If Anything, Car Dealers Have Gotten MORE Sleazy

The Market Ticker - If Anything, Car Dealers Have Gotten MORE Sleazy +Tag C'mon guys, you really don't think that most of Boobus Americanus will fall for this, do you? Well, actually they do. Witness the frequent game with "dealer stickers" on the windows in which they charge up to $1,000 for what amounts to $5 worth of Scotchguard (yes, from a spray can) in the form of "fabric and paint protection." That's pretty good money for a guy to spray a bunch of silicone from a can on your new upholstery for 10 minutes! No, I'm talking about the ubiquitous "documentation fee" that has showed up of late -- well, ok, not necessarily "showed up" (it's been there for quite a while) but ratcheted up. My quick survey says that these junk fees have more than doubled in the last 10 years or so and now frequently are over $500! You know what the dealer does for that? He hits "Print" on his computer. Yes, really. What's his per-hourly billed rate, when you look at what's actually done, for that "service"?  $5,000 or so?  That's nice if you can manage to talk people into paying that sort of hourly rate. Since this is a "fee" it generally cannot be blanked off their purchase agreement, and in fact there are even laws to that effect.  But that doesn't stop you from getting rid of it -- simply demand that the same amount come off the top-line price of the car. Oh, by the way, if you want to really be insulted in most states you will pay sales tax on that "Documentation Fee" too.  So now you get to pay the state for the dealer pressing "Print" and his $5,000 per hour charge to do so. People say that "The Internet has made car buying more-transparent."  That's a lie.  Take a look at all the various sites -- Truecar, Edmunds, etc. They all state in the fine print that these fees are excluded in the prices they quote you. As such you cannot compare apples-to-apples using these "shopping tools", because they exclude a fee that each dealer sets and that fee tends to be quite large and is factually nothing more than "additional dealer profit" on a per-unit basis. I own two vehicles I bought new at the present time.  On one I walked out of the dealership twice when they tried to add that fee in after we had negotiated a cash price "plus only tax, title and tag" and then in the F&I office they attempted to present with me a "standard" sales order that had it on there.  I told them I wouldn't pay it, they said because it was pre-printed it couldn't be negotiated, and I countered with "oh yes it can, subtract it from the price of the car and it is mathematically removed." It took walking out twice, but the deal closed and they didn't get a nickel of that junk "fee" from me. On the second transaction the dealer listened to me initially when I told him that my father's best friend ran a Buick dealership for 30 years, and as a result when I asked for a bottom-line price I both understood how car dealers operated and meant what I said -- and had no intention of playing games.  They presented me with a sales order that was acceptable "as-written" -- yeah, the "fee" was in there, but it was deducted back out of the cash price up above, so there you have it.  That transaction was utterly painless and the delivery was too; it took a literal 20 minutes front-to-back complete with paperwork and I was out the door with the car on a cash transaction. There is a common meme running around these days that dealers "don't make any money" on new cars nowdays due to the Internet.  That's horsecrap.  I'd argue they're probably making more per-car now than they were before due to this fee escalation; in many cases your actual cash price for the car exceeds the MSRP. I have a quote right here in my email for which this is the case. A better price eh? I've been asked to help a few friends over the years with this process at various dealers and every one of them have tried to pull this and sometimes much worse.  But in recent years this sort of nonsense has escalated in size, if not technique.  When called on it dealers will usually admit that this is simply profit to them, but they all start with pointing at their contract and trying to defend it as "everyone pays that."  I even had a dealer recently tell me that he paid it on his car.  Well, if he did and didn't get that trash deducted back off the cash price then he's dumber than a box of rocks. I have been blessed with not having a personal reason to deal with this crap voluntarily, other than when helping a friend in navigating this snake pit, for the last decade.... but now I do, once again, and thus into the breach I go. Now let me point something else out: These are the same people who form associations and then try to get those who want to break the back of this sort of outrageous behavior thrown out of their states -- witness Tesla in New Jersey and, believe it or not, the so-called-free state of Texas. PS: Let's run an experiment.  If you are a car dealer and don't pull this crap PM me (or use the "email" link below) and tell me what line(s) you represent.  I'll give you one shot if you have a line I'm interested in, and yes, I'll take a road trip to come get the car too -- I'm serious.  I like

30 Survey Results That Sound False But Are Actually True

30 Survey Results That Sound False But Are Actually True

Submitted by Michael Snyder of The Economic Collapse blog,
You will be shocked at what some Americans actually believe. 
For example, close to 90 percent of us believe that we are eating a healthy diet, and yet more than third of the population is officially obese.  65 percent of all Americans say that they are dissatisfied with the government, and yet nearly a third of us would be willing to submit to a "TSA body cavity search" in order to get on an airplane.
As you will see below, Americans are angrier and more frustrated with government and with their lives than ever before, but we also exhibit almost unbelievable levels of sloth and apathy.  Some of the numbers below are quite funny, and others are absolutely stunning.  But they all say something about who we have become as a nation.
The following are 30 survey results that sound false but that are actually true...
#1 According to a recent Rasmussen Reports survey, 52 percent of Americans "do not think the economy is fair to those willing to work hard".
#2 70 percent of all Americans do not "feel engaged or inspired at their jobs".
#3 According to another recent Rasmussen Reports survey, 59 percent of Americans believe that "less government involvement in the economy" would help reduce the size of the income gap in this country.  (And those 59 percent are actually correct.)
#4 20 percent of all government workers and 26 percent of all Obama supporters consider the Tea Party to be "the biggest terror threat" that America is facing.
#5 Approximately 30 percent of all American workers have $1,000 or less saved up for retirement.
#6 A worldwide survey conducted by the Worldwide Independent Network and Gallup found that 24 percent of people around the world consider the United States to be the biggest threat to peace.  Pakistan was in second place with just 8 percent.
#7 60 percent of Americans report feeling "angry or irritable".  Two years ago that number was at 50 percent.
#8 36 percent of Americans admit that they have yelled at a customer service agent during the past year.
#9 29 percent of Americans believe that "cloud computing" involves an actual cloud.
#10 A survey of employers that currently pay minimum wage to at least some of their employees found that 38 percent of them would start laying off employees if the minimum wage was raised.
#11 One survey found that 56 percent of Americans believe that it is okay for the government to track "the telephone records of millions of Americans" in order to keep us safe.
#12 When George W. Bush was president, 61 percent of Democrats considered NSA surveillance to be "unacceptable", but now that Obama is in the White House, only 34 percent of them consider it to be "unacceptable".
#13 67 percent of Americans support the use of unmanned drones in "homeland security missions" inside the United States.
#14 One survey found that 51 percent of all Americans agree with this statement: "it is necessary to give up some civil liberties in order to make the country safe from terrorism."
#15 Close to one-third of all Americans would be willing to submit to a "TSA body cavity search" in order to fly.
#16 65 percent of Americans are dissatisfied "with the U.S. system of government and its effectiveness".  That is the highest level of dissatisfaction that Gallup has ever recorded.
#17 Only 8 percent of Americans believe that Congress is doing a "good" or "excellent" job.
#18 70 percent of Americans do not have confidence that the federal government will "make progress on the important problems and issues facing the country in 2014".
#19 According to a survey conducted by the National Geographic Society, only 37 percent of all Americans in the 18 to 24-year-old age range can find the nation of Iraq on a map.
#20 Close to 25 percent of all Americans do not know that the United States declared independence from Great Britain.
#21 Right now, 29 percent of all Americans under the age of 35 are living with their parents.
#22 According to one survey, 24 percent of all U.S. teens that have a sexually-transmitted disease say that they still have unprotected sex.
#23 Approximately one out of every five teenage girls in the United States actually wants to be a teenage mother.
#24 The percentage of Americans that "believe there are signs that aliens have visited Earth" is actually higher than the percentage of Americans that believe that Jesus Christ is the Son of God.
#25 According to one recent survey, only 35 percent of all Americans say that they are better off financially than they were a year ago.
#26 It is hard to believe, but 56 percent of all Americans are considered to have "subprime credit" at this point.
#27 89.7 percent of all Americans believe that they are eating a healthy diet.  Meanwhile, approximately 36 percent of all Americans are obese.
#28 44 percent of all Americans do not have a first-aid kit in their homes.
#29 48 percent of all Americans do not have any emergency supplies stored up at all.
#30 53 percent of all Americans do not even have a 3 day supply of nonperishable food and water in their homes.  What will they do when a major crisis or emergency strikes?  Do they actually believe that the government will swoop in to save them if something happens?

Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China

Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China

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If it was the intent of the West to bring Russia and China together - one a natural resource (if "somewhat" corrupt) superpower and the other a fixed capital / labor output (if "somewhat" capital misallocating and credit bubbleicious) powerhouse - in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely "going according to plan."
For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 steps ahead... and quite a few steps east.
While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may regain from foreign borrowing this year. Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasurys, and go straight to the source.
Here is what will likely happen next, as explained by Reuters:

Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow's seizure of the Black Sea peninsula from Ukraine would be counter-productive.

The underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. 

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.

More details on the revelation of said "Holy Grail":

State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world's largest producer of conventional gas to the largest consumer.

"May is in our plans," a Gazprom spokesman said, when asked about the timing of an agreement. A company source said: "It would be logical to expect the deal during Putin's visit to China."

Summarizing what should be and is painfully obvious to all, but apparently to the White House, which keeps prodding at Russia, is the following:

"The worse Russia's relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you're isolated," said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.

Bingo. And now add bilateral trade denominated in either Rubles or Renminbi (or gold), add Iran, Iraq, India, and soon the Saudis (China's largest foreign source of crude, whose crown prince also happened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.
As reported previoisly, China has already implicitly backed Putin without risking it relations with the West. "Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia. Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan, it has refused to criticize Moscow. The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world's second biggest economy and it opposes the spread of Western-style democracy."
This culminated yesterday, when as we reported last night, Putin thanked China for its "understanding over Ukraine." China hasn't exactly kept its feelings about closer relations with Russia under wraps either:

Chinese President Xi Jinping showed how much he values ties with Moscow, and Putin in particular, by making Russia his first foreign visit as China's leader last year and attending the opening of the Winter Olympics in Sochi last month.

Many Western leaders did not go to the Games after criticism of Russia's record on human rights. By contrast, when Putin and Xi discussed Ukraine by telephone on March 4, the Kremlin said their positions were "close".

The punchline: "A strong alliance would suit both countries as a counterbalance to the United States." An alliance that would merely be an extension of current trends in close bilateral relations, including not only infrastructure investment but also military supplies:

However, China overtook Germany as Russia's biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan.

If Russia is isolated by a new round of Western sanctions - those so far affect only a few officials' assets abroad and have not been aimed at companies - Russia and China could also step up cooperation in areas apart from energy. CAST's Kashin said the prospects of Russia delivering Sukhoi SU-35 fighter jets to China, which has been under discussion since 2010, would grow.

China is very interested in investing in infrastructure, energy and commodities in Russia, and a decline in business with the West could force Moscow to drop some of its reservations about Chinese investment in strategic industries. "With Western sanctions, the atmosphere could change quickly in favor of China," said Brian Zimbler Managing Partner of Morgan Lewis international law firm's Moscow office. 

Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1 billion but Russia was still only China's seventh largest export partner in 2013, and was not in the top 10 countries for imported goods. The EU is Russia's biggest trade partner, accounting for almost half of all its trade turnover.

And as if pushing Russia into the warm embrace of the world's most populous nation was not enough, there is also the second most populated country in the world, India.

Putin did take time, however, to thank one other country apart from China for its understanding over Ukraine and Crimea - saying India had shown "restraint and objectivity".

He also called Indian Prime Minister Manmohan Singh to discuss the crisis on Tuesday, suggesting there is room for Russia's ties with traditionally non-aligned India to flourish.

Although India has become the largest export market for U.S. arms, Russia remains a key defense supplier and relations are friendly, even if lacking a strong business and trade dimension, due to a strategic partnership dating to the Soviet era.

Putin's moves to assert Russian control over Crimea were seen very favorably in the Indian establishment, N. Ram, publisher of The Hindu newspaper, told Reuters. "Russia has legitimate interests," he added.

To summarize: while the biggest geopolitical tectonic shift since the cold war accelerates with the inevitable firming of the "Asian axis", the west monetizes its debt, revels in the paper wealth created from an all time high manipulated stock market while at the same time trying to explain why 6.5% unemployment is really indicative of a weak economy, blames the weather for every disappointing economic data point, and every single person is transfixed with finding a missing airplane.

3 Emergency Heat Sources When The Power’s Out

Written by: Rich M Alternative Energy January 6, 2014 19 Comments

Image source: SacBee.com

Today’s homes are all heated as a requirement of the Universal Building Code. While air conditioning isn’t a regulatory requirement, heating is. The heating must be adequate to maintain the home in the “comfort zone” even in the most-extreme temperatures for that part of the country. There’s only one problem, though: Nearly all home heating systems depend upon electricity to function. When the grid goes down, that expensive hardware doesn’t do us the least bit of good.
Unfortunately, the power grid is the most vulnerable part of our infrastructure. Every severe weather event causes the grid to go down, albeit temporarily. Cyber-attacks have already been committed, showing that the grid can be taken down artificially. Almost anything can cause a power outage.
You’ve probably heard about it yourself. Some city or other has a power outage in the dead of winter and as a result of it, a few people freeze to death. The victims are almost always older people who can’t get out, can’t create heat by alternate methods, and can’t move enough to create enough body heat to keep themselves warm.
The question is, what will you do when the grid goes down where you live? How will you heat your home and take care of your family? Regardless of what type of heating system you have, at an absolute minimum it uses electricity for the control circuits. If you have a forced-air system (like most homes do), you also face the problem of no electricity to run the blower motor.
Don’t think you’re better off if you have a hot-water heating system. These systems still need electricity to run the pump that circulates the water. They won’t work any better in a grid down situation than forced-air systems will.
When that time comes, the best you can probably do is return to the old ways of heating your home. That means a fireplace or wood-burning stove.
Many homes still have fireplaces, although they are more decorative than anything else. Gas fireplaces are purely decorative, but a wood-burning one will produce some heat. A fireplace really isn’t a very efficient heater, as most of the heat goes right up the chimney. To be efficient, some means to capture the heat and distribute it into the room are necessary.
You can buy inserts to put in a fireplace which draw cool air in from the floor and return it to the room as hot air. Essentially, the insert is a series of metal tubes, which surround the fire. These either work by a blower motor or by convection. The best ones for an emergency situation are the ones which work by convection, as you won’t need electricity to run the blower. However, the convection models don’t move as much air as the ones with blowers do.
Benjamin Franklin vastly improved the efficiency of the fireplace by the invention of the Franklin Stove. This is a metal fireplace which allows the fire to be placed closer to the center of the room. The metal stove radiates heat from all sides, as well as from all sides of the metal tube chimney, making it much more efficient than a fireplace.
The wood-burning stove we know of today is a descendant of the Franklin Stove. While it is not usually as complicated, it does have a metal fire box, which is placed away from the wall, allowing heat to radiate from all sides.
The Most Versatile Backup Stove In The World Allows You To Cook Anything, Any Time, Any Where
1. Temporary wood-burning stove
For emergency heat, a wood-burning stove can be installed on a temporary basis. All that is needed is the stove, chimney pipe with an elbow, a piece of plywood and a convenient window. The stove can be placed close to the window and the chimney run out through an opening made in the window by removing one of the glass panes. The extra space in the window can be closed up with plywood.
Modern wood-burning stove chimneys, as well as fireplace chimneys, are triple walled. The smoke travels up the center part of the chimney. The triple walls create two air passages around this central chimney, which are connected at the bottom. Cool air from outside enters the outer passageway, traveling downward. When that cool air reaches the bottom, it is warmed by the fire and travels back up through the second passageway. This ensures that the outer passageway is always cool, preventing the possibility of starting a fire.
If you are using a wood-burning stove for emergencies, you want to be sure that you buy one that uses wood and not wood pellets. The wood pellet ones are more efficient, producing more heat per pound of wood than the others. However, you can’t use them with normal firewood. When you run out of pellets, you freeze.
2. Kerosene heater
Another very effective option is to use a kerosene heater. I heated my uninsulated attic office for years with a kerosene heater, when I lived in New York. These heaters are relatively clean burning and produce quite a bit of heat. Like the wood-burning stove, they will radiate heat from all sides, allowing you to gain the maximum possible heat out of them. There is no chimney, so the heat isn’t lost out the chimney.
The problem with any of these heating methods, whether using wood or kerosene, is that you have to have an adequate supply of fuel on hand. When your fuel runs out, your heat does as well. Fortunately, both wood and kerosene store well for prolonged periods of time, so you can stockpile fuel without a problem.
3. Gas catalytic heater
There is one other option that I’d like to mention; one that doesn’t require stockpiling fuel. That is of using a natural gas “catalytic” heater. These heaters are highly efficient and burn very clean. They use a ceramic element to provide a bed for the gas to burn in. The burning gas heats the ceramic element, which then radiates heat into the room. These heaters are available in a variety of sizes, intended to be used as room heaters in both small and large rooms.
There are two huge advantages to using this type of heater. First of all, they don’t need electricity, and secondly, you don’t have to stockpile natural gas. Natural gas pumping stations provide their own power, so they will probably still be operating even if there is no electricity. About the only way that they can go down is if the gas pipes are damaged.
Insulating a room
In addition to creating heat, you will also need some way of keeping that heat in the area where you want it to be. During normal times, you heat your whole home. However, in an emergency, you will probably only be able to heat a small portion of your home, perhaps only one room. In that case, you want to be sure that you keep as much of that heat in that room as possible.
The internal walls in a home don’t contain any insulation. Of course, if you are building a home, you could add this as part of your emergency planning. Even without insulation, these walls will help retain the heat somewhat, as a bare wall has some insulation value. Doorways that don’t have doors in them can be covered by blankets, making the blanket into a temporary “door.”
Actually, insulation isn’t the issue as much as holding the heat in the room is. While those may sound the same, in reality they aren’t. You can hold the heat in the room, even without insulation by using heat reflectors.
A “space blanket” or “rescue blanket” made of aluminized Mylar is actually a heat reflector. This material was first invented by NASA for use on the Lunar Excursion Module (LEM) that landed on the moon. While not insulation, this material reflects heat from both sides, doing an amazing job of helping maintain temperature.
For maximum effectiveness, coat the inside of your survival room with this material. You don’t have to do this ahead of time, as you can easily tape or staple the material in place. Don’t forget the ceiling, either. This will help keep the heat you are producing in the room, reducing overall heat requirements and adding to your family’s survivability.
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Beef Prices Surge Most In A Decade As Food Inflation Soars 84 zero hedge | by Tyler Durden  /  6h  //  keep unread  //  hide  //  preview +Tag Just a month ago we warned that food inflation was on its way. Today we got the first confirmation that problems are on their way. While headline data washes away the nuance of what eating, sleeping, energy-using human-beings are paying month-in and month-out, the fact, as WSJ reports, that beef prices surged by almost 5% in February - the biggest change since Nov 2003 - means pinching consumers and companies pocketbooks that are still grappling with a sluggish economic recovery. "Things are definitely more expensive," exclaimed on mother of three, "I can't believe how much milk is. Chicken is crazy right now, and beef - I paid $5 a pound for beef!" Just don't tell the Fed! Via WSJ, Of course, it's not just beef... ...prices also are higher for fruits, vegetables, sugar and beverages, according to government data. In futures markets, coffee prices have soared so far this year more than 70%, hogs are up 42% on disease concerns and cocoa has climbed 12% on rising demand, particularly from emerging markets. ... Food prices have gained 2.8%, on average, for the past 10 years, outpacing the increase in prices for all goods, which rose 2.4%, according to the government. ... Still, the price increases pose a challenge for food makers, restaurants and retailers, which must decide how much of the costs they can pass along and still retain customers at a time of intense competition and thin profit margins. During previous inflationary periods, food makers switched to less-expensive ingredients or reduced package sizes to maintain their profit margins. Retailers and restaurants usually raise prices as a last resort. ... In California, the biggest U.S. producer of agricultural products, about 95% of the state is suffering from drought conditions, according to data from the U.S. Drought Monitor. This has led to water shortages that are hampering crop and livestock production. U.S. fresh-vegetable prices that jumped 4.7% last year are forecast to rise as much as 3% this year, while fruit that gained 2% last year will rise up to 3.5% in 2014, according to the USDA. But, as The Wall Street Journal notes, there are more consequences: Food-price increases are a particularly touchy issue for emerging markets, where spending on food accounts for a higher share of monthly budgets than in wealthier countries. In 2008, a spike in food prices caused riots from Haiti to sub-Saharan Africa and South Asia. Three years later, in 2011, rising food prices were a factor behind the Arab Spring protests in North Africa and the Middle East that ultimately toppled governments in Tunisia and Egypt. The increase in global prices last month surprised some economists, and raised the specter of more severe increases that could hit the world's poorest countries, economists said. And it's set to get worse: "To be honest, until a month ago, our feeling and thinking was that most markets were well-supplied," said John Baffes, a senior economist at the World Bank. "Now, the question is: Are those adverse weather conditions going to get worse? If they do, then indeed, we may see more food price increases." Drought, harsh winter seen fueling higher food prices, Chris Christopher, economist at IHS Global, writes in client note. Consumers may face “surge ahead” Just don't tell the Fed - or they mighy

Government Agency Warns If 9 Substations Are Destroyed, The Power Grid Could Be Down For 18 Months

Government Agency Warns If 9 Substations Are Destroyed, The Power Grid Could Be Down For 18 Months

300+ zero hedge | by Tyler Durden  /  7h  //  keep unread  //  hide  //  preview

+Tag

Submitted by Michael Snyder of The Economic Collapse blog,
What would you do if the Internet or the power grid went down for over a year?  Our key infrastructure, including the Internet and the power grid, is far more vulnerable than most people would dare to imagine.  These days, most people simply take for granted that the lights will always be on and that the Internet will always function properly.  But what if all that changed someday in the blink of an eye?  According to the Federal Energy Regulatory Commission's latest report, all it would take to plunge the entire nation into darkness for more than a year would be to knock out a transformer manufacturer and just 9 of our 55,000 electrical substations on a really hot summer day.  The reality of the matter is that our power grid is in desperate need of updating, and there is very little or no physical security at most of these substations.


If terrorists, or saboteurs, or special operations forces wanted to take down our power grid, it would not be very difficult.  And as you will read about later in this article, the Internet is extremely vulnerable as well.
When I read the following statement from the Federal Energy Regulatory Commission's latest report, I was absolutely floored...

"Destroy nine interconnection substations and a transformer manufacturer and the entire United States grid would be down for at least 18 months, probably longer."

Wow.
What would you do without power for 18 months?
FERC studied what it would take to collapse the entire electrical grid from coast to coast.  What they found was quite unsettling...

In its modeling, FERC studied what would happen if various combinations of substations were crippled in the three electrical systems that serve the contiguous U.S. The agency concluded the systems could go dark if as few as nine locations were knocked out: four in the East, three in the West and two in Texas, people with knowledge of the analysis said.

The actual number of locations that would have to be knocked out to spawn a massive blackout would vary depending on available generation resources, energy demand, which is highest on hot days, and other factors, experts said. Because it is difficult to build new transmission routes, existing big substations are becoming more crucial to handling electricity.

So what would life look like without any power for a long period of time?  The following list comes from one of my previous articles...
-There would be no heat for your home.
-Water would no longer be pumped into most homes.
-Your computer would not work.
-There would be no Internet.
-Your phones would not work.
-There would be no television.
-There would be no radio.
-ATM machines would be shut down.
-There would be no banking.
-Your debit cards and credit cards would not work.
-Without electricity, gas stations would not be functioning.
-Most people would be unable to do their jobs without electricity and employment would collapse.
-Commerce would be brought to a standstill.
-Hospitals would not be able to function.
-You would quickly start running out of medicine.
-All refrigeration would shut down and frozen foods in our homes and supermarkets would start to go bad.
If you want to get an idea of how quickly society would descend into chaos, just watch the documentary "American Blackout" some time.  It will chill you to your bones.
The truth is that we live in an unprecedented time.  We have become extremely dependent on technology, and that technology could be stripped away from us in an instant.
Right now, our power grid is exceedingly vulnerable, and all the experts know this, but very little is being done to actually protect it...

"The power grid, built over many decades in a benign environment, now faces a range of threats it was never designed to survive," said Paul Stockton, a former assistant secretary of defense and president of risk-assessment firm Cloud Peak Analytics. "That's got to be the focus going forward."

If a group of agents working for a foreign government or a terrorist organization wanted to bring us to our knees, they could do it.
In fact, there have actually been recent attacks on some of our power stations.  Here is just one example…

The Wall Street Journal’s Rebecca Smith reports that a former Federal Energy Regulatory Commission chairman is acknowledging for the first time that a group of snipers shot up a Silicon Valley substation for 19 minutes last year, knocking out 17 transformers before slipping away into the night.

The attack was “the most significant incident of domestic terrorism involving the grid that has ever occurred” in the U.S., Jon Wellinghoff, who was chairman of the Federal Energy Regulatory Commission at the time, told Smith.

Have you heard about that attack before now?
Most Americans have not.
But it should have been big news.
At the scene, authorities found "more than 100 fingerprint-free shell casings", and little piles of rocks "that appeared to have been left by an advance scout to tell the attackers where to get the best shots."
So what happens someday when the bad guys decide to conduct a coordinated attack against our power grid with heavy weapons?
It could happen.
In addition, as I mentioned at the top of this article, the Internet is extremely vulnerable as well.
For example, did you know that authorities are so freaked out about the security of the Internet that they have given "the keys to the Internet" to a very small group of individuals that meet four times per year?
It's true.  The following is from a recent story posted by the Guardian...

The keyholders have been meeting four times a year, twice on the east coast of the US and twice here on the west, since 2010. Gaining access to their inner sanctum isn't easy, but last month I was invited along to watch the ceremony and meet some of the keyholders – a select group of security experts from around the world. All have long backgrounds in internet security and work for various international institutions. They were chosen for their geographical spread as well as their experience – no one country is allowed to have too many keyholders. They travel to the ceremony at their own, or their employer's, expense.

What these men and women control is the system at the heart of the web: the domain name system, or DNS. This is the internet's version of a telephone directory – a series of registers linking web addresses to a series of numbers, called IP addresses. Without these addresses, you would need to know a long sequence of numbers for every site you wanted to visit. To get to the Guardian, for instance, you'd have to enter "77.91.251.10" instead of theguardian.com.

If the system that controls those IP addresses gets hijacked or damaged, we would definitely need someone to press the "reset button" on the Internet.
Sadly, the hackers always seem to be several steps ahead of the authorities.  In fact, according to one recent report, breaches of U.S. government computer networks go undetected 40 percent of the time…

A new report by Sen. Tom Coburn (R., Okla.) details widespread cybersecurity breaches in the federal government, despite billions in spending to secure the nation’s most sensitive information.

The report, released on Tuesday, found that approximately 40 percent of breaches go undetected, and highlighted “serious vulnerabilities in the government’s efforts to protect its own civilian computers and networks.”

“In the past few years, we have seen significant breaches in cybersecurity which could affect critical U.S. infrastructure,” the report said. “Data on the nation’s weakest dams, including those which could kill Americans if they failed, were stolen by a malicious intruder. Nuclear plants’ confidential cybersecurity plans have been left unprotected. Blueprints for the technology undergirding the New York Stock Exchange were exposed to hackers.”

Yikes.
And things are not much better when it comes to cybersecurity in the private sector either.  According to Symantec, there was a 42 percent increase in cyberattacks against businesses in the United States last year.  And according to a recent report in the Telegraph, our major banks are being hit with cyberattacks "every minute of every day"...

Every minute, of every hour, of every day, a major financial institution is under attack.

Threats range from teenagers in their bedrooms engaging in adolescent “hacktivism”, to sophisticated criminal gangs and state-sponsored terrorists attempting everything from extortion to industrial espionage. Though the details of these crimes remain scant, cyber security experts are clear that behind-the-scenes online attacks have already had far reaching consequences for banks and the financial markets.

For much more on all of this, please see my previous article entitled "Big Banks Are Being Hit With Cyberattacks 'Every Minute Of Every Day'".
Up until now, attacks on our infrastructure have not caused any significant interruptions in our lifestyles.
But at some point that will change.
Are you prepared for that to happen?
We live at a time when our world is becoming increasingly unstable.  In the years ahead it is quite likely that we will see massive economic problems, major natural disasters, serious terror attacks and war.  Any one of those could cause substantial disruptions in the way that we live.
At this point, even NASA is warning that "civilization could collapse"...

A new study sponsored by Nasa's Goddard Space Flight Center has highlighted the prospect that global industrial civilisation could collapse in coming decades due to unsustainable resource exploitation and increasingly unequal wealth distribution.

Noting that warnings of 'collapse' are often seen to be fringe or controversial, the study attempts to make sense of compelling historical data showing that "the process of rise-and-collapse is actually a recurrent cycle found throughout history." Cases of severe civilisational disruption due to "precipitous collapse - often lasting centuries - have been quite common."

So let us hope for the best.
But let us also prepare for the worst.

The Music Just Ended: "Wealthy" Chinese Are Liquidating Offshore Luxury Homes In Scramble For Cash

The Music Just Ended: "Wealthy" Chinese Are Liquidating Offshore Luxury Homes In Scramble For Cash   Oneof the primary drivers of the real estate bubble in the past several years, particularly in the ultra-luxury segment, were megawealthy Chinese buyers, seeking to park their cash into the safety of offshore real estate where it was deemed inaccessible to mainland regulators and overseers, tracking just where the Chinese record credit bubble would end up. Some, such as us, called it "hot money laundering", and together with foreclosure stuffing and institutional flipping (of rental units and otherwise), we said this was the third leg of the recent US housing bubble. However, while the impact of Chinese buying in the US has been tangible, it has paled in comparison with the epic Chinese buying frenzy in other offshore metropolitan centers like London and Hong Kong. This is understandable: after all as Chuck Prince famously said in 2007, just before the first US mega-bubble burst, "as long as the music is playing, you've got to get up and dance." In China, the music just ended.

But more so than mere analyses which speculate on the true state of the Chinese record credit-fueled economy, such as the one we posted earlier today in which Morgan Stanley noted that China's "Minsky Moment" has finally arrived, we now can judge them by their actions.
And sure enough, it didn't take long before the debris from China's sharp, sudden attempt to "realign" its runaway credit bubble, including the first ever corporate bond default earlier this month, floated right back to the surface.
Presenting Exhibit A:

Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland.

Said otherwise, what goes up is now rapidly coming down.

Wealthy Chinese were blamed for pushing up property prices in the former British territory, where they accounted for 43 percent of new luxury home sales in the third quarter of 2012, before a tax hike on foreign buyers was announced.

The rush to sell coincides with a forecast 10 percent drop in property prices this year as the tax increase and rising borrowing costs cool demand. At the same time, credit conditions in China have tightened. Earlier this week, the looming bankruptcy of a Chinese property developer owing 3.5 billion yuan ($565.25 million) heightened concerns that financial risk was spreading.

"Some of the mainland sellers have liquidity issues - say, their companies in China have some difficulties - so they sold the houses to get cash," said Norton Ng, account manager at a Centaline Property real estate office close to the China border, where luxury houses costing up to HK$30 million ($3.9 million) have been popular with mainland buyers.

Alas, as the recent events in China, chronicled in minute detail here have revealed, the "liquidity issues" of the mainland sellers are about to go from bad to much worse. As for Hong Kong, it may have been last said so long ago nobody even remembers the origins of the word but, suddenly, it is now a seller's market:

Property agents said mainland Chinese own close to a third of the existing homes that are now for sale in Hong Kong - up 20 percent from a year ago. Many are offering discounts of 5-10 percent below the market average - and in some cases as much as 20 percent - to make a quick sale, property agents and analysts said.

Also known as a liquidation. And like every game theoretical outcome, he who defects first, or in this case sells, first, sells best. In fact, since panicked selling will only beget more selling, watch as prices suddenly plunge in what was until recently one of the most overvalued property markets in the world. And with prices still at nosebleed levels, not even BlackRock would be able to be a large enough bid to absorb all the slamming offers as suddenly everyone rushes to cash out.
The biggest irony: after creating ghost towns at home, the Chinese "uber wealthy" army is doing so abroad.

In a Hong Kong housing development called Valais, about 10 minutes drive from the Chinese border, real estate agents said that between a quarter and a half of the 330 houses are now on sale. At the development's frenzied debut in 2010, a third of the HK$30-HK$66 million units were sold on the first day, with nearly half going to mainland China buyers.

Dubbed a "ghost town" by local media, the development built by the city's largest developer, Sun Hung Kai Properties Ltd (0016.HK), is one of many estates in Hong Kong where agents are seeing an increasing number of Chinese eager to sell.

"Many mainland buyers bought lots of properties in Hong Kong when the market was red-hot three years ago," said Joseph Tsang, managing director at Jones Lang LaSalle. "But now they want to cash in as liquidity is quite tight in the mainland."

Perhaps our post from yesterday chronicling the crash of the Chinese property developer market was on to something. And of course, as also described in detail, should China's Zhejiang Xingrun not be bailed out, as the PBOC sternly refuted it would do on Weibo, watch as the intermediary firms themselves shutter all credit, and bring the Chinese property market, both domestic and foreign, to a grinding halt (something he highlighted in our chart of the day).
Meanwhile, the selling rush is on.
In a nearby development called The Green - developed by China Overseas Land & Investment (0688.HK) - about one-fifth of the houses delivered at the start of this year are up for sale. More than half of the units, bought for between HK$18 million and HK$60 million, were snapped up by mainland Chinese in 2012.
Because so much changes in just over a year.

"Some banks were chasing them (Chinese landlords) for money, so they need to move some cash back to the mainland," said Ricky Poon, executive director of residential sales at Colliers International. "They're under greater pressure from banks, so they're cutting prices."

In West Kowloon district, an area where mainland Chinese bought up close to a quarter of the apartments in many newly-developed estates, some Chinese landlords are offering discounts on the higher-end, three- to four-bedroom apartments they bought just a few years ago.

This month, a Chinese landlord sold a 1,300 square foot (121 square meter) apartment at the Imperial Cullinan - a high-end estate developed by Sun Hung Kai in 2012 - for HK$19.3 million, 17 percent less than the original price. The landlord told agents to sell the flat "as soon as possible," said Richard Chan, branch manager at Centaline Property in West Kowloon.

In the same area, a 645 square foot, 2-bedroom flat in the Central Park development was sold in just two days after the Chinese owner put it on the market at HK$6.5 million in what agents called the year's best bargain - the cheapest price for a unit of its kind over the past year.

Don't worry there will be many more bargains. Why? Because what was once a buying panic - as recently as months ago - has finally shifted to its logical conclusion. Selling.

"The most important thing for them is to sell as soon as possible," Centaline's Chan said. "In the past two weeks, those who were willing to cut prices were mainland Chinese. It is going to have some impact on the local property market, that's for sure."

Indeed. And once the Hong Kong liquidation frenzy is over, and leaves the city in a state of shock, watch as the great Chinese selling horde stampedes from Los Angeles, to New York, to London, Zurich and Geneva, and leave not a single 50% off sign in its wake.
The good news? All those inaccessibly priced houses that were solely the stratospheric domain of the ultra-high net worth oligarch and criminal jet set, will soon be available to the general public. Especially once the global housing bubble pops, which may have just happened.

Will Ford Sell Cars for Tesla?

By Douglas A. McIntyre March 19, 2014 6:45 am EDT

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Tesla Motors Inc. (NASDAQ: TSLA) will need to adopt some kind of a local dealership network in the United States if it is going to sell more than tens of thousands of cars a year. The logistics of selling cars without dealers is difficult. Too many states insist that dealers be conduits for new car sales. And too many consumers want a place, with an address and a building, to go to buy and fix their cars. Tesla will need a partner that has a large dealership network, so it does not have to incur those costs itself. Without a doubt, Tesla will have a U.S. partnership with a major manufacturer before the end of 2014.

Tesla has several good reasons for rejecting the dealership path. It sets quality control, both in terms of how it handles new customers, and maintenance and repair for existing ones. Dealer service for all manufacturers ranges from excellent to poor, and some of the performance is beyond the daily control of the car companies.
Tesla does not have to pay a middle man. Its sells a car. It collects the purchase price. The government takes whatever cut it is due. In theory, Tesla’s margins, based on percentage of sticker price, are better than those for most other manufacturers. Changing that only makes Tesla less profitable, and less attractive to Wall Street.
The side of the argument that Tesla needs a dealership partner is the decades over which Americans have purchased cars through dealers, and extent to which those dealers are entrenched, the services they can provide customers and the laws in place to protect them. Tesla can try to wait out state officials, across dozens of states, or it can decide passing up hundreds if not thousands of sales is poor business judgment.
Because Tesla will create a car dealership, its hardest decision will be which existing manufacturer to pick as a partner. The company will have to be very large. Niche manufactures like Porsche and Audi likely think the Model S and less expensive models on the way compete too much with their own products. And other high-end companies like BMW and Mercedes have acknowledged that they have to build models to compete with Tesla. Narrowed down, that leaves very few dealer networks that have luxury models, but would not view Tesla as a rival. Among a very few others, that leaves the Lincoln division of Ford Motor Co. (NYSE: F). It has been in trouble for years. A relationship with Tesla might give its image a lift.
And no one is going to buy a Lincoln over a Tesla.

By Douglas

Read more: Will Ford Sell Cars for Tesla? - Tesla Motors (NASDAQ:TSLA) - 24/7 Wall St. http://247wallst.com/autos/2014/03/19/will-ford-sell-cars-for-tesla/#ixzz2wPHUuArZ
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