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?

Autism

Autism is a developmental disorder that appears in the first 3 years of life, and affects the brain's normal development of social and communication skills.  It is a physical condition linked to abnormal biology and chemistry in the brain. The exact causes of these abnormalities remain unknown, but this is a very active area of research.

Children with autism typically have difficulties in:

•Pretend play

•Social interactions

•Verbal and nonverbal communication

The exact number of children with autism is not known. A report released by the U.S. Centers for Disease Control and Prevention (CDC) suggests that autism and related disorders are more common than previously thought.

If you or anyone you know has been impacted by Autism you know how life changing it may be.  A friend of my family has a new blog up:

Voices Found - autism and typing to speak

Check it out!


http://voicesfound.blogspot.com/

Constitutional Scholar - Christine O'Donnell

I have long been critical of the litany of candidates for the US Senates we have seen this year who seem to lack any real qualifications for what is arguably one of the most important positions in the world.

How important is the US Senate?

The United States Senate is the upper house of the bicameral United States Congress. The composition and powers of the Senate is established in Article One of the U.S. Constitution (which does not use the terms "upper" and "lower"). Each U.S state is represented by two senators, regardless of population.

The United States Senate is often described as the world's greatest deliberative body. Many of the most influential political leaders in U.S. history have served there. A total of fifteen senators later became President. Fourteen incumbent senators were nominated for President. Twenty-two senators later served as Vice President. Twenty-seven incumbent senators were nominated for Vice President. Nearly one hundred senators later governed their respective states.

The United States Senate has also been called the most exclusive club in the world. It is an auspicious body with a renowned history.

I am not critical of anyone who chooses to run for office. What I am critical of, is that people who seem to lack a fundamental knowledge of issues which impact our lives have become serious candidates for such an important position.

And what might be more important to each of us, than basic questions of our Constitution. Enter Constitutional Scholar - Christine O'Donnell.

Mind you, I didn't call Christine O'Donnell a Constitutional Scholar, she did. When asked recently what qualified her for the senate, O'Donnell discussed her "graduate fellowship from the Claremont Institute in constitutional government."

Anderson Cooper, on CNN, recently took Ms. O'Donnell to task for her speaking of her knowledge of Constitutional issues and her apparent lack of any actual knowledge of what the Constitution says.

Check out the video:

http://www.youtube.com/watch?v=tsRwV-OhG1I

The Quagmire of Real Estate - Sudden and Dramatic Drop in U.S. Home Prices - Deal of the Century?

Have you been looking to buy a home?  Are you being told that housing is a big gamble?  Is this the deal of the Century?

It sure seems as though there are some great buys.  I mean housing prices have tumbled, so why not buy?  Right?

Isn't home ownership part of the American dream?

I have people that tell me this is the best time ever to buy - you would be crazy not to buy now.  I also have a lot of people saying you would be crazy to buy - why put money in a sinking ship.

So what to do?  Well, some new reports have sounded another alarm as to buying now.  Is it really time to buy?

Clear Capital (www.clearcapital.com), is issuing this special alert on a dramatic change observed in U.S. home prices.

“Clear Capital’s latest data shows even more pronounced price declines than our most recent HDI market report released two weeks ago,” said Dr. Alex Villacorta, senior statistician, Clear Capital. “At the national level, home prices are clearly experiencing a dramatic drop from the tax credit-induced highs, effectively wiping out all of the gains obtained during the flurry of activity just preceding the tax credit expiration.”

This special Clear Capital Home Data Index (HDI) alert shows that national home prices have declined 5.9% in just two months and are now at the same level as in mid April 2010, two weeks prior to the expiration of the recent federal homebuyer tax credit. This significant drop in prices, in advance of the typical winter housing market slowdowns, paints an ominous picture that will likely show up in other home data indices in the coming months.

2% drop in two months is HUGE.  Scary huge. 

And Clear Capital is not alone.  Gary Shilling (he of S&P/Case Shiller) says single-family home prices will drop another 20% over the next few years with number of homeowners underwater to rise from 23% to 40%.

20% further decline!!!  That means if you buy now and put 20% down, YOU WILL BE UNDERWATER in the next few years.   You will loose everything you put down!  

But even worse, that 20% decline is based only on real estate prices returning to the norm (the average historical norm for house prices).   Excess inventories of 2.1 million are the "mortal enemy" of prices says Shilling. "A 20 percent decline would bring us back to the long-term trend, all the way back to 1890. I am a great believer in reversion to the norm".

What does Shilling mean by "the norm."  The norm is the average historical price for homes SINCE 1890.  And current prices are still well in excess of the norm. 

More importantly, a 20% decline just brings us back to the norm.

A lot has been said about home prices falling and how the decline is "as great as the Great Depression."  But that is misleading.  Housing prices during the 1920's were not as high as we have recently seen.

How bad could it be?

The Case-Shiller Index in its entire 110-year history had never crossed 140 until the recent bubble. In 2006, it reached 210. Every single real-estate bubble in the past has at best been followed by a fall back to at least the 110 level in the postwar era, although the bubble preceding the Great Depression witnessed a fall to 60.

WOW!

So historically, a fall of 20% doesn't even look bad!  What about a decline of another 50%?

Yes, if prices were to do what they did during the Great Depression, prices could fall a lot more.

When you look at the graph of the Case-Shiller residential real-estate index, an index dating from 1890 to the present and an index which measures the cost of housing in comparison to other goods, the first thing you see is that the 2001 to 2006 bubble stands out like the Empire State Building in a patch of daisies. There simply has never been anything like it before.

Where will prices go?  I have no idea.  But I also have no idea if now is a good time (or a really horrible time) to buy a house.

Dawn Of The New Fascist - Alaska Senate Candidate Joe Miller

The Anchorage Daily News reports that Tony Hopfinger, who founded and edits "Alaska Dispatch," was handcuffed and detained arrested by Alaska senate candidate Joe Miller's private guards at an Anchorage school. The senate hopeful was on hand as part of a town hall event and Mr. Hopfinger was there to try and interview the candidate.

The reporter was on public property where a public event was being held at the time of the incident.

Hopfinger had been trying to ask Miller questions when two or three guards told him to leave or risk being charged with trespassing. When Hopfinger continued to try to ask questions, one of the guards put the reporter in an arm-bar and then handcuffed him.

Hopfinger was released after police arrived.

The "private security" guards claim that Hopfinger shoved a man, but Hopfinger claims that he only pushed back at a guard after the guard began pushing him.

I am not sure why the "private guards" didn't call police. But I am sure with their expert training they figured why not detain someone on public property that you don't like. Too bad it that might constitute kidnapping or false imprisonment. When you are above the law you do as you will. It is good to hear Joe Miller has his own private SA, SS or Stassi or whatever we call them today. [What do you think the SA was about? Exactly this, those who questioned Hitler during his rise to power (but before he got it) would be attacked by the SA who would beat them, kidnap them, and sometimes make them disappear permanently.]

But just because Mr. Miller may be kidnapping his detractors is not why I think he is now a leading candidate for Fascism. No there is another position of Mr. Miller's that I find more disturbing.

Recently, Mr. Miller abruptly announced that he would no longer answer questions from the press. "We've drawn a line in the sand. You can ask me about background, you can ask me about personal issues, I'm not going to answer them. I'm not," he said at the time.

He is running for US Senate and he refuses to answer questions!! Why should anyone vote for a candidate that refuses to answer questions? Does Mr. Miller believe that he is above answering questions? Does Mr. Miller believe that he is so superior to us dumb Joe's that he need not explain himself?

Is Mr. Miller waiting to be anointed Führer und Reichskanzler?

Seems very convenient that someone trying to ask Mr. Miller questions needed to be arrested by Mr. Miller's private guards. Perhaps Mr. Miller if you answered questions no crimes need have been committed.

State of the Economy

It has been some time since I have commented upon the economy or the stock market.  There simply hasn't been that much that is different than what has been going on in the past several years.

I think there are serious, fundamental issues with our economy which are likely to lead (actually continue) to great despair for millions.

Today I saw an article at Some Assembly Required which summed up so well what I feel is going on.

From Some Assembly Required:

First Principals: In the US, housing is central to the economy, to the financial system, and to the society. It has failed. And with it the consumer economy has lost its main support, so, too, have employment, taxation, the social contract and governance. The replacement, in each case, is fear. And not far behind the fear is the gathering recognition that doom, that collapse is just off stage, waiting.

There is no rational way to discuss one aspect or another of the hydra facing us. Yes, fraudulent affidavits were used to keep foreclosure mills running. Why not? The mortgages were frauds at inception – deceitful loans made to deceitful buyers. The fraudulent mortgages were quickly passed on to the slice and dice middle-men who knew what they were cutting up was fraudulent but didn't care as long as they could pass it on – nudge, nudge, wink, wink – as MBS given fraudulently high ratings by firms that were no better than houses of prostitution. A “service” industry grew up that was designed to keep all the players fat, dumb and happy until they were starved, very unhappy, but still greedy, still dumb.

The housing market has disappeared into the hated federal government – no one else would lend money into such a market, nor offer MBS stuffed with fraudulent documents and backed by no-loss covenants. All the banks do is collect fees and distribute bonuses.

The rule of law disappeared along with the magic of deregulation – what are laws except inconvenient constraints on profits? Common sense left town years ago. Readers ask why I've not written about the 'foreclosure fraud', this is why: It is too big to grasp. We are living in a world made by fraud and it cannot but all fall down. Anyone who thinks this is all trivial technicalities is wrong.

I truly thought our doom would flow from the increasing decline in petroleum production, years from now. I was wrong.

Yes it is a very depressing assessment of our current state.  But I ask you, do you feel that we, the people of the United States, are doing the best, electing the best and doing more than what we have done in the past?

It is not enough to simply complain (Tea Party) and wish for things to go back to some hypothetical place that actually never existed.

We need real leaders.  We need real vision.