Suzi Orman Comes Out Swinging - On a Highway To Poverty

“My only fear in life, when it comes to money, is what’s happening in the United States of America. The American dream is dead for the majority of America. The middle class has disappeared. We have a highway to poverty and no roads coming out.” Suzi Orman, financial guru.


Wow.  Do you follow Suzi Orman?  I generally enjoy her but sometimes she can be a bit over the top.  You know ... she smiles that mega-watt smile a little too much.

But I agree with her.  Current fiscal policies are driving Americans into poverty.  Do the rich really need a tax cut?

Happy Holidays Ebinezer

As you go through this festive season remember that 43 million Americans are on food stamps – an increase of 15 million since 2007. That's 14% of the population. Food stamps today are what soup kitchens were in the 1930's.

Rich Americans Ditch Home Ownership For Renting

"More affluent Americans are opting to rent as oppose to buy,” says Jack McCabe, an independent real estate analyst and CEO of McCabe Research and Consulting in Deerfield Beach, Fla.

 

In a twist on the American dream, the rich now are renters.

 

From an article at CNBC:

Patrick Lee went from homeowner to home renter this year.

It may sound like a downgrade, but the New Yorker didn't make the switch because he couldn't keep up with payments or because he lost his job. Instead, Lee was nervous about the state of the housing market.

So in March he sold the Manhattan apartment he bought in 2008 for about the same price he paid and moved — along with his wife and child — a few steps away into a luxury, two-bedroom rental unit in a brand new building.

Lee wouldn't disclose what he's paying, but similar two-bedroom apartments in the building usually rent for $11,000 a month.

“I wanted to protect ourselves from prices going down,” says Lee, who is a managing director at a major bank. “I didn’t want to be an owner anymore.”

So is it smart not to own?  Isn't this a "buyer's market?"

In Manhattan the demand for high-end rentals has never been hotter. In the third quarter of 2010 there were 200 new leases signed for rentals charging $10,000 a month and up, more than double the 89 leases signed the year before, according to Jonathan Miller, CEO and president of New York City-based real estate appraisal and consulting firm Miller Samuel.

Last year, the phones at Foundation Rentals & Relocation office were ringing constantly with high-end homeowners wanting to rent property that they couldn’t sell, but no one was interested in renting them.


Now the firm is getting calls from executives, especially in the technology sector, looking to move into a rental.

“They’re entrepreneurs. They would rather put their cash in their business,” says Darcy Barrow, who founded the firm with her husband Christopher Barrow.

“And get a greater return,” adds Christopher.

Chris Wells, a broker working in the Palm Beach-Boca Raton-Coconut Cove area, says he has seen “skepticism” from would-be buyers, who ultimately decide to rent a home before making a purchase, easily spending about $8,000 to $15,000 a month, because they are waiting to see if home prices continue to fall.


“In Florida, we’re really not out of the recession yet,” says McCabe, the analyst. “There is no urgency to buy.”

The New Indentured Servitude - Entire Countries Become Indebted To Banking Conglomerates Too Big To Fail

Have you been following the debt situation in Ireland?  I find that is presents us with a fascinating question as to what is right and proper for the Irish people and for the World economy - and whether the two may be reconciled.

Bloomberg announced just a short while ago:

Nov. 28 (Bloomberg) -- European governments threw debt- strapped Ireland an 85 billion-euro ($113 billion) lifeline and scaled back proposals to saddle bondholders with losses in future budget crises, seeking to reverse the market selloff menacing the euro.

Notice the wording - "threw debt-strapped Ireland .. a Lifeline."  Sounds like the European Governments are saving Ireland - saving the people of Ireland from undue hardship.  But is that really the case?

Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.

“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”

“How far can we ask ordinary people -- farmers and fishermen and teachers and doctors and nurses -- to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”

Yes.  How far indeed do you expect farmers and fishermen and teachers and doctors and nurses -- to shoulder the responsibility of failed private banks?  Because make no mistake about it, the "people" actually being saved by this bailout are largely European Banks.

According to the New York Times

"French and German banks have lent nearly $1 trillion to the most troubled European countries and are more exposed to the debt crisis than the banks of any other countries, according to a new report that is likely to add pressure on institutions to detail their holdings.

French banks had lent $493 billion to Spain, Greece, Portugal and Ireland by the end of 2009 while German banks had lent $465 billion, according to the report by the Bank for International Settlements, an institution based in Basel, Switzerland, that acts as a clearing house for the world’s central banks."

So the bailout is really about bailing out French and German banks.

From Charles Hugh Smith from Of Two Minds:

Ireland, Please Do the World a Favor and Default

Ireland would save the world from much misery by defaulting now and driving the vampire banks into liquidation.

The alternative title for today entry is: Ireland, please drive a stake through the heart of the vampire banks which have the world by the throat. The entire controlled demolition of the Eurozone's finances can be summed up in one phrase: privatize leverage and profits, socialize losses and risk.

The basic deal is this: protect the bank's managers, shareholders and bondholders from any losses, while heaping the socialized losses and risks on the taxpayers and citizens.

While there are murmurings of "forcing bondholders to share the pain," any future haircut will undoubtedly be just for show, while the Irish pension funds are gutted to bail out the banks.

What do the Irish people think?  According to one blog:

As a nation we're a joke, a laughing stock, and now it's time to become a colony of the IMF under the direction of the same cowboy outfit that brought peace and prosperity to Argentina and Iceland. O Joy, I just can't wait. We the Irish People have our asses greased for yet another bout of sodomy. We're used to it. It feels good. And this time we walked right into it. Heck, we can always get drunk afterwards, have a rare old session and weep and wail over our Fenian dead.

Very strong words.  The Irish believe that they are becoming debt slaves.  And today thousands protested.

"What hurts me the most is why is the taxpayer paying for the IMF. Why are we bailing out the banks. These are the people who took the risk, let them take the hurt, let them feel the hurt." That is the common refrain of the tens of thousands of people who took to the streets today in Dublin, protesting against the government's rescue of various European banks (and Goldman Sachs) investment losses. More from RTE: "Gardaí said that around 10,000 people started the march, however the crowd swelled to around 50,000 people as it moved down the quays. Speakers at the march had estimated that the crowd was between 100,000 and 150,000. A small group of around 400 protestors are currently at the front gates of Leinster House. Some 60 gardaí are lining the footpath in front of the building, with crash barriers erected in front of them."

So in order to save German and French banks, Ireland will incur debt of $115,000,000.  How will the Irish people pay for this?  Tax increases and reductions in social services of course.  And how do the Irish feel about this?  From the Independent:

Asked if they agreed with a proposed €1 reduction of the minimum wage, 66 per cent said no, while 34 per cent said yes. Asked if they supported a proposed cut to child benefit, 60 per cent said no and 40 per cent said yes.

A proposed increase in third-level fees was rejected by 65 per cent and approved by 35 per cent. Asked if they agreed with a proposed reduction in tax relief on private pensions, 59 per cent said no and 41 per cent said yes.

The public was more evenly divided on the issue of broadening the tax net. Asked if they agreed that everybody who earned over €15,300 a year should be included, 52 per cent said no, while 48 per cent said yes. The proposed €100 property tax was rejected by 55 per cent, with 45 per cent in favour.

So the Irish really don't want new taxes and cuts in services. 

What is the alternative?  Default.  Is that so shocking?  That is the only negotiating tactic a debtor has. After default you can always "negotiate."

Russia defaulted in 1998 and guess what? Russia still exists.

Am I advocating default?  Not necessarily.  What I am questioning is whether the "loans" are best for the Irish people?  The paradigm of debt-money (and national debts) is that it was created by the banks, for the banks, and is supported by banks.

No less than Thomas Jefferson questioned the issue of debt.

And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.

Thomas Jefferson

And there is the question I have raised - have the Irish people been sold into servitude?  Servitude to the IMF and large Banking conglomerates.

The borrower is slave to the lender. When you are in debt to another, you enter into a slave/master relationship with your creditor. (Proverbs 22:7)

So the Irish are now indentured servants of the banks.

Ironically debt bondage has been defined by the United Nations as a form of "modern day slavery" and is prohibited by international law.

I guess that doesn't apply to Too Big To Fail Banks.

Would it be better for Ireland to default?  Who is really being saved by this bailout?

Fascinating questions.

Priest Accused Of Molesting (Old News) - Priest Accused Of Hiring Hit Man - All New Low

A Roman Catholic priest, John Fiala, was named in April in a lawsuit filed by a boy's family, who accused Fiala of molesting the youth, including twice forcing him to have sex at gunpoint.

The abuse allegedly took place in 2007 and 2008, when Fiala was a priest at the Sacred Heart of Mary Parish in the West Texas community of Rocksprings, a rural enclave known for sheep and goat herding (no I did not make that up).

Well Fiala isn't just any molesting Priest.  He thinks big.

The 52-year-old clergyman was arrested Nov. 18 on charges that he solicited a hit man to kill a teenager who had accused him of sexual abuse. Authorities said John Fiala first offered the job to a neighbor, who blew the whistle and helped police arrange a sting. They said Fiala got as far as negotiating a $5,000 price for the slaying before investigators moved in.


As far back as 2008, Fiala threatened the teen, and repeatedly brandished a pistol, said San Antonio attorney Tom Rhodes, who represents the family.  Fiala "began saying, 'If you tell anyone, I'll hurt you. I'll hurt your family, your girlfriend,'" Rhodes said. "It was more than once he threatened him with a gun."

Fiala is charged with one count of solicitation to commit capital murder and two counts of aggravated sexual assault of a child.


San Antonio Archdiocese spokesman Pat Rodgers said Fiala has been removed from the public ministry, meaning he cannot present himself as a priest.

Fiala used the pretext of private catechism lessons to be alone with the boy, Rhodes said, and in 2008 took the teen to a youth event in the town of San Angelo, Texas, during which he raped him in a motel room at gunpoint.


What is it with Catholic Priest and Texas?  Texas and its love of guns and Catholic Priest ... and you know.

Search The Other Guy

We Americans have very definitive opinions about what should happen.  It is just when it comes to figuring out how to accomplish those same objectives that we ... fall short.

The American public has made it clear that it wants Washington to cut the deficit and balance the budget, with just a few caveats - no new taxes - don't cut Social Security, Medicare, or Defense spending (or much else for that matter).

And as this week has shown, the American public wants to safe when they fly - so long as it doesn't inconvenience them in any way. Safe, but not inconvenienced.  Search the other guy.

Were You Part Of An "Expert Network"? - Feds May Come Knocking

What is an "Expert Network"?  This may be one of the instances where you are better off wondering what they are.

According to Wikipedia an Expert Network is generally described as:

An Expert Network can be loosely defined as a network of people used to conduct any sort of professional research. Information providers within expert networks can be anyone from doctors to academics to any type of working or retired professional. Researchers can be anyone from investors to marketers to product manufacturers. Researchers derive value from the information they gather by connecting directly with primary information sources and industry experts.

Hedge funds were the early adopters, but usage of expert networks is now widespread among all types of institutional investors, including mutual fund advisers, pension funds, banks and private equity.

Sounds innocuous enough right?
According to published reports, Federal authorities are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, The Wall Street Journal reported on Saturday, citing people familiar with the matter.


One focus of the criminal investigation is whether independent analysts and consultants who work for companies that provide "expert network" services to hedge funds and mutual funds passed along nonpublic information, the Journal reported. Such companies set up meetings and calls between current and former managers and traders who want an investing edge. 


For the uninitiated, this is the practice of putting industry executives or even ex-employees of a company on the payroll for "color" or "insight".  In other words, the Good Old Boy Network, I scratch your back, you scratch mine.  The uber-rich get richer!

The newspaper said one firm under examination is Primary Global Research LLC of Mountain View, Calif., which connects experts with investors seeking information in the technology, health care and other industries.


The investigations have been conducted by the FBI, federal prosecutors in New York, and the Securities and Exchange Commission. Ellen Davis, spokeswoman for the U.S. Attorney's Office and SEC spokesman John Nester declined to comment.  According to reports: "Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter. The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say."

Remains to be seen whether anything will actually happen.
My back itches, how about yours?

Revolution Is Upon Us?

"Occasionally the tree of Liberty must be watered with the blood of Patriots and Tyrants."

- Thomas Jefferson

By now we are all familiar with this quote from Thomas Jefferson.  In many ways it has become the battle cry for the Tea Party movement.  But its true importance can be seen in the growing discontent by not only average Americans but by those not fortunate enough to be members of the bourgeoisie (so to speak) throughout the developed World.

Many are asking if we have reached a tipping point.  The division of wealth between the richest and porrest has reached levels not seen since before the great depression.  Can a system like this continue?

One of my favorite blogs is Zero Hedge.  Today they have a story about a planned revolt against the banking system.  Why the banks?  To borrow another quote form Jefferson:

"I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

Have we all become debt slaves to the banks?  Some say yes and have a proposal for a Revolution!  From Zero Hedge:

A few weeks ago we noted that December 7 is becoming a grass roots "banker mutiny" day, in which citizens across Europe will pull money from their banks and thus force a pan-European bank run on what is already a bankrupt financial system, which survives each day only at the expense of the continent's increasingly indebted citizens, their life of increasing austerity, and of course, the US Federal Reserve and its final backstop. In some ways we discounted the potential reach of this movement. Enter Eric Cantona - just ask any sport afficionado who the most entertaining, flamboyant and skillful football player of 1990's Manchester United was and 9 out of 10 times you will hear that name. The icon (both in England and France) whose on field antics were only matched by his kung fu skills, and who has a massive popular following, has been recorded agitating viewers (many of them), to enact a bloodless revolution against French banks: "We don't pick up weapons to kill people, to start the revolution... the revolution is really easy to do nowadays. What is the system? The system revolves around the banks. It's based on the power of the banks... so it must be destroyed starting with the banks. This means that the 3 million people with their placards on the street... they go to the bank, withdraw their money from the banks and these ones collapse. 10 million people and the banks collapse and there is not real threat, a real revolution. We must go to the bank. In this case there would be a real revolution. It's not complicated. You simply go to the bank in your country and withdraw your money. If there are enough people withdrawing their money, the system collapses. No weapon, no blood, or anything like that." A peaceful anti-banking revolution, brilliantly explained so that everyone can understand.

Will December 7 become a day to be remembered?  Should there be a "revolution"?  Can a system where the rich control most of the wealth continue?

Many here in America have said no more.  Many in the Tea Party have said enough.  How does the average American feel?  Will Americans follow in this revolution?

I can't say. I doubt it.  It wouldn't be very smart in my opinion.  But the more that people show their discontent, the more likely change will happen.  And no form of government is exempt from these forces.  Again quoting form Thomas Jefferson:

“Experience hath shewn, that even under the best forms (of government) those entrusted with power have, in time, and by slow operations, perverted it into tyranny”

Ladies Who Lunch - Meg Whitman, Carly Fiorina, and Linda McMahon

We have all heard about "Ladies who lunch."  Wikipedia describes these benevolent women as:

Ladies who lunch is a phrase to describe slim, well-off, old-money, well-dressed women who meet for lunch socially, normally during the working week. Typically, the women involved are married and non-working. Normally the lunch is in a restaurant, perhaps in a department store during shopping. Sometimes there is the pretext of raising money for charity.

They sound so sheik - no?

Well I only wish someone, anyone, had sent the memo to Meg Whitman, Carly Fiorina, and Linda McMahon that they were invited to lunch.  Why?

Between Meg Whitman, Carly Fiorina, and Linda McMahon, they gave $217 million to the “cause” of getting themselves elected as national political leaders.  $217,000,000.00 of their own money.  Now I believe in public service ... but spending $217,000,000.00 to not get elected just seems ... well, gross. 

If the three lovely ladies had instead gotten together for lunch and spent ... say $2,000 on lunch (Christal is very expensive and they wouldn't want to settle for Cold Duck) they could have gotten together for 100,000 lunches.  Yes that is lunch every day of the year for almost 300 years. 

What else could they have done with all of that money?

The Daily Beast reports that:

• Whitman’s spending could have bought full tuition for 23,553 California residents at the University of California-Berkeley, which would almost double current undergraduate enrollment. She could have made 95,764 connections for at-risk youth through Big Brothers Big Sisters of Greater Los Angeles.
• Fiorina spending could have doubled the total assets of Goodwill of Southern California. It could have fully funded Pajaro Valley Unified School District for a year, saving the schools’ sports programs. Or, if Fiorina wanted to befriend folks closer to her mansion in Northern California, she could have increased the budget eight-fold of Raphael House, which provides low-income family services and shelter in San Francisco.
• McMahon spending would have covered a full year’s worth of salary and benefits for 802 state employees facing furloughs because of the state’s budget shortfall. It could have provided heating assistance to Connecticut families in need for seven years. It could have paid for 15 million school lunches across the whole country, or paid for two years of enhanced security for our troops in Iraq.

Yes the $217,000,000.00 is their own money and everyone is entitled to spend it as they please.  But the bigger point is, should anyone spend so much money on having themselves elected to office?  I mean, if you are a worthwhile candidate shouldn't other people and groups support you as well?

It strikes me that we spend far too much money on elections.  Do we really need endless commercials disparaging the other candidate?

But it seems far more ludicrous, in a time when unemployment is so high, when millions struggle every day, that three people spend $217,000,000.00 to elect themselves to office.

I am glad to see more women participate in politics.  We need more women and minorities taking active roles.  But it should not cost $217,000,000.00 to do so!

Republicans Stand Toe To Toe With Neo-Nazis

We are all safe from the boogey-man.  Yes Neo-Nazis Rally For Arizona Immigration Law.

Members of the National Socialist Movement held a march in favor of Arizona's SB-1070 immigration law in Phoenix over the weekend.  This is the same law that the Tea Baggers and GOP support in order to "take back the Country."

As ThinkProgress points out, the alliance between white-supremacy groups and Arizona's anti-illegal immigration legislation appears to be more than a matter of personal associations.


According to an immigration report from change.org earlier this year, numerous groups linked to white nationalist causes have provided monetary support to Arizona's SB-1070, both in its early stages as well as to its legal defense fund.

In an earlier blog I wrote how Arizona Republicans Seek To Tear Down Statue of Liberty.
Wouldn't it be nice if Arizona and Texas COULD be their own country? Let's build a fence to keep these separatist locked inside to themselves. It can be one big white trash BBQ of white, God delusioned, gun carrying bigots---eating corn dogs.

Economics 101

As I have mentioned before, I am often asked by friends what direction I think the economy is headed and how that might affect them.  I do not offer investment advice and am not an investment advisor not an economist, but there are certain items which tend to indicate where we are headed.  The following from the New York Fed indicates we may be in fro a very rough road.
From the NY Fed:

The Empire State Manufacturing Survey indicates that conditions deteriorated in November for New York State manufacturers. For the first time since mid-2009, the general business conditions index fell below zero, declining 27 points to -11.1. The new orders index plummeted 37 points to -24.4, and the shipments index also fell below zero. The indexes for both prices paid and prices received declined, with the latter falling into negative territory. The index for number of employees remained above zero but was well below its October level, and the average workweek index dropped to -13.0.

The expectations was of a reading of positive 15.  Oops.

New Orders feel significantly and general business conditions fell by over 38 points.  Very negative signs.

And then there is the situation in Ireland and the EURO in general.

From CNBC: Ireland Does Not Rule Out EU Rescue Possibility

Ireland did not rule out the possibility of turning to the European Union for help, while an Irish newspaper reported that the Prime Minister may approach Brussels as early as Tuesday.

The Irish Independent said Finance Minister Brian Lenihan may ask his European counterparts in Brussels on Tuesday if it would be possible to funnel funds into Irish banks which he has already promised to pump up to 50 billion euros ($68.38 billion) into.

“There is no question about Irish sovereign debt – the question remains about the funding of the banks. The banks are having trouble getting money,” the newspaper quoted the source as saying.

“We have to find out – could you go to the fund and get money for the banking sector? Lenihan at ECOFIN presents an opportunity to discuss it. It would be the banks that would have to pay it back – not the state.”

The total amount of outstanding European Central Bank loans owed by Irish banks rose to 130 billion euros as of Oct 29 from 119 billion on September 24, data published on the Irish central bank’s website showed on Friday.

Retail sales did increase slightly, but it remains to be seen whether sales continue or it peters out.

Cruise From Hell - Welcome to Gilligan's Island

Huffington Post is reporting that a cruise ship stranded offshore with 4,500 passengers and crew must be towed slowly into a Mexican port and will not arrive until at least Wednesday night, the Coast Guard said Tuesday.


The Carnival Splendor was 200 miles south of San Diego when an engine room fire cut its power early Monday, according to a statement from Miami-based Carnival Cruise Lines.

The 3,299 passengers and 1,167 crew members were not hurt and the fire was put out, but the 952-foot ship had no air conditioning, hot water or telephone service. Auxiliary power allowed toilets and cold running water to be restored Monday night.

The Mexican Riviera-bound ship, which was drifting about 55 miles off the northern Baja California coast, was in contact with the U.S. Coast Guard, which deployed aircraft and ships along with the U.S. Navy and Mexican Navy.

Two Mexican seagoing tugboats contracted out of the port of Ensenada were expected to reach the cruise ship at midday Tuesday and arrive back at the port around 8 p.m. PST Wednesday, Coast Guard Petty Officer Kevin Metcalf said.

Metcalf said the tugs, which will be escorted by a Coast Guard cutter, must move slowly because the ship is so big.

Passengers will be taken by bus to California, said Joyce Oliva, a Carnival spokeswoman. She said she was unaware of any safety concerns from passengers or their families about traveling by bus in Mexico.

Ensenada is about 50 miles south of the nearest U.S. border crossing, in San Diego.

Once passengers are dropped off, the Splendor will be towed back to Long Beach, Calif., a journey that will take days. That's why the passengers will be dropped off in Mexico first.

"They didn't want to keep them aboard any longer than they had to," Metcalf said. "They're running only critical systems as of now."

The U.S. Navy aircraft carrier USS Ronald Reagan, conducting maneuvers 120 miles south of San Diego, was diverted to help the ship. About 70,000 pounds of supplies, including bread, utensils, cups, milk, canned food and other items, will be flown to the Reagan, where helicopters will transfer them to the stricken cruise ship, Cmdr. Greg Hicks said.

The Splendor's seven-day voyage, which began in Long Beach, was canceled and guests will get refunds, reimbursement for transportation costs and a free future cruise of equal value, the cruise line said.

After the fire, passengers were first asked to move from their cabins to the ship's upper deck, but eventually allowed to go back to their rooms. Bottled water and cold food were being provided.

"We know this has been an extremely trying situation for our guests and we sincerely thank them for their patience," Carnival President and CEO Gerry Cahill said in the statement. "Conditions on board the ship are very challenging and we sincerely apologize for the discomfort and inconvenience our guests are currently enduring."

Toni Sweet of San Pedro, Calif., was watching TV when she saw a news report about the stranded ship and realized her cousin Vicky Alvarez and her cousin's husband, Fernando, were on board.

She had dropped the Las Vegas couple off at the dock in Long Beach for the cruise, their first break after caring for their aging parents. She said Vicky was nervous about the trip, but Sweet reassured her everything would be fine. She has not heard from them since the fire.

"It's their first cruise and they were real anxious. I don't think they're going to take another," she said. "Here you want them to have a good time and then this happened."

BP's Oil Spill Still Killing the Gulf - Why Is This Not A Crime?

Scientists from the National Oceanic and Atmospheric Administration believe they have a "smoking gun" after finding dead coral 4,500 feet below the surface in the Gulf of Mexico, seven miles from the Deepwater Horizon rig site. What a coincidence.


Using a submersible robot, scientists found "a brownish substance" on much of the dead coral, and Dr. Charles Fisher told the Times, "We have never seen anything like this at any of the deep coral sites that we've been to. And we've been to quite a lot of them." BP can just add this to its growing tab and all will be forgotten.

[Image via Lophelia II 2010 Expedition, NOAA-OER/BOEMRE]

Biggest Fraud In History?

From zerohedge:

The monetary and financial system that we are enslaved under at the current moment in human history has recently transformed itself into one of the most immoral and destructive forces the world has ever seen. The reason many citizens in America cannot see the extent of it at this time is because the Federal Reserve in coordination with Washington D.C. and the money center banks are doing everything in their power to keep you blind and complacent while they rob you blind. Many of the people in these institutions are not cognizant of the theft they are engaging in as they are either useful idiots or so wrapped up in their ego and false belief that they are making the paycheck they are based on some useful skill rather than simply working at the institutions that are instrumental in carrying out the ponzi scheme. You see, at the highest levels the elite must understand that the U.S. is flat broke; however, an admission of this would mean loss of power and possibly criminal prosecution. As a result, they have zero, I mean ZERO interest in the outcome for the general public and will do “whatever it takes” to quote Ben Bernanke to cover up their economically fatal mistakes and keep the mirage alive. As I mentioned above, there are two main segments that are crucial to keeping the ponzi scheme going, Washington D.C. and the big money center banks. This is why the Federal Reserve is quite purposefully directing all of the new money they are creating out of thin air into these two already bloated and corrupt cancers on the American landscape. - Mike Krieger

The Economy - Good News - Bad News

In my ongoing feature about the state of the economy I thought today I would take a slight change.  Often I have reported on stories which may be perceived as positive or negative.  Problem is, no one seems to know for sure which direction we are headed.  So today I report some good news and some, shall we say, less than positive news from some of my favorite blogs.

Calculated Risk - Headlines from today:

• General Motors: October U.S. sales increase year-over-year
• ISM non-Manufacturing Index increases in October
• ADP: Private Employment increases by 43,000 in October

The one note that I add to the good news from Calculated Risk is the caveat they include regarding employment:

Since employment began rising in February, the monthly gain has averaged 34,000 with a range of -2,000 to +65,000 during the period. October’s figure is within this recent range and is consistent with the deceleration of economic growth that occurred in the spring. Employment gains of this magnitude are not sufficient to lower the unemployment rate.

Mish's Global Economic Analysis - "Economic Conditions Deteriorating":

Unfortunately, but not unexpectedly, things are getting worse since mid-summer.

Adding to the housing misery, over 2 million unemployed workers will lose benefits starting November 30 unless Congress acts to extend benefits in the lame-duck session. Don't count on it.

Furthermore, gallup surveys point to a flat Christmas season at best, so seasonal hiring may not be as good as expected. Finally, stimulus money is spent and there is no driver for jobs with inventory replenishment nearing the end.

These factors will put still more pressure on delinquent loans and foreclosures, which in turn will further pressure prices.

The housing bottom may be a lot further off than most think, in terms of time and price.

Without offering anyone advice (I am no investment advisor), it seems that housing is certainly headed for a double-dip.  As long as unemployment continues at around this level and other economic forces remain tight, housing will suffer.

It also seems like the economy is heading into some strong headwinds.  And - and this is a big AND - the election of Republicans on a low government, less spending agenda, while it may be great for the Country in the long term, will put strong downward pressure on any current economic recovery.  Millions are scheduled to loose their unemployment insurance; we can expect no further stimulus spending; and, expect the Federal Reserve to be under increased pressure.  Those all are ingredients for a slower economy.  You may ask what about extending the Bush Tax Cuts?  Those tax cuts will have a marginal benefit on the middle class (yes they will have a little more money to spend), but it will give the rich a bunch more disposable income to spend at Tiffany's and Gucci. 

On a more cynical note:

How is it possible that consumer spending is back and the economy is nearly fully recovered while unemployment hovers around 10%, foreclosures are mounting, poverty has reached a 15-year high and great parts of the public are struggling with debt? Because the richest 5% account for 37% of all consumer spending. Sorry, but most of the American public simply don't matter.

To the victor goes the spoils.  Buy Tiffany's stock?