Littleflower, it's not a question of giving GOV more power. It's a question of cutting back the power of the banks. GOV is empowered to print currency. The banks rasseled away that power. It's a matter of getting back to a strict following of the constitution. The constitution severely limits the power to make war. War is very profitable. GOV just calls it a police action instead of war.
The founding fathers had many centuries of experience to call on when they framed the constitution. It severely limits GOV's ability to make war and screw the people. That is why bush hated it so much. The constitution was specifically written to keep the United Sates from pursuing empire. The bankers don't like that.
Screw the Banks and Investment Firms
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
17 powers,,, that's all.
By Judge Andrew Napolitano
1.) The Scope of the Problem.
The Constitution gives the Congress only 17 discrete powers. One of them is the power to regulate interstate commerce and another is the power to tax incomes. Unfortunately, but not surprisingly, almost from the time the first Congress sat, it used its Commerce Clause power to tax goods, to control private behavior, and even to prohibit items in interstate commerce. Subsequent Congresses used that power to control the conditions for production and sale of goods that eventually made their way into interstate commerce. And modern Congresses have used that power to regulate any human behavior they wish, so long as the behavior, when combined with other similar behavior, might conceivably affect the movement of goods or persons in interstate commerce. Thus, today, the water you drink, the air you breathe, the size of the toilet bowl in your bathroom, the number of legs on your desk chair, the strength of the water pressure in your shower in your home, the amount of wheat you can grow in your yard, the amount of sugar manufacturers can put into ketchup, the words you can utter in public or private, are all regulated by the Congress, claiming power under the Commerce Clause. And the feds, as well, use their enormous horde of cash from our income taxes to bribe the states by paying them to regulate in areas that the Constitution prohibits Congress from regulating.
2.) How to address this?
We need an amendment to the Constitution that expressly limits Congress to exercising only the 17 specific powers that are delegated to it in the Constitution and defines and limits the regulation of interstate commerce to its original meaning of keeping commerce regular by preventing all governments, state and federal, from interfering with it. We also need to rescind the 16th Amendment and affirmatively prohibit any federal tax on persons, as individuals or as groups. These two measures will starve the federal government back down to the footprint established for it by the Constitution. The Constitution can only be amended by enactment of an amendment by three-quarters of the legislatures of the states. In order to get to the state legislatures, an amendment can only come from an affirmative vote of two-thirds of both houses of Congress, or from a constitutional convention which Congress must call if asked to do so by two-thirds of the state legislatures.
By Judge Andrew Napolitano
1.) The Scope of the Problem.
The Constitution gives the Congress only 17 discrete powers. One of them is the power to regulate interstate commerce and another is the power to tax incomes. Unfortunately, but not surprisingly, almost from the time the first Congress sat, it used its Commerce Clause power to tax goods, to control private behavior, and even to prohibit items in interstate commerce. Subsequent Congresses used that power to control the conditions for production and sale of goods that eventually made their way into interstate commerce. And modern Congresses have used that power to regulate any human behavior they wish, so long as the behavior, when combined with other similar behavior, might conceivably affect the movement of goods or persons in interstate commerce. Thus, today, the water you drink, the air you breathe, the size of the toilet bowl in your bathroom, the number of legs on your desk chair, the strength of the water pressure in your shower in your home, the amount of wheat you can grow in your yard, the amount of sugar manufacturers can put into ketchup, the words you can utter in public or private, are all regulated by the Congress, claiming power under the Commerce Clause. And the feds, as well, use their enormous horde of cash from our income taxes to bribe the states by paying them to regulate in areas that the Constitution prohibits Congress from regulating.
2.) How to address this?
We need an amendment to the Constitution that expressly limits Congress to exercising only the 17 specific powers that are delegated to it in the Constitution and defines and limits the regulation of interstate commerce to its original meaning of keeping commerce regular by preventing all governments, state and federal, from interfering with it. We also need to rescind the 16th Amendment and affirmatively prohibit any federal tax on persons, as individuals or as groups. These two measures will starve the federal government back down to the footprint established for it by the Constitution. The Constitution can only be amended by enactment of an amendment by three-quarters of the legislatures of the states. In order to get to the state legislatures, an amendment can only come from an affirmative vote of two-thirds of both houses of Congress, or from a constitutional convention which Congress must call if asked to do so by two-thirds of the state legislatures.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
Box Burner
- Posts: 5803
- Joined: Mon May 01, 2006 2:33 am
- Location: Kentucky
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Many states have ratified a bill to move for ward with a constitutional convention. Then, "they" decided that it would be a perfect opportunity for the power mongers to REALLY fuck things up. Now, some of the states that ratified the con-con are having second thoughts.
http://blog.au.org/2008/12/16/the-conco ... of-rights/
The messy way is probably the cheapest and most effective.
http://blog.au.org/2008/12/16/the-conco ... of-rights/
The messy way is probably the cheapest and most effective.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
stevie the rat
Grand Theft Auto: How Stevie the Rat bankrupted GM
Screw the autoworkers.
They may be crying about General Motors' bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won't spoil Jamie Dimon's day.
Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders - led by Morgan and Citibank - expect to get back 100% of their loans to GM, a stunning $6 billion.
The way these banks are getting their $6 billion bonanza is stone cold illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.
Here's the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replace by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock.
Yet Citibank and Morgan, says Rattner, should get their whole enchilada - $6 billion right now and in cash - from a company that can't pay for auto parts or worker eye exams.
Preventive Detention for Pensions
So what's wrong with seizing workers' pension fund money in a bankruptcy? The answer, Mr. Obama, Mr. Law Professor, is that it's illegal.
In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.
The law is darn explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as "fiduciaries." Here's the law, Professor Obama, as described on the government's own web site under the heading, "Health Plans and Benefits."
"The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits."
Every business in America that runs short of cash would love to dip into retirement kitties, but it's not their money any more than a banker can seize your account when the bank's a little short. A plan's assets are for the plan's members only, not for Mr. Dimon nor Mr. Rubin.
Yet, in effect, the Obama Administration is demanding that money for an elderly auto worker's spleen should be siphoned off to feed the TARP babies. Workers go without lung transplants so Dimon and Rubin can pimp out their ride. This is another "Guantanamo" moment for the Obama Administration - channeling Nixon to endorse the preventive detention of retiree health insurance.
Filching GM's pension assets doesn't become legal because the cash due the fund is replaced with GM stock. Congress saw through that switch-a-roo by requiring that companies, as fiduciaries, must
"...act prudently and must diversify the plan's investments in order to minimize the risk of large losses."
By "diversify" for safety, the law does not mean put 100% of worker funds into a single busted company's stock.
This is dangerous business: The Rattner plan opens the floodgate to every politically-connected or down-on-their-luck company seeking to drain health care retirement funds.
House of Rubin
Pensions are wiped away and two connected banks don't even get a haircut? How come Citi and Morgan aren't asked, like workers and other creditors, to take stock in GM?
As Butch said to Sundance, who ARE these guys? You remember Morgan and Citi. These are the corporate Welfare Queens who've already sucked up over a third of a trillion dollars in aid from the US Treasury and Federal Reserve. Not coincidentally, Citi, the big winner, has paid over $100 million to Robert Rubin, the former US Treasury Secretary. Rubin was Obama's point-man in winning banks' endorsement and campaign donations (by far, his largest source of his corporate funding).
With GM's last dying dimes about to fall into one pocket, and the Obama Treasury in his other pocket, Morgan's Jamie Dimon is correct in saying that the last twelve months will prove to be the bank's "finest year ever."
Which leaves us to ask the question: is the forced bankruptcy of GM, the elimination of tens of thousands of jobs, just a collection action for favored financiers?
And it's been a good year for Señor Rattner. While the Obama Administration made a big deal out of Rattner's youth spent working for the Steelworkers Union, they tried to sweep under the chassis that Rattner was one of the privileged, select group of investors in Cerberus Capital, the owners of Chrysler. "Owning" is a loose term. Cerberus "owned" Chrysler the way a cannibal "hosts" you for dinner. Cerberus paid nothing for Chrysler - indeed, they were paid billions by Germany's Daimler Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler's bankrupt corpse on the US taxpayer.
("Cerberus," by the way, named itself after the Roman's mythical three-headed dog guarding the gates Hell. Subtle these guys are not.)
While Stevie the Rat sold his interest in the Dog from Hell when he became Car Czar, he never relinquished his post at the shop of vultures called Quadrangle Hedge Fund. Rattner's personal net worth stands at roughly half a billion dollars. This is Obama's working class hero.
If you ran a business and played fast and loose with your workers' funds, you could land in prison. Stevie the Rat's plan is nothing less than Grand Theft Auto Pension.
It doesn't make it any less of a crime if the President drives the getaway car.
Economist and journalist Greg Palast, a former trade union contract negotiator, is author of the New York Times bestsellers The Best Democracy Money Can Buy and Armed Madhouse. He is a GM bondholder and card-carrying member of United Automobile Workers Local 1981.
Screw the autoworkers.
They may be crying about General Motors' bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won't spoil Jamie Dimon's day.
Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders - led by Morgan and Citibank - expect to get back 100% of their loans to GM, a stunning $6 billion.
The way these banks are getting their $6 billion bonanza is stone cold illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.
Here's the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replace by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock.
Yet Citibank and Morgan, says Rattner, should get their whole enchilada - $6 billion right now and in cash - from a company that can't pay for auto parts or worker eye exams.
Preventive Detention for Pensions
So what's wrong with seizing workers' pension fund money in a bankruptcy? The answer, Mr. Obama, Mr. Law Professor, is that it's illegal.
In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.
The law is darn explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as "fiduciaries." Here's the law, Professor Obama, as described on the government's own web site under the heading, "Health Plans and Benefits."
"The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits."
Every business in America that runs short of cash would love to dip into retirement kitties, but it's not their money any more than a banker can seize your account when the bank's a little short. A plan's assets are for the plan's members only, not for Mr. Dimon nor Mr. Rubin.
Yet, in effect, the Obama Administration is demanding that money for an elderly auto worker's spleen should be siphoned off to feed the TARP babies. Workers go without lung transplants so Dimon and Rubin can pimp out their ride. This is another "Guantanamo" moment for the Obama Administration - channeling Nixon to endorse the preventive detention of retiree health insurance.
Filching GM's pension assets doesn't become legal because the cash due the fund is replaced with GM stock. Congress saw through that switch-a-roo by requiring that companies, as fiduciaries, must
"...act prudently and must diversify the plan's investments in order to minimize the risk of large losses."
By "diversify" for safety, the law does not mean put 100% of worker funds into a single busted company's stock.
This is dangerous business: The Rattner plan opens the floodgate to every politically-connected or down-on-their-luck company seeking to drain health care retirement funds.
House of Rubin
Pensions are wiped away and two connected banks don't even get a haircut? How come Citi and Morgan aren't asked, like workers and other creditors, to take stock in GM?
As Butch said to Sundance, who ARE these guys? You remember Morgan and Citi. These are the corporate Welfare Queens who've already sucked up over a third of a trillion dollars in aid from the US Treasury and Federal Reserve. Not coincidentally, Citi, the big winner, has paid over $100 million to Robert Rubin, the former US Treasury Secretary. Rubin was Obama's point-man in winning banks' endorsement and campaign donations (by far, his largest source of his corporate funding).
With GM's last dying dimes about to fall into one pocket, and the Obama Treasury in his other pocket, Morgan's Jamie Dimon is correct in saying that the last twelve months will prove to be the bank's "finest year ever."
Which leaves us to ask the question: is the forced bankruptcy of GM, the elimination of tens of thousands of jobs, just a collection action for favored financiers?
And it's been a good year for Señor Rattner. While the Obama Administration made a big deal out of Rattner's youth spent working for the Steelworkers Union, they tried to sweep under the chassis that Rattner was one of the privileged, select group of investors in Cerberus Capital, the owners of Chrysler. "Owning" is a loose term. Cerberus "owned" Chrysler the way a cannibal "hosts" you for dinner. Cerberus paid nothing for Chrysler - indeed, they were paid billions by Germany's Daimler Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler's bankrupt corpse on the US taxpayer.
("Cerberus," by the way, named itself after the Roman's mythical three-headed dog guarding the gates Hell. Subtle these guys are not.)
While Stevie the Rat sold his interest in the Dog from Hell when he became Car Czar, he never relinquished his post at the shop of vultures called Quadrangle Hedge Fund. Rattner's personal net worth stands at roughly half a billion dollars. This is Obama's working class hero.
If you ran a business and played fast and loose with your workers' funds, you could land in prison. Stevie the Rat's plan is nothing less than Grand Theft Auto Pension.
It doesn't make it any less of a crime if the President drives the getaway car.
Economist and journalist Greg Palast, a former trade union contract negotiator, is author of the New York Times bestsellers The Best Democracy Money Can Buy and Armed Madhouse. He is a GM bondholder and card-carrying member of United Automobile Workers Local 1981.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
one more, from Bob Chapman at globalresearch. Last paragraph only,
Why are we paying interest to the Fed on money that is being created out of thin air to save the privately owned Fed itself, as well as its member institutions, which are receiving interest themselves from the Fed on the taxpayer money being loaned to them to shore up their balance sheets so they can continue to function without being shut down? We're paying interest while they're earning interest? Does that sound fair to you? Talk about moral hazard! And these are the same institutions that have conspired with the Fed to destroy our financial system to make way for a one world government, which is a euphemism for an Orwellian police state. We are certainly not paying this interest to ourselves as the media morons would have us believe, but to the anointed Illuminist financial institutions, which continue to privatize profits even while losses are being socialized to bail them out. The common and preferred stock which taxpayers own in these companies is worthless, a fact which is being covered up and hidden from investors by use of deceitful financial statements that allow assets, with the blessing of our "regulators," to be carried at mark-to-model values, meaning that these assets are whatever the criminal zombie financial institutions say they are. So, America, you will never collect a penny from any of these stocks, which are all worthless because trillions in losses are being hidden until such time as these institutions are allowed to fail so we can have one big honking central bank that makes the Fed look like a pipsqueak. So much for paying interest to ourselves. This is nothing less than outrageous, and Congress had better put a stop to this soon, end the Fed, and start issuing interest free currency via our Treasury, or they will suffer the wrath of the American people.
Why are we paying interest to the Fed on money that is being created out of thin air to save the privately owned Fed itself, as well as its member institutions, which are receiving interest themselves from the Fed on the taxpayer money being loaned to them to shore up their balance sheets so they can continue to function without being shut down? We're paying interest while they're earning interest? Does that sound fair to you? Talk about moral hazard! And these are the same institutions that have conspired with the Fed to destroy our financial system to make way for a one world government, which is a euphemism for an Orwellian police state. We are certainly not paying this interest to ourselves as the media morons would have us believe, but to the anointed Illuminist financial institutions, which continue to privatize profits even while losses are being socialized to bail them out. The common and preferred stock which taxpayers own in these companies is worthless, a fact which is being covered up and hidden from investors by use of deceitful financial statements that allow assets, with the blessing of our "regulators," to be carried at mark-to-model values, meaning that these assets are whatever the criminal zombie financial institutions say they are. So, America, you will never collect a penny from any of these stocks, which are all worthless because trillions in losses are being hidden until such time as these institutions are allowed to fail so we can have one big honking central bank that makes the Fed look like a pipsqueak. So much for paying interest to ourselves. This is nothing less than outrageous, and Congress had better put a stop to this soon, end the Fed, and start issuing interest free currency via our Treasury, or they will suffer the wrath of the American people.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Cowboy, I've seen an interesting change of semantics. Various states and authors are starting to drop the word "dollars" and use FRN... federal reserve notes. It's almost like they want to differentiate and distance the US from the FED,,,, and it's paper.
This article talks about Russia dumping the dollar.
http://www.runtogold.com/2009/06/resurg ... RMI9Irfdxm
They talk about Russia holding lots of it's reserves in FRNs. Wait a minute,, I thought they were treasury notes. The Chinese have come out and said that the assets of the FED are rubbish.. After watching Obama kill stockholders, i doubt that he is overly chummy with the Rothschild's bankers.
is the FED being set up for a fall?
We also have new accounting rules that go into effect. The banks won't be able to hide the crap as easily.
http://www.thestreet.com/story/10508768 ... hange.html
This author thinks that investors smell blood at the FED.
http://www.examiner.com/x-6012-Phoenix- ... iner-email
From a historical point of view, there's no going back.
Dan
This article talks about Russia dumping the dollar.
http://www.runtogold.com/2009/06/resurg ... RMI9Irfdxm
They talk about Russia holding lots of it's reserves in FRNs. Wait a minute,, I thought they were treasury notes. The Chinese have come out and said that the assets of the FED are rubbish.. After watching Obama kill stockholders, i doubt that he is overly chummy with the Rothschild's bankers.
is the FED being set up for a fall?
We also have new accounting rules that go into effect. The banks won't be able to hide the crap as easily.
http://www.thestreet.com/story/10508768 ... hange.html
This author thinks that investors smell blood at the FED.
http://www.examiner.com/x-6012-Phoenix- ... iner-email
From a historical point of view, there's no going back.
Dan
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
weird about Russia and the demographic decline. Sort of like the Plague or Black Death in the Middle Ages. The economies of Europe actually improved after the Black Death. Wonder if that's a possible subset strategy for one world government or something close to it.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
Elderberry
- Moderator
- Posts: 14976
- Joined: Tue Jul 17, 2007 10:00 pm
- Burning Since: 2007
- Camp Name: Camp Kelly
- Location: Palm Springs
- Contact:
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Most all of the developed countries are in decline;
http://www.nationmaster.com/graph/peo_p ... es-million
I was in the Soviet Union many years ago. The whole ambiance was a feeling of despair. Alcoholism was the biggest problem. The "police state" just takes away all incentive. That causes a lot of poverty. Poor people don't want to have kids.
"It is estimated that there are more abortions than births in Russia. In 2004, at least 1.6 million women had an abortion (a fifth of them under the age of 18) and about 1.5 million gave birth. One of the reasons behind the high abortion rate is the fact that the birth of a first child pushes many families into poverty." WIKI
Japan is falling fast. I'm not sure but, there seems to be a general correlation in the West; the more education, the more reluctant people are to take on the responsibility of kids.
Latin-America, sub-sahara Africa, and the muslim populations seem to correlate that.
So, as we get smarter or poorer,,,, we die out.
http://www.nationmaster.com/graph/peo_p ... es-million
I was in the Soviet Union many years ago. The whole ambiance was a feeling of despair. Alcoholism was the biggest problem. The "police state" just takes away all incentive. That causes a lot of poverty. Poor people don't want to have kids.
"It is estimated that there are more abortions than births in Russia. In 2004, at least 1.6 million women had an abortion (a fifth of them under the age of 18) and about 1.5 million gave birth. One of the reasons behind the high abortion rate is the fact that the birth of a first child pushes many families into poverty." WIKI
Japan is falling fast. I'm not sure but, there seems to be a general correlation in the West; the more education, the more reluctant people are to take on the responsibility of kids.
Latin-America, sub-sahara Africa, and the muslim populations seem to correlate that.
So, as we get smarter or poorer,,,, we die out.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Back on topic;
http://theautomaticearth.blogspot.com/2 ... -bull.html
"The Obama administration plans to unveil on June 17 its sweeping plan to overhaul financial regulation, according to a source familiar with thinking at the U.S. Treasury Department"
Banks are selling stock like crazy to raise necessary capital
"have generated roughly another $20 billion, for a total of $85 billion or more, giving most of the banks considerably more capital than U.S. regulators have required them to amass as they ride out the recession. Money is pouring in so fast that surprised bankers can hardly believe it,"
At the 15 stress-tested banks that have raised capital by selling stock to the public, no senior executives have recently reported buying shares themselves, according to Jonathan Moreland, director of research at InsiderInsights.com."
"U.S. banks with debt that is rated by the Moody's Corp. unit face about $470 billion in losses through next year. If the economy continues to suffer, those losses could swell to $640 billion,"
Like lams to the slaughter.
http://theautomaticearth.blogspot.com/2 ... -bull.html
"The Obama administration plans to unveil on June 17 its sweeping plan to overhaul financial regulation, according to a source familiar with thinking at the U.S. Treasury Department"
Banks are selling stock like crazy to raise necessary capital
"have generated roughly another $20 billion, for a total of $85 billion or more, giving most of the banks considerably more capital than U.S. regulators have required them to amass as they ride out the recession. Money is pouring in so fast that surprised bankers can hardly believe it,"
At the 15 stress-tested banks that have raised capital by selling stock to the public, no senior executives have recently reported buying shares themselves, according to Jonathan Moreland, director of research at InsiderInsights.com."
"U.S. banks with debt that is rated by the Moody's Corp. unit face about $470 billion in losses through next year. If the economy continues to suffer, those losses could swell to $640 billion,"
Like lams to the slaughter.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Obama's Investment Advisers Say Screw Auto Workers:
While the Obama administration publicly claimed it was seeking to avoid bankruptcy filings by Chrysler and General Motors, behind the scenes the White House was determined to throw the two Detroit automakers into the bankruptcy courts.
Documents filed with the US Bankruptcy Court for the Southern District of New York make it clear that Obama’s Auto Task Force—headed by millionaire private equity manager Steven Rattner—had decided as early as Inauguration Day that a court-ordered restructuring of GM and Chrysler was needed.
The administration saw this as the most effective means for the companies to jettison unprofitable factories, brands and dealerships, gut the jobs and living standards of current auto workers and escape obligations owed to hundreds of thousands of retirees.
In the aftermath of the two bankruptcy declarations, both GM and Chrysler have announced nearly two dozen plant closings, massive layoffs and the elimination of more than 3,000 car dealerships.
Under the terms of Section 363 of the Bankruptcy Code, the two automakers’ most profitable assets are being sold to “newâ€
While the Obama administration publicly claimed it was seeking to avoid bankruptcy filings by Chrysler and General Motors, behind the scenes the White House was determined to throw the two Detroit automakers into the bankruptcy courts.
Documents filed with the US Bankruptcy Court for the Southern District of New York make it clear that Obama’s Auto Task Force—headed by millionaire private equity manager Steven Rattner—had decided as early as Inauguration Day that a court-ordered restructuring of GM and Chrysler was needed.
The administration saw this as the most effective means for the companies to jettison unprofitable factories, brands and dealerships, gut the jobs and living standards of current auto workers and escape obligations owed to hundreds of thousands of retirees.
In the aftermath of the two bankruptcy declarations, both GM and Chrysler have announced nearly two dozen plant closings, massive layoffs and the elimination of more than 3,000 car dealerships.
Under the terms of Section 363 of the Bankruptcy Code, the two automakers’ most profitable assets are being sold to “newâ€
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Well the banks had their little stress test. Life is good,,, the banks are sound. The REAL stress test is on it's way. A few numbers;
$ 2.4 trillion in alt-a and option-arm loans are coming up for reset in the next couple of years. "These Alt-A mortgages are already defaulting at a 20% rate today. " Hey, no problema. just because interest rates are headed for the moon doesn't mean that people will default. Just because the mortgage resets $ 1200 a month on a $ 400k house that is worth $ 150 K doesn't mean that I'm going to walk.
"41% of all homeowners with a mortgage are underwater. With prices destined for another 10% to 20% drop, the number of underwater borrowers will reach 25 million."
"the number of borrowers who are underwater climbed to 20.4 million at the end of the first quarter from 16.3 million at the end of the fourth quarter" that's quite an increase for one quarter
"The combined percentage of loans in foreclosure and at least one payment late is 12.07%, another record. Delinquencies on subprime mortgage loans rose to 24.95% from 21.88% in the fourth quarter of 2008" Is that what you call a 'green shoot"?
"Household credit market debt currently stands at $13.8 trillion"
" Essentially, American households need to spend $1 trillion less per year " That might affect the consumer economy.
" This has resulted in a net $4 trillion deficit of household cash versus household liabilities." So,,, sue me. I'm walking.
"With 25 million (U6 – 16.4%) people unemployed, out of a work force of 155 million, another 2 to 3 million likely to lose their jobs, house prices still falling, and foreclosures likely to top 2 million in 2009, credit card delinquencies will surge to unprecedented levels in 2010. Does anyone really believe our biggest banks are solvent?" Sure, Obama thinks they're just fine. Timmy told him so.
Now THAT is what I call a STRESS TEST. http://theburningplatform.com/economy/abby-normal
$ 2.4 trillion in alt-a and option-arm loans are coming up for reset in the next couple of years. "These Alt-A mortgages are already defaulting at a 20% rate today. " Hey, no problema. just because interest rates are headed for the moon doesn't mean that people will default. Just because the mortgage resets $ 1200 a month on a $ 400k house that is worth $ 150 K doesn't mean that I'm going to walk.
"41% of all homeowners with a mortgage are underwater. With prices destined for another 10% to 20% drop, the number of underwater borrowers will reach 25 million."
"the number of borrowers who are underwater climbed to 20.4 million at the end of the first quarter from 16.3 million at the end of the fourth quarter" that's quite an increase for one quarter
"The combined percentage of loans in foreclosure and at least one payment late is 12.07%, another record. Delinquencies on subprime mortgage loans rose to 24.95% from 21.88% in the fourth quarter of 2008" Is that what you call a 'green shoot"?
"Household credit market debt currently stands at $13.8 trillion"
" Essentially, American households need to spend $1 trillion less per year " That might affect the consumer economy.
" This has resulted in a net $4 trillion deficit of household cash versus household liabilities." So,,, sue me. I'm walking.
"With 25 million (U6 – 16.4%) people unemployed, out of a work force of 155 million, another 2 to 3 million likely to lose their jobs, house prices still falling, and foreclosures likely to top 2 million in 2009, credit card delinquencies will surge to unprecedented levels in 2010. Does anyone really believe our biggest banks are solvent?" Sure, Obama thinks they're just fine. Timmy told him so.
Now THAT is what I call a STRESS TEST. http://theburningplatform.com/economy/abby-normal
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Thanks Dan, and the idiot press just goes on their merry way, painting a rosy poesy little picture for people to get distracted by. Digital TV is here! Wow! no more analog, analog delivered free and useful in times of emergencies too! LaTeeDaa Ain't everything jest fine. Big man in the white house is gonna save us.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Cowboy, there are 2 big questions.
Can the US continue to sell bonds?
Can the banks ride out the losses?
The US hasn't been able to sell any long bonds,,, except to itself, via the FED. Short bonds aren't doing well either. Bond buyers are demanding higher interest. If bond buyers desert the market, as they did in Latvia, the dollar will lose most of it's value.
The CRE more or less forced the banks to loan to people who couldn't pay back. The banks, knowing this, took out a kind of insurance policy on the loans. The bankers were too greedy and short-sighted to realize that the huge volume of bad loans coupled with bad appraisals would just be too much to cover.
Now, GOV is making good on their losses by having your kids pay off bad paper. The problem is that the US is no longer competitive under the current tax / labor / finance arrangement. Every tax that is added on makes us less competitive.
Our productivity is so dismal that soon we won't even be able to service our debt. We don't have enough productivity to pay off our debts. We struggle to pay the interest. The bankers want their pound of flesh regardless of what it does to the economy,,, much like Argentina.
At the same time as we get poor, the banks / war industries promote expensive wars. Perhaps, they just blindly pursue profit. Perhaps, they want to destroy the US.
Just as GM marched rigidly to their death, it appears that the corporatocracy is going to push us off the cliff.
Dan
Can the US continue to sell bonds?
Can the banks ride out the losses?
The US hasn't been able to sell any long bonds,,, except to itself, via the FED. Short bonds aren't doing well either. Bond buyers are demanding higher interest. If bond buyers desert the market, as they did in Latvia, the dollar will lose most of it's value.
The CRE more or less forced the banks to loan to people who couldn't pay back. The banks, knowing this, took out a kind of insurance policy on the loans. The bankers were too greedy and short-sighted to realize that the huge volume of bad loans coupled with bad appraisals would just be too much to cover.
Now, GOV is making good on their losses by having your kids pay off bad paper. The problem is that the US is no longer competitive under the current tax / labor / finance arrangement. Every tax that is added on makes us less competitive.
Our productivity is so dismal that soon we won't even be able to service our debt. We don't have enough productivity to pay off our debts. We struggle to pay the interest. The bankers want their pound of flesh regardless of what it does to the economy,,, much like Argentina.
At the same time as we get poor, the banks / war industries promote expensive wars. Perhaps, they just blindly pursue profit. Perhaps, they want to destroy the US.
Just as GM marched rigidly to their death, it appears that the corporatocracy is going to push us off the cliff.
Dan
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Another green shoot;
"seen that the earnings of the S&P 500 went down to an astonishing $7.21 last week, having lost $7.67 from the month before when earnings were $14.88, which is down by half in One Freaking Month"
"lower earnings since the end of 2007, and this latest drop in earnings is down from January, when earnings were $45.95, which were down from this time last year when earnings of the S&P 500 were $62.28, which is down from September 2007 when the earnings of the S&P500 were over $85.00!"
"The really eye-popping result is that with the S&P 500 selling at 940, this means that the index has an astonishing price-to-earnings ratio of 130! Hahaha! Insane!"
Mogambo Guru.
There's no earnings in the stock market and investors don't know where to go. They had run to treasuries previously. BUT, now treasuries are a losing bet.
"The official US debt is exploding. Bill Gross says it will be 100% of US GDP within 5 years." Investors see that we can't repay what we owe. They just want to collect interest until the last moment. The investors will affect the market more than the GOV.
"seen that the earnings of the S&P 500 went down to an astonishing $7.21 last week, having lost $7.67 from the month before when earnings were $14.88, which is down by half in One Freaking Month"
"lower earnings since the end of 2007, and this latest drop in earnings is down from January, when earnings were $45.95, which were down from this time last year when earnings of the S&P 500 were $62.28, which is down from September 2007 when the earnings of the S&P500 were over $85.00!"
"The really eye-popping result is that with the S&P 500 selling at 940, this means that the index has an astonishing price-to-earnings ratio of 130! Hahaha! Insane!"
Mogambo Guru.
There's no earnings in the stock market and investors don't know where to go. They had run to treasuries previously. BUT, now treasuries are a losing bet.
"The official US debt is exploding. Bill Gross says it will be 100% of US GDP within 5 years." Investors see that we can't repay what we owe. They just want to collect interest until the last moment. The investors will affect the market more than the GOV.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
(This article by Prof. Michael Hudson, spells out the future of US military spending and the demise of the dollar. The logic of the argument is flawless. The prediction, unavoidable. The consequences, unknown at this time, though I suspect a wounded scorpion would sting like made before it was terminated.)
The city of Yakaterinburg, Russia’s largest east of the Urals, may become known not only as the death place of the tsars but of American hegemony too – and not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.
Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).
The attendees have assured American diplomats that dismantling the US financial and military empire is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the United States, NATO or the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. That is what a multipolar world means, after all. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.
Yet the meeting has elicited only a collective yawn from the US and even European press despite its agenda is to replace the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry,1 suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a dividerâ€
The city of Yakaterinburg, Russia’s largest east of the Urals, may become known not only as the death place of the tsars but of American hegemony too – and not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.
Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).
The attendees have assured American diplomats that dismantling the US financial and military empire is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the United States, NATO or the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. That is what a multipolar world means, after all. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.
Yet the meeting has elicited only a collective yawn from the US and even European press despite its agenda is to replace the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry,1 suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a dividerâ€
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
The Inevitability of Hyper-Inflation Folks.....
How long can the Dollar Last as the World’s Reserve Currency?
by Bob Chapman
The big question is how long can the dollar last as the world’s reserve currency? Needless to say, that is not an easy question to answer. We recently called the top on the dollar at 89.50 on the USDX. The USDX is six currencies versus the dollar on a weighted basis. More than a year ago the dollar hit a low on the USDX at 71.18. A phenomenal rally ensued from that level expedited by de-leveraging and the closing out positions within the carry trade. A good example of the carry trade was when a bank in NYC borrowed yen. At ½% interest, sold the yen for dollars and bought dollar denominated securities.
All of that is now history as the dollar comes under increasing pressure. We believe the dollar could test 71.18 this year. We also believe the dollar could break down to 40 to 55 over the next few years. The collapse of the dollar is certain. The Treasury and the Fed have committed the American taxpayer to $13.8 trillion of debt and before the dollar goes where it is ultimately going that figure could reach $30 trillion.
In modern times such fiscal and monetary irresponsibility is unparalleled. This abdication of moral responsibility has already begun the process of dollar deterioration and rising interest rates. The result will soon be hyperinflation.
The collapse may be disastrous for all countries, but it is going to be equally disastrous for the corrupt who have brought us to this sad situation. Hopefully as painful as it will be it could create many new opportunities for some. One thing we see as certain is that the elitists will find themselves targets of civil and criminal charges and targets of contempt and derision. The new world order they so arrogantly and confidentially predicted with one world government will again have been a failure.
There is no question where China is headed in this currency war to dump the dollar. They continue to accumulate gold with the intention of having a gold backed currency - something America is, we believe, incapable of doing. Such an ongoing pressing event has to put continual downward pressure on the dollar. China is already by passing the dollar reserve system by settling in other currencies, using barter and through swap arrangements, major changes are in the process of taking place. We do not believe the yuan will be the reserve currency of the future. A better idea is to have a weighted basket of 10 major currencies as a world benchmark. China is heavily dependent on exports and as yet does not have domestic demand to relieve pressure when exports fall. They are also still a dictatorial, communist society in power by force. They also still have an enormous population and wages are still dreadful even though they have increased 10-fold over the past 15 years. Politically both China and the US face populations that are profoundly unhappy and if major changes are not made in both societies, both are ripe for revolution.
Wednesday’s 10-year Treasury auction wasn’t all it was cracked up to be. The yield was 3.99% with 46.8% allotted at the high bid. The bid/cover was 2.62 versus the average of the past ten auctions of 2.40. Indirect participation, of foreign central banks was 34.2% versus an average of the past ten auctions of 28.23%. The only reason the sale went well was that the note had to be lifted 13 bps to 3.99% in order to attract buyers. In addition the Fed had to buy $3.5 billion in longer term maturity bonds and prop up the auction. They cannot fool us. The system sinks into deeper trouble every day. All we can say is you had better own gold and silver. What the Fed did was buy 18.4% of the auction with money they created out of thin air – more monetization.
Goldman Sachs CEO, Lloyd Blankfein says he believes the current upturn in world markets was probably not a full recovery from crisis and said he expects a further long recession. There is no reason to think this is it – so many things have to be sorted out. Why, would this be the recovery?
Nouriel Roubini says those are yellow weeds, not green shoots. He has nine reasons for pessimism. Employment is still falling sharply, which is bad news for consumption and the size of bank losses. He said this is a crisis of solvency, not just liquidity, but true de-leveraging has not really started, because private debts of households, financial institutions, and corporations are not being reduced, but rather socialized. Lack of de-leveraging will limit the ability of banks to lend, households to spend and firms to invest.
In countries running current account deficits, consumers need to cut spending and save much more for many years. Consumers have been hit by a wealth shock, that is falling house prices, stock market, rising debt-service ratios, and falling incomes and employment.
The financial system has been severely damaged, so the credit crunch will not ease quickly.
Profitable, owing to high debts and default risk, low economic and revenue growth and persistent deflationary pressure on companies margins businesses, will continue to be constrained from willingness to produce, hire workers, and invest.
Rising government debt ratios will eventually lead to increases in real interest rates that may crowd out government spending and even lead to sovereign refinancing risk.
The monetization of fiscal deficits is not inflationary in the short run – slack production and labor markets imply massive deflationary forces. If banks do not find a clear exit strategy from policies that double or triple the monetary base, eventually either goods price inflation or another dangerous asset and credit bubble, or both, will ensue.
We’ll interject here that we disagree with Mr. Roubini. That monetization causes inflation immediately, which later becomes hyperinflation. The central banks, the Fed in our case, have no clear exit strategy. What they have done and are doing has no fallback or battle orders for withdrawal.
Some emerging market economies with weaker economic fundamentals may not be able to avoid a severe financial crisis, despite massive IMF support.
Our comment is no one is going to escape. Decoupling is a myth and we’ve had that proven already.
At the beginning of the year the yield on the 10-year T-note was 2.35%. We figured it would go to 3.50%. Thus far it has gained to 4.00%. That is 1.65% in less than six months. The yield has risen 135 points since the Fed announced in March that it was going to buy Treasuries, some $300 billion worth for starters.
Rates are up due to $2.2 trillion in monetization, that they are already committed to, and that is just the beginning. Commodity prices in many instances have doubled, inflation expectations are high, equity prices are up 30% plus and gold and silver have remained strong so it is no wonder rates in the real market have moved substantially higher.
Massive new issuance will be high for sometime to come.
Retail gasoline prices have moved up more than 40 days in a row as gas rose $1.00 from its lows. That displaces $130 billion in discressionary spending.
The high rates have also caused a 60% fall in mortgage refinancing.
Subprime problems may generally be over but we have another year of ALT-A loans and three more years of Option-ARM, pick-and-pay loans to get through. In the first quarter due to rising unemployment 50% of foreclosures were concentrated in prime mortgages where the default rate is now 2.40%, more than double 1.10% yoy. Over the next few years this problem will worsen.
Home mortgage debt outstanding was 73% of GDP last year, the 3rd highest reading on record, after the 75% plus bubble years of 2006 and 2007. In order to return this debt to the average of the 1990s at 46%, Americans would have to cut margin debt to $6.6 trillion from $10.5 trillion. The solution to reduce such debt is to rebuild sayings and for banks to boost capital. We see little chance of either happening, hence the inevitable result.
As we know with the result of down payments, mortgage defaults proliferated. In a desperate attempt to buoy the housing market our government has brought back those same loans. This is monetizing an $8,000 tax credit. The FHA steers funds to cover closing costs directly – in some cases even offsetting the 3.5% minimum down payment FHA loans require. That is enough to cover most or all of the down payment and fees for homes up to the median price, now about $169,000. As you can see the government anxious to move foreclosed properties for the banks are breaking the rules and creating another subprime crisis. The NAHB says this will add 160,000 original sales. The FHA doesn’t care. Fifty percent will default. If they run out of money they’ll get another $500 billion from Congress, so that minorities can buy homes.
Special interests are still alive and well in Washington buying legislation or arranging for legislation to never see the light of day. Our president signed the “Helping Families Save their Homes Act,â€
How long can the Dollar Last as the World’s Reserve Currency?
by Bob Chapman
The big question is how long can the dollar last as the world’s reserve currency? Needless to say, that is not an easy question to answer. We recently called the top on the dollar at 89.50 on the USDX. The USDX is six currencies versus the dollar on a weighted basis. More than a year ago the dollar hit a low on the USDX at 71.18. A phenomenal rally ensued from that level expedited by de-leveraging and the closing out positions within the carry trade. A good example of the carry trade was when a bank in NYC borrowed yen. At ½% interest, sold the yen for dollars and bought dollar denominated securities.
All of that is now history as the dollar comes under increasing pressure. We believe the dollar could test 71.18 this year. We also believe the dollar could break down to 40 to 55 over the next few years. The collapse of the dollar is certain. The Treasury and the Fed have committed the American taxpayer to $13.8 trillion of debt and before the dollar goes where it is ultimately going that figure could reach $30 trillion.
In modern times such fiscal and monetary irresponsibility is unparalleled. This abdication of moral responsibility has already begun the process of dollar deterioration and rising interest rates. The result will soon be hyperinflation.
The collapse may be disastrous for all countries, but it is going to be equally disastrous for the corrupt who have brought us to this sad situation. Hopefully as painful as it will be it could create many new opportunities for some. One thing we see as certain is that the elitists will find themselves targets of civil and criminal charges and targets of contempt and derision. The new world order they so arrogantly and confidentially predicted with one world government will again have been a failure.
There is no question where China is headed in this currency war to dump the dollar. They continue to accumulate gold with the intention of having a gold backed currency - something America is, we believe, incapable of doing. Such an ongoing pressing event has to put continual downward pressure on the dollar. China is already by passing the dollar reserve system by settling in other currencies, using barter and through swap arrangements, major changes are in the process of taking place. We do not believe the yuan will be the reserve currency of the future. A better idea is to have a weighted basket of 10 major currencies as a world benchmark. China is heavily dependent on exports and as yet does not have domestic demand to relieve pressure when exports fall. They are also still a dictatorial, communist society in power by force. They also still have an enormous population and wages are still dreadful even though they have increased 10-fold over the past 15 years. Politically both China and the US face populations that are profoundly unhappy and if major changes are not made in both societies, both are ripe for revolution.
Wednesday’s 10-year Treasury auction wasn’t all it was cracked up to be. The yield was 3.99% with 46.8% allotted at the high bid. The bid/cover was 2.62 versus the average of the past ten auctions of 2.40. Indirect participation, of foreign central banks was 34.2% versus an average of the past ten auctions of 28.23%. The only reason the sale went well was that the note had to be lifted 13 bps to 3.99% in order to attract buyers. In addition the Fed had to buy $3.5 billion in longer term maturity bonds and prop up the auction. They cannot fool us. The system sinks into deeper trouble every day. All we can say is you had better own gold and silver. What the Fed did was buy 18.4% of the auction with money they created out of thin air – more monetization.
Goldman Sachs CEO, Lloyd Blankfein says he believes the current upturn in world markets was probably not a full recovery from crisis and said he expects a further long recession. There is no reason to think this is it – so many things have to be sorted out. Why, would this be the recovery?
Nouriel Roubini says those are yellow weeds, not green shoots. He has nine reasons for pessimism. Employment is still falling sharply, which is bad news for consumption and the size of bank losses. He said this is a crisis of solvency, not just liquidity, but true de-leveraging has not really started, because private debts of households, financial institutions, and corporations are not being reduced, but rather socialized. Lack of de-leveraging will limit the ability of banks to lend, households to spend and firms to invest.
In countries running current account deficits, consumers need to cut spending and save much more for many years. Consumers have been hit by a wealth shock, that is falling house prices, stock market, rising debt-service ratios, and falling incomes and employment.
The financial system has been severely damaged, so the credit crunch will not ease quickly.
Profitable, owing to high debts and default risk, low economic and revenue growth and persistent deflationary pressure on companies margins businesses, will continue to be constrained from willingness to produce, hire workers, and invest.
Rising government debt ratios will eventually lead to increases in real interest rates that may crowd out government spending and even lead to sovereign refinancing risk.
The monetization of fiscal deficits is not inflationary in the short run – slack production and labor markets imply massive deflationary forces. If banks do not find a clear exit strategy from policies that double or triple the monetary base, eventually either goods price inflation or another dangerous asset and credit bubble, or both, will ensue.
We’ll interject here that we disagree with Mr. Roubini. That monetization causes inflation immediately, which later becomes hyperinflation. The central banks, the Fed in our case, have no clear exit strategy. What they have done and are doing has no fallback or battle orders for withdrawal.
Some emerging market economies with weaker economic fundamentals may not be able to avoid a severe financial crisis, despite massive IMF support.
Our comment is no one is going to escape. Decoupling is a myth and we’ve had that proven already.
At the beginning of the year the yield on the 10-year T-note was 2.35%. We figured it would go to 3.50%. Thus far it has gained to 4.00%. That is 1.65% in less than six months. The yield has risen 135 points since the Fed announced in March that it was going to buy Treasuries, some $300 billion worth for starters.
Rates are up due to $2.2 trillion in monetization, that they are already committed to, and that is just the beginning. Commodity prices in many instances have doubled, inflation expectations are high, equity prices are up 30% plus and gold and silver have remained strong so it is no wonder rates in the real market have moved substantially higher.
Massive new issuance will be high for sometime to come.
Retail gasoline prices have moved up more than 40 days in a row as gas rose $1.00 from its lows. That displaces $130 billion in discressionary spending.
The high rates have also caused a 60% fall in mortgage refinancing.
Subprime problems may generally be over but we have another year of ALT-A loans and three more years of Option-ARM, pick-and-pay loans to get through. In the first quarter due to rising unemployment 50% of foreclosures were concentrated in prime mortgages where the default rate is now 2.40%, more than double 1.10% yoy. Over the next few years this problem will worsen.
Home mortgage debt outstanding was 73% of GDP last year, the 3rd highest reading on record, after the 75% plus bubble years of 2006 and 2007. In order to return this debt to the average of the 1990s at 46%, Americans would have to cut margin debt to $6.6 trillion from $10.5 trillion. The solution to reduce such debt is to rebuild sayings and for banks to boost capital. We see little chance of either happening, hence the inevitable result.
As we know with the result of down payments, mortgage defaults proliferated. In a desperate attempt to buoy the housing market our government has brought back those same loans. This is monetizing an $8,000 tax credit. The FHA steers funds to cover closing costs directly – in some cases even offsetting the 3.5% minimum down payment FHA loans require. That is enough to cover most or all of the down payment and fees for homes up to the median price, now about $169,000. As you can see the government anxious to move foreclosed properties for the banks are breaking the rules and creating another subprime crisis. The NAHB says this will add 160,000 original sales. The FHA doesn’t care. Fifty percent will default. If they run out of money they’ll get another $500 billion from Congress, so that minorities can buy homes.
Special interests are still alive and well in Washington buying legislation or arranging for legislation to never see the light of day. Our president signed the “Helping Families Save their Homes Act,â€
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Cowboy, the first article is absolutely BRILLIANT. Every bit of it is valuable information. The one item to take away is the statement that our creditors will suggest that we shrink our military. We all knew that this bridge was going to have to be crossed sooner or later.
Will we be styled after North Korea,,, or Costa Rica? North Korea starves it's people to maintain the military. Costa Rica said,,,, fuck war !! and abolished it's army.
http://en.wikipedia.org/wiki/Military_of_Costa_Rica
I expect that foreign central banks will keep the dollar on "life support"
I hope that GOV will decide to use dwindling resources to maintain the general economy rather than the military.
IF our resources are applied to the military rather than the producing economy, our industrial economy will collapse. We will simply have to revert to an agrarian economy.
Look at a satellite view of North Korea,,, very few lights.
The Illuminaughty plans of a Western controlled New World Order are turning to dust. The rising power of the East is breaking free of the Western restraints. The bankers can close their vaults and rattle their sabers. The East has both wealth and sabers. The West is trying to run the show with force and intimidation. The East is using co-operation. The West has to lose because force is so much more costly than co-operation.
As the dollar drops, the price of oil climbs. GOV seriously wants a VAT tax and a carbon tax. Imagine what kind of recovery we're going to have when gas hits $ 12 a gallon like much of the rest of the world. Private debt in the US is $ 44 trillion. I expect that GOV is going to look high and low to find anything to tax.
It's the end of an empire. Will we go peacefully or will we go out in flames?
Dan
Will we be styled after North Korea,,, or Costa Rica? North Korea starves it's people to maintain the military. Costa Rica said,,,, fuck war !! and abolished it's army.
http://en.wikipedia.org/wiki/Military_of_Costa_Rica
I expect that foreign central banks will keep the dollar on "life support"
I hope that GOV will decide to use dwindling resources to maintain the general economy rather than the military.
IF our resources are applied to the military rather than the producing economy, our industrial economy will collapse. We will simply have to revert to an agrarian economy.
Look at a satellite view of North Korea,,, very few lights.
The Illuminaughty plans of a Western controlled New World Order are turning to dust. The rising power of the East is breaking free of the Western restraints. The bankers can close their vaults and rattle their sabers. The East has both wealth and sabers. The West is trying to run the show with force and intimidation. The East is using co-operation. The West has to lose because force is so much more costly than co-operation.
As the dollar drops, the price of oil climbs. GOV seriously wants a VAT tax and a carbon tax. Imagine what kind of recovery we're going to have when gas hits $ 12 a gallon like much of the rest of the world. Private debt in the US is $ 44 trillion. I expect that GOV is going to look high and low to find anything to tax.
It's the end of an empire. Will we go peacefully or will we go out in flames?
Dan
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Good question Dan, as recent history would seem to indicate, looks like flames. The Financial-Run-Government will squeeze the people until it really hurts, precipitating civil unrest and martial law. That gives them the excuse to run things like a dictatorship, but even that will fail as they are not really prepared to combat a state by state revolt. But it will come to that because no one has the balls to make the necessary reforms now, witness the bailouts, executive compensations, no curbs on credit card rates, Ron Paul's bill to audit the Fed (Let's see on that one it's out of committee now) . It looks better for politicos to manage an emergency (that their inaction has pretty much helped along) rather than implement reforms that will injure the money class. It's complete shit that will end up with people dying, being thrown in jails and detention centers, loss of the internet, wide scale property destruction. Bastards. It's inevitable because of the way the system works. What can emerge is promising, let's hope.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
After reading those two excellent articles above, it's difficult for me to post anything that sounds intelligent. I'll give it a try. Y'all have been very forgiving about my questionable interpretations and conclusions.
The economy is in a bit of a lull now. Some indicators are showing a bottoming in a few sectors. Other sections,, as mentioned above, are forked. The fate of California is the ????????? du jour. If Ca can't demonstrate some fiscal discipline, the bond buyers will stay away. That will have a very negative affect on the rest of the country.
The great argument,,, du jour is the question of deflation or inflation. There isn't any question that we have monetary inflation. How will that translate into the consuming economy? We currently have deflation in some areas and inflation in others.
Billions of pixels have been illuminated to answer that question.
I] Believe that the question of price inflation has to be posed within the framework of "supply and demand".
[old number] Our factories are working at 64 % capacity,,, expected to go to 50 %. We have oversupply in manufactured goods... Price deflation The oil-glut has been mostly worked off and we have less supply than predicted....Price inflation. Cereal harvests are way off this year and food commodities are up. Food price inflation. You can go up and down the line and figure the future price of lots of stuff by it's scarcity.
It only gets interesting if you start applying "supply and demand" to debt instruments. GOV and Banking are insolvent and illiquid. For years, they've been whoopin and a hollaring that you should buy everything in sight. They created,,, and believed in their own "pyramid" scheme. Defaults pulled the rug out from under their credit party. Just like Madoff [and SS], they can't find enough new blood.
They're frantically trying to shove new debt down the throats of the consumer. That isn't working because the consumer isn't near dumb enough. Not to mention, some of those consumers are also maxed out and / or out of work. They couldn't shove the debt down the throats of the consumer so, they just figured they would shove it up his ass instead. The FED said "sure, we'll take all those toxic assets" The U.S. Treasury said, "sure, we'll convert them to public debt,, no problem". Oversight,, you've gotta be kidding.
The end result is that even though $trillions were loaded on the back of a couple of generations of taxpayers, consumers still didn't gobble up more personal debt. GOV is still working mightily to get consumers to consume,,, and none of that used junk. It has to be new stuff that will keep factories working. Americans have $ 44 trillion in debt and GOV wants them to take on much more.
The banks on the other hand know that asset prices are falling and won't loan. The banks are dying to make new loans but, they can't find any borrowers or collateral that is worth squat. You can't remove $ 14 trillion from an economy and still expect it to go humming along. Banks control GOV but, they can't seem to control consumers.
The U.S. borrowed 80% of the savings worldwide. This has come to an end but, the banks want to keep the party going right along.
We are in a lull now, BUT hanging over all of this is the supply-and-demand for debt instruments. There is way too much supply.
I forgot a link with numbers. http://www.moneyandmarkets.com/new-hard ... apse-34202
If you think that this kind of "fertilizer" can sprout "green shoots",,, think again.
Dan
The economy is in a bit of a lull now. Some indicators are showing a bottoming in a few sectors. Other sections,, as mentioned above, are forked. The fate of California is the ????????? du jour. If Ca can't demonstrate some fiscal discipline, the bond buyers will stay away. That will have a very negative affect on the rest of the country.
The great argument,,, du jour is the question of deflation or inflation. There isn't any question that we have monetary inflation. How will that translate into the consuming economy? We currently have deflation in some areas and inflation in others.
Billions of pixels have been illuminated to answer that question.
I] Believe that the question of price inflation has to be posed within the framework of "supply and demand".
[old number] Our factories are working at 64 % capacity,,, expected to go to 50 %. We have oversupply in manufactured goods... Price deflation The oil-glut has been mostly worked off and we have less supply than predicted....Price inflation. Cereal harvests are way off this year and food commodities are up. Food price inflation. You can go up and down the line and figure the future price of lots of stuff by it's scarcity.
It only gets interesting if you start applying "supply and demand" to debt instruments. GOV and Banking are insolvent and illiquid. For years, they've been whoopin and a hollaring that you should buy everything in sight. They created,,, and believed in their own "pyramid" scheme. Defaults pulled the rug out from under their credit party. Just like Madoff [and SS], they can't find enough new blood.
They're frantically trying to shove new debt down the throats of the consumer. That isn't working because the consumer isn't near dumb enough. Not to mention, some of those consumers are also maxed out and / or out of work. They couldn't shove the debt down the throats of the consumer so, they just figured they would shove it up his ass instead. The FED said "sure, we'll take all those toxic assets" The U.S. Treasury said, "sure, we'll convert them to public debt,, no problem". Oversight,, you've gotta be kidding.
The end result is that even though $trillions were loaded on the back of a couple of generations of taxpayers, consumers still didn't gobble up more personal debt. GOV is still working mightily to get consumers to consume,,, and none of that used junk. It has to be new stuff that will keep factories working. Americans have $ 44 trillion in debt and GOV wants them to take on much more.
The banks on the other hand know that asset prices are falling and won't loan. The banks are dying to make new loans but, they can't find any borrowers or collateral that is worth squat. You can't remove $ 14 trillion from an economy and still expect it to go humming along. Banks control GOV but, they can't seem to control consumers.
The U.S. borrowed 80% of the savings worldwide. This has come to an end but, the banks want to keep the party going right along.
We are in a lull now, BUT hanging over all of this is the supply-and-demand for debt instruments. There is way too much supply.
I forgot a link with numbers. http://www.moneyandmarkets.com/new-hard ... apse-34202
If you think that this kind of "fertilizer" can sprout "green shoots",,, think again.
Dan
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Good points Dan. There is a lull now. SCO is doing all the necessary work of righting the world's balance of power and restoring some weird type of sanity by taking the US off the top of the reserve totem pole. They are calling the shots. I'm afraid that the military wing of the financial rulers may call in their chips and blow something, like an Iranian Nuke plant, just to show how easily they are "not" going to go away. They did this on Sept 11, 2001 to secure dominion over Iraq & Central Asia and now the fucking plan has backfired, or not gone on plan quite as they wanted. If there is another strike, my guess is it will be on foreign soil. Obama is gonna look worse than Calvin Coolidge when the shit hits the fan.
California is gonna go down. I live here and can feel it all over. Let's see, again, if the anemic unions can make their stand.
California is gonna go down. I live here and can feel it all over. Let's see, again, if the anemic unions can make their stand.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Cowboy, one thing to remember is that Japan is the second biggest holder of treasuries. The U.S. was always the "cop" of the Pacific. Now, North Korea is looking to start something. IF the U.S. can't control Korea, Japan will have far less reason to pay protection to the U.S. China and Russia could probably keep things calm in Korea but, that isn't in their best interests. The Sino-Soviets may even have prodded Korea.
It would shake the world if Korea did something to Japan and the U.S. couldn't stop them.
It would shake the world if Korea did something to Japan and the U.S. couldn't stop them.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Get ready folks the Financial RollerCoaster is ready to jump the rails, your dollars ain't gonna buy what they used to....
http://www.gold-eagle.com/editorials_08 ... 60209.html
http://www.gold-eagle.com/editorials_08 ... 60209.html
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Cowboy, I'm still in the deflation camp. You can't kick out 7 million jobs a year and expect to see much demand. The earlier article with the numbers from the FED shows that disposable income is all gone. Recent info shows that projected tax receipts were FAR too optimistic. GOV may plan to sell $ 1 trillion in bonds every quarter but, I don't think that they can go on for very long. In the meantime, the states are going to be flat broke.
From a practical point of view, the world has told American workers, "we no longer need your services" The FIRE economy pulled in foreign money and provided jobs.
That charade is over with. The states are high and dry. Ca is close to getting their credit downgraded again. As long as GOV won't face the reality of diminished incomes, we march in lockstep right into bankruptcy. Ca GOV seems to think that even though the private sector is dying a horrible death, there is no reason to diminish the public sector payroll. GOV would like to think that it is above and far-removed from the petty problems of us peons.
It's a slow-motion bad dream.
From a practical point of view, the world has told American workers, "we no longer need your services" The FIRE economy pulled in foreign money and provided jobs.
That charade is over with. The states are high and dry. Ca is close to getting their credit downgraded again. As long as GOV won't face the reality of diminished incomes, we march in lockstep right into bankruptcy. Ca GOV seems to think that even though the private sector is dying a horrible death, there is no reason to diminish the public sector payroll. GOV would like to think that it is above and far-removed from the petty problems of us peons.
It's a slow-motion bad dream.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Maybe it's the Gaia philosophy at work...all this economic downturn is doing is squelching productivity, which may be good in terms of limiting growth, resource depletion, pollution, development. and giving the poor stressed out planet a breather...just a thought
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
This is beyond interesting and definitely belongs in a Burning Man Blog
http://cluborlov.blogspot.com/2009/06/d ... ation.html
http://cluborlov.blogspot.com/2009/06/d ... ation.html
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
Cowboy, Here's something to go with it;
http://fofoa.blogspot.com/2009/06/dead-end.html
This guy [FOFOA] has some real brains.
Dan
http://fofoa.blogspot.com/2009/06/dead-end.html
This guy [FOFOA] has some real brains.
Dan
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.