The Fraud Is Rampant

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Though private fraud gets the bigger headline (think Bernie Madoff), fraud in federal government programs is now so pervasive that even the Obama press is taking notice. The scope of fraud in all federal programs dwarfs the corruption in the private sector the media loves to sensationalize.

Consider the fraud in the Wall Street bailout. Here's just one example.

This past week, the Inspector General for the TARP $700 billion bailout reported that taxpayers will "almost certainly" lose money on their investments in the "too big to fail" financial institutions. One reason, it’s safe to say, is contained in Neil Barofsky’s revelation that he is conducting 65 separate investigations of possible fraud involving TARP funds.


Barofsky criticized then-President of the New York Federal Reserve (and now Treasury Secretary) Tim Geithner specifically for the bailout of one of those institutions, AIG (American International Group), the largest insurance conglomerate in the world. Barofsky says that the initial $85 billion credit line given AIG came with a bailout plan designed by Geithner the terms of which “were unworkable".

That's being polite. The Barofsky report documents that credit default swaps worth 40 cents on the dollar were bought at 100 cents on the dollar under the Federal bailout terms, funneling "tens of billions of dollars of government money...inexorably and directly to AIG's counterparties"--including Goldman Sachs.
That's being polite. The Barofsky report documents that credit default swaps worth 40 cents on the dollar were bought at 100 cents on the dollar under the Federal bailout terms, funneling "tens of billions of dollars of government money...inexorably and directly to AIG's counterparties"--including Goldman Sachs.

According to Bloomberg news this week, Geithner arranged for Goldman Sachs to receive full payment on credit default swaps they had purchased rather than 40 cents on the dollar AIG proposed. A Fed-run entity called Maiden Lane III was used to sell these CDSs, which cost American tax payers at least $13 billion dollars at the time. It is currently estimated that due to a continuing decline in value, this bank favoritism case could cost the American tax payer $35.6 billion.

To quote Bloomberg: "The deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, Stephen Friedman, was chairman of the board of directors of the New York Fed when the decision was made."

LINK HERE

Congressman Describes Economic Collapse and Tells Tim Geithner To Step Down (Video)

ICE probing spike in dollar index futures
LONDON (MarketWatch) -- The IntercontinentalExchange is probing trades in U.S. dollar index futures that briefly showed a massive 9% jump on Friday morning.
The lead contract surged as high as 82.18, up from a 75.38 close on Thursday.
LINK HERE

Forbes: Commercial Collapse will be Catastrophic For Economy

The long-feared financial disaster is still looming. Bad court decisions could set it off.

The commercial real estate market is on its last legs and unless drastic actions are taken, the effects on the broader economy will be catastrophic. The obvious problem is the excessive amount of debt placed on the properties and the amount of debt that has to be refinanced during a relatively short period of time.

Between now and 2013, at least $1.3 trillion of financing comes due, of which $160 billion was the result of securitizations. Unfortunately, as a result of the virtual disappearance of the secondary market, the weakened condition of the banks, and the amount of debt already held by insurance companies and pension funds, even under the best of circumstances, less than half of the outstanding debt can be refinanced. This is compounded by the collapse of the commercial rental market in the last 18 months as a result of the Great Recession. For example, office rents in prime areas of Manhattan that were in the $100-$120 a square foot range in 2007 are now trading (with rent concessions and work letters) at half that amount.
After two years of one financial crisis after another, the Fed has fewer cards to play, and the foreign investors who bailed out commercial real estate investors in the past are sitting on the sidelines waiting for the prices to collapse. This problem is exacerbated by the lingering effects of the recession: absence of credit; growing job losses as a result of falling prices, consumer demand and credit; the insolvency or near insolvency of so many institutions; and the loss of confidence in the U.S. economy by our trading partners
LINK HERE

Prepare for the Great Depression.
Survival Seeds

NATIONAL EMERGENCY: Trillions Stolen

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This crime makes Bernie Madoff’s look like an elementary school lunch money stickup. No, I’m not talking about the hundreds of billions in the housing crisis scam cooked up by JP Morgan and Goldman Sachs that left millions homeless and investors suckered the world over, or even the $2.75 trillion oil futures market scam that has siphoned 50% of all our spending on gas and fuel.

These huge scams are just diversions from the ultimate crime.

Trillions of dollars, trillions of our money, of our tax money - the money that comes out of your paycheck every week of your working life, all the thousands upon thousands that have been taken away from you and your family and are supposed to fund our government and keep our society functioning - have been handed over to the economic elite, to the Llyod Blankfeins and Jamie Dimons of the world.

Hank Paulson and his confidant Tim Geitner, the Goldman Sachs wonder twins, have looted the US treasury. There has been an economic coup in the United States!

Trillions of our dollars have vanished! You need to understand this!
LINK HERE

Over 12% Of Mortgages 30 days Late. Second Housing Crash Coming

The U.S. housing market is sputtering again, adding to doubts about the vigor of the economic recovery.

Just a few months after housing showed signs of leveling off, bad weather and uncertainty over the extension of a home-buyer tax credit sent new-home starts in October tumbling 10.6% from the previous month. They fell to the lowest level since April, the Commerce Department said Wednesday. Starts of single-family houses fell 6.8%.

Industry consultant John Burns talks to reporter Nick Timiraos about where the market is headed and the significance of low mortgage rates, the home buyer tax credit and the FHA, which he calls the "new subprime."
Earlier this month, Congress expanded the tax credit and extended it through April, so building should improve. Still, the latest data portend poorly for the economy overall, and for fourth-quarter growth.

On Wednesday Pulte Homes Inc., the nation's largest home builder, warned investors of a grim outlook. "As we look out to 2010, we are expecting difficult conditions to continue," said chief executive Richard Dugas.

Meanwhile, more Americans who bought homes during the boom are falling into mortgage limbo. About 3.4% of U.S. households -- or about 1.9 million homeowners -- are 120 days or more overdue on their payments, but not yet in foreclosure, according to LPS Applied Analytics, a research firm in Denver. That is up from 1.5% a year earlier.

Many of these people are likely to lose their homes over the next few years. That means more bank-owned homes will hit a market already suffering from oversupply.
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The Debt Economy: Encouraged By Tax Codes

John Kenneth Galbraith wrote that all financial crises are the result of “debt that, in one fashion or another, has become dangerously out of scale.” The recent financial crisis was no exception, with everyone—homeowners, private-equity investors, our biggest banks—taking on enormous amounts of debt. If it’s frustrating that the government is footing the bill to clean up the mess, it’s even worse that the government helped pay for the debt binge that created the mess in the first place, thanks to a tax system that actually subsidizes borrowing. Debt didn’t get dangerously out of scale because the system was broken. It got out of scale, in part, because the system worked.
The government doesn’t make people go into debt, of course. It just nudges them in that direction.
ndividuals are able to write off all their mortgage interest, up to a million dollars, and companies can write off all the interest on their debt, but not things like dividend payments. This gives the system what economists call a “debt bias.” It encourages people to make smaller down payments and to borrow more money than they otherwise would, and to tie up more of their wealth in housing than in other investments.
LINK HERE

Prepare for the Great Depression.
Survival Seeds

China: You Think You Have Problems?

By Bill Bonner
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Chinese authorities are no dopes. They know they have a “floating” population of some 150,000 million people who are looking for work. They know that if they don’t find some way to keep these people occupied they are likely to cause trouble. Trouble is the thing China’s leaders most don’t want.

“You think you’ve got trouble,” Premier Hu Jintao might have replied to Mr. Obama. “Did you know that there are something like 200 million Chinese who still get by on as little as a dollar a day? Let’s face facts. You’re sitting there in Washington, comfortably talking about how much free health care and unemployment benefits to give the American people. We don’t have the time…or the money for those kinds of things. Too many Chinese people. They don’t earn enough to afford the kind of cradle-to-grave bribes you give your people. We have to keep them working; there’s no other way.

“Besides, we don’t quite see why we should pay for your mistakes. It wasn’t our economy that blew up. It wasn’t our financial industry that sold houses to people who couldn’t afford them. It wasn’t our consumers who spent more than they had and went too deeply into debt.

“It’s the debtor who’s supposed to pay, not the lender. We’re the lender!”

Behind all the superficial arguing, accusing and kvetching, however, is a sick relationship. It has give and take. But the US is all take. China is all give. And now, on both sides, public authorities make the same mistake. In the US, they try desperately to prod Americans to take more…to continue doing what they were doing wrong. They offer incentives of every sort to lure consumers to consume even more. And their solution to the debt overhang is to hang on even more debt.


In China, meanwhile, the authorities desperately prod their people to give more…to produce more. Or, at least to build more plant and equipment with which to turn out more goods.
LINK HERE

Education Fees Hiked So Much Riots Breakout!
Students, furious at the increase that will bring their yearly fees above $10,000 for the first time, rushed the UCLA building where the regents were meeting, throwing food, sticks and vinegar-soaked red bandannas meant to look like blood.
LINK HERE

Mainstream News: $4.8 trillion - Interest on U.S. debt

Note: The Top Derivative Holders Chart on Left. The Debt pales in comparison to the major derivative problems about to unwind.
Unless lawmakers make big changes, the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels.

NEW YORK (CNNMoney.com) -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.

If that's hard to grasp, here's another way to look at why that's a problem.

In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a deficit watchdog group.

On the bright side - such as it is - the record levels of debt issued lately have paid for stimulus and other rescue programs that prevented the economy from falling off a cliff. And the money was borrowed at very low rates.
LINK HERE

Pontiac Silverdome Built For 55 Million-Sold for 583,000

Wouldn't this be the best thing you could do if you had an extra $583K? What a yard! You want to have a party? How about seating for 80,300 guest? Worried about parking at your current party house? The Silverdome has a 130-acre parking lot. Tent rentals can be a pain in the ass, but not with one of the largest enclosed single room buildings in the world.

Talk about a electronic playhouse. I'm not sure whether the Jumbo tron is still in there, but if so, hook that baby up to DirecTv and you've got 1080P across 30 or 40 feet. The sound system? They have more speakers in the Silverdome than you can count.

The furniture is on the low end, but you can leave the 77,000 plastic seats for the late arrivals. The 103 suites are nicely appointed and the owner's (that's you) suite is downright swanky. I'm sure the City of Pontiac cleared out the hooch, but stocking the bars is easy. You have a bunch of college friends, set each up in a suite for a weekend of flag football, soccer, or demolition derby.

How many people in the world own a place that has hosted Elvis, Led Zeppelin, Pink Floyd, Grateful Dead, Rolling Stones, two Super Bowls, a Final Four, and an NBA All-Star Game? Only you, Brother.

Prepare for the Great Depression.
Survival Seeds

65,000 Apply for 2,000 Jobs At VW Plant

Pamela Glant of Chattanooga says she sought a production job with Volkswagen's local auto assembly plant to improve her standard of living.

"I think I could do the work and I'd like to be tested," she said.

Ms. Glant is one of 35,000 people who applied for the 1,200 production jobs over the past three weeks, the company said Monday.

About 30,000 others have applied for the 800 professional and skilled maintenance slots so far, according to VW.

"We are overwhelmed by the response and we are very satisfied with the result," said Hans-Herbert Jagla, executive vice president of human resources for VW's Chattanooga operations. "It gives us the confidence that we will be able to hire all the capable and flexible people we need to build our cars safely and with the highest quality."

Late Sunday, VW closed a three-week application window for the production jobs. The plant is slated to start making cars in early 2011 and employ 2,000 people.

Ryan Rose, VW's general manager of human resources in Chattanooga, said the next step for the production jobs is an assessment process.
LINK HERE

Penn Traffic files for bankruptcy, to sell stores
LINK HERE

Cap and Trade Bill: You Will Not Be Able to Sell Your Home Unless...

A License Required for your house

Thinking about selling your house - A look at H.R. 2454 (Cap and trade bill) This is unbelievable!


Only the beginning from this administration! Home owners take note & tell your friends and relatives who are home owners!

Beginning 1 year after enactment of the Cap and Trade Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the "Cap & Trade" bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced.

The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year.
No one is excluded.
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A year from now you won't be able to sell your house. Yes, you read that right.
The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes ("mobile homes") are included.
In effect, this bill prevents you from selling your home without the permission of the EPA administrator.
To get this permission, you will have to have the energy efficiency of your home measured.
Then the government will tell you what your new energy efficiency requirement is and you will be forced to make modifications to your home under the retrofit provisions of this Act to comply with the new energy and water efficiency requirements.
Then you will have to get your home measured again and get a license (called a "label" in the Act) that must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner.
If you don't get a high enough rating, you can't sell. And, the EPA administrator is authorized to raise the standards every year, even above the automatic energy efficiency increases built into the Act.
LINK HERE

Société Générale has advised clients to be ready for a possible "Global Economic Collapse"

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As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.
Under the French bank's "Bear Case" scenario, the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.
Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade
Inflating debt away might be seen by some governments as a lesser of evils.
If so, gold would go "up, and up, and up" as the only safe haven from fiat paper money. Private debt is also crippling. Even if the US savings rate stabilises at 7pc, and all of it is used to pay down debt, it will still take nine years for households to reduce debt/income ratios to the safe levels of the 1980s.
The bank said the current crisis displays "compelling similarities" with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.
LINK HERE

Prepare for the Great Depression.
Survival Seeds

Will The Ukraine "Baxter" Viral Flu Collapse The World Economy?

(NaturalNews) Here's what we know with some degree of certainty about the H1N1 virus in Ukraine right now: nearly 300 people have died from the viral strain, and over 65,000 people have been hospitalized (the actual numbers are increasing by the hour). The virus appears to be either a highly aggressive mutation of the globally-circulating H1N1 strain, or a combination of three different influenza strains now circulating in Ukraine. Some observers suspect this new "super flu" might be labeled viral hemorrhagic pneumonia (meaning it destroys lung tissue until your lungs bleed so much that you drown in your own fluid), but that has not been confirmed by any official sources we're aware of.
LINK HERE

Complete Details Here
There are now 1.3 million infected in Ukraine, and over 75,000 hospitalized -- IN FOURTEEN DAYS. This is very serious! Based on previous clinical data we can expect over 8,000 to be dead or soon to be dead. Forward projection of the epidemic is difficult because the clinical attack rate is unknown -- but myself and my associates remain concerned it may be quite high. Deaths globally may be in the millions. Let's hope this is not the case.
LINK HERE

2 Million Infected NOW-Thousands Dead
LINK HERE

FDIC Stuck With 1.8 Billion Worth of Junk Real Estate

ATLANTA -- In the waning days of the Great Recession, the federal government is still jumpstarting the economy and propping up financial markets.

It is also trying to sell Dresden Heights, a failed condo development on a noisy freeway ramp next to a Motel 6, a Waffle House and a Do-It-Yourself Pest Control.
For more than a year, the Federal Deposit Insurance Corp. has been seeking a buyer for 36 partially built condos it inherited from a high-flying, short-lived Atlanta bank. The agency has been fending off vandals, haggling with architects and uncovering the developer's blunders, all in a bid to dispose of this condo project, just one of the 2,554 foreclosed assets dumped onto its books. "These are properties with a bad story," says Jim Gallagher, a senior official in the FDIC's Division of Resolutions and Receiverships. "What we're trying to sell is something that is rundown or not completed or has some property damage."

The financial crisis started with Americans buying homes they couldn't afford. It is ending with the government struggling to sell buildings it never wanted.

In the past two years, the FDIC has taken over 150 failed banks. In the process, it has seized more than 5,000 houses, subdivisions, buildings, parcels and other foreclosed assets. The current backlog of property stuck on the agency's books, with an appraised value of $1.8 billion, ranges from an $18,700 clapboard home with stained carpets in Birmingham, Ala., to a $1.7 million mountainside lodge with a heated driveway in Steamboat Springs, Colo.
LINK HERE

The Next 7 Million Job Loss Coming

The hype is that the "recession is over." Has anyone touting this line actually walked around the real world? The next 7 million jobs to be lost are already in the pipeline.
The divergence between the reality easily observed in the real world and the heavily touted hype that "the recession is over because GDP rose 3.5%" is growing. It's obvious that another 7 million jobs which are currently hanging by threads will be slashed in the next year or two.

According to the latest Employment Situation Summary (Bureau of Labor Statistics) dated November 7, 2009:

Total nonfarm payroll employment declined by 190,000 in October. In the most recent 3 months, job losses have averaged 188,000 per month, compared with losses averaging 357,000 during the prior 3 months. In contrast, losses averaged 645,000 per month from November 2008 to April 2009. Since December 2007, payroll employment has fallen by 7.3 million.
Civilian labor force: 154 million
Employment: 138.3 million
Unemployment: 15.7 million
Sept-Oct. change in employment: -589,000
in unemployment: 558,000
Not in labor force: 82,575,000
It is staggering that 7 million jobs lost out of 145 million (the total prior to the financial meltdown) has created a 10.2% unemployment rate.
LINK HERE

GEAB N°39 is available! Global systemic crisis – States faced with three brutal options in 2010: inflation, high taxation or default
LINK HERE

The Big Take Over: US Wants China to Buy into Its Small Banks

Chinese and U.S. regulators are negotiating a pact aimed at encouraging Chinese financial institutions to buy into small and medium-sized banks in the United States, bankers briefed on the plan said on Tuesday.

Chinese bankers have complained that it's been difficult for them to set up branches or invest in banks in the world's leading economy, due partly to U.S. regulators' tough supervision and strict approval process for financial deals.

But the global financial landscape has been revamped by the credit crisis, and cash-rich Chinese banks are now bigger players on the world scene and are scouting around for investment targets.
LINK HERE

Gold Bull Market Not Manic Yet-$8,000 or More Coming?

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There have been numerous gut-wrenching corrections on gold's journey in price from a low of US$256 back in early 2001 through its recent run past US$1,100, but gold has continued to rise inexorably. Each time it pulls back, the media give reasons why it was just a bubble and it's deflating. They're wrong.

Look at the strength in gold just this year.

Gold is simply the inverse of the dollar, which is worth less and less every year. The dollar has its short-term reversals, but that's all they are, just as gold's pullbacks are short-term corrections.

What is the top for gold? I don't know. But I know it isn't there yet. How do I know? Because the vast majority of the public still doesn't take the metal's rise seriously. What happened to tech stocks will happen to gold. What happened to oil will happen to gold. What happened to housing will happen to gold. It will have a parabolic move. And since it's a much more liquid asset than housing, the move will be more like oil in 2007–08 when it jumped from US$80 to almost US$150 a barrel, or tech stocks in 1999–2000, when the Nasdaq 100 jumped 88%.

When gold is near a top, it will be all over the mainstream media, not just the financial media. People will say that buying gold is a no-brainer, and we'll probably hear numbers like US$8,000 an ounce or more.
LINK HERE

Get Prepared History is About To Repeat Itself

LOS ANGELES -- It's coming in 2012: Another, bigger meltdown of Wall Street's "too-greedy-to-fail" banks. No, this is not another fanatical warning about that Dec. 21, 2012 end-of-days prediction based on the Mayan calendar, though you may well ask "Who will survive?"

Here is what's happening: History is repeating itself. Wall Street's soul-sickness is setting up a new meltdown. Dead ahead. Be prepared.

My track record speaks for itself. Back on March 20, 2000, my column headline read: "Next crash? Sorry, you'll never hear it coming." Bull's eye: The dot-com bubble popped at 11,722. The economy collapsed. A 30-month recession. Markets lost $8 trillion. Today the market is still below that 2000 peak. Factor in inflation and Wall Street's "too-greedy-too-fail" banks have lost about 30% of your retirement nest eggs in this decade. Incompetent? Clueless? No, Wall Street is a bunch of crooks without consciences.
LINK HERE

Prepare for the Great Depression.
Survival Seeds