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post #341 of 1237

7/14/12 at 11:03pm

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GENERAL MOTORS, GENERAL ELECTRIC: GUILTY OF ECONOMIC TREASON?

By Marilyn M. Barnewall
July 15, 2012
NewsWithViews.com

You, like me, may be tired of the presidential political ads – from both sides. The one that is fingernails on a blackboard for me is Barack Obama’s accusations that Mitt Romney has been for sending jobs to China. This entire television ad is a lie – and at its end the familiar voice of the man known as President Obama that tells me he approves the lies.

It was Barack Obama who gave TARP money to General Motors (which now builds 70 percent of its cars in China) and it was Barack Obama who appointed Jeffrey Immelt, General Electric CEO, his Chairman of the Council on Jobs and Competitiveness. Mr. Obama evidently didn’t realize Immelt was so stupid he needed to explain he meant American, not Chinese, jobs. Immelt calls China “GE’s second home.” I think Americans should make China GE’s only home.

It is Barack Hussein Obama, not Mitt Romney, who had the nerve to make this television ad about sending jobs to China when two men who belong to Obama – GM’s Dan Akerson and GE’s Immelt – are sending jobs to China so fast my head is spinning!

AN OPEN LETTER TO DAN AKERSON, CEO, GENERAL MOTORS

In a 2011 speech in Shanghai, China, (listen to the speech here) just three years after General Motors and Chrysler received $80 billion from U.S. taxpayers to prevent both companies from failing, you, Mr. Akerson, said the following:

“Almost 7 out of every 10 cars we make are made outside the United States.” So, after accepting the “largesse” of the American people to save your poorly-run, unionized, lousy company, you moved 70 percent of cars built to China… taking jobs away from American citizens who will long be paying for the stupidity of General Motors management decisions over many years. Any American who doesn’t understand that unreasonable labor demands are COSTING rather than providing jobs is too dumb to vote!

Your Shanghai speech, Mr. Akerson, left no doubt that General Motors is now China Motors. You are shrinking your U.S. operations while increasing your Chinese business. You also said:

“We have eleven joint ventures in China with SAIC and FAW – vehicle manufacturing, sales, distribution, engineering, design, financing, (etc.). We operate 11 final assembly plants in China and 4 power train plants in 8 cities across the country… We have more than 2,700 dealerships and sales outlets nationwide.” SAIC is Shanghai Automotive Industry Corp – run by the communist government of China. FAW is another Chinese government-owned manufacturer.

“We regard our 11 joint ventures as 11 keys to success not just in China, but globally. Our commitment to working in China, with China, for China remains strong and focused on the future.” That’s what you said. (Akerson actually refers to China as 'the crown jewel in the GM universe.')

Your Cadillac brand actually sponsored a made-for-TV propaganda film. The Chinese Communist Party called it 'The Birth of a Party' in an apparent bid to become the black limo of choice for Communist Party officials. It makes me sick that I once drove a Cadillac – and even sicker that I still have an old Buick. I’ll be looking either at Ford or one of the Japanese cars when I invest in a new car. The Japanese, at least, employ Americans in America.

As far as I’m concerned, Mr. Akerson, you and your lousy company – like all multi-national companies – are guilty of corporate treason and economic terrorism. You have not only sold out the American people and economically crippled the nation because of your evident belief that your company is entitled to the benefits of American capitalism to save your sorry butts, but apparently also don’t believe Americans are entitled to the jobs the bail-out funds made possible. You are a liar and you are a thief… and your company has declared economic war against this Great Nation!

The truth is, the serially-incompetent Obama Administration placed NO restraints on the U.S.$80B TARP bailout and it stinks of crony capitalism. However, that’s no excuse for any American company to turn so viciously on the nation that gave it birth. I pray each night that you, personally – all American multi-national company CEO traitors – are judged in the next world by the same standards you have used in your corporate decisions (nothing personal, it’s just business). You only have to spend 80 or 100 here on earth, but you get to spend eternity in hell when your time comes (as it comes to all of us). You will pay a price for each person who has been harmed by your greed and avarice.

Would things be any better under a Mitt Romney presidency? Romney says the bailout of GM was okay because it saved Union jobs… but two of Romney’s biggest supporters, John Paulson and Paul Singer, walked away from the General Motors bailout with over a billion dollars – a 3000% profit from the GM playoffs – or, is that “payoffs?”

Because of GM’s un-American activities and willingness to ask the Chinese “how high?” when they are told to jump, China’s AVIC now owns the famed WWII ‘Arsenal of Democracy, Willow Run Plant, Saginaw Michigan.

AVIC, Saginaw’s largest employer, exports anti-ship missiles to… the Islamic Republic of Iran. No wonder nations of the Middle East consider the United States government a joke. It is.

You may be laughing now, Mr. Akerson… but it isn’t over ‘til the fat lady sings.

AN OPEN LETTER TO G.E. CHIEF EXECUTIVE OFFICER JEFFREY IMMELT

You, Mr. Immelt, are a particularly disgusting piece of trash and I say to any American that holds even one share of General Electric stock or buys a General Electric product, you belong on the same trash heap.

In February 2009, President Obama asked you to serve on the President’s Economic Recovery Advisory Board (and we can tell how much you know about business by the results we see almost four years later). On January 21, 2011, Obama, obviously impressed with your failures, appointed you chairman of the Council on Jobs and Competitiveness. This was a new position, created by Obama via one of his too frequent Executive Orders. In July 2011, you, Mr. Immelt, announced that General Electric is in the process of relocating its X-ray division from Waukesha, Wisconsin, to China. You have previously referred to China as GE’s “second home market.”

You, Jeffrey, are a pimp for your company and your company is a whore. In 2007, GE, the world’s largest industrial company, was one of the biggest beneficiaries of funds set aside to rescue banks. Is GE a bank? No, but as I said, it is a whore… it can be whatever it wants to be (that rhymes nicely with “G.E.,” doesn’t it?

GE has a company called General Electric Capital, one of the world's largest and most diverse financial operations. GE Capital makes loans for commercial real estate, aircraft leasing and issues credit cards for stores like Wal-Mart. If categorized as a “banking company,” it would be the seventh largest bank in America. Because GE Capital is not a bank, it did not qualify for TARP funds under the Temporary Liquidity Guarantee Program (TLGP) funds. TLGP is a Federal Deposit Insurance Corporation (FDIC) program designed to guarantee unsecured bank, thrift and holding company debt, thus strengthening confidence in the banking system. GE didn’t qualify for the program – but close to $80 billion was funneled through two small financial institutions into GE’s corporate coffers.

You see, GE Capital owned an FDIC-insured savings and loan and an industrial loan company in Utah. These two very small financial institutions made up only three percent of GE’s total asset base… but gained qualification to the TARP funds from the Obama administration under a loophole (more crony capitalism… debtism, I mean). Special privileges had to be manipulated through the system, but it was done quickly and, with Immelt in charge of NBC News, a GE company, publicity was contained. What can we deduce from your actions (rather than the lies which fall so easily from your lips)? How about this: GE is an American company when it is going bankrupt because of your poor management, but a global company when it wishes to ignore its responsibilities to the American people.

General Electric is a global company… which is totally compatible with your recent statement at the Milken Institute: “I am a complete globalist.”

Anyone who buys a General Electric product is supporting a company that has become one of the most skilled tax avoiders in America. In 2010, GE set aside a mere 7.4 percent of its $5.1 billion U.S. profits to pay taxes. Actually, it paid practically nothing.

Do you hold General Electric stock? It closed 3 July at 20.43… down – not a lot, but down. Your sales (last quarter versus a year ago) are down 8.2 percent. Your net income is down 2.2 percent (same quarter-to-quarter comparative). Your net income (using a five-year annual average) is down 7.61 percent and the dividends you pay (using the same five-year annual average) are down 9.95 percent. I’ll bet you worry a lot, Jeffrey, about whether the world government is really going to happen, and will it happen in time to save your sorry butt? I can only hope not.

OPEN LETTER TO READERS:

These guys don’t get away with what they get away with if they don’t have your help. You are the ones who buy General Motors and General Electric products (what is there about the word “general” that turns people into traitors to their own country?). You are the ones who support General Motors and General Electric stock by investing in companies that have declared economic war against the United States.

Maybe you don’t buy the stock – maybe your hedge fund manager does. Have you checked? Do you know in what companies the fund in which you have your IRA or other retirement funds invests? If you don’t, you should. It’s your responsibility to know such things. If you know and don’t care… as I said, you belong on the same trash heap on which they will soon find themselves.

All letters signed Most Sincerely.

http://www.newswithviews.com/Barnewall/marilyn182.htm

The Entire World Is Experiencing The Opposite Of A Sovereign Debt Crisis

by Joe Weisenthal

July 15, 2012

The problems of Spain, Italy, and Greece are often pointed to as being somehow bleeding edge, canaries in the coalmine that stand as a warning to other governments of what might happen if they don't get their acts together.

But the real story today is just the opposite. The world is experiencing whatever the reverse of a sovereign debt crisis is, as borrowing costs for government are plummeting EVERYWHERE.

The most iconic chart is this one, which is the yield on the US 10-Year Treasury, which is once again within a few basis points of an all-time low.

FRED

You might be tempted to say, well, okay but the Fed is manipulating rates, or that the US is just the "cleanest dirty shirt" but both of these explanations fail when you look at the wide sweep of borrowing costs around the world.

Here's a 5-year chart of the Australian 10-year, whose yield is also within a hair of its lows.

Bloomberg

France (which is thought of as a beautiful fiscal model) is seeing its 10-year borrowing costs at 2.228%.

Here are the yields on some other 10-year Treasuries around the world.

Japan: 0.778%

Germany: 1.26%

UK: 1.549%

Sweden: 1.285%

Finland: 1.501%

Canada: 1.635%

Israeli bonds are falling to multi-year lows.

TradingEconomics

Here's the Mexican 10-year!

TradingEconomics

None of this is actually "good" news.

What this essentially means is that there's a lot of money out there that sees no productive investments in the real world, and thus people are willing to stick it with entities that promise them a very meager return.

But it is a good reminder that the crisis is basically the exact opposite of what so many mainstream commenters say it is. It's not about governments reaching their endgame.

It's about a growth-deficient world, governments being the one place that can absorb all this money.

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7/15/12 at 1:17pm

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12 Factors That Are Turning The Streets Of America Into A Living Hell

July 14, 2012

by The American Dream

The United States once had safe, beautiful cities that were the envy of the entire world, but now many of them are degenerating into rotting, festering, crime-ridden hellholes. All over the country there are communities where crime, drugs, gangs and human trafficking have gotten completely and totally out of control. Once upon a time you could walk down the streets of most U.S. cities at night without much fear, but these days there are many large American cities where it would be absolutely crazy to wander around the streets at night unless you want to be mugged, shot or sexually assaulted. If you end up at the wrong place at the wrong time you might end up being abducted by a human trafficker or have your face eaten off by a crazed drug addict high on bath salts. With each passing day our cities degenerate just a little bit more, and life in many of our worst communities truly has become a living hell. Sadly, this comes at a time when the United States has the highest incarceration rate in the world by far. We have tried to lock as many people away as possible and our communities are still turning into hellholes. So where do we go from here?

The following are 12 factors that are turning the streets of America into a living hell...

#1 Out Of Control Gang Violence

The United States has the highest rate of illegal drug use in the entire world. This makes it easy for gangs to make money and to grow.

In Chicago, there are 200 police officers in Chicago's Gang Enforcement Unit to go up against an estimated 100,000 gang members in the city.

How would you feel if you were outnumbered 500 to 1?

One of the Gang Enforcement Unit officers described to CBS News what gang activity in Chicago is like these days....

Sgt. Little is a decorated veteran of Iraq and Afghanistan. He said that parts of Chicago are comparable to what he saw in combat.

It's "tribal warfare," he said, "and as it continues to build unless we manage to interdict it, and manage to stop it long enough for the blood to stop boiling, the heat to die down."

You can see a video news report about gang violence in Chicago that contains this quote right here.

Overall, the FBI estimates that the number of gang members in the United States has increased by 40 percent since 2009 and that there are now a total of 1.4 million gang members living in America.

Has your community been taken over by gangs yet?

At this rate, they will take over all of our communities eventually.

#2 Naked Criminals Going Crazy

Lately, we have seen a rash of truly bizarre drug-fueled crimes all over the United States.

Of course most of us have heard about all of the "zombie attacks" that happened all over the country recently that involved criminals attacking and trying to eat their victims.

But now another trend seems to be emerging.

Now, a lot of these drug-fueled crimes are being committed by people that are completely and totally naked.

This first example comes from down in Florida....

A naked man allegedly flew into a violent rampage, biting a chunk out of another man's stomach after leaping from his roof onto a truck and urinating inside his home.

Officers responding to the scene needed backup to restrain Jeremiah Aaron Haughee with leg shackles, a spit hood and handcuffs after he continued fighting despite being Tasered five times.

Authorities did not carry out tests on Haughee to see if he was under the influence of any drugs.

Police first arrived at the home in Flagler Beach, Florida at 4.30 a.m. to find two men restraining the naked 22-year-old in a puddle of urine and glass.

Another "crazy naked criminal" incident happened recently at a hotel in California....

A naked man who may have been on drugs was arrested Saturday for killing a Tracy motel employee.

Andrew Carreiro, 25, is behind bars accused of killing the 62-year-old woman who cleans rooms at the Hacienda Inn on the 600 block of West 11th Street.

Witnesses say they found Carreiro covered in blood and standing near the partially naked body of the woman, say witnesses.

“[It’s] most definitely the craziest thing I’ve seen in my life, most definitely,” said Jermaine Haynes, a motel resident who made the gruesome discovery.

Why are we seeing so much bizarre behavior all over the nation these days?

Can anyone explain this?

#3 Jersey Shore In Real Life

America loves to party. In a nation where even Secret Service agents "party like rock stars", it shouldn't be surprising that partying is getting out of control in communities all over the country.

Over in New Jersey, one borough "was forced recently to amend its public-urination ordinance to include defecation" because there has been such a problem with public drunkenness.

Some people watch MTV's "Jersey Shore" and they assume that stuff like that simply does not happen in real life.

But it does happen in real life. In fact, some New Jersey towns along the coast are being invaded by hordes of people that want to live the "Jersey Shore lifestyle" and the results have been absolutely nightmarish.

The following is from a recent Bloomberg article....

For Dave Cavagnaro, life as a full- time resident along the New Jersey shore came with small headaches he expected: scant weekend parking, congestion and the occasional piece of litter.

Nothing prepared him for what is going on these days in his hometown of Point Pleasant Beach, about 90 minutes by car from Manhattan. Public urination. Beer bottles tossed on his lawn. Screaming crowds pouring onto his street after the 2 a.m. bar closing. He’s even caught a couple having sex against the side of his house.

#4 Horrifying Abuse Of Children

America is a world leader in the abuse of children. Sadly, there are more than 3 million reports of child abuse in the United States every single year.

Much of this abuse is sexual. What goes on behind many closed doors all over America is so sick that it is hard to find words to even describe how horrible it is.

In the United States today, it is estimated that one out of every four girls is sexually abused before they become adults.

How did we sink so low as a nation?

In this country we are also very physically violent with our children.

One man up in Wisconsin recently brutally murdered his three young daughters right inside the home of his ex-wife.

Unfortunately, that was not an isolated incident.

In fact, the United States has the highest child abuse death rate on the entire globe.

So what is causing all of this child abuse?

Well, the explosion of pornography on the Internet is certainly not helping matters.

Law enforcement officials estimate that about 600,000 Americans and about 65,000 Canadians are involved in trading dirty child pictures on the Internet.

And in a country filled with men that have dirty minds the following kind of thing can happen....

Texas authorities said Tuesday they removed 11 children from a crowded home where a registered sex offender lives after they found eight confined in a small, dark bedroom with restraints tying some to their beds.

Along with the children, 10 adults were living in the one-story, 1,700-square-foot home in Dayton, about 30 miles northeast of Houston, Child Protective Services spokeswoman Gwen Carter said. One month after a raid on the house, authorities are still trying to determine how the children are related and why they were there, she said.

Yes, life in many of our communities is actually turning into a living hell.

#5 Nightmarish Abuse Of Wives And Girlfriends

Children are not the only ones being abused.

All over the United States there is an epidemic of abuse against wives and girlfriends as well.

For example, it was recently reported that one West Virginia man kept his wife chained up for nearly 10 years and treated her like a slave.

And even our politicians get into the act when it comes to domestic abuse. The following is what Massachusetts State Representative Carlos Henriquez is accused of doing to his girlfriend....

Gonzalves told police that Henriquez came to her mother’s home around 2 a.m. and picked her up, telling her that he wanted to discuss their relationship. She said the conversation turned tense, and that Henriquez spent the next two hours driving around downtown Boston, and along Storrow Drive and into the Fenway neighborhood – assaulting her and refusing to let her out of his car.

“Ms. Gonzalves stated that Mr. Henriquez had punched her with a closed fist repeatedly and strangled her while she was in his motor vehicle,’’ police wrote in the report. “Ms. Gonzalves stated that every time she attempted to jump out of the car the suspect (Henriquez) grabbed her wrists to prevent her from jumping out of the motor vehicle.’’

#6 An Epidemic Of Sexual Predators

In America today you aren't just in danger of being abused in your own home.

The truth is that there are millions of sexual predators out there waiting to pounce on you and your children.

Unfortunately, you never know who to trust these days. Someone like Jerry Sandusky can seem very respectable, but it turns out that he was an absolute monster and his crimes against children went unreported for years and years.

Sadly, the truth is that there are hordes of Jerry Sanduskys out there. If you can believe it, it is estimated that 500,000 Americans that will be born this year will be sexually abused before they turn 18.

Yes, there have always been sexual predators in America, but these days they seem to be multiplying.

You never know where one is going to pop up. For example, just check out what happened at a Wal-Mart down in Georgia recently....

A man posing as a representative of the “America’s Funniest Home Videos” TV show tricked an 18-year-old Georgia woman into allowing him to suck her toe inside a Walmart in Georgia, police report.

According to a Columbia County Sheriff’s Office report, the teen was shopping Tuesday evening when approached by the middle-aged suspect, who cops have identified as Joey Leaphart, a 43-year-old registered sex offender whose rap sheet is littered with foot-related crimes.

But that teen got off easy. Other sexual predators will kill you once they are done with you.

A recent Daily Mail article detailed a nightmarish incident which took place in North Dakota. Two crack-fueled predators abducted and brutally murdered a 43-year-old math teacher named Sherry Arnold....

Spell and Waters had left Colorado days before the crime claiming they wanted work in eastern Montana and western North Dakota's oil fields.

After smoking crack cocaine over the entire trip, Waters allegedly told Spell the drug 'brought the devil out in him' and began talking about kidnapping and killing a female, AP reports.

After they spotted Arnold, Spell claims that Waters told him to 'grab the lady' and pull her into their Ford Explorer as she jogged by.

Once they got her into the Ford Explorer, they choked the life out of her and then buried her body in a shallow grave in North Dakota.

Many of these crimes are completely and totally senseless.

But they keep on happening with increasing frequency.

Sexual predators have become so common on Facebook that Facebook is actually using software to track "suspicious behavior and keywords". So what happens if the software finds something? A recent article by Paul Joseph Watson described what comes next....

Words or phrases considered vulgar or an attempt to exchange personal information are red flagged and brought to the attention of Facebook employees, who then decide whether the content is worthy of being brought to the attention of law enforcement.

#7 Horrifying Abuse Of Animals

Is it just me, or does it seem like the abuse of animals is reaching horrifying new levels?

The way we treat our animals says a lot about where we are as a society.

And right now, our treatment of animals says that we are very sick.

For example, one man down in Florida has been charged with biting the lips off of a kitten.

In Waco, Texas police say that a 22-year-old man recently strangled and ate the family dog while he was high on drugs.

Down in Arizona, authorities recently removed dozens of cats from the home of an elderly woman. This was the third time that they had removed cats from her home. This time they discovered that she had 64 cats living in her house. In the past, authorities say that the elderly woman would make a "feline stew concoction" with any of the cats that ended up dying.

#8 Rampant Theft All Over The United States

As the economy has crumbled and unemployment has soared, millions of Americans have started to become very desperate.

All over America we are starting to see desperate criminals steal anything that they think that they can sell for money.

For example, down in Bristol, Tennessee authorities say that there has been an epidemic of lawn equipment theft lately.

Over in California, criminals will even steal the gold right out of your mouth....

Robbers targeted a 17-year-old who had his grill of gold mouth jewelry taken in South Sacramento.

The Sheriff's Department said three men, at least one armed with a gun, beat the teen who was sitting in a car early Sunday morning. Besides taking cash, they took his gold grill, the mouth jewelry worn by many hip-hop fans.

With robbers going wild, stealing gold chains from victims in Stockton, it stands to reason that a grill would be stolen. An average set covering the upper and lower teeth can cost between $600 and $1,600. More if they are embedded with diamonds.

Down in Fresno, California thieves are stealing so much copper wire from city street lights that it is costing the city about $50,000 a month. So far, approximately 2,500 street lights have been stripped of their wiring by thieves.

#9 America's Meth Epidemic

As mentioned earlier, America has the biggest drug problem in the world and one of America's favorite drugs is meth.

According to PBS, there are approximately 1.4 million meth users in the United States right now.

Meth can destroy your life faster than just about any other drug. If you doubt this, just check out these before and after pictures.

Unfortunately, there are lots of signs that meth use is rising again.

According to the DEA, meth seizures increased from 2,839 in 2007 to 6,168 in 2010.

That is very, very bad news. When people become meth addicts they do absolutely crazy things. The following examples are from a recent USA Today article....

A mother in Bakersfield, California, was sentenced Tuesday for stabbing her newborn while in a meth rage. An Oklahoma woman drowned her baby in a washing machine in November. A New Mexico woman claiming to be God stabbed her son with a screwdriver last month, saying, "God wants him dead."

And meth is so addictive that addicts will do just about anything to get more of it.

One woman in St. Louis was recently charged with cooking meth inside her purse while she was inside a Wal-Mart store. When an addict wants more meth, not much else really matters at that point.

#10 Mob Robberies

Groups of young people are banding together in "flash mobs" and are robbing retail stores all over the country. During a "mob robbery", dozens of people will storm into a store and grab whatever they want and then storm right back out. The following is one recent example that happened in Baltimore....

“They went in, they started going everywhere in the store, grabbing things and then they just run out. And I knew that they didn’t buy it because they just run out,” Kendra Mellerson said. “They ran that way and they ran that way. And the guy was trying to come out and stop them but they couldn’t because there was so many.”

After some kids ran away, a store manager blocked the door to keep the rest of the kids from leaving. But those kids got so mad that the door was blocked, they started punching the store manager.

“Yes, they really started hitting that guy and he couldn’t keep getting beat on so he eventually let them out. And then they just ran,” Mellerson said.

Mob robberies are kind of like shoplifting on steroids.

You can see video of one very disturbing mob robbery that happened over in Detroit recently right here.

When we start to see groups of young people banding together to commit crimes like this that is a sign that our society has decayed really, really badly.

#11 Police Are Becoming More Corrupt And More Abusive

When bad things do happen, most people respond by calling the police.

That is who we are supposed to call, right?

Unfortunately, it appears that the police in America have become more corrupt and more abusive than ever.

Up in Seattle, police recently tasered a pregnant woman three times after she refused to sign a ticket for a traffic violation.

Who would do such a thing to a pregnant woman?

That little baby could have been easily killed.

Down in Georgia, one police officer recently kicked a woman who was nine months pregnant directly in the stomach. Amazingly, his superiors in the local police department defended his actions.

If that is how police will treat pregnant women, then how are they going to treat you?

Sadly, police all over the country continue to get caught breaking the very laws that they are supposed to be enforcing. For example, just check out what one police officer has been charged with doing in Philadelphia....

A Philadelphia cop was arrested over allegations that he abducted a 14-year-old girl, sexually assaulted her and made her watch him have sex with a prostitute.

Police found Anthony Dattilo, 36, at a motel in the Bensalem area of the city Wednesday while responding to a possible abduction, according to the Bucks County Courier Times.

Dattilo, a 12-year veteran of the Philadelphia Police Department, is reportedly in custody at the Bucks County prison on $500,000 bail.

#12 Human Trafficking

Human trafficking is big business. It is a 32 billion dollar industry worldwide, and it is an industry that is rapidly growing in America.

Most of those that are abducted and forced into sex slavery are women. A very large percentage of them are under 18 years of age.

This is one reason why it is a really, really, really bad idea for girls to run away from home.

All over America tonight, "pimps" will force young girls to have sex with strange men at hotels, truck stops and in back alleys.

The following is what one CNN reporter witnessed at a truck stop down in North Carolina recently....

The woman sports baggy shorts, a white T-shirt and frizzy hair. Her fat middle-aged pimp sits in a beat up red Honda, watching as his “lot lizard” moves from truck to truck, in broad daylight. If this pimp has a cane it is for substance, not style.

She moves through the parking lot, occasionally opening a cab’s passenger-side door and climbing in.

The trucker and hooker disappear in the back for 10 minutes.

Danielle Mitchell watches from the other end of the parking lot and shakes her head.

“We know from talking to other victims and other agencies that girls are taken to truck stops and they’re actually traded,” she says, sitting in her car, a shiny silver sport utility vehicle, keeping a healthy 50-yard distance from the pimp.

Sadly, this is rapidly becoming an out of control epidemic in the United States.

According to the Daily Mail, the FBI recently rescued 79 sex slaves all across America in just one three day period....

The FBI has rescued 79 teens held against their will and forced into prostitution from hotels, truck stops and stores during a three-day swoop on sex-trafficking rings across the country.

The sex slaves were aged between 13 and 17, although one said she had been involved in prostitution since she was just 11, authorities said.

During the sting operations across 57 U.S. cities - including Atlanta, Sacramento and Toledo, Ohio - 104 alleged pimps were arrested.

Unfortunately, getting those 79 sex slaves off the street barely made a dent in the overall problem.

America is very sick, and our cities continue to get even worse with each passing day.

You can find even more evidence that our society is collapsing right here.

This article is already over 3000 words long, and I feel as though I have barely scratched the surface.

Sadly, most Americans don't think about these kinds of things very much.

Instead, most of them spend their time obsessed with entertainment and celebrities and other things that don't mean a whole lot in the long run.

That is why the fact that Steven Tyler and Jennifer Lopez are leaving American Idol is causing so much trauma all over America right now.

Our priorities are seriously messed up.

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7/16/12 at 6:22am

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Quote: Originally Posted by stoneranger......

"12 Factors That Are Turning The Streets Of America Into A Living Hell

July 14, 2012"

Stone not to worry , the Prez and others want to take ALL guns from the LAW abiding citizens.............

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7/16/12 at 9:17am

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Quote:

Originally Posted by split710

Quote: Originally Posted by stoneranger......

"12 Factors That Are Turning The Streets Of America Into A Living Hell

July 14, 2012"

Stone not to worry , the Prez and others want to take ALL guns from the LAW abiding citizens.............

Sure...then we would have to rely on the gov't for protection also because the gangs and criminals will always have guns.

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7/16/12 at 9:30am

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15 July 2012

Read This Book: Predator Nation by Charles Ferguson

Chapter 1 (an excerpt)

WHERE WE ARE NOW

MANY BOOKS HAVE ALREADY been written about the financial crisis, but there are two reasons why I decided that it was still important to write this one.

The first reason is that the bad guys got away with it, and there has been stunningly little public debate about this fact. When I received the Oscar for best documentary in 2011, I said: “Three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail. And that’s wrong.” When asked afterward about the absence of prosecutions, senior Obama administration officials gave evasive nonanswers, suggesting that nothing illegal occurred, or that investigations were continuing. None of the major Republican presidential candidates have raised the issue at all.

As of early 2012 there has still not been a single criminal prosecution of a senior financial executive related to the financial crisis. Nor has there been any serious attempt by the federal government to use civil suits, asset seizures, or restraining orders to extract fines or restitution from the people responsible for plunging the world economy into recession. This is not because we have no evidence of criminal behavior. Since the release of my film, a large amount of new material has emerged, especially from private lawsuits, that reveals, through e-mail trails and other evidence, that many bankers, including senior management, knew exactly what was going on, and that it was highly fraudulent.

But even leaving this crisis aside, there is now abundant evidence of widespread, unpunished criminal behavior in the financial sector. Later in this book, I go through the list of what we already know, which is a lot. In addition to the behavior that caused the crisis, major U.S. and European banks have been caught assisting corporate fraud by Enron and others, laundering money for drug cartels and the Iranian military, aiding tax evasion, hiding the assets of corrupt dictators, colluding in order to fix prices, and committing many forms of financial fraud. The evidence is now overwhelming that over the last thirty years, the U.S. financial sector has become a rogue industry. As its wealth and power grew, it subverted America’s political system (including both political parties), government, and academic institutions in order to free itself from regulation. As deregulation progressed, the industry became ever more unethical and dangerous, producing ever larger financial crises and ever more blatant criminality. Since the 1990s, its power has been sufficient to insulate bankers not only from effective regulation but even from criminal law enforcement. The financial sector is now a parasitic and destabilizing industry that constitutes a major drag on American economic growth.

This means that criminal prosecution is not just a matter of vengeance or even justice. Real punishment for large-scale financial criminality is a vital element of the financial re-regulation that is, in turn, essential to America’s (and the world’s) economic health and stability. Regulation is nice, but the threat of prison focuses the mind. A noted expert, the gangster Al Capone, once said, “You can get much further in life with a kind word and a gun than with a kind word alone.” If financial executives know that they will go to jail if they commit major frauds that endanger the world economy, and that their illegal wealth will be confiscated, then they will be considerably less likely to commit such frauds and cause global financial crises. So one reason for writing this book is to lay out in painfully clear detail the case for criminal prosecutions. In this book, I demonstrate that much of the behavior underlying the bubble and crisis was quite literally criminal, and that the lack of prosecution is nearly as outrageous as the financial sector’s original conduct.

The second reason that I decided to write this book is that the rise of predatory finance is both a cause and a symptom of an even broader, and even more disturbing, change in America’s economy and political system. The financial sector is the core of a new oligarchy that has risen to power over the past thirty years, and that has profoundly changed American life. The later chapters of this book are devoted to analyzing how this happened and what it means.

From: Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America by Charles H. Ferguson

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7/16/12 at 10:35am

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The Largest Natural Disaster In U.S. History: The Endless Drought Of 2012 Will Bake America Well Into August

by The American Dream

July16, 2012

Why is the heartland of the United States experiencing such a horrific drought right now? At the moment, approximately 61 percent of the entire nation is experiencing drought conditions, and this is absolutely devastating farmers and ranchers all over the country. Less than two weeks ago I wrote an article asking what would happen if these drought conditions persisted, and now we are finding out. The U.S. Department of Agriculture has created the largest natural disaster area in U.S. history. The USDA has declared 1,016 counties in 26 U.S. states to be disaster areas. The USDA declaration basically covered about half of the nation, and there is now no denying how horrible this drought really is. You can see a map of this disaster area right here. This endless drought is being compared to the nightmarish drought of 1988, and if it persists into August it could become perhaps the worst drought that America has ever seen. The USDA says that approximately 60 percent of all corn in the country is experiencing "moderate to extreme" drought conditions. If this drought does not end soon, the losses are going to be mind blowing. Already, it is estimated that farmers and ranchers have suffered billions of dollars in damage. How much worse can things get?

At the beginning of July many were hoping that we would soon see some rain and that we could still see a decent corn harvest.

Unfortunately, the drought has gotten even worse since that time. The following is from an article in the Chicago Tribune....

The whole of Iowa was classified as abnormally dry as of July 10 and 12.7 percent of the top corn and soybean producing state was in severe drought, up from 0.8 percent the prior week.

Harder-hit Illinois, the No. 2 corn and soy state, was 66.28 percent under severe drought or worse, up from 40 percent the previous week.

Severe to exceptional drought covered 80.15 percent of Indiana, versus 68.84 percent the prior week.

Conditions in Missouri also deteriorated, with 82.54 percent of the state in severe drought or worse, compared with 78.83 percent the week before.

That is not good news.

Posted below is the latest update from the U.S. drought monitor. As you can see, nearly the entire southern half of the country is extremely dry right now....

It is being projected that in some of the major corn growing areas as much as 60 percent of the crops could be lost.

Many farmers that had been desperately hoping for rain are now becoming resigned to the fact that their crops are not going to make it. The following is from an article in the New York Times....

"Corn is anywhere from knee-high to waist-high," Gonzalee Martin, agriculture and natural resources educator with Purdue University’s Allen County extension office, told The News-Sentinel. "Much of it has already tassled with no ears at all. Much of it’s going to be completely lost"

When your livelihood depends on the weather, an endless drought can be extremely stressful. Many farmers that had been anticipating a bumper crop this year are now faced with an utter disaster. The following example comes from CNN....

Now, as punishing drought grips the Midwest, Villwock, 61, walks his hard-hit 4,000 acres in southwest Indiana in utter dismay.

Where there should have been tall, dark green, leafy plants, there now stand corn stalks that are waist high or, at best, chest high. They are pale in color and spindly. Fragile. Tired.

Pull back an ear's husk and you find no kernels, he says. With temperatures rising above 95 degrees, the pollen starts to die.

"It's emotionally draining," he said. "The crop got out of the ground very well. We were so optimistic. But maybe a few of us were counting our eggs before they were hatched."

So is there any hope that things are going to turn around?

Unfortunately, things do not look promising right now. It is being projected that the Corn Belt will experience extremely high temperatures and very low rainfall all the way through mid-August. The following report comes from accuweather.com....

AccuWeather.com agricultural meteorologists are concerned that new and frequent waves of near-100-degree temperatures and stingy rainfall will further stress crops over Iowa, Illinois and Nebraska into mid-August.

When temperatures are very high and rainfall is very low, evaporation happens very rapidly. As accuweather.com notes, when the ground becomes very, very dry it can create a vicious cycle that feeds on itself....

Evaporation rates are very high into the first part of August. Soaking rain on a regular basis instead of a brief downpour is needed to be of benefit beyond a couple of days.

Turning things around in the Midwest as a whole will be a difficult task as dry ground tends to bring higher daytime temperatures, which in turn raises evaporation rates and so on.

So what does all of this mean for the rest of us?

It is going to mean higher food prices.

On Friday, the price of corn hit $7.50 a bushel.

It had been thought that the price of corn would only be about $5.00 a bushel this year.

At this point, the price of corn is up 48 percent since mid-June, and it could go a whole lot higher.

Some analysts are projecting that if this endless drought persists, we could see ten dollars for a bushel of corn and 20 dollars for a bushel of soybeans.

And yes, you will notice this at the supermarket.

In a previous article, I included a quote from a recent article by Holly Deyo about why the price of corn affects the price of so many other products....

Since 75% of grocery store products use corn as a key ingredient, expect food prices to skyrocket. Corn is also a staple in many fast foods. Corn is in ethanol and the main food source or chickens. In addition to this, maize is in many things that aren't obvious like adhesives, aluminum, aspirin, clothing starch, cosmetics, cough syrup, dry cell batteries, envelopes, fiberglass insulation, gelatin capsules, ink, insecticides, paint, penicillin, powders, rugs and carpets, stamps, talcum, toothpaste, wallpaper, and vitamins. That's just for starters...

This is a huge heads up for you to purchase corn-using products NOW before these conditions reflect in grocery goods. It will be a narrow window of opportunity.

This endless drought is also a complete and total nightmare for ranchers.

At this point, approximately 50 percent of America's pastures and ranges are in "poor" or "very poor" condition.

Back in June, that figure was only sitting at 28 percent.

So things have gotten a lot worse very quickly.

A lot of ranchers are selling off their cattle because this drought is making it very difficult to continue to feed them. The following is from examiner.com....

Rauhn Panting, with the University of Idaho, who works with ranchers and farmers, says, "We're going to run out of grass. It's going to be scary." Ranchers are being advised to vacate grazing lands, weeks and even months before when they usually have to leave.

Left with only two choices, feed or sell, many are opting to sell their cattle. The Torrington Stock Market in Wyoming, has recorded that 36,000 cattle were sold in May and June of this year. The usual average for these months is 5,500. Small ranchers, with 30-50 cow/calf pairs, are being hit the hardest.

So expect higher meat prices in the fall and winter as well.

This all comes at a really bad time. We are already on the verge of a global financial catastrophe. Agriculture was supposed to be one of the few bright spots in the U.S. economy.

Sadly, the U.S. is not the only one having problems with crops this year.

For example, in Germany farmers are actually experiencing a full-blown plague of rats.

Yes, seriously.

The following is from a recent Der Spiegel article....

Millions of field mice are overrunning the central German states of Thuringia and Saxony-Anhalt, much to the concern of local farmers. The rodents are devastating food crops, cutting yields by up to 50 percent. Getting birds of prey to hunt the critters didn't help, and now farmers want to be allowed to use a banned rat poison.

Edited by stoneranger - 7/16/12 at 10:51am

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7/16/12 at 2:02pm

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http://www.washingtontimes.com/blog/watercooler/2012/jul/15/picketvideo-obama-if-youve-got-business-you-didnt-/

This son of a....

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7/16/12 at 8:02pm

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Signs of Things to Come

By JR Nyquist

Created 16 Jul 2012

There is trouble in the Mideast and trouble in the Midwest. A serious drought threatens crops in the American Midwest while in the Middle East, a Saudi informant for Debka-Net-Weekly says, “It is already decided.” The United States will attack Iran in the fall. Another Debka story, dated July 12, says “The first week of October is now tagged as decision-time for attacking Iran.”

Jeffrey Goldberg, writing in The Atlantic], doesn’t think there will be an attack on Iran. He describes a parade of U.S. officials arriving in Israel for “top-level consultations.” A short while ago Deputy Secretary of State William Burns arrived in Israel, followed by Obama’s national security advisor, and now Secretary of State Hillary Clinton. “The number of top American officials visiting Jerusalem is outmatched only by the number of American warships already in the Persian Gulf,” wrote Goldberg. Since negotiations have stalled with Iran, Obama is sending what Goldberg calls “the Summer 2012 Please-Don’t-Bomb-Iran Tour, starring the Obama Administration, now on stage in Jerusalem.”

The claim that Goldberg and others make is that an Israeli attack against Iran would strengthen the Iranian clerical regime, instead of weakening it. Some analysts believe that a surprise strike against Iran would make Iran appear in a sympathetic light – as the victim of U.S. imperialism or Zionist aggression. Therefore, it is best to do nothing. Continue to negotiate, etc. Others believe that a strike against Iran would rally those Iranians who oppose the regime, leading to its overthrow and freedom for the Iranian people.

What are Iran’s leaders saying about all this? A few days ago the Iranian leadership vowed to back any nation that fights America or Israel. “The oppressors – and at the helm of it America and the Zionists – have been taken by surprise by the [Arab Spring] movement and are trying with all their power to control it,” said the Ayatollah Ali Khamenei in a recent speech. “However, if the Islamic nations resist the conspiracies, then it is guaranteed that they will be victorious over the world oppressors.”

The U.S. has responded to this defiance by imposing a new round of sanctions against Iranian and other companies that support Iran’s missile and nuclear programs. At the same time, the United States is embarked on a buildup of forces in the Gulf. On July 11, the Los Angeles Times reported, “U.S. deploys sea drones to Persian Gulf to clear Iranian mines.” According to the Times story, “Reopening the strait could take the Navy and its allies five to 10 days, officials said. But even a temporary disruption of tanker traffic could cause global oil prices to soar and spark widespread economic turmoil.”

The global economy is on the edge. On Saturday I spoke with a friend in Lisbon, Portugal. He said that unemployment there was 17 percent. Neighboring Spain has an unemployment rate over 24 percent . Greece has 21 percent. All countries are suffering to some extent, and recovery is either shaky or not happening. What the world wants now is a smooth ride. And the Midwest, perhaps as much as the Mideast, is promising the opposite. Consider what lies behind the following Reuter’s headline: “Drought parches more of U.S. Midwest, crops suffer.” So far this is the biggest drought in 25 years, and it might get worse. This drought will affect methanol production, food exports, domestic food prices, and more. Presently, almost two-thirds of the nine-state Midwest region is suffering drought. Unless the region gets significant rainfall by August 1 there will be crop failures. (See also, the U.S. Drought Monitor .)

According to the Climate Prediction Center of the National Weather Service, “Dryness and drought have been increasing both in extent and intensity across much of the Ohio and Tennessee Valleys, the Corn Belt region, the middle and lower Mississippi Valley, and much of the Great Plain. Drought is likely to develop, persist or intensify across these areas.” According to CNN , 1,000 counties in 26 states are natural disaster areas. About 61 percent of the lower 48 states are affected. Half the pastures and ranges are in poor or very poor condition. Not only is the United States suffering from drought, but other countries such as India have been suffering drought conditions (See the Global Drought Monitor ).

It is worth noting that in 2008 Prof. William Alexander of the University of Pretoria wrote a paper titled, “The Likelihood of a Global Drought in 2009-2016.” In this paper Alexander described problems with the Global Warming hypothesis. Instead of Global Warming, Alexander believes we are headed for Global Cooling – which means global drought. Alexander noted, “This prediction model is based on the thoroughly studied, synchronous linkage between periodic solar activity and the hydro-meteorological processes…. The likelihood of prolonged, severe droughts from next year onwards is very real.” Noting the impact of the Great Depression Drought, Alexander wrote: “As I write these notes there is a considerable volume of international Internet traffic expressing concerns relating to the lack of solar activity during the past year and the possibility that the world may be entering an ice age.”

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7/16/12 at 8:08pm

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When bankers get nervous, watch out

As economies worldwide weaken, the pressure is rising on the world's central bankers for dramatic action that will ultimately do more damage. When that happens, the gold rally is on.

By Bill_Fleckenstein

Fri 2:42 PM

World stock markets remained under pressure over the last week due to the ongoing dysfunction in Europe and -- not to be underestimated -- the fact that the world economy is slowing down dramatically (which should not come as a shock to anyone who reads this column).

I think at this point it is worth discussing the worldwide response by central banks to this macro-deterioration. As my longtime readers know, I have absolutely no respect for any of the idiots who run central banks. They are always wrong. Repeat: they are always wrong.

Do you believe in global waning?

For the last six to 12 months, they have all felt that their individual economies were stronger than they were. And no central bank has been more off the mark, or guilty of making more mistakes, than our own Federal Reserve.

It is so incompetent that, in addition to spawning two gargantuan financial bubbles and the ensuing consequent dislocations, it is not even capable of understanding that when you have the warmest weather in more than 100 years, it skews the seasonally adjusted data. Thus, they were all patting themselves on the back this winter while I and others were pointing out that seasonal data were drastically boosted by the weather.

Now the underlying economic weakness can no longer be debated, and of course it is exacerbated by the uncertainty and chaos revolving around European government debt and the implications for Europe's financial system.

Recently, the Fed has sent signals that it is getting ready to do more easing of the money supply (beyond extending Operation Twist), and many other central banks have taken steps toward easier money as well. (We've seen this from China, Brazil, the European Central Bank and the Bank of England).

One of this week's Wall Street Journal headlines, "Fed weighs more stimulus," pretty much says it all. (The New York Times also ran a similar story).

In the journal piece, Jon Hilsenrath -- a regular outlet for the Fed's public relations spin -- makes this point regarding the Federal Open Market Committee (FOMC) meeting minutes released July 11: "The minutes portray an institution in a state of high alert over the economic outlook. Fed officials expressed worry at the meeting about risks to the American economy stemming from the euro-zone debt crisis, the possibility of a 'significant slowdown' in the Chinese economy and the prospect of deep U.S. government spending cuts and tax increases scheduled to go into effect at year-end."

The minutes are from late June -- meaning there has been even more weak data released since that bolsters the Feds' concerns.

Keep in mind, Fed governors had gotten their hopes up and now those hopes have been slammed, which is going to make them doubly uptight and more prone to panic. (Remember when Bernanke said the subprime mortgage mess was "contained" in 2008 and the extensive actions the Fed took when he found out how wrong he was?)

In any case, given the fact that the Fed has been so wrong, I expect that when it finally decides to the do next round of quantitative easing, it will be bigger and bolder and might even include some imaginative new tricks.

On Thursday, Joan McCullough of East Shore Partners, whose newsletter I have subscribed to for years, succinctly described the current Fed predicament as follows: "They blew their chance for that after the June FOMC, opting instead for a wimpy move of extending OT (Operation Twist). So they have two options remaining: get hugely creative/unconventional or fuhgeddaboudit altogether."

Really using their sinking caps

By extension, as I noted, other central banks will also be inclined to panic. That is why it is difficult to make money on the short side right now by betting stock prices will decline, even though stocks are leaking and in all likelihood may take a nasty tumble before the Fed finally panics. Stock bulls think, "Why should I sell when the Fed has my back?" But even in the four-year-old "QE era," the market still has had to get brutal enough to force out weak-handed players, thereby unnerving those who had been intent on remaining calm.

That is what has happened in the past, and it could easily happen again. But such an environment makes it tricky to be short stocks because even though some individual stocks might be working, if you try to up your exposure, it is easy to get run over by spurious rumors or more hope.

Even as the market has mostly declined over the last couple of weeks, there have been a few hellacious rallies that would make you jittery if you had just increased your short exposure. On Thursday morning, for instance, the S&P futures were lower by about 1.5% in the first hour, then cut those losses in the wake of absolutely nothing.

It might be possible to make some money on the short side if you employ guerrilla tactics, but just getting short, pressing and sitting back to collect a big payday might be rather difficult.

Yellow dog still on a short leash

Turning to the gold market, obviously it has been under pressure, too. I'm sure many folks were disappointed Thursday to see the WSJ headline noted above, combined with all the other stimulus we've seen, not only not make gold rally but see it decline. Unfortunately, that is just where we are right now. The minute "good news" for gold doesn't work, it turns into bad news, because it didn't cause the market to rally.

One of the problems the gold market has had is that demand from India has been subdued. The finance minister there has been trying to clamp down on gold purchases, and of course India's currency has been quite weak. That minister has now resigned, so we may see Indian behavior begin to revert back to what it has been. If so, we will be approaching the strong seasonal period for gold in another month, with potentially pent-up demand.

However, an additional big negative for gold (in the form of negligible demand) has been the lack of any serious U.S. buying (although the hedge fund community was a big believer last year). Now though, when you look at their view, as expressed by positions in the Commitment of Traders Report, it looks like more of the big, futures-oriented hot money (i.e., hedge funds and commodity trading advisers) is short.

More importantly, a big buyer who needs to own gold, but doesn't thus far, is the "average" wealthy American. I think that is unquestionably what has ailed gold stocks, not their own fundamentals, which have been disappointing from time to time, but not nearly as bad as the stocks' behavior would suggest.

The bottom line is that the bull market in gold has been more global than American.

Who knew mad men were so sane?

At some point, though, I continue to believe that more American investors will start buying gold, though I have no idea what the catalyst will be. Recognizing that an idea has to start somewhere, or that as the Chinese say, a journey of a thousand miles begins with the first step, Thursday's Wall Street Journal carried a two-page pullout advertisement by Charles Schwab with the banner "A different view of risk" and tagline "Bubbles, crashes, and downturns are going to happen, but you can take steps to find opportunities in risk."

The ad goes on to give a short primer on one facet of the bull case for gold, which is paid off by more big type: "All that glitters: How gold is impacted by the paper value of money." It then accurately concludes: "By printing money the Fed is actually debasing the value of its currency. This is where gold as an asset class comes in, because (Stephen) Cucchiaro (chief investment officer at Windhaven Investment Management, a Schwab affiliate) sees gold as an excellent way to measure the value of paper currency. It isn't possible to print more gold; the amount aboveground is relatively fixed, so as more money is printed, it takes more of it to purchase the same amount of gold. The result: the price of gold goes up and the value of paper money goes down."

There, ladies and gentlemen, is the bull case for gold in a nutshell, and eventually more folks are going to realize this. The reason I bring all of this up is because gold bulls feel tortured after nine months of correction (which may go on a bit longer). But in my opinion, given all I have described above, the next rally in gold, when the Fed finally acts, is going to be huge. Thus, I think gold investors need to be mentally prepared for what they might do if that is the case.

Anyone with gold exposure probably doesn't need to take that much action until it looks like the powers that be are finally panicking. But when that moment arrives, gold bulls should make sure they have the positions they want, so they can capture attractive (even if a little higher) prices, rather than paying up after the market has rallied a long way and exposing themselves to more risk.

For now, gold owners should remember the saying, "Just when the caterpillar thought the world was over, it turned into a butterfly."

Thanks to Fred Hickey, my good friend and top-notch analyst, for directing me to a number of facts in this column.

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7/17/12 at 8:29am

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How Bernanke will cause the next crash before 2014

Commentary: Rich will lose 50% in massive wealth destruction

By Paul B. Farrell, MarketWatch

JUly 17, 2012

SAN LUIS OBISPO, Calif. (MarketWatch) — “Massive wealth destruction coming,” warns Hong Kong economist Marc Faber, one of many “Dr. Dooms” we’ve featured over the years.

Faber warned in a recent interview on CNBC: The Super-Rich “may lose up to 50 percent of their total wealth.”

Marc Faber

How? “Somewhere down the line we will have a massive wealth destruction. That usually happens either through very high inflation or through social unrest or through war or credit-market collapse.” And as if to punctuate his message, in Barron’s recent “Midyear Roundup,” Faber was asked, “Will things get worse before they get better?”

Answer: “Yes, possibly much worse,” adding “most markets peaked in May 2011.” He expects “further weakness in the second half of the year. Corporate profits will disappoint … stock markets are oversold. The U.S. government-bond market is overbought. The U.S. dollar is overbought, and gold is oversold near term.” Worse, he’s “very negative about the outlook longer term.”

In spite of his doom and gloom about America and the world economy, when pressed Faber did recommend some China REITs. And waffled a bit on America: “It is safest to buy U.S. Treasurys because the U.S. can print money” and “pay the interest. But you are earning only 1.6%, and the cost of living is increasing by about 5% a year around the world. You are getting a negative real return.”

Not very promising in today’s uncertain world, where the American elections are unlikely to solve the economy’s core jobs problem, no matter who wins in November.

So when comes the change? “Down the line.” “The breaking point could be three, four, five years away. The world is heading toward a major crisis.”

OK, he hedges his bet on timing. But he’s very clear on how and why: The collapse will be “caused by Federal Reserve Chairman Ben Bernanke and the Federal Reserve’s continuous printing of new money.” The “bailout and money printing” since the 2008 Wall Street Crash did not “create any long-lasting wealth or create healthy growth.” Nor will the next president. So investors must hedge longer-term bets.

New crash coming before Bernanke leaves Fed by early 2014

The next “collapse will come on Bernanke’s watch.” Warning to investors: Bernanke’s second four-year term as chairman of the Fed ends Jan. 31, 2014. (He will remain a board member until 2020.)

Get it? There will be another crash. The crash will ignite before 2014 when Bernanke’s term ends. The crash will be worse than 2008. Bernanke will be the cause. He will be clueless about the unintended consequences of his policies (like his predecessor Alan Greenspan, who ultimately had to admit to Congress “I really didn’t get it until very late.”)

Bernanke’s no different. When reappointed in 2010, “Black Swan” author Nicholas Taleb said Bernanke “doesn’t even know that he doesn’t understand how things work.”

Unfortunately, since Wall Street simply went back to business as usual after the 2008 Crash, fighting all reforms, a new crash is not only easy to predict in the 2013-2014 period, we can also predict that it will be far more deadly for Wall Street banks, the American economy, taxpayers, investors, consumers and retirees.

Guess what? Many ‘Dr. Dooms’ predicted 2008 crash

Why so easy to predict? Because we’re repeating all the same dumb and dumber mistakes we did in the year leading up to the 2008 crash. The Fed’s cheap money policies have favored banks, devaluing the dollar, destroying the value of stocks, fueling inflation, triggering job losses and social unrest. In short, the happy conspiracy between the Fed and Wall Street is suicidal and will take down the rest of America with it.

Same mistakes? You bet. In mid-June 2008 just before the collapse we listed several years of warnings about a coming global economic and market crash. And they were not just a ragtag bunch of “Dr. Dooms.”

Here’s a selection of the warnings of a crash coming, all made years before the 2008 global meltdown … Two Fed Governors beginning in 2000 … then in 2004, former Secretary of Commerce Pete Peterson … hedge fund managers like Rodriguez and Soros ... in 2005, economist Nouriel Roubini and the IMF’s Chief Economist, Raghuram Rajan … also a Special Report in the Economist on the 75% appreciation in global real estate in just five years … in 2006 Texas billionaire Rainwater warned us in Fortune; collapse warnings from Faber, from economist Gary Shilling in Forbes, also bond king Bill Gross, and Warren Buffett in Fortune … and a Harpers special on coming collapse in real estate … then in August 2006, the new Treasury Secretary Hank Paulson privately warned Bush’s staff at Camp David ... in 2007, more warnings, from money manager Jeremy Grantham, economist Gary Shilling in his Insight Newsletter and former SEC Chairman Arthur Levitt in the Wall Street Journal … at the same time our new Treasury Secretary was quoted in Fortune: “Strongest economy in my lifetime.”

How can investors prepare for the coming crash of 2013?

So what an investor to do? Start by lowering your expectations. Then look with enormous skepticism on any returns that exceed roughly five percentage points over the inflation rate. And stop listening to happy talkers, Wall Street hustlers and cable’s talking heads.

Remember, their advertisers need you to keep chasing hot stocks and the hottest sectors hyped in the press. That’s a bad strategy given the big risks dead ahead.

But that’s not enough. Here’s your No. 1 strategy: “The critical question over the next decade isn’t ‘Where will my returns be highest’?” warns Faber. Instead, ask: “Where will I lose the least money?”

Get it? Invest to lose the least money. Yes, capital preservation. That’s also Uncle Warren Buffett’s “rule No. 1.” And it should be your rule No. 1 for the rest of this decade: “Never lose money.”

Stop chasing today’s hottest deals, ignore this week’s most-talked-about analysts recommends, your broker’s sure bets, the next IPO. We know you’re unhappy with “new normal” returns under 10%, but chase them and you’ll lose more.

Instead, wake up and be a smart investor. Analyze every investment. Pick the ones most likely to “lose the least amount of money.” We’re in for some scary years ahead. And capital preservation has to be your one and only game. Deviate and you lose.

Need whole new mind-set. Why? Optimism is a portfolio killer

Many of you are contrarians, free-market individualists and macho traders who will think Faber is just another crackpot “Dr. Doom.” And that all those many other warnings between 2000 and 2007 were just lucky guesses by perennial Doomsday Cassandras and Chicken Littles “crying wolf” one time too many.

Ignore warnings at your peril. Remember the catastrophic $10 trillion-plus market losses after the 2000 dot-com crash? Another multitrillion loss after the 2008 meltdown? In all, Wall Street lost an inflation-adjusted 20% of America’s retirement money through that decade.

Imagine Wall Street banks in virtual bankruptcy, again, like 2008, begging Congress for yet another bailout, as America sinks into a longer double-dip recession.

Warning, next time there will be no trillion-dollar giveaways, like Paulson and Geithner did with our too-big-to-fail banks during the 2008 meltdown. We’re already hearing grumblings about the J.P. Morgan Whale and the Libor scandals. More is ahead. Banks are too-big-to-manage, will fail. Expect government to extract a heavy price in the next bailout. Assuming politicians and the public are willing to add another $29.7 trillion debt.

Recently Faber warned that our brains are our worst enemies, captured in one word: overconfidence. Check out his GloomBoomDoom.com site: Investors are “deeply asleep at the switch.” Investors feed on happy talk. Investors minimize warnings, hard facts and the truth: “My experience has been that most investors (including myself) who lose money fail because of overconfidence … convinced that an investment will be highly profitable and seldom consider that they could be wrong.”

Both Wall Street and Main Street investors invariable don’t wake up … till it’s too late.

Final warning: Remember Dr. Doom’s Rule One: “Invest where you’ll lose the least amount of money!” Why? Because “massive wealth destruction is coming.” A time when “the rich may lose up to 50% of their total wealth.” With Bernanke the trigger.

Edited by stoneranger - 7/17/12 at 9:24am

post #352 of 1237

7/17/12 at 10:45am

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The End of the Bernanke Put is Here

by Phoenix Capital Research

on 07/17/2012 08:20 -0400

For well over a year, even after Ben Bernanke admitted that the consequences of QE outweighed the benefits, the financial media world is awash with claims that QE 3 is just around the corner. It doesn’t matter than it’s been over a year. Nor does it matter that the Fed has staged 10 FOMC meetings without launching more QE, everyone claims QE is coming.

Guess what? It’s not. And I’m going to lay this idiotic theory to rest right here and now.

First off, the Fed cannot launch QE because of the political climate in the US. In case you missed it, the last time the Fed engaged in a large monetary move (outside of just extending some pre-existing policy) was in November 2011 when it facilitated a coordinated Central Bank move to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements.

The political response to this was extreme. Every GOP candidate under the sun began to target the Fed. Some began calling for Bernanke to be fired. Meanwhile, Obama became totally silent on defending the Fed. Let that sink in for a moment. Obama, who reappointed Bernanke, didn’t defend Bernanke’s actions. In fact he acted as if nothing had happened.

The message was clear: the Fed had become politically toxic and if Obama wanted a shot at re-election, he needed to distance himself from the Fed.

It was only a few months later that the Fed went into full on damage control mode by increasing its town hall meeting efforts (Bernanke now goes to colleges to explain why the Fed is great), writing complaints about how the media is presenting its moves during the financial crisis along, and of course the now famous “Bernanke’s a normal guy who drives a Sebring and reads a Kindle” article in the Wall Street Journal.

Consider that Bernanke, only a few years ago, lied to Congress about monetizing debt. Around that same time the Inspector General in charge of oversight of the Fed said that the Fed:

1) Didn’t know where it was sending hundreds of billions of Dollars.

2) Had not launched any investigations into where the money had gone

3) Had not launched any investigations into why Lehman Brothers had been allowed to fail

Has everyone forgotten this? Bernanke, the savior of capitalism, Time Magazine’s Man of the Year, and arguably the most powerful human being in terms of monetary clout ON THE PLANET is now going into classrooms to explain why the Fed is wonderful and should continue to exist.

Even more than that, he’s having his favorite mouthpiece at the Wall Street Journal portray him as a normal American who drives a US car and reads his kindle. This is the HEAD OF THE FED we’re talking about. Since when does Bernanke need anyone to depict his private life? The guy used to tell the media to get stuffed when it snooped around the Fed’s actions… now he’s openly going to the media asking to get profiled?

Folks, the political game has changed in the US. The Fed is no longer invulnerable. In this climate more QE cannot possibly happen. End of story. Indeed, if the Fed were to launch QE at any time between now and the election, Obama is DONE. The last possibly chance for QE without it being a clear hand-out to Obama (and a gift from the political gods to Romney) was June. The Fed passed on that.

Don’t believe me? Why do you think Obama is privately begging Germany and EU leaders to keep the EU together until after November? He knows the Fed cannot step in and save the day without killing his chances at re-election. END. OF. STORY.

Finally, there’s a simple monetary reason the Fed cannot engage in more QE: BANKS NEED TREASURIES. Treasuries are the ONLY senior asset on bank balance sheets that are increasing in value (don’t even try to claim that mortgage bonds, corporate bonds or muni bonds are attractive to banks given what the banks know about the ongoing debt crisis in the world).

More QE pushes the US Dollar down. So for the Fed to engage in more QE would mean the Fed would be buying appreciating assets from the banks (which can be leveraged up for trades… remember all the big banks are now basically hedge funds) in exchange for cash which yields next to nothing and would be depreciating in value if more QE was announced.

The banks need all the Treasuries they can get their hands on. I know, I know, ultimately Treasuries will be worth much less when the debt crisis hits the US. But it hasn’t yet.

If you’re a large bank what would you rather own? Treasuries or some other sovereign bond which either yields nothing (Germany, Japan, France) or which is about to default (the PIIGS and others)?

The answer is obvious. You want Treasuries. We’re not talking about ideals here; we’re talking about reality. And in today’s financial reality, Treasuries are the best senior most asset a bank can buy. WHY would a bank want to hand these off to the Fed for cash, which yields nothing?

I could go on and on, but the reality is the above arguments alone erase any reason for the Fed to launch QE any time soon, if ever. The ONLY reason the Fed would launch QE would be if liquidity needs were so desperate for the banks that the would be willing to give up their senior most assets in exchange for cash to meet day to day liquidity needs.

And if we get to that point in the US again, QE will be the LAST of our worries.

So, QE is not coming. End of story. You can continue to argue otherwise based on some idealistic view of the world, but the reality is Europe and Japan’s bond markets are both on the brink of collapse. US banks want all the Treasuries they can get. In a perfect world, they’re not great investments, but they’re far more attractive that the alternatives in the REAL world.

So… if you’re still investing based on the idea that QE is coming and that the Bernanke Put is firmly in place, you’re going to be in for a HUGE surprise in the coming months. QE isn’t coming. And the Bernanke Put is losing its credibility rapidly.

Which means… the primary prop underneath the US stock market and financial system (namely Fed intervention) is slowly being removed. What follows will not be pretty and smart investors should be taking steps now to prepare in advance.

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7/17/12 at 8:07pm

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Decline of the Empire

by Dave Cohen

07/17/2012

Good Luck Farming In Hell

The United States is having its worst drought since ... when? Comparisons were being made to 1988, but as the drought continues and spreads, a government report says it is the worst since the 1950s, and one of the ten worst this country has ever experienced. We don't yet know the final outcome.

The drought that is delivering a punishing blow to corn growers, farmers, and ranchers across the Midwest and High Plains is among the most intense drought events to occur in the U.S. since the 1950s, according to a federal report released on Monday, placing it among the top 10 droughts in U.S. history.

According to the most recent drought outlook, the drought is likely to persist — if not further intensify — during the next few months.

On Monday, the National Climatic Data Center (NCDC) released its latest State of the Climate report on U.S. drought conditions, finding that record heat and a lack of widespread rainfall during June caused the drought to rapidly expand and intensify...

Running true to form, the Bloomberg story Worst-in-Generation Drought Dims U.S. Farm Economy Hopes focuses on the economic costs of the drought.

A worst-in-a-generation [worst-since-the-1950s] drought from Indiana to Arkansas to California is damaging crops and rural economies and threatening to drive food prices to record levels. Agriculture, though a small part of the $15.5 trillion U.S. economy, had been one of the most resilient industries in the past three years as the country struggled to recover from the recession.

[Left: The dry section of the Morse Reservoir, one of three reservoirs which supply water to nearby Indianapolis, in Cicero, Indiana,on July 12, 2012.]

“It might be a $50 billion event for the economy as it blends into everything over the next four quarters,” said Michael Swanson, agricultural economist at Wells Fargo & Co. in Minneapolis, the largest commercial agriculture lender. “Instead of retreating from record highs, food prices will advance"...

The U.S. Department of Agriculture declared July 11 that more than 1,000 counties in 26 states are natural-disaster areas, the biggest such declaration ever. The designation makes farmers and ranchers in affected counties — about a third of those in the entire country — eligible for low-interest loans to help manage the drought, wildfires or other disasters...

[My note: No corn? No problem! Here's a low-interest loan ... we'll fix ya' right up!]

Corn for December delivery jumped 4.4 percent today to close at $7.725 a bushel on the Chicago Board of Trade. The grain has soared 53 percent since mid-June. More than three- quarters of the acres where corn is grown in the U.S. is in a drought zone.

The biggest U.S. crop, worth $76.5 billion last year, corn is the main ingredient in the feed of chicken, cattle and hogs. Meat, poultry and fish prices surged 7.4 percent last year and are expected to gain as much as 4.5 percent this year as rising prices make animal feed more expensive. Soybeans have risen 21 percent since mid-June and wheat has climbed 41 percent.

I guess there's not much to be concerned about. After all, agriculture is merely a small part of America's 15.5 trillion dollar economy in nominal terms, and the damage this year might only amount to a paltry $50 billion. The government could print that much up in a few seconds.

Writing in the New Yorker, Elizabeth Kolbert gives us the title of today's post in The Big Heat.

“You couldn’t choreograph worse weather conditions for pollination,” Fred Below, a crop biologist at the University of Illinois at Urbana-Champaign, told Bloomberg News recently.

“It’s like farming in Hell.”

Last week, the U.S.D.A. officially cut its yield forecast by twelve per cent, citing a “rapid decline in crop conditions since early June and the latest weather data.”

Kolbert notes that Americans have their heads up their asses.

Up until fairly recently, it was possible—which, of course, is not the same as advisable—to see climate change as a phenomenon that was happening somewhere else. In the Arctic, Americans were told (again and again and again), the effects were particularly dramatic. The sea ice was melting. This was bad for native Alaskans, and even worse for polar bears, who rely on the ice for survival. But in the Lower Forty-eight there always seemed to be more pressing concerns, like Barack Obama’s birth certificate. Similarly, the Antarctic Peninsula was reported to be warming fast, with unfortunate consequences for penguins and sea levels. But penguins live far away and sea-level rise is prospective, so again the issue seemed to lack “the fierce urgency of now.”

The summer of 2012 offers Americans the best chance yet to get their minds around the problem...

It is unclear what American "minds" Elizabeth might be referring to. She then takes the long view.

... One of the most salient—but also, unfortunately, most counterintuitive—aspects of global warming is that it operates on what amounts to a time delay. Behind this summer’s heat are greenhouse gases emitted decades ago. Before many effects of today’s emissions are felt, it will be time for the Summer Olympics of 2048. (Scientists refer to this as the “commitment to warming.”)

What’s at stake is where things go from there.

[My note: if we could radically reverse our CO₂ emissions today, which we can't, we would not be affecting the climate until the 2040s because of the built-in delay i.e. the commitment to warming.]

It is quite possible that by the end of the century we could, without even really trying, engineer the return of the sort of climate that hasn’t been seen on earth since the Eocene, some fifty million years ago.

Ms. Kolbert finishes with a flourish, pointing out that the insanity of doing nothing about the climate has become increasingly obvious.

Along with the heat and the drought and the super derecho, the country this summer is also enduring a Presidential campaign. So far, the words “climate change” have barely been uttered. This is not an oversight.

Both President Obama and Mitt Romney have chosen to remain silent on the issue, presumably because they see it as just too big a bummer.

And so, while farmers wait for rain and this season’s corn crop withers on the stalk, the familiar disconnect continues. There’s no discussion of what could be done to avert the worst effects of climate change, even as the insanity of doing nothing becomes increasingly obvious.

Welcome to Earth! Perhaps it has escaped Ms. Kolbert's notice that the interminable 2012 presidential election campaign is centered around the American economy. Hopey-Changey and the Mittster have not not mentioned global warming because it is just too big a bummer. Plainly, it is politically impossible to talk about the environment at a time when the economy has turned to crap. This omission is thus not an accident, or an oversight as Kolbert suggests, as I originally explained in For Humans, The Economy Is Everything. Humans regard preserving the environment as a luxury they can not afford, especially when times are tough. As I have pointed out on numerous occasions, such a stance is indeed insane.

I wish to remind Elizabeth that she writes for a magazine (the New Yorker) which is as mainstream as mainstream gets. I have never seen an article in that venerable publication which questions the status quo. Allow me to quote Gore Vidal from the novel Burr. The narrator Aaron Burr is describing America's 2nd president John Adams (pp. 216-217).

Yet Adams' intelligence, though limited, was profound. What he knew he knew well. Unfortunately what he did not know he did not suspect existed.

So it goes at the New Yorker and for everyone writing there. Convention thinking is the sine qua non of acceptance there. No serious writer attempting to delineate humanity's likely future will ever find a congenial home at the New Yorker, including me. Given the Human Condition, it is the hallmark of the serious questioner of sacred truths that he (or she) is marginalized. Thus Ms. Kolbert has no legitimate right to use the word "insanity" regarding the human situation in the 21st century until she fully grasps what that situation is. If she did fully understand it, her work would not appear in the New Yorker. Quod Erat Demonstratum.

In the meantime, I have a message for the farmers of America's Breadbasket: good luck farming in hell.

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7/17/12 at 8:13pm

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The cons and cons of debt monetisation

Steve Saville

Posted Jul 17, 2012

Although it probably won't happen within the next couple of months, it's a good bet that the ECB will eventually be prodded into monetising a large amount of European government and commercial bank debt. It is therefore appropriate for us to discuss the pros and cons of such a development, but since we can't think of any pros* we'll have to focus on the cons.

A critical point to understand is that monetary inflation carried out by the central bank is a problem for the same reason that private counterfeiting is a problem. It results in an exchange of nothing for something and is therefore a form of theft. Nobody would argue that a private counterfeiter was providing a valuable service to the economy if he printed-up money to buy the bonds of financially-stressed governments, so why do many people believe that the central bank can do some good when it buys bonds with money conjured out of nothing?

Even believing that under certain conditions the central bank does no harm (rather than does some good) when it creates new money requires disabling the part of the brain devoted to logic and common sense. Of course it does harm! Adding to the supply of money cannot possibly add to the total wealth in the economy, and yet some people get richer as a result of the monetary injection. If some people get richer while the total wealth is not increased, then other people must be made poorer and what we are dealing with is a forced transfer of wealth.

We now get to the essence of what central bank debt monetisation is: a means of transferring wealth from some people to other people. In the specific case of the ECB using new euros to buy-up the bonds of insolvent governments and banks, it would be a transfer of wealth to the investors in these bonds from everyone with euro-denominated savings. In effect, the costs of making a bad investment in bonds would be shifted from those who made the ill-conceived investment decision to those who had nothing to do with the decision. Furthermore, the shifting of costs would be done surreptitiously. If all euro savers were sent a bill for their share of the wealth transfer there would be an uprising, but when the transfer is done via monetary inflation not even one person in one hundred will be able to figure out why he/she has become poorer.

The costs to euro savers are hidden from view because rather than there being an immediate transfer of money there is a gradual transfer of purchasing power. Bondholders and banks see an immediate boost in purchasing power because they are the first receivers of the new money, but savers see a gradual decrease in purchasing power as the new money works its way through the economy. It should also be understood that the price-related effects of the new money will be lumpy, in that some prices will be affected more than other prices. This leads to mal-investment and means that the debt monetisation not only brings about an unethical transfer of wealth, it also brings about a reduction in the overall pool of wealth.

All of which prompts the question: Why do it? Why would a central bank monetise debt when doing so helps a small number of speculators at the expense of a large number of savers and brings about a reduction in the total amount of wealth?

It clearly has nothing to do with protecting bank depositors, because the depositors at a bank don't lose anything when the bank's shareholders are wiped out and bondholders take large losses. It is done, we think, due to ignorance and a willingness to engage in unjust practices for political or financial gain.

Ignorance plays a part in the following ways:

Most people don't understand the link between monetary inflation and the eventual decline in their standard of living.
The top people at a central bank will necessarily be bad economists because a good economist would never want the job or would never be considered eligible for the job. For example, Ben Bernanke would not currently be the head of the Fed if not for his strong belief that creating money out of nothing can benefit the economy.
Almost all politicians are clueless about economics.

A willingness to do whatever it takes to achieve political or financial gain plays a part in the following ways:

The ability to create money out of nothing provides politicians with far greater scope to buy votes than would exist if their promises had to be funded by direct taxation.
Monetary inflation often creates the false impression of a more vibrant economy in the short-term, thus helping to boost the re-election chances of the incumbents.
The people who benefit the most from monetary inflation often exert a disproportionately large amount of influence over the central bank and the government.
Due to the promises made by politicians in the past, a lot of voters now have a vested interest in continuing the inflation because it is only via the wealth transfer brought about by monetary inflation that these people will ever receive their so-called entitlements.

Due to the combination of ignorance and vested interests outlined above, there will be a lot more monetary inflation in the future despite it being both unethical and economically debilitating. The question is when, not if.

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7/18/12 at 12:10am

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Volcker Rule

From Wikipedia, the free encyclopedia

The Volcker Rule is a specific section of the Dodd–Frank Wall Street Reform and Consumer Protection Act originally proposed by American economist and former United States Federal Reserve Chairman Paul Volcker to restrict United States banks from making certain kinds of speculative investments that do not benefit their customers.^[1] Volcker argued that such speculative activity played a key role in the financial crisis of 2007–2010. The rule is often referred to as a ban on proprietary trading by commercial banks, whereby deposits are used to trade on the bank's own accounts, although a number of exceptions to this ban were included in the Dodd-Frank law. The rule's provisions are scheduled to be implemented as a part of Dodd-Frank on July 21, 2012,^[4] with preceding ramifications.

*****************************************************

Proprietary trading (also "prop trading" or PPT) occurs when a firm trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments, with the firm's own money as opposed to its customers' money, so as to make a profit for itself. They may use a variety of strategies such as index arbitrage, statistical arbitrage, merger arbitrage, fundamental analysis, volatility arbitrage or global macro trading, much like a hedge fund. Many reporters and analysts believe that large banks purposely leave ambiguous the amount of non-proprietary trading they do versus the amount of proprietary trading they do, because it is felt that proprietary trading is riskier and results in more volatile profits.

*******************************************

Remember the bank tests....banks are walking on shaky ground with their "good ideas" to make a fast buck...you might want to keep up with this issue in the coming week

~Sis~ : ))

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7/18/12 at 10:39am

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The Federal Reserve Is Not Going To Save Us From The Great Depression That Is Coming

by The American Dream

July 18, 2012

Federal Reserve Chairman Ben Bernanke delivered his annual address to Congress on Tuesday, and he did very little to give lawmakers much confidence about where the U.S. economy is heading. Bernanke told members of Congress that recent economic data points "suggest further weakness ahead" and that the Federal Reserve is projecting that the U.S. unemployment rate will remain at 7 percent or above all the way through the end of 2014. Now, it is important to keep in mind that Federal Reserve forecasts are almost always way too optimistic. The actual numbers almost always end up being much worse than what the Fed says they will be. So if Bernanke is saying that the U.S. unemployment rate will be 7 percent or higher until the end of 2014, then what will the real numbers end up looking like? During his testimony, Bernanke seemed unusually gloomy about the direction of the U.S. economy. He seemed resigned to the fact that there really isn't that much more that the Federal Reserve can do to stimulate the U.S. economy. Yes, the Federal Reserve could try another round of quantitative easing, but the first two rounds did not really do that much to help. The truth is that the United States is absolutely drowning in debt, and when that debt bubble finally bursts the Federal Reserve is simply not going to be able to save us from the Great Depression that will happen as a result.

At this point, Bernanke appears to be in "cya" mode. For example, the following is from Bernanke's prepared remarks to Congress on Tuesday....

The second important risk to our recovery, as I mentioned, is the domestic fiscal situation. As is well known, U.S. fiscal policies are on an unsustainable path, and the development of a credible medium-term plan for controlling deficits should be a high priority. At the same time, fiscal decisions should take into account the fragility of the recovery. That recovery could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken. The Congressional Budget Office has estimated that, if the full range of tax increases and spending cuts were allowed to take effect--a scenario widely referred to as the fiscal cliff--a shallow recession would occur early next year and about 1-1/4 million fewer jobs would be created in 2013. These estimates do not incorporate the additional negative effects likely to result from public uncertainty about how these matters will be resolved. As you recall, market volatility spiked and confidence fell last summer, in part as a result of the protracted debate about the necessary increase in the debt ceiling. Similar effects could ensue as the debt ceiling and other difficult fiscal issues come into clearer view toward the end of this year.

The most effective way that the Congress could help to support the economy right now would be to work to address the nation's fiscal challenges in a way that takes into account both the need for long-run sustainability and the fragility of the recovery. Doing so earlier rather than later would help reduce uncertainty and boost household and business confidence.

Did you catch that?

Bernanke says that the federal government is on an "unsustainable path" and must reduce debt, but he also says that the economy cannot afford tax increases and spending cuts right now. In fact, Bernanke is warning that "a shallow recession would occur early next year" if something is not done about the looming "fiscal cliff" that so many people are talking about.

So what does Bernanke want us to do?

If we continue on the path that we are on, our debt will continue to grow by leaps and bounds.

But if we seriously cut spending or raise taxes, that will significantly slow down the economy.

Either path leads to a whole lot of pain.

Bernanke sounds like a politician that is trying to cover all of his bases without giving us a recommendation about how to fix things.

Of course the truth is that the Federal Reserve system itself is at the very heart of our economic problems and has been the engine that has caused our national debt to explode at an exponential rate, but we all know that Bernanke will never admit that.

Bernanke can see that things are starting to fall apart, and he wants to shift as much blame to Congress and to other entities as he can while there is still time.

Bernanke knows that the U.S. economy is not going to produce enough jobs for our population anymore, and he does not want to be blamed for that.

Bernanke knows that the money printing done by the Fed is going to cause prices to continue to go up and that this will seriously stretch family budgets all over America, and he does not want to be blamed for that.

Bernanke wants to come out of all this looking like a good guy. At this point he is probably hoping that the next great global financial crisis does not happen until his term ends.

Unfortunately, he is not going to have that luxury. The next wave of the economic collapse is rapidly approaching, and it is going to hit the U.S. even harder than the last recession did.

And when the unemployment rate soars well up into the double digits, what do you think is going to happen?

The truth is that the entire country will soon resemble cities such as Gary, Indiana and Flint, Michigan.

To get an idea of what most of our cites will soon look like, just check out this video.

When people lose hope, they tend to get desperate.

And desperate people do desperate things.

Just look at the mob robberies that we are seeing all over the country right now.

In Jacksonville, Florida the other day, hundreds of young people that had just left a massive house party that police had broken up decided that they would descend on the local Wal-Mart.

According to police, approximately 300 people stormed into Wal-Mart and started going crazy. They threw produce at each other, many of them started putting merchandise into their pockets, they destroyed an anti-shoplifting security scanner that is worth about $1,500 and there were even reports that shots were fired outside of the store.

It was absolute chaos. You can see video of this incident right here.

A similar mob robbery happened in the Portland, Oregon area on Saturday night....

A group of teens targeted a Troutdale store last weekend in a 'flash rob' and investigators are trying to identify the suspects.

Investigators said as many as 40 kids entered the Albertsons store at 25691 SE Stark Street at the same time late Saturday night and started stealing things.

Security officers chased the thieves out, but no one was captured. They also left employees pretty shaken up, including one woman who was in tears after getting terrorized by the robbers.

So will Ben Bernanke and the Federal Reserve be able to save us from this kind of chaos?

Of course not.

If you have any faith in Bernanke at this point then you are being quite foolish.

Our economy is on the verge of collapse, and when it does collapse there is going to be hell to pay on the streets of America.

These days young people seem to commit absolutely brutal crimes just for the fun of it. For example, in Chicago the other day two teens beat to death a 62 year old disabled man who was collecting cans for no apparent reason whatsoever. The following is from a report about this incident from the NBC affiliate in Chicago....

Police said a 16-year-old gang member punched Delfino Mora, father to 12 children and a grandfather to 23, last Tuesday in an alley in the 6300 block of North Artesian. Mora's devastated family told NBC Chicago that Mora was on his regular route of collecting cans that he sells for cash when the teens confronted him.

Nicholas Ayala, 17, of the 6300 block of North Talman and Anthony Malcolm, 18, of the 5500 block of North Broadway were both charged with first-degree murder and robbery.

Malik Jones, 16, the Latin Kings member accused of striking Mora, was charged with first-degree murder and ordered held without bail Sunday by Judge Adam Bourgeois.

Police said Jones handed his friends his cell phone to start filming then demanded money from Mora and punched him in the jaw. Ayala and Malcolm are accused of taking turns filming the video which allegedly showed Mora's head smashing into the concrete.

But just because you aren't in the city does not mean that you are safe.

For example, just check out what happened to three rural Michigan teens when they decided that it would be fun to hop on a passing train. The following is from a recent article in the New York Times....

For generations of Midwestern youths who have grown up hearing the long whistles and deep rumbling of passing locomotives, hopping a freight train to another city has seemed like a free ride to adventure.

But for three rural Michigan teen-agers who actually followed this dream, the results proved disastrous. The two 15-year-old boys and a 14-year-old girl climbed off the train when it stopped last Wednesday evening in a rough neighborhood here. Within hours, the girl had suffered multiple sexual assaults and all three had been shot in the head and left for dead in a park.

One boy, Michael Carter, was killed, while the other, Dustin Kaiser, and the girl staggered to a road and flagged down a truck driver. Dustin is in stable condition at the Hurley Medical Center after two rounds of surgery, while the girl, who was shot through the cheek, was treated and released on Friday, said Donna J. Fonger, a hospital administrator.

Our country is degenerating, and the Federal Reserve is not going to save you.

We have been living in the greatest debt bubble in the history of the planet, and it is going to burst at some point and that is going to cause a massive economic depression.

Just check out what Richard Duncan, the author of The New Depression, told CNBC the other day....

When we broke the link between money and gold forty years ago, this removed all the constraints on credit creation. And afterwards credit absolutely exploded. In the U.S. it grew from $1 trillion to $50 trillion – a fifty-fold increase in forty three years.

This explosion of credit created the world we live. It created very rapid economic growth. It ushered in the age of globalization.

But it now seems credit cannot expand any further because the private sector is incapable of repaying the debt that it has already. And if credit now begins to contract there is a very real danger that we will collapse into a new great depression.

In the chart posted below you can see what he is talking about. Once upon a time the total amount of debt in the United States (including government debt, business debt and consumer debt) was sitting at about a trillion dollars.

Today, it has nearly reached 55 trillion dollars....

We have lived way above our means for decades, and now a day of reckoning is rapidly approaching.

Ben Bernanke and the Federal Reserve may be able to delay the coming depression slightly, but they cannot avert it.

You better get ready.

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7/18/12 at 11:27am

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post #358 of 1237

7/18/12 at 11:59am

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Derivatives Should Be Banned From Financial Markets

By James Rickards

July 16, 2012

James Rickards is a hedge fund manager in New York City and the author of Currency Wars: The Making of the Next Global Crisis from Portfolio/Penguin.

The idea that the financial products known as derivatives pose a danger to the financial system is nothing new. Commentators have been pointing this out for years. Most famously, Warren Buffett referred to derivatives as "time bombs" and financial "weapons of mass destruction." Recently a complex derivatives trade caused over $5 billion in losses at J.P. Morgan.

Derivatives are bets between two parties that are made today with a payoff in the future based on the value of some stock, bond, or index. One party will profit if the reference security or index goes up in value and the other party will profit if it goes down. These bets usually settle up every three months based on value at that time, and then a new calculation period begins. There are many variations on this basic pattern, but almost all derivatives involve some form of a bet in which gains and losses are calculated and settled-up periodically.

If derivatives are as dangerous as the commentators suggest, why are they permitted? If they are such a threat to the financial system, why does the size of derivatives bets continue to grow? The answers have to do with several myths the big bank derivatives players have created. These myths are false and distract interested parties from doing what needs to be done to ban derivatives. It's time to demolish these myths once and for all.

Myth No. 1: Derivatives break up risk into parts and allow the pieces to be put into strong hands best able to absorb losses. Financial transactions do involve multiple risks. Even a simple loan can have interest rate risk, credit risk, and foreign exchange risk. The original idea behind derivatives was that these risks could be repackaged into separate financial instruments. In the simple loan example, one party could absorb the interest rate risk, another could absorb the credit risk, and still another could absorb the foreign exchange risk. Since each party specialized in a certain type of risk, it could offer the best prices so that the entire package would be cheaper to the customer than having a single bank absorb all of the risk on its books.

The problem with this simple view is that most derivatives do not derive from an original loan or investment, but are created exclusively to make new bets. Instead of moving risk into strong hands, derivatives actually create risk out of thin air. Risk is not being reduced by derivatives, it is growing exponentially.

Myth No. 2: Derivatives allow markets to get valuable price information about the underlying security or index on which the derivative is based. This process of getting market information from actual trading is called "price discovery." This rationale is heard frequently in the credit default swap market—basically bets on whether a company or country will go bankrupt. Supporters say that prices in the credit default swap market provide good information about the financial health of countries in distress such as Greece or Spain.

This explanation ignores that fact that such price information has always been available from the underlying bonds themselves. The market doesn't need credit default swaps to tell it Greece is in trouble. The market in Greek bonds shows directly that prices are falling and borrowing costs are going up and that Greece is in financial distress.

In fact, the actual bond market is a much better indicator of financial health than the swap market because bonds are widely held by a large number of investors, while the credit default swap market is tightly controlled by a small number of major bank dealers who set prices in a nontransparent way. The credit default swap market is much easier to manipulate than the underlying bond market and therefore it's easier to create a sense of panic which often benefits the dealers in this kind of credit insurance. Derivatives to not improve price discovery, they make it easier to manipulate markets.

Myth No. 3: Bank management has derivatives risks under control using mathematical models that capture the complex interaction of factors embedded in derivatives trades. This view is laughable on its face given the continual series of notorious derivatives fiascoes from Long-Term Capital Management to AIG to J.P. Morgan and many others.

Yet, this myth is pernicious at a deeper level because many bank managers actually believe it. They have constructed elaborate management tools based on empirically false assumptions about the frequency and severity of bad events and the correlations among them. Risk managers sometimes acknowledge these limitations but then say their tools are "better than nothing." This is false too. Bad tools are not better than nothing. They lead to bad investments with the taxpayers picking up the losses every time things go wrong. It would be more honest to admit what we don't know and limit derivatives until the state of the art improves.

The next time some derivatives proponent says that derivatives reduce risk, increase transparency, and are well hedged, stop them in their tracks and ask if they believe in tooth fairies, Easter bunnies and leprechauns. Actually, it's safer betting on the leprechauns than in the soundness of modern derivatives finance. Since markets seem not to have learned from past disasters, one should expect worse to come.

post #359 of 1237

7/18/12 at 2:40pm

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Two Buses With 40 Israeli Tourists Blown Up At Bulgarian Airport

by Tyler Durden on 07/18/2012 - 11:43

Update 2: Blame it on Iran: ISRAELI PRIME MINISTER SAYS SIGNS THAT IRAN BEHIND BURGAS BOMBING -RTRS

Update: According to BurgasInfo.com not one but two buses were blown up. Unclear if the second one was also carrying Israeli tourists.

According to Bulgarian press Sega.bg, and confirmed by other wire sources, a bus with 40 Israeli tourists was "blown up" at 5:30 pm local time at the local airport of the seaside town of Bourgas. Sega says that according to BTV "it is an assassination attempt." The bomb was located in the trunk of a white bus with Israel tourists from Israel who were en route to the seaside town of Sunny Beach according to an airport source. The mayor of the city, Dimitar Nikolov confirmed the news according to Sega. Furthermore, according to the airport's website, an Air Via flight from Tel Aviv landed at 4:50 pm local time. The shock wave was so large it also exploded two neighboringing buses located in the arrival area of the airport. The number of casualties is currently unknown, but at least three people are dead according to the local police, with dozens wounded. Sega adds "the flames are huge with three firetrucks on the scene and seven ambulances driving out charred people."

The number of casualties in the Bulgarian bus explosion (reported earlier) is not even known yet, but Israel already knows just who is behind it:

ISRAELI PRIME MINISTER SAYS SIGNS THAT IRAN BEHIND BURGAS BOMBING -RTRS
Prime Minister Benjamin Netanyahu: "Iran is responsible for the terror attack in Bulgaria, we will have a strong response against Iranian terror." - Haaretz

Elsewhere:

CARNEY SAYS OBAMA BRIEFED ON BULGARIA BLAST THAT HIT ISRAELIS
CARNEY SAYS US NOT IN POSITION TO SAY WHO IS RESPONSIBLE FOR THE BUS ATTACK

And here we were wondering why crude spiked above $90 for the first time in months earlier today.

post #360 of 1237

7/19/12 at 9:05am

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U.S. Retail Collapse Accelerates

by Jeff Nielson
July 19, 2012

Less than two weeks ago I wrote "Crash Warning." It outlined the current economic parameters of the global economy and explained that we were careening toward a particular form of economic Armageddon which I believe was first described by John Williams of Shadowstats.com, when he coined the phrase "hyperinflationary depression" nearly a decade ago.

The debt-laden, fraud-saturated paper Ponzi-schemes of Western bankers are now all about to implode in a deflationary (debt-default) collapse – most notably all their fraud-bonds. Simultaneously, the rabidly excessive money-printing of these reckless gamblers is causing (and will cause) the prices for hard assets (i.e. assets which actually have value) to spiral upward, with the most likely final destination being hyperinflation.

Because that previous commentary was describing a global economic paradigm, my analysis was necessarily abbreviated with respect to the apex of all economic ills: the United States. In particular, I spent less than a paragraph discussing the collapse of the retail sector in the world’s largest economy -- a consumer economy.

Before we examine this train-wreck directly, let’s take a moment to define the backbone of this consumer economy: the American consumer. The two charts below should be very familiar to regular readers, and describe the American consumer in stark but precise terms: poor and/or unemployed.

[chart above courtesy of http://nowandfutures.com/index.html]

We see two things in the chart above on average American wages. First we see how (in real dollars) wages for the average U.S. worker have been falling steadily for more than 40 years. Those wages have now fallen by more than 50%, all the way down to the same levels as during the Great Depression. And we see how the U.S. government’s lies about inflation have almost entirely concealed this relentless collapse in wages. How convenient.

Meanwhile, we see the percentage of Americans who are actually working also plummeting downward, to a 30-year low. The collapse in wages has been accompanied by a collapse in employment levels. Combined, it translates into a collapse in consumer purchasing power of well in excess of 50%.

The great Economic Myth (naturally perpetuated by the U.S. government) is that "the world can’t live without" the American Consumer. The truth is that the rest of the world has been gradually learning how to live without the American consumer for the past 40 years, as the American consumer is literally less than half what he used to be. The real-and-obvious question instead is how will the U.S.’s consumer economy be able to survive the Death of the U.S. Consumer?

The relentless campaign by the U.S. government to transform its own Middle Class into the Working Poor has been an unmitigated success. Using the numbers of the Corporate Media itself, only about 10% of the U.S. population presently qualify as "middle class", now actually a smaller segment of the total population than the wealthy Americans who tower oppressively above them.

The purpose of destroying wage-levels for U.S. workers has been to drive those wages so low that American serfs will be able to "compete" with the wages of Asian serfs…while they manufacture toys and consumables for the wealthy. This is the "prosperity" which the Corporate Oligarchs promised us when they rammed "globalization" down our throats. They had the gall to call it "free trade", when the only thing "free" about it was their ride – on our backs.

However, this transformation comes at a terrible cost. Deprived of income, the Working Poor have been forced to use ever-increasing amounts of debt in a foolish quest to sustain an unsustainable level of consumption: mimicking the policies and attitude of the U.S. government itself. The result is the ultimate retail "perfect storm": consumers with small-and-falling incomes; loaded up with so much debt that they are incapable of borrowing any more; and with much/most of those incomes permanently going to pay interest to the Debt Parasites (i.e. banks). Perpetual debt-slavery.

Of course the "collapse" to which I’m referring didn’t just start last month, or even last year. It began in earnest with the Crash of ’08, and has continued unabated since then. The propaganda-concocted "recovery" of government and media has been nothing but a cruel hoax, designed to placate the growing suffering of the Working Poor, and goad them into more overspending with the malicious lies that "things are getting better".

The truth is the exact opposite. During every month of this sham-recovery, the real rate of inflation (as provided by John Williams of Shadowstats.com) has exceeded the percentage increase in retail sales (which are always unadjusted for inflation). Translation: every month of this "recovery" U.S. retailers have been selling less and less goods. This leads to another extremely obvious question: how can a consumer economy claim to be experiencing a "recovery" when it sells less and less goods each month, to consumers with ever-smaller incomes (and ever-larger debts)?

This scenario become still more absurd when we note that rising costs of raw materials have put extreme pressure on retail profit margins. Selling less and less goods for less and less incremental profit is not a formula for retail success. Rather it is a prescription for annihilation, and this is precisely what we see before us.

U.S. mall-vacancy rates have soared to all-time highs, and stubbornly refused to budge from those levels. Concurrently, margin-starved retailers are closing their storefronts and opting for more and more on-line commerce. In other words, they’re closing stores which generate significant numbers of jobs and tax revenues in favor of on-line operations which provide little of either. It is a self-reinforcing downward spiral which can only end in total economic disintegration. And we’re told that this collapse in sales, profit margins, employment, and tax revenues can all be taking place while the U.S. economy "recovers".

This brings us (at last) to the actual numbers currently being peddled by this propaganda-machine. On Monday it was announced that U.S. retail sales had fallen by 0.5% in the month of June, and that this was the third month in a row that sales had (officially) fallen. For a consumer economy, this sounds bad enough even when we only contemplate the official propaganda. However, it’s only when we translate these numbers that we can truly appreciate the approaching U.S. economic holocaust.

As noted previously, retail sales numbers are never adjusted for inflation. Living in a permanent era of high inflation, this makes absolutely no sense at all if you’re attempting to distribute information with this statistic, but makes wonderful sense if you’re a propaganda-machine with the sole goal of deceiving people every day of their lives.

Instead of the runaway inflation produced by the psychopathic money-printing of Western bankers being their "enemy", it is their best friend. The propagandists hide it completely with their absurd lies about "official" inflation. And eureka! High inflation is magically transformed into "high (and growing) retail sales", and "high (and growing) GDP".

I’ve dealt exclusively with the U.S.’s GDP sham in a previous commentary, so those readers still not familiar with this clumsy ruse can refer to that older piece. Here’s how the game of pretending that inflation doesn’t exist is used to lie about retail sales.

Real inflation is currently bouncing somewhere around the 10% level. John Williams will tell us that it has briefly dipped below that level, however his calculation is somewhat skewed by the effect of (temporarily) falling gasoline prices. As less and less of the Working Poor can afford to drive, the correct weighting of gasoline in an any inflation calculation must steadily fall – while (high) double-digit increases in food prices must be given more and more weight, as is the case in other poor nations.

I will steadfastly stick with a 10% figure for real inflation, with the qualification that this is an understatement for the American majority. Note also that in order to hide its deceptions involving retail sales, the U.S. government reports it as a monthly figure, with monthly rates of change. Conversely, almost every other major economic statistic is expressed as an annual rate of change, because we have been programmed to understand all statistics expressed in this manner. Thus by reporting retail sales in purely monthly terms, this dramatically shrinks the perceived size of these incremental changes in the eyes of the average reader. This serves two purposes.

When these numbers are bad (as they are presently), it dramatically understates this severity in the minds of those being fed these numbers. Conversely when the numbers were (supposedly) "good"; when U.S. retail sales were increasing (nominally) by a 20%+ annual rate while wages were increasing by only a (nominal) 3% annual rate, it stopped the dim bulbs in the media from forming the word "bubble" in their minds.

The argument for expressing these numbers in monthly terms is that they are "highly volatile", and so reporting them as annual figures would be "misleading". Obviously such an argument is nothing less than Machiavellian when coming from the most-accomplished propaganda machine which the world has ever seen.

Translated into an annual number, and adjusted for inflation; the 0.5% number reported for June is transformed into a collapse in U.S. retail sales at an annual rate of 16%. The 0.2% decline reported in May becomes a plunge of well in excess of 12% (annually). Which of these numbers "misleads" people, and which informs them?

With consumption directly or indirectly accounting for well over 80% of the U.S. economy; by the time that the "multiplier effect" is factored in (in reverse) this collapse in retail sales transforms almost point-for-point into a collapse in (real) U.S. GDP. Thus the consequences of this double-digit freefall in U.S. retail sales are plain for all to see.

The worsening economic collapse engineered by several successive U.S. regimes (at the guidance of their Bankster Overlords) is about to produce an economic cataclysm for Americans which will make the Great Depression seem like a day at Disneyland. Indeed, in the don’t-worry-be-happy world of the U.S. propaganda machine and its beloved "recovery" every day is like a day in Disneyland.

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