EZ READING MONEY MATTERS

Turning The US Into Pre-Bismark Germany

July 31, 2008

Elaine Meinel Supkis

Bush wants to privatize as many of the public freeways as possible. The theft of these expensive road systems is just one step in the process of selling off all our public holdings to foreign powers in order to pay our many bills. I harp on this a lot because the theft of much of this nation is treason. And it is treason to run trade and budget deficits and then capitalize foreign powers and in turn, sell us to them. There are many reasons why I totally oppose this process. Also, we visit history here in Berlin, NY. We had one of the earliest 'plank' toll roads in Ameirca 150 years ago.

Toll Nation

The Bush administration unveiled a plan to impose new tolls on freeways and encourage more private investment to finance road and mass-transit projects, a move aimed at stirring debate as lawmakers prepare for a major overhaul of transportation policy.

The White House says more tolls and public-private partnerships can solve perhaps the biggest problem confronting the nation's aging infrastructure: There are limited funds available to upgrade transportation networks and too many federal funds are doled out inefficiently through earmarks and pet projects that do little to improve mobility or reduce congestion.

The search for alternative funding sources is ramping up because Americans are driving less and shifting to more fuel-efficient vehicles. That means they will be paying less in gasoline and diesel-fuel taxes, which traditionally have been the biggest source of federal funding for highway and mass-transit construction.
*snip*
Ms. Peters says gas-tax rates should hold steady -- at 18.4 cents a gallon for regular gasoline and 24.4 cents a gallon for diesel, where they have stood for more than a decade -- and private money and toll revenue can address any needed increases in funding. She declined Tuesday to say how much more the U.S. needs to increase its overall spending on transportation infrastructure. Instead, she suggested ways to make transportation spending less wasteful.

Even today, Americans want to reduce the gas tax to zero. It was supported by Hillary Clinton and John McCain as a neat, easy trick to reduce gas prices. Now, we see the US President suggesting the taxes are not enough! So he wants to steal all the roads and hand them off to hostile aliens who have one goal only: to maximize profits off of the movement of citizens and goods within the US. Then our dollars will flow like crazy to Europe and Asia, enriching them. If this captive money flows to US thieves, they will not want it taxed and will ship the loot to the Cayman Islands.

The entire concept of public support of public facilities is collapsing as our government heads to bankruptcy. If the government outsources, offshores and privatize everything, only people with money will be able to use what used to be public facilities. All the rest will be shoved aside. Traffic that once flowed on freeways will shift to slower community roads still maintained by the public. The destruction this will cause will bankrupt local communities and they, in turn, will be forced to privatize roads! Soon, the entire US will be 'toll only' and this will be the end of any pretense of being a united states and we will reproduce Germany circa 1848. The great patriot, Bismark, set out to ruthlessly eliminate tolls. He used both diplomacy, arm twisting and outright violence to do this. In the end, he got his 'Tollverein'. Instantly, capitalism in Germany took off!

Why is that, we ask? And why was one of the earliest national freeway systems also built in Germany? The free movement of goods and trade is the cornerstone of the Free Trade New World Order people. Yet at the same time they decry barriers and tariffs across the planet, these very same clowns are pushing us to put up endless barriers and tolls INTERNALLY! Eh? What about that?

Instead of imposing a profit tax on oil companies during the run up in commodities markets, the US is planning to squeeze us all by means of demanding a daily road tax instead! This is extremely retro and I would suggest, it is designed to weaken the unity of America. When we cross borders from one state to another, they will all impose tolls and fines to fund their budgets.

This is so infuriating! The entire point of tolls and barriers is to protect domestic markets! And fund governments! We denied this and undid this vis a vis the rest of the planet which promptly took advantage of this and flooded us with easy credit and surplus trade goods, destroying our own economic base! And now, we are going to do to OURSELVES what we should have done to ALIENS! The aliens get free trade and we get tolls, barriers and tariffs....HERE AT HOME!!!!!

Europeans and Asians are buying up our infrastructure. They are not doing this for charity. An easy way to make money is to charge tolls, tariffs and fees. This is why our Constitution talks about how CONGRESS sets these things, not individual states. The earlier, Confederation was a total failure due to the various states immediately setting up fees, tariffs and tolls against EACH OTHER.

Little progress made in bridge repairs across US

(AP) -- A year after the worst U.S. bridge collapse in a generation brought calls for immediate repairs to other spans, two of every three of the busiest problem bridges in each state -- carrying nearly 40 million vehicles a day -- have had no work beyond regular maintenance.

An Associated Press review of repairs on each state's 20 most-traveled bridges with structural deficiencies found just 12 percent have been fixed. In most states, the most common approach was to plan for repairs later rather than fix problems now.

Even with tragedy facing us, even as we see on TV people dying because our infrastructure is falling apart, NOTHING is done. Congress voted over and over and over again to build bridges in Iraq and Afghanistan. Bush and Congress just opened the door to infinite spending on AIDs medicines in countries that don't practice safe sex. Israel got its piece of pizza pie doubled in size this year and nary a peep from the free spending traitors in Congress. Everyone overseas who wanted money, got money. Allies, former Soviet satellites, the rulers of a billion Muslims, all got more money. And meanwhile, the US falls apart. This is TREASON. Pretending all this protects America is a charade. In NY, NJ and Conn, most of the bridges and tunnels are toll roads. This creates pollution and other problems at the entrances to these toll booths.

Indeed, so much money was made this way, the Port Authority built these buildings called The World Trade Center. But the guys collecting tolls in the future will be building this stuff in their homelands, not here. Think of the money that pours in! It is huge.

I like to use my local situation to explain global economics. Berlin has been nearly totally destroyed by Free Trade. It is greatly reduced since Ronald Reagan's rule. Most voters here were Republicans and got what they voted for. Not that anyone in power today is against reaming out localities of all business opportunities. In the case of toll roads, Berlin had one of the earliest plank toll roads in America. We still call this road, 'Plank Road.' It runs right past my farm and over the mountains to Massachusetts.

Plank Road Fever in Antebellum America: New York State Origins
Daniel B. Kein
John Majewski

Plank roads burst upon New York and the nation as the solution to these problems--wooden roads that formed a hard flat surface upon which wagons could rollunhindered, with tittle discomfort to man or beast.
3
The technique seems to have originated in Russia and was introduced into Canada around 1840.4 Not surprisingly, news of the wooden roads drifted across the border into New York State. The story of plank roads in the United States thus begins in Salina, New York, a village near Syracuse, where in 1844 a group of towns- men formed a committee and obtained a charter from the state legislature to build a road from Salina to the nearby village of Central Square. Like many communities scattered throughout New York, the village wanted better access to canals and railroads. The committeemen
had heard of the Canadian plank roads but knew nothing of their construction. One of their number, a civil engineer named George Geddes, became intrigued by the notion of wooden roads and made two trips to Toronto to investigate the procedure.
*snip*s
The road’s success prompted one writer to proclaim that "The road has fully and completely succeeded.... The revenue justifies the prediction which was made by its builder."’9 By 1847, the New York State legislature had received so many petitions for plank road charters that it passed a general incorporation law. The law opened the floodgates, as more than 340 New York plank road companies received charters between 1847 and 1854.

I can understand why this was attempted. The Northeast has lots of hardwood trees. The new water-driven mills began to turn out a huge number of board feet of wood that was planked instead of using axes to chop beams into shapes as was done for thousands of years. In springtime, far from rejoicing in the warm weather, we have 'mud season.' I am very familiar with this since I live on a dirt road! The ground is frozen down at least 3-4 feet. The top layer melts but the lower layers don't melt for at least several weeks! So the water doesn't go down into the water table, it stays firmly at the top layer. This, in turn, becomes very muddy. VERY muddy. Driving any vehicles or walking or riding on this muddy slick that is above a frost layer is extremely messy. When it melts lower down, the mud gets WORSE. At the bottom of my driveway, for example, it can literally hip-deep in sticky, oozing mud.

Here is a picture of the tiny town of Berlin showing where east/west Plank Road crosses north/south Rt.22 which was a 'turnpike' 200 years ago.

The road goes very steeply up this ridge! It is famously steep. I once drove a 4 wheel car that went out of control on ice on that road and crashed. It is scary! A gas truck lost its brakes 50 years ago on this very same steep road and wiped out part of the village and killed a number of people, the destruction of that is right about where my camera was aiming.

So, during the early colonial years, all commerce ground literally to a halt as the rivers were dangerous, too, with all the ice floes as well as spring flooding and the insidious mud everywhere. From mid-March to mid-April, everything is filthy and slow. Then, in less than a week, all dries out once the last layer of ice melts deep down below! This is when I do all my road work.

So when the proposal to build toll plank roads was attempted, it was very popular. But not with everyone!

History of Plank Roads:

Experience proved Geddes wrong. Planks lasted four or five years, not eight, whether the roads were lightly or heavily travelled. What is more, after the planks began to deteriorate the roads became very hazardous: wagon wheels and the slender legs of horses would sometimes slip through the planking, with ruinous results. Much of Geddes’s mistake stemmed from the poor quality of the Canadian data. The Canadian plank roads had been built by the government, but the right to collect tolls had been auctioned to private parties. The result was disorganized information about revenue, maintenance costs, and ultimately about profits.

HAHAHA, the Crown built the roads in Canada and then used them as political leverage! In chaos comes profits. Everyone at the top knows this. In Berlin, the road from Troy, NY to Williams Town at the next state over. Today, the road is abandoned just 6 miles beyond my farm. My farm had trouble after the new toll road was built. The poor farmers who were living hand to mouth on this road all had to move or leave because they couldn't afford to go to and from the village of Berlin. Despite the lack of mud season closing roads, the farmers were in difficulties due to this newfangled road. Everyone was very much happier when the toll road was removed. I am happy I don't have to pay a toll every time I go to the post office or the store! This is why we should all be happy to not have tolls everywhere.

Bush signs housing bill in private

But Bush initially vowed to veto the bill as being overly socialistic. He finally dropped his objection when he decided that it was better than nothing. In a rare split, House Republicans opposed the bill and business interests like home builders and bankers favored it.

The White House had said there would be no bill-signing event, with one administration official noting ruefully that they had no desire to trumpet the accomplishment of the committee chairmen, Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.).

The houses being 'saved' are in the same category as toll roads: the 'owners' will own NOTHING. The value of future profits will go to investors who are being saved by the government! So they get their money from the government and then the government will engineer it so house values rise since it, not the home owners will profit from all this. Ack. It will not work. It can't possibly work. I see no way of it working. Turning our nation into tenants and toll payers is stupid, stupid, stupid.

The 19th Century Anti-rent Riots in NY:

Land history in New York State differed in pattern from most other sections of the colonies because of the Dutch influence. As the patroonship system evolved over the decades, parts of the manor were sold to small farmers. These manors, along with millions of acres confiscated by New York after the American Revolution, were sold to speculators.

A system of leasing which had existed since he middle of the 17th century allowed a freeholder to buy land from the lord of the manor with little or no down payment. For several years, no rent was expected, but after that period the leaseholder was expected to pay the lord part of his produce as rent. In addition, certain feudal customs prevailed, such as being required to work for the owner and clear his acreage. The owner's permission was even required if the tenant wished to entertain guests. Upon the sale of such land, the lord received a percentage -- usually 25 or 30 per cent -- of the proceeds.

Conditions were difficult for many farmers who, particularly on the Rensselaer manor, fell into debt. After the death of Stephen Van Rensselaer in 1839,a significant change occurred. The sons, unlike their benevolent and charitable father, demanded of the freeholders all back rent and other obligations not adhered to previously. When attempts were made to collect the back rents, riots began.

Armed conflicts raged throughout Albany County, spreading to the Mohawk and Delaware valleys. Farmers ignored writs of ejection issued as a result of their refusal to pay the rent. Local authorities attempted to enforce the writs, but were resisted and harassed by farmers, who sometimes disguised themselves as Indians. Governor Seward, although sympathetic to the farmers' plight, was compelled to back up the law enforcement agencies. In Delaware County conditions reached the stage of anarchy, requiring the governor to declare a state of insurrection.

Physical force was not the only form of resistance that occurred. Associations and societies were formed by the tenant farmers, and conventions were held in Berne, New York, the unofficial capital of the anti-rent movement. As the protest gained momentum , it attracted national land reformers whose philosophy extended beyond local problems. Dealing with these problems in more universal terms, they espoused the concept that all have a right to the earth and all land monopoly should be abolished.

A man's home is no longer his castle. Nor is a lady's home her castle. 30% of homeowners in America own free and clear. But this means, if we add the tenants and the deep-in-debt crew, they are a very small minority. And so appeasing the majority of non-owners means all sorts of crummy, stupid things will be launched. Passing the buck always ends up with the populace either living in increasingly third world status with nothing fixed, everything broken or paying tolls or private schools, etc. More about that later, I have a lot of experience with having to pay for tolls and schools! Out of my own pocket.

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Terrorism Is In Eye Of Beholder

July 31, 2008

Elaine Meinel Supkis

Global power is shifting away from the US and European empires. So both are howling with rage over the thought of anyone besides themselves having nuclear bombs. Also, revolutions and riots break out all over the place as bombs go off as 'terrorists' struggle with various empires. And all empires hate terrorism at home and LOVE it when they are doing it to unarmed or poorly armed peasants and natives. Colonization is good if European or Americans are colonizing Palestine or Ireland but no good if the Chinese move to Africa or if Africans seek to come to the US or European empires! And torture and nuclear armaments are all over the news as we look exactly like the Soviet Union.

Al-Qaeda in Iraq Leader May Be in Afghanistan

The leader of the Sunni insurgent group al-Qaeda in Iraq and several of his top lieutenants have recently left Iraq for Afghanistan, according to group leaders and Iraqi intelligence officials, a possible further sign of what Iraqi and U.S. officials call growing disarray and weakness in the organization.

U.S. officials say there are indications that al-Qaeda is diverting new recruits from going to Iraq, where its fighters have suffered dramatic setbacks, to going to Afghanistan and Pakistan, where they appear to be making gains.

Despite fighting civilians and various tribal people and peasants over the last 200 years, the US still doesn't get it. All insurgencies operate under on principal: strike and run. When the empire puts on too much pressure, move onwards to a new local and repeat. Huge empires can end up on wild goose chases across the centuries. These can be cheap or expensive chases. It is all up to the people at the center of the empire to decide if this is a golden opportunity for corruption or if it is something serious.

Chasing insurgents in circles across the globe is, for the present US military/industrial complex, a fun and lucrative game. Vast fortunes are being assembled as the military does everything in its power to make this chase after barely armed civilians as expensive as humanly possible. This is why tremendously expensive bomber jets and spy planes that cost many billions of dollars are being used to fire missiles or drop bombs that are hideously expensive on tents occupied by women and children or bombing a lunar landscape or terrorizing whole cities and alienating the populace.

Absolutely no one from the President of the Empire of the USA down to the lowliest soldier is cost cutting. No one is counting up the costs of this expensive exercise in imperial powers. No one is trying to see if it might be a waste of time and money, bombing civilians from the air. The entire concept of the 'war on terror' has really been a front in the much more important and real war: the seizure of maximum finances from the US empire itself. This is why these wars are lost. Like clockwork. At no time do we ever win a war against a recalcitrant people. The illusion of victory lures the US population into supporting these endless, hideously expensive enterprises that gain us exactly nothing.

For our expensive empire's expansion simply means we must spend more and more. Since everything under the sun in the Pentagon has been 'privatized' this means these wars are all about profits, not any sane evaluation of the value or cost of various enterprises. The thing being sold to the American people is, if we only can run down and kill off or buy off all terrorists, we will be safe. The lunacy of this proposition is obvious: this month, we have seen a very strong up-tick in global terrorist bombings.

From China to Russia, from India to Sri Lanka, in Africa, in the Middle East, in Pakistan, in all the countries we are seeking to control via military force, we see a rise in 'terrorism'. This week, England announced that the true terrorists are not Muslims but Catholic Irish! HAHAHA. Back to one's roots. Always, this was the real terror for the Crown. Ireland and Scotland as well as Wales were early targets of Royal imperial interests. So, 1,000 years later, it continues. This durability shows us that military force cannot stop 'terrorism'. Imperial policies, on the other hand, cause this terrorism.

After all, why are Catholic Irish angry with British Crown colonialism? That is a very long story. For example, my own clan was given a hunk of Ireland by Queen Anne. We gave it up during the Troubles beginning with the mid-19th century. Hanging onto these estates proved to be too expensive. So one retreats. All over this planet, the ruling elites of Britain, France and Spain claimed giant hunks of the earth for themselves and over the centuries, outraged natives fought back, sometimes passively but also sometimes quite explosively. The only time this stops is if the empire gives up. Right now, England insists on occupying a huge hunk of Ireland. Thus, the terror and Troubles continues.

Palestinians: IDF troops wound 9 at boy's funeral in West Bank

Israel Defense Forces troops wounded nine Palestinians in the West Bank city of Ramallah on Wednesday in a clash with protesters at the funeral of a 11-year-old boy killed a day earlier, Palestinian medics said.

They said the troops had shot the casualties with rubber bullets while fighting stone-throwing protesters. A 18-year-old Palestinian was hit in the head by a rubber bullet and doctors described him as brain dead.

An initial Border Police investigation has found that Ahmed Moussa , 11, who was killed at a West Bank protest on Tuesday, died from a live round fired by one of the security force's troops.

Ahmed Moussa died during a confrontation with Israeli security forces on Tuesday in the West Bank village of Na'alin. Villagers have been protesting for months against Israel's separation fence.

The latest ugly reports from the latest European attempts at conquering natives, appropriating their lands and destroying them as a people. Like the Crown of Britain, the wealthy Jewish supporters of invading Palestine are extremely ruthless and brutal. They hope that they can live in 'peace' while oppressing a huge number of people. They hope that the natives will 'forget' the past and not bring it up in the future. After 1,000 years, the Irish or the Palestinians will finally figure out that alien invaders have a right to occupy and control their homelands. Then they go away, somewhere far away. Like, colonize Australia or North America. Or maybe, Africa?

Indeed, in the British press this month, there is outright hysteria about nearly a million Chinese moving to Africa. In France, Spain and Italy as well as England, there is fury about several million Africans seeking to come to Europe! Oh my! An invasion! Stop it! HAHAHA. The fears about Africans coming to Europe is pure racism. Millions and millions of Europeans invaded the entire planet and ruthlessly annihilated, enslaved or suppressed the rest of humanity including China itself. In 1800, China didn't colonize England, just for example. Now that the people who were enslaved, colonized and oppressed are now reversing the flow. They are moving into the former or present empires that rule the earth.

Imagine if a million Iraqi refugees, caused by the US/UK colonial invasion, were to move to England and the US? So far, less than 10,000 have been allowed into the heart of the global empire! We will not let in more than a tiny trickle.

Olmert not confident of peace deal this year

(CNN) -- Israeli Prime Minister Ehud Olmert does not believe a peace accord with the Palestinians can be reached by the end of the year, according to a senior Israeli official. Speaking to parliament's Foreign Affairs and Defense Committee, Olmert said Monday that Jerusalem's status was the main hurdle in the way of reaching such an agreement, according to the official, who attended the committee meeting.

Olmert and Palestinian Authority President Mahmoud Abbas signed a joint statement in November at a U.S. summit for Middle East peace, pledging to work toward securing a peace agreement by the end of this year. The Bush administration has repeatedly said it believes a peace deal can be achieved by the end of President Bush's final term in office.

Olmert is resigning because he is corrupt. He is corrupt in exactly the same way our own empire is corrupt. Senator Ted Stevens of Alaska of 'Bridge to Nowhere' fame, is finally being hauled into court because his corruption was finally totally obvious. The people of Alaska are fearful the flow of easy IOU Federal money will slow down. Accustomed to getting a free ride, they worry that fiscal restrictions will be placed on them. No longer able to tap into the endless wealth of endless debt at the heart of the empire, they will not have huge financial gains from Steven's corruption.

Israel is corrupt because they, too, have tapped into the endless IOU supply system in Washington, DC. The Jewish lobbies have so utterly infected everyone there with corruption, from top to bottom, they now have gained the ability to redirect public funding from the US citizens to their pet country, Israel. As the red ink mounts, these powerful, rich lobbyists can't talk about cutting spending at all. For then the topic of cutting the #1 recipient of US funding, Israel, comes up. So money is spent on the politicians to NOT talk about balancing the budget.

Every time, by the way, they do talk this way, enraged voters besiege them to cut off Israel. So mum is the word these days. Israel assassinates its leaders if they negotiate too much. Israel's domestic politics is very chaotic so they alway can fall back on the excuse, they have no leaders and therefore, can't negotiate anything. This will not win in the end. The Palestinians know they are in a battle to the death just like the Irish knew this. Starvation, privation, denial of property rights, savage military suppression and yet, a thousand years later, the Irish battle onwards and so will the Palestinians.

Like with the Irish who used to fight each other before the British Crown invaded, this suppression and supplanting of natives is driving them together into a much stronger political entity. Despite the present split of Hamas versus PLO, Hamas will win in the end due to the fact that the PLO is a paid entity of the US empire. And quite unpopular because of this. The 'peace' the US seeks in Palestine is identical to the 'peace' England wants with the Irish: for them to shut up, go away and let the occupation become legitimate and eternal. A hopeless desire.

Ahmadinejad Condemns World Powers for Atomic Arsenals

(Bloomberg) -- Iranian President Mahmoud Ahmadinejad criticized the world's most powerful countries for expanding their atomic arsenals while attempting to stop the progress of other nations toward ``peaceful nuclear energy.''

``The expansion of nuclear arms by oppressing powers is continuing and other nations' peaceful nuclear activities are being condemned by these very countries through accusations that they are being aimed at constructing nuclear weapons,'' Ahmadinejad said in a speech aired live on state television.

England is upgrading its nuclear arsenal. They cling to this arsenal so they can imagine they are an empire and global power capable of menacing China or Brazil. Oops. China has nukes! Well, at least they can menace Brazil. This is very, very expensive. The British economy is on the ropes and going down, fast. Yet the imperial rulers there insist on keeping up the fiction of global domination no matter what. Who is menacing Britain?

THE IRISH! They don't have nukes! Britain thinks the Irish are the greater danger. Yet, money is spent on nuclear bombs. I'm absolutely certain that if Queen Anne had nuclear bombs, she would have dropped them on Dublin back in 1740. And King George III would have done the same to Boston, absolutely. The world's biggest empires insist on clinging to nuclear bombs and feel no compunction about threatening others with these weapons.

Nonaligned countries back Iran's nuclear program

(AP) — More than 100 nonaligned nations backed Iran's right to peaceful uses of nuclear power on Wednesday, an endorsement sought by Tehran in its standoff with the U.N. Security Council over its refusal to freeze uranium enrichment.

The decision came as supreme Iranian leader Ayatolla Ali Khamenei pledged to continue the country's nuclear program.

Senior Iranian officials depicted the support from a high-level conference of the Nonaligned Movement as deflating claims by the U.S. and its allies that most of the international community wanted Iran to stop enrichment.

115 nations to be exact. And this is nearly half of the planet earth. Not one of them have nuclear bombs. The two that do have these bombs, Pakistan and India, both show the utility of such weapons. The US constantly demands the right to bomb natives and peasants in Pakistan. And Pakistan says 'No.' End of story. If they had no nukes, the US and UK would not hesitate for even one minute to bomb, bomb, bomb Pakistan! This is why I say, if the major imperial powers refuse to disarm, everyone should have at least one nuclear bomb. That would stop a lot of border wars, incidentally. Look at Pakistan and India: no longer a problem with each other or with China! They now negotiate everything.

The U.S. military has canceled a controversial war plan designed to strike adversaries promptly - even preemptively - with conventional and nuclear weapons.

The strike plan was known as Concept Plan (CONPLAN) 8022 and first entered into effect in the summer of 2004 to provide the president with a prompt, global strike capability against time-urgent and mobile targets.

CONPLAN 8022 was the first attempt to operationalize the “Global Strike” mission assigned to U.S. Strategic Command in January 2003. The mission was triggered by new White House guidance following the terrorist attacks in September 2001 and fear of proliferation of weapons of mass destruction.

Lack of leadership and definition has since placed Global Strike in limbo, with little progress and prompt effects instead being incorporated into other existing strike plans. “Global Strike” is now described as a much broader mission synonymous with the “New Triad” first articulated by the Bush administration’s 2001 Nuclear Posture Review.

Periodically, the military in the US empire plot WWIII. Then, someone sane comes along and looks in horror at the script and rips it up. When Bush unilaterally said, we have the right to make preemptive nuclear strikes on not only China and Russia but anyone, the world gasped. Since that day, the Russians and Chinese have cheerfully told all their neighbors, this is the new global war policy and they have set up systems to accommodate the US in this matter. The loud warnings that if the US even thinks about attacking two of some of its biggest lending banker nations, Europe and Japan will vanish in a nuclear firestorm has started big pushes by our allies to kill this program.

So it was killed to the relief of Europe and Japan. But this doesn't make headline news in the US nor is there any sane analysis about this matter in the major media which is up and down the line, totally war mongering and pro-violence.

(CNN) -- The White House on Monday predicted a record deficit of $490 billion for the 2009 budget year, a senior government official told CNN.

The deficit would amount to roughly 3.5 percent of the nation's $14 trillion economy.

The official pointed to a faltering economy and the bipartisan $170 billion stimulus package that passed earlier this year for the record deficit.

I include this as a perfect example of how the media lies by omission. The US deficit grew massively because we have the most expensive military on earth and they are spending an absolute fortune on chasing civilians and bombing civilians. And the supplementary funds for this cost far more than the stupid 'stimulus' package which was not even a tax cut but rather, a deferral of paying taxes. But rare is the article that mentions our bloated and misdirected military spending when talking about our deficits! And never, ever is Israel mentioned. Let's look at one of a million examples of this waste and wild spending:

U.S. Says Contractor Made Little Progress on Iraq Projects

The U.S. government paid a California contractor $142 million to build prisons, fire stations and police facilities in Iraq that it never built or finished, according to audits by a watchdog office.

The Special Inspector General for Iraq Reconstruction (SIGIR) said Parsons of Pasadena, Calif., received the money, part of a total of $333 million but only completed about one-third of the projects, which also included courthouses and border control stations. The inspector general's office is expected to release two detailed audits today, evaluating Parsons's work on the contract, which is worth up to $900 million.

"Far less was accomplished under this contract than originally planned," the inspector general wrote. "Millions of dollars in waste are likely associated with incomplete, terminated and abandoned projects under this contract." Auditors did not give a dollar figure of how much had potentially been wasted, but they said Parsons got about 10 percent -- or $11.3 million -- of the $108 million of award fees it could have received.
*snip*
But now the prison -- known as Kahn Bani Sa'ad Correctional Facility -- sits unfinished and dilapidated. Local residents have derisively nicknamed it "the whale." At one of the buildings, the second floor is without a roof. Gray cement walls jut up in the sky. There is no plumbing or electricity. Windows have not been put in, and walls are unpainted. Roads in the complex remain unpaved.

A report came out this week that none of our bridges are being fixed! Another story was, Bush and his gang want to privatize the entire Eisenhower Freeway system and turn it into all toll roads owned by the Chinese and the Arab oil lords! We are going broke, our nation is falling apart and we are lining the pockets of a million leeches who want to be Daddy Warbucks.

Parson's Military Installations and Ranges

Since the company's founding in 1944, Parsons has expanded its professional and contractual relationships with Department of Defense (DoD) clients. Personnel with secret and top secret security clearances are skilled in developing one-of-a-kind, first-of-a-kind solutions for classified programs.

Parsons has participated in virtually every missile defense system, including the National Missile Defense, Space Defense Initiative, MX-Peacekeeper/MX, Minuteman, Safeguard, Sentinel, and Nike.

We are the leading contractor for ordnance site studies and clearance, currently conducting projects dealing with explosive ordnance throughout the U.S. and abroad. Parsons has developed innovative approaches to digital data collection and integrated geophysics, global positioning systems, and geographic information systems to cost-effectively analyze ordnance contaminated sites, conduct risk assessment, and detail areas for cleanup for anticipated land use.

Parsons has significant experience in military operations and all of the technical disciplines that support range sustainability. Our engineering, environmental, and planning staffs bring unique skills and experience together in an integrated approach.
*snip*
We are committed to maintaining a safe and healthy construction-site environment. The objective of our conscientious, well-trained employees is to conduct operations effectively and efficiently through a system designed to prevent workplace accidents, injuries, and illness. We achieve this objective through a combination of concerned management and responsible and knowledgeable supervision.

Parsons extensive experience with heavy rigging, land and water transportation, and computerized material control management all add up to cost-effective solutions for projects of all sizes and complexity.

Note how this corrupt, venal corporation that lines many pockets in DC boasts about being 'cost effective'! HAHAHA. Arrest them all. And confiscate their profits. Use this to balance the budget. If we do this to all the entities feeding off of the corrupt Pentagon, we will not only see the budget deficit reduced to zero, we might even afford to fix our own nation instead! Gads! Why aren't either of our Presidential candidates suggesting this?

Indeed. Anyone talking this way gets no media attention or is attacked mercilessly.

China Imports Workers to Build Embassy in U.S., Sparking Anger

(Bloomberg) -- To the touchy, tense relationship between global superpowers, add this gritty irritant: As Washington's unemployment rate rose, China brought over hundreds of laborers to build its U.S. embassy.

China has been using an aging motel in Washington for three years to house the army of workers who built the $250 million granite and glass embassy, which at 345,500 square feet is one of the city's largest. Now, with the embassy scheduled to open tomorrow, some labor officials and lawmakers are being less than diplomatic in their criticism.

``This is outrageous,'' says Mark Levinson, chief economist at Unite Here!, a union representing 450,000 industrial, textile and hotel employees nationwide. ``When the U.S. is in a recession and Chinese imports are flooding into the U.S., the Chinese should be using American workers.''

This is too childish, by the way. The Chinese trusted us in the past and for example, when they ordered Boeing jets for the President of China, they found the CIA had wired in a host of spy equipment systems! When Russia insisted on building our embassy during the Cold War, they also riddled it with spy stuff! And so on. The Chinese cannot let us build them anything. Or we will riddle it with spy stuff. End of story. About spying, I NEVER had as much trouble with my telephone service as when the Chinese leaders lived with me. Gads. I was lucky anything worked right. Periodically, I would scold the State Department about this. The Chinese always went out to make important phone calls, of course. On top of this, the Chinese secret police spied on their own people. It got rather messy at one point. I had to eject one of the Chinese officers because he annoyed me too much.

The Military-Industrial Complex
by Chalmers Johnson and Tom Engelhardt

Several inferences can be drawn from Shorrock's shocking expos?. One is that if a foreign espionage service wanted to penetrate American military and governmental secrets, its easiest path would not be to gain access to any official U.S. agencies, but simply to get its agents jobs at any of the large intelligence-oriented private companies on which the government has become remarkably dependent. These include Science Applications International Corporation (SAIC), with headquarters in San Diego, California, which typically pays its 42,000 employees higher salaries than if they worked at similar jobs in the government; Booz Allen Hamilton, one of the nation's oldest intelligence and clandestine-operations contractors, which, until January 2007, was the employer of Mike McConnell, the current director of national intelligence and the first private contractor to be named to lead the entire intelligence community; and CACI International, which, under two contracts for "information technology services," ended up supplying some two dozen interrogators to the Army at Iraq's already infamous Abu Ghraib prison in 2003. According to Major General Anthony Taguba, who investigated the Abu Ghraib torture and abuse scandal, four of CACI's interrogators were "either directly or indirectly responsible" for torturing prisoners. (Shorrock, p. 281)

HAHAHA. Quite. Note that both Russia and China are not this stupid. And a stupid empire doesn't last long, does it? There is corruption in both Russia and China but if this corruption extends to foreigners taking over the system like we have here, people are executed. Here, the media lies about this level of alien corruption and attacks anyone who dares to mention that the US is being corrupted by aliens. The business of CACI torturing people is interesting. Private KGBs litter our nation.

Statement Regarding Baseless CCR Lawsuit 5/7/08

CACI will not try this baseless lawsuit in the press. We reject emphatically this latest plaintiff's allegations and claims. After nearly four years, plaintiffs' counsel, Susan Burke, Shereef Akeel and the Center for Constitutional Rights, are perpetuating baseless allegations against CACI as part of their "big lie" propaganda campaign. From day one, CACI has rejected these prepostorous allegations and intends to vigorously defend itself and vindicate the company's good name.

While Ms. Burke's and Mr. Akeel's politically driven agenda and specious accusations always create a few news headlines, court cases are based on facts and the facts are on our side.

After numerous and thorough government investigations, no CACI employee or former employee has been charged with any misconduct in connection with CACI's interrogation work in Iraq. CACI has unequivocally renounced the abuse that occurred at Abu Ghraib prison and has cooperated fully in all government inquiries of this matter. CACI does not condone or tolerate illegal or inappropriate behavior by any employee when engaged in CACI business.

Contrary to the image foisted upon the public by Susan Burke and Shereef Akeel, CACI provided qualified, dedicated professionals who were called to serve in highly stressful and very dangerous conditions and received good performance reviews for the work they did. We invite people to read the newly released book – Our Good Name – which documents public statements, government reports, and sworn testimony before Congress and the courts, and provides a factual account of CACI's role at Abu Ghraib prison. The book, Our Good Name, cites reputable sources in the public record. We did not do what Ms. Burke and some in the press did – cite anonymous sources, quote those with a political agenda against the war, or make outrageous allegations without facts.

The book – Our Good Name – is the definitive account of what our company went through during the Abu Ghraib controversy and sets the record straight concerning the interrogation work we were asked to perform in Iraq.

Yes, they hire only experts from the Vatican. No one expects the Spanish Inquisition except for the Opus Dei members of the Supreme Court.

Documents Released by the CIA and Justice Department in Response to the ACLU's Torture FOIA

Memo Dated January 28, 2003, from CIA to OLC
Contains "communications from the CIA to OLC on a matter in which the CIA requested legal advice from OLC" and shows that CIA interrogators were permitted to use both "Standard Techniques" and "Enhanced Interrogation Techniques" and that in each CIA interrogation session in which an Enhanced Technique was employed, a "contemporaneous record" was created setting forth, among other things, "the nature and duration of each such technique employed" and "the identities of those present."

Memo Dated August 4, 2004, from CIA to OLC
Contains "communications from the CIA to OLC on a matter in which the CIA requested legal advice from OLC" and shows that CIA interrogators were told that the Justice Department had concluded that certain interrogation techniques, "including the waterboard," did not violate the torture statute. The document also indicates that CIA interrogators were told to take into account the possibility that their actions would ultimately be subject to judicial review.

Memo Dated August 1, 2002, from OLC to CIA
Memo "advising the CIA regarding interrogation methods it may use against al Qaeda members," and includes information "regarding potential interrogation methods and the context in which their use was contemplated." The document also discusses "alternative interrogation methods," a phrase that was echoed by President Bush in a September 2006 speech promoting the Military Commissions Act. Though heavily redacted, the document shows that the Justice Department authorized alternative interrogation methods after concluding that "those carrying out these procedures would not have the specific intent to inflict severe physical pain or suffering" or "to cause severe mental pain or suffering." The memo explains: "Prolonged mental harm is substantial mental harm of sustained duration, e.g. harm lasting months or even years after the acts were inflicted upon the prisoner." The memo also includes this sentence: "Your review of the literature uncovered no empirical data on the use of these procedures, with the exception [redacted]." The memo is signed by Jay Bybee, who also signed the "organ failure" memo issued to the CIA the same day, and who is now a federal appellate judge.

Years ago, I once had an extended debate with a Russian woman about the KGB. She denied they tortured people. I, personally, knew victims of this torture! So as I brought forward one case after another of torture AFTER 1980 [She did admit Stalin tortured people] she simply denied it all. So it is here: the entire planet knows we torture Muslims as well as tasering, beating and intimidating Americans. 'Interesting question', as Kerry said when a student was then tortured for asking these questions about the Bilderbergers and the Illuminati. HAHAHA. There is no Illuminate! And if you ask, you get tasered right in front of one of them.

But then, Kerry is also a Skull and Bonesman and thus, approves of torture. They do this to each other, after all, in between praying to Geronimo's skull for total power over all humanity.

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Culture of Life News Main Page

Big Brother TV Cardboard House Nearly Collapses

July 30, 2008

Elaine Meinel Supkis

Lots of financial news today! The business about debt growth, the power of governments to ease the pain of economic contractions, global lending and global recessions are being heavily discussed in the news and online. Tying all things together is quite a struggle. But my key to all this is to understand military financing, fairy tales and human psychology. We are like that stupid TV show, 'Big Brother' which nearly had that flimsy McMansion of idle waste collapse on the heads of the goofy, useless drones inside.

Here is my own news service last year, talking about the collapse in mortgage financing:

The collapsing mortgage market continues and far from slowing down, is accelerating. The inability to understand all this on the part of the media and our financial officers in the Government is a scandal we will pay dearly for this isn't over at all. The witless mortgage companies writing bizarre mortgage contracts didn't stop last year, far from it, they are doing it not just last quarter but this quarter! They are still at it, madly writing bad contracts and watching the older ones go bad at the same time. Digging deeper and deeper into the hole, they enlarge it and now some of the biggest players in this game are going down into bankruptcy.
*snip*
The fees these conmen culled from the herd of investors will seem puny in comparison to the loss of funds we are just now beginning to see. Every penny of these fees should be returned to the investors. These conmen then should be sent to prison. Every financial collapse has these features: previous geniuses and financial wizards see their wands break and they either commit suicide, go to prison or flee the country. Why can't we prevent this sort of madness?

It is simple: greed always wins. I remember when the right wing began their 'greed is good' campaign. This flies in the teeth of 99.9% of history. Interestingly, it flies in the face of nearly all fairy tales. There are so many of them! In many stories, the person is given the choice between a jeweled box or a golden bridle for a wild horse or some such thing and a plain, old, beat up box or bridle. The bad sister or evil brother will invariably choose the rich item and the kindly, loving sister or brother will always want the plain one. Then it turns out, the golden, rich item causes the death of the greedy brother or sister while the plain one leads to marriage and happiness.

And here is my cartoon from back then:

Normally, when the price of anything is bid too high, the market ceases to rise. This is quite simple and is the basis for all market functions. When people bidding on something have access to unlimited credit, they don't stop bidding up prices. This is classic inflationary cycles. When there are no bidders due to lack of lending, prices fall and we have a depression if jobs are lost as well as all asset values. Money creation can come to a complete halt. This is why our top central bankers are so very anxious to create constant credit out of thin air. They think they can evade all bad outcomes if only they can keep credit creation going.

This means there can never be any rest cycles from any inflationary cycle due to endless credit extended so people can bid up the price of various machines or entities. A good example is wars: so long as outsiders are willing to extend open-ended credit to the warring parties, they will fight to the death. We have many such situations, the most vicious example being WWI. All waring empires in that desperate mess were bankrupt after only one year. One empire, Russia, declared bankruptcy, collapsed, had a revolution, a failed counter-revolution and ended up with this 75 year depression whereby rationing was the norm. Since three of the warring empires, Germany, England and France were also the world's collective #1 economy, by far, they had lots and lots of potential credit to burn before declaring bankruptcy.

When the war stagnated into deadly, mass murder trench warfare that killed or wounded many millions of soldiers and yet, not move barely an inch, all parties cheerfully continued this murderous bidding war because they all had credit to burn. But after 4 years of this sort of insane ignoring of reality, Germany reached its credit limits while Britain and France finally got the US to declare war and enter the death pit. This way, both could withdraw and let the US take all the losses. The US, in turn, was 'rich' because both England and France not only had to give us their gold as collateral for this insane spending spree, they, in turn, made promises to the US that they would repay us.

To do that, they decided to make Germany pay for all of WWI. This, in turn, forced Germany into a series of bankruptcies that thoroughly disrupted international trade and banking. This, in turn, when Germany finally got fed up and simply stopped entirely the pretense of paying off these massive debts, caused the entire world to go bankrupt. This is because, if any banker is so stupid as to think that infinite credit won't be abused, gets hammered in the end as all debtors declare bankruptcy.

This week, a family who got one of those bloated, big McMansion 'Extreme Makeover' houses on that TV show went into bankruptcy and lost their freebie 'dream home'. This is because they got it as a gift and seeing that they went from a house worth only $50,000 to one worth over $450,000 due to telling their sob story on TV. They got this free house during the period I was building my own home by hand, mostly by myself, while living in a tent, just to show the difference between beggars whining and people taking care of themselves.....these deadbeats went to a local bank three years ago and instantly drove up a huge debt against the property. $450,000 was like honey to a destructive bear ripping apart a bee hive. They instantly lost every penny of this windfall.

THIS IS WHY BAIL OUTS ARE DANGEROUS. The burned hand learns. Europe learned from 1914-2008 that the US would bankroll any military or commercial insanity. Since there was no barrier between wishes and getting funding, Europe happily rolled along whatever road they wanted. A grave turn around came by 1970 in the US: we started thinking the same way. Why worry about increasing debts if Europe will bankroll us? Ditto, Japan! So this new system was created to allow the world's biggest economy to run entirely on red ink: Europe and Asia would fund our credit needs if we allowed them to flood our country with exports.

This is an exact reverse of the WWI-WWII system. Then, the US allowed endless credit but only if we could keep out their exports! England, for example, desperately wanted to export to us after WWI. But the US retaliated by passing tariffs and erecting barriers. Germany had to export to the US because they were paying the entire cost of WWI. But we couldn't let them do this, either. So a trade war between England, Germany and France tore apart Europe. Hyperinflation ravaged Germany but kept out French and English exports to Germany, just for example.

Indeed, please note the solution the US is using to keep out exports from Asia and Europe is exactly the same: devaluing the currency! HAHAHA. Um, gads, no one reads history upstairs in our government. We are behaving exactly like a defeated empire, not the world's #1 economy! Well, yesterday's big news, as far as I am concerned is simple: Europe and Asia have finally cooperated in a successful scheme to put the US back in the same dire situation Germany was in post-WWI. The Japanese carry trade is back with vengeance and Europe will pull out of the doldrums by exporting to the US as the euro falls against the dollar but NOT against the yen and yuan even though the biggest exporters to Europe are them, not the US. The US is Europe's RIVAL. For example, if the euro is weaker, the Europeans can underbid against Boeing in the jet markets, a huge goal of the European leaders. Now, on to today's news:

No funds to lend to 40,000 students

The Massachusetts Educational Financing Authority yesterday said it will not be able to provide student loans this fall for the first time in its 26-year history, leaving more than 40,000 families without an important source of tuition funds just weeks before college classes begin.

The nonprofit lending authority, which last school year provided $510 million in loans, said it has been unable to secure funding to provide private student loans due to the ongoing turmoil in the nation's credit markets. The agency had already disclosed in April that it would no longer offer federally backed student loans.

It is now contacting the tens of thousands of students to whom it has made loans in the past, urging them to seek other options.

Lending to our students is dying. It isn't causing problems due to higher interest rates that accurately reflect the rate of inflation, it is GONE. Nothing there. The banking system bankrolling student loans in Mass. is DEAD. The state is run by Mitt Romney who is an offshore pirate tax evader. Arrest him. When he was elected, he spent lots of money for power and promised to make everyone rich. Instead, he bankrupted the state systems. I hope he is charged like the Senator from Alaska. Corruption is everywhere and evading taxes while spending public money is criminal. Arrest Cheney, while we are at it. A war profiteer deserves a long stay behind bars and I don't mean drinking joints. I am talking about Utah dry bars!

Many doors will not shut in our faces. A degree is a necessity if one wishes to get a good job. Some people are lucky and can, without a degree, hack their own way through the world. But they are few and far between. The average person needs this or they are shoved aside. And I happen to be a fan of learning. There were two great periods of 'Free School' foundations: during the Great Depression and during the Stagflation Seventies. I participated in these schools. They may not have had the capacity of structure or systems that universities had but they were great stop-gaps for gaining skills and information. I suspect we may see yet another revival of this, only now we have the WONDERFUL tool of online learning.

The one problem is differentiating between flawed systems and working systems. It is easy to fall down various rabbit holes online. They are everywhere. If something is very appealing and seems simple, it is often a trap, not a door to advancing knowledge.

Governor Calls For Session On Fiscal Crisis

Gov. David A. Paterson, in a brief and rare live televised address, said Tuesday evening that New York is facing a fiscal crisis in the wake of Wall Street’s meltdown, and he called on the Legislature to return next month to grapple with a budget deficit that will grow to $26.2 billion over the next three years. “Our economic woes are so severe that I wanted to talk to you personally this evening about where we stand,” the governor said in a speech from the Capitol that lasted roughly five minutes. “The fact is, we confront harsh times. Let me be honest, this situation will get worse before it gets better.”
*snip*
The state’s potentially staggering shortfall stems largely from the financial woes on Wall Street, which accounts for a fifth of the state’s revenue. A recent review by The New York Times of the latest statements by large financial firms based in New York said they were likely to hand out $18 billion less in pay and benefits this year than they did last year.

In his speech, the governor said taxes collected on 16 of the state’s largest banks fell 97 percent between June 2007 and June 2008, to $5 million from $173 million.

Now, I thought this would be headline news but the NYT, for example, had it far below the fold. I had to use Google to find it. The number of stories carrying this news were precious few and far between! I recall when Schwarzenegger did the same thing, it barely made waves. I would suggest the desire for people to be kept in the dark is responsible. Remember: none of our 'leaders' can talk to us if the news is kept out of sight and out of mind! When the media suddenly shuts of the lights, doesn't talk about something, we miss important opportunities to have a loud public discussion of what the hell is going on! Just like the blanket of silence that has muffled all talk about Iraq and Afghanistan and the wild, wild US spending there has prevented us from saving ourselves from disaster.

Just like endless US credit extended WWI fatally, the credit the US is getting so we can continue to bleed to death in Iraq and Afghanistan continues....maliciously. Everyone extending us this credit know perfectly well, it is killing US power. Note that the US government is not extending credit in useful places that make us stronger....lord forbid we use it to expand export markets! It will vanish and it has vanished when it is used for that purpose. Bit of news, by the way, the dumb Doha trade rounds collapsed. HAHAHA. Good.

Back to Patterson's hidden speech: he is forced to cut services, fire people and reduce grants. HE HAS NO CHOICE. He can't run off to trade rivals and beg for more credit. Unlike the President or Congress, he has to balance the state budget somehow. Instead of waiting passively for the fiscal red ink train to hit him, he is moving quickly to deal with the pain. Unfortunately. I keep saying, 'You put away in good times, stuff for rainy days'. Or as one of the very oldest Bible stories tell us, 'There are these 7 fat cows and 7 lean cows. The skinny cows ate the fat ones. Therefore, remember, you got to save during good harvests because you will be forced to eat the seed grain for the next harvest and this is very bad.'

Well, we ate all our seed corn for next year's sowing. During all the 'good' years, as our leaders boasted about our 'strong economy' I was roaring mad because the economy was running on red ink, not capital. We put no capital aside for the lean years. The bankers kept reserves laughably low and thus were not able to cope with bad years. The government ran deepest in the red during the good years and now will have to hammer us all in bad years because it is bankrupt.

Note that the ratio of lending to GDP gets much worse during depressions. A good ratio is when we were solvent from 1950-1970. Instead of maintaining this solvency, we chose to do what the big empires did in 1914: overspend military and social budgets for half a century. The deterioration between the GDP ratios and debt is double the mess during the Great Depression! This is very significant. Our growth in capital has lagged far, far behind our borrowing. This is why Bernanke was chosen to be our Fed chief: to supposedly deal with the looming confirmation that we are entering a depression. His solution is to shovel all our excess dollars into the central banks of our dire trade rivals who are destroying our industrial base. Thus, he is expected to restart the previous status quo which is leading us into quadrupling the red ink side of our ledger books.

Americans carry approximately $961.8 billion in revolving debt, according to the Federal Reserve Board. Delinquency rates on credit cards are at the highest levels since the end of 2002.

Even as consumers cut back on using credit cards, they're finding it harder to pay down their balances, says Javelin President James Van Dyke.

"In some cases they're out of work or perhaps their wages have been cut back, or maybe they had a variable rate which they have to pay more for than ever before," Van Dyke said. When people use their credit cards less, "this changes what goes on in the industry because credit card companies typically make a lot of their money on the fees they charge merchants."

The reduction in revenue from new purchases, combined

In other words, we are a trillion in debt to credit cards. In good times, one can ignore this sort of bad lending situations. But in bad times, it doubles the pain. When people go bankrupt, if the credit card guys hammer them for fees and funds as well as the mortgage lenders demand they get something, too, we end up with fiscal slavery. People can't pay off their obligations or get new loans. If they do get new loans and are allowed to merrily default on old ones, they will make this worse and worse as no one takes anything very seriously.

Why worry about how much you are being lent if you can run off and start all over again without breaking stride? People who are defaulting on excess lending are certain they will be extended credit in the future. This is a foolish notion. So long as the world needs the US to sop up all excess manufacturing at a high profit margin, we will be allowed this fatal boon. But when we can't perform this function, we go down, hard.

All solvent people are pulling back spending. Anticipating hard times, they are being prudent. This is wise. The government is supposed to run in the black and when things go wrong, fill in for the consumers who cut back when things go wrong. Instead, the US decided to run even more in the red when times were good. Now, they are also cutting back when consumers MUST cut back! We have no choice. We can't commit economic suicide because the government and many borrowers were stupid and reckless. Not to mention, greedy and irresponsible. If no one is responsible, we crash. As we see clearly today.

Fed auctions another $75B to banks to help ease credit stresses

The central bank on Tuesday released the results of its most recent auction. It's part of an ongoing program started in December that seeks to ease financial turmoil and credit stresses. Those problems -- along with the deep housing slump -- have badly pounded the economy, forcing companies and people to hunker down.

In the latest auction, commercial banks paid an interest rate of 2.350 percent for the 28-day loans. There were 70 bidders. The Fed received bids for $90.56 billion worth of the loans. The auction was conducted on Monday with the results made public on Tuesday.

'Get your cheap lollipops here!' yells Bernanke. Wow, if we all get loans at 2.35% we would all cheerfully reset our debts! Imagine the wealth that would flow if we all paid credit cards with a 3% interest rate rather than the obviously usurious rate of over 21%. Now why can't Bernanke do this for us? This window of easy lending to the reckless bankers who created this whole debt bubble is stupid, wasteful and isn't being done after first arresting the bankers who were so irresponsible. And confiscating all their wealth.

These open windows will now stay open until January 30, 2009 which is six months from now. And you can bet, this won't be the final deadline. Financial lending systems set up in the Great Depression emergency are still running today and are bankrupting our government, after all.

The Paradox of Deleveraging By Paul McCulley:

Harkening back to those two speeches from Mr. Bernanke, it is very clear that he sees the role of the central bank as different in deflationary times than inflationary times. Specifically, in the speech on Japan, he said (my emphasis):

The Bank of Japan became fully independent only in 1998, and it has guarded its independence carefully, as is appropriate. Economically, however, it is important to recognize that the role of an independent central bank is different in inflationary and deflationary environments. In the face of inflation, which is often associated with excessive monetization of government debt, the virtue of an independent central bank is its ability to say "no" to the government. With protracted deflation, however, excessive money creation is unlikely to be the problem, and a more cooperative stance on the part of the central bank may be called for. Under the current circumstances, greater cooperation for a time between the Bank of Japan and the fiscal authorities is in no way inconsistent with the independence of the central bank, any more than cooperation between two independent nations in pursuit of a common objective is inconsistent with the principle of national sovereignty.

Again, I'm aware that he was speaking in the context of both goods and services price deflation and asset price deflation in Japan, not just asset price deflation. So the parallel is not complete with current circumstances in America, which involves elevated goods and services inflation in the context of asset price deflation. Conventional wisdom holds that when an economy faces a paradox of private thrift, it is appropriate for the sovereign to go the other way, borrowing money to spend directly or to cut taxes, taking up the aggregate demand slack. Indeed, that is precisely what Congress did earlier this year, sending out $100+ billion of rebate checks, funded with increased issuance of Treasury debt. Good ole fashioned Keynesian stuff!

Concurrently, conventional wisdom is struggling mightily with the notion that when the financial system is suffering from a paradox of deleveraging, the sovereign should lever up to buy or backstop deflating assets. But analytically, there is no difference: both the paradox of thrift and the paradox of deleveraging can be broken only by the sovereign going the other way.

Fortunately, Congress is finally grappling with this reality, as it moves towards passage of Mr. Paulson's plan for backstopping Fannie and Freddie with taxpayer funds. It's not a fun thing to do, particularly following the use of $29 billion of taxpayer funds to facilitate the merger of Bear Stearns into JPMorgan. But it is the right thing to do. And it is further the right thing that Congress is doing it, not the Fed under Section 13(3), except as a possible bridge to Treasury authority.

This guy is INSANE. First, the Bank of Japan has NO independence from the LDP which has had one party rule of Japan since WWII. Secondly, the Bank of Japan lies about many things just like the Federal Reserve. And the Bank of Japan conspires with the Bilderberger people to create a money creation system set up via the Japanese carry trade. A weak yen and a super-insane low interest rate set well, well below inflation benefits the wealthy who tap this Free Funny Money™ so they can bid against each other for great works of art or buy huge palaces and yachts, etc. And this pays for wars waged by the US.

Bailing out everyone after they flooded our Ship of State with red ink and using red ink to do this bailing out is PURE INSANITY. But so many powerful people love this. The investing community is happy to the point of tears that they will be bailed out via more and more red ink owed to Japan and China. By the way, Japan's 'deflation' was not a paradox: it was deliberate policy on the part of the LDP and the export manufacturing giants. They suppressed wages and cut government spending on the Japanese people who are now significantly poorer. If they manage to save any yen at all, they must invest overseas or lose all value as it earns literally 0% interest in banks. This wretched system has devastated internal Japanese commerce and whole sections of the nation is being depopulated as the birth rate plunges. Always, in depressions, births go down.

Frank Veneroso

It has been calculated from the flow of funds accounts that the ratio of aggregate mortgage debt to residential real estate value reached a peak of 50% when the home price and home finance bubbles reached their peak at the end of 2006. But the flow of funds accounts do not capture second and third mortgages. They do not capture the home equity loans that are in portfolios other than those of the commercial banks. There is a large “other” household debt item in the flow of funds accounts which includes various such claims against residential real estate collateral. I encountered one ratio calculated by the housing finance industry that suggested that, at the home price peak at the end of 2006, the aggregate loan to value ratio was 57%.....

If home prices fall nationwide by 35%, it follows that the average loan to value ratio will exceed 90%. About 30% of all residential real estate in value terms is without a mortgage. For all real estate with a mortgage, the distribution of mortgage indebtedness is very skewed. With the average loan to value ratio rising to almost 90%, a huge share of almost all mortgage debt will be deeply underwater. All studies show that when mortgages are well underwater there are defaults and foreclosures. This applies to the majority of mortgage debt classified as prime as well as the margin of mortgage debt classified as subprime. If home prices mean revert, the odds are high that in the shakeout that will follow the total credit market debt to GDP ratio will finally fall from its moon shot trajectory.....

In other words, if all the people who have paid off their homes and owe nothing are taken out of the statistics, the overdebtedness of the people who do have loans is nearly total. They are pretty much bankrupt. Houses are, like cars, queer things. They can't simply be held and then sold. You have to pay annual taxes, fees, upkeep, repairs, insurance, etc. They might rise in value but if they fall in value, unlike say, stocks or bonds, they have a HUGE overhead that can't be ignored. This includes dangers like vandalism, fires, earthquakes and storms. This is why, treating the home as an ATM machine rather than a necessity, is not a good fundamental basis for an economy.

Congress and the media all hope the latest bail out bill for this mess will work. I am betting, it will only encourage people who are not in trouble to try to rejigger their debts. The mess here is astonishing. The solutions, nearly always require great losses of profits, values and money vanishing. This is because everything was grossly overpriced due to excessive bidding thanks to easy lending. Fixing the lending mess caused by excessive debts during WWI proved to be totally impossible. Every solution made something worse down the road so that after a mere 20 years, the only real solution was to blow up much of the planet's manufacturing and major trade centers. It was by sheer luck, the US wasn't blow to smithereens, too. If the other side got nukes, too, we would have been destroyed along with everyone else.

WWIII will take care of that, by the way. So we can't imagine we can go deeper into debt forever. We have to work our way out of this mess and it does not include shoving all the debt into the public purse: this leads to wars. We can go bankrupt and live in a tent, I did this once. But our government won't do that, it will struggle to destroy all trade partners the other way, via war.

A Deal at Merrill Puts Spotlight on Others

Somehow, $4.4 billion just evaporated at Merrill Lynch. Less than two weeks ago, Merrill Lynch valued the toxic mortgage investments on its books at $11.1 billion. Now, it is selling those investments for $6.7 billion — and financing most of the purchase to boot.

The fire sale raises a troubling question for the nation’s battered financial industry: Have other banks with similar investments overestimated their values?
*snip*
Still, financial stocks rallied on Tuesday, as investors hoped the deal at Merrill signaled the troubles plaguing banks’ balance sheets might be coming to an end.

“This is setting some sort of precedent for these prices,” said Stuart Plesser, an analyst with Standard & Poor’s Equity Research.

As wealth vanishes, everyone hopes it is all dead and gone and we can merrily go back to borrowing like crazy again. The price of oil drops, we think we can spend like fiends again. True, we will be able to shove into the future paying our debts off. But this future is not vanishing, it is a huge wall that grows bigger and more dangerous, the more we put off paying our bills and balancing our budgets. Last night, I watched the earthquake news on TV. At the very infantile show, 'Big Brother', the goody young people were lounging about this mad house, doing nothing constructive but preening themselves and socializing. They should all be out working to produce something useful, not babbling at each other!

Well, everything began to shake. They stared in amazement and didn't move at first. Then, they milled around helplessly and some had the bright idea of going outside. It reminded me of scenes from 'The Time Machine' when the people of the future were really all cows out to pasture, being fattened by the real rulers who were cannibals. We dearly love to imagine we can entertain each other, loll about on soft cushions and pay all our bills by winning game shows. But outside forces are at work.

Merrill shocks Wall Street with $8.5bn share sale

As part of a sweeping financial restructuring, the company is dumping most of its remaining holdings in risky mortgage derivatives and tapping the Singapore government for an emergency $3.4bn cash infusion.

Existing shareholders will have their stakes in the company viciously diluted by the new share sale, and anger last night immediately focused on John Thain, chief executive since last November, who had promised on more than one occasion in recent months that Merrill did not need to raise new equity capital.

Instead, he had told shareholders he would raise money through selling assets, such as Merrill's 20 per cent stake in the Bloomberg financial information business, which it offloaded this month for $4.4bn.

Mr Thain gambled yesterday that the dramatic new moves to rid Merrill of its toxic mortgage portfolio would be enough to restore confidence, and that they would be seen as a once-and-for-all clean up of the company.

A portfolio of mortgage derivatives known as collateralised debt obligations (CDOs) that Merrill had valued at $11.1bn as recently as a fortnight ago, were offloaded last night for $6.7bn. Before the credit crisis struck, that portfolio had been worth $30bn.

Investors who trusted the gnomes who lie were all burned by Merrill Lynch. ML is grossly under capitalized. But no one can figure out what is going on if the guys running things, lie. Arrest Mr. Thain and charge him with fraud.

Oil-speculation bill blocked

Senate Republicans blocked action yesterday on legislation proposed by the Democrats to curb speculation in energy markets and reduce record oil prices.

The measure, sponsored by Senate Majority Leader Harry Reid, didn't get the 60 votes required to end debate and bring it to a final vote. The tally was 50-43.

Republicans want to be able to debate numerous amendments to the legislation, including expanding offshore drilling for oil and natural gas. Reid, of Nevada, said the Republicans were trying to talk the legislation to death. He proposed limited amendments, with the goal of moving the measure before Congress leaves for its August break.

Well, the hell hounds and pirates can breath easy now. They have invested a lot in oil futures.

Zimbabwe to remove 'zeros' from currency

The Sunday Mail, a government mouthpiece, reported that central bank reserve governor Gideon Gono told an agricultural show Saturday he would introduce the new measures in the coming days to make sure cash shortages are a "thing of the past."

Zimbabwe's government says western sanctions _ tightened last week _ are mainly to blame. Critics blame mismanagement by President Robert Mugabe's government and a land-reform program that slashed the country's agricultural production.

The future Bernanke solution.

Australia faces worse crisis than America

Hanover Finance - the country' third biggest operator - last week froze repayments to investors. The company said its "industry model has collapsed" as the housing market goes into a nose dive. Some 23 finance companies have gone bankrupt in New Zealand over the last year.

It is now clear that the Antipodes are tipping into a serious downturn. Australia's NAB business confidence index fell to its lowest level in seventeen years in June. New Zealand's central bank began to cut interest rates last week on fears that the economy may have contracted in the second quarter, and is now entering recession. Housing starts slumped 20pc in June to the lowest since 1986.

Gabriel Stein, from Lombard Street Research, said Australia could prove vulnerable once the global commodity cycle turns down. It has racked up a current account deficit of 6.2pc of GDP despite enjoying a coal, wheat, and metals boom, effectively spending its resources bonanza in advance. Household debt has reached 177pc of GDP, almost a world record.

"It is amazing that in the midst of the biggest commodity boom ever seen they have still been unable to get a current account surplus. They have been living beyond their means for 10 years. What worries me is that productivity growth has been very low: they have coasting after their reforms in the 1990s," he said.
*snip*
"The easy money went straight into real estate," said Hans Redeker, currency chief at BNP Paribas.

"Australia will now have to generate 4pc of GDP to meet payments to foreign holders of its assets," he said. This is twice as high as the burden faced by the US.

We are in the exact same fix. So is England. All of the US/UK empire is in the same fix because we are all doing the same stupid things and because we underestimated the intelligence and malice of people we defeated in WWI, WWII and the Cold War. Not to mention, the Crimean War, etc. The exact same reliance on rising home values, the same super-cheap/sub-inflation rate lending. The same collapse in savings. Since this is GLOBAL and not local, we have to consider why it happened and see clearly that this easy lending to the US/UK empire was a TRAP. We all ran into the 'Big Brother' play pen and sat down to have fun and not manufacture much of anything and now we find out the producers of the show are all Morlocks sharpening their hatchets.

Bennigan's Restaurants Shut Down Nationwide

Some managers and some employees say they were called in the middle of the night. People got the calls at the stores, others were called at 1:00 in the morning at their homes. No one expected it.

Displaced employees wiped away tears outside the Bennigan's restaurant in Calumet City. They are among the thousands who lost their jobs when the restaurants closed.

"For them to tell us we don't have a job or anything, that's a hurtful thing, especially if you have kids," said former employee Tina Beacham.

The corporate-owned locations comprise about half the entire chain. The two locations in downtown Chicago, at 225 N. Michigan Ave. and 150 S. Michigan Ave., are both among them, and the doors to both were locked Tuesday morning.

Inside, neon signs remained lit, but the "closed for business" signs shooed passersby away. Managers said the mass-shutdown went into effect at midnight Monday night, and there was no warning.

We will see more and more similar news. One company sent everyone emails saying, if you got this email, you are fired. A one AM phone call is hideous, criminal, cruel, vicious and heartless. Sneaky, too. This is the new style of business: imitate Gollum and be invisible, sneaky and do things in the dead of night like strangling babies in cradles and eating them. Grrrr. We can't save stupid homeowners who get a free house from a TV station and then go immediately deep into debt and bankruptcy. But we can pass laws forbidding this sort of worker abuse when a business shuts down!

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Dr. Abbott's TV Show About LA Earthquakes

July 30, 2008

Elaine Meinel Supkis

Here is an excellent TV show about the possible outcomes of various earthquakes in California. It is extremely informative. Professor Abbott mentions water, gas and power that runs across several very major earthquake fault zones including the biggest water/energy/travel systems criss cross the San Andreas. All Californian residents must learn from the past. One of my sisters would have died in the Northridge quake because her apartment building pancaked. But she was sleeping elsewhere that fateful night.

Here is a CNN screen shot showing the epicenter of today's quake. Note the suburban houses and the golf course that are right on top of this pressure point shoving things upwards! The professor in the video talks about all this.

Through live-action demonstrations and vivid animations, Dr. Pat Abbott explains how earthquakes have shaped the scenery and the character of the greater Los Angeles area. Dr. Abbott shows how faults capable of large earthquakes lie beneath most of the area, posing great risk to the millions of people living in earthquake country. Animations illustrate how and why earthquakes happen, how mountains and valleys have formed as a result, how the ground will shake in large earthquakes, and why this shaking is so destructive to buildings. Dr. Abbott also shows how to evaluate your home for earthquake safety and explains how to reduce the devastating effects of earthquakes. This video is part of Dr. Abbott's "Written in Stone" series.

The earthquake expert, Dr. Lucy Stone, is playing one of my favorite instruments, the Viola De Gamba.

In today's CNN news, a mother recorded how a huge TV screen nearly fell on her and her baby. Securing it with straps would have prevented a potential tragedy.

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Whittier Earthquake Shakes LA Basin

July 29, 2008

Elaine Meinel Supkis

For the last three months, up and down the entire West coast from Panama to Alaska, there have been an increasingly violent series of earthquakes. This is mostly due to the havoc created by the fastest moving continent on earth: Australia. Must be those kangaroos who are at fault, eh? There have been quite a few very violent mass quake events like the recent collapse of part of the lithosphere in Sichuan, China. The Great Boxing Day Quake in Indonesia is perhaps the opening shot in a major planetary rearranging of the tectonic furniture. Today, Los Angeles was shaken up with a medium sized earthquake in one of the hardest to detect or examine upthrust/folds, the Whittier area upthrust region. This all has to do with the basin geology of Los Angeles.

IRIS, the official government geologist system:

The greater Los Angeles area earthquake of 29 July 2008, 11:42 PDT (18:42 UTC), was centered in the hills south of Diamond Bar and Chino Hills. An early analysis of the earthquake's focal mechanism implies that the shock originated as the result of oblique-reverse faulting, in which a block of crust is thrust up and over the crust on the opposite side of the fault and also moves sideways with respect to the crust on the opposite side of the fault. This style of faulting is intermediate between pure reverse faulting and pure strike-slip faulting. The epicenter is in a region of the greater Los Angeles area in which both significant reverse faulting (the Puente Hills thrust) and right-lateral strike-slip faulting (the Whittier fault) have been documented. The early focal-mechanism is thus consistent with the shock having occurred as the result of stresses similar to those which produced previously mapped faults in the earthquake region. At present, however, the shock has not been associated with a specific geologically mapped fault.

The 29 July 2008 was situated about 30 km east-southeast of the Whittier Narrows earthquake of 1 October 1987, which had a magnitude of 6 and which produced over $358 million in damages. The Whittier Narrows earthquake occurred as the result of thrust-faulting (reverse-faulting on a shallowly dipping plane) on the Puente Hills thrust.

USGS:

The last six months, the southern half of California has been having many multiple low-level earthquakes. The middle sector of the San Andreas complex system has been totally still. Not so much as the slightest detectible tremor. Like a virgin in a chastity belt, the middle of California is like Sleeping Beauty only when this Princess wakens, she is Kali, the Destroyer. For the last month, the cluster of earthquakes off of Oregon have been rising in velocity and power. A goodly series of violent shakes just this last week is a sign, the Pacific Plate is pushing very hard and something is rather stuck. Instead of a big quake and then smaller and smaller ones, we are seeing bigger and bigger ones. Each session is greater in violence than the earlier sessions. Volcanos, for example, work this way. And most emphatically, Oregon and Washington are both very active volcanic states!

Back to Southern California:

Looking at this chart of today's first quake and the after shakes, one might suggest this is more like a toothpaste tube being squeezed hard. The major forces at work are the Pacific Plate and the North American continent itself. California has a much more unstable geology than say, Japan. The complex slip-faults, folds, tears, collapsed sections, as well as volcanoes and uplift granite mountains, volcanic rifts: California has it all. Japan is being formed by Australia and India which are on one giant plate, shoving very hard on all of Asia, slowly wrapping around Asia. This is causing strings of volcanoes to grow and form archipelagos. The US West Coast is where several non-North American plates are being squeezed like crazy by the huge Pacific Plate and the North American continent. The battle of these behemoths means there are many violent restructuring of the landscape at regular intervals.

Of all places on earth, California is the worst for putting up very, very expensive houses and very, very large cities. The vast expense of this vast expanse means the US is constantly teetering on the edge of financial doom. We saw how Sichuan, China, suffered. The vast landslides as well as the shaking killed many thousands of people and rendered many communities uninhabitable. Sichuan, China is also very interesting because it is a huge basin like the Central Valley of California and the Los Angeles Basin. I notice that where there is huge, constant uplift mountain building, right smack dab in the center there is often these mysterious basins and depressions, some of them quite gigantic. Like the Tibetan Plateau. It is a depression right next to the world's tallest mountain ranges!

Some geologists think that when continental collisions like the one of India slamming into China, cause the lithosphere to get these radiational cracks that go straight down. So perhaps, as the squeeze pushes up a ring of mountains, the center does the exact opposite. It breaks and falls. This is why the foothills surrounding the LA Basin are rising more and more, a detectable rise while the basin itself continues to subside! One very spectacular example of a basin/sink area is the Hudson Bay in Canada. It is nearly totally circular in shape. I suppose this is due to the lack of recent mountain building that can deform it by 'squeezing' it like the Central Valley in Chile and the Central Valley in the US.

Here is a map from Cliffshade of Colorado which I heavily edited:

Note how some of these big basins are nearly circular. Eventually, Japan will encroach on the edges of the Sea of Japan basin and cut it off from the Pacific Ocean. It will become first like that huge basin we call the Mediterranean Sea or the somewhat smaller Black Sea. Periodically in geological history, the Mediterranean Sea has dried up and it becomes a huge Death Valley like...Death Valley or the Dead Sea. If Japan does cut off the ocean from the Japan Sea Basin, it too, would dry up and become very similar to Death Valley. Note how Death Valley, by the way, it sinking and eventually will become part of the Gulf of California. Less than 60 million years ago, there was no Gulf of California! Eventually, all of the Central Valley will be part of the Gulf of California as it continues to subside.

The Puente Hills Blind Thrust:
L.A.'s latest earthquake hazard find

ABS Consulting estimates that a Mw » 7 earthquake on the Puente Hills Thrust would cause in excess of $100 billion in damage. This is over double the damage in the 1994 Northridge (Mw 6.7) earthquake. Such an event, if credible, should not be ignored, especially if it can occur every 250 to 2000 years as postulated by Shaw and Shearer.
*snip*
Given the evidence presented by Shaw and Shearer, the Puente Hills Thrust clearly exists. However, the authors have to make many assumptions to postulate its downward extent and its potential "seismogenic" (earthquake-producing) capability. The fault is only defined to a depth of about 5 to 7 kilometers in the seismic profiles. At this point, the fault is confined to upper Tertiary-age sediments that are not believed to be seismogenic based on past earthquakes. They must extrapolate this fault to the depth of the Whittier Narrows earthquake to project it into harder rock which is believed to be capable of generating a significant earthquake. Furthermore, only part of the Sante Fe Springs segment is defined to this depth, making the projection of the other segments to seismogenic depth even more speculative. Given such a limited seismogenic rupture surface, the potential magnitude that this fault system could generate, even if extrapolated to the depth of the Whittier Narrows earthquake, would be smaller than the authors indicate.

The quantification of earthquake risk requires that the frequency as well as the size of a potential earthquake be known. If a fault generates an earthquake once every 100,000 years, then it does not pose much of a risk. The recurrence intervals suggested by Shaw and Shearer for the Puente Hills Thrust of 250 to 2000 years are short enough to make the fault a significant risk. However, these estimates are based on fault slip rates that are inferred from crustal deformations observed on the surface and could be quite inaccurate. Given the still speculative extent and seismogenic potential of the Puente Hills Thrust, ABS Consulting scientists believe that it would be irresponsible to include it in its earthquake risk model at this time. However, we will carefully monitor the developing information on this fault and will include it in our model as soon as the scientific community has reached a consensus on its geographic extent, seismogenic potential, and recurrence frequency.

It is always a gamble, insuring housing in California. That state has an amazing talent for trouble. Fire, water, earth and air: all seem to switch from friendly and happy to super-nasty and in a flash, too. There seems to not be some slow build up to a disaster like say, with a hurricane. Instead, these freakish, violent alterations in reality come often with little warning. We just know they come, they must come and they will come.

Insurance companies bet that they can make a big profit in between these many disasters. The problem with this philosophy is, California can have epic fires, massive floods AND a massive earthquake all in one year! It is all up to Mother Nature to decide. Indeed, the concept of a massive fire, water problems and earthquakes coinciding is not only possible but very likely. As we saw in the Great San Francisco Quake 100 years ago.

Scientists Predict $200B in Damage from Southern California Earthquake

May 22, 2008

The U.S. Geological Survey (USGS) and the California Geological Survey (CGS) have jointly published a report detailing a hypothetical scenario the impact a 7.8 magnitude earthquake — similar to the recent earthquake in China — would have in the Southern California region.

Scientists said an earthquake of that magnitude would cause loss of lives and massive damage to infrastructure, including critical transportation, power and water systems. They predicted the earthquake would kill 1,800 people, injure 50,000, cause $200 billion in damage, and have long-lasting social and economic consequences. Although imaginary, the Shakeout Scenario is based on USGS' and CGS' best predictions of what would actually occur during and after a major earthquake on the San Andreas Fault, the organizations said.

Among their predictions:

•The strongest shaking and greatest damage would occur near the stretch of the San Andreas Fault that extends through the fastest growing areas of Southern California, including the Coachella Valley, Inland Empire and Antelope Valley.

•At least 10 million people will be exposed to heavy shaking. California's efforts at mitigation have concentrated on life safety and have been largely successful. Thus, in spite of the large numbers of people in highly shaken areas, deaths are estimated at only 1,800.

More than that number died in Hurricane Katrina. The quake predictions for the San Andreas is totally false. The Whittier quakes might be this great, but if the middle of the San Andreas blows, it hasn't moved in several hundred years and is under extreme tension! That quake has a very good chance of being a +9 mag event. This is much, much, much more powerful than a mere 7.8 event. In China, much of the problem was due to whole mountainsides suddenly shifting from above to down into any and all valleys. In California, the hills surrounding LA are very steep, very unstable, very loose which is why it was so easy to build houses one above the other there and....guess what?

It just has to rain slightly too much in an El Nino winter and these stupid, ill-anchored houses go crashing down the hillsides! No earthquakes needed! IF we have earthquakes as violent as the recent group of quakes in China, whole sectors of suburbia will be jumbled under a mountain of dirt down on top of highways, malls and other houses! If this were to happen, and since LA is a basin exactly like Sichuan, China, the chances of this killing many, many, many people is VERY HIGH. Not low! My family has lived in California since the Gold Rush. I have climbed all over the place in my childhood.

Those hillsides and mountains covered with houses to day were, even in my youth, naked. My grandfather used to shake his head in dismay as he watched houses climb these steep canyons. 'They are all doomed,' he would inform me. Geeze, guess why I sound so doom-saying all the time! Heh.

The center of LA is right smack dab in the center of this basin that is falling. If the Big One blows out the middle of the state, I would not be very surprised if there are side quakes in this basin region. After all, Sichuan saw a series of +6 mag quakes run like a zipper northwards in a series of very violent sub-quakes!

California can't plan for just mere 7.8 quakes, they must be realistic about a +9 quake. The people who have been lured there should know the consequences. The real estate industry is totally and completely against this just like they refuse to follow fault line maps to avoid building directly on fault lines! I once lived in Berkeley and traced many of these major fault lines in the San Francisco BASIN...ah! It is like the LA Basin only it fell so far, it became part of the ocean, didn't it?

In Oakland, Berkeley, and further south: zillions of businesses, highways and houses are right smack dab on top of a major, very destructive fault line! This is PAINFULLY OBVIOUS. One fault line ends at the End Zone of the University of California's football stadium! Ye gads! 99% of the campus has been built since the last major blowout of this particular fault line. Everyone hopes Mother Nature won't come in, shrieking, ripping all these lovely buildings apart.

By the way, the West dearly loves to make fun of the Chinese all the time. 'Why, look at those schools that fell!' we taunt them. Well, a number of grade schools, high schools and a major university is just as vulnerable as any Chinese school! We should condemn all buildings built on major fault lines. I would love to see this and we will NEVER see this. Mother Nature gets to do all the demolition, with everyone inside, of course.

April 4, 2003: New Study Reveals the Behavior of the Puente Hills Thrust Fault

The good news, Dolan explained in interviews with local media, is that these findings show that it is several thousand years between devastating earthquakes on the Puente Hills fault. As just one of a few dozen major faults in and around the Los Angeles metropolitan area, it doesn't add much to the overall seismic hazard of Los Angeles. The findings of Dolan's group will, however, help refine the seismic hazard assessment for the area; knowing the threat is the first step in managing it. Another plus: the methods developed during this research may be applied to other, similar areas of seismic hazard that are difficult to study using more conventional methods.
*snip*
The bad news, Dolan continued, is that when the Puente Hills thrust fault ruptures in an earthquake, it tends to do so in a very big way. Evidence from the new study, the first ever to probe the behavior of the Puente Hills fault, indicates that the four past earthquakes discovered along the fault had magnitudes between MW7.2 and 7.5 -- 10 to 15 times larger than the 1994 Northridge earthquake (MW6.7), the costliest earthquake disaster in U.S. history. In a magnitude 7 earthquake, not only would more energy be released, causing a larger area to experience damaging levels of shaking, but the shaking would last longer and more of the lower frequency seismic waves that affect tall buildings and other large structures would be generated.

"So, obviously, very large earthquakes this close to the high-rise district are of concern," Dolan said.

Worrisome, too, are the changes that would result from ground uplift during such an earthquake. According to Dolan, in a single magnitude 7 earthquake along the Puente Hills thrust fault, "USC would go up a meter or two relative to the area just south of the Los Angeles Coliseum. Downtown, and everything north of USC, would also be lifted by a meter or two." Adding to the bad news is the fact that the Puente Hills fault extends through the Los Angeles basin, a highly populated area made up of soft sediments that amplify shaking.

"This fault is in one of the worst places you could think of to put a fault of this size and geometry," Dolan said.

Some of these sediments, however, were the key to the study released this week. The Puente Hills thrust fault is "blind" because it never breaks through at the surface, instead producing folds in the rocks above it, which may sometimes be expressed as chain of low hills, raised up by successive earthquakes along the fault below. Each year, the Los Angeles basin is squeezed a few millimeters from north to south as tectonic plates of the Earth's crust carrying North America and part of the Pacific Ocean floor converge. This squeezing is accommodated by the many faults in and around the basin, which shift to release the energy of this compression as earthquakes.

Um, if the University of Southern California shoots upwards by three feet, I would strongly suggest the dirt on the surface will do what things do when they are jerked upwards faster than a speeding bullet: they have avalanches of dirt, houses, schools and cars. And trees. Everything slides downhill. This is because the earth doesn't move three feet like in a slow heave like in the most dangerous volcanic caldera on earth, Yellowstone as it snorts and snores itching to waken and devour several states.

No, this moves like the crack of a bullet from a gun: one second, you are listening to a boring lecture and texting your friends about what to eat at lunch, the next minute the ceiling is falling, the building is buckling as it slides towards the center of LA and glass windows of all the towers in LA are flying down onto the streets below, killing anyone caught out in the open or running out of violently shaking buildings...I have been in earthquakes. They certainly startle everyone and in general, people freeze in place. If they try to run, it is very difficult. In a major shake where say, USC jumps three feet, everyone will be falling down, not jumping along.

Recognition of Paleoearthquakes on the Puente Hills Blind Thrust Fault, California

Borehole data from young sediments folded above the Puente Hills blind thrust fault beneath Los Angeles reveal that the folding extends to the surface as a discrete zone (145 meters wide). Buried fold scarps within an upward- narrowing zone of deformation, which extends from the upward termination of the thrust ramp at 3 kilometers depth to the surface, document the occurrence of at least four large (moment-magnitude 7.2 to 7.5) earthquakes on this fault during the past 11,000 years. Future events of this type pose a seismic hazard to metropolitan Los Angeles. Moreover, the methods developed in this study can be used to refine seismic hazard assessments of blind thrusts in other metropolitan regions.

Since LA is a classic basin caused by vast mountain building activity where two or more plates grind against each other, worse, since it is part of a multi-junction of plates not just pushing but sliding against each other, I would figure there are a host of unknown upthrust situations throughout this basin and one way to discover them is for there to be some major blow out event whereby a section of the San Andreas suddenly moves forwards, northwards, by over 30 feet in one split second. That would be on par with the Great Boxing Day quake that saw an even greater shift of the planetary surface.

The Tectonic Evolution of the Gulf of California

The major boundary zone between the Pacific and North America plates continues southward from the San Andreas fault system into the Gulf of California. Across this boundary, extension and strike-slip faulting is causing the Baja California peninsula to separate away from mainland Mexico, thereby opening the Gulf of California. This is one example of how a small fragment of crust (Baja California) may get transferred from one plate (North America) to another plate (Pacific), a process that has happened many other times in geologic history.

Our research has focused on trying to understand the early history of this rift system, using a variety of approaches: 1) geological field study of faults within the Gulf Extensional Province (surrounding the Gulf of California) to document geometries, timing, and amounts of fault motion within this region; 2) volcanic stratigraphy of the Puertecitos Volcanic Province, a major Miocene-Pliocene rhyolite field that was dismembered by phases of extensional and strike-slip faulting related to the evolution of the Gulf of California; 3) argon geochronology to establish ages of the various volcanic units; 4) paleomagnetic work, to establish magnetic reversal stratigraphy of both volcanic sequences and marine sequences, and to look for tectonic rotation, about vertical axes, during the faulting; 5) processing of Landsat-TM data , to distinguish the main volcanic packages based on their reflectivities, and to identify active faults in the region. Results of this work so far indicate that the westernmost fault systems have been active more than 6 million years, that is, before the time that is commonly assumed that major plate motion in the Gulf really began. The eastern fault systems have evolved through time, with high percentages of early (between 6 Ma and 3 Ma) extension, and rather low percentages of post-3 Ma extension. We have identified a major discontinuity called the "Matomi Accommodation Zone" south of which the deformation may be younger (Pliocene), due to a jump of the Gulf spreading centers. We have found new tie points in Miocene and Pliocene rocks on both sides of the Gulf of California (Upper Delfin Basin segment) which allow us to constrain the total amount of slip in this segment of the Gulf since late Miocene time.

Interesting: the Gulf of California is very, very new, geologically speaking. And there was this 'jump' within the centers which were spreading the Gulf which back then, was a Central Valley. The ocean came flooding in.

The nature of all this is obvious: the Sea of Japan will, over the eons, turn into a Death Valley. Death Valley will turn into the Gulf of California. Quite a few basins have turned into watery zones, often great places to find oil, naturally. And other basins, if they are too far from water, turn into super-hot deserts. The uplift in Asia caused by India has raised the Tibetan basin to a very high altitude. But who knows? It may continue to fall relative to the mountains being built and reach sea level? This unstable earth is most interesting.

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PANIC Part II: One Year Later

July 28, 2008

Elaine Meinel Supkis

Once again, the stock market slipped on a 239 point banana peel. We revisit this blog exactly a year ago and my, oh my, it was the exact same thing! Looks like the Japanese carry trade has been pulled out of the ditch and restarted. I don't think it will creak along much longer due to increasingly painful inflation in Japan. Japan's workers are being hammered even harder, incidentally. All the major US media is now intent on proving that it is China, not the warmongering US, that is causing high oil prices. HAHAHA. I don't see China menacing Iran Kitty! And Venezuela pulls our chain, sells oil for only $100 a barrel to Spain. I don't think the US public can figure out what is going on, thanks to all this wonderful propaganda churned out by our lovely media owners.

My blog, exactly one year ago: Pause In Panic, Counting Many Losses

I decided to make a chart of the data they had at Big Picture. What interests me most is that the world's #1 and #2 economy both have the poorest stock markets. Both have the weakest currencies. Both had beggared their own workforces to cut inflation. But also outsourced jobs like crazy to cut inflation. But within this little scheme are several exact opposites. Japan has the world's biggest profit margin from trade, for example. Japan also has the world's biggest US bond fund, double that of China who is #2. And Japan has the biggest automobile trade surplus with the US compared to all other nations.

The real puzzle is not that Japan's Nikkei is so bad but why they keep it deliberately bad for this can't be accidental. If Japan was doing really badly in global trade, etc, then it would be understandable! But this is not the case here. The US struggles with inflation while Japan enjoys the ravages of depression and the Bank of Japan does nothing to fix this even as the US and indeed, the entire world struggles with oil-induced inflation.

I made up that graph, myself. My, oh my! Look at that: the worst stock markets when it comes to percentage growth were the US and Japan! And it is obvious to me that both are using the cheap currency, cheap loans, crush the workers schemes that seem pretty anaemic. Far from being astounding economies, the #1 and #2 economies were both pretty pathetic. One very significant difference: Japan is the creditor nation for the US. The US is in debt to virtually every man, woman, child, dolphin, polar bear, koalas on this planet earth! Not to mention, the panda in China.

Japan has one of the planet's biggest trade surpluses. The US definitely, by far and away, has the world's mightiest trade deficits! This yin/yang duality is down the line. Everything Japan is, we ain't except for the 'suppress worker's wages, lie about inflation and lend far below even the fake official inflation rates' parts. Let's look at today's news in light of what I wrote a year ago:

Yen Cross Basics by Joseph Trevisani:

Three terms have resurfaced in the currency markets recently: carry trade, risk aversion and risk appetite. The euro/yen cross is once again popular. Have world economic and financial conditions so improved that this risk barometer is again an active trade?

A little more than a year ago, in June 2007, the American dollar was worth 124.00 yen. That month it began falling against the Japanese currency and by late March of this year it had landed at 96.00 yen --an astonishing 23% slide in ten months. Over a slightly later period, August 2007 to July this year, the dollar fell a comparable amount against the euro, dropping 20% in value from 1.3350 to 1.6037. But since then the yen and the euro have parted ways against the dollar.

On Friday, the dollar closed at 107.90 against the yen, a 43% recovery of the 124.00 – 96.00 decline. But against the united currency the dollar finished the week at 1.5700, a bare 13% recovery of its 1.3350 – 1.6037 decline. The difference is the euro/yen. This cross has erased the entire credit crisis inspired collapse when it sank from just over 169.10 to 149.26 in two months. On the 17th of this month it reached a new all time high at 169.96. The dollar has hardly improved versus the euro but it has surged against the yen. Is the euro/yen the biggest factor in the dollar’s return against the yen? The euro/dollar rate gets most of the media focus but for currency traders the cross has been where the action is.

The yen got weaker because, as I reported last year, Japan surrendered to China and after a flurry of top secret Bank of Japan and Bank of China presidents, a series of diplomatic initiatives were signed and suddenly, Japan went from barking along with the US at China over China's currency values and Japan and China began to work in tandem on many, many issues, large and small.

Indeed, the globe trotting duo, Hu and Wen had a huge visit to Tokyo and then Japan visited the Dragon Throne. And since those visits, a curious silence has fallen over Asia. Both China and Japan suddenly, and in tandem, resumed stockpiling dollars in the FOREX reserves after these visits and both are weakening their currencies against the dollar and boosting the euro. This is why the yen is collapsing against the dollar while the dollar is still bad off vis a vis the euro. There is no logical reason for this. It is purely Asian strategic moves in the Floating Currency Casino. They are playing with marked cards while the US is playing poker with a mirror behind our backs, reflecting our cards so the Asians can read them.

From Seeking Alpha:

The primary Japanese factor in the movement of the dollar yen, as the pair is called in the interbank market, has been the static nature of the Japanese economy and Japanese interest rates. For almost six years prior to mid-2006 the Bank of Japan had a zero rate policy. When the Bank of Japan finally raised rates to 0.25% in July 2006, the bank governors envisioned a slow return to a normal rate environment. But the persistence of deflation until last August, and the fear of the prior deflationary decade inhibited the BOJ’s ability to increase rates.
*snip*
The yen crosses can and do affect the trading rates of their components, the euro and the dollar, in ways which do not relate to the economic currents between the Eurozone and the United States.

Bullocks! This article by an 'expert' goes off the cliff like so many others! Japan has had the EXACT SAME INFLATION AS THE REST OF THE PLANET. I have crunched Bank of Japan's numbers and looked at their graphs and they show quite vividly, the thing that has been eating inflation is the Japanese workers! They have seen huge wage reductions coupled with the government allowing Toyota to not pay for overtime...AT ALL! But to force workers to do 'inspections' above and beyond working hours. Free overtime for Toyota!

Indeed, literally working people to death. Not only have wages utterly collapsed there, working conditions are dire, it is more like China than say, Germany or France. The number of full-employed has fallen like a rock. Part timers are used, instead. This keeps wages very low, too. More people are now part time workers than full time in modern Japan. A significant loss of working class powers.

Toyota to raise prices in Japan

Toyota Motor Corp. plans to raise domestic prices for some models by 1 to 3 percent to cope with the sharp rise in prices of materials, including steel, sources said.

The models subject to the price increases will likely be midsized passenger cars or larger vehicles that are currently selling well, they said.
*snip*
If Toyota raises prices, other automakers will likely follow suit.

Toyota could keep prices low in Japan thanks to ....super-cheap 0.5% lending by the Bank of Japan! And even with this and working people without pay, Toyota's bottom line is suffering because of the downturn in auto sales in the US. So here is yet more obvious inflation in Japan! But does this stop the Bank of Japan?

No. Not any more than the budget and trade deficits coupled with rising, even hyperinflation bothers Bernanke. 2% or lower! Full speed ahead, damn the icebergs.

Ministry urges labor policy shift

Corporate efforts to cut labor costs by reducing the number of regular employees and hiring more part-time and dispatch workers are actually stifling productivity and hampering economic growth, a government report said Tuesday.

In its annual white paper on labor and the economy, the Ministry of Health, Labor and Welfare suggested that companies return to Japanese-style, long-term employment with an emphasis on nurturing their work forces and raising the added value per employee.

The ministry called on companies to devise well-planned strategies to hire new graduates and train personnel from a long-term vision.

This tid bit is from today's Asahi Shimubun in Japan:

Japan Jobless Rate Rises to 4.1%, Highest Since 2006

(Bloomberg) -- Japan's unemployment rate rose to the highest in almost two years in June and household spending fell, adding to signs that the economy's longest postwar expansion may be coming to an end.

The jobless rate climbed to 4.1 percent, the statistics bureau said today in Tokyo. Economists estimated the rate to stay at 4 percent. Household spending declined 1.8 percent from a year earlier, the fourth monthly drop, the bureau said.

Corporate sentiment is at a four-year low as higher energy prices and the U.S. slowdown prompt companies to pare hiring plans and forego wage increases. Inflation at a 10-year high is discouraging consumers from spending and weighing on an economy that probably shrank last quarter.

The misery in Japan is astonishing. And totally ignored by the government. Note the 'inflation is at a 10 year high' part! No wage increases plus rising inflation=death. And suicides, murders and abortions are all rising rapidly. This is very cruel. Note also the 'longest post-WWII expansion' is ending. Hey, we were told in the US media, Japan has been in this depression, not a massive, fast-growing economy!

Their stock markets didn't soar. Nor did their housing markets. But their MANUFACTURING took off like a rocket! And this is significant because as Japan's manufacturing took off, ours died. Now, ours is totally dying, fast.

Asian Nixonomics May Spell Subsidy-Driven Stagflation

(Bloomberg) -- Asian governments from India to Malaysia, clinging to budget-busting fuel subsidies, may end up paying an even higher price: saddling their economies with an extended period of stagflation.

``Subsidies will come increasingly in the way of future growth,'' says Kalpana Kochhar, a senior adviser for the International Monetary Fund's Asia-Pacific Department in Washington. ``Not passing prices through and keeping artificial price and wage controls never works.''

Governments are being forced to choose between two unattractive alternatives: run up bigger deficits by continuing to shield citizens from soaring energy prices, or start to withdraw subsidies, fueling inflation and political backlash. Inflation has already reached decade highs throughout the continent and played a role in destabilizing politics.

Yes, there is inflation. There is inflation in America. Despite the subsidies in Asia, the biggest gas guzzlers on earth are still...AMERICANS! We dearly wish to blame everyone else for this situation. On top of this, China and Indonesia [which is mostly Muslim] and Japan are not menacing Iran. The US is doing this. Menacing Iran means high oil prices. Period. If Asia is trying to minimize the pain of all this rabble rousing oil conquering messes created by Americans seeking to tear apart the Middle East and steal the oil---well, what on earth? HAHAHA. Right! We are not doing things, Asia is doing things to us! We are innocents.

This is the sort of rubbish propaganda the US needs to feel better. Well, oil prices fell for two reasons: the US for the first time, directly talked to Iran. And the US has asked Israel to cool the hot head talk about war. Also, Asia might have 'stagflation' but what are we brewing? Hyperstagflation? We just have to stop throwing rocks at others and look in the mirror! Can we achieve a hideous depression alongside hyperinflation? I had to buy a large box of screws today. It cost me over $28. Three years ago, it cost only $16. OUCH. Plywood: 12 years ago, 1/2" sheets were going for about $3.50. Now, they are over $12. This is crazy. Then there is the oil....1999, it was selling at $0.89 a gallon, today, with it dropping by $0.5 it is still above $4 a gallon!

China's Cars, Accelerating A Global Demand for Fuel

"In China, size matters," says Zhang, the 44-year-old founder of a media and graphic design company. "People want to have a car that shows off their status in society. No one wants to buy small."

Zhang grasps the wheels of his Hummer, called "hanma" or "fierce horse" in Chinese, and hits the accelerator.

Car ownership in China is exploding, and it's not only cars but also sport-utility vehicles, pickup trucks and other gas-guzzling rides. Elsewhere in the world, the popularity of these vehicles has tumbled as the cost of oil has soared. But in China, the number of SUVs sold rose 43 percent in May compared with the previous year, and full-size sedans were up 15 percent. Indeed, China's demand for gas is much of the reason for the dramatic run-up in global oil prices.

ARF! The Washington Post warmongers are barking again at the Chinese! THEY are much of the reason we are paying through the nose for gasoline! HAHAHA. Right. I am glad Bloomberg News admitted this month, the war talk aimed directly at Iran is mostly responsible for all this price hike stuff. The US government has threatened to rip the noses off of all the hell hounds if they corner the top tiers of the global oil market futures so they have backed off, whimpering and snarling. For the moment. They will be back if there is no other way to make a fortune.

The US produces Hummers. We should be delighted, the Chinese want to buy these gas guzzling machines from us! Balance our trade deficit! Eventually, the Chinese will be running around in pick up trucks, drinking booze, driving into ditches and getting tasered by Chinese cops. Then singing about it on the radio, with a nasal twang. Yup!

Fuel Subsidies Overseas Take a Toll on U.S.

From Mexico to India to China, governments fearful of inflation and street protests are heavily subsidizing energy prices, particularly for diesel fuel. But the subsidies — estimated at $40 billion this year in China alone — are also removing much of the incentive to conserve fuel.

The oil company BP, known for thorough statistical analysis of energy markets, estimates that countries with subsidies accounted for 96 percent of the world’s increase in oil use last year — growth that has helped drive prices to record levels.

HAHAHA. The NYT joins the propaganda dog pack. Why should China conserve fuel when the US is responsible for the high price of fuel? Eh? It isn't their responsibility. The US can shut up about Iran, make peace there, open markets to Iranian oil and voila. Oil will be cheap again. To the complete horror of the Texas oil men! They do NOT want this any more than Israel wants this! End of story.

Venezuela agrees to sell Spain oil at $100 a barrel

(Thomson Financial) - OPEC member Venezuela agreed Friday to sell Spain 10,000 barrels of oil per day at $100 a barrel in exchange for medicine and other goods, a Spanish government source told AFP.

The agreement was reached during a meeting between Venezuelan President Hugo Chavez and Spanish Prime Minister Jose Luis Rodriguez Zapatero in Madrid, the source said.

Oil prices hovered around $125 a barrel on Friday after reaching a record high of over $147 on July 11.

Spain would make up the difference between the market price for oil and the price charged by Venezuela, a former Spanish colony, by providing the country with building material, new technologies and medicine, the source said.

YIKES! The price of oil is only $100 a barrel...for select customers. What will the US doing about this? How about attack the Spanish for not conserving oil? Tell Europeans to stop driving cars? The coordinated media efforts this week to convince Americans, we have NOTHING to do with high oil prices, it is the fault of people babbling in Spanish, Chinese drivers who want to act like Americans and Indonesian fishermen who want to use their boats. Not us. And since NONE of these people are egging on a massive boycott of Iranian oil or talking about bomb, bomb, bombing Iran, they, not the nutty warmongers running for President or the monkey in the White House, are causing high oil prices. Eh? Two weeks ago, the major media and the major money men including that innocent, silly, little baby boy, Paulson, were in DC for an emergency Bilderberger meeting.

I suspect this massive propaganda push is the result of that meeting. 'Ja, Let's blame der slanty-eyed, funny talking foreigners from former third world nations for der high oil prices!' said Kissinger in a thick, funny German accent. By the way, I am not joking. This is exactly what they decided.

IMF Says End of U.S. Housing Slump `Not Visible'

(Bloomberg) -- The International Monetary Fund said there's no end in sight to the U.S. housing recession and warned that deteriorating credit conditions for consumers and banks may prolong a period of slow economic growth.

``At the moment, a bottom for the housing market is not visible,'' the IMF said in its Global Financial Stability Report, released today in Washington. ``Stemming the decline in the U.S. housing market is necessary for market stabilization as this would help both households and financial institutions to recover.''

This news is being blamed for causing total panic in the stock market today. HAHAHA. Let's blame this on the Chinese, South Americans, Indonesians and Spaniards.

Bust Up These Beasts

Steve Forbes

The Bush Administration should vigorously push to have Fannie and Freddie recapitalized and broken up into 10 to 12 new companies, with their ties to the government completely severed. Yes, this would mean Uncle Sam's pumping in some $300 billion in equity capital and, perhaps, taking on some $100 billion in those questionable mortgages. But such an investment would enable these companies to have a sound debt-to-equity ratio in the vicinity of 4-to-1. Shares in Fannie and Freddie would then be exchanged for shares of common and preferred stock in the new, solvent firms. Current shareholders could ultimately recover their losses, and taxpayers could eventually get most, if not all, of their money back. In fact, Uncle Sam might even make a profit.

One part of the restructuring should mandate that the federal government sell off its equity within, say, a five-year period.

Having 10 to 12 sound private companies competing in the mortgage market will help revive and reinvigorate that sector. If the Federal Reserve ever learned central banking--i.e., making the dollar strong and stable--the housing market would quickly snap back.

The housing collapse has nothing to do with the weak dollar. AU CONTRAIRE! The dollar going weak is not what killed the housing bubble! The Japanese carry trade ended rather abruptly. The housing market going weak in the knees saved our trade deficit by weakening the dollar which was too strong against the yuan and yen. They, in turn, fixed this by holding increasing numbers of dollars instead of plowing them back into the US lending stream. This, in turn, is now causing higher interest rates and is strengthening the dollar which is wrecking our trade with both nations! The easy lending regime that enabled the housing bubble ran alongside a very strong dollar vis a vis the yen and yuan. But not the euro. We cannot make the dollar stronger unless we brutally end the trade deficits with Asia and incidentally, Europe. Both nations know this. So they are trying to trick us into thinking the dollar is stronger this summer due to something nice happening.

But all that is happening is simply, China and Japan are holding a total of nearly three trillion dollars in cash and another trillion plus in US Treasuries. And the US plans to overspend our own budget by over half a trillion this year alone, a record. And to do this, Congress raised the debt ceiling to well over $11 trillion. Can Japan and China sop up another trillion from us in the next year and a half? One wonders. Oh, do we wonder.

Steve Forbes thinks all we have to do is 'privatize' mortgage lending. And this is just stone stupid. Fannie Mae and Freddie Mac were waste paper baskets for the private lenders. Who would write loans to all and sundry and then rush to Fannie Mae and Freddie Mac to dump them there and then rush off to write more bad loans! This is why the system is collapsing, got that, Steve?

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SIVs In Australia Eradicated

July 28, 2008

Elaine Meinel Supkis

The Australians decided, without warning, to zero out their SIV losses totally. This daring move had to be done just like throwing excess weight overboard when a plane is in trouble. Lending via the normal channels is falling to zero, also. But in my next article today, we will discuss the resumption of the Japanese carry trade, a subject of greatest fury here. The US people are seeing public services die rapidly now. Even as we spend record amounts trying to control the entire planet. Which is, incidentally, undergoing a huge rash of bombings by 'terrorists'. Hedge fund hell hounds are howling because of the SEC's restrictions on short sales and of course, their attempt at capitalization via bidding up oil futures is now failing, too. Citigroup's other chairman leaves with over $40 million in severance pay. Tax the rich!

US Markets to Get 'NABBED' - Straight to Hell

NAB, National Australia Bank, was just forced to write down over ninety percent of its exposure to US mortgages via so-called SIV’s or conduits last Friday, to the order of $830 million dollars.

This was by no means a matter of choice for NAB. The bank had just issued and sold $850 million worth of new debt paper. Buyers of that debt are now screaming bloody murder. They are asking why this information, which surely must have been known to the bank at the time of the debt sale, was not disclosed to the market beforehand. They are now demanding their money back or some other way to back out of the deal.

Yet, what happened to this single Australian bank is nothing compared to what will happen to US equity and bond markets when they wake up on Monday morning, July 28, 2008. Robert Gottliebsen of The Business Spectator, an Australian financial news and analysis portal, wrote a commentary pointing to the possible consequences of NAB’s write-down.

This storm began last July. I warned about the consequences of the shift in the value of the yen from 127 to the dollar to the yen rising to around 96 to the dollar. This caused a massive global train wreck. To this day, the participants in this mess have been steadfast in refusing to connect the end of the carry trade from the Bank of Japan with the resulting banking collapse in the G7 nations. More about that later. Right now, the big issue is how this stupid Japan carry trade working in tandem with the Federal Reserve dropping interest rates to Japanese levels: both of these forces fueled one of the biggest joint corporate/housing bubbles in history. All over the planet, not just in the US, suddenly housing 'values' shot to the moon.

In Europe, England, the US, northern Africa, Asia, South America, Canada, Australia, New Zealand, everywhere on earth saw this exact same housing bubble. Now, it is popping. This is due to two factors: people's incomes fell far behind the cost of housing to the point, the principal could no longer rise no matter how low the lending costs. The other factor is the end of the Japanese carry trade. Which, incidentally, has resumed this week. Not roaring ahead like in 2004 but it has revived somewhat. The yen is still too strong for it to be a done deal.

Australia's attempt at simply shoveling this mess off the cliff is predicated on the possibility of the Japan carry trade refueling the lending markets. This is how I see it: once all these crummy SIVs are dumped into the Pacific, the banks no longer have them on the books and can now restart lending! Isn't that cute? And the hit isn't direct since they can now all go to the Bank of Japan for easy loans that will refill the tanks at home with more red ink that can happily continue flowing over Australia. For everyone on earth is addicted to easy credit! If the Japanese credit was realistic, there would be no carry trade.

Japan has inflation! They can't have zero interest rates!

Worried Banks Sharply Reduce Business Loans

Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring.

Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001.

The scarcity of credit has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt.

We want more liquidity! We want more loans! We need more money! This is obvious. All the machinations of our ruling elites is aimed squarely at getting this lending madness restarted. There is no attempt at limiting the spending that lies a the root of this mess. In the US, we are seeing a squeeze in outcome of spending but spending itself is up. Schools, for example, must spend much more on fuel, energy, heating today compared to in 2000. This spending means budgets must cut elsewhere.

For Many Student Athletes, Game Over

As cash-strapped school districts across the nation scale back sports programs or try to pass on part or all of their costs to students and parents, some fear that the tradition of the scholar athlete is at risk. In Mount Vernon — where this year more than 700 students were expected to participate on 55 teams in basketball, football, volleyball, tennis, cross country, track, soccer, wrestling, swimming, baseball, softball, golf and cheerleading — many teachers and parents say that sports not only keep children coming to school but also keep them away from crime, drugs and gang activity.

We are seeing the results of wild overspending: the US will see a drop off in our lifestyles. We will pay more and live poorer. Across the board, inflation and paying debts off will reduce our options. People will be fired as money is redirected towards paying bills, paying for energy, etc. The US public has idly allowed military spending to double and redouble and not a peep from the masses. This is because there was no rationing, not paying higher taxes, etc. The Great Society promises continued. But since this 'guns 'n butter' regime has been launched, US public debt has shot upwards and will now head towards $11 trillion thanks to Congress and Bush raising the fake debt ceiling. As I showed last night, this thing was supposed to stop overspending until it reached $0 in 1991. Instead, military spending has shot upwards.

The need to keep the populace at bay is important to DC. But they don't care about LOCAL politics. So letting all the cities and states go bankrupt is OK, I guess. Except this will hammer both taxpayers and the public. I lived in NYC when it nearly went bankrupt at the end of the Vietnam War. It was very dangerous there! I formed a street patrol and it used to be a daily battle, fighting off the forces of chaos. When the entire city went dark one summer night, looting and riots broke out. The police vanished, the governor was too scared to call in the National Guard and for three days, my neighborhood burned down. I did not like this. I spent one night on the roof with a hose, trying to prevent the sparks flying past us from igniting the house and burning it down.

Every store but one in my community was looted and burned. Going bankrupt is very dangerous! Right now, all is quiet due to the full future effects of these rising bankruptcies are still in the future. But having lived through this in the past, I assure everyone, riots lie just below the time/event horizon. Another thing to consider: when people think their homes are valuable, they take great care of them. When the government owns or controls housing, it deteriorates. When we had draconian rent control laws in NYC, for example, many, many apartment buildings went into steep decline and many of them ended up looted or burned. I got my first building this way: the rent controls killed the building and it was a burnt wreck when I came in with crowbars and hammers. I had to have large dump trucks park in front and my crew and I threw literally tons of debris into them. Once the building was freed of the plague of government interference, its value shot upwards tremendously.

The housing bill is just like this: it will destroy, not save, housing! Since the government gets 50% or more of any value added for the entire time the owners keep the houses, this is tremendous disincentive to even mow lawns, much less, upkeep the value of the house! So I see 20 years of housing destruction, not growth. This is totally infuriating, by the way! Housing gains value ONLY if it serves a function. In this case, sheltering people who have jobs! If the jobs are gone, the housing is worthless. Look at Flint, Michigan! Housing there can't even be given away! People have no need to live there anymore. So the government's function should be to provide jobs by protecting industries!!!!! DUH!!!!!

This means stopping the free trade stuff from draining all our manufacturing base. This is laughably easy to do: tariffs and barriers! I keep hammering on this because the mythology of the Great Depression and how this was brought about not by three major global empires reneging on WWI debts owed to the US but rather, due to the US protecting its home base from a flood of imports from the three empires that owed us billions of war loans! So today, we go nakedly forwards, sword in hand, hoping our rival trade partners won't strip us of our skin.

From February 4, 2008: Proposed Military Spending Is Highest Since WWII

The Pentagon on Monday will unveil its proposed 2009 budget of $515.4 billion. If it is approved in full, annual military spending, when adjusted for inflation, will have reached its highest level since World War II.

That new Defense Department budget proposal, which is to pay for the standard operations of the Pentagon and the military but does not include supplemental spending on the war efforts or on nuclear weapons, is an increase in real terms of about 5 percent over this year.

Spending on schools has not declined. It has been REDIRECTED. Oil companies are happy. Students are going to hell. The elderly will freeze this winter but Bagdad will be patrolled. Our cities will see riots just like when our troops were in Vietnam and Europe. And no one will save us when this happens. We used to have a National Guard, now they have been shipped out, too. National Guards working overseas means the money they spend is spent overseas. There is no job creation going on in America thanks to the military spending, this money is strictly for overseas uses. To defend the entire world against what? China? HAHAHA. China, our biggest trade partner who is running huge surpluses with us?

As military spending as well as spook spying spending shoots upwards, US spending on domestic services is declining as far as wages and real services are concerned. The appearance of spending increases is entirely sucked up by higher fuel costs. So the net gain in economic welfare is negative, not positive.

During the Reagan/Bush I era, military spending took off. We didn't see riots in America only because oil prices and lending rates began to fall rapidly. But our trade deficit as well as government overspending increased tremendously. Thus, the desire for a 'ceiling'. This failed because the government's ruling elites wanted more military spending no matter what! So it was never cut and they never dared cut domestic spending for fear of these pesky riots. The Clinton years saw a reduction in military spending and an increase in domestic spending coupled with the lowest oil prices of the last 40 years as well as the beginning of the Japanese carry trade.

Starting in 2000, defense spending shot upwards and now surpasses the Reagan years and at the very beginning of all this, domestic spending shot upwards, too. But this peaked in 2004. Since then, military spending has climbed rapidly while domestic spending is collapsing. This year, Congress and the President have jointly decided to boost domestic and military spending which is why they had to sneak past everyone the raising of the debt ceiling to $11 trillion.

Hedge Funds May Post Worst Month in 5 Years as Bank Bets Sour

(Bloomberg) -- Hedge funds may post their worst month in at least five years after bets on financial stocks falling and on crude oil rising backfired.

Hedge Fund Research Inc.'s Global Hedge Fund Index of more than 55 funds slid 3.2 percent through July 24, heading for the biggest monthly drop since the measure started in 2003.

Wagers on a decline in financial stocks and homebuilders, one of the most popular, soured after Fannie Mae and Freddie Mac shares more than doubled in the six trading days to July 23. Bullish bets on crude oil turned to a loss as oil slid 15 percent from a record $145.29 a barrel on July 3 after doubling in a year.
*snip*
The expansion could require increased capital to finance the borrowed shares during the three days before trades settle, as well as make short selling more cumbersome and labor-intensive. It is expected that the industry will push back forcefully on any attempt to expand rules.

The SEC is also working to make short-selling rules permanent. The SEC staff is expected to narrow down the options and recommend them to the four SEC commissioners, which could happen as soon as Monday. The rules wouldn't be finalized until later this year.

If Iran Kitty can restart the hissing battle with Miz Liberty, oil prices will go up. Israel is very anxious to restart the cat/naked US battle of witlessness. But the US is being slightly cautious now. Some Americans have finally put the obvious 2+2 together and figured out there is a direct connection between what Iran says and world oil prices! Saddam used to play this game but not as ruthlessly as Iran. He needed higher oil prices after the Iran/Iraq war. One way to do this was the threaten his neighbors so prices would shoot upwards. He became so accustomed to doing this, even I noticed the connection! Heh.

It was painfully obvious, of course. One of the things Europe wanted when he was forced to sell via the UN for a set price after Gulf War I was for there to be oil stability in pricing. When Russia entered the markets and tanked oil prices, Iran was hammered hard by this. Saddam couldn't raise oil prices anymore so they set out to do the same thing, I suppose. They also want to destroy the US imperial war machine and killing the US economy does the trick. So they are not aiming at our navy which sits like a bunch of rubber duckies, square in the sights of Iranian rockets but rather, they zero in on our economy. Sinking the US supertanker is their goal.

The hell hounds and pirates who run hedge funds are the unwitting fools being used by the Iranians. Since many of these hell hounds and assorted others are also Jewish, this is tremendously ironic, we call this, 'Digging your own grave'. This mob of gnomes rush from one 'money making' scheme to the next one. They can't help themselves! The 'bid up the price of oil' scheme has blown up just like the 'bid up the price of food commodities' has collapsed due to enraged governments coping with riots and revolutions shut down that system.

This leaves 'naked short selling' and plain short selling! Which the SEC is cutting off. The need to devour something is very strong with these sharks. They have to eat someone! So we see this peculiar battle as the sharks bribe Congress to defang the SEC so they can attack...Goldman Sachs! HAHAHA. The pirates want to attack the pirates! This battle is vicious. If the SEC closes the 'three day' loophole that is an left over from the pre-computer days on Wall Street, then all sorts of mayhem will happen. The gnomes will go stark raving mad. They need some glitch, some hole to exploit to the max! They cannot make easy money without the help of inefficiency and bungled systems. Just like they love the floating currency regime: if they can see or create trends they control, they can go onwards forever. A prime example being the Japan carry trade business.

Government tries to stop short selling:

Wall Street executives expect the Securities and Exchange Commission to extend the temporary limits it has placed on short-selling and expand them to cover additional stocks beyond the 19 financial companies it targeted two weeks ago. The limits are set to expire Tuesday, and executives, lobbyists and hedge-fund representatives of the Managed Funds Association, the biggest hedge-fund industry group, have been talking throughout the weekend, trying to come up with possible approaches to asking the SEC to reconsider expanding the rules, according to people familiar with the talks.

A call with regulators on Friday gave the funds group "a fair degree of certainty" that the SEC intends to seek an extension of the emergency period, these people said. Regulators said an extension could be for as short as 60 days and could involve insurance, housing-industry and a broader range of financial stocks, according to these people. SEC Chairman Christopher Cox indicated last week the rules might be extended to all stocks.

And here is confirmation that the SEC is finally getting enough support to impose controls on short trades. Short trades should not exist. They are a problem, not a solution. Insane amounts of fake wealth was created via this hole in the system. This money is very volatile. It also contributes directly to inflation. The profits are not 'capital' or printed dollars, it is pure made-up bookkeeping numbers. No value-added labor or production is involved. It is pure money creation which is why the gnomes adore this. Goldman Sachs and JP Morgan are now in danger from this system they love. They, themselves, are now shark bait! So they have run off to the government for protections which they denied their own victims in the past.

Note that they wanted this protection to be LIMITED. Not legal rule for all time. The SEC is doing this to them and they hate it but they can't stop the SEC or they will be eaten up by short traders. They want a temporary fix that vanishes when they resume short selling others. This is VERY lucrative! Very. So they are torn in two, hoping to resume the status quo after suspending it selectively to protect their own asses.

KKR Plans to Go Public With Value Up to $15 Billion

Kravis and Roberts, both 64, filed for an initial public offering in New York more than a year ago. The cousins, who started the firm in 1976 with their Bear Stearns Cos. colleague Jerome Kohlberg, put the plan on hold as stock markets dropped and credit dried up. Kohlberg hasn't been with the firm since 1987, when he left to start his own firm, Kohlberg & Co.

Announced private-equity deals dropped more than 70 percent to $163.1 billion in the year through July 25 from the same period in 2007, data compiled by Bloomberg show. Banks are reluctant to fund leveraged-buyouts after the subprime mortgage crisis triggered more than $466 billion in writedowns and losses among the world's largest financial institutions.

``You can't get bank debt right now, and KKR or any other private-equity firm can't get the returns they're looking for without bank debt,'' said Palisade's Veru. ``They require more equity investment than leverage.''

Private equity=Japan carry trade. This, they hope to also resume. They need this so bad, it is making them all grind their fangs is fury and rage. They hate the weak dollar. They need the strong dollar just like Japan needs this. China exploits all of this, of course, for their own benefit. Why not? When a huge empire is suicidal and stupid, just like a two ton pig ready for slaughter, it gets killed and eaten.

Citi paying departing Klein $42.6 million

(Reuters) - Citigroup Inc agreed to pay departing executive Michael Klein about $42.6 million, a person familiar with the matter said on Friday.

Klein, a former investment banking head, is receiving roughly as much as the bank awarded Charles Prince, the Citi chairman and chief executive, who retired in November as the bank prepared to post billions of dollars of write-downs.

But Klein's payout comes at a cost: under the agreement, he cannot work for, advise, or solicit clients for 12 major commercial and investment banks through October 4, 2009. He also cannot solicit or hire Citi employees during that period.

This is all the result of those stupid tax cuts. The gnome community loved these cuts and have exploited this historic opportunity to renege on paying for the government that feeds them. Yes, it feeds them! They benefit from deficit spending, hugely benefit. Not only do they not pay taxes, this spending is for THEM. They get government contracts and government hand outs. The 'privatization' scam they pushed is enriching them and making everyone else poorer...IN THE FUTURE. This is significant! Being gnomes, they don't care if this destroys everything in the future. Their motto is, 'Eat, drink and rip off everyone!' So they are happy so long as this process benefits them. If it grinds them down, they halt the system and fix it until they can resume their negative actions that grind down everyone else.

This is why I call them traitors. Since most of our budget deficit is, by definition, caused by 'defense' spending that doesn't protect Americans, this is an overhead that does NOT benefit us at all! It benefits them. They are 'internationalists' in that they don't care about America, they care about themselves. They certainly don't love European or Asian workers! They despise Africans and South American peasants! This is for THEM, not any of us. So we have the tragic situation where the US taxpayers get to foot the future bills for all this and the rich get rewarded with multi-million dollar golden parachutes after they wreck everything they ran. Citibank is bankrupt. It limps along because the Saudis don't want it to sink. But it is dead in the water. Giving this huge handout to a ridiculous man who screwed everything up is pure insanity. He should be taxed at the old 90% rate. All executives should be taxed at this rate. Then they might stop this nonstop looting.

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Congress Sneakily Raised Debt Ceiling To Almost $11 Trillion!

July 27, 2008

Elaine Meinel Supkis

Right behind my back, in the dark, in the Cave of Death, Congress snuck in a proviso to raise the debt ceiling by nearly a trillion dollars to nearly $11 trillion. And they always race to new ceilings! This made nearly NO news at all! And I scan the news closely! Readers email or make comments when news like this breaks yet none of us heard this news. Time to go back to the beginning of the law that forced Congress to set a ceiling and the President to adhere to this. Back, back to the Reagan years when he smiled and said it was OK to go deep into debt and run everything in the red. Today, this ethos is our new Constitution!

Peter Schiff: US National Debt Limit Raised Ahead of Budget Busting Bailout Legislation

With President Bush no longer threatening a veto, the subprime mortgage and Fannie and Freddie “bailout” bill is now sailing through Congress. In anticipation of its enactment, Congress had the foresight to raise the national debt limit to $10.6 trillion. Who says that politicians don't plan ahead?

Once signed into law, the budget busting legislation will hand the Administration a blank check to prop up the ailing home lenders. The ultimate cost is anybody's guess. I believe that the price tag will be higher than just about anyone imagines. Paulson's Bazooka will be locked and loaded with enough fire power to blow what's left of our economy into the dustbin of history.

OK, here is my reaction: GODDAMN IT. What the hell is going on? HAHAHA. No wonder the NYT had that big story about what a pitiful, poor, pathetic outsider and naïf Treasury Secretary Paulson is! The baby didn't know his way about Washington, DC, even though he and his wife give to both the Republican and Democratic parties, hosts politicians, ran in and out of DC giving orders, etc. But he knew no one and knows nothing. And Bernanke is doing his best, even Obama says so! He is struggling to provide Free Funny Money™ to all and sundry in and out of government! The NYT didn't bother trumpeting the dire news in a headline I could see on the front page. When I googled this story to see if there were others covering it, there were only 2 other sources!!!! What the hell is going on here?

Well.....welcome to the Cave of Death. The need to run a global empire means spending money all over kingdom come and giving it away like candy in a perpetual Ground Hog's day but it is always Halloween instead. Once upon a time, not too long ago, either, the business about raising the debt ceiling was front page news. During the Clinton years, the GOP went stark raving mad, howling about this. Of course, it was pure politics since the problem really took off with Ronnie Reagan and Bush Jr simply sent it into high orbit.

Before we go into history here, let's visit Ron Paul and see what he has to say about all this, here is a part of a speech he made way back in 2003:

Speech by Ron Paul, 6/3/2003: The Federal Debt Spiral

The administration held a grand signing ceremony last Wednesday to celebrate the tax cut bill, a marginally worthwhile piece of legislation that does reduce income taxes slightly. The East Room of the White House was awash with cabinet members, Congressmen, Senators, administration staffers, supporters, and news media of every kind, all gathered for a perfect political photo-op.

One day earlier, however, the President signed another bill into law without fanfare of any kind. There was no press conference, no cameras, and no ceremony whatsoever. In fact, the White House issued only the briefest comment on this particular bill, even though it affects the American people far more than the modest tax cut bill. The reason for the silence? The President had just approved a whopping $984 billion increase in the national debt, the single-largest increase in our nation’s history. This was hardly a proud moment for the President or Congress, so the White House understandably kept the whole matter very quiet.

For perspective, this latest debt limit increase of nearly one trillion dollars is as large as the entire federal budget in 1985. The embarrassing increase was necessary because federal law limits the amount of debt the Treasury can carry, and the current $6.4 trillion limit had been reached. The federal government across the board has been spending money feverishly, at levels approximately 22% higher than just three years ago. This spending spree caused Congress to raise the debt limit from $5.9 trillion only six months ago, but the new limit was quickly reached.
*snip*
The House managed to avoid a direct vote on raising the debt limit, instead burying a series of automatic debt increases in the terrible 2004 budget passed in April. The Senate, by contrast, at least held an up-or-down vote on the issue. Yet only one Republican Senator voted against saddling the American people with nearly another trillion dollars of debt. Both parties in Congress clearly now view the debt ceiling law as purely symbolic at best. Privately, most members probably view it as an unnecessary obstacle that should be eliminated, an opinion shared by Federal Reserve Chairman Greenspan.

Over the years, the embarrassing news about the debt ceiling has been allowed to fall further and further into the mists of Avalon, like King Arthur, the Ship of State sails off into the West, never to return. The media has been very cooperative with hiding this news, of course. Bush doesn't determine what is a headline....hell, he does! He has a long record of asking the New York Times and the Washington Post as well as all the major magazines to kill stories and they all kill this story gladly. They don't care. No one running things these days gives even a minor wince when running the US deeper and deeper into debt.

All conversations on all editorial pages about all topics: war, health, welfare, schools, diplomacy, whatever---totally ignores the growing budget deficits and how these are now destroying our future! I wish I could pass a law saying that no article, editorial or TV show can mention the need or desire to spend money on anything without first explaining the budget deficit and showing how these new expenditures will make things worse.

The other day, a poor woman committed suicide when the sheriff came to evict her and auction off her home. It seems she hid the incoming bills and information from her entire family. She just threw it all away and kept on spending money! Then, she shot herself! She is Miz Liberty. She is the US. She acted like Congress, like Bush. She acted like the media. Everyone who is in charge of spending are not passing the information of the rising debt to the rest of us. Now, it is so bad, this isn't even rated a back page story!!!!

Now let's go to when a desperate Congress, like an addict or drunk, decided it was time to set some limits on wild spending, the passage of the law setting a ceiling. This was back in 1985:

Balanced Budget and Emergency Deficit Control Act (1985)

The Balanced Budget and Emergency Deficit Control Act (P.L. 99-177, 99 Stat. 1038) is popularly known as the Gramm-Rudman-Hollings Act after the names of its principal sponsors, and was designed to reduce the federal budget deficit. The law did so primarily by setting seemingly rigid deficit limits and authorizing mandatory, across-the-board spending reductions to reach them. Although the Supreme Court ruled that a key part of this mechanism was unconstitutional, the basic concepts embodied in the statute have continued to influence the process for adopting the federal budget.

Although the Constitution does not mandate a balanced budget, it does require Congress to approve all federal expenditures (Article I, section 9, clause 7), and it empowers the federal government to raise revenue through taxes, tariffs, and other measures (Article I, section 8, clause 1). The latter provision also authorizes the government to incur and pay debts. Congress has passed legislation establishing procedures for adopting the federal budget (e.g., the Congressional Budget and Impoundment Control Act) and for handling the national debt (e.g., the Public Debt Act).

The government regularly ran a budget deficit in the years following World War II, but the situation became especially serious in the early 1980s. Between 1981 and 1985 the annual budget deficit nearly quadrupled, and it threatened to remain at high levels indefinitely. Further, if nothing were done, the total national debt would have more than doubled between 1985 and 1990. The Balanced Budget and Emergency Deficit Control Act was adopted in the fall of 1985 in connection with a measure that raised the national debt ceiling.

The law's most important feature was a schedule for reducing the federal budget deficit to zero by 1991. It fixed a maximum allowable deficit for each fiscal year. If Congress and the president failed to adopt a budget that met the target, the law called for across-the-board spending reductions in most federal programs. Responsibility for determining whether the budget satisfied this requirement was given to the comptroller general, who is the head of the General Accounting Office (an agency that does research and investigations at the behest of Congress). The comptroller also had the authority to order the across-the-board spending cuts needed to lower the deficit to the required level.

HAHAHA. This is like a whore swearing she will be a virgin and never ever sell her sex to just any passing gnome with campaign finances stuffed in his pockets! Well, that lasted about.....NEVER. Not even a day! The back door was left open. Congress continued to spread their legs and the lobbyists simply inserted the money where there is no light of day. And the misspending continued merrily forwards. Indeed, note the optimism of the bill's sponsors: balanced budget by 1991. What really happened then?

We went to war with Saddam and as usual, our oil prices shot up, our economy collapsed and the government had to spend lots of money. The war itself didn't cost too much except lives. Bush Sr. boasted that we were now the MERCENARY empire and were for sale to the highest bidders. Well, that didn't last long, either. Soon, all our many allies figured out how to make us pay for their wars and not give us a hand out but instead, give us loans. So the red ink didn't slow down, it increased. For there was a new danger: inflation supposedly went down because the Japanese began to seriously soak up all excess US dollars in their FOREX reserves which went from only $12 billion in 1985 to nearly $1 trillion in 2000.

After 2000, China did the same. So the availability of easy loans was ongoing despite wild US spending. Let's go see various headlines from the last 20 years which illustrate how this news about breaking the budget barriers became less and less important and carried less and less real information until the whole thing was killed:

July 30, 1987: CONGRESS PASSES EMERGENCY RISE IN DEBT CEILING

Congress approved a one-week extension of the Government's borrowing authority today as Senate negotiators said they had reached a compromise on a new mechanism for automatic spending cuts under the budget-balancing law.

Congress approved a one-week extension of the Government's borrowing authority today as Senate negotiators said they had reached a compromise on a new mechanism for automatic spending cuts under the budget-balancing law.

The vote on the debt ceiling increase was 263 to 155 in the House. The Senate approved it on a voice vote and sent it to President Reagan, who is expected to sign it immediately. Approval came just days before the Government would have run out of cash Friday and defaulted for the first time in history.

The compromise on the new automatic spending cut mechanism was reached by the chairman of the Senate Budget Committee, Lawton Chiles, Democrat of Florida, and the committee's ranking Republican, Pete V. Domenici of New Mexico. It is expected to be debated in the Senate Thursday, and both Senators predicted approval. The Reagan Administration has not said yet if it would support the new mechanism.

Deficit Ceiling to Be Relaxed

Under the automatic cut proposal, if the projected Federal deficit did not meet the targets in the budget law, spending would be reduced by equal percentages across the board, except for Social Security, Federal pensions and several programs for low-income families. Half of the cuts would be in the military budget.

Right off the bat! Less than 2 years later, the ceiling was 'relaxed'. The old whore lay back in her bed, her legs spread wide. 'Oooh, gnome, you are so handsome and big!' she sighed. 'Fork it over and I'm all yours.'

Note the last sentence: the military budget was going to be cut. Oh my! Emergency! The hysteria this caused can't be imagined. Someone tell April who was the US ambassador to Bagdad to give Saddam the green light to attack Kuwait!!!!

Done deal! Now, no one is going to cut the military budget. The Cold War was over, time for hot wars. By the way, today, no one in the media mentions deficits and military spending in the same room. They are never mentioned together anymore.

2/20/2003: Government hits national debt ceiling

(AP) -- Replaying a drama from last year, the government is once again bumping against the debt limit of $6.4 trillion and the Treasury Department has begun taking evasive actions to prevent an unprecedented default on the national debt.

Treasury Secretary John Snow informed leaders of Congress on Wednesday that the government would reach the borrowing limit on Thursday and he would begin pulling investments out of a $48 billion government pension fund to make room for normal public borrowing auctions.

In a reference to the looming possibility of a war with Iraq, Snow urged Congress to act without delay to raise the borrowing limit.

"I know that you share the president's and my commitment to maintaining the full faith and credit of the U.S. government, especially at this critical time," Snow said in his letter.

Look at how the numbers, under Bush Jr, took off! The $1 trillion deficit of 1982 is now over $6 trillion. But we are at WAR!!! More money must be spent!!!! At least this article mentions them talking about spending money on wars. During all of this, the government passed that Social Security bill that doubled the taxes on the working class. To pay for our retirements. But instead, it was used to pad the budget and thus make the deficits look smaller. It is all gone. It is all just a piece of paper, as Bush once remarked. It is our national SIV.

11/19/2005: Debt Limit to Rise to $8.18 Trillion

The strict rules that once limited tax cuts and entitlement spending increases lapsed two years ago. Limits on spending lost their teeth. This year, Congress failed to pass a budget altogether.

Last night, with the federal government warning that it was on the verge of defaulting on its debts, the House rejected efforts to reimpose restrictions on tax cuts and spending, then joined the Senate to raise the federal debt limit by $800 billion, to $8.18 trillion.

The collapse of statutory restraints on the growing budget deficit has alarmed Wall Street, befuddled the Treasury Department and elicited calls for a rethinking of the way the government handles its authority to tax its citizens and spend those proceeds.

"The fact is, very little [budgetary restraint] is left in any real form or substance," said Robert D. Reischauer, a former director of the Congressional Budget Office, now president of the Urban Institute.

With last night's passage of the debt ceiling increase, the government's borrowing limit has climbed by $2.23 trillion since President Bush took office: by $450 billion in 2002, by a record $984 billion in 2003 and by $800 billion this year. Just the increase in the debt ceiling over the past three years is nearly 2 1/2 times the entire federal debt accumulated between 1776 and 1980.

A recession, a sluggish economy and five tax cuts in four years -- coupled with soaring defense spending on wars in Iraq and Afghanistan and rising domestic spending -- have turned record surpluses that Bush inherited into a record deficit of $413 billion in the past fiscal year.

That story was written right about when the housing bubble reached its greatest girth. Note that the economy is still being described as 'sluggish'.

Here is my April 25, 2005 article about all this stuff: It All Falls Apart

For weeks we have been treated to a virtual Mississippi river of propaganda explaining how high energy costs no longer matter and doesn't effect the markets and interest instability doesn't matter either, housing values will rise forever in a hyper inflated fashion which isn't really a bubble....pop.

OK. Readers of Culture of Life News knows that last week we ran a series of articles explainin the amazing 200+ point climb in stocks which seemed irrational on the surface. The economic indicies are all showing great weakness. The ones that matter the most, the "historic index" if you will, are in terrible shape. No country at any time in history can run the raging trade and budget deficits America has created for very long! It is literally impossible. All kinds of excuses are carted out to explain this situation and to excuse responsibility for it. As our CEO executives get arrested for economic crimes, all wail that they know nothing and have no control over their own criminal enterprises.

One government report after another details the failings and crimes of our own government and all reports end with, "We hold no one responsible for this". Just because one evades responsibility for things doesn't make them dissappear.

And here is my article from the same day the news about the debt ceiling was reported, on November 19, 2005:

Federal Reserve Will Conceal M-3 Monetary Aggregate To Hide Inflation

Stark memo with no mainstream press trumpets, the Fed decided they are fed up feeding us vital financial information. So they will simply hide it from us so we can't see how much money they are creating out of thin air.

Discontinuance of M3 On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

So, they will still continue to show us large-denomination "time deposits"-- but they won't show their own contribution to this! You can bet in a year, even that will be hidden from view so the mooing herd of investors can't panic. You know, if you want to kill a lot of cows, you herd them in a large group into an ever tighter corral, smaller and smaller until each one is forced into the ramp that takes them into the slaughter house.

Restrictions, restrictions. Note the currency that will be hidden from view will be the euro. Can't let the Europeans see how the yen/dollar black hole operates. They must be kept guessing.

This news, and I look for this sort of news, slipped by like a thief in the night on 11/10 late in the day, the following day being a holiday and a weekend. This sort of bad news dump is what Bush and his Skull and Bones minions like Greenspan are addicted to doing. It is the "news black hole" they use when they don't want us to talk about something.

Google this information and up until today, you get very little.

And here is my cartoon from back then!

Only a very, very tiny handful of online commentators roared in rage over this news! Note the ceiling news story from the same day made no mention of this breaking news from the Federal Reserve. I got the news from the Reserve itself, I am on their mailing list. I will also note here, they are NOT emailing me or probably anyone, lately! This is just disgusting and part of the whole 'We want to operate in the dark' business.

Most Americans were actually quite happy in November, 2005. Money was flowing out of the Home ATMs like there was literally no limits. But right about then, the Fed began to raise interest rates, fast. This was due to obvious painful inflation. This is why they decided to hide important statistics that show inflation. They could then lie about inflation. This is because these goofy magicians think inflation is psychological, not caused by excess lending.

ARGH. Like we just have to take Prozac and all would be well. Back to the history of the debt ceiling news:

3/16/2006: Congress Sets New Federal Debt Limit: $9 Trillion

Faced with a potential government shutdown, the Senate votes to raise the nation's debt limit for the fourth time in five years. The bill passed by a 52-48 vote, increasing the ceiling to $9 trillion. The bill now goes to the president.

The debt now stands at more than $8.2 trillion.

Like many cash-strapped Americans who have maxed-out credit cards, the federal government has hit its limit for borrowing funds to keep operating. If the limit isn't raised, the government likely will run out of borrowing authority within days, risking a shutdown.

When President Bush took office five years ago, the national debt was at $5.6 trillion; since then, big budget surpluses have collapsed into huge deficits, and the debt has shot up nearly 50 percent.

Few lawmakers, though, wish to be on record as authorizing more debt -- the House goes so far as to hike the limit automatically. And Senate Democrats are telling their Republican counterparts not to expect any help from them, particularly in an election year.

Here is the NPR graph:

Now here is my own story and cartoon from this same news stream back then, on March 16, 2006:

GOP Belly Flops Budget Talks While Trade Deficit Soars

The tax cutting/cutting citizen's programs GOP Jihad machine is grinding its gears as the USA faces the biggest budget deficits along with the biggest trade deficits in our history. Frist won't allow on the floor debates on these topics. Meanwhile, the clock is ticking and the debt ceiling hasn't been raised to $9 trillion.
*snip*
As I keep on saying, anyone who thinks this mess will end with a birthday party for us is the sort of person who believes in Santa Claus. Well, capitalism is supposed to be pure Darwin "red in tooth and claw" and the twin to this creature is called "revolution and war" which shadows capitalist expansions and contractions.

This is why FDR and his crew were so very desperate to iron out the peaks and valleys of raw capitalism. They were very aware of the downside. Alas, as the last survivors of the Great Depression die off, the younger generations, pretty old ourselves, will have to relearn all those harsh, nasty lessons.

Associated Press: America's deficit in the broadest measure of international trade surged to an all-time high of $804.9 billion last year as the country went deeper into debt to foreigners. The Commerce Department said the deficit in the current account was up 20.4 percent from the previous record of $668.1 billion set in 2004. The current account is the best measure of trade because it tracks not only goods and services but also investment flows between countries.

I have drawn so many cartoons illustrating red ink I feel like I live in the Suez Canal. This is way beyond out of control. Everyone I know is fearful that their jobs will be outsourced, frearful of ever finding any work at all, fear is everywhere. The young people I know are not happy about their futures, they are scared and getting increasingly angry. Fear of this sort can and will explode suddenly. All factory workers, across all industries, are being forced back and back and back. They are rapidly losing ground now even if they can't get their jobs exported, the owners of our country simply import more labor, more and more, it just pours in, unstoppable.

This is deliberate. The red ink is deliberate. All Congress has to do is vote for the taxes to be put back to the levels under Clinton. Period. Seems terribly simple, doesn't it?

Then they can vote for tariffs and barriers. Why?

Because they WORK. Since all countries are trying and succeeding in overwhelming us in trade, we have to cut back...let them trade with each other for a while. Meanwhile, to cut down on our energy imports, we impose draconian gas rationing. People with gas guzzlers will just have to bite a bullet. Better than biting real bullets which is what will overtake us if we continue this path.

I also published this story that very same day:

The Real Estate Market Is Now A Buyer's Market and Will Go Down

It is now obvious that the real estate market is now a buyer's market which means the home ATM machine is going to cough up $0 for a long time. This was laughably easy to see coming since this happens with near-clock-like regularity. The fiscal policies of Greenspan will make this cycle particularily punishing. This, too, is laughably easy to see coming.
*snip*
This is so simple: every time housing values crest, foreclosures on the more tenuous properties begin. These are the speculators who put virtually no money down on properties that aren't even really on the market yet. The properties revert back to the developers who frantically, knowing this is now a bad market, will aggressively sell, undermining the profits of other sellers.

This peak always coincides with good times in the labor markets. Labor has already been bleeding badly for several years with incomes behind the rate of inflation. This market would have peaked in 2002 except Greenspan, to help his Skull and Bones Buddy, Bush, kept interest rates artificially low, below the rate of inflation causing one of the biggest run-ups in housing value in our history.

Again: the big move now is to hide our debts from the American people. Just like 99% of the bad news from the war fronts is carefully hidden from view, so is this tsunami of red ink. The trade deficit only makes news when it is slightly smaller. But still running at historic levels of red ink. Which is NEVER mentioned anymore. Back when it was half the present size, it was in the news regularly. Now, it is not. Not even slightly! Gah!

What are we waiting for? The Chinese sheriff to show up to auction off the last of our assets? Then we shoot ourselves?

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Paulson Is Really A Naive Little Baby Boy!

July 27, 2008

Elaine Meinel Supkis

The housing rescue will save no homeowners but will make the Chinese and Japanese investors happier. Not to mention pirates and others. The entire US rebate program went towards Exxon/mobile's bank vaults. The editors of the NYT, working on behalf of the owners, have a stupid editorial about all this as well as a long, long article about how Paulson, a consummate insider, is really a naive baby who knows nothing about how power works, how lobbying in DC operates, how the levers of power work, etc. It is truly a hilarious profile with obvious internal clashes of reality. It is obvious that the concerted effort of all our rulers to appear as if they are stupid and helpless and victims of the economic messes they created themselves. Totally.

As Rebates Run Their Course

It is unconscionable to omit food aid from a stimulus measure, because the priority in a downturn should be to help the most vulnerable Americans. It is also poor economics, because a temporary increase in food stamps, which are spent quickly and in full, is the single most effective way to lift consumer spending. Direct aid to states and localities also reaches vulnerable populations, like Medicaid recipients, and is powerful stimulus because the extra money is passed on quickly to employees, contractors and program beneficiaries.

Another reason to approach the next stimulus bill differently is that the government has now intervened to prop up the economy in other ways, most notably by giving the Treasury authority to bail out Fannie Mae and Freddie Mac, the mortgage giants, if necessary.

The Treasury might never have to spend a penny. Or it may have to spend upward of $100 billion. The growing possibility of huge taxpayer outlays — and ever larger federal deficits — leaves little room for error and waste in future rescue efforts. That argues against another large tax rebate scheme, or various temporary tax cuts, like increased write-offs for business equipment. Politically popular though they may be, such measures have far less bang for the buck than direct spending programs to boost the economy.
*snip*
Congress must take the lead this time, not the Bush administration, in writing a stimulus bill that truly addresses today’s economic problems and challenges, without wreaking undo damage on the federal budget.

The earnest editors of the New York Times never cease to amuse. We saw record food inflation yet the government did absolutely nothing about this. How about indexing food stamps with inflation? Eh? And NOT core inflation but real food inflation. Food goes up, stamps go up. Food prices drop, so do the stamps. Duh. How easy is this? It is laughably easy! Of course, this is not the solution any more than indexing the elderly's Social Security to a price index of things the elderly buy and use! No, it has to be indexed to a totally fake, obviously well below the rate of inflation, indexes! I will note that fuel prices hammer the elderly in particular. Social Security has risen in the lowest single digits this last decade while fuel costs have risen from $10 a barrel for oil to $140 a barrel. It is now dropping although Iran Kitty is hard at work to raise it back up again, egging the US back into menacing Iran. Right now, it is not working. But the Iranians have the ability to change all that. They will keep at it until the US resumes hysteria in the Gulf again.

Senate Republicans block heating aid bill

Republicans on Saturday blocked the Senate from considering a bill next week that would nearly double federal aid to help the poor pay heating and air-conditioning bills.

Although a dozen Senate Republicans support the measure, most voted with GOP leaders who would rather spend the time trumpeting their call to expand offshore oil drilling before Congress takes six weeks off for vacation and the presidential nominating conventions.

The wealthy supporters of ecology protections own a lot of fine beachfront properties. They do NOT want offshore oil rigs and oil spills. So they are throwing themselves upon any legislation that will allow this. They won't even allow non-polluting wind mills because they might annoy the pretty vistas! Everyone in DC must look like they want to solve problems. But the problem here is cheap oil. The people of America went hog wild when oil was only $10 a barrel and the size of vehicles and houses ballooned. We will use up every drop of oil as fast as humanly possible if we can. A heavy oil tax which could be used to subsidize energy purchases of people on fixed incomes or the poor is the way to go. But we won't go there because rich people don't want to go there. They are big, big energy consumers!

Back to the stupid bonanza from the government: this is an IOU. On top of a ten trillion dollar mountain of IOUs. It robs the future and its sole function turned out to be a funnel of money to OPEC, oil speculators and the big oil corporations in America. They are, right now, pouring money into McCain's campaign so they can continue to run America like they did with oilmen Bush and Cheney.

The NYT editor is worried about 'wreaking undo damage on the federal budget'. HAHAHA. It crashed years ago. It limps along only because super trade rivals that are killing us in the markets, Japan and China, are buying up most of our debts. Note that this stupid editor never mentions this! The fiction that Americans are supporting our government's overspending continues simply by never mentioning who our creditors really are! This ridiculous coverup is deliberate. The editor knows perfectly well, he isn't buying up all our Federal red ink! None of his rich buddies are buying up ALL the red ink, either! THEY CAN'T!!! They are stuck! They are in debt, they don't have lots of loot to use to buy our national debts and besides, thanks to the super-low, fake interest rates set by Bernake, it is below the rate of inflation so no one but dire trade rivals seeking to slit our throats buy this junk. A major theme here at Culture of Life News, of course. Now, to prove yet again, how I am right while these clowns are wrong, let's go to exactly one year ago at my own news service:

One year ago, on 7/27/2007, I wrote about the panic on Wall Street again:

Risk is how investors makes profits in the stock markets. Just two weeks ago, the huskers on Wall Street were all yelling we were in a new economy that will be fueled by corporate mergers and consolidations as well as buy backs and this would go on forever and forever. This was a silly lie. Another hedge fund, a really big on, the Man Fund of Ireland, is now dying. The herds of investors who keep markets alive are now spooked and running like hell for cover as the lions of Bankruptcy stalk and kill them, one by one.

Another hedge fund in trouble, a bigger fish. As Bear Stearns discoved, having outside the main group hedge funds does not isolate risk and destruction, it probably makes it worse. This is because if a financial house spins off various funds which they still run, if any of these collapses, they can't hide it within the organization. It is out there in the open for all to see! And all seeing people then run like hell from the parent organization.

All the stupid schemes cooked up to 'spread risk' also spread risk by contaminating everything with risk. Investors must be risk-adverse when risks lead to bankruptcy. Pulling out before the whole house burns down is the art of investment. Just like selling in the housing market, timing is important. It is better to take the potential loss of some extra profits and sell an asset just before a turn than to hang on, overprice it and then get stuck. Many houses for sale these days are overpriced. The market turned back at the beginning of 2006. Most professional home builders cut prices and sweetened deals to get out before the fall was obvious to everyone.
*snip*
In the teeth of an obvious downturn brewing for the last 1 1/2 years, all the happy talk people have been nearly hysterical, trying to trick investors who are not professionals, into believing all was well and the world was going to go into a super-boom, bigger than the one caused by 1% or lower interest rates. This, in the teeth of a rising headwind of hurricane force as all world central banks except for Japan raised interest rates higher and higher due to excess 'liquidity' which is French for 'banks making money out of thin air using their magic wands.'

From Forbes last month:

The world is awash in cash. Global liquidity is a phenomenal force. Some economists like the Conference Board's Gail Fosler call it "the garden of Eden"--low interest rates, lowish inflation. Only intermittent volatility, new record peaks in many markets. Money is being made hand over fist.
One amazing factoid: Central banks bought more securities than the Treasury issued in 2006--a total of $320 billion according to Brad Setser, a former Treasury official who follows the money flows better than anyone.

Some central bank economists believe there is a shortage of fixed income product in the world. That's right. You heard it here first. A shortage. Meaning there's not enough bonds to satisfy pension funds and insurance companies worldwide. No wonder interest rates are so low.

Interesting, isn't it? $320 billion extra 'securities'? I would suggest, they aren't all that secure. Actually, nothing is totally 'secure.' Not even the Bank of Japan! History is littered with the corpses of zillions of past 'securities' that ended up worthless. Whole nations can and do go bankrupt. Some empires go bankrupt. This usually causes vast historic changes and ever-bigger global wars. Up until just a year ago, the extra $300 billion in securities went into real estate. That option is now shut so it is groping about, seeking a way of existing. Pieces of paper sitting in banks not being lent to home owners are sad puppies and usually go for less than the rate of inflation.

Whoa! There were extra securities for sale? And there was this undying need to buy them? HAHAHA. We see now that the buyers were mostly people seeking not to protect pensions but governments seeking power and leverage over US policies. And it worked! Hello! Note how the US no longer mentions the value of the yen or the value of the yuan! There is NOT A PEEP ABOUT THIS ANYMORE! HAHAHA. Why was this dropped, anyway? The rescue of Bears Stearn and...oh, do note I talked about Bear Stearn's bad situation last year....the rescue of Fannie Mae and Freddie Mac is all about pleasing these Asian rivals who loom over us like a dark summer thunderstorm. It should be mentioned that both China and Japan are on the same page. The same wavelength. Both want the same things. This obvious unity of purpose and ends should be noted by the US and acted on. We cannot pretend they are different from each other. The fiction that one is an ally and one is an enemy must end. We will not save our nation if we follow the fake Cold War models.

AIDS Funding Binds Longevity of Millions to U.S.
Open-Ended Commitment of Money Is Implied

President Bush plans to sign a bill next week that commits the United States to spending about $40 billion over the next five years to fight AIDS overseas, a major expansion of what many consider his most successful foreign policy initiative.

The legislation also extends an implicit pledge that has little precedent in the history of U.S. foreign assistance: to continue purchasing lifesaving drugs for millions of individual people in developing countries for an indefinite period of time.

OK: no food stamps, health care insurance or heating aid for US citizens but these same people will bankroll an open-ended scheme to pour great profits into the bank accounts of pharmaceutical companies? This is a huge profit-making venture! AIDs is a very peculiar disease: there is no cure. The medicines only prolong the lives of victims. Who then, especially in third world nations, spread it further and faster. This is not a vaccine that prevents the disease and stops it spreading. These medicines increase the spreading of the disease because the victims can't protect themselves from contact. I would heartily approve of spreading both male and female condoms, just for example. This is cheap and effective. Spreading drugs is not effective, it is totally counterproductive.

I may sound heartless here but the aim is not humanitarian, the aim of this bill is to open a door to the US taxpayer's pockets that will load us up with infinite debt. For the more the people take these drugs and don't practice safe sex, the worse it gets. But the big pharmaceuticals get richer and richer! Wow! Easy street for them. On top of all this, we don't have $40 billion for anything. We don't have $180 billion a year for the twin wars in Central Asia and the Middle East. We don't have the $500 billion for huge Pentagon gold-plated weapons systems!

Here is a totally insane NYT story about Hank Paulson that is full of contradictions:

Can Hank Paulson Defuse This Crisis?

IF Henry M. Paulson Jr. hadn’t left Wall Street for Washington to become Treasury secretary in 2006, he would still be making tens of millions of dollars a year as the chairman of Goldman Sachs. He would be comfortably zipping around the globe on a corporate jet. He would be presiding over the only big Wall Street firm that hasn’t lost billions on bad debt.
*snip*
Even Mr. Paulson, for all his Wall Street experience and market savvy, occasionally appears flummoxed by the scale and complexity of the current crisis.

“When I talk to people, there are a whole lot of them that say: ‘I don’t like this,’ ‘I don’t like that,’ ‘I don’t like the other thing,’ ” he said in the Times meeting. “I say: ‘Neither do I. What idea do you have? What do you think we should do?’ ”
*snip*
Moreover, a Treasury secretary who initially preached against “excessive regulation” of the financial sector is presiding over a sweeping government intervention in the economy, one that conceivably marks the end of a federal deregulatory push that began in the late 1970s and accelerated in subsequent decades.

Why in the name of a million demons and gnomes is t his gnome 'flummoxed' by what is going on? He could spend ten minutes a day reading my news service. He won't. He can't. The need to be mystified by the magic of what is evolving is a way of coping with criminal behaviors. ALL the players on the stage here, all the fools and follies of the present supporting cast in 'The Collapse Of The Entire US Economic Systems' have to pretend they cannot connect cause and effect. They cannot foresee obvious future outcomes. They have to preserve their cloaks of naive childishness. They must look like they are victims and not the authors of the messes they are creating. Every day, they wake up and what comes to mind is not, 'How do we figure out this mess,' but rather, 'How can we benefit from this mess?' So they all seek the wrong things, they head down the wrong roads. They want eternal wealth, easy profits, continuous expansion of their controls over things they pretend they can't control.

The 'I don't like this or that' comment is very telling, by the way. Obviously, even Paulson has the dim wit to throw out some real solutions here and there. These are not popular with the gnomes. They hate these suggestions and demand they not be talked about. Period. Note also, Paulson, who is against regulation, is for regulation....but only if it benefits him and his buddies who don't like this or that solution! Once they subscribe to a solution, they rush out and shove it along and then retreat back into the fiction that they don't control events.

NYT:

“He has handled this crisis extremely well,” said Representative Barney Frank, the acerbic Massachusetts Democrat who is chairman of the House Financial Services Committee and customarily a scathing critic of the Bush administration. “It’s fair to say that he and almost everybody else failed to anticipate some of these problems. We all underestimated it. What I give him credit for is how rapidly he adapted.”
*snip*
WHEN Mr. Paulson accepted the Treasury job, he sought advice from Robert E. Rubin, another former Goldman Sachs chief, who served as Treasury secretary in the Clinton administration. The two sat together in the library of Mr. Rubin’s Manhattan home as Mr. Paulson peppered him with questions about how Washington works.

“Some people from business or law go down to Washington and they go with the view that they’ve done very well in whatever they’ve done and they can take that same way of functioning and apply it in Washington,” says Mr. Rubin. “Very often that doesn’t work. Others say, ‘I’ve had a lot of experience, but this world operates in different ways and I have to learn how this world works.’ That’s a much more effective approach, and that’s my impression of what Hank has done.”
*snip*
“I’ve watched him grow in the last year, not in terms of intellectual capacity but in his appreciation of how this town works,” says Mr. Dodd.
*snip*
He was also deeply embroiled in the 2003 ouster of the former New York Stock Exchange chairman Richard A. Grasso over complaints about Mr. Grasso’s compensation. And Mr. Paulson sat at Goldman’s helm during the excesses of the dot-com bubble, selling vast numbers of subpar companies that promptly crashed with the market. Goldman wasn’t the worst of the offenders, but it wasn’t an exception either.
*snip*
WHEN Mr. Bush struggled to right his listing administration in 2006, his chief of staff, Joshua B. Bolten, a former executive at Goldman Sachs, recruited Mr. Paulson to replace John W. Snow at Treasury.

Take note of all these comments! They are all trying to picture this very, very, very rich, very, very, very connected man who has been very, very, very busy lobbying in DC for years, as a Naïf. A wild child who was fooled by events because NO ONE could foresee them except for who? Me? HAHAHA. To go on: This infant man needed to be taken by the hand by other Goldman Sachs former executives who also took over our government and running our economic systems from the top in DC, why, they had to educate this very, very rich and very, very politically savvy infantile baby as to where the levers of power were? HAHAHA. HAHAHA!!!!!

Oh, the fictions of the ruling elites! They are so funny. As if Paulson never, ever went to Bilderberger meetings, etc. A child from the backwoods carrying a musket and a coonskin cap. Note the little side story about how he used his political connections to get rid of Grasso! Note how it was Bolten, a Goldman Sachman himself, who brought Paulson into the Treasury! Geeze, is there a connection here? Perish the thought!

NYT:

Moreover, Mr. Paulson has especially endeared himself to the denizens of Wall Street by using federal power and the public purse to rescue the financial industry from its own, outsize mistakes and prevent the meltdown from getting out of control.

“He’s saved their bacon,” Mr. Cox says.
*snip*
In 1999, he snared Goldman’s top job after leading a palace coup to push out Jon Corzine, his co-senior partner. (Mr. Corzine, a Democrat, is now the governor of New Jersey.)
*snip*
At the same time, Mr. Paulson began echoing the line of many in the financial industry that the real problem facing Wall Street was a welter of cumbersome regulations.

HAHAHA. This little boy actually was a brutal infighting gnome who took over Goldman Sachs after a bitter battle. Eh? What? And his endearment with the gnome community is appreciated since his rôle was to rescue them using the US taxpayer's future earnings? HAHAHA.

I eagerly await the next NYT editorial about the Bilderberger meetings including what the editor said to Paulson over canapes and champagne.

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Student Loans And Fake Rescues Of Mortgagees

July 26, 2008

Elaine Meinel Supkis

A reader kindly sent me an email detailing the terrible difficulties their son faces trying to pay for his education. Also, we get more details about the government's bailout of people who went way over their heads in debt using their homes as ATM machines. It is clearly a NO GO. Won't work at all. Easy to explain why. And world markets are in a panic. Even the commodity markets are now spiraling down the drain. Time to understand what went wrong and where it went wrong. More banks, by the way, went belly up in the last 24 hours. There are a few thousand more to go. Alas. America is NOT capitalized. We were cannibalized.

An email came in today:

Thank you so much for hammering the student loan scams. We are dealing with my son's college loans and credit card debt right now. I'm sure our story is rather typical.

My son just graduated magna cum laude from a private college. When he applied in 2003-2004, the financial aid office talked him into extending the terms of his student loan out to 30 years so his initial payments would be managable, and he was told he could renegotiate the loan later as his earnings increased.

He also applied for a citibank credit card and received a 4% interest rate so he could purchase incidentals not covered by the loan.

We paid out-of-pocket for his off-campus apartment, meals and living expenses and actually saved money even at 1500 dollars per month--the college charged more. That came to around $60,000 over 4 years.

Upon his graduation, we looked over what we owed. My son's part which he has to begin making payments on six months after graduation, is $27,300 at 6.75% interest.

Our "Parents Plus" student loan comes out at $49,700 at 6.25%.

Now for the bad part. That easy credit bank credit card that started at 4% interest has now risen to 11.9% interest and my son owes $22,300 on it. We made the payments and have never been late on a payment and our credit rating is excellent.

If by some miracle, my son were able to pay off these debts at these interest rates over the 30 year time period, he will pay back nearly three hundred and fifty thousand dollars. Add the $60,000 we paid out of pocket, and he will have paid over $400,000 dollars for an education that would have costs less than $100,000 before the Republicans took office. Elaine, that is nearly half a million dollars for a college education, and most of it is interest paid to the loan people and credit card companies. This is a terrible situation.

Enter our evil lawmakers who are owned by the financial institutions. When Congress finished adjusting the laws pertaining to student loans, my son is officially enslaved for three quarters of his working career IF HE CAN FIND ANY WORK IN THIS DEVESTATED ECONOMY.

Just what did congress do?

People with student loans cannot escape them by declaring bankruptcy. Whatever wages the person has, will be garnished for the monthly payment.

If the initial term of payment was for 30 years, there can be no renegotiation of the loan. You either pay it off in full or make a payment each month until it is paid off.

If the minimum payment is a set amount, and the person makes four payments this month, the minimum payment is due again next month--you can't skip a payment if you are paid ahead.

If, for any reason, you miss a payment, your interest rate goes up and the more payments you miss, the more the interest rate goes up.

The only good thing about this scam is that if you make all payments on time, your interest rates drop a point or two.

So, Elaine, my dear son, without help, will essentially be enslaved for a majority of his working career. This is Biblical style usury and enslavement.

Thanks for all the details [many of which are deleted to keep everything as anonymous as possible]. They do not merely want you to pay the principal. The principal went to the school, etc. All they get from this process is the fee. The prize here, the frosting on your son's debt cake is in the interest payments. And so long as these are well above the Treasury rate, this is PURE GOLD to the lenders! THEY get a free $400,000 non-stop 'pay, pay, pay!' for years and years. People supposedly holding such things call them 'securities' and 'bonds' because it makes the lender secure and puts your son into slavery.

I am just livid about all this! Forcing everyone to go to college even if the job doesn't require the intense training of college, this is standard procedure today. One cannot be an authority on anything without that very expensive and valuable piece of paper. Of course, in down markets, just as the deed on a house can represent less and less wealth or paper money loses value rapidly, so it is with college degrees. In bad markets, it can rapidly become totally worthless!

Before Bush and the DNC/GOP elimination of college loan bankruptcy rights, if the degree became worthless, the student defaulted. If the degree was worth a good income, the student would pay it back. Simple economics! But so many college degrees are actually worthless. I should know! I quit my program when I got pregnant with my first child. I didn't study economics or history. But since I can read and hang out with historians and economists and even better, hang out at bars in Lower Manhattan, I learned a lot of stuff. When I worked for various gamesters on Wall Street or the NYC real estate markets, I learned a tremendous number of things from very canny people who had seen everything.

Also, my dear departed father-in-law was a mathematician, economist and publisher. He taught me many things. He was very smart and always lost money on Wall Street. Another man I learned a lot from always made money on Wall Street but couldn't stay married and lost fortunes in courts. Classic gnome.

Mr. Cohen told me once, 'NEVER EVER get involved in any government program or rescue operation. Take your lumps and start over again. But don't go to them for help. Once they notice you, they never let go. Never.'

Joe, on the other hand said, 'Remember, all temporary government programs become permanent blights and end up destroying what they set out to save.' These two sayings are very important. When my present husband was injured at work and we had to sue several entities, our income vanished during this time since I had to nurse him on top of everything! During our tremendous poverty, we lived in the tent complex I wrote about a few weeks ago. We struggled along without welfare or any government help, large or small.

This was hard, hard work but at the end, we kept our property so I could build a house and we picked up our lives and rolled onwards, now we live in a lovely house, debt free. Which I built myself, by hand. The hard way. Everyone says they don't want the government in their lives but end up that way. Of course, due to workman's compensation, we are under government scrutiny. But this is something we won because it was our due, not a hand-out. We far, far would rather my husband be a professional museum photographer! Not an invalid.

Back to school debts: the government decided, due to lobbying efforts by very wealthy gnomes, it should be made utterly impossible for students who can't get a good return on their degrees to still be stuck with it forever and ever. This means no one can go to school to learn in the classic sense, to explore the intellect and to learn about hidden talents, pick up rational, complex skills and in general, become 'civilized.' Now, if one isn't focused entirely on a money-making career, this can be FATAL. Our schools are deteriorating into simple journeyman apprenticeships for people praying there will be a job when they pass all the hurdles.

I know so many young people who begin college with the idea of becoming something and then change their minds! I did this! It is COMMON. But now, it is also very dangerous. When I went to college, it was fairly cheap. Very cheap, indeed. I petitioned to live off campus and was allowed this boon at only 17 years of age [privileges of the ruling class]. I only worked in the summer and made enough money to support myself in school. Rent was only, get this, $45 a month for a one bedroom house. I upped my status by taking on a 2 bedroom house for only $65 a month.

That was the sixties. But suddenly, starting in 1970, inflation took off. Rents shot upwards! Wages didn't keep up. I had to start working part time during the school year. Fast forwards to today: my children had to work full time while going to school or use other harsh methods to fund their schooling. Rents now are ten times higher than in my own youth. It is far, far harder for them. And this angers me a lot! My heart goes out to the middle class which is being squeezed at both ends: they are expected to pay even though this is very harsh for them. This is why our once-solid middle class is in danger of a full collapse.

Now to go back to the issue of the Fed 'rescue' of people deep in debt due to high housing prices:

Before homeowners can get FHA-backed mortgages, they must first retire any other debt on the home, such as a home equity loan or line of credit. Borrowers are not permitted to take out another home equity loan for at least five years, unless it's to pay for necessary upkeep on the home.

To get a new home equity loan, borrowers will need approval from the FHA, and total debt cannot exceed 95% of the home's appraised value at the time.
*snip*
However, the refinanced loans do come with many strings. For one thing, borrowers are responsible for paying an insurance premium to the FHA guaranteeing the loan, which will be 1.5% of the principal annually.

Borrowers also agree to share any profits from future home-price appreciation with the FHA. To do that, they'll pay a "3% exit fee" of the mortgage principal to the FHA when they resell or refinance.

Plus, they'll agree to pay the FHA 100% of any profits they realize from higher home prices if they sell or refinance within a year. So if the original loan principal is $200,000 and the home sells for $250,000, the borrower will owe the FHA $50,000, minus costs.

After a year, borrowers will share 90% of the profits with the FHA. The percentage keeps dropping in 10% increments to 50% after the fifth year, where it stays.

Good grief. So many wrong things here! First off, the problem is, people went for the risky loans because they didn't qualify for traditional loans! Then, they went bankrupt. This was due to the ridiculous high prices of houses that often were shabby housing. Most people who got mortgages this last 5 years were not buyers but people running up debts on their properties because of the artificial inflation of the houses' value! This is a debt crisis, NOT a housing crisis. People wanted to scoop up cheap debts and did so. It was as if the Federal Reserve's Brink's truck overturned on Interstate 5 in California and everyone rushed in to grab the loot and run off again!

Now, the same people can't deal with the results of this mess they created when they ran up debts to the uppermost limits, using their homes as collateral. Since 99% of these poor saps did this when markets reached their peak in 2006, they are all already well 'underwater'. I bet virtually NONE of the people needing to be saved from their own follies are under 95% in their debts! And since many buyers used loans as down payments, they don't qualify! And if they got second mortgages and other instruments which were handed out even to people who were above 110% in debt on the value of the house at the height, now all of that is MUSH.

Each month, the value of houses fall. They are in a deflationary spiral! There is no escape here. The government is willing to take a 5% haircut, not a 25% or even 40% haircut! On top of this, for the first few years, the government gets any gains on the houses' value increases. FOREVER. They get a 50% above the amount of the rescue loan!!!!! GAH!!! Some 'rescue'! Obviously, the US government will be a permanent landlord/partner who dictates all terms! I assure everyone, this is a TRAP.

Furthermore, the government requires strict accounting of income, etc. Payment of all loans. No more 'ATM' business since the government holds all increases in value on ITS books, not the helpless homeowners. What is particularly stupid here is, if anyone has the qualifications to be a standard mortgagee, they would not be in trouble! It is all the people who jumped for NINJA loans who need to be rescued. And frankly, they and their bankers have to take their lumps. Jump into a shark pool, you get eaten! That's life. Hopefully, children watching this will learn harsh lessons.

Fannie, Freddie Subordinated Debt May Be Cut by S&P

(Bloomberg) -- Standard & Poor's may downgrade the subordinated bonds of Fannie Mae and Freddie Mac, surprising investors who had anticipated the securities would be supported by any Treasury rescue plan.

The potential cut would affect $19.2 billion of AA- rated subordinated debt at Fannie Mae and Freddie Mac, according to data compiled by Bloomberg. The cost to protect the bonds from default rose for the first time in three days. S&P said it may also downgrade $26 billion of preferred stock, pushing down the securities in New York trading. The AAA ratings on the companies' senior debt were affirmed with a stable outlook.

New legislation authorizing a backstop of the mortgage- finance companies leaves it up to the Treasury Secretary to decide whether to honor preferred dividend payments or to repay subordinated bondholders before the government, S&P analyst Victoria Wagner said in a telephone interview. That ``ambiguity'' casts a cloud over the securities, she said. Once analysts have fully analyzed the final legislation, the ratings may be cut one or two levels, she said.

And the pros know this rescue is FRUITLESS. It won't work. Period. We feel this in our bones. The government, the bankers and the reckless public that fell for the lure of easy lending all have to be educated in reality: you can't run up infinite debts! This valuable lesson is NOT being heeded at all! Proof: both the Federal Reserve and the Federal Government are pushing more debts onto ledgers and are enabling bad economic outcomes, not good ones. We are not living within our collective means at all! We have to change course or we die! Until this truth is accepted, all rescues will fail.

Panic Building on Wall Street

Fannie Mae (FNM) and Freddie Mac (FNM) were on the verge of collapse, only to be saved by the full faith and credit of the United States. But in reality the Fed did not save them, YOU did. If you are a U.S. citizen, the bailout has your name on it and you don't even know it, do you?

When a financial institution, bank, broker, hedge fund (Long Term Capital Management) gets bailed out, it is the taxpayer that ultimately pays for it. The Fed “loans” money to the failing institution and rewards mismanagement, but the loan is paid for by collecting taxes from you! How often has your friendly banker asked you to bail out others that have made poor business decisions? The answer is, plenty of times, but those who read the mainstream press never get a clue that the full faith and credit of the United States means simply, the ability of the federal government to tax its citizens. It is just that simple!

HAHAHA. Right on the anniversary of my big article about Panic Attacks from last year!

Here is my July 26, 2007 story: PANIC!

NEW YORK (MarketWatch) - Stocks plunged Thursday as anxiety about shaky credit markets and the troubled housing sector swept Wall Street, pushing the Dow Jones Industrial Average down nearly 400 points.
"We're seeing panic in the market today - you can almost cut the level of fear with a knife," said Al Goldman, chief market strategist at AG Edwards.

No new news? Are you kidding me or what? The news that China is now #3 in the world's economies, is news. And the fact that the Japanese workers are committing terrorist attacks against nuclear power stations in Japan as well as the worst terror of them all, they are going to vote the corrupt, evil LDP out of power at last: this is all very big news! Not that the average American sees this coming!

The key, all along, is the Bank of Japan and the government of Japan supressing human resource costs in order to have this fake depression whereby they could give Toyota and other high-value exporters super-cheap money so they could use a super-cheap yen to undercut coemptition---THIS IS ALL ENDING. As I predicted.

Japan cannot follow this course any longer. They are at a terminus point. Starving the Japanese workers to death isn't an option. Forcing them into labor similar to under Mao in China is unacceptable. Rebellion is in the air. The new government of Japan will, next month, put in new bank officers at the Bank of Japan and I suppose they won't tar and feather the fascists who ran it before but I would suggest this is a good idea.

In China, the Chinese government is pulling on the reins and they want to cut trade with the US and re-direct it to Africa and South America. On top of this, both Japan and China will now be using their vast FOREX reserves to buy up interesting stuff like working with Russian oil and Putin, just for example.

I will suggest that the status quo is breaking. And a new one is rising. And it isn't one that will feed us endless loans and hold yet another two trillion in trade dollars!

Back then, virtually no one was talking about how the Japanese carry trade was flooding the US with red ink. This malicious program was greeted by the gnomes as well as our reckless spending government as manna from heaven. We wanted more and more and more. And when it ceased to flow after 7/17/7, there was a painful pause. Then the chorus of, 'We need more liquidity' began to be shouted hither and yon. Everyone on TV began to bleat about how we needed to get banks to restart the liquidity, aka, red ink, flowing. I said, 'Nope. Can't happen. Too much red ink already. Flows will now change direction. Look to China!' And of course, China began to raise reserve ratios and interest rates while the Fed and other G7 central bankers tried to lower rates. All the G7 were most anxious to make the yen weaker again. They knew where our lending was coming from: the Bank of Japan.

Well, even today, there are frantic efforts to get this stupid carry trade restarted. But it won't because it can't. Instead, Japan is now contracting, not expanding at 3-5% a year. And the US is one sick puppy that can't grow, it can only throw up on the carpet.

Credit Unions Slowly Fill Void As Payday Lenders Leave D.C.

In January, legislation went into effect capping interest rates in the District at 24 percent, effectively driving out the area's payday lenders, whose business model is wedded to annualized rates of 300 percent and above. Credit unions are now slowly filling the void in small-dollar loans. At least half a dozen District institutions are attempting to reinvent the loans as a tool to help bring hard-pressed borrowers closer to financial health.

The credit unions' products vary, but generally they are loans of $300 to $1,000 with an annual percentage rate of up to 18 percent. Unlike payday loans, in which borrowers sign over part of their next paycheck for the cash advance, the credit unions' new products have longer terms, from thirty days to a year.
*snip*
The small loans provide a new, though minor, source of revenue for the institutions. The number of loans they issue is tiny compared with the large volume once generated by the payday lenders. In 2006, the latest year for which figures are available, the two largest payday lenders in the District made a total of 260,000 loans, worth $125 million. This year, by comparison, "stretch pay" programs -- payday-loan alternatives offered at 43 credit unions nationwide -- have issued only 8,656 small-dollar loans. Just a few hundred of those were made in the District.

Usury continues. People need this payday scam because they are used to it now. If it became unavailable again like it was before Nixon, we would not see people who are poor, overspending nonstop. Back when I was younger, the Mafia was the lender of last resort. And they were paid or else. Boom. So people didn't go to them lightly. There was naked fear. The interest rates charged on these loans are ridiculous and should be illegal. But there is no FEAR involved so people are increasingly falling into the clutches of this system. In DC, it is gone. But DC is very small. Everyone simply drives for an hour and bingo! There they are!

Just like gambling has spread like a blight. These crummy, destructive systems are everywhere and are wrecking our morals and our social systems! When gambling was illegal, again, one got the satisfaction of breaking the law [I was once a hippie, we loved breaking arcane or stupid laws] while not going right off the financial cliff like when things are legal. When they are legal, there are no barriers! So people fall apart, fast. There is no fear, so people don't fear doing things that eat up their wealth and destroy their health. So it is rather funny to say that making some things illegal is actually rather useful.

East Hampton Reels as Billionaire Town Floats Debt

(Bloomberg) -- East Hampton, New York, where billionaire Ron Baron paid $103 million for an oceanfront estate last year, may have to borrow to close a deficit, as even the richest towns get pinched by rising costs and lower revenue.

The Long Island sanctuary for the rich, where lobster salad sells for $85 a pound, has been hit by a double whammy: a tripling in workers' health costs since 2003, which officials failed to anticipate, and a 43 percent drop in revenue from mortgage taxes related to real estate sales in the first half of the year from 2007. Town officials for the first time plan to reduce the deficit by borrowing, after winning state approval for a $15 million bond sale.

California is broke. Der Terminator is terminating jobs, cutting wages, shoving hard to move everything downwards. Last year, California boasted about being one of the richest states in America and equal to most major countries like say, Japan or England! Now, it is falling apart. California's wealth was based on a debt pyramid of huge proportions. Its ports were busy destroying the US trade surplus and helped to make it record deficits. Irresponsible house building and bidding up of properties was utterly out of control there. California is now busy bankrupting not just America but the entire planet earth! Gah! Talk about insane!

Now, the tsunami if debt is crashing into the Gold Coast of New York, the other financial pole in the US. The Tristate Port Authority also is working hard to destroy our trade balance. I can see gargantuan ships with no names on them, sailing into harbor to disgorge Toyotas or computers or whatever. The rich financiers are now 'leveraged' to the point, they can't fix their own debts despite 4 years of multi-million dollar bonuses. They created this entire mess alongside the Federal Reserve. And they lobbied Congress to do the crummy things they did and everyone is at fault because everyone thought that DEBT WAS WEALTH. It is obviously not.

So about the budget and trade deficits? This is what we should have Congress talk about. This week, Bush and Congress are happy because they promised to pay drug companies $40 billion over the next five years to save foreigners with AIDs. This would be wonderful except they are NOT raising taxes to pay for this generosity. This is just a typical example of how our empire is destroying our finances. Either Congress cuts $40 billion from the Pentagon or they should say, 'Sorry, we can't even save Americans, forget the entire planet.'

45 million Americans have no health insurance. We could start there, just for one example.

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