Buffet predicts: ONSLAUGHT OF INFLATION-Buy GOLD and SILVER

In his long awaited annual letter to shareholders, Warren Buffet reflected on the economic crisis, the coming inflationary pressures, and his own personal mistakes. “During 2008 I did some dumb things in investments. I made at least one major mistake of commission and several lesser ones that also hurt,” he explains.

Speaking of the government response to the nations economic crisis, he writes:

“This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone ‘all in.’ Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel.”


He goes on to explain the foreseeable inflationary threat:

“These once-unthinkable dosages will almost certainly bring on unwelcome
aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.”

On the issue of moral hazard, he says that “major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political
challenge. They won’t leave willingly.”

In 2008, Mr. Buffet’s Berkshire Hathaway suffered a decrease in book value per share of 9.6%, only the second such decline in Berkshire’s 44 year history. The price of his company’s stock has dropped over 50% since the 2007 peak of $151,600 per share.

Buyers giving up MILLION DOLLAR Deposits in this REAL ESTATE COLLAPSE!

THE real estate market in Manhattan has become so unnerving to buyers that some are forfeiting six-figure deposits rather than close on deals they have made.

At 304 Spring Street, a sleek condominium building in SoHo with stunning Hudson River views, the buyer for the duplex penthouse recently decided he would not go through with the deal and walked away from a $780,000 deposit.

At 1120 Park Avenue, a classic prewar co-op filled with multimillion-dollar apartments, it appears that a buyer forfeited a deposit of as much as $1.1 million.
At 304 Spring Street last August, a buyer went into contract on a three-bedroom three-bath penthouse with three terraces, for $7.8 million. But when the market ground to a near-standstill in October, the buyer, a professional basketball player, backed out of the deal and gave up his deposit, said Richard Orenstein, an executive vice president at Halstead Property.

The penthouse, which first went on the market in October 2007 at $9.25 million, has since been appraised at $6.5 million, and its owner has decided to offer the property in a sealed-bid auction-like process in March, with a starting bid of $4.995 million.

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Most Irish Pension Funds INSOLVENT-Coming to North America

By Charlie Weston, Personal Finance Editor
Friday February 27 2009
LOSSES in pension funds are so large that most of them are now insolvent, pension fund managers told the minister with responsibility for pensions, Mary Hanafin, last night.
The Irish Association of Pension Funds (IAPF) told the minister there was an urgent need for an examinership process for pension funds.

The Minister for Social and Family Affairs was also told there was a need for later retirement, a State annuity scheme and a bar on companies walking away from pension fund responsibility when there was a deficit.

IAPF chairman Patrick Burke said that in the last 20 months Irish pension funds had suffered the largest losses ever recorded, with deficits of €30bn.

"These losses have left most defined benefit schemes in circumstances of very serious insolvency and many at the edge of an abyss with little or no assets to pay the liabilities due to current and former employees who have yet to retire," he told the annual dinner of the association.

Urgent action was needed to protect the benefits of members of pension schemes, he said. But the current legislative framework was utterly deficient, he told Minister Hanafin.

"On the legislative front, much more remains to be done from the critical perspective of protecting members and the sustainability of defined benefit provision in the private sector," Mr Burke added.

The IAPF, along with the Society of Actuaries, have submitted a number of proposals to rescue defined benefit pensions, where employers take on the investment risk and promise a set level of pension.

The two bodies said there should be a change to benefits given out as part of defined benefit schemes.

Examples of this include people drawing down their pension at 67 rather than 65, or getting a reduced pension from 65 until some later date.
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Europe's Crisis: Much Bigger Than Subprime, Worse Than U.S

Europe's Crisis: Much Bigger Than Subprime, Worse Than U.S.
Posted Feb 27, 2009 08:00am EST by Henry Blodget

John Mauldin, president of Millennium Wave Advisors, was among the few analysts whose forecasts for 2008 proved accurate. Mauldin, author of the popular "Thoughts from the Frontline" e-letter, joined us to discuss the economic situation in Eastern Europe.

From The Business Insider:

If you think things are bad here, take a quick peek at what's going on across the pond:

The Telegraph: Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay – or roll over – $400bn this year, equal to a third of the region's GDP. Good luck. The credit window has slammed shut.

Not even Russia can easily cover the $500bn dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36pc of its foreign reserves since August defending the rouble.

"This is the largest run on a currency in history," said Mr Jen.

In Poland, 60pc of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story. As an act of collective folly – by lenders and borrowers – it matches America's sub-prime debacle. There is a crucial difference, however. European banks are on the hook for both. US banks are not.

Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74pc of the entire $4.9 trillion portfolio of loans to emerging markets.

They are five times more exposed to this latest bust than American or Japanese banks, and they are 50pc more leveraged (IMF data).

Spain is up to its neck in Latin America, which has belatedly joined the slump (Mexico's car output fell 51pc in January, and Brazil lost 650,000 jobs in one month). Britain and Switzerland are up to their necks in Asia.
Eastern Europe has borrowed an estimated $1.7 trillion, primarily from Western European banks. And much of Eastern Europe is already in a deep recession bordering on depression. A great deal of that $1.7 trillion is at risk, especially the portion that is in Swiss francs. It is a story that could easily be as big as the US subprime problem.

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The Sudden Spectacular Crash of the GLOBAL ECONOMY

In a short period of months, the entire system of global capitalism has screeched to a halt. No one knows what happens next.
The worldwide economic meltdown has sent the wheels spinning off the project of building a single, business-friendly global economy.

Worldwide, industrial production has ground to a halt. Goods are stacking up, but nobody's buying; the Washington Post reports that "the world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores." A Hong Kong-based shipping broker told The Telegraph that his firm had "seen trade activity fall off a cliff. Asia-Europe is an unmit igated disaster." The Economist noted that one can now ship a container from China to Europe for free -- you only need to pick up the fuel and handling costs -- but half-empty freighters are the norm along the world's busiest shipping routes. Global airfreight dropped by almost a quarter in December alone; Giovanni Bisignani, who heads a shipping industry trade group, called the "free fall" in global cargo "unprecedented and shocking."
SNIPPET:
After the collapse of the dot-com bubble and the recession that followed it, the economic “expansion” of the Bush era was the first on record in which median incomes never got back to where they were before the crash. Fortunately for Wal-Mart shoppers, a massive housing bubble was rising. Americans started financing their consumption by taking chunks of equity out of their homes. The result: in 2005, long before the housing bubble crashed, the average amount of equity Americans had in their homes was already the lowest it had ever been.

We hear a lot of chatter about a “credit crunch” being at the root of our economic woes -- that banks aren’t lending to otherwise qualified individuals and businesses. The truth, however, is that before the housing (and stock) markets crashed, the average American household already had 20 percent more in debt than it earned in a year.
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Icelanders storm their Central Bank

Icelanders marked their 90th anniversary of sovereignty from Denmark Monday by taking to the streets in protest against the rapid devaluation of their currency and storming their Central Bank, Seðlabanki.

The tiny Nordic nation of 300,000, which only last May was named “The Happiest Place On Earth” by the UN, saw its fortunes turn on its head in a matter of days in October after its banks, Kaupthing, Landsbanki and Glitnir, collapsed under the weight of billions of dollars of debt accumulated in an aggressive overseas expansion. While all three banks have been nationalized, Glitnir filed for bankruptcy protection on November 26th and Iceland’s largest bank, Kaupthing, filed on Monday.

Thousands attended a peaceful anti-government rally in downtown Reykjavik, chanting slogans, carrying signs and singing.

The rally then developed into a march on the Icelandic Central Bank, where the crowd of several hundred held a tense stand off with riot-gear-clad police. Protesters calling for the sacking of Central Bank chair David Oddsson threw eggs and red paint at the building, but were prevented from entering by the riot police. The crowd refused to leave “until the curly haired man leaves too”, referring to Oddsson. The protest ended peacefully after Police Chief Geir Jon Thorisson entered the crowd and rationally persuaded the protesters to leave as the riot police withdrew from their positions.
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Moody's predicts default rate will exceed peaks hit in Great Depression

A bigger proportion of non-investment grade companies will go bust in the US and overseas in the coming years than during the Great Depression, according to Moody's, one of the world's foremost experts on credit.

By Edmund Conway, Economic Editor
Last Updated: 7:42PM GMT 26 Feb 2009
In what will be seen by many as die-cast confirmation that the world economy is plummeting towards an economic and corporate implosion of unprecedented proportions, Moody's said it anticipated a tidal wave of defaults was approaching.
It said that in the coming months more than 15pc of speculative-grade bonds and loans - all but the most highly-rated - would default on their debts.
This peak is even higher than the peak reached in 1933, when bank after bank throughout America was collapsing, taking hoards of other companies with them. Back then, the default rate peaked at 15.4pc; moreover these companies were former investment grade issuers regarded as more reliable credit prospects than their contemporary counterparts.
Kenneth Emery, senior vice president at Moody's said: "The three main drivers of the forecasting model are forecasts for the high-yield bond spread and the unemployment rate, along with the current level of issuer ratings. In the fourth quarter, the high yield bond spread reached unprecedented levels; and we've got an unemployment forecast approaching 9pc this year and issuer ratings at record low levels.
"We certainly think that this credit cycle will be worse than the last two in the early 1990s and 2000s. In fact, in 2009 we expect to see the largest number of defaults since the advent of high yield bond market in the early 1980s. And the default rate for non-investment grade bonds may reach levels even higher than those registered during the Great Depression.
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Mass Layoffs in S. Florida-Depression hitting hard

Employers have been dismissing more workers in mass layoffs in recent months, both nationally and in South Florida.

BY SCOTT ANDRON
SANDRON@MIAMIHERALD.COM
After 21 years at the same Fort Lauderdale boat company, Robert Mulder lost his job. Mulder was laid off in November along with dozens of his co-workers, and now they face a job market that's expected to get worse.

Mass layoffs are putting more people like Mulder out of work. The U.S. Department of Labor said Wednesday that 238,000 people lost their jobs in mass layoffs nationwide in January, a 60 percent increase from January 2007.

Nearly 2,600 people have been affected in Broward and Miami-Dade counties so far this year -- and it's only February.

This time last year, the number was less than 900.

Many of them face the prospect of long-term unemployment. Mulder and countless others, well-established in their careers, were suddenly thrust into a labor market that hasn't enough jobs to go around.

''It's pretty tough out there,'' said Mulder, who was his company's accounting manager and assistant controller. ``Hopefully something will turn around, but you listen to the news and you get more depressed about what's going to happen. I'm looking for stuff at lower salaries, temp to perm, anything.''

But the cuts won't affect only the people whose jobs are eliminated. As the number of available jobs shrinks, competition will be keen for whatever's left. That could push down wages.

''It isn't just bad for people who are losing their jobs,'' said Bruce Nissen, a labor sociologist at Florida International University. ``It's bad for everybody in terms of our incomes.''

The layoffs, which the Labor Department says affected 19,301 Floridians in January, cut across industries and geography.

The department defines mass layoffs as those involving 50 or more workers at a single company. Florida companies sometimes disclose smaller cuts to the state but also may fail to disclose larger cuts.
Snippet:
Whatever the causes, mass layoffs can have a deep and lasting effect. Those laid off tend to be older and have years invested in their careers, said University of Florida economist Dave Denslow.

These people have found work they are comfortable with, and are abruptly forced to start over.

''It takes them a long time to find a new job,'' Denslow said, adding they often have to take a pay cut. What's more, research suggests that even years later, they may still be making less than their peers who were never let go.

''On average,'' Denslow said, ``you're hurt forever.''

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16 Nations to Default

Globe and Mail Update
February 26, 2009 at 11:53 AM EST
The International Monetary Fund says the financial crisis could push as many as 16 nations into default, and that it will need to double its lending capacity to mount an appropriate response.

In a 31-page report released today in Washington, the fund argues that it will need the equivalent of about $500-billion (U.S.) to prop up governments that have been crushed by the collapse of the global economy.

The report specifically noted that there's a high likelihood that more nations in Eastern Europe will come to the IMF for help.

“The institution's global membership, as well as its capacity to catalyze broader sources of financing, further reinforce the importance of it maintaining a central role in the provision of balance of payments support,” the report said. “To play this role credibly, however, the fund must have resources commensurate to the magnitude of the problems at issue.”

IMF leader Dominique Strauss-Kahn

The report serves as intellectual backing for the fund's managing director, Dominique Strauss-Kahn, who began pushing the world's richer countries for additional financial support earlier this month.

Japan was the first to respond, pledging an additional $100-billion to the IMF at a meeting of Group of Seven finance ministers and central bank governors in Rome on Feb. 14.

The G7 as a group said they supported giving the IMF greater resources, but stopped short of endorsing an amount.

Today's report advocates that the national governments that control the fund give Mr. Strauss-Kahn the authority to raise money by issuing bonds, suggesting the politics of getting countries to follow Japan's lead could take too long.
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Economic Crash will create huge RIOTS Worldwide

The global economic meltdown has already caused bank failures, bankruptcies, plant closings, and foreclosures and will, in the coming year, leave many tens of millions unemployed across the planet. But another perilous consequence of the crash of 2008 has only recently made its appearance: increased civil unrest and ethnic strife. Someday, perhaps, war may follow.
As people lose confidence in the ability of markets and governments to solve the global crisis, they are likely to erupt into violent protests or to assault others they deem responsible for their plight, including government officials, plant managers, landlords, immigrants, and ethnic minorities. (The list could, in the future, prove long and unnerving.) If the present economic disaster turns into what President Obama has referred to as a “lost decade,” the result could be a global landscape filled with economically-fueled upheavals.
Indeed, if you want to be grimly impressed, hang a world map on your wall and start inserting red pins where violent episodes have already occurred. Athens (Greece), Longnan (China), Port-au-Prince (Haiti), Riga (Latvia), Santa Cruz (Bolivia), Sofia (Bulgaria), Vilnius (Lithuania), and Vladivostok (Russia) would be a start. Many other cities from Reykjavik, Paris, Rome, and Zaragoza to Moscow and Dublin have witnessed huge protests over rising unemployment and falling wages that remained orderly thanks in part to the presence of vast numbers of riot police. If you inserted orange pins at these locations — none as yet in the United States — your map would already look aflame with activity. And if you’re a gambling man or woman, it’s a safe bet that this map will soon be far better populated with red and orange pins.
By one estimate, the six days of riots caused $1.3 billion in damage to businesses at the height of the Christmas shopping season in Greece cities.
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Las Vegas Real Estate down an incredible 53% since 2006

Since the peak of the economic boom in 2005/6, I've been writing that Las Vegas was extremely vulnerable and would ultimately feel the brunt of any economic downturn.

Many, based on previous history, felt that I was wrong and thought the city would be insulated from any recession, as peoples' "vices" would still need to be serviced and they would always be willing to spend in doing so..

See this link for more on this topic: The Las Vegas gravy train has ended link

Anyway, with the cheap-credit infused prosperity of the early decade, Las Vegas experienced one of the nation's steepest rise in home values - as the masses of soon-to-be millionaire investors flocked to the city to compete with the 6,000 or so new LV monthly residents who came to fill the many new service sector/gaming jobs created by the massive hotel/gaming construction boom - spawned by easy credit and analyst profit predictions that reached to the never-ending future... But I digress.

Ultimately, the factors above, combined with creative financing - which provided affordability regardless of price - created a massive demand for homes and inventories were quickly gobbled up - causing prices to go parabolic as they reached out and touched the stratosphere.

But the party eventually had to end - regardless of what all the kool-aid drinkers wanted one to believe.

Last year I wrote that the median house price in Las Vegas would ultimately fall to levels seen in 1999 - Las Vegas homes for $60 a Square Foot?

Well, based on recent data from Housingtracker.net, which is a combined look at condo and single-family home statistics, Las Vegas's median home values are currently down 40% YoY and 53% from April 2006 (April 2006 Median=$344,900; Today's Median=$162,500).

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Greeks shut airports, services to protest economy

ATHENS, Feb 25 (Reuters) - Greeks disgruntled by their country's economic woes ramped up protests against the government on Wednesday, shutting down airports and disrupting many public services.

Public schools and tax offices shut down, and services at ministries and public offices were suspended, as hundreds of workers marched to parliament with banners reading "No to pension reforms, privatisations and job cuts".

"Government policy ... only burdens workers, the unemployed and the poor," public sector umbrella union ADEDY, which represents 500,000 members, said in a statement.

The strikes are the latest in a wave of protests that have put pressure on Greece's conservative government, shaken by the worst riots in decades in December and struggling with a sharp economic downturn.

After years of 4 percent growth, Greece is seeing its economy sharply slowing down due to the global financial crisis. Workers accuse the conservative government, clinging to a one-seat majority in parliament, of only helping the rich.

"We will continue and intensify our struggle, until our demands are satisfied," ADEDY, which called the 24-hour strike, said.

National carrier Olympic airlines [OLY.UL] said 68 of its domestic and international flights were cancelled and four were rescheduled, while private rival Aegean Airlines (AGNr.AT) said 36 flights were grounded and 23 others disrupted.

The government, struggling with a huge public debt and fiscal deficits, has launched a 28-billion-euro ($36-billion) bank support plan, saying it meant to pour money into the slowing economy.

The strike was the latest in a series of public protests to hit the ruling conservatives. December riots were prompted by the police shooting of a teenager but fuelled by discontent over the economy and high youth unemployment.

In January, thousands of farmers protesting low product prices blocked border crossings, causing 11 days of travel chaos across Greece and hurting commercial transport. They ended the protest after securing a 500-million-euro aid package.

Truckers went on strike last week, demanding a crackdown on unlicensed transport companies and illegal economic immigrants, who they said were destroying goods and fighting drivers in their effort to stow away on board.

On Wednesday, they ended the five-day strike and blockades at the borders with Bulgaria and Greek ports, after transport ministry officials promised to start talks.

"Our strike is over, but only for now," said the president of Greek truck drivers federation, Apostolos Kenanides.
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Defaults by Franchisees Soar

Defaults by Franchisees Soar as the Recession Deepens
The recession is bruising businesses across the franchising industry.

From ice-cream parlors to tanning salons, franchisees' defaults on loans guaranteed by the U.S. Small Business Administration are piling up in amounts unseen in years. A list of loans at 500 franchises shows the number of defaults by franchisees increased 52% in the fiscal year ended Sept. 30, 2008, from fiscal 2007. Loan losses totaled $93.3 million, a 167% jump from $35 million just 12 months earlier.

The figures, a stark barometer of the downturn's severity and scope, could give pause to banks that have loan money about where to lend next. Banks that make SBA-guaranteed loans say they use the annual list as guidance in assessing future commitments.

SBA-guaranteed loans are aimed at providing capital to small businesses that often can't qualify for conventional credit. Those loans, made through commercial banks and other lenders, can total as much as $2 million for as long as 10 years. The SBA essentially insures a significant portion of the loan to encourage lending and small-business entrepreneurship. The recently passed stimulus package raises that guarantee amount to 90% from 75%.

The annual list, which shows the number of loan failures for the year and failure rates over eight years, is compiled by the SBA and published by the Coleman Report, a lending-industry trade publication based in La Canada, Calif.

The franchise brands where at least 11 franchisees defaulted on loans during the 2008 fiscal year were: Aamco Transmissions, Carvel Ice Cream, CiCi's Pizza, Cold Stone Creamery, Curves for Women, Domino's Pizza, Dream Dinners, Planet Beach tanning salons, Quiznos, Subway and Taco Del Mar.

'Overpriced Resales'

Gary Heavin, chief executive of Curves International Inc., says, "These loan problems were a result of the overpriced resales of franchises between third parties."

In an email, a spokesman for Domino's Pizza Inc. says that "while even one store closure or franchise default is sad and disappointing, the vast majority of the Domino's franchise community remains profitable, even in these unprecedented economic conditions."


A spokeswoman for Planet Beach Franchising Corp. says the company "experienced a higher 'failure' percentage particularly in the past two years." She adds that the company recognized the tanning industry faced a downturn and in 2005 "took steps to bring our business model into a completely new industry, the Contempo Spa" concept.

Dream Dinners Inc. CEO Darin Leonard says, "We are not involved in the transaction between an individual franchisee and their bank. As an organization, we are experiencing double-digit same-store sales increases in a very difficult retail climate."

A spokesman for Aamco Transmission Inc. said the company would have no comment. Quiznos franchiser QIP Holder LLC, Carvel Inc., CiCi Enterprises LP, Subway franchiser Doctor's Associates Inc. and Taco Del Mar didn't respond to calls seeking comment.
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Financial Guru: There will be BLOOD

HEATHER SCOFFIELD
Globe and Mail Update
February 23, 2009 at 6:45 PM EST
Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm.

The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.

Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same.

“There will be blood.”

Will invoking the Great Depression bring it on?
The Buy America penchant pushed by the U.S. Congress in passing the recent stimulus bill was only the tip of the iceberg.

Abu Dhabi buying Nova Chemicals at bargain-basement prices on Monday is a sign of things to come, with financial power quickly being transferred over to the world's creditors – namely sovereign wealth funds – and away from the world's debtors.

And much of today's mess is the fault of central bankers who targeted consumer-price inflation but purposefully turned a blind eye to asset inflation.

The Laurence A. Tisch professor of history at Harvard University, and author of The Ascent of Money, A Financial History of the World, sat down with The Globe and Mail's economics reporter, Heather Scoffield.

Heather Scoffield: Canadian leaders frequently argue that Canada is in better financial shape than elsewhere in the world, and therefore should fare better during this crisis. Do you agree?

Niall Ferguson: Canada is [considered] a winner because its banks are less leveraged, bank regulation here has been tighter, because its housing market hasn't been in a bubble quite the same way. It's tempting to conclude from that ... that Canada will be less hard hit in the crisis than the United States. But that is unfortunately wrong. Because this is a very unfair crisis. The epicentre is the United States, but the rest of the world, and particularly America's trading partners, will get hit harder than the U.S.”
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Bank blows MILLIONS with bailout money on PARTIES! Bank didn't even ask for the 1.6 BILLION!

Bailout Bank Blows Millions Partying in L.A.

Posted Feb 24th 2009 12:30AM by TMZ Staff

A bank that received $1.6 billion in bailout money just spent a fortune last week in L.A. hosting a series of lavish parties and concerts with famous singers ... and TMZ cameras caught it all.

Northern Trust, a Chicago-based bank, sponsored the Northern Trust Open at the Riviera Country Club in L.A. We're told Northern Trust paid millions to sponsor the PGA event which ended Sunday, but what happened off the golf course is even more shocking.
Northern Trust flew hundreds of clients and employees to L.A. and put many of them up at some of the fanciest and priciest hotels in the city. We're told more than a hundred people were put up at the Beverly Wilshire in Bev Hills, and another hundred stayed at the Loews Santa Monica Beach Hotel. Still more stayed at the Ritz Carlton in Marina Del Rey and others at Casa Del Mar in Santa Monica.

Here are the highlights:

- Wednesday, Northern Trust hosted a fancy dinner at the Ritz followed by a performance by the group Chicago.

- Thursday, Northern Trust rented a private hangar at the Santa Monica Airport for dinner, followed by a performance by Earth, Wind & Fire.

- Saturday, Northern Trust had the entire House of Blues in West Hollywood shut down for its private party. We got the menu -- guests dined on seared salmon and petite Angus filet. Dinner was followed by a performance by none other than Sheryl Crow.

There was also a fabulous cocktail party at the Loews. And how's this for a nice touch -- female guests at the Chicago concert all got trinkets from....TIFFANY AND CO.

As for what all that costs, well the company isn't talking. We spoke with a rep from the band Chicago who said Northern Trust paid them around $100,000. A House of Blues source told us it cost more than $50,000 to close the joint down last Saturday night. As for Sheryl Crow's fee, her rep didn't get back to us. Earth, Wind & Fire acknowledges payment but won't say how much.
Lots of people from Northern Trust went to the golf tourney ... in special Mercedes that shuttled them to and from the hotels. But for those who weren't into golfing, they could spend a few hours at the Northern Trust seminar on the credit crunch.
our tax dollars, hard at work.
Here's what's absolutely amazing -- the United States Government flat out gave Northern Trust the $1.6 billion in bailout money, and the bank didn't even request it!

Thomas Jefferson was right -- "A little rebellion now and then is a good thing."

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Massive Commercial Real Estate Bust in Beijing

Reporting from Beijing -- "Empty," says Jack Rodman, an expert in distressed real estate, as he points from the window of his 40th-floor office toward a silver-skinned prism rising out of the Beijing skyline.

"Beautiful building, but not a single tenant.
"Completely empty.

"Empty."

So goes the refrain as his finger skips from building to building, each flashier than the next, and few of them more than barely occupied.

Beijing went through a building boom before the 2008 Summer Olympics that filled a staid communist capital with angular architectural feats that grace the covers of glossy design magazines.

Now, six months after the Games ended, the city continues to dazzle by night, with neon and floodlights dancing across the skyline. By day, though, it is obvious that many are "see-through" buildings, to use the term coined during the Texas real estate bust of the 1980s.

By Rodman's calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan. And that doesn't include huge projects developed by the government. He says 100 million square feet of office space is vacant -- a 14-year supply if it filled up at the same rate as in the best years, 2004 through '06, when about 7 million square feet a year was leased.

"The scale of development was unprecedented anywhere in the world," said Rodman, a Los Angeles native who lives in Beijing, running a firm called Global Distressed Solutions. "It defied logic. It just doesn't make sense."

Construction cranes jut into the skyline, but increasingly they are fixed in place, awaiting fresh financing before work resumes.

Boarded fences advertise coming attractions -- "an iconic landmark" or "international wonderland" -- that are in varying states of half-completion. A retail strip in one development advertised as "La Vibrant shopping street" is empty.
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Analysts: A New Era of CHAOS all over the GLOBE

Steve Watson
Infowars.net
Monday, Feb 23rd, 2009
A wave of economists, investors and other financial experts issued a series of dire warnings concerning the global financial crisis over the weekend, stating that a new era of chaos has taken hold all over the globe.
Some asserted that a total banking collapse has already occurred, while others said that the downturn is now the worst on record, far outstripping the great depression.
Hedge fund manager and billionaire philanthropist George Soros said the financial system has effectively disintegrated, with the turbulence more severe than during the Great Depression and with the decline comparable to the fall of the Soviet Union.
Former chairman of the Federal Reserve Paul Volcker said he could not remember any time, even in the Great Depression, when things went down so fast and quite so uniformly around the world.
Financial market analyst Martin D. Weiss has stated that the banking collapse has already occurred and a major Wall Street meltdown is now imminent.
Leading forecasters, The National Association for Business Economics, have warned that the recession is projected to worsen and unemployment could hit 9% this year, 10% percent next year and continue to rise into 2011. In 2008, the jobless rate averaged 5.8 percent, the highest since 2003.
Financial professors Carmen Reinhart of the University of Maryland and Kenneth Rogoff of Harvard University have said that the crisis is “as bad as they come”, warning that if the averages of previous crises hold, Americans can expect unemployment to reach 11 or 12 percent, housing prices nationally to drop 36 percent, stocks to lose more than half their value, and real output per capita to plunge 9.3 percent.
New York University economist Nouriel Roubini has predicted a lost decade of Japanese-style stagnation (a deadly combination of stagnation, recession and deflation) but on a worldwide basis.
“The global economy is now literally in free fall as the contraction of consumption, capital spending, residential investment, production, employment, exports and imports is accelerating rather than decelerating,” Roubini wrote.
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Major Meltdown Imminent. 40% crash on markets coming! Turmoil Rages on!

The nation’s largest banks are so close to collapse and the world economy is coming unglued so rapidly, a major Wall Street meltdown is now imminent.

Specifically, it’s now increasingly likely that virtually all of our forecasts of recent months could come to pass in a very short period of time, including …

Stock market crash: A swift plunge in stocks to about 5000 on the Dow, 500 on the S&P 500 and 900 on the Nasdaq … or lower. (For our reasons, see “Stocks to fall AT LEAST another 40%!“) more
Corporate bankruptcies: A chain reaction of Chapter 11 filings or federal takeovers, including not only General Motors and Chrysler, but also Ann Taylor, Best Buy, Jet Blue, Macy’s, Saks Fifth Avenue, Sears, Toys “R” Us, U.S. Airways and even giants like Ford or General Electric.
Megabank failures: Bankruptcies or nationalization not only of Citigroup and Bank of America, but also JPMorgan Chase and HSBC. (See my January issue, “Megabanks Could Fail Despite Federal Aid.”)
Nationwide epidemic of small and medium-sized bank failures: Outright FDIC takeovers, with little prospect of nationalization. (I’ll give you a link to our free guide with a more extensive list in a moment.)
Insurance failures: State takeovers of companies like Ambac Assurance, Bankers Life and Casualty, Conseco, FGIC, Medical Liability Mutual, Mortgage Guaranty Insurance, Nuclear Electric Insurance, PMI Mortgage, Standard Life of Indiana and many others. (Our free guide also contains a more extensive list of insurers.)
Cities and states: An epidemic of defaults by thousands of cities, states and other issuers of tax-exempt municipal bonds.
Stock market shutdowns: Trading halts on major, big-cap stocks … plus on-again, off-again exchange shutdowns, making it increasingly difficult for investors to liquidate their holdings at any price.
Credit market deep freeze: A virtual shutdown in all debt markets except U.S. Treasuries. An avalanche of selling — and virtually no buyers — for corporate bonds, commercial paper, asset-backed securities, municipal bonds and all forms of bank loans.
Government bond collapse: A steep decline in the price of medium-and long-term government securities, as the U.S. Treasury bids aggressively for scarce funds to finance a ballooning budget deficit.
Shocking? Perhaps. Avoidable? No.
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Jim Cramer: Social Chaos-All Wealth Gone-Money Worthless-No Credit Cards-

Cramer: Nationalization Would Crush America Jim Cramer points out that if it isn't nationalization of certain big banks, then it's chaos for the financial systems and puts this into a historical perspective.
He also said Insurance companies would not be able to pay out on property, life, liability insurance and NO annuity payments either, because if ALL stock are made worthless, the Insurance companies hold major amounts of bank stocks (usually preferred, rather than the common stock we nobodys buy) and if the ordinary people LOSE ALL THEIR MONEY in common stock that was OK, AS LONG AS THE PREFERRED STOCK WAS NOT WIPED OUT BY "Nationalization" and the VIP stockholders don't lose then we are "saved".

Britain to face summer of rage because of: THE ECONOMY

Britain faces summer of rage - police
Middle-class anger at economic crisis could erupt into violence on streets
Paul Lewis
The Guardian, Monday 23 February 2009
Article history

Scenes such as those seen in London in January when protestors clashed with mounted riot police at a protest over Israel's action in Gaza could become more common sights in the UK. Photograph: Peter Macdiarmid/Getty Images

Police are preparing for a "summer of rage" as victims of the economic downturn take to the streets to demonstrate against financial institutions, the Guardian has learned.

Britain's most senior police officer with responsibility for public order raised the spectre of a return of the riots of the 1980s, with people who have lost their jobs, homes or savings becoming "footsoldiers" in a wave of potentially violent mass protests.

Superintendent David Hartshorn, who heads the Metropolitan police's public order branch, told the Guardian that middle-class individuals who would never have considered joining demonstrations may now seek to vent their anger through protests this year.

He said that banks, particularly those that still pay large bonuses despite receiving billions in taxpayer money, had become "viable targets". So too had the headquarters of multinational companies and other financial institutions in the City which are being blamed for the financial crisis.

Hartshorn, who receives regular intelligence briefings on potential causes of civil unrest, said the mood at some demonstrations had changed recently, with activists increasingly "intent on coming on to the streets to create public disorder".

The warning comes in the wake of often violent protests against the handling of the economy across Europe. In recent weeks Greek farmers have blocked roads over falling agricultural prices, a million workers in France joined demonstrations to demand greater protection for jobs and wages and Icelandic demonstrators have clashed with police in Reykjavik.
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Ready for the NEW WORLD ORDER? Regulations on all financial markets!

European leaders in Berlin have agreed on the need to regulate all financial markets including hedge funds.
Leaders of Europe's major economies said a global solution was needed to the current financial crisis.
German Chancellor Angela Merkel highlighted that leaders faced an "extraordinary international crisis".
But leaders including UK Prime Minister Gordon Brown warned against reverting to protectionism in such a difficult economic climate.
The Berlin gathering is a precursor to the next meeting of the G20 group of major developed and developing countries in London on 2 April, which aims to rewrite the rules of the global financial system.
'Supervision'
"There is a need for a global new deal so that the world economy can recover" said Mr Brown to ensure an economy that is based on the "soundest principles".
Leaders said there was a need for international institutions, including the International Monetary Fund, to play a greater role not just to help countries in financial trouble but to prevent countries from getting into such difficulties.
Mr Brown said leaders had agreed that that the IMF needed access to at least $500bn (£348bn)
The comments in Berlin come amid ongoing volatility in world financial markets and uncertainty over the future of some of the world's key banks.
Ms Merkel said: "We are making a commitment that all financial markets, products, and participants - including hedge funds and rating agencies - are of course subject to supervision and regulation."
Details on such a plan need to be worked out before the meeting in London, she added.
Hedge funds, which typically attract wealthy private investors, have been criticised for their lack of transparency and oversight.
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Chaos in FORT LAUDERDALE people seeking government housing

Note: If you view the chart on the left you will notice that we are going to Real Estate prices of the 70's. The line-up for government housing will probably be 10 times the number indicated below, in the future.
FORT LAUDERDALE - Thousands of people seeking government-subsidized housing packed the street Saturday morning in front of the Robert P. Kelly Housing Authority building until police shut down the line because the crowd had grown unmanageable.

Officials estimated that 4,500 people were waiting in line at 8 a.m. when the Housing Authority of Fort Lauderdale began distributing the 3,000 available applications for Section 8 housing, a federal program that provides rent subsidies to landlords to help low-income people find affordable housing.

But the application process was shut down earlier than expected because of the overwhelming turnout, police spokesman Sgt. Frank Sousa said.

"It was a much larger crowd than anticipated," he said, adding he was unsure if all the applications had been distributed.
Though the crowd grew unruly, only one person was arrested for trespassing, Sousa said. He had no details.

Outside the Housing Authority building at Sunrise Boulevard and Northwest Fifth Avenue, discarded blankets, fast-food containers and plastic chairs littered the curb where thousands had gathered.

Carmen Garcia arrived too late to get an application. "It's really unfortunate. Times are really hard right now, and this could have helped out," she said.
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Huge Protest over Irish Economy-The Depression is WORLDWIDE

Police said 100,000 people were on the streets, while organisers said they expected 200,000 to protest in total.
The Irish Congress of Trade Unions (Ictu), which organised the march, said it was campaigning for "a fairer and better way" of dealing with the economic crisis.
"Our priority is about ensuring that people are looked after, the interests of people are looked after, not the interests of big business or the wealthy," Sally-Anne Kinahan, Ictu's secretary general, told the BBC.

I've a mortgage to pay, I've children to put through school, and now I'm being told I have to take cut back, after cut back, after cut back
Irish protester
One protester said he was "sick and tired of the way this government conducts itself and what it's doing to this country."
"I've worked all my life, I've never broke the law, never walked out on strike. Instead I've went to work and done my job," he said.
"I've a mortgage to pay, I've children to put through school, and now I'm being told I have to take cutback, after cutback, after cutback."
Ireland, which was once one of Europe's fastest-growing economies, has fallen into recession faster than many other members of the European Union.
The country officially fell into recession in September 2008, and unemployment has risen sharply in the following months.
The numbers of people claiming unemployment benefit in the Irish Republic rose to 326,000 in January, the highest monthly level since records began in 1967.
Link

Grim Outlook by Book: When Giants Fall. An economic roadmap for the End of the American Era

Note: I have just received this book. I must say it has some events that will take place that are quite disturbing, facts figures its all there. A GREAT read and a must have. Probably the last Doomer book you'll ever need to read!
Bloomberg's James "Jim" Pressley reviews this book:
Abandon hope, all ye who open this book. Michael J. Panzner, author of “Financial Armageddon,” is back with a new jeremiad on our cracked and out-of-joint times.

His outlook is grim. We stand on the cusp of what hedge- fund manager Barton Biggs would call “an episode of great wealth destruction,” Panzner writes in “When Giants Fall: An Economic Roadmap for the End of the American Era.” Things are already bad for Americans and they are going to get worse.

Working hours will rise and pay will fall, forcing many people to take two or even three jobs, he asserts. We’ll be traveling on foot -- or by bicycle or boat. More and more of us will live in extended-family households, three generations under one roof. We’ll recycle rainwater, draw heat from the sun and eat food grown in our own gardens.

Tax revenue will slump, unraveling safety nets like Social Security and Medicare. Hospitals will shut. Police budgets will be slashed, crime will surge, more people will pack guns. The dollar and modern payment mechanisms may give way to “barter arrangements, alternative financial instruments and collective support networks,” he says.

“Like the other great spasms in our history, the one that now seems to be unfolding is unlikely to be narrow in scope, shallow in depth, or short-lived in duration,” he writes.

And so this book goes, with page after dystopian page outlining the decline of the U.S. and the splintering of the planet into brutish nation states fighting over dwindling stores of commodities, energy and water.

Bleak Collage

Panzner, a veteran trader who has worked for banks including HSBC Holdings Plc and JPMorgan Chase & Co., has read widely. The text bristles with references to historians such as Paul Kennedy and Niall Ferguson. He quotes Chalmers Johnson here, Richard Haass there. Pat Buchanan and Naomi Klein pop up in between.

The result is a bleak collage of quotations describing a U.S. adrift in a dangerous world: Americans have overspent, lost their prestige and gone soft. Oil production may be peaking, poor populations are exploding, and the planet is being befouled. China’s foreign reserves have surged to $1.95 trillion.

Sound familiar? It should.
Link

Latvia's government collapses!

Latvia's government collapses

By David L. Stern

Published: February 20, 2009

Latvia's center-right coalition government collapsed Friday, a victim of the country's growing economic and political turmoil and the second European government, after Iceland, to disintegrate because of the international financial crisis.

The government in Riga, faced with forecasts of a severe drop in the economy this year, was the first in Eastern Europe to succumb to turmoil caused by the crisis. Its collapse rounded out a week that saw worries about feeble investment, banks and output in Central and Eastern Europe coursing through international markets.

Latvia has had a history of revolving-door politics and complex coalitions since pulling free of the Soviet Union in 1991. Prime Minister Ivars Godmanis, who presented his resignation to President Valdis Zatlers on Friday, had been in power only since December 2007. But the precipitous plunge of Latvia's economy, which helped provoke the worst riot since 1991 last month, played a major part in the government's downfall.
Link

Full Scale Riots in Tranquil Caribbean Island! Economic Collapse!

Britons flee French island of Guadeloupe as rioters turn on white families
Britons are among thousands of tourists fleeing Guadeloupe after full scale urban warfare erupted on the French Caribbean island.

Trouble broke out on the island earlier last month after protesters began rioting over high prices and low wages.
But the situation escalated this week after protesters began turning on rich white families as they demanded an end to colonial control of the economy.

The troubles come at the height of the holiday season, with thousands of mainly British, French and American tourists on the paradise tropical island.

Guadeloupe descends into full-scale urban warfare after demonstrators riot over low wages and white control of the island's economy . Violence has escalated on the Caribbean island as protesters turn their attention to rich white families who they blame for their poor standard of living
Protesters were now targeting 'all white people', with the media in mainland France describing the situation as virtual civil war'.

Guadeloupe is a French overseas department ruled directly from Paris, and authorities in France have sent 300 extra riot police to the island in a bid to quell the violence.

Meanwhile, hundreds of protesters are roaming the streets of the capital Point-a-Pitre, looting shops and restaurants, burning cars and vandalising public buildings.

Holiday resorts along the coast have hired extra security to protect tourists, while the airport is jammed with visitors now trying to get out of the country.

Union leader Jacques Bino was the first man to die in the violence when he was caught in crossfire on Tuesday while driving a car near a roadblock manned by armed youths who had opened fire at police.

Six members of the security forces were injured during shoot-outs with the armed youths as they tried to help emergency teams who were trying to save Mr Bino's life.

Dozens more police and demonstrators have also been hurt in frequent clashes on the capital's streets - which one newspaper describing it as looking like a battlefield'.



Protesters ransacked shops and torched cars as the island descends into full-scale urban warfare

Most shops, banks, schools and government offices are now shut in Guadeloupe and the neighbouring French tourist island of Martinique - where protests are also mounting.

Guadeloupe's socialist opposition leader Malikh Boutih said: 'It is shocking to watch a police force which is almost 100 per cent white confront a population which is 100 per cent black.

'All the same elements of the riots on mainland France in 2005 are present here. A man holds a photo to pay tribute to Jacques Bino
'We don't have the same concrete buildings, there are palm trees instead, but it's the same dead-end, the same "no future" for young people, with joblessness and a feeling of isolation.'
The first protests began a month ago when the left-wing union coalition, the Collective Against Exploitation, demanded a £180 a month pay increase for low-wage earners.
President Nicolas Sarkozy sent his minster for overseas departments to the island to meet with union leaders on response to the demands.

But the racial tensions which have been simmering for decades exploded into full-scale rioting, with colonial descendants who own 90 per cent of the wealth becoming the focus of the violence.

The unrest was further aggravated last week when wealthy white landowner Alain Huyghues-Despointes publicly criticised mixed-race marriages and said he preferred to 'preserve his race'.

In Paris, the violence has provoked divisions in Mr Sarkozy's cabinet with black minister Rachida Data acknowledging that Guadeloupe suffered from 'a problem with the distribution of wealth'.

Laetitia Delaprade, spokeswoman at Voyages Antillais, a Paris-based travel agency that specialises in French Caribbean, said: 'People are scared. No one wants to go there and those that are there want to get out.'

Tourism Authority chief Madeleine de Grandmaison said: 'Tourism is fragile. People are not only cancelling this week, but also for all the months of February, March and April.

'We have a huge deficit of tourists ahead of us. At least 10,000 tourists have cancelled vacations in Martinique and Guadeloupe.'

Authorities struggle to contain the anarchy which has swept across the island
Link

Obama has lost 30% of the value of Banks in the US in 2 weeks!

At the time we had a new Fed President (Greenspan) who was untested and untrusted. We had other things going on in the markets in general, none of them particularly good.

We have no trust in the markets today. None.

I cannot value anything in this market. Absolutely nothing. And this sort of lie is part of the reason:

Feb. 19 (Bloomberg) -- U.S., U.K., and European regulators are in talks to jointly regulate the $28 trillion credit-default swap market, the Federal Reserve said today.

Regulators including the Fed, U.K.’s Financial Services Authority, German Federal Financial Services Authority and European Central Bank met today to discuss a possible information sharing agreement, the Fed said in a statement on its Web site. The goal would be to apply consistent standards to the market and provide support across jurisdictions, the Fed said. "

This was supposed to be done last year, remember? By the end of the year we were supposed to have an implementation plan to get this done with the infrastructure in build-out going on right now.

Instead we have The Fed lying again about the issue.

Why?

Because Bernanke knows - these contracts cannot be covered as the people who wrote them have ZERO, or close to it, in capital!
This is what the market DID as a direct and proximate consequence of Geithner's and President Obama's actions (or rather, their inability to come to the table with anything approaching an actual plan)

That's a decline of 87 S&P "handles", or about ten percent in less than two weeks.

But that's not all. Have a look at the BKX, the banking sector:

That's a decline of thirty percent in the banking index in the same two week period.

THIRTY PERCENT.

Folks, this is the very definition of "no confidence." A thirty percent loss in two weeks, in the very sector that we were promised would be "saved" by our new President, and that two weeks has passed without one iota of a plan being actually released.

How much lower can it go?

I have it on good authority that there is very strong support of stock prices at zero, and if you look at charts of Bank of America (closed under $4 today), Citibank (closed under $2.50), Wells Fargo (closed at $12.01), Fifth-Third ($1.21), SunTrust ($6.70) along with dozens more you will find that all of them are in fact racing directly towards that very heavy support right at that zero boundary. Many of these stocks have been cut in half or more in the last two weeks.

Mr. President, you cannot come to Washington and write checks with your mouth you are unable to cash, and expect the market to put up with it. The market is bigger than you, or any other President, as you have just learned.

You also cannot expect any bank to be able to raise capital with a stock price measured in fractions of a penny, and that's exactly where they are all going in the here and now unless you and Tim Geithner get up on stage tomorrow and put a stop to this foolishness.

Your inept and outrageously incompetent handling of this mess has led to the destruction of one third of the equity value of banks in the United States in less than two weeks. Your ineptitude is in fact greater than George Bush and Hank Paulson, who managed to take a third off the BKX but they took more time to do it than you did.

In short your and Timmy's policies thus far are an abject failure and we are now sitting on the abyss in the market with a literal potential for a waterfall selloff that initiates tomorrow and translates into Monday exactly as happened, and as severe, as in 1987.
And further down, he put this in to give you an idea of the immediacy of the peril:

Quote:
Whatever your plan is Mr. President and Mr. Geithner, and I presume it is NOT what I outlined above, I recommend that you get it out in the public right now. Overnight, with enough time for it to sink in - and certainly NOT 30 minutes before the market opens tomorrow morning for Options Expiration as Bernanke thought he'd do in August of 2007. We've had enough liquidity destroyed due to government game-playing - we can't afford to have any more traders carried out on their shields that provide necessary liquidity in the markets.
LINK

The Great Depression has Arrived- Collapsing American Dreams

It almost seems amusing that we are still discussing the “coming” depression because of the fact that it is already arrived and settling in. Really, what this entire new “era” is all about is watching our dreams deteriorate right before our eyes.

Want to hear what the real world is like today? Country star John Rich dramatizes this well in his new song, “They're Shutting Detroit Down.”



John Rich – “They're out there losing millions and it's up to me and you to come running to the rescue. Well pardon me if I don't shed a tear/they're selling make believe and we don't buy that here/cause in the real world they're shutting Detroit down, while the boss man takes his bonus pay and jets on out of town/DC's paying out the bankers as the farmers auction ground/while they're living it up on Wall Street in that New York City town, here in the real world they're shutting Detroit down.”

My favorite line is – “the boss man takes his bonus pay and jets on out of town.”

Wow! All these collapsed dreams! All the thousands of baby boomers with calloused hands looking at 50% reduced portfolios. What's a mother to do? Well, there's always Wal-Mart. And McDonalds needs someone to keep their tables clean. And let's not forgot The Waffle House. An old trusted stand in. Work as a short order cook for 60 hours a week. The opportunities are endless for those with empty bank accounts.

It seems that the majority of us are just not destined to move forward. How many thousands of thousands of heads of households are looking at the devastation of their 401K portfolio? It's not easy to forget the glory days of the past as they lose their home and lose their savings. I see eventually Hooverville shacks lining vacant lots. Made up of cardboard and bits of old trash taken from local garbage. This is our future?

“The Federal Reserve on Wednesday sharply downgraded its projections for the country's economic performance this year, predicting the economy will actually shrink and unemployment will rise higher.” “The bleaker outlook represents the growing toll of the worst housing, credit and financial crises since the 1930s.” “…unemployment—now at 7.6 percent, the highest in more than 16 years—will keep climbing and stay elevated for quite some time, the Fed predicted.” breitbart.com/article.php?id=D96E5TL82&show_article=1

All the stimulus packages will ultimately bring hyperinflation. In a year, in two years? What does the time line really matter? This is the middle class and the poor class. This financial crisis has been predicted for quite some time. Still, when it actually occurs there is no way you can be totally emotionally prepared. And like a boulder rolling down hill it will only continue to grow worse in the foreseeable future.

“The US government may have to nationalize some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times. In an interview, Mr. Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalization could be the least bad option left for policymakers.” “…policymakers across the political spectrum appeared to be moving towards accepting some form of bank nationalization.” “If nationalization is what works, then we should do it.” Link

Is this economic collapse going to continue? Will the world wide economy continue to go down hill? There is a continuing global imbalance in the world that only continues to increase in size. Production and industry will always be the real key to a country's long term and real prosperity. Is the US going to be able to continue to service its growing debts? Few can really comprehend the fate that lies ahead for the North American group of nations.

The collapse in employment is across the board and affecting all industries. Only in the health care sector and social aid has there been any increase and demand for employment. 2009 is expected to be a bad year for employment losses. Probably, the unemployment numbers are even higher than the government statistics state. America 's problems continue to be the result of the expansion of the money supply. Instant gratification with the tragic results further down the corner. And there just isn't the increase in productivity the increase of the money in circulation needs. Many professional jobs continue to leave this country making the unemployment figures higher. Corporations are responsible for expanding work visas allowing many foreigners to come to the US and work in the technical sector competing for computer programming and engineering positions. Cheaper foreign labor.
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$100 bill to be used as Toiler Tissue?

Respected economist John Williams, editor of ShadowStats.com, a popular website that tracks real inflation figures, is advising that people hoard physical gold as well as food items in bulk so that they have some means with which to barter as the economic crisis turns ugly.

“Three or four years into the future I think we could be in a hyperinflation, within the current year you’re going to see much higher inflation than most people are looking at,” Williams told MarketWatch.

Williams said that his definition of hyperinflation would be a situation in which a $100 dollar bill would become more functional as a piece of toilet paper than a store of value.

“This is a time when you want to preserve your wealth and assets because inflation will knock the value out of it,” he added, advising that people buy physical gold and assets other than the U.S. dollar.
Video Link
How Bad will it GET?
Morning Edition, February 18, 2009 · Around the world, unemployment is rising and incomes are falling, and it isn't clear how long the recession will last or how deep it will get. The global economic situation is so serious that the head of U.S. intelligence agencies now says it has surpassed terrorism as the top threat to national security.

National Intelligence Director Dennis Blair's dramatic report last week — that the economic crisis is now the United States' top "near-term security concern" — caught some members of Congress by surprise. But it makes sense.

The global economic downturn could easily change the world. Previously stable countries could become unstable. The geopolitical lineup could shift sharply, some countries becoming more powerful while others get weaker. Allies could turn into adversaries.

And no one knows for sure how things will turn out.
Link

For Canadians: FREE SAMPLES
LINK

Get Ready for Civil Unrest Around The WORLD-Years of Unemployment.

Morning Edition, February 18, 2009 · Around the world, unemployment is rising and incomes are falling, and it isn't clear how long the recession will last or how deep it will get. The global economic situation is so serious that the head of U.S. intelligence agencies now says it has surpassed terrorism as the top threat to national security.

National Intelligence Director Dennis Blair's dramatic report last week — that the economic crisis is now the United States' top "near-term security concern" — caught some members of Congress by surprise. But it makes sense.

The global economic downturn could easily change the world. Previously stable countries could become unstable. The geopolitical lineup could shift sharply, some countries becoming more powerful while others get weaker. Allies could turn into adversaries.

And no one knows for sure how things will turn out.

Threats Of A Long Recession

"This is one of these moments where our assumptions are being challenged," says David Gordon, a former intelligence officer who now leads research at the Eurasia Group. Until last month, he was the director of policy planning at the State Department.

"I think there is a lot of uncertainty right now where things are going, and that makes it hard to plan," Gordon says. "But it also means that you have to broaden the way you think about things, include different kinds of scenarios."
One possibility is that unemployment could get so bad in some countries that there will be civil unrest. Blair cited that scenario in his threat assessment last week, saying, "Economic crises increase the risk of regime-threatening instability if they are prolonged for a one- or two-year period."

The key factor there is the duration. Gordon agrees that a long recession would be hard for countries to manage.
Link

The Dollar has no future

During testimony on his nomination, when Secretary of the Treasury Geithner was asked about errors made in the Great Depression, he replied:

There were two:
1. Monetary stimulation ended too soon.
2. Heed was not taken of the dollar foreign exchange position.

Think hard on the implications of both these points.

The dollar rose into the Great Depression, acting as a break on American exports as protectionism was rising everywhere. You can be sure the present dollar rally as a place of refuge has no meaningful future.

You can be sure that Monty's estimate of $20 trillion in total monetary and fiscal stimulation is conservative.
The New Currency Trade: Gold Vs. All Else
Posted by David Gaffen
February 17, 2009, 3:36 pm

GoldInvestors have taken to terming the flight from risky assets into gold a new currency trade. The ongoing concern about the enormous task of getting the world's banks on track - bedeviling investors across the globe - has produced a safe-haven trade into the likes of Treasurys and the dollar. However, the dollar's success is, in some ways, a mirage, improving only because other major world currencies have been dreadful.

The dollar has strengthened in the last couple of months, along with gold, which is an odd occurrence, and speaks to the dearth of worthy investments around the world. But the shift to gold has picked up as "everyone is trying to devalue their own currency against everyone else," says Sean Peche, manager at BlueAlpha Investment Advisory Limited in London.

That explains the dollar's strength of late, one founded on risk aversion. Since the beginning of the year, the dollar has gained 9.5% against the euro and 2.3% against the pound, while gold, in dollar terms, is up 9.4%. The yellow metal closed up $25.50 to $967 an ounce Tuesday, highest since July 17, 2008. "Gold is telling you the dollar's rally is not going to continue," says Lance Lewis, fund manager at Lewis Capital Partners.

He adds that "other countries have a better ability to finance what they need," in reference to China and a few others that are creditor nations (others owe them money), rather than the U.S., a debtor nation.
LINK

Homeowners in foreclosure: Hey Bank! PRODUCE THE "NOTE"!

By MITCH STACY
ZEPHYRHILLS, Fla. (AP) - Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.
And just like that, the foreclosure proceedings came to a standstill.
Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.
During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.
Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.
"I'm going to hang on for dear life until they can prove to me it belongs to them," said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. "I'll try everything I can because it's all I have left."
In interviews with The Associated Press, lawyers, homeowners and advocates outlined the produce-the-note strategy. Exactly how many homeowners have employed it is unknown. Nor is it clear how successful it has been; some judges are more sympathetic than others.
More than 2.3 million homeowners faced foreclosure proceedings last year and millions more are in danger of losing their homes. On Wednesday, President Obama will unveil a plan to spend at least $50 billion to help homeowners fend off foreclosure.
Chris Hoyer, a Tampa lawyer whose Consumer Warning Network Web site offers the free court documents Lovelace used to file her request, has played a major role in promoting the produce-the-note strategy.
Link

"The Worst is Yet to Come"-America undergoing a Permanent CHANGE!

"Worst Is Yet to Come:" Americans' Standard of Living Permanently Changed

Posted Feb 17, 2009 12:53pm EST by Aaron Task in Investing, Recession

There's no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.
But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:

An $8 trillion negative wealth effect from declining home values.
A $10 trillion negative wealth effect from weakened capital markets.
A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies."
"The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car," Davidowitz says. "A lot of that is gone."

Going forward, the veteran retail industry consultant foresees higher savings rate and people trading down in both the goods and services they buy - as well as their aspirations.

The end of rampant consumerism is ultimately a good thing, he says, but the unraveling of an economy built on debt-fueled spending will be painful for years to come.
Video Link