Friday, December 12, 2014

The US housing bubble is back like it never left

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the US housing bubble is back like it never left: *median household income = nominal cc @diana_olick

Ellen Brown: Big Banks Will Take Depositors Money In Next Crash

Greg Hunter: The G-20 met recently in Australia to make new banking rules for the next financial calamity.  Financial reform advocate Ellen Brown says these new rules will allow banks to take money from depositors and pensioners globally. 
Brown explains, “It became rules we agreed to actually implement.  There was no treaty, and Congress didn’t agree to all this.  They use words so that it’s not obvious to tell what they have done, but what they did was say, basically, that we, the governments, are no longer going to be responsible for bailing out the big banks.”
“These are about 30 international banks.  So, you are going to have to save yourselves, and the way you are going to have to do it is by bailing in the money of your creditors.  The largest class of creditors of any bank is the depositors.”

It gets worse, as Brown goes on to say, “Theoretically, we are protected by deposit insurance up to $250,000 in the U.S. and 100,000 euros in Europe.  The FDIC fund has $46 billion, the last time I looked, to cover $4.5 trillion worth of deposits. ”
“There is also $280 trillion worth of derivatives that the five biggest banks in the U.S. are exposed to, and under the bankruptcy reform act of 2005, derivatives go first.  So, they are basically exempt from these new rules.  They just snatch the collateral.”
“So, if you had a big derivatives bust that brought down JP Morgan or Bank of America, there is no way there is going to be collateral left for the FDIC or for the secured depositors.  This would include state and local governments.”
“They all put their money in these big banks.  So, even though we are protected by the FDIC, the FDIC is not going to have the money. This makes it legal for these big 30 banks to take our money when they become insolvent.  They are too-big-to-fail.”
“This was supposed to avoid too-big-to-fail, but what it does is institutionalizes too-big-to-fail.  They are not going to go down.  They are going to take our money instead.”
Part of the coming financial calamity will involve hundreds of trillions of dollars in un-backed derivatives.
Brown contends, “If the derivative bubble pops, nobody knows what is going to happen, and it’s obvious it has to pop.  It can’t just keep growing.  Depending on who you read, some people say it is up to two quadrillion dollars.  It’s virtual money, and it cannot keep going on.”
When a financial crash does happen, you can forget about getting immediate access to your money.
Brown says, “The banks will say, well, we don’t have it.  All the money goes into one big pool since Glass Steagall was repealed.  They are allowed to gamble with that money and that’s what they do.  I think maybe Bank of America is the most vulnerable because of Merrill Lynch.”

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How "Superman of Renters" Daniel Bramzon Revolutionized L.A.'s Eviction-Defense Industry


Department 94 is unlike any other courtroom in Los Angeles. Most courts are quiet, orderly affairs. Parties show up on time and speak when spoken to. Department 94 is different — one part game show, one part DMV on a Monday morning.
Located on the seventh floor of the Stanley Mosk Courthouse in downtown L.A., the chamber is the entry point for every single eviction case in the city.
Rents in Los Angeles have climbed by 25 percent since 2000, according to a UCLA study, while households' median incomes have actually declined. That's left L.A. among the least (if not the very least) affordable cities in which to live in the United States. According to Zillow, a person making the metro area's median income of $59,000 must pay 48 percent of his or her paycheck to cover median rent, which is currently an eye-popping $2,392.
With margins like that, it's easy to fall behind. Some 64,000 to 73,000 people are evicted in L.A. each year — a population equal to that of Redondo Beach. But before the sheriff shows up at their door with a padlock, they're called here, to "unlawful detainer" (legalese for eviction) court. Every day, more than 50 cases move through Department 94.
Each morning begins with a long monologue by Commissioner Robert Harrison — he's not a judge, but he isn't entirely un-judgelike, a kindly sort who looks a bit like Daniel Stern in a graying Abraham Lincoln beard — explaining the rules of the court.
"No live or dead insects please," Harrison calls out with a broad smile. "Please dispose of them in the restroom."
A Spanish translator stands in the middle of the room, talking under him. All the while people file in and out; the bailiff orders people to sit down, take off their hats and turn off their cellphones; and lawyers wander in search of their clients. Many attorneys represent four, five, six clients a day, and they've often never even met before today.
Confusion reigns.
After explaining the rules, the commissioner reads the names of the property owners and tenants in each case. The parties then go up two flights to the court's cafeteria, where they're encouraged to hammer out a settlement and keep things from going to trial.
If Department 94 is the cattle call, the cafeteria is the meat market. Tenants and landlords sit awkwardly while lawyers shuttle up and down the escalators and elevators between multiple clients, often missing one another by minutes.
The lawyers all know one another — they've been telling bad jokes and bickering for years.
For example: Gary Hoffman, a patrician-looking landlord's attorney who has been in the business for three decades, timidly approaches Deepika Sharma, a tenant's attorney with Public Counsel, a pro bono firm. He smiles. She scowls.
"Is it yes or no, Gary?" she says.
He hesitates, then says, "It's close."
"I'm not taking anything less than what I gave you" earlier, she says. Hoffman slinks away.
"He asked me twice if my softer co-worker is coming in," Sharma says when Hoffman is out of earshot. "I said, 'No, you have me.' "
"I hate seeing her," Hoffman says later. "She doesn't know what negotiation means."
In the end, most cases settle for either a "pay-and-stay," where the tenant pays the back rent, often with some sort of payment plan, or a "no-dough-and-go," where the tenant is given, say, 30 days to leave, and all back rent is forgiven.
"In today's environment, '30 and a waiver' is wonderful," says Stephany Yablow, one of the landlord attorneys. "Sixty and a waiver is fine, too."
Department 94, nearly all of the gray-haired landlords' attorneys agree, is not what it used to be. A new crop of attorneys has arrived on scene over the last decade to defend tenants. They're aggressive. They use every trick in the book to slow down cases, draining money from landlords, forcing them into less favorable settlements.
The landlords sometimes are forced to pay tenants a move-out fee.
"How do you think it is for us, to try and explain that to our clients?" Hoffman asks incredulously. " 'The court system has gone crazy.' That's what I say to them."
It's a new day for landlords trying to evict tenants, and many of them blame one man in all of the sprawling city: Daniel Bramzon.
Landlord attorney Ray Kermani says Danny Bramzon once essentially asked him to “step outside.” - PHOTO BY TED SOQUI
  • Photo by Ted Soqui
  • Landlord attorney Ray Kermani says Danny Bramzon once essentially asked him to “step outside.”
Among eviction attorneys, Danny Bramzon's courtroom swagger is legendary. He loves to trash-talk the opposition: "I can't wait to fucking grill [your client] on the stand, I'm gonna take so much pleasure in it," or "You're going to be so embarrassed when you lose this case."
Ray Kermani, one of the few younger landlord attorneys on the scene, says Bramzon once said to him something to the effect of, "Why don't we step outside?"
"He likes to get in people's heads and likes to say things like that," Kermani says. "It was very unprofessional."
"He's very slimy," agrees Kermani's partner, Mohamad Ahmad. "He'll call me a lying piece of shit." Although, Ahmad allows, "Since he had a child, he's kind of calmed down."
"If we're so wrong, why do we win so many cases?" Bramzon asks, sitting in the bar at downtown's Wokcano on a Tuesday evening. He's drinking an extra-dirty martini with extra olives, and every so often he pulls out a small canister of Binaca mouth spray from his breast pocket and takes a spritz. "Why do we win more cases than any nonprofit organization? Why do we obtain more money than any nonprofit organization? Why are we the most feared nonprofit organization?!"
In place of a necktie, Bramzon wears a large necklace with a ceramic, M-shaped medallion, depicting a serpent and a pyramid, a traditional icon of pre-Columbian Mexico. Bramzon is from Miami, but his dad is from Mexico, and Danny lived there for a few years as a kid. His mother is Jewish and from Philadelphia — "Philly," Bramzon says. There are times he uses his Philly accent and times he uses his Mexican accent. Underneath his shirt, Bramzon wears a gold Star of David.
He's reluctant to talk about the dichotomy of the Mexican heritage worn over his shirt, the Jewish heritage worn underneath. He says only: "I identify with all my heritage."
Unlike most of the other nonprofit attorneys, Bramzon started out in a private law firm. In 2005, he was working at the powerhouse Century City law firm Christensen, Miller, Fink, Jacobs, Glaser, Weil and Shapiro, now a politically connected firm with a somewhat different mix of partner names. Bramzon was 27 and, because he often worked late, he grew friendly with the mostly Hispanic cleaning crew.
One night, one of the cleaning ladies came up to him, holding a piece of paper in her hands.
"Señor Danny," she said, handing him the paper. It was an eviction lawsuit filing.
Bramzon looked into it, researched the case law and helped her reach a fair settlement with her landlord. Less than a month later, the woman's cousin came to him. She, too, was being evicted.
"I went to the property on Beverly and Normandie," Bramzon recalls. "There was a couple of inches of water in this person's living room. And I swear, there's a bed in the middle of the living room with a girl who must have been 5 or 6 at the time, on a breathing machine. She had asthma. The landlord was refusing to fix the ceiling."
By the time he was finished, the mother had been paid $10,000 to move out, and Bramzon had found his calling.
In his Westwood living room, he started Basta — Spanish for "Stop!" or "That's enough!" — a nonprofit law firm devoted exclusively to low-income tenants.
Basta wasn't the first firm of its kind. A couple years earlier, a lawyer named Elena Popp, who had been evicted with her family at the age of 8, left her longtime job at Legal Aid Foundation Los Angeles to found the Eviction Defense Network (EDN) with her then-husband.
At the time, some 95 percent of tenants getting evicted either didn't show up to court or went without representation. Those who didn't show defaulted. The others, in the words of Popp, "got screwed." They were forced into settlements hardly better than the initial judgments against them. Trials were short.
Popp's firm deviated from the model of Legal Aid, which receives public funding and represents clients pro bono. Both EDN and Basta are "low bono" — that is, they charge clients a little bit of money, often on a sliding scale, and take a percentage of the settlement, if there is any.
"At EDN, we all come from the nonprofit world," Popp says. "Basta comes from the for-profit world and is better at the business part of the equation."
Indeed, Basta's business is booming, as Bramzon himself is proud to admit. It has just hired a 14th lawyer, and it has offices in the eviction hot spots of Los Angeles, Long Beach and Lancaster. In 2012, the firm reported $1.5 million in revenue. This year, according to Bramzon, it will surpass $2 million. According to publicly available tax forms, Bramzon himself made only $30,000 from his work at Basta in 2012. On the side, he has a small private practice, which he says "pays the bills."
The landlords and their attorneys bristle at the sheer brazenness of Basta's business model.
While many defense lawyers, like Popp, seek out a settlement with the landlords' attorneys that gives their clients another month or two to move out and forgiveness of back rent (a "no-dough-and-go"), Basta lawyers, by most accounts, refuse to settle unless the landlord pays the tenant some money, of which Basta takes its 30 percent cut.
Mohamad Ahmad recalls one interaction between him and Basta attorney Ned Harris.
"Ned has told me that straight up: 'You either pay us $2,000 on this case, or we won't settle," Ahmad says. He claims, "If I say, 'Here's my settlement offer: one year free rent to your client, or he leaves in two weeks and I pay $3,000,' [Basta] takes the money. Because they get a piece."
Other lawyers tell similar stories, although Bramzon insists that the decision to accept or reject a settlement offer is Basta's clients' alone.
"It's not just defending the downtrodden," says Dennis Block, whose firm represents landlords in more eviction cases than any other in L.A. "It's just such a crock. It's a matter of trying to move money out of the landlords' pockets to the law firm's pockets."
Bramzon is amused by this. He wonders if the landlords find it easier to accept paying him, a lawyer, rather than their own impoverished tenants.
"They can't conceptualize money going to poor people," he laughs. "Everyone says, 'Oh my gosh, Basta, you're asking for money!' We're not keeping it, fools! I'm fucking Robin Hood!"

Mexico vows to sell dollars to halt peso's slide

MEXICO CITY (AP) — Mexico is ready to intervene in currency markets to fight the peso's fall against the dollar amid concerns over dropping oil prices and a possible increase in U.S. interest rates.

Mexico's Exchange Commission said that as of Tuesday, the government will hold a daily auction of $200 million whenever the peso falls at least 1.5 percent from the previous day.
The idea is to provide liquidity to a currency market that has been volatile in recent weeks. Experts attribute the instability to fears that investment in Mexico could slide in coming years in the face of lower oil prices and the possible flight of dollars away from Mexican debt toward higher interest rates elsewhere.
The peso closed Monday at 14.40 per dollar and Tuesday was at 14.36, an improvement that would not trigger a dollar auction.
The commission, composed of the Central Bank and Treasury Department, announced the measure Monday. It was first instituted during the 2008 international financial crisis and has been used in various moments since.
While the peso's depreciation is a boon for Mexican exporters who deal in dollars, over the long term it could be seen as negative for the country as a whole.
Alfredo Coutino, director for Latin America for the consultant Moody's Analystics, said it was oil's plunge that sparked the volatility, "and unfortunately Mexico has a high dependence on oil exports."
"The fall in the price of oil affects investment decisions," he said. One-third of Mexico's revenue comes from oil and the country recently passed historic energy reforms aimed at attracting private investment that could revive the country's declining production. But as oil prices fall, Coutino said, "Mexico isn't as attractive and that could affect big companies' investment decisions in 2015 and 2016."
After reaching $100 a barrel, oil has slumped in recent months and now sells at $56.70 a barrel.
Economists also expect the U.S. Federal Reserve to raise interest rates in 2015, after keeping them low for six years trying to stimulate the economy. If that happens, those holding Mexican debt could pull their money out of Mexico to invest in the U.S.
"That generates the mentality that it is time to begin to leave Mexico," Coutino said.
Joel Virgen, assistant director of economic research at Grupo Financiero Banamex, said that so far they have not detected a flight of dollars from the country, but the nervousness is evident in the currency market.
"This should be seen as a preventative measure," he said. "It's like when you buy auto insurance: Basically, you buy it to not use it."
The peso has fallen 10 percent against the dollar this year, but not much more than other currencies that have reacted similarly. MetAnalisis, a Mexican consulting company, notes that the Brazilian real has fallen 9.6 percent, the euro 11.8 percent, the Chilean peso 16 percent and the Colombian peso 20 percent.

Opinion: European banks are stuck in a severe crisis

Twenty-one are in worse shape than Bank of America was at the height of the credit crisis

By

OphirGottlieb

Big banks in Europe are riskier than anywhere else in the world.
They have higher non-performing loans, greater asset shrinkage, larger losses and higher debt-to-equity ratios. And European banks are bracing for even worse loan losses.
It’s the combination of those characteristics that lead to a crisis, and the eurozone essentially is in one today.
Non-performing loans over total loans
There are 200 banks in the world with market values of more than $5 billion, 48 of which are in Europe. The chart below plots non-performing loans over total loans on the y-axis and market capitalization (or value) on the x-axis for that population of banks.
To give a perspective on this, at the height of the Great Recession, after Bank of America BAC, -0.57%  had integrated all Countrywide loans and Merrill Lynch debt, the combined entity hit an all-time high of 4.5% non-performing loans to total loans.
If we take the population of world banks greater than $5 billion in market capitalization and select those with non-performing loans over total loans that are greater than 5% (worse than the Bank of America/Countrywide/Merrill Lynch combination), we are left with 24 banks. Twenty-one of those are in Europe.
Total assets, 2-year growth rate
Taking the same population of world banks over $5 billion in market cap and charting only those that show asset shrinkage over the past two years, we are left with 31 banks. Twenty-seven of those are in Europe. In addition, all 22 banks in the world with a 2% shrinkage in assets or worse (per year over two years) are in Europe.
Below we plot total assets, with the 2-year compound annual growth rate (CAGR) on the y-axis and market cap on the x-axis.
Net income margin
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McDonald's to pare U.S. menus, ingredient lists

By Lisa Baertlein

(Reuters) - McDonald's Corp said on Wednesday it plans to cut the number of items on its U.S. menus and use fewer ingredients in food as it moves to speed up service, bolster sales and offer consumers personalized options to compete better with Subway and Chipotle Mexican Grill.
Mike Andres, the company's U.S. president, said starting in January menus will have eight fewer food items and five fewer Extra Value Meals.
The world's biggest fast-food chain, which has not had a monthly gain in sales at established U.S. restaurants since October 2013, is also making the changes to reach out to consumers who are demanding simpler, more natural food choices.
The company is testing its slimmed-down menus in six markets, including Bakersfield, California, and Knoxville, Tennessee, a spokeswoman said.
The simplified menu boards will offer one Quarter Pounder with Cheese hamburger as compared with four on the regular menu, one Premium Chicken sandwich versus three, and one Snack Wrap versus three.
Andres said McDonald's is not finished tweaking menus.
"There's more to come," Andres said on a conference call with investors. "We don't need to have a big menu board to offer variety."
The menu changes come as McDonald's plans to roll out its new "Create Your Taste" sandwich program to 2,000 of its 14,000-plus U.S. restaurants by the end of 2015.
McDonald's is hoping that giving customers a choice of sandwich toppings will enable it to better compete with Subway and Chipotle Mexican Grill Inc, popular restaurants that allow diners to build their meals ingredient-by-ingredient.
McDonald's abandoned a prior customization drive several years ago. Chief Executive Officer Don Thompson recently told Reuters that technology that allows customers to order from mobile phones and in-restaurant kiosks makes success more likely this time around.
In addition, the company with the "golden arches" has been working to win back mothers and young diners, who increasingly want food that is fresh and minimally processed. In October, it launched a U.S. online campaign called "Our food. Your questions." aimed at addressing negative perceptions about its food quality.
Andres said McDonald's ingredient labels need to be shorter and noted that simplifying ingredients is an enormous task, "but we have to get started," offering a glimpse into how the company is rethinking its recipes.
Busy McDonald's operators don't keep food in storage for very long, Andres said. "Why do we have to have preservatives in our food? We probably don't."
Shares of McDonald's were down 1.3 percent at $90.14 in afternoon trading.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Alden Bentley, Meredith Mazzilli and Bernard Orr)

Central Banks’ 2% Plan to Impoverish You

Reprinted with permission from Washingtons Blog
The 2% target is low enough that the household frogs in the kettle of hot water never realize they’re being boiled alive because the increase is so gradual.
A comment by correspondent David C. suggested the importance of demonstrating the impoverishing consequences of central banks reaching their 2% inflation target. David observed: “That central bankers aren’t all hanging by their necks from lamp posts everywhere is a testament to how scarce are those who grasp exponents and compounding.”
Anyone with basic Excel skills can calculate the cumulative impoverishment caused by central banks’ “modest” 2% annual inflation. Here is my worksheet:
Column 1: year
Column 2: index starting with 100
Column 3: annual inflation sum (2% of previous year’s total index)
Column 4: cumulative total index
1    100.00  2.00  102.00
2    102.00  2.04  104.04
3    104.04  2.08  106.12
4    106.12  2.12  108.24
5    108.24  2.16  110.41
6    110.41  2.21  112.62
7    112.62  2.25  114.87
8    114.87  2.30  117.17
9    117.17  2.34  119.51
10  119.51  2.39  121.90
Ten years of modest 2% inflation robs households of nearly 20% of their purchasing power. What was $100 in year 1 costs about $122 after 10 years of “modest” 2% inflation. Put another way, $100 in year one is only worth $81 in year 10.
11  121.90  2.44  124.34
12  124.34  2.49  126.82
13  126.82  2.54  129.36
14  129.36  2.59  131.95
15  131.95  2.64  134.59
16  134.59  2.69  137.28
17  137.28  2.75  140.02
18  140.02  2.80  142.82
19  142.82  2.86  145.68
20  145.68  2.91  148.59
Two decades of “modest” 2% inflation robs households of one-third of their purchasing power. What was $100 in year 1 costs about $150 after 20 years of “modest” 2% inflation. Put another way, $100 in year one is only worth $66 in year 20.
Even when central banks fail to reach their 2% annual-thievery target, incomes decline across the entire spectrum. The middle class (however you define it) lost roughly 10% as of 2012. In Japan, famous for essentially no inflation, wages have fallen by 9% in real terms since 1997.

While wages go nowhere, costs continue lofting ever higher as central banks print and pump money and credit:

source: What Inflation Means to You: Inside the Consumer Price Index (Doug Short)
Imagine central banks overshoot their 2% theft per year target and reach 3% annual inflation. If 2% is good, 3% must be even better, right?
In one decade of 3% annual inflation, the purchasing power of $100 declines to $73, and after 20 years of central bank inflation, it drops almost in half to $54. The central banks’ inflation is a steady transfer of wealth from households to the banking sector and those holding ballooning assets like stocks. This is why central banks cling to their target so vociferously: their reason to exist is to enrich the banking sector at the expense of the rest of us.
The 2% target is low enough that the household frogs in the kettle of hot water never realize they’re being boiled alive because the increase is so gradual. The central banks assume their 2% plan to impoverish us all escaped our notice. Apparently it has.

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Luxury Brand Retail Stocks: All You Need to Know

Strangely, Americans are getting richer and poorer at the same time, and this is benefiting the luxury brand stocks. While the number of Americans requiring food stamps is at a staggering 48 million or so, at the other end of the spectrum, the rich are increasing their wealth to new record-highs at a rapid pace. This is what will help the luxury brand stocks—a widening income gap that’s seeing the rich rapidly becoming richer.
In 2013, there were about 9.63 million households with a net worth of at least $1.0 million, according to Spectrum Group. Given that the S&P 500 has gone up about 200% during this current bull market, it’s not surprising to see the rise of the wealthy. Add in the increase in home prices and real estate, and you have more wealth created since the economy tanked in 2008.
In reality, it has been one of the best five years for material wealth to rise due to the strong upward moves in both the stock market and the housing market, which were fueled by near-zero interest rates and the Federal Reserve’s aggressive and controversial quantitative easing strategy (which has been brought to a halt—at least for the time being).
So, here we are. Investors may not be rejoicing over the gains this year compared to some of the previous years, but the building up of capital continues, which is also a plus for the luxury brands.
The auto sector is sizzling again, but what’s interesting is the rise in the more expensive vehicle segment of the auto market. Classified as vehicles priced at more than $50,000, the number of sales is looking to top one million units in the U.S. this year, according to TrueCar. The sales growth in this segment surged 30.8% year-to-date to November.
Clearly, the more affluent groups have added money to spend. You will see this in the spending on non-essential goods and services, including travel expenses and personal goods—which means good things for luxury brand stocks.

Luxury Brand Stocks to Watch in 2015

In travel, luxury brand stocks in the hotel space come to mind as a possible play on the added spending, such as Hilton Worldwide Holdings Inc. (NYSE/HLT). You can also play the demand for travel via the airlines, which are also riding the wave of cheaper fuel costs. In this space, I like to watch United Continental Holdings, Inc. (NYSE/UAL) and JetBlue Airways Corporation (NASDAQ/JBLU).
In the luxury personal goods stocks, I expect companies like high-end jeweler Tiffany & Co. (NYSE/TIF) will continue to do well on the charts and reward shareholders. If you like $100,000 watches and pendants, this is the place for you to do some shopping! In the case of a leading stock like Tiffany & Co., with a stock price that’s at a high, investors may consider playing via call options.
In the luxury handbags and apparel area, the top player to watch is Michael Kors Holdings Limited (NYSE/KORS), which has overtaken Coach, Inc. (NYSE/COH). With a leading stock like Michael Kors, it’s best to look at the company on weakness, when it’s off from its high; this can offer a good investment opportunity at a lower price.
In the luxury department store stocks, one company to watch is Nordstrom, Inc. (NYSE/JWN). Nordstrom is estimated to grow its sales 7.4% in fiscal year 2015, followed by 7.7% in 2016, according to Thomson Financial. Nordstrom has also beaten consensus earnings-per-share (EPS) estimates in three of the last four quarters, so it offers a good example of the type of stock investors should seek.
Finally, in the small-cap luxury brand space, investors may want to watch a contrarian stock like Vera Bradley, Inc. (NASDAQ/VRA), which was started by two friends and was able to break into and become popular within the crowded handbags market.

The World’s Most Expensive Watches: 8 Timepieces Over $1 Million

We’ve all experienced sticker shock while perusing the world’s most expensive watches. There are even a few brands for which six-figure price tags are the norm — “expensive watches” by almost anyone’s definition. But a handful of luxury watches go well beyond “pricey” and into the rarefied “million dollar watch” category, i.e., costing more than $1 million. We’ve compiled eight of the world’s most expensive watches, all breaking the $1 million ceiling, in which the only things grander than the complications are the price tags.

What’s the most you’ve ever paid (or thought about paying) for an expensive watch? Let us know in the comments section below!
The Hublot Classic Fusion Haute Joaillerie “$1 Million,” limited to only eight pieces, earns its $1 million price tag with the 1,185 baguette diamonds covering every surface of the watch, from the case and bracelet to the openworked dial. For the case alone, a 15-person team had to perform 1,800 hours of cutting and 200 hours of dimensional checking and quality control. Certainly one of the most expensive watches ever made by Hublot.
Hublot Classic Fusion Haute Joaillerie "$1 Million"
Million Dollar Watches: Hublot Classic Fusion Haute Joaillerie “$1 Million”
The Roger Dubuis Excalibur Quatuor finds its way to the million-dollar watches list thanks to its case, which is made entirely of silicon (according to the brand, the first such watch of its kind), a material with half the weight of titanium and four times the hardness. The Quatour — yes, the most expensive watch produced to date by Roger Dubuis — is equipped with the RD101 movement, notable for its four sprung balances, which work in pairs to compensate for the effects of gravity much faster than a tourbillon would, resulting in a more accurate watch. The Excalibur Quatuor is priced at 1 million Swiss francs (which translates to roughly around $1,125,000 U.S.).
Roger Dubuis Excalibur Quatuor
Million Dollar Watches: Roger Dubuis Excalibur Quatuor
The Jaeger-LeCoultre Hybris Mechanica à Grande Sonnerie has a retail price of $ 1,474,070. The watch boasts 1,300 parts, which make it capable of playing the entire Big Ben chiming sequence. It was released in 2009 as part of the Hybris Mechanica 55 trilogy, a trio of very expensive watches that comprised 55 complications altogether.
Jaeger-LeCoultre Hybris Mechanica à Grande Sonnerie
Million Dollar Watches: Jaeger-LeCoultre Hybris Mechanica à Grande Sonnerie

Central banks’ 2% target is low enough that the household frogs in the kettle of hot water never realize they’re being boiled alive because the increase is so gradual.

by Charles Hugh-Smith
The 2% target is low enough that the household frogs in the kettle of hot water never realize they’re being boiled alive because the increase is so gradual.
A comment by correspondent David C. suggested the importance of demonstrating the impoverishing consequences of central banks reaching their 2% inflation target. David observed: “That central bankers aren’t all hanging by their necks from lamp posts everywhere is a testament to how scarce are those who grasp exponents and compounding.”
Anyone with basic Excel skills can calculate the cumulative impoverishment caused by central banks’ “modest” 2% annual inflation. Here is my worksheet:
Column 1: year
Column 2: index starting with 100
Column 3: annual inflation sum (2% of previous year’s total index)
Column 4: cumulative total index
1    100.00  2.00  102.00
2    102.00  2.04  104.04
3    104.04  2.08  106.12
4    106.12  2.12  108.24
5    108.24  2.16  110.41
6    110.41  2.21  112.62
7    112.62  2.25  114.87
8    114.87  2.30  117.17
9    117.17  2.34  119.51
10  119.51  2.39  121.90
Ten years of modest 2% inflation robs households of nearly 20% of their purchasing power. What was $100 in year 1 costs about $122 after 10 years of “modest” 2% inflation. Put another way, $100 in year one is only worth $81 in year 10.
11  121.90  2.44  124.34
12  124.34  2.49  126.82
13  126.82  2.54  129.36
14  129.36  2.59  131.95
15  131.95  2.64  134.59
16  134.59  2.69  137.28
17  137.28  2.75  140.02
18  140.02  2.80  142.82
19  142.82  2.86  145.68
20  145.68  2.91  148.59
Two decades of “modest” 2% inflation robs households of one-third of their purchasing power. What was $100 in year 1 costs about $150 after 20 years of “modest” 2% inflation. Put another way, $100 in year one is only worth $66 in year 20.
Even when central banks fail to reach their 2% annual-thievery target, incomes decline across the entire spectrum. The middle class (however you define it) lost roughly 10% as of 2012. In Japan, famous for essentially no inflation, wages have fallen by 9% in real terms since 1997.

While wages go nowhere, costs continue lofting ever higher as central banks print and pump money and credit:

source: What Inflation Means to You: Inside the Consumer Price Index (Doug Short)
Imagine central banks overshoot their 2% theft per year target and reach 3% annual inflation. If 2% is good, 3% must be even better, right?
In one decade of 3% annual inflation, the purchasing power of $100 declines to $73, and after 20 years of central bank inflation, it drops almost in half to $54.The central banks’ inflation is a steady transfer of wealth from households to the banking sector and those holding ballooning assets like stocks. This is why central banks cling to their target so vociferously: their reason to exist is to enrich the banking sector at the expense of the rest of us.
The 2% target is low enough that the household frogs in the kettle of hot water never realize they’re being boiled alive because the increase is so gradual. The central banks assume their 2% plan to impoverish us all escaped our notice. Apparently it has.


STUDY: Minimum Wage Increase Cost Americans 1.4 Million Jobs. Low Skilled Workers and Youths Hardest Hit.


Hikes in the minimum wage have other effects besides just giving low-income workers a raise. Important new research suggests that minimum wage increases in the late 2000s resulted in the loss of some 1.4 million American jobs and hurt unskilled workers most of all.
A new study by researchers Jeffrey Clemens and Michael Wither from the University of California San Diego found that low-skilled workers were the most adversely affected by minimum wage increases, despite the fact that this was the group that such legislation sought to help.
The study shows that between July 23, 2007 and July 24, 2009, the federal minimum wage rose from $5.15 to $7.25 per hour. During this period, the employment-to-population ratio declined substantially—by 4 percentage points among adults aged 25 to 54, and by 8 percentage points among those aged 15 to 24.
http://www.breitbart.com/Big-Government/2014/12/11/Minimum-Wage-Cost-Americans-1-4-Million-US-Jobs-Study-Finds
Minimum Wage Maximum Unemployment
Study: Low-level workers put out by wage hikes

Minimum wage hikes hurt the people that politicians claim to help, according to a new study.
University of California at San Diego professors Jeffrey Clemens and Michael Wither found that the $7.25 minimum wage passed in 2007 contributed to job losses for entry level and low-skilled workers. The wages may have been high on paper, but the take home pay for workers fell during the first three years of the new wage.
“We find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers,” the study says.
http://freebeacon.com/issues/minimum-wage-maximum-unemployment/

The Economy Is Worse than During the Great Depression

Underneath the Propaganda, the Economy Is In BAD SHAPE …

We noted in 2013 that the British economy is worse than during the Great Depression.
The Washington Post’s Wonkblog pointed out in August that Europe is stuck in a “Greater Depression” … worse than the Great Depression.
Well-known economist Brad DeLong agrees. As does Paul Krugman.
Historian, economist and demographer Neil Howe provided the following charts via Forbes last month, showing how dire the situation is in Europe:
Great Depression v. Great Recession, United Kingdom GDP
Great Depression v. Great Recession, Europe GDP
The chart for the U.S. doesn’t look as bad …
But as Howe notes:
These figures don’t mean that the Depression was definitely worse. Though it was deeper, it … likely will be shorter than the Great Reces­sion in the United States. The recovery in the ‘30s occurred much faster than it has in recent years.
***
What’s more, from 1933 on, U.S. GDP grew at a blistering average rate of over 8% per year for the next eight years. And that includes one recession year: 1938. By 1941, 12 years after the Great Depression began, U.S. GDP was 41% higher than its pre-downturn figure. This is almost certainly a much higher level, relative to 1929, than the United States will see by 2019, relative to 2007.
Indeed, Pulitzer prize-winning economic reporter David Cay Johnston showed last year that Americans bounced back faster after the Great Depression than the “Great Recession”.
As we pointed out in 2012, the much-hyped “recovery” may be a myth:

What Do Economic Indicators Say?

We’ve repeatedly pointed out that there are many indicators which show that the last 5 years have been worse than the Great Depression of the 1930s, including:
Mark McHugh reports:
Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling). In a healthy economy, the same dollar is collected as payment and subsequently spent many times over. In a depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given money supply. This VoM chart using monetary base should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:

In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.

[It’s gotten much worse since then.]
(As we’ve previously explained, the Fed has intentionally squashed money multipliers andmoney velocity as a way to battle inflation. And see this)
Indeed, the number of Americans relying on government assistance to obtain basic foodmay be higher now that during the Great Depression. The only reason we don’t see “soup lines” like we did in the 30s is because of the massive food stamp program.
And while apologists for government and bank policy point to unemployment as being better than during the 1930s, even that claim is debatable.

What Do Economists Say?

Indeed, many economists agree that this could be worse than the Great Depression, including:

Bad Policy Has Us Stuck

We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.
For example:
  • The government is doing everything else wrong. See this and this
Quantitative easing won’t help … it will only make things worse.
This isn’t an issue of left versus right … it’s corruption and bad policies which help the super-elite but are causing a depression for the vast majority of the American people.
The government and the banks are doing all of the wrong things. See this and this.
And Europe is doing all of the wrong things, as well:
If a patient is bleeding out, doctors have to suture the wounds before they decide whether to give more blood or to taper off the amount of transfusions.
But Europe has never treated the wounds …  As we noted in 2011, failing to prosecute financial fraud – on either side of the Atlantic – is extending the economic crisis.
In 2012, we pointed out that European (and American) governments were encouraging bank manipulation and fraud to cover up insolvency … trying to put lipstick on a pig.
Indeed:
  • Quantitative easing hurts the economy. Even the Bank of England and the creators of QE admit that it is “pushing on a string“.  But the UK did tons of QE instead of actually fixing the economy
Heck of a job, guys …

PREDICTION: Fall Of The U.S. Petro Dollar Nears