BP crew

The Beach House

BP clean-up crews

I have seen no oil yet.............WOOHOO

Vacation Blog

I am off on VACATION! WOOHOO!

A nice Falcon 2000 owned by net jet sales in bham.

The Mid-Bay bridge in Destin

The Donut Hole! Best Donuts!

DERIVATIVES

The Horrific Derivatives Bubble That Could One Day Destroy The Entire World Financial System
Today there is a horrific derivatives bubble that threatens to destroy not only the U.S. economy but the entire world financial system as well, but unfortunately the vast majority of people do not understand it. When you say the word "derivatives" to most Americans, they have no idea what you are talking about. In fact, even most members of the U.S. Congress don't really seem to understand them. But you don't have to get into all the technicalities to understand the bigger picture. Basically, derivatives are financial instruments whose value depends upon or is derived from the price of something else. A derivative has no underlying value of its own. It is essentially a side bet. Originally, derivatives were mostly used to hedge risk and to offset the possibility of taking losses. But today it has gone way, way beyond that. Today the world financial system has become a gigantic casino where insanely large bets are made on anything and everything that you can possibly imagine.
The derivatives market is almost entirely unregulated and in recent years it has ballooned to such enormous proportions that it is almost hard to believe. Today, the worldwide derivatives market is approximately 20 times the size of the entire global economy.
Because derivatives are so unregulated, nobody knows for certain exactly what the total value of all the derivatives worldwide is, but low estimates put it around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars.
Do you know how large one quadrillion is?
Counting at one dollar per second, it would take 32 million years to count to one quadrillion.
If you want to attempt it, you might want to get started right now.
To put that in perspective, the gross domestic product of the United States is only about 14 trillion dollars.
In fact, the total market cap of all major global stock markets is only about 30 trillion dollars.
So when you are talking about 1.5 quadrillion dollars, you are talking about an amount of money that is almost inconceivable.
So what is going to happen when this insanely large derivatives bubble pops?
Well, the truth is that the danger that we face from derivatives is so great that Warren Buffet has called them "financial weapons of mass destruction".
Unfortunately, he is not exaggerating.
It would be hard to understate the financial devastation that we could potentially be facing.
A number of years back, French President Jacques Chirac referred to derivatives as "financial AIDS".
The reality is that when this bubble pops there won't be enough money in the entire world to fix it.
But ignorance is bliss, and most people simply do not understand these complex financial instruments enough to be worried about them.
Unfortunately, just because most of us do not understand the danger does not mean that the danger has been eliminated.
In a recent column, Dr. Jerome Corsi of WorldNetDaily noted that even many institutional investors have gotten sucked into investing in derivatives without even understanding the incredible risk they were facing....
A key problem with derivatives is that in the attempt to reduce costs or prevent losses, institutional investors typically accepted complex risks that carried little-understood liabilities widely disproportionate to any potential savings the derivatives contract may have initially obtained.
The hedge-fund and derivatives markets are so highly complex and technical that even many top economists and investment-banking professionals don't fully understand them.
Moreover, both the hedge-fund and the derivatives markets are almost totally unregulated, either by the U.S. government or by any other government worldwide.
Most Americans don't realize it, but derivatives played a major role in the financial crisis of 2007 and 2008.
Do you remember how AIG was constantly in the news for a while there?
Well, they weren't in financial trouble because they had written a bunch of bad insurance policies.
What had happened is that a subsidiary of AIG had lost more than $18 billion on Credit Default Swaps (derivatives) it had written, and additional losses from derivatives were on the way which could have caused the complete collapse of the insurance giant.
So the U.S. government stepped in and bailed them out - all at U.S. taxpayer expense of course.
But the AIG incident was actually quite small compared to what could be coming. The derivatives market has become so monolithic that even a relatively minor imbalance in the global economy could set off a chain reaction that would have devastating consequences.
In his recent article on derivatives, Webster Tarpley described the central role that derivatives now play in our financial system....
Far from being some arcane or marginal activity, financial derivatives have come to represent the principal business of the financier oligarchy in Wall Street, the City of London, Frankfurt, and other money centers. A concerted effort has been made by politicians and the news media to hide and camouflage the central role played by derivative speculation in the economic disasters of recent years. Journalists and public relations types have done everything possible to avoid even mentioning derivatives, coining phrases like “toxic assets,” “exotic instruments,” and – most notably – “troubled assets,” as in Troubled Assets Relief Program or TARP, aka the monstrous $800 billion bailout of Wall Street speculators which was enacted in October 2008 with the support of Bush, Henry Paulson, John McCain, Sarah Palin, and the Obama Democrats.
But wasn't the financial reform law that Congress just passed supposed to fix all this?
Well, the truth is that you simply cannot "fix" a 1.5 quadrillion dollar problem, but yes, the financial reform law was supposed to put some new restrictions on derivatives.
And initially, there were some somewhat significant reforms contained in the bill. But after the vast horde of Wall Street lobbyists in Washington got done doing their thing, the derivatives reforms were almost completely and totally neutered.
So the rampant casino gambling continues and everybody on Wall Street is happy.
For now.
One day some event will happen which will cause a sudden shift in world financial markets and trillions of dollars of losses in derivatives will create a tsunami that will bring the entire house of cards down.
All of the money in the world will not be enough to bail out the financial system when that day arrives.
The truth is that we should have never allowed world financial markets to become a giant casino.
But we did.
Soon enough we will all pay the price, and when that disastrous day comes, most Americans will still not understand what is happening.

From The Economic Collapse Blog

Home Sales Drop 27 Percent In July And Things Are Only Going To Get Worse For The U.S. Housing Industry

On Tuesday the National Association of Realtors announced that existing home sales in the United States dropped a whopping 27.2% in the month of July. The consensus among analysts was that we would see a drop of around 13 percent, so when the 27 percent figure was announced it sent a shock through world financial markets. Only 3.83 million units were sold in July, which was down from 5.26 million in June, and which was the lowest number that the National Association of Realtors has ever seen since they began tracking this statistic back in 1999. To say that the real estate industry is alarmed by these numbers would be a tremendous understatement. What we are seeing unfold is essentially "Armageddon" for those involved in the housing and real estate industries. The real estate market is grinding to a standstill and a shockingly low number of people are actually in the market to buy a home right now. In the months ahead home sales may pick up a little bit, but only if housing prices start to fall. Why? Because right now there are tons of houses on the market and there are very few qualified buyers available to purchase them and potential buyers are starting to realize this. Buyers are beginning to understand that they have all the leverage now and they are waiting for prices to fall.

Anyone who has taken Economics 101 in college knows that when supply is high and demand is low prices will fall, and that is exactly the situation we have in the U.S. housing market right now.

At the moment, most home sellers in the United States are very hesitant to lower the prices on their homes too much. Many have no intention of selling their homes below what they originally paid for them, and many others truly believe that the housing market will eventually rebound.

But the truth is that housing prices are simply not going to rebound to 2006 levels. If anything, they are going to continue to fall.

The following are the three basic points that every American needs to understand about the U.S. housing market right now....

1) There Is A Gigantic Mountain Of Unsold Homes On The Market

There are a staggering number of unsold homes on the market right now. As you can see from the chart from the Calculated Risk blog below, there is now over a year's worth of unsold homes flooding the marketplace....

So who is going to buy all of those unsold homes with so few qualified purchasers in the marketplace?

That is a very good question.

Unfortunately, all the signs indicate that the glut of unsold homes is going to get even worse.

As of this March, U.S. banks had an inventory of 1.1 million foreclosed homes, which was a new all-time record and which was up 20 percent from one year ago.

And the tsunami of foreclosures and repossessions just keeps growing....

*One out of every seven mortgages were either delinquent or in foreclosure during the first quarter of 2010.

*According to RealtyTrac, a total of 1.65 million U.S. properties received foreclosure filings during the first half of 2010.

*U.S. Banks repossessed 269,962 U.S. homes during the second quarter of 2010, which was a new all-time record.

The supply of unsold homes is already incredibly massive and it is growing at a staggering rate.

With such a flood of homes on the market, why in the world would anyone in their right mind pay a premium price for a home in 2010?

2) There Are Not Nearly Enough Qualified Buyers Seeking To Buy Homes

The banks and lending institutions that survived the subprime mortgage crisis of 2007 and 2008 learned some very valuable lessons. The days when even the family dog could get approved for a home loan are long gone. Now the pendulum has swung to the other end of the spectrum. Fearful of making more bad loans, banks and lending institutions have really, really tightened up lending standards. So a lot fewer people are getting approved for home loans these days.

That makes a lot of business sense for banks and lending institutions, but it also means that there are a lot fewer qualified buyers out there looking for homes.

Not only that, but millions of Americans who could potentially buy homes are waiting for the market to go down even further.

When you add that all together, you get the kind of home sales numbers discussed at the beginning of the article.

The Mortgage Bankers Association recently announced that demand for loans to purchase U.S. homes has sunk to a 13-year low. Unless the number of Americans getting approved for home loans starts increasing, you simply are not going to see housing numbers recover much.

And the truth is that Americans are not even doing much browsing for homes right now. Even Internet searches for homes are way down. Internet searches on real estate websites are down about 20 percent compared to this same time period in 2009.

So with a massive flood of houses on the market and with very few qualified buyers to purchase them, how in the world are housing prices supposed to go up?

3) The Housing Industry Will Never Fully Recover Without A Jobs Recovery First

In order to get qualified for home loans, Americans have to have good jobs first. But in this economy that is a huge problem.

Robert Dye, a senior economist with PNC Financial Services Group, recently told USA Today what he believes the bottom line problem of this housing crisis is....

"Jobs, jobs, jobs"

Today, 14 million Americans are unemployed and millions more are underemployed. Unfortunately, there are not nearly enough good jobs for all of them.

Today it takes the average unemployed American over 8 months to find a job. The number of Americans receiving long-term unemployment benefits has risen a staggering 60 percent in the past year alone.

Things have gotten so bad that according to one recent survey 28% of all U.S. households have at least one person that is searching for a full-time job.

To get an understanding of how horrific the unemployment situation has become in the United States, take 38 seconds to watch the incredible video posted below....

http://www.youtube.com/watch?v=9ssIhiD8kKM&feature=player_embedded

The truth is that without jobs, Americans simply cannot buy homes.

So is there any hope that we will see a robust jobs recovery any time soon?

Well, as I have written about previously, unfortunately there is every indication that the employment market is going to get even worse.

So the bottom line is that the housing market is going to continue to suffer.

There is going to continue to be a massive glut of unsold homes on the market.

There are going to continue to be very few qualified buyers in the marketplace.

Large numbers of Americans are going to continue to be unemployed.

Yes, that is a lot of bad news, but you aren't reading this column to get the same kind of mindless optimism that you get from the mainstream media news.

SCARE YOUR SOCKS OFF

http://theeconomiccollapseblog.com/

Where GaGa Stayed

One of Two

GaGa's Matching Prevost's in the Boulder's Club parking lot

9167-9 E Sunflower CT

Scottsdale, AZ 85262

$2,850,000

When is a “vacation home” a real retreat, a private sanctuary where Hollywood stars and sports celebrities alike come to unwind and experience the quietude and beauty of the high Sonoran desert? The answer comes readily: When it is the VILLA RETREAT at The Boulders. This stunning 5700 sf 6 bedroom, 6.5 bath property consisting of two separate villas, is a true oasis in the desert,ideal for a large family(s), couples who want to share the space, or investors. Several patios and a meandering pool overlooking boulder outcroppings, the desert and the golf course beyond coalesce into an environment so unique, so peaceful, that when in the rental pool of the Boulders Resort, those who can afford its luxury pay $2500- $5000 a night.

: MASSIVE PRICE REDUCTION !!!! A private retreat within a resort situated in an exceptional setting. This unbelievably unique property is comprised of a main house & guest house which shares terraces, patios, desert gardens & a negative edge pool & spa. The main house features 3bd,3.5b with gorgeous views from every window.A separate gym attached. The guest house with a full kitchen & great room has 3 bedrooms as well. Completely remodeled in 2008, this fully furnished turnkey retreat opens its doors to those seeking a wonderful location in a private, unique & beautiful environment.THE 2 VILLAS ARE BEING SOLD WITH ALL FURNITURE AND ARTWORK INCLUDED. FEATURED HOME in the PHOENIX HOME AND GARDEN MAGAZINE'S SEPT.2008 issue.THIS IS A MUST SEE !!!!!

Saguaro Forest Buy

42147 N SAGUARO FOREST DR. # 228

Scottsdale, AZ 85262

$1,575,000

last sold 6/11/2003 for $2,600,000

BEST PRICED Chiricahua Villa EVER on the market. Located on the 1st fairway of the Chiricahua golf course. South view with breath taking city and valley lights. Come enjoy the Tuscan charm and amenities this home has to offer. Three bedroom suites,custom faux painting, mature landscaping, pool/spa, temperature controlled storage room. Price inc. the DEGM. Call right away to preview. Very easy to show, vacant.

Reduced

5550 E. Road Runner

Paradise Valley, AZ 85253

Now $5,700,000

290,100 contiguous acres

http://www.thebellranch.com/offering.html

Reportedly SOLD!

From www.luxist.com :

Some big properties take a long time to sell but finally after years on the market the Bell Ranch in northeastern New Mexico has finally sold. Bates Sanders Swan represented the seller and RMA Brokers represented the sellers. The sale and purchase of the Bell Ranch was closed on August 17, 2010. The Bates Sanders Swan announcement says that the sale was comprised of 290,100 acres of contiguous deeded land most of which is situated in San Miguel County about 40 miles north of Tucumcari and 150 miles east of Santa Fe. It is believed that this is the largest single block of deeded land to sell in the Western United States during the past 60 years. The announcement says that the buyer has interest in maintaining and enhancing the Bell Ranch, which was established in 1824, as one of the most historic and admired cattle operations in the nation.

The Bell Ranch features Bell Mountain and a a 10,832-square feet hacienda with swimming pool andtennis courts The property includes a general manager residence and lake house, ranch offices, stables, barns, garage and storage facilities. Cowboy camps are located throughout the property. The Bell Ranch airfield (8,200' x 75' lighted dirt airstrip) has a large hangar. It was listed for $115 millionback in 2007 and then was at $103 million in 2009. It was most recently at $83 million. The final selling price hasn't been revealed.

The ultimate PJ

First Supersonic Private Jet

Reported to cost $80,000,000

SONIC BOOM COMPLIANCE

The Aerion SBJ is designed to operate effectively under the existing sonic boom regulations with the potential to adapt as the regulations are changed. For flights over the United States where aircraft must stay below Mach 1.0, Aerion cruises efficiently at Mach 0.98. In other populated parts of the world the regulations require that a sonic boom does not reach the ground. There, Aerion can cruise as fast as Mach 1.1 without creating a sonic boom on the ground. Over the oceans and other uninhabited areas, Aerion can cruise at up to Mach 1.6.

The baseline Aerion aircraft has a relatively low sonic boom, with an initial overpressure of about 0.8 psf. This is less than the boom of many supersonic fighters and much less than the Concorde. Relatively minor changes to the Aerion design can reduce the overpressure to 0.5 psf. Over the next several years, regulations for low sonic boom will be developed and low-boom technology will be improved. Aerion will then develop low-boom aircraft to operate under the new regulations.

Aerion is briefing government groups on its supersonic business jet program as regulators consider how to treat a new generation of supersonic aircraft. In Europe and America, government bodies and state-funded programs are discussing environmental concerns in public forums. Aerion participates in these forums to encourage the development of new standards for supersonic aircraft. Because the outcome of these early discussions with regulators is uncertain - and any new regulations are many years away, Aerion is not seeking a rules change to introduce its supersonic aircraft. Among these forums:

FAA: The FAA's Office of Aviation Policy, Planning and Environment - the branch of the FAA focusing on new noise standards for supersonics - held its first public hearing on the subject in October 2008 in Chicago. A second meeting was held in February in Palm Springs, with a third yet to be announced. As intended, the first meeting attracted those curious about the potential for supersonic aircraft: community leaders, business jet operators, airport management, OEMs, environmental activists and members of the public at large. Richard Tracy from Aerion discussed the company's supersonic aircraft, which will meet Stage 4 noise requirements, and ICAO emissions criteria, but does not incorporate technology to suppress a sonic boom. The FAA - the only national aviataion authority that sets a speed limit of Mach 1 - is gathering information from the public and from government research groups, including NASA. The agency is responding to growing interest in supersonic aircraft among manufacturers and potential operators.

For its next open meeting, the FAA has requested that Aerion present more information on Mach Cut-Off flight, a means of cruising at low supersonic speeds without creating an audible disturbance. The agency is interested in the physics of the technology, and how onboard systems would collect atmospheric data and adjust speed allowing for cruise up to about Mach 1.2 without producing a boom on the ground. Mach Cut-Off relies on the principle that the speed of sound increases with temperature, and therefore is lower at cruise altitude than on the ground. By adjusting cruise speed based on temperature data, the sonic shock wave can be kept from htiting the ground, dissipating instead at a selected altitude, for example, 5,000 feet.

ICAO: The International Civil Aviation Organization, which sets global aviation standards, is looking at similar issues. In April 2009, Aerion's business and testing manager, Jason Mtisheck, participated in a Paris meeting of ICAO's Working Group 1, which establishes noise and noise testing critera. Working Group 1 has established a Supersonic Technical Group to look into determining criteria for supersonic aircaft. This subcommittee is examining sonic boom shaping for noise reduction, and the effects of boom pressure waves on structures such as buildings and homes.

HISAC: Aerion is also participating in HISAC, a European Commission-funded consortium led by Dassault with 37 partners from 13 countries. Aerion is not a formal partner, but has been welcomed to the group to brief it on the Aerion SSBJ. HISAC, an acronym for Environmentally Friendly High Speed Aircraft, is studying the technical requirements and feasibility of business-jet-sized supersonic aircraft with reduced sonic boom signatures, low airport nose and low emissions.

http://www.aerioncorp.com/

Great Buy!

$969,000

9024 E. Robert Hunter Drive

Scottsdale, Az 85262

5 bedroom on 5 acres

Last sold for $2,050,000 on 6/8/04

Owned by Suntrust

36420 N. Up and Down before it was there