Since my last posting on this subject,not a whole lot has changed. Well, except the fact that this situation is getting worse, as we all knew it would, and the markets are noticing.
The stock markets have fallen in 3 of the last 4 days and most of the MSM is placing the blame on the European Financial crisis. Our corporate earnings are getting hit, with more to come many think, and the prices are diving.
It was just the other day that one of the ‘doomsday’ guys, that have good track records by the way, was saying we have fallen off the financial precipice. I don’t think he is far from wrong.
Common sense indicates that the world wide economy, including our own, has yet to see the worst. That is coming on a daily basis. Please don’t believe these talking heads when they tell you that they are ‘fixing’ the problem. I am not sure they, nor anyone else, know what the problem really is!
When you don’t know the problem, you certainly can’t fix it, even if they could and I for one don’t believe that the efforts (read money they are printing) undertaken will do any good at all.
The entire system is crumbling as I write. Since the Lehman debacle we have seen far too many financial houses succumb tot he economic pressures and of course sheer greed and fraud.
Look at PFG, the future clearing house that went broke and dang few of these people will ever see any money. Given the fragile state of affairs, why would anyone want to put their money in such a clearing house, just to take more risk to make money that, due to the risk of bankruptcy of the futures firm, they might never see again!
Folks, this financial crisis will slowly unravel the fundamentals of our economy. I suggest you get prepared…take a look at where your money is and how easy or difficult it will be to access it in the event of some financial catastrophe. Do you own any gold or silver? How easy is that to get to? I am all for the Boy Scout Motto here “Be Prepared”!
The recent article exposing the enormous amounts of money being spent on ‘vacations’ by President Obama and his wife is phenomenal! They must not realize the dire straits that most of this country is experiencing right now. I expect leaders to be more sympathetic and compassionate to the people that they ‘serve’. Unfortunately it appears that they are simply serving themselves!
It is getting bad enough now that Hollywood is getting in on the act, with new reality shows that highlight the plight of different people that had jobs but now don’t or are really struggling. It is really hard to become used to a certain lifestyle and then, BOOM!, no job or several menial jobs that results in some pretty severe financial and lifestyle shocks.
I say we haven’t seen anything yet! We will see more market fluctuations in all the markets as the instability of the world economies becomes the norm rather than the exception. Add to this the increase in ‘natural and man made disasters’ and you have the perfect storm with the result total chaos and the unraveling of the power elite.
From the ashes there will come something so much better than what we see now, and it is time to begin preparations! Read up on how to establish community for I believe it is only with community will we survive!
Read the article below and weep!
Expensive massages, top shelf vodka and five-star hotels: First Lady accused of spending $10m in public money on her vacations
By Tamara Abraham
Last updated at 8:28 PM on 24th August 2011
The Obamas’ summer break on Martha’s Vineyard has already been branded a PR disaster after the couple arrived four hours apart on separate government jets.
But according to new reports, this is the least of their extravagances.
White House sources today claimed that the First Lady has spent $10million of U.S. taxpayers’ money on vacations alone in the past year.
Expensive taste: Michelle Obama, pictured yesterday in West Tisbury, Massachusetts, has been accused of spending $10m of public money on vacations
Expensive taste: Michelle Obama, pictured yesterday in Massachusetts, has been accused of spending $10m of public money on vacations
Branding her ‘disgusting’ and ‘a vacation junkie’, they say the 47-year-old mother-of-two has been indulging in five-star hotels, where she splashes out on expensive massages and alcohol.
The ‘top source’ told the National Enquirer: ‘It’s disgusting. Michelle is taking advantage of her privileged position while the most hardworking Americans can barely afford a week or two off work.
‘When it’s all added up, she’s spent more than $10million in taxpayers’ money on her vacations.’
His and her jets: The President and his wife, who are spending nine days on Martha’s Vineyard, have come under fire for travelling on separate planes
His and her jets: The President and his wife, who are spending nine days on Martha’s Vineyard, have come under fire for travelling on separate planes
The First Lady is believed to have taken 42 days of holiday in the past year, including a $375,000 break in Spain and a four-day ski trip to Vail, Colorado, where she spent $2,000 a night on a suite at the Sebastian hotel.
And the first family’s nine-day stay in Martha’s Vineyard is also proving costly, with rental of the Blue Heron Farm property alone costing an estimated $50,000 a week.
The source continued: ‘Michelle also enjoys drinking expensive booze during her trips. She favours martinis with top-shelf vodka and has a taste for rich sparking wines.
‘The vacations are totally Michelle’s idea. She’s like a junkie. She can’t schedule enough getaways, and she lives from one to the next – all the while sticking it to hardworking Americans.’
The Obama administration was forced to pull a warning about racism in Spain – just as the First Lady arrived in the country for a summer holiday
Travelling in style: Mrs Obama during her $375,000 trip to Spain last year
A bevy of bodyguards surrounds the U.S. First Lady and eldest daughter as they take a stroll on the Costa del Sol
High security: Bodyguards surround the First Lady and youngest daughter Sasha as they take a stroll on the Costa del Sol
While the President and his wife do pay for some of their personal expenses from their own pocket, the website whitehousedossier.com says that the amount paid by the couple is ‘dwarfed by the overall cost to the public’.
The magazine also reported that Mrs Obama, whose fashion choices are widely followed, had been going on ‘wild shopping sprees’, much to the distress of her husband, who, its sources reveal, is ‘absolutely furious’ at his wife’s ‘out-of-control spending’.
The President has already come under fire this week over his decision to take a family vacation while millions of Americans are out of work and countless more are financially strapped.
Chilled: The President enjoys an ice cream with his daughters as he relaxes on his Christmas holiday in Hawaii
Luxury break: The President and his family, pictured in December, splashed out more than $1.5million on a Christmas holiday in Hawaii
‘Winter White House’: The property in Kailua cost $38,000 to rent
But the situation sparked further anger after he and his wife elected to fly separately to the Massachusetts retreat – despite travelling on the same day.
Mr Obama left the White House aboard Marine One on his way to Andrews Air Force base to hitch a lift aboard Air Force One – along with First Dog Bo.
After landing at Cape Cod Coast Guard Air Station, he then took a final helicopter to his holiday destination to complete the remarkable 500-mile journey.
His wife and daughters, who arrived just four hours earlier, were also travelling from Washington, but took a specially designed military aircraft.
They would also have had their own motorcade from the airport to the vacation residence.
FIRST LADY OF LUXURY TRAVEL: HIGHLIGHTS FROM THE OBAMAS’ LAVISH GETAWAYS OVER THE PAST 12 MONTHS
GIRLS’ TRIP TO SPAIN: AUGUST 2010
The exact cost is unclear as Mrs Obama and her 40 friends footed many personal expenses, such as hotels and meals themselves.
But the U.S. taxpayer would have paid for the First Lady’s 68-strong security detail, personal staff, and use of presidential jet Air Force Two.
Per diems for the secret service team runs at around $281 each – nearly $98,000 for the length of the summer break.
Use of Air Force Two, the Air Force version of a 757, comes in at $149,900 for the round trip. This does not include time on the ground.
Mrs Obama’s personal staff, of which there are an unknown amount and might cost considerably more per day, should also be taken into account.
CHRISTMAS BREAK IN HAWAII: DECEMBER 2010
According to the Hawaii Reporter, the bill for the $1.5m trip included:
* $63,000 on an early flight bringing Mrs Obama and the children to Hawaii ahead of the President.
* $1,000,000 on Mr Obama’s return trip from Washington on Air Force One.
* $38,000 for the ‘Winter White House’ beach property rental.
* $16,000 to rent nearby homes for Secret Service and Navy Seals.
* $134,000 for 24 White House staff to stay at the Moana Hotel.
* $251,000 in police overtime.
* $10,000 for an ambulance to be on hand at all times
SKI TRIP TO VAIL: FEBRUARY 2011
Mrs Obama and her daughters stayed at the Sebastian hotel on Vail Mountain, where rooms cost more than $2,400 for multi-bedroom suites.
The family appear to have flown there on Air Force Two.
They were escorted to the resort by a motorcade of about a dozen vehicles, including 15 state and local law enforcement officers
SUMMER HOLIDAY ON MARTHA’S VINEYARD: AUGUST 2011
The Blue Heron Farm estate, where the Obama family are currently staying, rents for about $50,000 a week.
According to U.S. News and World Report, the Coast Guard is required to keep ships floating near the property, the presidential helicopter and jet remain at the ready and security agents will be on 24-hour duty.
I don’t know about you but my vacations are not nearly as expensive even without all the security! Couldn’t our leaders…well lead for a change?
As we have been saying for some time now, the good ole U.S.of A. is technically busted financially! I guess we have been saying this for at least 2 years now if not longer (privately I have held this belief for a decade at least) and now Moody’s and Standard and Poor’s rating services have just now ‘almost’ agreed with me by putting the debt of these United States on CREDIT WATCH!
For those of us that cannot remember what this means think back to Greece, Ireland and Portugal…all countries that went on Credit Watch just before having their respective debt rating reduced, and in some cases to JUNK STATUS! So you might ask what might this mean for me? Well look at the Austerity programs introduced in these countries to control the debt and hopefully reduce it. While all the austerity measures were being put into place the cost to ‘roll over’ or ‘refinance’ debt coming due was, and in some cases remains, extremely high.
What does this look like? Well what you were paying for example for 10 years worth of money evidenced by a 10 year note might have been 3 or even 4% will now cost you maybe 8 or 9%…imagine the growth of debt at 2 times the interest rates! That is assuming you can attract enough buyers even at that price. And speaking of price what you paid 100 cents on the dollar for would now be worth a lot less, I mean a lot! This could cause such turmoil in the market that no one will be able to believe, as the holders of now almost worthless debt seek to sell at whatever price they can get driving down the prices even further and faster as the Central banks try to buy up everything that is offered just to keep the panic somewhat at bay!
Of course, when the Central banks buy anything they are using newly created currency…thus making whatever currency they are using more and more worthless! Imagine that a dollar that isn’t worth spit!
I expect gold and silver to continue to soar, the stock market to continue to trend lower and all hell to break loose very soon!
Imagine this situation exacerbated by some even larger natural disaster…massive evacuations of Japan as it becomes more and more uninhabitable…scenarios that are too hard for most to believe….but too hard not to consider, considering the nature of the natural events occurring with even more frequency throughout the world.
I have and continue to urge everyone to prepare or continue to prepare. Precious metals, especially silver and storable foods!
The job market is pretty dismal. The last stat that created only 100,000 jobs, but reduced the unemployment rate to 9.4% was truly a miracle that only government statisticians could pull off.
Recent analysis indicate an even worse situation with the number of jobs available falling and the number of people in line to get those jobs tripling from 1.8 people for every job in 2007 to 4.6 people in line now! Do you call that a recovery?
Now you know why Helicopter Ben continues to spew out money, he has no choice, it is the only option he has left. I expect things to really deteriorate both financially and socially as the youth rebel against a system that has virtually ‘locked’ them out!
Job Openings in U.S. Decrease for Third Time in Four Months
By Bob Willis – Jan 11, 2011 8:41 AM MT
Job openings in the U.S. fell in November from the highest level in two years, signaling a sustained labor market recovery will take time to develop.
The number of positions waiting to be filled decreased by 80,000 to 3.25 million, the Labor Department said today in Washington. The number of people hired dropped from the prior month and separations climbed.
Employers added a fewer-than-forecast 103,000 jobs in December, for a total of 1.1 million in all of 2010, the Labor Department reported last week. Faster job growth is needed to bring down the unemployment rate on a sustained basis and spur consumer spending.
“The breadth of job gains has disappointed recently, but this is expected to improve,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report.
Job openings decreased 2.4 percent in November from a revised 3.33 million in the prior month that were the most since October 2008, the Labor Department report showed.
The drop was led by education and health-service providers, which saw a 91,000 decrease in openings. Retailers had 37,000 fewer jobs available and state and local government agencies saw a 25,000 decrease.
Professional and business services, which include accountants, computer systems experts and temporary-help agencies, had the biggest increases in available employment, followed by manufacturers.
Compared with the 15 million Americans who were unemployed in November, today’s figures indicate there were 4.6 people vying for every opening, up from about 1.8 when the recession began in December 2007. The number of jobless fell to 14.5 million last month, pushing the unemployment rate down to 9.4 percent, the lowest since May 2009, the Labor Department reported last week.
Today’s report helps shed light on the dynamics behind the monthly employment figures. Private payrolls, which exclude government positions, rose by 113,000 workers in December, Labor Department figures showed on Jan. 7.
Employers took on 4.21 million workers in November, down 39,000 from the previous month, according to today’s report. Total firings, which exclude retirements and those who left their jobs voluntarily, rose to 1.79 million from 1.76 million a month before.
In the 12 months ended in November, the economy created a net 800,000 jobs, representing about 50.8 million hires compared with about 50 million separations, today’s report showed.
At the pace of improvement projected by Federal Reserve officials, “it could take four to five more years for the job market to normalize fully,” Fed Chairman Ben S. Bernanke said Jan. 7 in testimony to the Senate Budget Committee.
Fed policy makers in November began buying Treasury securities as part of a plan to pump as much as $600 billion into the financial system through June, in addition to $1.7 trillion purchased in the first phase of the program.
Fed Vice Chairman Janet Yellen, citing a study by four Fed economists that relied on the central bank’s main economic forecast model, said in Denver on Jan. 8 that the unconventional easing would have boosted job growth by 3 million workers by 2012.
Ford Motor Co., revealing three new electric or hybrid vehicles to the public yesterday, plans to hire more than 7,000 workers in the next two years, including engineers with expertise in battery-powered cars.
Ford will hire 4,000 factory workers and 750 engineers this year and add 2,500 hourly workers next year, Mark Truby, a company spokesman, said in an interview in Detroit.
“We’ll be recruiting in Detroit and eight other cities,” he said.
Cuts among state and local governments may deepen as municipalities try to balance budgets. Florida, facing a $2.5 billion budget gap next year, may eliminate 5 percent of its state workforce to save costs, Governor-elect Rick Scott said in a Bloomberg television interview Dec. 3.
Stay very focused now on incidences of disobedience, especially where our youth are concerned. In my opinion this is a ‘watershed’ decade. The next decade will look entirely different!
I have to say my hat is off to the gentleman who wrote this pamphlet about non violent insurrection against the ‘money and markets’ of our current times. This fellow is 93 years old, was a concentration camp survivor and is right on! It has struck a nerve in France and over 600,000 copies have sold. The title ‘Cry Out’ about says it all!
Clif High has ‘predicted’ something like this book to galvanize opinion and the people in France and Europe. Times they are a changing.
The success of this book leads us to our country and what it will take to galvanize our citizens to throw off the shackles of the elite and their corporations and government. I think many of us can say that none of these are working for the common man anymore, but serve this elite in all of it’s manifestations.
The little red book that swept France
The latest call to (non-violent) arms has turned a 93-year-old war hero into a publishing phenomenon. John Lichfield reports
Take a book of just 13 pages, written by a relatively obscure 93-year-old man, which contains no sex, no jokes, no fine writing and no startlingly original message. A publishing disaster? No, a publishing phenomenon.
Indignez vous! (Cry out!), a slim pamphlet by a wartime French resistance hero, Stéphane Hessel, is smashing all publishing records in France. The book urges the French, and everyone else, to recapture the wartime spirit of resistance to the Nazis by rejecting the “insolent, selfish” power of money and markets and by defending the social “values of modern democracy”.
The book, which costs €3, has sold 600,000 copies in three months and another 200,000 have just been printed. Its original print run was 8,000. In the run-up to Christmas, Mr Hessel’s call for a “peaceful insurrection” not only topped the French bestsellers list, it sold eight times more copies than the second most popular book, a Goncourt prize-winning novel by Michel Houellebecq.
The extraordinary success of the book can be interpreted in several ways. Its low price and slender size – 29 pages including blurbs and notes but just 13 pages of text – has made it a popular stocking-filler among left-wing members of the French chattering classes. Bookshops report many instances of people buying a dozen copies for family and friends.
But Mr Hessel and his small left-wing publisher (which is used to print runs in the hundreds) say that he has evidently struck a national, and international nerve, at a time of market tyranny, bankers’ bonuses and budget threats to the survival of the post-war welfare state. They also suggest that the success of the book could be an important straw in the wind as France enters a political cycle leading to the presidential elections of May 2012.
In a New Year message Mr Hessel, who survived Nazi concentration camps to become a French diplomat, said he was “profoundly touched” by the success of his book. Just as he “cried out” against Nazism in the 1940s, he said, young people today should “cry out against the complicity between politicians and economic and financial powers” and “defend our democratic rights acquired over two centuries”.
In a party-political aside which might or might not undermine his new status as political prophet, Mr Hessel went on to imply that “resistance” should begin with a rejection of President Nicolas Sarkozy and a vote for the Parti Socialiste.
The book has not pleased everyone. It also contains a lengthy denunciation of Israeli government policies, especially in the Gaza Strip. Although the final chapter calls vaguely for a “non-violent” solution to the world’s problems, the book also suggests that “non-violence” is not “sufficient” in the Middle East. Mr Hessel, whose father was a German jew who emigrated to France, has been accused by French jewish organisations of “anti-semitism”.
Mr Hessel was born in Berlin in 1917. He emigrated to France with his family when he was seven. He joined General Charles de Gaulle in London in 1941 and was sent back to France to help organise the resistance. He was captured, tortured and sent to concentration camps in Germany. After the war, he helped to draft the UN’s Universal Declaration of Human Rights in 1948.
Jean-Pierre Barou, the joint head of the small Montpellier-based publishing house Indigène, which commissioned the book, said Mr Hessel had revealed a “deep sense of indignation in France”.
As a political tract, the book contains no especially original analysis of the world’s problems.
“They dare to tell us that the State can no longer afford policies to support its citizens,” Mr Hessel says. “But how can money be lacking … when the production of wealth has enormously increased since the Liberation (of France), at a time when Europe was ruined? The only explanation is that the power of money … has never been so great or so insolent or so selfish and that its servants are placed in the highest reaches of the State.”
The originality of the book is the suggestion that an organised “Resistance” is now called for, just like in 1940. “We, veterans of the resistance … call on young people to revive and pass on the heritage and ideals of the Resistance,” the book says.
How people should resist the power of money and the markets – by peaceful means, the book insists – is not made entirely clear.
A message of resistance
* “I would like everyone – everyone of us – to find his or her own reason to cry out. That is a precious gift. When something makes you want to cry out, as I cried out against Nazism, you become a militant, tough and committed. You become part of the great stream of history … and this stream leads us towards more justice and more freedom but not the uncontrolled freedom of the fox in the hen-house.”
* “It’s true that reasons to cry out can seem less obvious today. The world appears too complex. But in this world, there are things we should not tolerate… I say to the young, look around you a little and you will find them. The worst of all attitudes is indifference…”
* “The productivist obsession of the West has plunged the world into a crisis which can only be resolved by a radical shift away from the ‘ever more’, in the world of finance but also in science and technology. It is high time that ethics, justice and a sustainable balance prevailed…”
I continue to look for that item, book, film or something else that might give us the confluence of events that will lead to real change!
Folks these are statistics that we have been feeding you for some time now in blogs and reposted articles retrieved from various sources. Wake up and read this…
I had no idea that the largest export we have now is TRASH! It is now wonder why we are in such bad shape now!
19 Facts About The Deindustrialization Of America That Will Blow Your Mind
The United States is rapidly becoming the very first “post-industrial” nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution. It was America that showed the world how to mass produce everything from automobiles to televisions to airplanes. It was the great American manufacturing base that crushed Germany and Japan in World War II.
But now we are witnessing the deindustrialization of America . Tens of thousands of factories have left the United States in the past decade alone. Millions upon millions of manufacturing jobs have been lost in the same time period. The United States has become a nation that consumes everything in sight and yet produces increasingly little. Do you know what our biggest export is today? Waste paper. Yes, trash is the number one thing that we ship out to the rest of the world as we voraciously blow our money on whatever the rest of the world wants to sell to us. The United States has become bloated and spoiled and our economy is now just a shadow of what it once was. Once upon a time America could literally out prod uce the rest of the world combined. Today that is no longer true, but Americans sure do consume more than anyone else in the world. If the deindustrialization of America continues at this current pace, what possible kind of a future are we going to be leaving to our children?
Any great nation throughout history has been great at making things. So if the United States continues to allow its manufacturing base to erode at a staggering pace how in the world can the U.S. continue to consider itself to be a great nation? We have created the biggest debt bubble in the history of the world in an effort to maintain a very high standard of living, but the current state of affairs is not anywhere close to sustainable. Every single month America goes into more debt and every single month America gets poorer. So what happens when the debt bubble pops?
The deindustrialization of the United States should be a top concern for every man, woman and child in the country. But sadly, most Americans do not have any idea what is going on around them.
For people like that, take this article and print it out and hand it to them. Perhaps what they will read below will shock them badly enough to awaken them from their slumber.
The following are 19 facts about the deindustrialization of America that will blow your mind….
#1 The United States has lost approximately 42,400 factories since 2001. About 75 percent of those factories employed over 500 people when they were still in operation.
#2 Dell Inc., one of America ‘s largest manufacturers of computers, has announced plans to dramatically expand its operations in China with an investment of over $100 billion over the next decade.
#3 Dell has announced that it will be closing its last large U.S. manufacturing facility in Winston-Salem , North Carolina in November. Approximately 900 jobs will be lost.
#4 In 2008, 1.2 billion cell phones were sold worldwide. So how many of them were manufactured inside the United States ? Zero.
#5 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.
#6 As of the end of July, the U.S. trade deficit with China had risen 18 percent compared to the same time period a year ago.
#7 The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.
#8 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.
#9 In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.
#10 Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St. Paul , Minnesota . Approximately 750 good paying middle class jobs are going to be lost because making Ford Rangers in Minnesota does not fit in with Ford’s new “global” manufacturing strategy.
#11 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.
#12 In the United States today, consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services.
#13 The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000.
#14 In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th.
#15 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
#16 Printed circuit boards are used in tens of thousands of different products. Asia now produces 84 percent of them worldwide.
#17 The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States .
#18 One prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.
#19 The U.S. Census Bureau says that 43.6 million Americans are now living in poverty and according to them that is the highest number of poor Americans in the 51 years that records have been kept.
So how many tens of thousands more factories do we need to lose before we do something about it?
How many millions more Americans are going to become unemployed before we all admit that we have a very, very serious problem on our hands?
How many more trillions of dollars are going to leave the country before we realize that we are losing wealth at a pace that is killing our economy?
How many once great manufacturing cities are going to become rotting war zones like Detroit before we understand that we are committing national economic suicide?
The deindustrialization of America is a national crisis. It needs to be treated like one.
If you disagree with this article, I have a direct challenge
for you. If anyone can explain how a deindustrialized America has any kind of viable economic future, please do so below in the comments section.
America is HAS A CHALLENGING TIME AHEAD, and I doubt whether it’s Obama or Palin or the resurrection of Abe Lincoln, it may be impossible to fix. Unless, of course, we the American people wake up and go to work.
Time to get to work…show up and then PARTICIPATE.
Probably preaching to the choir here, but I have to say these things over and over again it seems like since I believe it is the single largest issue we as a country must face!
We are going down the tubes financially and it is accelerating. From the top of government down and bottom up, too much debt and not enough income! This as many Americans know now is a recipe for disaster!
Many cities are late on their payments and there will be many bankruptcies across this country. Has anyone noticed that our standard of living is declining? It will get a lot worse and much faster when the dollar ceases to be the world’s reserve currency. We will make 3rd world countries look appealing be contrast.
Here the spoiled will rebel and riot and burn as their goodies are taken away, we are just plain old not used to it. Of course, another scenario is we, much like the frog in water who dies gradually as the heat is turned up, will not even notice that we died sometime in 2009.
$2tn debt crisis threatens to bring down 100 US cities
Overdrawn American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery. Nor are European cities safe – Florence, Barcelona, Madrid, Venice: all are in trouble
More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned.
Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery.
“Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy,” Whitney told the CBS 60 Minutes programme on Sunday night.
“There’s not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars’ worth of defaults.”
New Jersey governor Chris Christie summarised the problem succinctly: “We spent too much on everything. We spent money we didn’t have. We borrowed money just crazily. The credit card’s maxed out, and it’s over. We now have to get to the business of climbing out of the hole. We’ve been digging it for a decade or more. We’ve got to climb now, and a climb is harder.”
American cities and states have debts in total of as much as $2tn. In Europe, local and regional government borrowing is expected to reach a historical peak of nearly €1.3tn (£1.1tn) this year.
Cities from Detroit to Madrid are struggling to pay creditors, including providers of basic services such as street cleaning. Last week, Moody’s ratings agency warned about a possible downgrade for the cities of Florence and Barcelona and cut the rating of the Basque country in northern Spain. Lisbon was downgraded by rival agency Standard & Poor’s earlier this year, while the borrowings of Naples and Budapest are on the brink of junk status. Istanbul’s debt has already been downgraded to junk.
Whitney’s intervention is likely to raise the profile of the issue of municipal debt. While she was an analyst at Oppenheimer, the New York investment bank, in October 2007 she wrote a damning report on Citigroup, then the world’s largest bank, predicting it would cut its dividend. She was criticised for being too pessimistic but was vindicated when the bank was forced to seek government support a year later. She has since set up her own advisory firm and is rated one of the most influential women in American business.
US states have spent nearly half a trillion dollars more than they have collected in taxes, and face a $1tn hole in their pension funds, said the CBS programme, apocalyptically titled The Day of Reckoning.
Detroit is cutting police, lighting, road repairs and cleaning services affecting as much as 20% of the population. The city, which has been on the skids for almost two decades with the decline of the US auto industry, does not generate enough wealth to maintain services for its 900,000 inhabitants.
The nearby state of Illinois has spent twice as much money as it has collected and is about six months behind on creditor payments. The University of Illinois alone is owed $400m, the CBS programme said. The state has a 21% chances of default, more than any other, according to CMA Datavision, a derivatives information provider.
California has raised state university tuition fees by 32%. Arizona has sold its state capitol and supreme court buildings to investors, and leases them back.
Potential defaults could also hit Florida, whose booming real estate industry burst two years ago, said Guy J. Benstead, a partner at Cedar Ridge Partners in San Francisco. “We are not out of the woods by any stretch yet,” he said.
“It’s all part of the same parcel: public sector indebtedness needs to be cut, it needs a lot of austerity, and it hit the central governments first, and now is hitting local bodies,” said Philip Brown, managing director at Citigroup in London.
In Europe, where cities have traditionally relied more on bank loans and state transfers than bonds, financing habits are changing. The Spanish regions of Catalonia and Valencia have issued debt to their own citizens after financial markets shut their doors because of the regions’ high deficits. Moody’s cut to the rating of the Basque country on Friday left it still within investment grade but noted “the rapid deterioration in the region’s budgetary performance in recent years”. It said it expected it to continue over the medium term.
In Italy, Moody’s and S&P have threatened to downgrade Florence, while Venice has been forced over the past few months to put some of the palazzi on its canals up for sale to fund the deficit.
“Cities are on their own. Governments won’t come to their rescue as they have problems of their own,” said Andres Rodriguez-Pose, professor of economic geography at the London School of Economics. “Cities will have to pay for their debts, and in some cases they will have to carry out dramatic cuts, such as Detroit’s.”
Vallejo, a former US navy town near San Francisco, is still trying to emerge from the Chapter Nine bankruptcy protection it entered in 2008.
The city, now a symbol of distressed local finances, is still negotiating with the unions, which refused to accept a salary cut plan two years ago. Paul Dyson, an analyst with the Standard & Poor’s credit agency, said Vallejo, which is mostly a dormitory town for Oakland or San Francisco employees, did not have enough local industry to sustain its finances and property tax – a major source of local income – plunged with the collapse of the real estate market. The S&P credit-rating agency has a C rating on the town – the lowest level.
With a population of about 120,000, Vallejo has $195m (£125m) of unfunded pension obligations and has to present a bankruptcy-exit plan to a Sacramento court by 18 January. Since 1937, 619 local US government bodies, mostly small utilities or districts, have filed for bankruptcy, Bloomberg News recently reported. US cities tend to default more than European municipalities as they usually rely on bonds issued to investors, which enter into a default if the creditor misses payments. European towns, by contrast, traditionally depend on bank loans and government bailouts.
Are you ready for the total economic collapse of our country?
In a not too surprising move, the Banking Cabal has asked the FED to rescind your rights to have a mortgage invalidated due to faulty (fraudulent) documents. Criminals helping criminals as far as this goes.
Why now? Well remember the new Consumer Financial Protection agency that was created a few months back? Well as it turns out this consumer right will be under their jurisdiction next year. The last thing the banks want is some independent upstart agency watching over something that could very well wipe out a very large percentage of their balance sheet and income.
Let’s hope that these 2 Cabals just don’t have time to act.
Banks Push Fed to Curb Borrowers’ Right to Rescind Mortgages
By Carter Dougherty – Dec 15, 2010 10:01 PM MT
Mortgage firms are pressing the Federal Reserve to curb homeowners’ right to invalidate loans based on flawed documents — a right consumer groups say is one of the few weapons borrowers have to battle unfair lending.
Consumer groups and industry lawyers say a rule under consideration by the central bank would make it harder for borrowers to exercise their right of “rescission,” which forces a lender to relinquish a lien on a mortgaged property. They said the number of rescissions has grown in recent years as a result of the foreclosure crisis and allegations that mortgage documents were fabricated or processed improperly.
Ken Markison, regulatory counsel at the Mortgage Bankers Association, said the change would save lenders money. “Greater clarity will help avoid unnecessary litigation and reduce costs,” Markison said.
Wells Fargo & Co., Bank of America Corp., and JPMorgan Chase & Co., the three largest U.S. mortgage lenders, all declined to discuss rescissions or didn’t respond to requests for comment. Susan Stawick, a Fed spokeswoman, also declined to comment.
Lenders are pressing the Federal Reserve to act on the issue now because starting in July, rescission rules will come under the purview of the new Consumer Financial Protection Bureau, industry lawyers said. Jeffrey Naimon, a lawyer with Buckley Sandler LLP, described the consumer agency in an e-mail as “a much more political” regulator than the Fed.
Since the financial crisis began, the Fed has come under criticism for having failed to meet its existing legal mandate to protect consumers from deceptive mortgages and other financial products. That track record was one reason behind Congress’s push to create an independent consumer agency.
“I cannot understand why the Fed is rushing through this voluntary gift to the banks unless the Fed is afraid that if it doesn’t curtail the rights of rescission now, it will never happen,” said Kathleen Engel, a professor at Suffolk University Law School in Boston.
The right of rescission was established by the 1968 Truth in Lending Act. Borrowers who can show a material misstatement in loan documents have three years to issue a rescission notice to the lender, who must revoke its lien on the property.
Consumer and industry lawyers said rescissions have risen because of fallout from the collapse of the housing bubble, although precise numbers are hard to come by. Kathleen Day, a spokeswoman for the Center for Responsible Lending, estimated that there are “thousands” of rescission cases pending in jurisdictions around the country; by contrast, the Federal Reserve estimated that there will be 2.25 million foreclosure filings this year.
Borrowers usually exercise the right of rescission during a foreclosure or other legal proceedings, effectively forcing a loan modification. The borrower seeks a new lender, the original lender returns interest and fees, and the principal is repaid by the second lender.
“It is ultimately the biggest hammer in the toolkit for a lawyer helping someone to save their home,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.
The Fed issued the proposed regulation on Sept. 24 as part of an update of truth-in-lending rules, and asked for public comment by Dec. 23. The Fed filing said the new rules are part of an ongoing review of truth-in-lending rules that has been proceeding for years, and would “reduce uncertainty and litigation costs.”
“The Board does not believe that Congress intended for the creditor to lose its status as a secured creditor if the consumer does not return the loan balance,” the Fed wrote.
The Fed filings noted that rescissions are sometimes based on technicalities, such as providing only one copy of a disclosure instead of two. The goal of the new rule is to “reduce undue compliance burden and litigation risk for creditors,” the Fed said, while improving “the clarity and usefulness of disclosures for the consumer’s right to rescind.”
Day of the Center for Responsible Lending called the proposed curbs an “industry-friendly move” that contradicts the Obama administration’s goal of minimizing foreclosures.
“It runs at cross purposes with any effort to bring people to the table,” Day said in an interview.
At a mid-October meeting of the Fed’s Consumer Advisory Council, an external advisory group, consumer groups expressed opposition to the change. At the meeting, Governor Daniel Tarullo signaled that he opposed the proposed rescission rule, according to two people present. Tarullo declined requests for comment.
Two members of the advisory council, who asked that they not be identified because the discussions were private, said they brought the dispute to the attention of Elizabeth Warren, the special adviser to President Barack Obama charged with setting up the Consumer Financial Protection Bureau. The bureau will take over responsibility for truth-in-lending regulations when it begins operations after July 21.
A coalition of consumer and civil rights groups, including Consumers Union and the NAACP, sent a letter to the Fed on Nov. 16 asking the central bank to hold off on updating truth-in- lending regulations until the CFPB starts work.
Naimon, the lawyer with Buckley Sandler who represents lenders, said that waiting for the CFPB would “result in years of additional delay.”
Rescissions add “thousands of dollars” to the cost of a foreclosure process because a bank has to hire a local law firm to manage the litigation, he said. That legal work “can’t just be done from headquarters.”
With credit markets tight, lenders have become less willing to issue new mortgages, so rescissions have become a potent tool for consumers seeking a loan modification, said Robert Cook, a Hanover, Maryland-based attorney with the firm Hudson Cook LLP. Lenders lose the security on the mortgage — the home itself — effectively becoming unsecured creditors.
“The conventional wisdom, which I think is correct, is that rescissions rise as the economy falls,” Cook said.
The private securitization of mortgages, rare when the lending act was passed in 1968, has imposed additional costs. Under the law, Cook said, the trustee of a pool of privately securitized mortgages can pull the rescinded mortgage out and force the issuer to buy it back.
The Fed proposal would require borrowers to tender the full loan principal before the creditor relinquishes the lien, a change that would “eviscerate the single most effective tool that homeowners have to stop foreclosures,” the consumer groups wrote in their letter.
Naimon argued that rescissions are a “lose/lose proposition” because they are “often a frivolous claim” and no money will be paid to consumers, but rather to lawyers for mortgage bankers.
To contact the reporter on this story: Carter Dougherty in Washington at email@example.com.
You might try giving Ron Paul’s office a call and tell them that you are aware of these shenanigans and hope he can lead the way to stop it!
So Congress supports the new tax bill. Yet another piece of really horrible legislation. Haven’t we given the uber rich enough…I mean after the bail outs, which still go un funded, more dough. I can’t really support this one when we are tanking under more debt.
Yes I am fully aware of the argument that tax breaks to the rich create jobs, theoretically. Unfortunately, it will most likely mean investments by the uber rich in other countries that can produce goods and services at lower costs than the U.S. I hope I am wrong….
Obama gets tax deal — now needs new jobs
President Obama has his tax cut deal — now he needs the jobs.
In selling the agreement with Republicans, Obama stressed the analysis of economics who said it would boost the economy and stimulate jobs — a major concern for a president whose Democratic Party took a beating at the polls last month in the shadow of a 9.6% unemployment rate.
“I am absolutely convinced that this tax cut plan, while not perfect, will help grow our economy and create jobs in the private sector,” the president said this week.
Obama signs the tax cut extension deal today at 3:50 p.m.
One thing the deal will do for sure: Increase the federal debt, already tagged at a record $13.7 trillion.
By Chip Somodevilla, Getty Images
This debt concern had once been raised by Obama, who once opposed an extension of the George W. Bush-era tax cuts for the nation’s wealthiest taxpayers. The president wound up accepting a temporary, two-year extension of all the Bush tax cuts, in exchange for a 13-month extension of unemployment benefits and a series of middle-class tax cuts.
In recent days, Obama has said he will continue to fight to have the high-end tax cuts expire in two years by challenging the Republicans to pay for them with deficit-reducing budget cuts.
“I don’t see how the Republicans win that argument,” Obama said. “I don’t know how they’re going to be able to argue that extending permanently these high-end tax cuts is going to be good for our economy when, to offset them, we’d end up having to cut vital services for our kids, for our veterans, for our seniors.”
Yet some of Obama’s fellow Democrats think Republicans got the better of the president on this deal.
Rep. Peter DeFazio, D-Ore., said on CNN this week that the deal is “a trap” for Obama and “potentially the end of his possibility of being reelected.” He said the increased deficits will wind up increasing pressure to cut programs Democrats care about, DeFazio said, possibly including Social Security.
“Next year, the new Republicans come in — whoa! — we got to cut back (on) everything because we have a $1.7 trillion Obama deficit,” DeFazio said. “They won’t be talking about their role in creating that.”
DeFazio also wondered whether the agreement will generate employment: “I believe six months from today people are going to say, where are all the jobs? What happened?”
(Posted by David Jackson)
I expect more employment, even here in the U.S. but not nearly enough and you will see a disproportionate amount invested overseas.
Much to the chagrin of virtually every EU leader, Moody’s downgraded their debt ratings today! Thus we get a small look at how ‘reality’ meets the BS of the politicians. This reality check is now happening more often than not, a nice change if you ask me. Wikileaks is another example of this…how the assessments of our foreign service is so different from the tripe we are fed on a daily basis.
This latest debt rating downgrade is just one more sign of the direction we are all headed when it comes to our economies. Now is the time to consider what we can replace the current system with…I am thinking the only practical solution will be seen arising from our local communities. Local ‘barter’ currencies and much more cooperation and services supplied by local entrepreneurs. That is the simple version.
Moody’s Slashes Ireland’s Credit Rating
BRUSSELS — Even as Europe’s leaders were praising the Irish government’s deficit-cutting efforts, the country received a dramatically different verdict Friday from a credit rating agency: a steep downgrade and a warning of more to come.
Having pledged late Thursday to do “whatever is required” to contain the debt crisis and defend their embattled currency, European Union leaders reconvened for the final day of a summit meeting. In the draft of a closing statement, the leaders welcomed the “impressive progress” in Dublin toward meeting the stiff conditions set for its recent bailout, including adoption of steep budget cuts.
Moody’s Investors Service had a different assessment, however. It cut Ireland’s credit rating by five notches to Baa1, with a negative outlook, from Aa2 and it warned further downgrades could follow. The rating remains investment grade but if it were to move down by three more notches, Irish debt would be classified as junk.
“The Irish government’s financial strength could decline further if economic growth were to be weaker than currently projected or the cost of stabilizing the banking system turn out to be higher than currently forecast,” Moody’s said in a statement.
The downgrade followed a similar move by another agency, Fitch, last week. Standard & Poor’s still has Ireland rated as A, the top band, but on review for a possible downgrade.
Just prior to its downgrade of Ireland, Moody’s said that it had put Greece’s Ba1 rating on review for a possible downgrade, citing uncertainty over the country’s ability to cut debt to sustainable levels.
Market reaction was mixed to the moves. The euro stood at $1.3333 early Friday, up from $1.3244 late Thursday. European stock indices were mixed and the benchmark bond yields for most vulnerable countries in the zone edged up. The 10-year Irish yield surged 21 basis points to 8.3 percent.
European leaders were hoping to help calm markets by agreeing late Thursday to create a permanent support fund for the euro after 2013.
“We are ready to do everything that is necessary to ensure the financial stability of the euro area,” José Manuel Barroso, president of the European Commission, said at a news briefing.
The draft declaration said that European leaders would ensure “the availability of adequate financial support” through their existing bailout fund of €440 billion, or $584 billion, a hint that they may be prepared to increase it if necessary.
With a bailout of Ireland recently completed, and concern that contagion will spread to Portugal and perhaps Spain, leaders have been divided on whether to increase the size of the fund, or to allow money from it to be used to buy government debt.
They also are far from agreement on longer-term financial issues, like whether to create common bonds backed by the entire euro zone.
Herman Van Rompuy, president of the European Council, said that the leaders had not discussed increasing the value of the fund or making it more flexible, but had agreed more generally that they would “do whatever is required to ensure the stability of the euro.”
Leaders did agree on the creation of a bailout mechanism that would operate after 2013, when the mandate of the current €440 billion fund expires. Yet even here, vital questions on the size and scope of the fund were left until the spring.
For the first time, bondholders could be asked to shoulder some losses in future debt crises on a case-by-case basis, a measure that euro zone countries supported when they met several weeks ago to approve the bailout of Ireland and seek ways to support troubled economies in the future.
To set up this facility, the E.U. will have to revise its governing treaty, but it plans to do so in such a way as to avoid requiring referendums in any of the 27 member countries, all of which will have to ratify the revision.
At the meeting Thursday, Germany and Britain agreed to compromises on the future rescue fund. The German government modified its efforts to win a clear declaration that the fund would be used only as a last resort.
Britain, which has not adopted the euro, accepted assurances that it would not be required to take part in any future euro zone bailout funds set up under a catch-all clause in E.U. treaties intended to deal with emergencies.
One issue that had threatened to overshadow the meeting disappeared Thursday when the European Central Bank said it had decided to nearly double its capital reserves.
Mathew Saltmarsh reported from Paris .
I urge each and everyone of the readers to consider what they would like to see happen as the economies of the world collapse. This could be the most important thought process you could ever do.