Go Figure: Bond Firms Reduce NYC  Holdings Due to de Blasio’s ‘Progressive Agenda’

The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.

Alexis de Tocqueville 

Bod firms are becoming very nervous with NYC Mayor Bill de Blasio;s Progressive Agenda:

New York Mayor Bill de Blasio’s plan to pay for labor contracts that boost deficits is causing UBS Global Asset Management Americas Inc. and RidgeWorth Capital Management Inc. to reduce holdings of city debt.
UBS cut its allocation of New York bonds in some of its national funds to as low as zero from as high as 3 percent, said Ebby Gerry, who helps oversee about $15 billion of state and local debt in New York as head of municipal investments. De Blasio this month announced a union deal that stretches out payments to teachers through 2021 and an affordable-housing program that will cost the city $8.2 billion.

“We’re concerned with what Mayor de Blasio might do in working with the unions, things like this housing project that he’s looking at with not having a full understanding of how he’s going to pay for it,” Gerry said. “We’re watching pretty closely.”

While the extra yield that investors demand to buy New York City general obligations rather than top-rated munis has decreased this year, bondholder defections may reverse that trend, sending borrowing costs higher. Moody’s Investors Service on May 12 called de Blasio’s fiscal 2015 spending plan “credit negative” because it boosts projected deficits.

The bond firms eliminating their NYC holdings have internalized the lesson of Detroit’s bankruptcy caused by its progressive agenda. Too bad voters haven’t…

Redefining the ‘mobile ad’: Get ready for Google ad’s where you least expect them

Here’s something to look forward to from your friendly neighborhood Google-bot:

A newly disclosed letter Google sent to the Securities and Exchange Commission (SEC) in December sheds light on new plans to put ads on Google-made gadgets such as the Nest smart thermostat, Google Glass, and other places you wouldn’t think of at first.

According to the SEC letter, Google proclaims the term “mobile” as a shifting definition that no longer encompasses just smartphones and tablets. Google wants the term to be redefined so that it can put advertising in more places without having to create a new category. Here’s the stinger (bolded for emphasis):

“In a short period of time, the meaning of “mobile” at Google has shifted dramatically to “handset” from “tablet + handset”. We expect the definition of “mobile” to continue to evolve as more and more “smart” devices gain traction in the market. For example, a few years from now, we and other companies could be serving ads and other content on refrigerators, car dashboards, thermostats, glasses, and watches, to name just a few possibilities.”

Google has glasses (Google Glass), thermostat (Nest) and car dashboards (Open Automotive Alliance) and watches (Android Wear) are on the way. You didn’t think Google wouldn’t want a way to monetize its products, did you? Riiight.

Although Google has a foot in many fields (I’ve already lost count!), its core business is still online advertising. Its bread and butter is online advertising. Expecting its products to come sans ads in some form is silly.

Won’t it be great when you get into your car for your daily slog to work and see a Dunkin’ Donut ad displayed prominently on your LCD dashboard?

ad on car dashboard

Apparently as this information spread across the intra-web, Google issued this helpful ‘clarification.’

The Wall Street Journal provided an updated statement from Google: “We are in contact with the SEC to clarify the language in this 2013 filing, which does not reflect Google’s product roadmap. Nest, which we acquired after this filing was made, does not have an ads-based model and has never had any such plans.”

Keep in mind “does not have” and “never had any such plans” doesn’t mean their won’t be such plans in the future..

John Kerry, a man who’s only real work experience is marrying wealthy women, discusses job creation 

If the idea wasn’t so insidious, it would be amusing; listening to a guy talk about creating jobs who’s only real work experience is marrying wealthy women:

Women who repeatedly marry rich men are dismissed as shallow gold-diggers and crass parasites. But why are men who repeatedly marry rich women not portrayed in a similarly unfavorable light?

John Kerry is married to Teresa Heinz Kerry, a half billionaire, whom he married even though she was five years older than him – a practice which, while not unheard of, is certainly highly uncommon for a man who was in his 50s. And before that, he was married to his first wife, Julia Thorne, who, according to press reports, had a similarly huge fortune of over $100 million.

So, what exactly is John F. Kerry’s ideas for creating jobs? You guessed it, combating global warming:

If we make the necessary efforts to address this challenge – and supposing I’m wrong or scientists are wrong, 97 percent of them all wrong – supposing they are, what’s the worst that can happen? We put millions of people to work transitioning our energy, creating new and renewable and alternative

Well, if it was that easy to “transition our energy” don’t you think it would’ve already happened? The photovoltaic principle was discovered in 1839 and wind power has been around since the beginning of time. If any major breakthroughs were going to happen, they would’ve happened by now.

Truth is ‘renewable’ energy is old technology that is expensive and intermittent at best. Furthermore, thinking that replacing existing, inexpensive and reliable means of energy with expensive and unreliable green energy is somehow going to create ‘jobs’ is the height of willful ignorance. As Frederic Bastiat explained in 1850 in his classic “That Which is Seen, and That Which is Not Seen“:

I am sorry to disturb these ingenious calculations, as far as their spirit has been introduced into our legislation; but I beg him to begin them again, by taking into the account that which is not seen, and placing it alongside of that which is seen. The reader must take care to remember that there are not two persons only, but three concerned in the little scene which I have submitted to his attention. One of them, James B., represents the consumer, reduced, by an act of destruction, to one enjoyment instead of two. Another under the title of the glazier, shows us the producer, whose trade is encouraged by the accident. The third is the shoemaker (or some other tradesman), whose labour suffers proportionably by the same cause. It is this third person who is always kept in the shade, and who, personating that which is not seen, is a necessary element of the problem. It is he who shows us how absurd it is to think we see a profit in an act of destruction. It is he who will soon teach us that it is not less absurd to see a profit in a restriction, which is, after all, nothing else than a partial destruction. Therefore, if you will only go to the root of all the arguments which are adduced in its favour, all you will find will be the paraphrase of this vulgar saying – What would become of the glaziers, if nobody ever broke windows?

You would think John Forbes Kerry, a Yale Man, would recall a foundational principle of economics. Apparently a Yale education isn’t what it used to be.

Life After People: Photos of the ruined Pontiac Silverdome

pontiac silverdome 1

Modern ruins aren’t exclusively contained within Detroit. The Pontiac Silverdome, former home of the Detroit Lions, is looking worse for wear:

The former home of the Detroit Lions isn’t looking so good these days. Before the roof collapsed in December 2012, the Silverdome was a fully functional stadium. This was a structure with seating, bathrooms, and restaurants designed to serve more than 80,000 people. Opened in 1975, the Silverdome once hosted the Superbowl, an appearance by the pope, and was home to the Lions until 2001.

Current owners of the Dome, Triple Investment Group LLC, purchased the property from the City of Pontiac in 2009 for the shockingly low price of $583,000 are auctioning as much of the stadium as possible:

Stadium seats are already on sale, however, along with certificates of authenticity that include laminated swatches of the roof. They’re hoping to sell as many as 10,000 seats — that’s probably a long shot, Montgomery admits — ranging in price from $90 to $175.

That latter figure only applies to the 20th seat in each row, owing to that number’s football significance. The Lions officially retired No. 20 in Barry Sanders’ honor, but it previously was worn by fellow Hall of Famer Lem Barney and fan favorite Billy Sims. And it’s in this building — or what’s left of it — that No. 20 thrilled so many fans with breathtaking runs.

As pointed out previously here at MCT, stadiums are money losers for municipalities planning on constructing them. The city of Pontiac has found out the hard way.

pontiac silverdome 2 pontiac silverdome 3 pontiac silverdome 4

Hopefully something more useful is constructed in place of the Silverdome.

According to the “Big Picture” a long term 75% debt to GDP ratio is perfectly o.k.

The headline at the “Big Picture” reads “Tune Out Politicians Still Obsessing Over Government Debt.”

debt to GDP chartCalling this situation less than ideal is crazy:

Right after the credit crisis, projections showed the ratio of debt to gross domestic product in the U.S. reaching 225 percent by 2040. Improvements to the economy since then have increased tax receipts and lowered demand for safety net programs. According to the latest forecast, the debt-to-GDP ratio will be a bit more than 100 percent by 2040. That isn’t ideal, but it’s far below crisis levels.

This forecast indicates either weak growth, explosive government spending or both.

7000 Touch-screen kiosks: McDonald’s answer to high cost of doing business in Europe

McDonald’s replaces 7000 cashiers in restaurants across Europe with touch-screen kiosks:

The hiring picture doesn’t look quite so rosy for Europe, where the fast food chain is drafting 7,000 touch-screen kiosks to handle cashiering duties.

The move is designed to boost efficiency and make ordering more convenient for customers. In an interview with the Financial Times, McDonald’s Europe President Steve Easterbrook notes that the new system will also open up a goldmine of data. McDonald’s could potentially track every Big Mac, McNugget, and large shake you order.

Make it more expensive to do business (i.e. increase the minimum wage or corporate taxes) and it’s the lower skill workers who bear the brunt of the cutbacks.

h/t Insty…

Robin Hood Tax: Another bad European idea that will find its way here

obama hood

Does this remind you of a developing Democrat election campaign?

At its best, the financial services sector provides important services to people across the income spectrum. But in its current guise, it is failing to do so. In fact, it has become a powerful driver of inequality. The huge increase in speculation in the financial markets has pushed the volume of financial transactions to more than 70 times the size of the world economy. And we are all still suffering from the irresponsibility of this sector, which led to the global financial crash.

Lord Turner, former chair of the Financial Services Authority, described much of the financial services sector as “socially useless” and said it had grown too big. Calculating the difference between what people take out of the economy in terms of their pay, and what they put in in terms of the value to society of their work, the New Economics Foundation estimated that many people in the financial services sector were a burden on the rest of us.

If you really want to look at the difference in what people take out of the economy versus what they put in, look no further than the worlds third largest economy, the United States Federal Government.

**** h/t Timmy ****

Party of the 99%: Obama’s spend $7.9 million on 2013 trip to Ireland while soldiers lose vacation time in 20 locations

Defense Department has decided to remove 20 areas from list of locations qualifying for imminent danger pay:

Beginning June 1, soldiers deploying for 12 months to certain countries across the globe will have to go without their two-week rest and recuperation leave.

The change is being sparked by a recent Defense Department decision to remove 20 areas from its list of locations that qualify for imminent danger pay.

It goes without saying. Washington politicians continue to retain their generous vacation schedule.

Speaking of generous vacations schedules, remember when Dear Leader, his family and his entourage jetted to Ireland to attend the G8 summit in 2013? I know it’s difficult tracking the myriad of lavish Obama vacations, fortunately Judicial Watch continues keep tabs on these extravagances and recently filed a Federal lawsuit to obtain the records for the Ireland ‘summit’. What they found was a shocking $7.9 million tab for the June 17 – 19, 2013 trip:

Judicial Watch announced today it has obtained records from the U.S. Department of the Air Force and the U.S. Department of Homeland Security revealing that President Obama’s June 2013 trip to Belfast, Ireland, including a Dublin sightseeing side trip by Michelle Obama, her daughters, and her entourage, cost the taxpayers $7,921,638.66.

According to the Department of Air Force documents, the flights to, from, and around Ireland for the June 17 – 19, 2013 trip totaled 33.6 hours at $228,288 an hour, which comes to a flight expense alone of $7,670,476.80 The records came in response to a Judicial Watch Freedom of Information lawsuit filed on January 13, 2014.

According to the DHS documents, the total cost for “security and/or other services” for the Dublin side trip by Michelle Obama and her entourage was $251,161.86, including $55,004.85 at the Shelbourne Hotel and $70,855.44 at the Westbury Hotel. Vehicle rental charges were $114,721. The records also came in response to a Judicial Watch Freedom of Information lawsuit filed on January 13, 2014.

After accompanying the president to a meeting with Northern Ireland youth on the morning of June 17, the First Lady, her daughters, and her entourage departed on their own, apparently aboard Air Force Two, for a sightseeing side trip to Dublin. Though the White House claimed the trip was for diplomatic purposes, WashingtonDossier.com reported the itinerary showed, “She and her daughters will visit the Trinity College library to explore President Obama’s Irish family roots, attend a performance by the world-famous Riverdance troupe, and visit the Wicklow Mountains national forest.”

In a June 2013, article, on the Michelle Obama side trip, the Washington Times reported, “First lady Michelle Obama is sparing no expense on her trip to Ireland, staying at a $3,300-per-night hotel suite in Dublin. Irish press reports Monday said Mrs. Obama and her entourage have booked 30 rooms in the five-star Shelbourne hotel. The first lady is said to be staying in the Princess Grace Suite …. ” According to the hotel’s website, the Grace Kelly Suite features two guest bedrooms, a living room, and a dining area, and measures 1530 square feet.

Soldiers (the 99%) have their 2 week R&R’s removed while the Obama’s travel like the 0.1%…

Remind me again who, precisely, is the party of the 99%…

Michigan Governor: State tax surplus could be used to limit cuts to pensions in Detroit bankruptcy proceedings

Michigan taxpayers have been overcharged by the state of Michigan to the tune of $350 million. That is what Michigan’s budget surplus really is, the state taxed its citizens an extra $350 million that they had no plan to spend. So, rather than sending the money back to the taxpayers, spending the money to fix our literally crumbling roads or simply hang on to the money for a rainy day, what does our nerd Governor propose?

Gov. Rick Snyder said Thursday he’s open to using one-time surplus tax dollars for the state’s contribution toward a fund to bolster Detroit pensions and settle the city’s bankruptcy.

Snyder has pledged $350 million over 20 years toward a $816 million fund designed to limit cuts to pensions and shield city-bought art at the Detroit Institute of Arts from being sold to satisfy creditors.

While private sector citizens in Michigan have had to go round after round of belt-tightening  (job losses, furloughs, pay cuts) during the reign of economic terror during the Granholm era. Now we have to punch additional holes in our belts for even more belt-tightening during the ongoing Obama disaster. Why should Michigan taxpayers take it in the shorts, again, protecting city worker pensions? Let them tighten their belts, or sell the DIA art and other city assets like other bankruptcies require.

BTW, you know after Snyder uses our tax ‘surplus’ protecting city pensions, he will come hat in hand looking for additional ‘revenues’ (i.e. taxes) to fix our roads.

Pending Economic Downturn: The Skyscraper Index

According to the “Skyscraper Index” there is a correlation between the completion of the “worlds tallest” skyscraper and an economic downturn:

Sometimes a skyscraper is not just a skyscraper, at least to economists who see them as harbingers of downturns. The Skyscraper Index measures the correlation between the world’s tallest building and the business cycle. The theory, first proposed in 1999 by Dresdner Kleinwort analyst Andrew Lawrence, is that construction of the world’s tallest building is usually completed right before an economic downturn. The Empire State Building went up early in the Great Depression, and the World Trade Center was completed on the eve of a recession.

Here’s a helpful infographic:

skyscraper index graphic

In related news, Saudi Arabia is constructing what will be the tallest skyscraper in the world, the 3,280 foot (1km or 0.6 mile) tall Kingdom Tower scheduled for completion in 2019. With the skyscraper index in mind, plan for the 2019 economic downturn accordingly.