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The trade only works if everyone is lulled into staying on the long side until it's too late.

Let's try a thought experiment: suppose we're players in the stock market, Wall Street insiders with real leverage and connections to the Fed. You know, the kind of player who can reverse a decline in the S&P 500 with an order (executed through a proxy) for thousands of call options on the SPX.

Retail participants tend to forget we make money on both the long and short side. The small-fry who provide liquidity always assume a sharp decline in equities is a terrible thing because "everybody is losing their gains," and this general belief is pushed by the mainstream financial media: unfailingly chirpy news anchors' expressions and voices darken when reporting the rare drop in stocks: horrible, horrible, horrible, a drop means we all lose, I'm sad reporting this.

The players are laughing at this play-acting and the gullibility of the audience: insiders make huge gains when they engineer a sharp decline. It's not that difficult to manipulate the market when volume and volatility are low, especially in an age where quant-bot trading machines are programmed to follow trends.

It's also easy to hype stocks publicly while selling (distributing) your shares at the top to unwary punters who believe the PR (the Fed has your back, thanks to the Fed's quantitative easing (QE), the market will never go down, etc.).

But pushing the melt-up higher gets more difficult when the market gets heavy. Markets get heavy when participation thins (i.e. fewer stocks are leading the advance), speculative sectors are rolling over as the crowd of greater fools shrinks and volume on up days keeps declining.

When the markets get heavy, the easy-profits trade is get short and engineer a sharp decline. Nudging a heavy market into a free-fall has a number of advantages to players, other than the gratifying profits from being short equities and long volatility.

1. The Fed needs a decline to "prove" it isn't pushing markets higher, further enriching the already obscenely rich. A thoroughly corrupted Congress is finally awakening to the public rage over the Federal Reserve's blatant enrichment of the few at the expense of the many, and as a result, the Fed has a serious PR problem: Janet Yellen may be a lot of things, but a believable actress isn't one of them. Her performance claiming the Fed acts only on behalf of widows, orphans, Mom, apple pie and the merchants lining Main Street was laughably inauthentic.

A sharp decline would demonstrate that the Fed isn't controlling the market to enrich the insiders–even though a sharp decline would only benefit the insiders who engineered the drop. Heh. No need to be churlish about it. Where's your sense of humor?

2. A mini-crash would panic the herd into selling, enabling insiders to scoop up shares on sale. This is of course the classic insider play: unload enough shares to blow off all the sell stops (i.e. orders to sell if price drops to specified level), which extends the decline and reinforces the panic-selling.

3. Never give a sucker an even break. After two years without a meaningful correction and complacency at multi-year highs, how much profit is there left in pushing an increasingly heavy market up another few percentage points? The big money is in engineering a decline that catches the crowd by surprise and doesn't allow the traders a chance to board the short-bus before it roars out of the station.

Many traders are confident the market will broadcast a technical signal that will give them a chance to get on the short bus with the insiders. How likely is this? If we're engineering a decline, why would we spoil the trade by letting a bunch of peasants get on board? With every quant-bot programmed to recognize all the usual technical signals and systems, why telegraph the trade?

As legendary stock trader/manipulator Jesse Livermore observed, the market will take the fewest possible number of participants along for the ride, and expecting the market to issue a "go short now for easy profits" signal would violate this rule: if everybody shifts from the long side to the short side, the trade is no longer profitable.

The trade only works if everyone is lulled into staying on the long side until it's too late. Traders seem to be waiting for another standard-issue decline in September/October that would set up yet another standard-issue Santa Claus rally. Will it really be this easy to book profits in the second half? When everybody expects the same thing to unfold, it's just another form of complacency.

Complacency–and the confidence that you can beat a confidence game by following what everybody else is following–is dangerous.

via Zero Hedge http://ift.tt/1ljEdeE Tyler Durden

Presented with no comment…

 

 

Source: Sunday Funnies

via Zero Hedge http://ift.tt/1jPJoIn Tyler Durden

President Obama and Israeli Prime Minister Netanyahu spoke on the phone today; The White House just released the clarifying statement of next steps…

 

Readout of the President’s Call with Prime Minister Netanyahu of Israel

President Obama and Prime Minister Netanyahu spoke again this morning by phone, their second call in three days to discuss the situation in Gaza.  The President discussed Israel’s ongoing military operation, reiterated the United States’ condemnation of attacks by Hamas against Israel, and reaffirmed Israel’s right to defend itself.

 

The President also raised serious concern about the growing number of casualties, including increasing Palestinian civilian deaths in Gaza and the loss of Israeli soldiers.

 

President Obama informed the Prime Minister that Secretary of State John Kerry will soon travel to Cairo to seek an immediate cessation of hostilities based on a return to the November 2012 ceasefire agreement. The President underscored that the United States will work closely with Israel and regional partners on implementing an immediate ceasefire, and stressed the need to protect civilians—in Gaza and in Israel.

And all done in time for a late tee-off…

via Zero Hedge http://ift.tt/Wn4X8J Tyler Durden

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

Late last year, I published a post titled: Two Congressmen Push for Release of 28-Page Document Showing Saudi Involvement in 9/11. Here’s an excerpt from the piece:

Since terrorists attacked the United States on Sept. 11, 2001, victims’ loved ones, injured survivors, and members of the media have all tried without much success to discover the true nature of the relationship between the 19 hijackers – 15 of them Saudi nationals – and the Saudi Arabian government. Many news organizations reported that some of the terrorists were linked to the Saudi royals and that they even may have received financial support from them as well as from several mysterious, moneyed Saudi men living in San Diego.

 

Saudi Arabia has repeatedly denied any connection, and neither President George W. Bush nor President Obama has been forthcoming on this issue.

 

But earlier this year, Reps. Walter B. Jones, R-N.C., and Stephen Lynch, D-Mass., were given access to the 28 redacted pages of the Joint Intelligence Committee Inquiry (JICI) of 9/11 issued in late 2002, which have been thought to hold some answers about the Saudi connection to the attack.

 

“I was absolutely shocked by what I read,” Jones told International Business Times. “What was so surprising was that those whom we thought we could trust really disappointed me. I cannot go into it any more than that. I had to sign an oath that what I read had to remain confidential. But the information I read disappointed me greatly.”

 

The public may soon also get to see these secret documents. Last week, Jones and Lynch introduced a resolution that urges President Obama to declassify the 28 pages, which were originally classified by President George W. Bush. It has never been fully explained why the pages were blacked out, but President Bush stated in 2003 that releasing the pages would violate national security.

Naturally, the so-called “most transparent Administration in history” hasn’t declassified anything, but that didn’t stop Rep. Thomas Massie, R-KY from reading them. What he saw was so incredibly disturbing he called a press conference to talk about it. This is what he had to say:

That’s three members of Congress that I know of who have come out shell-shocked upon reading this document. So why can’t the American public see it?

via Zero Hedge http://ift.tt/1qutLJd Tyler Durden

While the S&P500 rebounded sharply on Friday, BofAML’s Macneil Curry warns evidence continues to say that this is a very late stage advance from which a greater correction is forthcoming. The recent deterioration in breadth (52wk highs failing to keep track with price), the negative seasonal period and divergences between the broader indexes say that risk/reward is skewing to the downside. Bottom Line: “The S&P 500 is vulnerable.”

 

Via BofAML’s Macneil Curry,

The S&P500 is vulnerable

While the trend in the S&P500 is still higher, with potential for a near term push towards 2000; this is a very late stage advance from which we look for a medium term correction. 1944 (the June-26 low) is key. Below here confirms a top and turn…

 

The 2 charts he is most concerned about…

Breadth…

 

The bearish divergence for new 52-week highs from last May points to fewer and fewer new 52-week highs as the S&P 500 has continued to rally to new all-time highs. This suggests weaker internals.

The divergence in new 52-week highs from last May is a sign of a maturing rally from late 2012.

 

and Seasonals… 

With President Obama in his second
term, 2014 is an incumbent mid-term.2014 is following the incumbent midterm year YTD through June. The pattern calls for a June/July peak ahead of a pullback into September. This has the potential to support large and mega caps relative to small caps.

 

Going back to 1928, July is the strongest month of the year with an average return of 1.52% and is up 57% of the time.

However, June was up 1.9% and July returns tend to fizzle, not sizzle, after an up June. When the month of June is up, July is up only 51% of the time and has an average return of 0.48%. This is well below average for July and a below the average monthly return for all months of 0.59%.

via Zero Hedge http://ift.tt/1oZ17ta Tyler Durden