Taser Precedents

In addition to tasering for confessions and collecting DNA, it is also now acceptable to taser pregnant women.

Court: Seattle Police OK to Taser Pregnant Woman

SEATTLE — A federal appeals court says three Seattle police officers were justified when they used a stun gun on a pregnant mother who refused to sign a traffic ticket.

Malaika Brooks was driving her son to school in 2004 when she was stopped for doing 32 mph in a school zone. Rather than give her the ticket and let her go on her way, the officers arrested her. They used a Taser three times when she refused to get out of her car.

A panel of the 9th U.S. Circuit Court of Appeals ruled 2-1 Friday that the officers were justified in using force because of the threat that Brooks could have picked up her car keys off the floor, started the car and driven away erratically.

The dissenting judge called the ruling "off-the-wall," and said the police officers had no authority to arrest Brooks — let alone the authority to use a Taser on a nonthreatening woman who was seven months pregnant.

10 Year Treasuries Spike

Very difficult to foresee what waits ahead but important to focus on the fundamentals.

Sell-Off In U.S. Treasuries Raises Sovereign Debt Fears

The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis. Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be "the canary in the coal mine", a warning to Washington that it can no longer borrow with impunity. He said there is a "huge overhang of federal debt, which we have never seen before".

David Rosenberg at Gluskin Sheff said Treasury yields have ratcheted up 90 basis points since December in a "destabilising fashion", for the wrong reasons. Growth has not been strong enough to revive fears of inflation. Commodity prices peaked in January and US home sales have fallen for the last three months, pointing to a double-dip in the housing market.

Mr Rosenberg said the yield spike recalls the move in the spring of 2007 just as the credit system started to unravel. "The question is how the equity market is going to handle this back-up in rates," he said.

The trigger for last week's sell-off was poor demand at Treasury auctions, linked to the passage of the Obama health care reform. Critics say it will add $1 trillion (£670bn) to America's debt over the next decade, a claim disputed fiercely by Democrats.

It is unclear whether China is selling US Treasuries after cutting its holdings for three months in a row, or what its motive may be. There are concerns that Beijing may be sending a coded message before the US Treasury rules next month on whether China is a "currency manipulator", though experts say China is clearly still buying dollar assets because it is holding down the yuan against the greenback. Some investors may be selling Treasuries as a precaution against a trade spat.

Looming over everything is the worry that markets will not be able to absorb the glut of US debt as the Fed winds down its policy of bond purchases, starting with an exit from mortgage-backed securities. It currently holds a quarter of the $5 trillion of the MBS market.

The rise in US bond yields has set off mayhem in the 10-year US swaps markets. Spreads turned negative last week, touching the lowest level in 20 years. The effect was to drive credit costs for high-grade companies such as Berkshire Hathaway below that of the US government. This may have been a technical aberration.

The President and The Press

And there is very grave danger that an announced need for increased security will be seized upon by those anxious to expand its meaning to the very limits of official censorship and concealment.

FULL SPEECH TEXT HERE

Use Your Illusion

Those that can't learn from history are doomed to repeat it, or so the saying goes. When the history lesson is just a year or two old and people let it slip from their memories there is likely a bigger issue at hand than the ability to learn. 2010 is starting to look and feel a lot like 2007.

In this case, most of the world is living under the illusion that governments have the ability to stimulate the economy to avert disaster...that governments can pay for social welfare programs and endless wars...that the party never ends.

The reality is that there is no longer any capital behind the full faith and credit of most governments - it is an illusion.

Watch the video all the way through and take notice of what happens at 1 minute and 50 seconds in. Soon many will see the true depth of the world they are living in.

Social Security Payoutt to Exceed Revenue

Default/devaluation or hyperinflation are already baked into the cake. The end result is really the same for the average Joe - poverty. There isn't a legitimate debate about health care because there will be no money to pay for it or much else in the next several years.

So long as people continue to parrot out the party line and align themselves with political zeitgeists and demagogues there is no stopping the runaway train of debt.

Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravening wolves. Ye shall know them by their fruits. Matthew 7:15

Social Security to See Pay-out Exceed Pay-in This Year

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.

Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.

“When the level of the trust fund gets to zero, you have to cut benefits,” Alan Greenspan, architect of the plan to rescue the Social Security program the last time it got into trouble, in the early 1980s, said on Wednesday.

That episode was more dire because the fund could have fallen to zero in a matter of months. But partly because of steps taken in those years, and partly because of many years of robust economic growth, the latest projections show the program will not exhaust its funds until about 2037.

Still, Mr. Greenspan, who later became chairman of the Federal Reserve Board, said: “I think very much the same issue exists today. Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years.”

The Social Security Administration is expected to issue in a few weeks its own numbers for the current year within the annual report from its board of trustees. The administration has six board members: three from the president’s cabinet, two representatives of the public and the Social Security commissioner.

Though Social Security uses slightly different methods, the official numbers are expected to roughly track the Congressional projections, which were one page of a voluminous analysis of the federal budget proposed by President Obama in January.

Mr. Goss said Social Security’s annual report last year projected revenue would more than cover payouts until at least 2016 because economists expected a quicker, stronger recovery from the crisis. Officials foresaw an average unemployment rate of 8.2 percent in 2009 and 8.8 percent this year, though unemployment is hovering at nearly 10 percent.

The trustees did foresee, in late 2008, that the recession would be severe enough to deplete Social Security’s funds more quickly than previously projected. They moved the year of reckoning forward, to 2037 from 2041. Mr. Goss declined to reveal the contents of the forthcoming annual report, but said people should not expect the date to lurch forward again.

The long-term costs of Social Security present further problems for politicians, who are already struggling over how to reduce the nation’s debt. The national predicament echoes that of many European governments, which are facing market pressure to re-examine their commitments to generous pensions over extended retirements.

The United States’ soaring debt — propelled by tax cuts, wars and large expenditures to help banks and the housing market — has become a hot issue as Democrats gauge their vulnerability in the coming elections. President Obama has appointed a bipartisan commission to examine the debt problem, including Social Security, and make recommendations on how to trim the nation’s debt by Dec. 1, a few weeks after the midterm Congressional elections.

Although Social Security is often said to have a “trust fund,” the term really serves as an accounting device, to track the pay-as-you-go program’s revenue and outlays over time. Its so-called balance is, in fact, a history of its vast cash flows: the sum of all of its revenue in the past, minus all of its outlays. The balance is currently about $2.5 trillion because after the early 1980s the program had surplus revenue, year after year.

Now that accumulated revenue will slowly start to shrink, as outlays start to exceed revenue. By law, Social Security cannot pay out more than its balance in any given year.

For accounting purposes, the system’s accumulated revenue is placed in Treasury securities.

In a year like this, the paper gains from the interest earned on the securities will more than cover the difference between what it takes in and pays out.

Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete. Mr. Goss said that large cushion could start to grow again if the economy recovers briskly.

Indeed, the Congressional Budget Office’s projection shows the ravages of the recession easing in the next few years, with small surpluses reappearing briefly in 2014 and 2015.

After that, demographic forces are expected to overtake the fund, as more and more baby boomers leave the work force, stop paying into the program and start collecting their benefits. At that point, outlays will exceed revenue every year, no matter how well the economy performs.

Mr. Greenspan recalled in an interview that the sour economy of the late 1970s had taken the program close to insolvency when the commission he led set to work in 1982. It had no contingency reserve then, and the group had to work quickly. He said there were only three choices: raise taxes, lower benefits or bail out the program by tapping general revenue.

The easiest choice, politically, would have been “solving the problem with the stroke of a pen, by printing the money,” Mr. Greenspan said. But one member of the commission, Claude Pepper, then a House representative, blocked that approach because he feared it would undermine Social Security, changing it from a respected, self-sustaining old-age program into welfare.

Mr. Greenspan said that the same three choices exist today — though there is more time now for the painful deliberations.

“Even if the trust fund level goes down, there’s no action required, until the level of the trust fund gets to zero,” he said. “At that point, you have to cut benefits, because benefits have to equal receipts.”

What Inflation? Movie Ticket Prices Pushing $20

Higher Prices Make Box Office Debut

Major U.S. movie-theater chains, seeking to capitalize on the surge in revenues fueled by such 3-D hits as "Avatar" and "Alice in Wonderland," are imposing some of the steepest increases in ticket prices in at least a decade.

The new prices take effect Friday in many markets across the country in theaters owned by such major exhibitors as Regal Entertainment Group, Cinemark Holdings Inc. and AMC Entertainment Inc.

The increases, in one case as much as 26%, vary from theater to theater, but many cinemas are raising prices most—or even solely—for 3-D showings.

Stossel: Offshoring GOOD for America!

"There is nothing good about manufacturing jobs."

This guy is either evil or a dumba$$...your choice, although they are not mutually exclusive.

The Monetary Base During the Great Depression and Today

A must read piece by Jesse from Jesses Cafe Americain;

The Monetary Base During the Great Depression and Today

Cotenancy Clauses Alive and Well

Ann Taylor is backdooring its way out of all sorts of leases - along with dozens of other major players.

Ann Taylor Closing 72 Stores; Opening 30
Women's apparel retailer, Ann Taylor Stores Corporation, recently reported its fourth quarter results, which included better-than-expected sales and gross margin results.

During 2009, Ann Taylor opened 14 new stores, but closed 42 stores. Additionally, the company converted 11 Ann Taylor stores into Loft stores; which all together created a 3% reduction for the retailer in 2009. Currently, Ann Taylor operates 907 stores comprised of 291 Ann Taylor stores, 506 Loft stores, 92 Ann Taylor Factory stores and 18 Loft Outlet stores.

Ann Taylor expects to close another 72 stores this year, which would complete its previously announced restructuring program set to include the three-year closure of 174 stores. Of the 2010 closures planned, 14 will shutter in the first half of the year, while the remaining 58 will shutter in the last half of the year. Aside from these closures, Ann Taylor is planning to open 20 Loft Outlet and 10 Loft stores during 2010. In total, the company expects store square footage to be down about 3% for the year.

The average Ann Taylor store is 5,312 square feet; the average Ann Taylor LOFT store is 5,882 square feet; and the average outlet store is 6,667 square feet.

Debt Overload

Americans need to take notice of where their tax dollars are being spent and why - namely on the interest on the federal and state debts. More than two decades ago, the Reagan administration determined that "not one red cent" of federal income tax revenue was allotted to federal spending. Instead, more than 100% of it was used to address the interest on the national debt. In an era where the debt and its interest payments are almost exponentially larger it is no longer possible for the borrowed funds to be paid back.

U.S. & UK Move Closer to Losing Rating, Moody's Says

March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.

Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.

“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”

The pound fell against the dollar and the euro for the first time in three days, depreciating 0.8 percent to $1.5090, while the dollar index snapped a four-day drop, adding 0.3 percent to 90.075.

The U.S. government will spend about 7 percent of its revenue servicing debt in 2010 and almost 11 percent in 2013, according to the baseline scenario of moderate economic recovery, fiscal adjustments in line with government plans and a gradual increase in interest rates, Moody’s said.

Under its adverse scenario, which assumes 0.5 percent lower growth each year, less fiscal adjustment and a stronger interest-rate shock, the U.S. will be paying about 15 percent of revenue in interest payments, more than the 14 percent limit that would lead to a downgrade to AA, Moody’s said.

U.K. Debt Service

The U.K. is likely to spend 7 percent of revenue servicing debt this year and 9 percent in 2013, rising to almost 12 percent under the adverse scenario, Moody’s said.

Financing costs above 10 percent put countries outside of the AAA category into a so-called debt reversibility band, the size of which depends on the ability and willingness of nations to reduce their debt burden by raising taxes or reducing spending. The U.S. has a 4 percentage-point band, while the U.K. has a 3 percentage-point band.

“Those economies have been caught in a crisis while they are highly leveraged,” Cailleteau said, referring to the level of private and public debt as a percentage of gross domestic product. “They have to make the required adjustment to stabilize markets without choking off growth.”

The U.S. would be the “most affected” under the adverse scenario, as the only country that would face a downgrade, Cailleteau said. The company’s baseline scenario assumes that all current AAA sovereigns will keep their ratings over the next three years, he said.

‘Warning Shot’

“On balance, we believe that the ratings of all large Aaa governments remain well positioned, although their ‘distance-to- downgrade’ has in all cases substantially diminished,” Moody’s said in the report.

None of the current Aaa rated countries are likely to lose their ratings, said Peter Chatwell, a fixed-income strategist at Credit Agricole CIB in London.

“This report is a warning shot to governments, setting out the line that they can’t cross with their budgets,” he said.

While the U.S. is likely to benefit from economic growth more than other AAA nations, weak public consumption is likely to weigh on GDP this year, the ratings company said.

“The pattern of growth and the high rate of unemployment raise the question of how strong the recovery will be going forward,” Moody’s said. “The ability of the U.S. economy to grow more rapidly and, therefore, for government revenues to contribute to fiscal consolidation, will have to depend on a revival in the growth of consumption.”

U.S. Growth

The U.S. economy will grow 3 percent this year and in 2011 after contracting 2.4 percent in 2009, according to the median estimate of economist forecasts compiled by Bloomberg. Unemployment will average 9.6 percent this year, up from 5.8 percent in 2008, and will fall to 9 percent next year, based on the median estimate.

Sales at U.S. retailers unexpectedly climbed 0.3 percent in February, compared with a median forecast for a 0.2 percent contraction, the Commerce Department said on March 12.

“The emphasis of the market, and our own, will move increasingly away from public finance developments in 2010, towards medium-term consolidation plans and the credibility thereof,” Moody’s said.

Achieving the fiscal consolidation necessary to avert a downgrade will test “social cohesion” and may involve rewriting the “social contract” between governments and their people, Cailleteau said. “People have to decide what level of pain they are willing to accept to have a healthy economy.”

U.K. Prime Minister Gordon Brown has clashed with opposition leader David Cameron over the timing and speed of budget cuts as they prepare for an election that must be held by June 3.

‘Very Fragile’

The opposition Conservatives argue that the government should come to grips now with the budget deficit, while Brown’s Labour Party says it’s too soon to remove fiscal stimulus.

“Although the economy is now growing, recovery is still in its early stages and remains very fragile,” Brown told business leaders in London on March 10. “We’re not going to withdraw the stimulus until the recovery is assured.”

The U.K. economy, which emerged from its longest-ever recession last quarter, is forecast to expand by 1.2 percent this year after a 5 percent contraction in 2009, according to median economist estimates compiled by Bloomberg. Unemployment will average 8 percent this year and 7.9 percent next year, the estimates show.

“The question here is less when fiscal retrenchment ought to start, but rather how credible it is that sufficient retrenchment will take place,” Moody’s said.

Retail Dominoes Steadily Topple

The bleeding has not been stopped in the retail side of commercial real estate. With rising unemployment, skyrocketing food prices and the slow squeeze of consumer credit it only gets worse from here.

French Connection Slashes U.S. Stores in Shakeup

Men's Wearhouse Identifies 145 Stores for Probable Closure

By Sasha M Pardy
March 12, 2010

During 2009, Men's apparel retail chain, Men's Wearhouse, opened 6 new, but closed 41 stores. Due to geographic overlap caused by its 2006 acquisition of the AfterHours Formalwear chain, the company has identified 145 stores that it would likely close.

In a conference call with analysts on March 10th, George Zimmer, Chairman & CEO said, "what we have been experiencing since the acquisition over three years ago, is that customers would rather shop in a regular Men's Wearhouse store than a Men's Wearhouse and Tux store. So there are hundreds of these stores that are very close to each other, and there are about 145 stores that we have right now that we think should probably close when their leases expire or before. We have already closed 35 tuxedo rental stores in 2009. So it is reasonable to assume that we will be closing well over 100 tuxedo rental stores. However, this is going to strengthen our business as opposed to weaken it, because we have such a high rate of recapture. Most of those customers are just going to the nearest Men's Wearhouse store."

The combination Men's Wearhouse and Tux stores typically range between 1,000 and 4,000 square feet and are primarily located in regional malls and lifestyle centers.

American Eagle Shuttering 28 Martin + OSA Stores

By Sasha M Pardy
March 11, 2010

Pittsburgh, PA-based specialty apparel retailer, American Eagle Outfitters (NYSE:AEO), is shuttering its MARTIN + OSA banner, including its 28 stores and online business. The company expects to conclude the liquidation of the MARTIN + OSA stores, which are typically 6,500 to 7,500 square feet, by the end of this July.

In a statement, management said the concept performed better in fiscal 2009 than it did in 2008; however, MARTIN + OSA still generated an after-tax loss of $44 million in 2009, so the company deemed the brand as "not achieving performance levels that warrant further investment."

"Closing MARTIN+OSA was a difficult decision, particularly in light of the progress that was made over the past year. Creating new brands is never an easy endeavor. The valuable lessons and experiences we gained will serve us well, as we continue to develop and launch new lifestyle brands," said Jim O'Donnell, chief executive officer. The company opened the first MARTIN + OSA stores, which carried sportswear and casual apparel for men and women age 25 to 40, in fall 2006.

American Eagle said it would turn its efforts and resources to its other brands -- American Eagle, aerie, and 77kids. It currently operates 939 American Eagle stores and 137 aerie stores. Its 77kids brand, a moderately-priced concept targeted at children ages 2 to 10, was launched online during 2008.

During 2009, American Eagle closed 16 net American Eagle stores, but also opened 21 new aerie stores. This year, American Eagle is planning to open 14 new, but close between 15 to 25 American Eagle stores; as well as open 20 new aerie stores and five stand-alone 77kids stores. The average new aerie store is 4,200 square feet, while the company has been opening new and remodeling existing AE stores to 7,000 square feet.

Zimbabwe Dollar Gaining on Sterling

Now this is comical...

More Unloved than Even Mugabe's Dollar

It says something about your currency when foreign exchange dealers are even prepared to swap it for the Zimbabwean dollar. Yet this was the pitiful fate of sterling yesterday as it suffered its biggest rout on the currency markets for more than a year.

Apart from the pastings received at the hands of the US dollar and the euro, sterling also fell by more than 1.7 per cent against Zimbabwe’s much-mocked paper, completing a decline of more than 7 per cent since the end of January.

Some economists are convinced that this could be the start of a sterling rout, with investors losing confidence in Britain’s resolve to tackle the gaping hole in its public finances.

The weakness of sterling over the past two years has been welcomed by Mervyn King, Governor of the Bank of England, as a boost for exporters. So investors believe the authorities will do nothing to shore up the currency.

One senior banker said yesterday his big worry was that if a bailout of Greece was agreed, all the hedge funds that have been shorting the euro could turn their attention to sterling.

Technical factors may have been in play, such as the Pru’s need to exchange sterling for dollars ahead of its $35.5 billion acquisition of AIG’s Asian business. But a bigger influence was undoubtedly the Sunday Times poll predicting a Labour election victory. Gordon Brown has been accused of many things. But the prospect of his re-election resulting in Robert Mugabe’s currency being preferred to sterling must surely be one of the most hurtful.

More Retail Meltdown

In The Coming Commercial Real Estate Crisis, the author highlights a failed mall in Minnesota which was sold for nearly 1/10th of its "book value." To rebuild this mall today, it would probably cost around $130 sf for a basic buildout. This raises a major red flag: the cost of existing commercial real estate assets is collapsing in most markets, yet the cost to build them has continued to rise since it cratered in 2008 and 2009. The inflation needed to overcome the staggering deflationary forces and force construction costs to rise in the worst real estate environment ever is nothing short of awesome and is not limited to COPPER, gypsum, cement and steel...it includes every good and service used by every man, woman and child on earth. When this inflation is unchained from the deflationary collapse it will be smothering.

As we have discussed at length, retail bankruptcies/closures contribute to a vicious, momentum building cycle which can empty a mall in 6-12 months. In 2008, national retailers were victimized most as we saw Circuit City, Linens and others go down. Q3-4 2009 and 2010 have been dominated by local and regional failures like Myer Emco in the D.C. region.

The article below discussed rental breaks for retailers which are seldom agreed upon with landlords. Any national or regional ownership group will flat out reject any loss in income and elect to hire an attorney to take it to the retailer for all they are worth.

Wise, local owners will from time to time give retailers a break to keep the cash flow steady and avoid legal fees, down time, tenant improvement dollars and commissions.

Retail Tenants Appeal For Rent Relief

Retail sales plunged 6.2% in 2009 from the previous year, the U.S. Commerce Department reports. That represents the greatest decline since the government began recording annual sales in 1992, and the figure eclipses the 0.5% drop in 2008.