Unbelievable Stress of Making "Only" $200,000 After Taxes

People who have nothing to eat, no job, and are about to be tossed out of their homes in foreclosure, really do not know what stress is.

To fully appreciate stress, please consider the sorry "plights" of Andrew Schiff, marketing director for Euro Pacific Capital, Daniel Arbeeny, a Wall Street headhunter, and hedge-fund manager Richard Scheiner.

Bloomberg describes the out-and-out horror stories of all three in Wall Street Bonus Withdrawal Means Trading Aspen for Coupons
Andrew Schiff said the $350,000 he earns, enough to put him in the country’s top 1 percent by income, doesn’t cover his family’s private-school tuition, a Kent, Connecticut, summer rental and the upgrade they would like from their 1,200-square- foot Brooklyn duplex.

“People who don’t have money don’t understand the stress,” said Alan Dlugash, a partner at accounting firm Marks Paneth & Shron LLP in New York who specializes in financial planning for the wealthy. “Could you imagine what it’s like to say I got three kids in private school, I have to think about pulling them out? How do you do that?”

Wall Street’s cash bonus pool fell by 14 percent last year to $19.7 billion, the lowest since 2008, according to projections by New York state Comptroller Thomas DiNapoli.

“It’s a disaster,” said Ilana Weinstein, chief executive officer of New York-based search firm IDW Group LLC. “The entire construct of compensation has changed.”

Wall Street headhunter Daniel Arbeeny said his “income has gone down tremendously.” On a recent Sunday, he drove to Fairway Market in the Red Hook section of Brooklyn to buy discounted salmon for $5.99 a pound.

$17,000 on Dogs

Richard Scheiner, 58, a real-estate investor and hedge-fund manager, said most people on Wall Street don’t save.

Scheiner said he spends about $500 a month to park one of his two Audis in a garage and at least $7,500 a year each for memberships at the Trump National Golf Club in Westchester and a gun club in upstate New York. A labradoodle named Zelda and a rescued bichon frise, Duke, cost $17,000 a year, including food, health care, boarding and a daily dog-walker who charges $17 each per outing, he said.

He described a feeling of “malaise” and a “paralysis that does not allow one to believe that generally things are going to get better,” listing geopolitical hot spots such as Iran and low interest rates that have been “artificially manipulated” by the Federal Reserve.

Poly Prep

The malaise is shared by Schiff, the New York-based marketing director for Euro Pacific Capital, where his brother is CEO. His family rents the lower duplex of a brownstone in Cobble Hill, where his two children share a room. His 10-year- old daughter is a student at $32,000-a-year Poly Prep Country Day School in Brooklyn. His son, 7, will apply in a few years.

“I can’t imagine what I’m going to do,” Schiff said. “I’m crammed into 1,200 square feet. I don’t have a dishwasher. We do all our dishes by hand.”

He wants 1,800 square feet -- “a room for each kid, three bedrooms, maybe four,” he said. “Imagine four bedrooms. You have the luxury of a guest room, how crazy is that?”

Summer Rentals

The family rents a three-bedroom summer house in Connecticut and will go there again this year for one month instead of four. Schiff said he brings home less than $200,000 after taxes, health-insurance and 401(k) contributions.

“I wouldn’t want to whine,” Schiff said. “All I want is the stuff that I always thought, growing up, that successful parents had.”
Imagine the Stress

  • Imagine the stress of renting a three-bedroom summer home for only one month instead of four.
  • Imagine the stress of only making $350,000 pre-tax 
  • Imagine the stress of making a mere $200,000 after tax and IRA contributions, and having to wash dishes by hand
  • Imagine the stress of being able to send your kids to the $32,000-a-year for the Poly Prep Country Day School in Brooklyn

Imagine the stress knowing full well that none of the above is enough, yet not being able to whine about it.

“I wouldn’t want to whine,” Schiff said. “All I want is the stuff that I always thought, growing up, that successful parents had.”

This is more than nauseating, so if you need to excuse yourself to take care of matters, please do so now.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Charging for a Right

Once again, Rahm and the other gun grabbers direct their attention in the wrong direction and happen to run afoul of Constitutional guarantees in the process:
  • Mayor Rahm Emanuel’s legislation to require handguns to be registered in Illinois cleared a House committee today, and the bill’s sponsor said he plans to lower the proposed fee per gun to $20 from the current level of $65.

    Sponsoring Rep. Will Davis said the proposal will help keep better track of who has handguns, but gun rights advocates compared paying a fee to a poll tax.

And why would you have to keep track of who has handguns? It isn't the law abiding who are running around shooting people unless it's in legitimate self defense situations, and we just don't see the gang bangers running to register their guns so the government can keep track of them.

Head over to the right hand link bar and join the NRA and the ISRA today to ensure you don't have to pay for a Right guaranteed by the Constitution.

Rahm v Schools Gets Ugly

It's nice to see someone giving it to Rahm as much as Rahm dishes it out:
  • Mayor Rahm Emanuel said Tuesday there's no truth to the contention made earlier this week that he'd given up on 25 percent of Chicago's students and said his actions speak louder than words.

    [...] In a sit-down interview with NBC Chicago earlier this week, Chicago Teachers Union President Karen Lewis recalled a conversation she had with then Mayor-elect Emanuel.

    "In that conversation, he did say to me that 25 percent of the students in this city are never going to be anything, never going to amount to anything and he was never going to throw money at them," Lewis said Monday.

Knowing Rahm's history in Washington DC and Lewis' contention that Rahm motherfucked her in a private meeting, we have no doubt that Rahm said something, if not exactly, then pretty near what Lewis is claiming. Rahm cares only about himself, his next move and what it takes to get to the next spot. And if that means writing off 25% of the Chicago Public Schools student body, then he'll do it.

Actually, we're surprised it's only 25% he'd write off seeing as how Rahm would gladly see 100% of the teachers union disbanded and 100% of the coppers unequipped for G-8 and 100% of firefighters eating cat food after they retire.

More Gang Politics

Chicago Magazine follows up their previous article about the "Unholy Alliance" of gangs and politicians with another piece about the "Prisoner Shuffle" that shows how politicos wield their power to get gun, drug and homicide offenders better accommodations in prison and even transfers to prisons closer to home - and their bases of operations:
  • Among the perquisites of political power, state lawmakers can use their legislative offices to make inquiries with the Illinois Department of Corrections on behalf of inmates who want to be moved to other prisons.

    While many inquiries in support of transfers are legitimate—perhaps a well-behaved inmate wants to be closer to a sick or elderly family member who can’t travel long distances—several gang members and politicians we interviewed say that the perk is sometimes misused as a valuable favor that legislators offer gang leaders in exchange for their help.

And the authors name names - the usual suspects like "reverend" Meeks, Monique Davis and even a Chicago cop Ed Acevedo. Truly embarrassing revelations - but none of these politicians have any sense of shame.

Another Black Eye

  • A Chicago Police officer falsely reported a raucous bar fight so he could avoid a possible DUI arrest and flee the scene in northwest suburban Niles, Cook County prosecutors said Wednesday.
This occurred in November of 2010 and is just now being prosecuted? And in the intervening time, this softball racked up another DUI in September of 2011 and plead guilty?

Why does the Department keep hiring, hiding and protecting people that are only going to embarrass the rest of us somewhere down the road?

Gold Plunges Over $100; Some Blame Bernanke; What Did He Say? Nothing (However, I have 5 Different Interpretations of Nothing)

It was a wild ride in gold today with a top to bottom over $100 as show in the following chart.



Some Blame Bernanke For "Committing to Nothing"

Bloomberg reports Gold Falls in ’Manic’ Plunge as Bernanke Damps Stimulus Bets
Gold futures fell as much as $100 to below $1,700 an ounce on signs that that the Federal Reserve will refrain from offering more monetary stimulus to bolster the U.S. economy.

In testimony before Congress today, Fed Chairman Ben S. Bernanke gave no signal that the central bank will take new steps to boost liquidity.

“People were expecting that the Fed would loosen policies, even if the perception is that the economy is doing well,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in a telephone interview. “The investor sentiment changed as the Fed committed to nothing. This is the manic nature of the market.”
Bernanke Hints at More QE

In video commentary Fox News says Bernanke Hints at More Quantitative Easing

Hints at More QE? Really? How about this interpretation?

Door is Open, But Not For A While

The Wall Street Journal reports Comex Gold Tumbles On Bernanke Testimony.
"Bernanke's comments to Congress left the door open for more QE," said Steve Scacalossi, a director of precious metals with TD Securities, in a note. "But his statements that employment is recovering at a better than expected rate implies that if QE is coming, it won't be for a while."
QE Increasingly Improbable

The LA Times says Bernanke's testimony in Congress pushes down gold, silver prices
Federal Reserve Chairman Ben S. Bernanke's words carried a great deal of weight in the commodity markets — so much so that they squashed the prices of gold and silver.

Bernanke told Congress that the U.S. economy was probably headed for modest growth this year, adding that the current increase in oil and gas prices probably would reverse before sparking long-term inflation.

The presentation Wednesday signaled to many investors that the Fed's embarking on another round of quantitative easing was an increasingly improbable scenario.

"When Bernanke didn't mention the possibility of another round of monetization, that was enough to take the fizz out of everything," said independent commodities analyst Dennis Gartman. "Before today, gold was looking quite strong, but today it just gave up the ghost."
Overall Dovish Undertones With Markedly Less-Dovish Testimony

Yahoo! Finance reports Euro Tanks, U.S. Dollar Surges on Bernanke Testimony
Federal Reserve Chairman Ben Bernanke was on Capitol Hill today testifying in front of the Committee on Financial Services. Despite overall dovish undertones, the chairman’s testimony was markedly less-dovish than recent Federal Reserve communiqués, boosting the U.S. Dollar across the board.
Bernanke's Actual Testimony

Please consider Semiannual Monetary Policy Report to the Congress, Testimony by Ben Bernanke.

A quick sscan shows Bernanke did not mention the word "quantitative" once. The Only reference to "easing" was in relation to constraints on motor vehicle parts in Japan related to the earthquake.

Bernanke did say growth would be close to or somewhat above second half of last year but "fundamentals that support spending continue to be weak". More specifically the Fed forecasts "2.2 to 2.7 percent, considerably lower than the projections they made last June"

He also said "housing affordability has increased dramatically" but "potential buyers lack the down payment ... others are reluctant to buy a house now because of concerns about their income"

In regards to unemployment, Bernanke said "With output growth in 2012 projected to remain close to its longer-run trend, participants did not anticipate further substantial declines in the unemployment rate over the course of this year. Looking beyond this year, FOMC participants expect the unemployment rate to continue to edge down only slowly toward levels consistent with the Committee's statutory mandate."

That's "markedly less dovish"? Really?

What does that mean for QE?

Nothing. That's what.

People can and did read into Bernanke's testimony what they wanted to hear. Others judged the market reaction, and wrote a corresponding explanation to fit.

One thing's for certain, that was hardly an upbeat assessment of the economy especially in light of the statement that "global financial markets posed significant downside risks".

Here's the deal. If the economy tanks the Fed is likely to do another round of QE. The same holds true for another LTRO by the ECB.

By the way, a couple of the links above came via email from Pater Tenebrarum at the Acting Man Blog, who in turn got them from Lance Lewis. Thanks!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Economy Grew 3.0% Annualized, Faster Than Expected in 4th Quarter; Or Did It?

Reuters reports Economy grew faster than expected in fourth quarter
Gross domestic product expanded at a 3 percent annual rate, the quickest pace since the second quarter of 2010, the Commerce Department said on Wednesday in its second estimate.

The reading, which was up from the 2.8 percent pace the government reported last month and reflected modest upward revisions to almost all components of GDP, added to the recent run of fairly upbeat economic reports.

Consumer spending, which accounts for about 70 percent of U.S. economic activity, was raised to a 2.1 percent rate of increase from 2 percent. At the same time, growth of real disposable income was revised up to a 1.4 percent rate from 0.8 percent.

"Consumers are spending from rising income rather than digging into their savings to spend," said Shulyatyeva.

Business investment in capital goods was lifted to a 2.8 percent pace from 1.7 percent, but still weak compared to the recent trend. Outlays on home building were firmer than previously estimated, while investment on nonresidential structures was modestly weak.

While a rebuilding of inventories added a hefty 1.88 percentage points to GDP in the last quarter, the increase was revised down to $54.3 billion from $56.0 billion.

"The large boost to GDP growth from stock building in the fourth quarter is unlikely to be repeated in first quarter but the household accounts provide a much more encouraging backdrop for consumer spending," said Peter Newland, a senior economist at Barclays Capital.

Excluding inventories, the economy grew at a 1.1 percent rate, rather than the 0.8 percent initially reported. That was still a sharp step-down from the prior period's 3.2 percent pace.

The report also showed exports were not as strong as previously thought, but imports are also not growing strongly, leaving a smaller trade gap that was less of a drag on growth.

It also showed still moderate inflation pressures, though a

price index for personal spending rose at a 1.2 percent rate instead of 0.7 percent.
GDP Price Indices 

The rise in income is nice but excluding the inventory correction, the rise in GDP was anemic.

Moreover, please note Excel Spreadsheet Table 4.--Price Indexes for Gross Domestic Product and Related Measures: Percent Change From Preceding Period in the BEA's GDP Report.



My friend BC Writes
Does anyone actually believe prices decelerated at a 70% quarterly annualized rate in Q4?

Had the trend rate of the deflator held from Q1-Q3, annualized real GDP for Q4 would be 1.3% instead of 3%, 1.2% yoy, and a slight contraction q-q for real final sales and barely 1% yoy (historically recessionary).

It would not surprise me were the NBER in 3 quarters or more to date a recession as having begun in Q1 '12 after the economy stalled in Q4 '11.

BTW, the Treasury withholding receipts from Jan. to Feb. indicate a contraction in employment, which fits with Gallup's self-reported employment survey.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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World Bank Warns of Economic Crisis in China; Only 3% Growth for Decade Says Michael Pettis

A World Bank report to be released next week warns of an economic crisis in China unless state-run firms are scaled back. The Wall Street Journal discusses the report in New Push for Reform in China
An exclusive preview of an economic report on China, prepared by the World Bank and government insiders considered to have the ear of the nation's leaders, offers a surprising prescription: China could face an economic crisis unless it implements deep reforms, including scaling back its vast state-owned enterprises and making them operate more like commercial firms.

"China 2030," a report set to be released Monday by the bank and a Chinese government think tank, addresses some of China's most politically sensitive economic issues, according to a half-dozen individuals involved in preparing and reviewing it.

The report warns that China's growth is in danger of decelerating rapidly and without much warning. That is what has occurred with other highflying developing countries, such as Brazil and Mexico, once they reached a certain income level, a phenomenon that economists call the "middle-income trap." A sharp slowdown could deepen problems in the Chinese banking sector and elsewhere, the report warns, and could prompt a crisis, according to those involved with the project.

It recommends that state-owned firms be overseen by asset-management firms, say those involved in the report. It also urges China to overhaul local government finances and promote competition and entrepreneurship.
China's Difficult Transition From an Unsustainable Growth Model

Peak oil, a housing bubble, bad debts and over-reliance on investments with no genuine economic feasibility guarantee China's current boom is not sustainable. China bulls are in for a ride awakening when various bubbles pop.

As for recommendations, the report  proposes a sharp increase in the dividends that state companies pay their owner (the government) in order to boost revenue and pay for new social programs.

Does China need to increase competition, break apart, and privatize the state-owned monopolies?
Or should China simply increase the dividends?

I vote for the former as does Michael Pettis at China Financial Markets.

Via email, Pettis says:
The report is good as far as it goes, but it doesn’t go far enough. Of course increasing SOE dividends to the government for use in social programs will transfer wealth from the state sector to the household sector, but if the total profitability of the SOE sector is less than one-fifth to one-eighth of the direct and indirect subsidies transferred from the household sector, as I have argued many times, then even 100% dividends is not enough to slow the transfer significantly, and remember the transfers have to be reversed, not merely slowed. This proposal falls in the better-than-nothing category, but just.

What we really need are much more dramatic transfers, for example wholesale selling of assets, with the money used either to clean up bad loans or delivered directly to households. According to the article, however, “neither the World Bank nor the DRC proposed privatizing the state-owned firms, figuring that was politically unacceptable.”

This is the problem. The best solution for China, economically, seems to be off limits because it will be politically difficult. In that case the second best solution, a gradual build-up of government debt as growth slows for many years, is the most likely outcome.

And how much will growth slow? The World Bank report apparently doesn’t say, but the consensus has been slowly moving down towards 5-6% annual growth over the next few years.

That’s better than the crazy numbers of 8-9% most analysts were predicting even two years ago (and some still are), but it is still too high. GDP growth rates will slow a lot more than that. I still maintain that average growth in this decade will barely break 3%. It will take, however, at least another two or three years before a number this low falls within the consensus range.

And by the way when it does, metal prices should fall sharply. Copper prices have done reasonably well in the past few months as Chinese buyers have restocked, as we suggested might happen to our clients last fall. With the recent easing we may see more strength in copper over the next month or so, but I have little doubt that within two or three years copper prices are going to be a whole lot lower than they are today. Chinese investment demand simply cannot hold up much longer.
Sad State of Political Acceptability

The report makes feeble recommendations to ensure the proposals are "politically correct". This is a bad practice for three reasons.

  1. You only damage your own credibility
  2. You presume perhaps incorrectly what is politically acceptable
  3. You plant false hope that incorrect solutions will work, when it's clear they will not

It would be far better list the alternatives and the limitations of those alternatives, then provide an honest assessment rather than assume something cannot be done. Unfortunately, telling people what they want and expect to hear is the sad state of political pandering everywhere.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Lieutenant Sounds Off

  • When we went through the police academy, we all had some senior police officer tell us “Kid – this job ain’t what it used to be.” Well,it ain’t. No matter when you came on the job, it is never the same as it used to be and it never will be. However, some things do stay the same.

    My father told me that when he entered the Chicago Police Academy in September of 1938, he heard this same saying from his instructors. Now, as I enter my thirtieth year as a Chicago police officer, proudly wearing my father‘s Lieutenant’s star number, I find myself saying exactly the same thing to the young kids working for me.

    In August of 1968 after the Democratic Convention, the Chicago Police were vilified by the media across the country as thugs and the enemy. The Chicago police officers at the convention were ordered there. They did not freely choose to be there like the demonstrators who attended the battle on Michigan Avenue. The officers were there doing their duty. Politicians and officials called for federal indictments against the police. Eight Chicago police officers were charged with civil rights violations and 41 officers were disciplined after an internal police investigation. Oh, yeah and by the way, 119 police officers were injured during the convention. That part never seems to get mentioned.

History repeating.

UPDATE: To the reading challenged, we are deleting references to "13 years." If you read carefully, you can see it says "30th." Also, the grammar police posts are getting annoying so we're deleting them, too.

Anyone Else Feel This Way?

We're led by fools, idiots and morons:

Thanks to our west side readers for this one.

Did You Vote?

Early voting opened up this week. There really isn't any excuse to miss adding your voice to the mix - it's almost impossible to make it any easier to vote, yet so many people don't bother.

Get out there and do it if you're registered. If you aren't registered, well, that one is on you.

Sharpen the Mower: Spain Needs Triple the Budget Cuts and Tax Hikes to Meet EMU Imposed Budget Targets

Conditions in Spain have deteriorated at a rapid pace. As little as a few months ago the Spanish economy was foolishly projected to grow at .7%. Now it expected to contract 1%.

Likewise, Spain's budget deficit was supposed to shrink to 6% in 2011 and 4.4% in 2012. Instead it rose to 8.51 percent in 2011, up from a revised estimate of 8.2% which was up from a revised estimate of 6.5%.

I think you can see a clear pattern here and as a result, the EU Commission Pressures Spain for Explanations.
Spain must explain soon to the European Commission why its 2011 budget deficit was substantially higher than expected and deliver clear future budget plans, the Commission said on Tuesday.

Spain's 2011 budget deficit came to 8.51 percent of GDP, the finance minister said on Monday, up from early estimates of 8.2 percent and far above forecasts from the Commission for something nearer 6.5 percent.

"We need to understand the causes of this significant slippage," Commission spokesman Olivier Bailly told a regular briefing in Brussels.

Spain will have to come up with more than 40 billion euros in savings to meet that target, implying spending cuts that most economists see as impossible given that the economy is already slipping into recession and the jobless rate is the highest in the European Union at 23 percent.

Bailly said Spain also needed to deliver its 2012 budget estimates in the coming weeks, not at the end of March, saying the task in hand was so great it could not be delayed.
Sharpen the Mower

My friend Bran notes that Spain now needs to come up with another 30 billion Euros in budget cuts on top of the 15 billion promised. Moreover, those cuts need to be spread out over 9 months, not 12.

This set of facts prompted the Spanish Gurus Blog to write Sharpen the mower. Spain's deficit exceeds 90 billion euros.
Specifically, Spain's budget deficit is 91.3 billion euros, 8.51% of GDP. So it should not take a wizard to realize the simple mathematical fact that team Rajoy has not yet begun with budget cuts and tax increases, if by 2012 Spain is to meet the 4.4% of GDP deficit target set by creditors.

The measures announced in December were only an appetizer. Instead of sharpening the blades, I think a good lawn mower would be more practical.

The announced cuts and tax increases of last December (income tax, capital gains), are expected to generate about 14,900 million.

To meet the objective of a 4.4% deficit, in 2012 the government deficit should not exceed 46,500 million euros.

To do so requires a nearly 30 billion euros hole to be filled, with the aggravating circumstance that it's now March and those 30 billion euros need to come in the next 9 months.

This figure is double the cuts and tax increases approved last December. So Rajoy has quite imagination if he expects this to happen.
I modified that translation substantially, but I am pretty sure I have it accurate. Spain's unemployment is already 22.9%. What pray tell would another 30 billion in cuts or tax hikes do to that number?

By the way, to go from 15 to 45 is tripling (not doubling) the tax hikes and cuts.

Many structural reforms pertaining to jobs and work rules are quite necessary. The accompanying tax hikes are not and the Spanish economy is poised to implode as a result.

Not to worry, EU commissioner Jean-Claude Juncker promises to "examine the situation with calm and serenity".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Damn the Voters, Full Bailouts (and Existing Policies) Ahead

What's "too complicated" for France is not "too complicated" for Ireland. The Financial Times reports Ireland calls vote on European treaty
Dublin will hold a referendum on the eurozone fiscal treaty, plunging Europe into months of uncertainty and potentially placing a question mark over Ireland’s future membership of the euro.

Enda Kenny, Ireland’s prime minister, said on Tuesday that the government had decided to hold a referendum following advice supplied by the attorney-general that “on balance” the Irish constitution required the treaty to be put to a vote.

He said he would sign the treaty at a European Union summit on Friday and within a matter of weeks the government would organise a referendum commission – an independent body appointed to explain the subject matter of a referendum to the public.

An opinion poll last month found 73 per cent of the public felt a vote should be held on the treaty, which would tighten budget rules for the 17 countries sharing the euro. Some 40 per cent of the 1,000 people questioned in the Sunday Business Post/Red C poll said they would support the treaty, 36 per cent were opposed and 24 per cent were undecided.

The government’s decision to hold a referendum follows a threat by the Sinn Féin party to challenge in the Supreme Court any decision not to give the public a say. Irish officials have privately acknowledged it would be more difficult to win a referendum if the government was seen to have been forced to hold a vote by the Irish courts.

The Irish public have twice rejected EU treaties, only to approve them in second referendums. In 2008 the Lisbon treaty was rejected only to be approved in a second referendum held 18 months later.
Logic of Signing a Treaty then Voting on It

In the real world it makes no sense to sign a treaty then vote on it. In the political world it is a way of telling voters their wishes do not matter, that politicians will hold a referendum as many times as it takes to get a treaty signed.

In a massive landslide, Irish voters swept out Ireland's previous prime minister, only to have Enda Kenny come along and do the exact same things as the politician he replaced.

US Budgets and Bailouts

That is exactly what happened in the US 2008 presidential elections as well. Obama carried out the same bailout policies and the same war mongering policies as Bush.

There is plenty of rhetoric for change, just no real change that anyone can see. Both sides want to do something about the budget, neither side does.

Obama wants to close corporate tax loopholes, then just a few days ago proposed a new set of loopholes for manufacturing, just as Santorum and Romney have proposed. The net result would be an increase in the budget deficit.

There are differences between the parties on social issues, but nothing happens there but hot air.

Romney vs. Obama What's the Difference?

Not your grandfather’s Republican Party; President Obama and Mitt Romney are Nearly One and the Same!


Obama Seeks to Prove He is More Like Romney; Obama vs. Romney - What's the Difference?

Germany Bailouts

Voter sentiment in Germany is overwhelmingly against giving more money to Greece. So why did Chancellor Angela Merkel ram through more aid for Greece?

The answer as explained many times is all Merkel cares about is her legacy, and that legacy says no country can leave the eurozone. Merkel does not give a damn about what is good for Greece, or what her own constituents want either.

French Promises

French President Nicolas Sarkozy will not hold a referendum claiming it's "too complicated". In reality, Sarkozy knows the referendum would be about him (See Referendum on a Person or on a Treaty?).

Everywhere you look, it's a case of "Damn the Voters, Full Bailouts (and Existing Policies) Ahead". Politicians have decided, things are "too complicated to change". Expect a cornucopia of promises from politicians, just don't expect any real change.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Referendum on a Person or on a Treaty?

Reader Andrea from Italy, but who now lives in France adds some insight into Sarkozy's "Treaty Too Complicated For A Vote" excuse.

Andrea writes ...
Hi Mish,

I can add some more info.

Sarkozy started his presidential campaign pledging to be the "president of the people" and saying he wants to give to the people the power to decide about some issues: particularly he said he is going to propose a referendum about a couple of issues, immigration laws and unemployement benefits. As you can easily imagine, these are "minor" subjects for a referendum, normally dealt by executive power.

So, it is very contradictory that he does not want a referendum about the European Treaty, even more in the light of the fact that in recent years France held two referendums about Europe: one about Euro introduction and another about approval of the European treaty signed in 2006 (possibly as complicated as this one). Clearly he knows the topic is a referendum on his own policies and he wants to avoid this.

Regards,

Andrea
On second thought, the treaty is too complicated (for his own personal good), not too complicated for the good of France.

President of the people? Is there a president (leader) of the people anywhere? Certainly not Germany, Ireland, Greece, Italy, the United States, Australia, Canada, or anywhere else.

I am tired of the endless brutal lies from politicians everywhere. Unfortunately, such lies on both sides of the Atlantic are going to get much worse.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Hoff Gets a New Job

Gee, does this sound like a guy who was ready to quit and enjoy more time with his family?
  • Recently-retired Chicago Fire Commissioner Robert Hoff was hired as a deputy fire chief for the Carol Stream Fire Protection District.

    The district's board of trustees on Monday voted 3 to 2 to hire Hoff, 56, a third-generation hero firefighter for the $115,000-a-year position.

    Hoff had previously indicated that his departure was to spend more time with his family.

The Daily Herald story is here.

Anyone else want to call "bullshit" on the administration's take that Hoff was ready to retire and his going head-to-head with Rahm over manning and safety issues had nothing to do with it?

The Seattle Template

  • Nobody’s ready to start talking about the "mean streets" of Seattle. But an alarming spike in street violence in this usually mellow city has everyone running scared. Mayor Mike McGinn, calling the increase a “public safety emergency,” pledged Monday to beef up police patrols and urged citizens to help combat lawlessness in their neighborhoods.

    “This is an issue that requires more than just a police response,” McGinn said at a community meeting in the city’s hard-hit Rainier Beach neighborhood, one of several hit by killings this year. Many of the nine slayings so far this year remain unsolved.

    “I cannot emphasize enough that our response to crime and safety in our communities is dependent upon a very strong partnership between city government and the community,” he said. “Everyone who lives here, who works here, who shops here, and who comes here to enjoy what Seattle has to offer deserves to feel safe and secure.”

Gee, nine murders? Around here, we call that "Englewood."

But seriously, even the language reads the sale as what we were hearing after the downtown wildings the media refused to cover for months. We have a feeling this "public safety emergency" is a phrase that might be seen a lot this summer.

2012 v 2011

January 2012 started with a bang. Actually a bunch of bang-bangs and the homicide rate shot up some 44% as compared to January 2011.

We pointed out that Sneed was carrying water for the department and the Rahm administration by reporting that the homicide rate has slowed to a mere 9% increase in mid-February.

Now comes word that the February 2012 numbers have surpassed the February 2011 numbers in homicides and aggravated batteries...whoops, we mean murders and shootings, so everything from this point forward in February is bonus territory.

And a warm week is on tap for the start of March.

Technical Notes

We've seen the questions about posts with over 200 comments - why do the oldest comments disappear and the comment section fail to have the "view older comment" button as in the past?
  • We have no idea and have been in contact with the blogger help staff to see if this is a problem unique to SCC or across the blogger network. No answer is forthcoming at this time.

We also saw a complaint about the new comment format.

  • It seem blogger has made some changes to their templates and again, we have nothing to do with it. We're haven't changed any of our template settings in over 6 years now, but blogger keeps upgrading and changing things. Some of it we can decline. Some we can't. It's a free service, so we can't really bitch about it.
Comments closed here for now.

Holiday to be Canceled?

Hot rumor:
  • heard a Rumor that more ways to save money are on the way. Logic is if it doesn't exist why have a payed holiday for it. Talking about CAPS, heard that the city is using the same logic they applied to watch commanders. Call it something else and then you don't have to pay for the old title.

We're actually surprised this hasn't popped up more frequently. Thirteen holidays is quite a bit...at least one or two more than most city departments, and the CAPS holiday is pretty much a big fat target for Rahm and the administration.

That being said, it's still a part of the contract and must be negotiated over. Rahm can't just take things away, no matter what he wants to do. We fully expect this to be part of the "austerity cuts" proposed this summer and it could be a winner for Rahm. Maybe if we headed the city off at the pass? Suggest a holiday cut for something substantial in negotiations and then a public push for how reasonable we're being in the face of Rahm's proposed cuts to the bone? We certainly need to be seen as more proactive and a willing partner in negotiations. Just saying "no" to Rahm isn't going to fly in this atmosphere. Rahm controls the media and plays everyone against each other. Time to take a page out of his book.

What Sides You Want With That?

  • A rooster with a broken wing that was rescued after causing a brief interruption to Blue Line service overnight in the Logan Square neighborhood has to be euthanized, authorities said.

    It wasn’t known how the animal got onto the northbound tracks at the Logan Square subway station, but power was turned off at 12:14 a.m., according to CTA spokeswoman Catherine Hosinski. The stop is located at 2620 N. Milwaukee Ave.

    Chicago Police and personnel from the city’s Dept. of Animal Care and Control were summoned to the scene to assist it off the track and 12 minutes later, the service was restored, Hosinski said.

    Animal control executive director Cherie Travis said the bird suffered a broken wing.

    “Unfortunately, the vet examined the rooster and determined that he has a broke wing and will be euthanized,’’ said Travis.

And eaten, we hope. Otherwise it's just going to sit in the morgue on a tray with the rest of the dead bodies.

Sarkozy Breaks Campaign Pledge, Says Treaty Too Complicated For A Vote

French president Nicolas Sarkozy is campaigning on a pledge to consult people directly on "significant issues". However, despite trailing in polls, Sarkozy refuses to agree to referendum on EU fiscal treaty.
Mr Sarkozy, who is trailing the socialist François Hollande in opinion polls seven weeks before the presidential election, came under pressure to promise a referendum on the pact after he pledged to consult the people directly on significant issues if re-elected.

“No,” he replied when asked on French radio yesterday if he would put the treaty to a public ballot. “If you’re dealing with a treaty with 200 articles, 250 articles, I can’t see how you’d formulate a clear question.”

The French electoral calendar means the treaty cannot be passed by parliament until after the election. Mr Hollande has said he will seek to renegotiate parts of the deal if he wins, a move that has been criticised by Mr Sarkozy and German Chancellor Angela Merkel.

Arnaud Montebourg, a prominent party figure who came third in the presidential primary last autumn and has been campaigning for Mr Hollande, went further than the candidate by predicting the treaty “will never be ratified”.

Mr Montebourg said a left-wing majority in France would never vote for the pact, while there was “not a majority” in favour of it in Ireland, the UK or other European countries. “The ‘Merkozy’ treaty would inflict austerity on all of Europe and plunge us dangerously into recession,” he said.
Too Complicated To Form a Clear Question?

Sarkozy says "I can’t see how you’d formulate a clear question.

Mish Attempt to Formulate Clear Question For Voters

  1. Punch Yes to Approve Treaty
  2. Punch No to Disapprove Treaty

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Capital Flight From Italy, Greece, Portugal Accelerates; Two Trillion Fantasy; Merkel Weaker Every Week; Crude and Geopolitical Risks

Via Email, here is a nice summary of European events from Steen Jakobsen at Saxo Bank in Denmark. Topics include the G20 Summit, Extend-and-Pretend Dogma, Capital Flight , and Geopolitical Risks.

Steen Writes ...
Two Trillion Fantasy

This week-end's G-20 came and went without any real new information. Yes, the policy makers wants us to believe ultimately IMF will have 2 trillion US dollars at its disposal.

No, the US, UK and rest of non-Europe is not really interested before we all get more clarification on how Europe will ring fence the debt crisis.

This is more and more Wall Street vs. Main Street: Underfunded banks buys underfunded government bonds and underfunded governments guarantees underfunded banks.

The real loser being the unemployed - Edward Heath put it more elegantly: Unemployment is of vital importance, particularly to the unemployed.

Meanwhile the real economy and unemployment is exploding higher adding further burdens to already stretched government deficits.

The new EU forecast for GDP growth in 2012 of minus .3% from this past Friday down from plus .05% is great example of how EU and the debt crisis non-solutions continues to lack behind fundamentals. Soon the rising disconnect will hit the politicians games of buying time.

Capital Flight



Merkel Weaker Every Week

Chancellor Merkel is weaker, week after week. She soon will have to rely on SPD votes if she continues down this path. 62 percent polled over weekend are against giving more money to Greece and 2/3 don't believe Greece can be saved according to German newspaper Bild.

Finland will have an interesting vote this week. Follow it closely.

The G20 did not give more credibility to more funds but they sure talked the talk of extend-and-pretend dogma.

Geopolitical Risks

Crude: We are potentially a few weeks from some sort of confrontation unfortunately. IEA report from Iran is due this week. Israel's time window is closing if you believe the media coming out of Israel. Iran's finances are running out of time as well. Iran failed to pay for Indian rice last week.

High energy prices will soon spill-over into gasoline and survey data and will start to impact data and sentiment negatively.

Greece Controlled Default: Greece will have a controlled default and a vacation from Europe.

Portugal CDS Spreads: Portugal is the real issue and containment is almost impossible. CDS spreads suggest the probability of default within five years is about 65 percent.

Nice money printing week,
Steen Jakobsen
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Cop Shot - Non Life Threatening

  • A Chicago police officer was shot and wounded in the foot this morning following a miles-long pursuit that ended near Rainbow Beach on the city's lakefront, officials said.

    The unidentified officer was taken to Advocate Christ Medical Center in Oak Lawn with non-serious injuries, said a police source, who asked not to be identified.

    A Chicago police spokesman had no details on the shooting.

Two in custody. And surprise surprise! It started in Englewood.

Mathematical Case for Brokered Convention; How Ron Paul Can Throw a Big Wrench Into Romney's Campaign

There are 2,286 republican delegates. It takes 1,144 delegates to win the Republication nomination. With four candidates remaining, many are wondering about the likelihood of a brokered convention where no candidate wins in the first round.

Conventional wisdom suggests there will not be a brokered convention. From where I sit, one is increasingly likely.

Following is a table of delegates won so far (totals from Real Clear Politics Delegate Count), plus my projections of all primaries and caucuses through Super-Tuesday on March 6 (based on recent polls).

StatePrimaryCountRomneySantorumGingrichPaul
Total to Date-24399473220
IowaJan 3286700
New HampshireJan 1012*7003
South CarolinaJan 212520230
FloridaJan 3150*50000
NevadaFeb 42814365
MinnesotaFeb 74021714
ColoradoFeb 73691721
MaineFeb 11249307
MichiganFeb 2830*131124
ArizonaFeb 282929000
WashingtonMar 343131758
GeorgiaMar 6761922278
OhioMar 6661927137
TennesseeMar 6581625710
VirginiaMar 64949000
OklahomaMar 643111895
MassachusettsMar 64128823
IdahoMar 63232000
North DakotaMar 628101233
AlaskaMar 627101133
VermontMar 61711411
Super Tuesday EstMar 678235920210472
If Paul Wins IdahoMar 6782327202104104

* States penalized half of their delegates.

Thru Super-Tuesday Scenarios
Romney 359 Others 423 (Romney wins Idaho)
Romney 327 Others 455 (Romney loses Idaho)

Notes

  1. I assigned delegates by expected percentages based on recent polls except in winner-take-all setups. All state delegates were assigned to the above four candidates.
  2. In no instance did I assume Romney would do worse than his most recent polls. In several instances I bumped up Romney's poll percentages substantially.
  3. Points one and two were not done to favor Romney per se, but rather to to give a modest boost to the prevailing idea there would not be a brokered convention.

Michigan Prediction

30 Delegates
Percent: Romney-40% Santorum-35% Gingrich-8% Paul-12%
Delegates: Romney-13 Santorum-11 Gingrich-2 Paul-4
Real Clear Politics Michigan Primary Poll

Arizona Prediction
29 Delegates
Arizona is "Winner Take All"
Romney wins all 29 Delegates
Real Clear Politics Arizona Primary Poll

Washington Prediction
43 Delegates
Percent: Romney-30% Santorum-38% Gingrich-12% Paul-17%
Delegates: Romney-13 Santorum-17 Gingrich-5 Paul-8
Real Clear Politics Washington Caucus Poll

Georgia Prediction
76 Delegates
Percent: Romney-24% Santorum-26% Gingrich-33% Paul-10%
Delegates: Romney-19 Santorum-22 Gingrich-27 Paul-8
Real Clear Politics Super Tuesday Poll (Georgia, Ohio,  Oklahoma, Massachusetts, Vermont)

Ohio Prediction
66 Delegates
Percent: Romney-26% Santorum-38% Gingrich-19% Paul-10%
Delegates: Romney-19 Santorum-27 Gingrich-13 Paul-7

Tennessee Prediction
58 Delegates
Percent: Romney-26% Santorum-40% Gingrich-12% Paul-16%
Delegates: Romney-16 Santorum-25 Gingrich-7 Paul-10
Vanderbilt University Tennessee Primary Survey

Virginia Prediction
49 Delegates
Romney wins all 49 Virginia delegates.
Virginia has a proportional allocation with a twist. Should any candidate take 50% in a district, the candidate will all votes in the district. In a display of complete ineptitude, Santorum and Gingrich failed to collect and turn in enough signatures on time and are not on the ballot. Romney is currently polling about 53% and Paul 23%, but Paul can only win delegates if he outright wins a district.

Oklahoma Prediction
43 Delegates
Percent: Romney-23% Santorum-42% Gingrich-20% Paul-9%
Delegates: Romney-11 Santorum-18 Gingrich-9 Paul-5

Massachusetts Prediction
41 Delegates
Percent: Romney-64% Santorum-16% Gingrich-6% Paul-8%
Delegates: Romney-28 Santorum-8 Gingrich-2 Paul-3

Idaho Prediction
32 Delegates
Romney wins all 32 Idaho delegates
January Straw Poll Results Romney-34% Santorum-10% Gingrich-12% Paul-43%
February Straw Poll Results Romney-45.4% Paul 42.7%

A third straw poll will be held March 1-3 and my answer may change based on the results of that poll.

Ron Paul or Mitt Romney will likely take all of the delegates based on the explanation below. Whether or not Paul or Romney takes all the votes depends entirely on whether or not Gingrich or Santorum can win any counties which at this time looks doubtful.
Idaho Caucus Explanation:
Voters will go to locations for their county and use ballots or tokens to support a candidate on Tuesday, March 6th. There are five candidates for Idaho voters to choose from and they will keep voting until a winner is selected.

In each round the candidate with the fewest votes or anyone with less than 15% is out of the race. The voting ends at the county level when there is a final vote for two candidates or one has more than 50% of the vote for that county.

The delegates assigned for that county will then represent the winning candidate. Counties will report their winner to the state office in Boise. If one candidate has more than 50% of the vote for all of Idaho, they get all 32 delegates. Otherwise, the candidates split delegates they won in each county
I cannot find any recent polls for North Dakota, Alaska, or Vermont. Romney should do extremely well in Vermont and fair at best in North Dakota and Alaska.

North Dakota Prediction
28 Delegates
Percent: Romney-35% Santorum-40% Gingrich-10% Paul-10%
Delegates: Romney-10 Santorum-12 Gingrich-3 Paul-3

Alaska Prediction
27 Delegates
Percent: Romney-35% Santorum-40% Gingrich-10% Paul-10%
Delegates: Romney-10 Santorum-11 Gingrich-3 Paul-3

Vermont Prediction
17 Delegates
Percent: Romney-64% Santorum-16% Gingrich-6% Paul-8%
Delegates: Romney-11 Santorum-4 Gingrich-1 Paul-1

How Ron Paul Can Throw a Big Wrench Into Romney's Campaign

I purposely bumped up Romney's percentages to see if a brokered convention would still be possible. I also awarded Romney all 32 delegates in Idaho even though that race is a statistical dead-heat with Ron Paul.

If Ron Paul wins Idaho, and the rest of my numbers above are close, the odds of a brokered convention are well above 50 percent in my estimation. There may be a brokered convention anyway, provided Santorum, Paul, and Gingrich stay in to the end.

Fuzzy Math

The New York Times discusses The G.O.P.’s Fuzzy Delegate Math.
There are 2,286 delegates to the Republican National Convention, of which 1,144 are required to clinch a majority. The Web site TheGreenPapers.com, which has extensive information on delegate-selection procedures in each state, divides them into two broad categories, what it calls “hard” and “soft.” Hard delegates are formally bound to a candidate on at least the first ballot at the convention, while soft delegates are not.

Although this is a useful conceptual framework, it probably simplifies things too much. Instead, Republican delegates exist along something of a spectrum between bound and unbound, pledged and unpledged, hard and soft.

Contributing to the confusion is that there are a series of three interrelated ideas about delegates which are often treated as interchangeable, even though they are not:


  • Bound vs. Unbound Delegates. Is the delegate officially bound to a particular candidate on at least the first ballot at the convention?
  •  
  • Pledged vs. Unpledged Delegates. Whether or not she is formally bound to a candidate, will the delegate’s candidate preference be known in advance of the convention and reported upon by the news media?
  •  .
  • Elected vs. Selected Delegates. Was the delegate selected through some relatively direct means, such as based on the popular vote in the state’s primary? Or through some indirect means, like through the series of conventions that often take place in caucus states, and which may not correspond to the popular vote there?



  • Category of Delegates

    Legal Challenges on the Way

    I did not take any of the bound, unbound, super-delegate counts into consideration. However, I was rather generous to Romney in other ways.

    Moreover, there are legal challenges pending in Arizona and Florida. Winner-Take-All primaries are a violation of Republican National  Committee rules if held before April 1. As it stands, Romney 50 Florida delegates and 29 Arizona delegates that could dramatically change the totals.

    Should Romney loses those challenges and also lose Idaho, a brokered convention would be all but certain.

    If Wishes Were Fishes

    If wishes (mine) were fishes, then Ron Paul would win the nomination outright. A more realistic wish is for a brokered convention because Romney, Santorum, and Gingrich are all likely to lose to Obama.

    I believe Paul would defeat Obama although polls don't currently support that idea.

    Republicans Need to Face the Facts

    Of the four candidates, only Ron Paul balances the budget, only Ron Paul wants to stop the war-mongering, only Ron Paul does not alienate the majority of women, only Ron Paul can ignite a fire in independents, and independents (not the radical right), are the key to this election.

    Republicans are not going to vote for Obama so appealing to the far right makes little sense in terms of an overall strategy. Moreover, independents are likely horrified by the war-mongering and misguided statements on religious and social issues of all the candidates but Paul.

    If Republicans lose this election, it will be because they all outdid each other in foolish attempts to appeal to the far right on issues where a huge majority of the population of the US is in the middle.

    Mike "Mish" Shedlock
    http://globaleconomicanalysis.blogspot.com
    Click Here To Scroll Thru My Recent Post List

    Violence Continues

    • One man was killed and two teens were hospitalized after being shot this afternoon in a drive-by shooting in the West Pullman neighborhood on the far South Side, police said.

      But officials said seven others, including four children, were injured in a traffic crash that occurred as paramedics were being dispatched to the shooting, said Chicago Fire Department Chief Joseph Roccasalva.

      Police were called to the 11600 block of South Ada Street shortly after 3:30 p.m., police said.

    Remember, if it didn't happen in 007 or 011, no one at 35th Street cares.

    latin king Runs for Clerk

    Not only does he have a UUW arrest for holding guns for the kings in his background, his family was notorious for running a fake ID ring up and down 26th Street, his father was convicted and faces deportation after his sentence is complete, the building housing the Photo Estudio Munoz burned down under suspicious circumstances, and he has a short temper and is inclined to violence as evidenced on YouTube when citizens confront him.

    Oh yeah, he's also an alderdcreature. Thank goodness he isn't designing city stickers.

    Yet somehow none of that manages to disqualify him for running for higher office:
    • The most prominent Cook County primary race this year is for an office that generally is low-profile: clerk of the Circuit Court.

      Chicago Ald. Ricardo Munoz (22nd), who has been on the City Council since 1993, is challenging three-term incumbent Dorothy Brown, also of Chicago.

      At the heart of the race is what many rank-and-file lawyers privately regard as a scandal: the office’s inefficiency in handling court records and the frequency with which key documents go missing. One Chicago politician jokes that the office is so antiquated that it’s the largest consumer of carbon paper anywhere.

      Both Munoz and Brown claim they can fix those problems.

    Of course, Brown is no prize herself, steeped in Machine politics and with all sorts of mini-scandals surrounding her tenure. But with these two idiots in the mix, is it any wonder Chicago wins the "most corrupt" title hands down?

    Fake Gun

    Completely justified. Too bad they didn't kill him:
    • Police opened fire on but did not strike a 17-year-old who pointed a fake gun at them in a Northwest Side alley Saturday night. The 17-year-old was later found hiding in the area and faces a number of charges, while another male he was with remained at large Sunday.

      About 7:30 p.m. Saturday, officers on patrol in the area saw the two males acting suspiciously in an alley in the 5300 block of North Natoma Avenue, police News Affairs [...] said.

      The two fled as officers came to investigate. At one point, the 17-year-old reportedly turned and aimed a weapon — later discovered to be fake — at the officers. [...] the officers feared their safety and fired shots at the young man, but their bullets did not strike him or his companion.

    Better luck next time.

    Jury Convicts Assailant

    • A hotel manager from Arlington Heights was found guilty of attempting to murder a Chicago Police officer by dragging him from his speeding Mercedes-Benz before pushing him out and running him over with his car near the busy Rush Street nightlife district.

      Cook County jurors also convicted Michael Cacini, 36, of aggravated battery Friday for the April 20, 2010 attack that left Near North District officer Kristopher Rigan with a dislocated shoulder, missing teeth and abrasions to his arms.

      The father of six was also convicted of striking Rigan’s partner Thomas O’Shaughnessy with his vehicle as O’Shaughnessy rushed to his colleague’s aid at 10 West Elm.

    Interestingly, we were also informed of the following:

    • The defense atty in this Attmpt Murder To P.O. case is Sam Amirante. Thought you may find this interesting. Here we have an atty who is the chairman of the board for the Italian American Police Association here in Chicago defending a man accused of trying to murder a policeman .....The Attorney also attends FOP golf outings with the pics on his law office web site to promote it. He even links the police association on his law office web page. This guy is defending murderers and accused cop killers and he is honored at police functions. He most recently received and honor from the Italian Police Association. This is absolutely absurd and wrong on so many levels
    Amirante also participated in the defense of John Wayne Gacy. Anyone else think the FOP and the IAPA ought to rethink their association with someone who plays both sides of the fence?

    019 District Photo

    The latest in a series:
    • 19th District Station Photo

      The 19th District is closing on 3 March 2012. All past and present officers are encouraged to come and get in the closing photograph.

      1 March 2012 @ 1300 hours

      Please spread the word…
    Reach out to the retirees if you know any.

    The Most Interesting Man in the World

    We're flattered:


    We've seen a bunch of these where you can make your own and entertain your friends. Have at it.

    German Interior Minister Says EU "Should Create Incentives for Exit That Greece Cannot Turn Down"; Greece Delays Swap Until March 8

    It is possible if not likely we have to suffer through at least 11 more Groundhog days as Greece sets March 8 deadline for investors in bond swap.
    Greece has set a March 8 deadline for investors to participate in its unprecedented bond swap aimed at sharply reducing its debt burden, according to a document outlining the offer.

    Greece formally launched the bond swap offer to private holders of its bonds on Friday, setting in motion the largest-ever sovereign debt restructuring in the hope of getting its finances back on track.

    In the document, Greece said the March 8 deadline could be extended if needed. Athens in the past has said it wants to conclude the transaction by March 12.
    Interior Minister Says Greece Should Exit Eurozone

    In yet another break in Merkel's ranks, German interior minister Hans-Peter Friedrich says Greece should exit eurozone.
    With German Chancellor Angela Merkel facing a parliamentary vote Monday on a second Greek bailout, her interior minister, Hans-Peter Friedrich came out over the weekend in favour of Greece leaving the eurozone.

    Friedrich told the news magazine Der Spiegel, “I do not mean that Greece should be kicked out of” the 17-nation eurozone, but he said the bloc should “create incentives for an exit that they cannot turn down.”

    Merkel is opposed to Greece leaving the eurozone, and agreed in January with French President Nicolas Sarkozy that Greece should be kept in the monetary union, as long as its government imposes strict budgetary reforms. She expects the Bundestag to approve the second bailout package in a vote Monday.

    Friedrich, of the CSU, the Bavarian sister party to Merkel’s Christian Democrats, is the first member of the federal government to have spoken out suggesting a radical change of course in euro crisis policy.

    “Outside European monetary union, Greece’s chances of regenerating itself and becoming competitive are definitely better than if it remained inside the eurozone,” Friedrich told Der Spiegel.

    Meanwhile, at a meeting of G20 finance ministers and central bankers in Mexico City, German Finance Minister Wolfgang Schäuble said it made “no economic sense” to be “endlessly” pumping money into eurozone rescue funds.
    It should have been obvious Germany wanted Greece out of the Eurozone no later than January 27 when Merkel demanded Greece to Cede Sovereignty to Eurozone "Budget Commissioner".

    Merkel's Official Denial "I will have no part in forcing Greece out of the euro" Should have made it all the more clear on February 7.

    At the same time Schäuble started "Salami Tactics" on German participation (see above link). On February 23, came the Pact With the Devil Over Gold.

    Then on February 23 Troika Demands 38 New Changes in Greek Tax, Spending and Wage Policies in Next 6 Days.

    Finally, at long last, the German Interior Minister came flat out and stated what previously Finance Minister Wolfgang Schäuble only hinted at, and Merkel herself "officially denied". As I have said many times, Merkel's denial is not plausible. She just not does to be on record as the person causing any country to exit the Eurozone.

    Merkel is to be pitied for one of two reasons.

    1. She is so amazingly dense that she cannot see that Greece needs to leave the Eurozone
    2.  
    3. She is so concerned about her legacy that she does not have the honesty and decency to say what she knows is true, and she is willing to further destroy Greece in the process.

    I vote for door number 2.

    Mike "Mish" Shedlock
    http://globaleconomicanalysis.blogspot.com
    Click Here To Scroll Thru My Recent Post List

    A Cry for Help

    • Yipes!

      Police Supt. Garry McCarthy’s plans for enlisting police security for the G-8/NATO summits this spring is so hush-hush, Sneed hears it’s got statewide security agencies in a swivet.

      “It’s almost March and the two summits are in May,” said a top security source. “What’s up?”

      “There is no way Illinois agencies outside Cook County have the manpower to help Chicago without the numbers the New York Police Department could provide,” said another source.

      McCarthy, who has yet to comment on whether he requested help from New York, “has status with them and they have a force of 30,000, twice the size of Chicago’s police force,” said another security source.

      But some plans are under way:

      *Sneed has learned the Chicago Police Department has requested the help of 350 cops from police departments across the state, according to a recent email dispatched by the Illinois Law Enforcement Alarm System.

      *Assistance from Illinois State Police also has been requested, but Sneed hears only about 250 police officers could be spared.

      So how many Chicago cops are needed?

      *It took 4,000 cops to handle the G-8 a few years back in Pittsburgh, which had a police force of less than 1,000 officers.

      *It took at least 2,000-plus cops from outside the Chicago area to help control crowds on election night 2008, when President-elect Barack Obama addressed an excited crowd at Grant Park.

      *Response: “We are assessing our needs as we plan, and that includes the use of in-state and out-of-state sworn personnel,” police spokesman Melissa Stratton said Saturday. “We are not limiting candidates to one state or agency. We don’t have the final footprint for the summits so we won’t be able to finalize the number of sworn personnel we will be utilizing from other agencies until closer to the event.”

      *Meanwhile: Mayor Rahm Emanuel, who is this/close to President Barack Obama, was in Washington midweek to meet with Homeland Security chief Janet Napolitano to discuss Chicago’s upcoming double summit and federal help.

    Everyone keeps says how the CPD "handled" the Obama crowds in 2008 with just 2,000 cops (completely disregarding the widespread, yet unreported, rioting on the west and south sides). Anyone who has studied crowd dynamics knows there is a distinct difference between a crowd out celebrating (although lord knows what they were happy about looking back 3 years) and a mob out looking for trouble, destruction and targets to vent their anger upon.

    Of course, our readers have been bringing this up since the events were announced, but what the hell do they know?

    On Duty Death

    Twenty-five year vet passes of what appears to be a heart attack:
    • A Chicago Police officer suffered a heart attack and died while working in River West Saturday.

      Preston Ross Jr., 48, was in full uniform, working near the CTA Blue Line station at Grand and Milwaukee when he began having problems breathing and collapsed, authorities said.

      A Chicago Fire Department ambulance took the 25-year police veteran to Northwestern Memorial Hospital, where he was pronounced dead at 10 a.m., police spokesman [...] said. A police motorcade later escorted the officer’s body from Northwestern Memorial to the Stein Institute, where an autopsy will be performed.

    Godspeed Officer Ross.

    Shots Fired in 016

    • Chicago police searched for two men who fled after they were involved in an altercation with officers during which shots were fired on the Northwest Side tonight, police said.

      The incident began at about 7:40 p.m. in the alley behind the 5300 block of North Natoma Avenue, police said.

      The men were being questioned by police, and preliminary reports indicated shots were fired by police in the incident but no one was hit, said [...] Police News Affairs.

      A police officer was taken to Resurrection Medical Center with a hand injury, said Chicago Fire Department Chief Joseph Roccasalva. The officer was in good condition.

      [....] A weapon was recovered from the scene, according to police.

    Be very careful out there.

    The Net Draws Tighter

    • The one-time business partner of former Mayor Richard Daley’s son who was ensnared in a federal minority contract investigation has pleaded guilty to lying to the FBI about his failure to disclose two key investors in a sewer company that got city work.

      The two undisclosed investors previously have been identified by the Tribune as the former mayor’s son, Patrick Daley, and the mayor’s nephew, Robert G. Vanecko.

      Anthony Duffy, 47, pleaded guilty Friday to lying to agents when he was queried about his failure to disclose information about two investors on economic disclosure statements he was required to file with the city on behalf of his company, Municipal Sewer Services.

    Gee, a Daley and Venecko involved in some shady deal. Who'd have thunk it?

    Hey Anthony? Save yourself a few years and give up the connected princes.

    Bill to Destroy California Businesses Introduced in Senate; Bill Mandates Employers with 5 or More Employees to Create "Personal Defined Benefit Plan" Managed by CALPers

    The gall, arrogance, and stupidity of public union pandering has reached new heights. A senate bill sponsored by written by Sen. Kevin de León, D-Los Angeles seeks to force businesses with five or more employees to create personal defined benefit plans, managed by CALPers.

    The Sacramento Bee reports California Democrats push pension plan for nongovernment workers
    Senate Bill 1234, written by Sen. Kevin de León, D-Los Angeles, would require businesses with five or more employees to enroll them in a new "Personal Pension" defined benefit program or to offer an alternative employer-sponsored plan.

    The new system's investments would be professionally managed by CalPERS or another contracted organization. Employees would contribute about 3 percent of their wages through a payroll deduction, although they could opt out of the plan.

    The fund would assume much lower investment returns than the 7.75 percent that the California Public Employees' Retirement System says its investments will generate, de León said.

    Steinberg rejected suggestions that Democrats are pushing de León's bill to fend off pressure to enact substantial public pension changes.

    "Absolutely not. We're not running away from it," Steinberg said, calling de León's bill the private sector "bookend" to public pension reform measures he expects lawmakers will send to Brown before the current session ends.
    Pure Insanity

    There is no polite way to put this so I won't. Sen. Kevin de León is clearly a certifiable nutcase.

    Stoctkon and Vallejo California are both bankrupt over insane promises made to public union employees. So is Detroit Michigan, Central Falls Rhode Island, Providence Rhode Island, and Harrisburg Pennsylvania.

    Numerous other cities will eventually be forced to seek bankruptcy. Los Angeles and Oakland are at the top of the list.

    Numerous airlines and GM went bankrupt over defined benefit pension plans.

    De León's bill would bankrupt countless small businesses trapped in its wake.

    Things That Would Happen If Passed

    1. Immediate large-scale firings by small businesses. No small business owner in his right mind would have over four employees. 
    2. Any business that could, would leave the state. 
    3. Many businesses that do stay would be destined to go bankrupt.
    4. California would end up like Detroit or Greece

    States on the Right Path

    The road to reform is 180 degrees opposite. Governor Scott Walker in Wisconsin, Governor John Kasich in Ohio, and Governor Mitch Daniels are on the right path.

    Five Point Road to Reform

    1. End collective bargaining of public unions
    2. Scrap Davis-Bacon and all prevailing wage laws
    3. Scale back existing pension benefit promises via bankruptcy if necessary
    4. Eliminate defined benefit pension plans
    5. Institute national right-to-work laws

    Corruption of America

    The gall, arrogance, and stupidity of Senate bill 1234 sponsored by Sen. Kevin de León, D-Los Angeles, is absolutely stunning.

    Here are a few particularly relevant paragraphs from my post Fatally Flawed Approaches to the Budget Deficit and Taxes; Debt Will Swell Under 3 of 4 Republican Hopefuls' Tax Plans 
    Porter Stansberry wrote a tremendous article on The Corruption of America and how public unions are at the center of it.

    Golden State on road to Greece, by way of Detroit

    Stansberry touched on Detroit in his article and so did the Orange County Register in an editorial Golden State on road to Greece, by way of Detroit

    The Chicago Tribune reported Chicago teachers asking for 30% raises over next 2 years.

    Is that insane or is that insane? The only way to stop such insanity is by ending collective bargaining of public unions, scrapping Davis Bacon and all prevailing wage laws, and instituting national right to work laws.

    Legal Bribery

    As long as public unions, corporations, and lobbyists can bribe legislators with campaign contributions, then bills are going to be written by public unions, corporations, and lobbyists.
    Tax reform alone cannot and will not work. In addition to a balance budget amendment, something must be done to rein in the power of public unions and corporate lobbyists at the center of this mess.

    Ending collective bargaining rights of public unions and passing right-to-work legislation would be a wonderful first step.

    Addendum:

    I missed the words "Employers could make voluntary contributions into the fund." Sorry, but I still don't buy it. This would be the first step towards mandated involuntary contributions. Moreover, maintenance of the plan would cause headaches, and giving money over to CALpers to manage is inane.

    If people want to enter such programs on their own, let them. Mandating businesses offer such plans is another ridiculous burden on all businesses, especially small businesses. Nothing at all stops private companies from offering such plans.

    Who is going to guarantee these benefits anyway, and who will be at risk when the plans fail to meet the goals? The answer today may be one thing, the answer down the road is sure to be taxpayers and businesses.

    Mike "Mish" Shedlock
    http://globaleconomicanalysis.blogspot.com
    Click Here To Scroll Thru My Recent Post List

    160 German Tax Collectors Volunteer to "Help" Greece

    Goodness gracious, how gracious! The German business weekly WirtschaftsWoche reported Saturday that Germany offers to send tax men to Greece
    The German government is prepared to send 160 financial experts to Greece to help the country overhaul its tax collection, the business weekly WirtschaftsWoche reported Saturday.

    Hans Bernhard Beus, deputy finance minister, told the magazine that the tax officials are ready to jump in to help the ailing country. They would need to at least speak English, but about a dozen of the volunteers speak Greek, he said.

    A large number of the volunteers would come from western German state of North Rhine-Westphalia, where state Finance Minister Norbert Walter-Borjans of the centre-left Social Democrats (SPD) told WirtschaftsWoche: “Greece is facing the problems that former East Germany faced in 1990.”

    The central German state of Hesse is also prepared to send in volunteers, the state’s Finance Minister Thomas Schäfer of the conservative Christian Democrats (CDU) said.

    “In helping Greece, we should also entertain the idea of bringing in retired tax collectors, because considerable practical experience could be used here,” he told WirtschaftsWoche.

    In January, the Greek government released a 170-page list of 4,000 tax evaders, who owe the state approximately €15 billion. The Greek government under Prime Minister Lucas Papademos has announced that it will be seriously pursuing tax evaders.
    Is this tax collection help or the beginning of colonization?

    Mike "Mish" Shedlock
    http://globaleconomicanalysis.blogspot.com
    Click Here To Scroll Thru My Recent Post List

    More G8 Rumors (UPDATE)

    If even a quarter of these rumors turn out to be true, we are in for a world of hurt:
    • Rumor today says feds had a meeting and said they needed 6000 officers for 12 hour shifts times 2. ooops we don't have that many!

      Rumor also has heard they need 80 cars and 160 officers for 2 presidential details and 5 dignitary details, that another 80 cars and 160 PO's. oops. where we gonna get them?

      We don't have the MANPOWER as far as I can see. I'm just a dumb day guy with time on the job, but this looks like a disaster.
    Now we're hearing that the FEMA guidelines for large scale events with the potential for disorder are being blatantly ignored by those in charge of planning the Department's response to this event. This would seem to open the door for liability on the part of the city on a bunch of fronts.

    UPDATE: Commentators are saying Second Watch training has been suspended for the time being? Second Watch may not be going downtown after all. Of course, we're somewhere under 80 days until officers might actually need some of this training, but that's no reason to worry, right? It's not like we're unable to pull entire ranks of officers off of the street and train them up in a day or so.

    Anyone else wondering about the possibility of actually canceling days off in March so that they can train up the rank-and-file?

    Weekend Starts Badly (Plus One)

    At least for some people. We actually had a good day.
    • At least six people were shot Friday between noon and 8 p.m., according to Chicago police.

      Two died.

    Supposedly, G-Mac had a couple of commanders in his office to "discuss" the spate of shootings last weekend. We guess the gang bangers didn't get the memo to "knock it off" this weekend though.

    UPDATE: Someone must have turned up at a hospital with a gunshot wound later. Add one to the totals.

    New Cars!

    • The Chicago Police Department will purchase 500 Ford Interceptor sedans and SUV’s over the next five years built at a South Side plant that recently added a third shift and 1,200 jobs, Mayor Rahm Emanuel said Friday.

      “We not only have the cars built here in Chicago, designed here in Chicago. We’re gonna put our money where our mouth is. We’re gonna order the cars here from this plant,” Emanuel told a news conference at the Ford assembly plant at 12600 S. Torrence.

      The mayor noted that production of the Interceptor — designed to replace the old Crown Victoria as a police staple — was “consolidated from Canada” at the Torrence Avenue plant. That accounted for 230 of the 1,200 new jobs.

    And look! Rahm is claiming a bunch of new jobs, too. Still no word on how any of the G8/NATO crap is actually going to benefit Chicago economically though.

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