6 Million could lose their house in the next 3 years!

What would you do if someone foreclosed on your home? If suddenly you and all your possessions were out on the street with a bank account depleted from trying to make mammoth mortgage payments, where would you go?

An estimated 6 million families could be facing this question in the next three years, with nearly 1 in 10 mortgage holders either delinquent or in foreclosure. And although we've heard a lot about trying to help people stay in their homes -- like President Obama's $275 billion foreclosure-prevention package -- it's been far more difficult to follow what happens to these families once they've been forced out.

"We haven't done a good job of tracking those people who were not able to stay in their homes," admits Douglas Robinson of NeighborWorks, an umbrella organization for more than 230 local nonprofits focused on community development. "Over the past four years, we've been heavily focused on foreclosure prevention -- keeping people in their homes. We're just starting to look at the other side of things now."

According to Robinson, those victims of foreclosure who do wind up being pushed out of their homes can be roughly divided into two waves.

The first wave consists of those who lost their homes because they were unable to keep up with payments on poor mortgages, often with cripplingly high interest rates. There's no hard research as yet, but anecdotal evidence indicates that, although these people didn't have the financial resources to keep up with their mortgage payments, most were able to rent apartments or even homes in their same communities.
But for the second wave, the transition hasn't been nearly so seamless. These are the people who are unable to make mortgage payments because they've lost their jobs. They no longer have the incomes to afford rentals.

This second wave is creating a strong demand for social services, including homeless shelters -- a demand that far exceeds supply. Again, as yet there is no hard data, but anecdotal evidence indicates a far higher percentage of these people are winding up in hotel rooms, with friends and relatives, in shelters, or even sleeping in cars or on the street.
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Banks walking away from foreclosed homes and GO TO JAIL if you don't pay "your" DEBTS!

SOUTH BEND, Ind. — Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.
Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.

So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.

“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.

City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.

The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.

In Ms. James’s case, the company that was most recently servicing her loan is now defunct. Its parent company filed for bankruptcy and dissolved. And the original bank that sold her the loan said it could not find a record of it.

“It is what some of us think is the next wave of the crisis,” said Kermit Lind, a clinical professor at the Cleveland-Marshall College of Law and an expert on foreclosure law.

For older industrial cities like South Bend, hard times in the mortgage market began before the recent national downturn, as did the problem of bank walkaways. In the case of Ms. James, a home health care administrator, the foreclosure proceedings began in the summer of 2007, when she could not keep up with the adjustable rate on her mortgage.

In Buffalo, where officials said the problem had reached “epidemic” proportions in recent months, the city sued 37 banks last year, claiming they were responsible for the deterioration of at least 57 abandoned homes; the city chose a sampling of houses to include in the lawsuit, even though the banks had walked away from many more foreclosures. So far, five banks have settled.
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Woman Sentenced to Jail for Sons Crime?
by ACLU of Michigan
Mon Mar 30, 2009 at 09:22:05 AM PDT

The American Civil Liberties Union of Michigan asked for an emergency hearing today on behalf of an Escanaba woman sentenced to 30 days in jail because she is too poor to reimburse the court for her son’s stay in a juvenile detention facility.

"Like many people in these desperate economic times, Ms. Nowlin was laid off from work, lost her home and is destitute," said Michael J. Steinberg, ACLU of Michigan Legal Director. "Jailing her because of her poverty is not only unconstitutional, it’s unconscionable and a shameful waste of resources. It is not a crime to be poor in this country and the government must stop resurrecting debtor’s prisons from the dustbin of history."

35,000 Protestors ahead of G20 Meeting will violence erupt?

They hoped for 10,000, but in the end more than triple that number turned out on London's streets for the biggest demonstration since the beginning of the economic crisis.

The Put People First march yesterday was organised by a collaboration of more than 100 trade unions, church groups and charities including ActionAid, Save the Children and Friends of the Earth. The theme was "jobs, justice and climate" and the message was aimed at the world leaders who will be gathering for the G20 summit here this week.

The marchers, estimated at 35,000 by police, accompanied by brass bands and drummers and a colourful assortment of banners and flags, walked the four miles from Embankment to Hyde Park, where speeches from comedian Mark Thomas and environmental campaigner Tony Juniper, and music from the Kooks, made for a party-like atmosphere.

People came from all over the country and families with children in pushchairs were among those marching. Jyoti Fernandes, an organic farmer who travelled from Somerset with her four children, said: "We are here to remind people that we have to look after our land and look after our food."

A group of fewer than 200 anarchists joined the march and were kept isolated and surrounded by police. Chants of "Burn the bankers!" were the closest anyone came to any show of aggression despite a heavy police presence and a few buildings along the route, including the Ritz Hotel, boarding up their windows. As protesters passed the gates of Downing Street, there were chants and shouts of "Enjoy the overtime".

Thomas told the Observer he believed the protest marked "the start of a grassroots movement". He added: "This is a moment. This is the first time people have had a chance to come out on to the streets in a big way."

Kevin Stevens, 43, ignored police warnings for City workers to keep a low profile and came dressed in a pinstripe suit as a banker. "I thought I might prove all the talk about attacking City workers is nonsense," he said.

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Soros: G20 last chance or its a DEPRESSION!

Billionaire investor Gorge Soros has said the G20 summit will be a "make or break" event for the world's economy.
In a BBC interview, Mr Soros said the international financial system had collapsed because it was flawed and it had to be restructured.
Mr Soros say it may be the last chance to prevent a full-scale depression.
He said the G20 meeting had to come up with concrete solutions to help the developing world in particular, which had been been worst hit.
'Depression'
Mr Soros warned that any attempt to pull economies out of recession had to be done co-operatively.

Soros: G20 is 'make or break'

He said: "The G20 meeting is make or break because unless they do something for developing world there will be serious collapse in that part of the world.
"I'm using phrase depression because unless we take the right measures we're liable to end up there.
"I don't think we'll ever be back to where we came from. It should be recognised that the last 25 years were an aberration and we cannot go back there. We have to reconstruct the financial system from its foundations up."
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Humorous Financial ( But Really True) Collapse by South Park-A Must See

Bread Lines forming in California along with Tent Cities

ANTHONY BARTKEWICZ, MyFox National
- Many say a depression doesn't have to be great, that the economy can sink into a milder depression. The Salvation Army says it's happening now, and in San Diego County, people are standing in line outside a Salvation Army waiting for donated bread.

Salvation Army director of communications Suzi Woodruff Lacey said they are seeing people from all walks of life: "white collar, blue collar, people who have lost their jobs, people who are in danger of losing their homes."

Bread lines were regularly seen in the 1930s during the Great Depression, when unemployment peaked at more than 25 percent and the stock market lost 90 percent of its value. Today, California's unemployment rate hit 8.4 percent.

TENT CITIES
Tent cities reminiscent of the "Hoovervilles" of the Great Depression have been springing up in cities across the United States - from Reno in Nevada to Tampa in Florida - as foreclosures and redundancies force middle-class families from their homes.

"Where the tent city is now is literally a toxic waste dump, it's unsafe, but these people are very resourceful," Burke said. "Some people are living in squalor, with just a tarp tied to a chainlink fence. But then you'll see someone with several tents: The tent they live in, plus some outbuilding tents. And they couldn't be more neat and more tidy. They're working hard to create a sense of home."

Many of the 200 residents of Sacramento's Tent City, as with those around the country, are not recent victims of the downturn: They are the chronically homeless, some of them mentally ill. But the encampment seized national attention after Oprah Winfrey featured it on her daytime television show, part of a series of reports she has been running on the "new faces" of homelessness.

Embarrassed by an influx of television crews, Arnold Schwarzenegger this week announced plans to house the tent-dwellers in a nearby convention centre until a $1m (£690,000) plan for more permanent shelter can be implemented.

The California governor told reporters he had "personally delivered a letter to President Barack Obama last week, to request that economic stimulus funds for the homeless be fast-tracked".

Obama grappled with the phenomenon on Tuesday, when a reporter at his primetime news conference asked him about the "tent cities sprouting up across the country". The president said he was "heartbroken that any child in America is homeless", adding: "The most important thing I can do on their behalf is to make sure their parents have a job."

Talk of a Recovery is Borderline Criminal Behavior

The coming week will be interesting to watch. The G20 meeting in London comes with a threat of exploding protests in the streets. There’s also the threat of deepening rifts between the Anglo world and continental Europe. Czech EU president-of-the-day Mirek Topolanek, whose government had dissolved the day before, felt free to speak his mind for once, and called Obama's economic policies on stimulus and toxic assets "the road to hell". He didn't just speak for himself, many Europeans leaders see the situation in a similar fashion. And the more American and British politicians like Summers and Brown, and pundits like Krugman and Evans-Pritchard, holler about the disastrous manner in which Europe's leaders deal with their crises, the more they will defend it. So Obama has no choice but to hush the issue, and retrace his earlier -loud- steps.

Both sides clamor for changes to regulatory laws for the financial systems. But they don't mean the same changes. Europe wants to get rid of all the excesses caused by lax regulation induced by the political influence the banking system has, especially in the Anglo countries. The US wants to give more power to its own governmental bodies, that are essentially run by that very banking system. Europe will never ever accept anything of the kind. That's the second point Obama doesn't even have to try bring to the table. And of course it's the G20, it's not just Europe and the US/UK exchanging punches. China has launched a few trial-balloons in the past week on the topic of reserve currencies, and Russia and India would like a piece of that pie. None of these countries experience great benefits of the US dollar's special status, and they see a re-weighting of the IMF’s Special Drawing Rights as a first step towards a remake of the entire global finance system. And eventually they'll get it, but for now the risks for the US are so enormous that America will fight like a cornered feral cat.

And I'm starting to consider any and all talk about recovery and resuming growth to be borderline criminal behavior. So there.
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Unemployment rates marching toward Depression Levels

Note: Of course these figures are not even close to the real unemployment numbers. Another stat : 40% of the births in 2007 were to unmarried women! (Total 4.317 million births)

Eleven states posted unemployment rates above 10 percent in February, as Georgia is inched toward the double digits, according to seasonally adjusted figures released Friday morning by the U.S. Bureau of Labor Statistics.

Georgia's unemployment rate for February was a record high 9.3 percent. Metro Atlanta's unemployment rate also was 9.3 percent in February.

Michigan registered the nation’s worst rate, with 12 percent of its labor force out of work as of February 2009.

Also in double digits were South Carolina (11 percent), Oregon (10.8 percent), North Carolina (10.7 percent), California (10.5 percent), Rhode Island (10.5 percent), and Nevada (10.1 percent).

All seven of those states experienced rapid rises in unemployment during the past year. North Carolina’s increase was the sharpest in the nation, up 5.5 percentage points from its February 2008 jobless rate of 5.2 percent.
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Baltic Dry Index Down 20% in 5 Days: This Clearly Signals the End of Days

That headline might seem facetious but just a month ago we heard the exact opposite conjecture about a spike in the Baltic Dry Index and all that it "implied". I call this "thesis" trading... hedge funds, traders, and pundits seize upon any glimmer of hope - any atypical data point that does not agree with the other 47 data points in a series to create "thesis". Now, when the Baltic Dry Index was "surging" (from a historical rock bottom low) - jumping from scary awful to just awful we were told it was clearly signaling the globe would be recovering. CNBC would run reports every 2 hours about how the recovery was being signaled and how mustard seeds were in the air. I don't watch CNBC during the day but I can tell from my inbox (anxious people afraid they are missing "the recovery") and watching video in the evening. However, when the inverse happens (a 20% drop in said index in 5 days) the "fair and balanced" pom pom channel does not seem to be reporting about this ketchup seed. Instead I hear: crickets chirping. Other non TV financial pundits who have the same thesis appear to be.... silent. Perhaps they just missed looking at the chart the past few days (ahem).

So let's review : when 1 data point out of 50 agrees with the cheer leading aspect of coming recovery: report it, have the pundits latch on to it, have all the "you should never sell, buy and hold, average down, stick to the long run even when you are down 50% due to my acumen" mutual fund managers talk up said solo data point, and dismiss the other 49 data points that speak to the opposite. Weave magical tails about China being the economic growth engine of the world that will bring us all to nirvana (in "6 months" of course) - as the shipping index CLEARLY showed back then.
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Jim Sinclair: Financial situation is TOTALLY out of control

Note: The graph on the left is a possible STOCK MARKET scenario (not by Jim Sinclair) that will occur this summer. The individual who has produced this graph, has been right on for YEARS. TimeWave Zero
Professor James Galbraith was interviewed early this morning on the Geithner plan for the purchase of toxic assets. This interview focused on the very subject that constitutes my most serious concerns. It was on Bloomberg TV, but I see no review of it on their website.

His analysis would confirm what I have been told concerning the condition of the paper held by many financial institutions.

His review confirms my belief that there is no alternative but to bail out every financial institution in amounts that can't now, due to the opaque nature of the miscreant paper, be evaluated. What you can be sure of is that the number is enormous. Yes, larger than anything we have seen yet.

This financial situation is totally out of control. Government financial leaders are flailing in the wind, trying every remedy ever heard of while inventing new measures, all of it in total futility.

Major Banks will be nationalized. Smaller institutions will be rolled into nationalized banks.

The Dollar does not have a future. Gold is your only refuge asset.
To allow yourself to be run out of anything gold by the COMEX manipulators is to sacrifice your financial lifeline. It is just that bad.

The price of gold will attain Alf Field's objectives. There is no question about this conclusion as this problem cannot remain hidden. The unavoidable financial consequences are already raising their ugly heads and the curtain is coming up on the degree of this total disaster.

New financial oversight regulations of hedge funds and the OTC derivative market are so late all they really will amount to are meaningless public relations. The damage is done and cannot be undone by spin.

Galbraith this morning voiced his concern that the paper held in the banking system is "permanently impaired." That means this paper is to a large degree the left over partial contracts of the creation of the securitized OTC derivative paper sold everywhere to everyone without offset and is therefore valueless.
Galbraith alluded to a fractional reserve approach towards mortgage securitization by intent of error whereby the same mortgages were securitized more than one time.

Galbraith spoke of obscuration in terms of a planned cover-up of details of the asset's condition. He also discussed the need for clean audits that will only be available on the true valuation of that which is worthless and those with partial valuation. He indicated the conditions are so dire that only nationalization will permit clean audits.

Your future depends on gold as there is no piece of paper or SDR package of various paper that can protect you.

Gold is no longer investment, it is your lifeline. It is that serious.

About that there is no question.

About Professor Galbraith: James K. Galbraith

A look at GLOBAL DOOM around the World

US-Black Thursday begins at IBM thousands could be laid off-Link

LONDON — Vandals attacked the home of former Royal Bank of Scotland head Fred Goodwin, smashing windows at the house of the ex-CEO whose 700,000 pound ($1.2 million) annual pension has prompted public outrage.

Meanwhile, the British division of HSBC PLC said that it may lay off as many as 1,200 people, or 2 percent of its British work force, following a review of operations. The Unite union claimed that 2,900 staffers would be affected..

Tempers flare as pain spreads in Europe

U.S. cities deal with a surge in shanty towns

___

PARIS — Striking French workers for the U.S. manufacturer 3M held their boss hostage amid labor talks at a plant south of Paris, as anger over layoffs and cutbacks mounted. While the situation at the 3M plant outside Pithiviers was calm, workers marched on the presidential palace in Paris and tires were set afire by Continental AG employees whose auto parts factory was being shut down.

___

BUCHAREST, Romania — Crisis-hit Romania will receive €20 billion in loans from a group of lenders led by the International Monetary Fund. The money will bolster government finances hard hit by the world financial crisis. The IMF agreed to a two-year bailout loan of €12.95 billion ($17.49 billion). Another €5 billion will come from the European Union, €1.5 billion from the World Bank, and the rest from the European Bank for Reconstruction and Development. Romania is the third EU member to receive an IMF-led bailout loan after Hungary and Latvia. Eastern Europe has struggled with falling growth, sagging currencies and political turmoil from the crisis.

BERLIN — German chemical company BASF SE said that it will reduce production because of weak order levels. The new cuts follow earlier reductions of more than 25 percent worldwide.

TOKYO — Japan's exports fell by nearly half in February from a year earlier — a record drop — dragged down by plunging auto shipments to the U.S. and Europe.

DUBAI, United Arab Emirates — Cargo handler DP World said that business at its ports dropped 8 percent in the first two months of this year as global trade evaporates because of the global economic slump. The slowdown shows no signs of easing.

OSLO — Norway's central bank lowered its key interest rate by half a percentage point to 2 percent, citing a deteriorating outlook for the global economy.

Doom Link

Karl Denninger: The End Game Approaches

Note: chart is from the 1929 DOW crash showing some of the fake moves in the market toward the bottom.
(snippet)
We're about done here folks.

By "done", I mean done with the government's ability to screw around with markets, game the outcome and hide the sausage, if you will, at least to any sort of positive effect.

Today we heard from The Fed that their threatened program to start buying the long end of the Treasury curve will begin tomorrow.

[This was likely prompted by people selling in the Treasury market while the stock market was also dropping.] That's not supposed to happen, but it did. It denotes selling - on a day when people should have been moving into Treasuries, not out of them. This compelled Ben to stomp on this trend lest he be seen as a toothless tiger, and that just won't do for Sir FedsALot.

Who's selling into Ben's "expectations" and producing this? Good question. I don't know, but Ben does - he has real-time Fedwire information that he doesn't release. I'm willing to bet it is NOT domestic holders, and is likely foreigners - including perhaps, central banks and their minions (Heeeeelllloooo China!)

This "acceleration" is a major problem, as it appears that Ben is losing control - rapidly. If foreigners are selling into the market we are literally nothing more than market recognition away from Armageddon in the bond market.

Do not for a second believe that the fact that the stock market rallied has defused the underlying problem. It has not.

The underlying problem is not the stock market. It is the credit (bond) market - that is, the underlying reality that there is too much debt out there in relationship to GDP, it cannot all be serviced, and as the economy contracts it feeds a vicious spiral where a default produces unemployment which drops both spendable income (and thus income available debt service) AND tax revenues, giving it to the credit market in all orifices. This is "deflationary destruction" and it is inevitable when government pushes off the normal cyclical cleaning out that recessions do, as our government has.

The problem with this is that once he owns all the long-term Treasuries he can't sell them without collapsing the price, and now the solvency of our government rests with the ability to roll over short-end debt. See, that which The Fed buys and Treasury sells is a funding circle-jerk, effectively removed from the float and thus the government's funding base.

Anyone care to take the bet on whether the selling pressure will move down the curve?

If it happens, we're done - and neither Bernanke or Obama has the ability to prevent it.
I further believe the American Public is getting damn close to the breaking point. The tone among people I interact with daily and among what I see online and off is shifting from hope and faith to anger with each passing day, and each revelation of another 10 billion here or there that get funneled through some conduit to an offshore bank just raises the pressure another notch. The people now want blood, and I believe the minimum they will accept are thousands of indictments, prosecutions and prison sentences along with forfeiture of these men and women's fortunes. Madoff didn't satisfy, it further enraged.

The government is running a very real risk, as I have noted in the past, of being declared by the people as "the felon" instead of "the cop," and if that happens I don't want to be anywhere near the angry mob that makes that decision.

So for now, enjoy the general upward to sideways trend in the market, but prepare. While the spring may bring hope and summer one of discontent, I believe there is a very high probability that come fall, the peak of Hurricane Season, a very ill wind will be blowing both in New York and Washington DC.
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Peter Schiff: This has just STARTED! AND China QUIETLY getting OUT of US DOLLAR

In an unusual disclosure, Chinese Premier Wen Jiabao publicly expressed his concerns about the safety of China's holdings of U.S. assets, putting the country's massive yet largely furtive foreign exchange assets into the spotlight. Our research finds that China currently has about 64% of its foreign reserves in U.S. assets, a level that has declined gradually from as high as 84% in 2003. The majority of Chinese holdings of U.S. assets are risk free and long-term in nature, but there has been a clear trend in China's reserve holdings that shows a persistent increase in exposure to risky assets and non-U.S. assets over the past five years. Although, China's net purchases of risky U.S assets have dropped sharply since mid-last year, while its net purchases of Treasurys have jumped. This underscores the authorities' reduced risk appetite amid the ongoing global storm. Their reserve diversification process could accelerate again when global financial markets stabilize. Importantly, China's net purchases of short-term U.S. Treasurys have jumped dramatically over the past year, accounting for the majority of the country's total net purchases of U.S. government paper. This is an unprecedented development and a situation that warrants close attention going forward.

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ABC News: Gerald Celente Greatest Depression starts in 9 months

Ron Paul Predicts a 15 year DEPRESSION

Pension trustees and insurance company portfolio managers look away now. Your increased commitment to government bond holdings in recent times is about to blow up spectacularly.

At least, that is the view of Ron Paul, the US congressman who ran against John McCain in last year’s Republican Party presidential nomination.

His is a minority view. Yields on government bonds worldwide have been falling fast over the past few months and in the UK, the commencement of “quantitative easing” this month sent bond prices soaring.

But the credibility of both western governments and their currencies is waning, and has been ever since the gold standard was abandoned in 1971, says Mr Paul. And that means even “safe” investments are far from safe, he claims.

“People will start to abandon the dollar as current and past economic policies create a steep rise in interest rates,” Mr Paul says.

“If you are in Treasuries, you will need to be watchful and nimble to time your escape.”
(Snippet)
Unfortunately, cashing out will not protect the value of investments, he insists, because “fiat” currencies will all decline over the coming years as measures to try to haul the world economy out of recession fail. “The current stimulus measures are making things a lot worse,” says Mr Paul.
The US government just won’t allow the correction the economy needs.” He cites the mini-depression of 1921, which lasted just a year largely because insolvent companies were allowed to fail. “No one remembers that one. They’ll remember this one, because it will last 15 years.”

At some stage – Mr Paul estimates it will be between one and four years – the dollar will implode. “The dollar as a reserve standard is done,” he says. He sees little hope for other currencies where central banks have also created too much liquidity dating right back to the early 1970s.

“Europe and the US will both have to fundamentally change their money systems,” he adds.

And don’t even mention shares to Mr Paul: “The last place you want to be is in the stock market,” he says. “It may not bottom out for 10 years – just look at Japan.”
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In Case you missed 60 Minutes-OBAMA Laughing at Current Economic Situation

New World Currency discussion at G20 Summit in London

BEIJING, March 23 (RIA Novosti) - China is ready to discuss Russia's proposal of a new global reserve currency as an alternative to the U.S. dollar at the G20 summit in London, a vice governor of the country's Central Bank said on Monday.

Russia earlier submitted a proposal to the G20 summit which could see the IMF examining possibilities for creating a supra-national reserve currency, and also forcing national banks and international financial institutions to diversify their foreign currency reserves.

"We believe it is necessary to consider the IMF's role in this process and also define the possibility and the need to adopt measures allowing for Special Drawing Rights (SDRs) to become an internationally recognized super-reserve currency," Russia's proposal read.

Hu Xiaolian said that China, which holds about $2 trillion in foreign exchange reserves, was prepared to debate the issue as "the dollar's dominance and U.S. economic woes could entail considerable currency fluctuations and affect the world financial situation."

At the same time, she said that discussion into a new global currency could be started but considering the dollar's status as the current primary currency, "we should focus more on enhancing control over the existing system."

The G20 summit, involving advanced and emerging economies and international financial institutions, will be held in London on April 2, aimed at finding ways to overcome the ongoing global financial crisis.

During the G20 summit, Chinese President Hu Jintao will meet Russian President Dmitry Medvedev and U.S. President Barack Obama, Chinese Deputy Foreign Minister He Yafei said.

Yafei also said that Jintao will address the summit outlining measures to stabilize the global financial markets, reform the international financial system and harmonize macroeconomic regulation standards.
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World Bank all but declares 2009 the Second Great Depression.

World Bank: 2009 Will Be “Very Dangerous” Year

In other economic news, World Bank President Robert Zoellick warned the entire globe will feel the effects of the economic meltdown this year.

Robert Zoellick: “Well, I think 2009 is going to be a very dangerous year. And just to give you some reference points, the IMF came out with a new global forecast recently, close to decline of about one percent of growth. We at the Bank will be coming out with ours soon, and it will probably be in the range of one to two percent. But to put that number in a context, you haven’t seen a figure like that globally since World War II, which really means since the Great Depression.”

The World Bank also warned over the weekend that a wave of social and political unrest could sweep through the world’s poorest countries if G20 leaders fail to come to their aid. A new report from the Overseas Development Institute said the collapse of the global economy would cost 90 million lives, lead to an increase to nearly a billion in the number of people going hungry, and cost developing countries $750 billion in lost growth.

Save America? Default or War

The United States is the largest borrower in the world. The US national debt has already exceeded the level of 11 trillion dollars as of the beginning of 2009 and continues to grow like an avalanche. Experts say that the USA has only two ways to solve the problem: to either declare default or trigger off a war.

According to experts’ estimates, the probability of default on US treasury bonds is very high at the moment. The rumors are not new at all. Moreover, experts say that the USA has already started to work on an opportunity to refuse from the dollar in order to avoid debt payments.

Dmitry Abzalov, an expert with the Center for Russia ’s Political Conjuncture, said that governments currently take on the debts of corporations. “The corporate debts crisis thus becomes the crisis of governmental debts. The US debt in the beginning of 2009 amounted to $10.6 trillion. Taking into consideration the current deficit budget of the United States, as well as the prospects for the deficit of the budget during the current year, it becomes clear that the US Treasury bond market is based on no alternative whatsoever. There is no other way for investors to invest their funds with treasury bonds being the only option,” the expert told Bigness.ru.

When the world economy recovers, investors will realize that there are plenty of other opportunities for investments, the European bonds, for example (if the European economy recovers from the crisis too, of course), or the bonds of developing countries.

“The pyramid of US bonds will collapse in this case. The debt percentage grows every day, which makes the USA borrow more and more on a daily basis. America will have no chances to pay off the debt,” the expert said.

Inga Foksha, an analyst with Aton Investment Company, agrees that the US default is quite possible, although she is certain that it will not happen unless the world finds an alternative to the US dollar. The dollar will collapse immediately in case of default, which is absolutely unacceptable, because 63 percent of world reserves are saved in dollars. Their collapse will trigger the global economic collapse.

“Technically, the default of the United States may occur during three or five years, although it is too early to say that it could be possible. The USA can print new dollars to pay their debts with them,” she said.

Nevertheless, the US government bonds still enjoy investors’ support and are still considered a risk-free investment.

Dmitry Abzalov believes that the current situation with the US national debt may end with a new war. The war will destroy excessive liquidity and the current debt.

“The war in Iraq began to delay the US crisis, which started brewing in the US economy at the end of 2000,” he said.

The Americans have been trying to raise their economy with the help of military actions for decades, since the Great Depression of the 1930s. A war boosts the nation’s industry, even if a recovery is based on defense orders.
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Credit-Land.com

Is this the End of America?

U.S. law-making is riddled with slapdash, incompetence and gamesmanship

By Terence Corcoran

Helicopter Ben Bernanke’s Federal Reserve is dropping trillions of fresh paper dollars on the world economy, the President of the United States is cracking jokes on late night comedy shows, his energy minister is threatening a trade war over carbon emissions, his treasury secretary is dithering over a banking reform program amid rising concerns over his competence and a monumentally dysfunctional U.S. Congress is launching another public jihad against corporations and bankers.

As an aghast world — from China to Chicago and Chihuahua — watches, the circus-like U.S. political system seems to be declining into near chaos. Through it all, stock and financial markets are paralyzed. The more the policy regime does, the worse the outlook gets. The multi-ringed spectacle raises a disturbing question in many minds: Is this the end of America?

Probably not, if only because there are good reasons for optimism. The U.S. economy has pulled out of self-destructive political spirals in the past, spurred on by its business class and corporate leaders, the profit-making and market-creating people who rose above the political turmoil to once again lift the world out of financial crisis. It’s happened many times before, except for once, when it took 20 years to rise out of the Great Depression.

Past success, however, is no guarantee of future recovery, especially now when there are daily disasters and new indicators of political breakdown. All developments are not disasters in themselves. The AIG bonus firestorm is a diversion from real issues , but it puts the ghastly political classes who make U.S. law on display for what they are: aging self-serving demagogues who have spent decades warping the U.S. political system for their own ends. We see the system up close, law-making that is riddled with slapdash, incompetence and gamesmanship.


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World Trade Getting Much Worse. Air Freight Volumes Collapsed

CHICAGO -(Dow Jones)- A sharp drop in global trade is likely to result in falling demand for air freighters, although large plane makers Boeing Co. (BA) and Airbus haven't changed their production outlooks.

Analyst Joseph Nadol at JP Morgan late Wednesday cut his 2009 and 2010 earnings estimates for Boeing, noting that "the credit-fueled bubble of American consumer demand has significant implications for the Boeing 777, perhaps more than any other aircraft." Those airplanes have ferried goods to the U.S. from emerging markets like China and India, and have carried business passengers working in the trade.

According to the International Air Transport Association, air freight volumes have "collapsed," falling by 25% in January from the previous year. The trade group expects world gross domestic product to fall by nearly 2% this year, with no turnaround in sight for air cargo. Emerging markets, which for several years fueled strong growth for air freight carriers, late last year saw a significant decline in cargo traffic.
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HUNDREDS of Ponzi Scams are being investigated

Watchdog fears market ‘Ponzimonium’

US federal regulators have warned of a “rampant Ponzimonium” as they disclosed they are investigating “hundreds” of possible scams in the aftermath of the $50bn fraud allegedly perpetrated by Bernard Madoff.

Bart Chilton, a commissioner at the Commodities Futures Trading Commission, the US regulator, said the watchdog was “seeing more of these scams than ever before” in commodities and other futures markets.

Mr Chilton said the CFTC, which patrol commodities and financial futures markets such as derivatives on stocks and foreign exchange, was investigating “hundreds of individuals and entities, many of which were related to Ponzi scams”.

The CFTC has filed charges against 15 alleged Ponzi schemes so far this year, compared with 13 during the whole of 2008. If the rate were sustained, the regulator could end the year filling more than 60 cases, officials said.

US regulators have said they are detecting more scams than before as the publicity surrounding Mr Madoff‘s case prompts some investors to question the credibility of returns.

But this is the first time a senior regulator has publicly put the number of investigation in the “hundreds”.

“The floundering economy has unearthed many of these house-of-card scams,” said Mr Chilton. “In the last month alone we’ve gone after crooks in Pennsylvania, New York, North Carolina, Iowa, Idaho, Texas and Hawaii.”

Mr Chilton did not provide details of the investigations but it is likely the majority of the cases relate to small investments, in the range of a few million dollars to $50m (€37m, £35m). In the latest case, the CFTC this week charged a North Carolina investment company over an alleged $40m Ponzi scheme in foreign exchange trading.

“These frauds combined harmed tens of thousands of hard-working Americans, many of whom thought they were investing properly to save for retirement or even their first home,” said Mr Chilton.

“It is a good thing that folks are double-checking to ensure they aren’t being ripped off by fraudsters,” he said, referring to the increasing number of investors who are tipping off US federal regulators after they have become suspicious.

Get ready for a BANK RUN your deposits are going to ZERO

Sheila Bair ( Who is she? Click here) came out with some very scary words for depositors everywhere:
“Without additional revenue beyond the regular assessments, current projections indicate that the [depositor investor] fund balance will approach zero,” Bair said.
In the words of Lewis Black, I will repeat that, because it bears repeating:

“Without additional revenue beyond the regular assessments, current projections indicate that the fund balance will approach zero."

This is actually one of the most terrifying news I have heard in forever, as it goes to the heart of depositor confidence problem, with a next step being the global bank run that Kanjorski ( Who is he? Click here) was fuming about.

The reason for Bair's statement is to attempt to explain the need for the recently instituted fee increases for TLGP participants.
"Even though this increase comes at a difficult time, I strongly believe that keeping deposit insurance industry-funded will be better for you and your customers when this crisis is over."

“I’m optimistic that Congress will soon act on the borrowing authority increase,” Bair said. “This should give us the breathing room we need to reduce the special assessment, while covering all projected losses, with industry funds.”
Oh yes, let's not forget that Chris Dodd of such recent fame as the AIG bonus scandal, is trying to plough even more taxpayer money into a cause worthy of... saving taxpayer money... Still not too sure I understand how that works. But let the law of unintended consequences strike as it may.

There is a minor light at the end of the tunnel.
Bair said she wants to “end too-big-to-fail” models that have shaped U.S. policy and wants financial firms to reduce systemic risk by “limiting size” and “complexity.” She said regulators “need to impose higher capital requirements” to ensure banks have enough capital to withstand worsening economic scenarios.
In the meantime, Bair is praying that nobody realizes that there is no money left to insure America's deposits, and that everyone absorbs the optimism spewing forth from the lips of CNBC's Steve Liessman like a wet sponge.

Roubini: America One Big Ponzi Scheme and Second Largest Mall owner Faces 5 PM Deadline

By: Julie Crawshaw

For more than 10 years, millions of Americans ran their own personal Ponzi schemes, says NYU economist Nouriel Roubini.
"When you put zero down on your home, and you thus have no equity in your home, your leverage is literally infinite and you are playing a Ponzi game," Roubini writes in Forbes.

It’s a game virtually everyone played, Roubini notes. That’s how we became the United States of Ponzi.
Banks made interest-only, zero down payment liar loans to NINJA (no income, no jobs and assets) borrowers at initial teaser rates.
Private equity firms did over a $1 trillion of leveraged buyouts with a debt-to-earnings ratio of 10 or above.

Consumers allowed their debt relative to income to soar to 135 percent today from 65 percent in 1994.

“An economy where the total debt to GDP ratio (of households, financial firms and corporations) is now 350 percent is a Madoff Ponzi economy,” Roubini says.
All of which led to the United States to become the largest net foreign debtor in the world — and possibly defaulting on its foreign debt.
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Second Largest Mall owner Faces 5 PM Deadline

by CalculatedRisk on 3/20/2009 11:12:00 AM

In addition to watching for bank failures this afternoon, the 2nd largest mall owner in the U.S. - General Growth Properties - is facing a significant deadline:

From the WSJ: General Growth Shakes Up Executive Ranks

[General Growth's] most critical deadline is 5 p.m. Friday, when it hopes the majority of its bondholders will have agreed to refrain from demanding payment this year on $2.25 billion in bonds. If that effort fails, General Growth says it might need to seek Chapter 11 bankruptcy protection.
List of malls here:
Is your mall here?

More Government and corporate crime-Total CRIMINAL Chaos

WASHINGTON — At least 13 firms receiving billions of dollars in bailout money owe a total of more than $220 million in unpaid federal taxes, a key lawmaker said Thursday.

Rep. John Lewis, D-Ga., chairman of a House subcommittee overseeing the federal bailout, said two firms owe more than $100 million apiece.

"This is shameful. It is a disgrace," said Lewis. "We are going to get to the bottom of what is going on here."

The House Ways and Means subcommittee on oversight discovered the unpaid taxes in a review of tax records from 23 of the firms receiving the most money, Lewis said as he opened a hearing on the issue.

The committee said it could not legally release the names of the companies owing taxes. It said one recipient had almost $113 million in unpaid federal income taxes from 2005 and 2006. A second recipient owed almost $102 million dating to before 2004. Another was behind $1.1 million in federal income taxes and $223,000 in federal employment taxes.

"If we looked at all 470 recipients, how much would they owe?" Lewis asked.

Lewis said the panel plans to review tax records from other firms receiving federal money, but he was unsure if it would look at every firm.

"We're not done," he said.
CNN poll: Americans fear a new Great Depression
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The Fed is desperate now creating Massive Hyper-Inflation. Gold and Silver as much as you can carry!

Yesterday's FED announcement was immediately followed by the biggest single-day collapse in US Treasury yields ever, the biggest single-day drop in the US Dollar, ever, and the most dramatic single-day swing in Gold since 1980. The Federal Reserve indicated it would expand its balance sheet yet again by purchasing up to $300 billion of long-term government securities and up to $750 billion in additional mortgage-backed securities over the next six months. The press release failed to mention the FED doesn't have an extra Trillion with which to make these purchases, or that the 'money' would be created from THIN AIR, or that this process will eventually result in a terrible Zimbabwe style hyper-inflation. (here)
Surprised? Bill H. from last nights Le Metropole Cafe commentary helps clarify the FED's announcement: "This is panic by the Fed, plain and simple. It is also the admission of failure, failure of all the past plans to unthaw the credit crunch. If you watched Gold today, you saw it down $30 plus Dollars until the Fed announcement, it is now up $30+. If you had any questions as to whether Gold was manipulated or not, today's action should do it for you. Gold had no reason to be down hard except for the fact that it was necessary to "retard" it so a $60 rally would look like a $30 rally, HOW PATHETIC!!! If you had any lingering questions about owning Gold, they should be completely gone as the Fed "rang the bell" today, WE WILL DESTROY THE CURRENCY TO SAVE THE BANKING SYSTEM!" The pressure cooker in the precious metals is about to blow folks. I highly recommend as much REAL Gold and Silver as you can carry.

This is it!

Steve Merrill

The Mother of all DEPRESSIONS coming! The end of the DOLLAR.

The Mother of All Depressions (MOAD)
Bob Moriarty
Mar 19, 2009

The US government lit the fuse to the $683 trillion dollar derivative's debt bomb on Wednesday March 18, 2009 with the announcement the Fed would purchase $300 billion dollars worth of US Treasury used toilet paper and an additional $750 billion dollars worth of mortgage backed used toilet paper. In total the commitment to counterfeit over a trillion dollars leaves only $682 trillion dollars worth of derivatives to sort out.

Economics is all about price discovery. No one knows what the real value is of the $683 trillion dollars in derivatives. No one knows who owns what. No one knows who owes what. If left to its own devices, the market would lower prices until all assets had a value to someone. The government in its infinite wisdom has just short-circuited this discovery mechanism.

This is the end of the dollar. Everyone with any sense on earth will be unloading both their treasuries and mortgage-backed crap on the Fed. The Fed has just pissed $1 trillion of counterfeit money into a $683 trillion dollar cesspit. It can't possibly fix the problem. When the world realizes the impact of the Fed monetizing all debt, there will be a total default. And then what happens?

The Mother of All Depressions.

The ability to publicly fund its debt has been what has kept the US government spending. Once that ability is dead, so is the government.

The meeting of the G20 in London on April 2, 2009 will be the most important financial meeting in history. If the delegates do not adopt a new gold standard of honest money, the dollar will totally default within a few months. The fuse has been lit. There is nothing the government can do beyond what they have already done. Nothing has worked. Nothing can work.

Bob Moriarty
President: 321gold
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China Inc. On Huge Foreign Buying Spree!
China’s companies are fast finding ways to spend, snapping up raw materials across the globe while those assets are cheap.

Chinese companies have been have been gulping down tens of billions of dollars worth of key assets in countries as varied as Iran, Brazil, Russia, Venezuela, Australia and France, the Washington Post reports.
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AIG IS CHINESE!
The AIG companies were one of the very few U.S. companies to have their origins in China when their founder, C.V. Starr, formed American Asiatic Underwriters in Shanghai.

UN Panel says World should DITCH THE US DOLLAR

LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.

Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.

Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.

"It is a good moment to move to a shared reserve currency," he said.

Central banks hold their reserves in a variety of currencies and gold, but the dollar has dominated as the most convincing store of value -- though its rate has wavered in recent years as the United States ran up huge twin budget and external deficits.

Some analysts said news of the U.N. panel's recommendation extended dollar losses because it fed into concerns about the future of the greenback as the main global reserve currency, raising the chances of central bank sales of dollar holdings.
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Worst crisis since 1930s says Fed

US Federal Reserve chief Ben Bernanke says the world is suffering from the worst financial crisis since the 1930s.
Mr Bernanke argues that the roots of the current global economic downturn stem from global imbalances in trade and flows of capital in the late 1990s.
In a speech to the Council on Foreign Relations, he argues that the US and its trading partners did not do enough to redress these imbalances.
He also says future economic recovery depends on financial stability.

Mr Bernanke calls for "forceful, coordinated" action to combat the financial crisis.
"Until we stabilise the financial system, a sustainable economic recovery will remain out of reach," he says.
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The Recession/Depression has ENDED! Quotes that are similar TODAY

"The depression has ended." - Dr. Julius Klein, Assistant Secretary of Commerce
Quote


September 1929
"There is no cause to worry. The high tide of prosperity will continue." — Andrew W. Mellon, Secretary of the Treasury.

October 14, 1929
"Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board." — New York Times

December 5, 1929
"The Government's business is in sound condition." — Andrew W. Mellon, Secretary of the Treasury

December 28, 1929
"Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression." — Associated Press dispatch.

January 13, 1930
"Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today." - News item.

January 21, 1930
"Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction." - News dispatch from Washington.

January 24, 1930
"Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast." - New York Herald Tribune.

March 8, 1930
"President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days." - Washington Dispatch.

May 1, 1930
"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States - that is, prosperity." - President Hoover

June 29, 1930
"The worst is over without a doubt." - James J. Davis, Secretary of Labor.

August 29, 1930
"American labor may now look to the future with confidence." - James J. Davis, Secretary of Labor.

September 12, 1930
"We have hit bottom and are on the upswing." - James J. Davis, Secretary of Labor.

October 16, 1930
"Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment." - Charles M. Schwab.

October 20, 1930
"President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President's special committee on unemployment." - Washington dispatch.

October 21, 1930
"President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter." - Washington Dispatch

November 1930
"I see no reason why 1931 should not be an extremely good year." - Alfred P. Sloan, Jr., General Motors Co.

January 20, 1931
"The country is not in good condition." - Calvin Coolidge.

June 9, 1931
"The depression has ended." - Dr. Julius Klein, Assistant Secretary of Commerce.

For those of you that are history impaired, The Great Depression did not end until after 1941, and only because we entered into WWII.

Home of the 2010 Olympics: Real Estate is CRASHING! Lawsuits! Discounts!

Vancouver condo price drop leads to lawsuits and big discounts

Developers slash prices for some buyers while suing others who try to back out of deals
VANCOUVER — The number of developers suing pre-sale condo buyers for attempting to back out of their contracts is mounting in the fallout from British Columbia’s slumping real estate market.

At least six developers have filed a combined 74 suits in B.C. Supreme Court in Vancouver against buyers, claiming breach of contract for failing to complete their purchases for condominium units which, in many cases, are no longer worth the prices established in original contracts.

Amacon is one of the developers suing some 16 pre-sale buyers attempting to back out of their contracts in its now-complete Morgan Heights project in south Surrey.

The lawsuits are a sign of the tensions that arise when real estate markets turn from upturn to downturn, Tsur Somerville, director of urban economics and real estate in the Sauder School of Business at the University of B.C., said in an interview.

However, on Tuesday, Amacon announced it is slashing prices on a signature downtown Vancouver building where construction has not yet started.

Amacon said it is cutting prices in The Beasley project by 22 per cent, some $100,000 to $250,000 and more per unit, based on reductions in construction costs for both pre-sale buyers who signed higher-priced contracts last spring and bidders for 70 to 80 unsold units it will release to the public in early April.
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Depression Unrest Turmoil Instability Riots all coming and SOON

Marc Faber says:

The best bet for investors may be to buy a farm and escape from the cities, as a prolonged recession could lead to war, as the Great Depression did. If the global economy doesn’t recover, usually people go to war.
Jim Rogers says:
I expect to see social unrest, civil unrest in the United States a couple of years from now. Yes its changing the entire situation in the United States, the US is the largest debtor in the history of the world. There is a dramatic change taking place.

The world's century is moving from the west to the east, to Asia and many people have not figured this out yet.

Yes, you are going to see a lot of turmoil in the United States in the next 3, 4, 5 years.
Director of National Intelligence Dennis C. Blair said:
"The global economic crisis ... already looms as the most serious one in decades, if not in centuries ... Economic crises increase the risk of regime-threatening instability if they are prolonged for a one- or two-year period," said Blair. "And instability can loosen the fragile hold that many developing countries have on law and order, which can spill out in dangerous ways into the international community."***
Former national security director Zbigniew Brzezinski warned "there’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots."
The chairman of the Joint Chiefs of Staff warned the the financial crisis is the highest national security concern for the U.S., and warned that the fallout from the crisis could lead to of "greater instability".
Others warning of crash-induced unrest include:
The head of the World Trade Organization
The head of the International Monetary Fund
Senator Christopher Dodd
Congressman Ron Paul (radio interview on March 6, 2009)
Britian's MI5 security agency
Leading economic historian Niall Ferguson
Leading economist Nouriel Roubini
Leading economist John Williams
Top trend researcher Gerald Calente
European think tank Leap2020
The Start of TURMOIL HERE:
A group of disgruntled workers at a recently closed auto parts supply company in Windsor, Ont., have taken over the plant.

In the latest bizarre twist in a saga that has been brewing since two auto plants in the area shut down early last week, about a dozen workers occupied the Aradco plant Tuesday night. They have welded the doors shut from the inside and say they will not leave until they get what they are owed.

Work at the Aradco plant stopped last week because of a dispute between the plant owners and Chrysler, which has mused publicly about pulling out of its Canadian operations unless unionized workers make substantial concessions.

Employees reject severance offer
The Canadian Auto Workers Union that represents the Aradco workers say that in the wake of the shutdown, the workers are owed money for severance pay, vacation pay, and termination pay totalling $1.7 million.

The plant's owner, Catalina Precision Products Ltd. has offered the workers four weeks of severance pay — or about $200,000 in total for all 80 workers.

The plant builds parts for Chrysler. Since last week, Chrysler has been trying to go in and collect parts and tools it says are the company's, but the workers are not allowing it. They have been blocking trucks from coming on to the property. Union representatives say the workers fear that if the tools and parts are removed, they will have no negotiating power.

"Some of the workers here have decided to take over the plant. That's the only thing they have in order to try to get the monies that are owing to them," said Gerry Farnham, president of the CAW local representing the workers.

Treasurys Are 'Disaster Waiting to Happen': Dr. Doom

The Federal Reserve has no option but to start buying Treasurys as the government's needs for financing are huge, but the government bond market is a disaster in the making, Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, told CNBC.
Federal Reserve policymakers start a two-day meeting on Tuesday, weighing options on how to spur lending to help cash-strapped consumers kickstart the economy.
Economists expect them to leave rates at zero and look to other ways of boosting liquidity, such as buying government bonds – a measure which has already been taken by the Bank of England.
But there will be a time when the Federal Reserve will have to increase interest rates to fight inflation, and it will be reluctant to do so because the cost of servicing government debt will rise substantially.

"So we'll go into high inflation rates one day," Faber said.

The stock market is likely to continue its bounce at least for a while, but the outlook is bleak, he added.
"I think we may still have a rally (in the S&P) until about the end of April and probably then a total collapse in the second half of the year sometimes, when it becomes clear that the economy is a total disaster," Faber said.
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Congress members have MILLIONS invested in AIG! Obama Received a $101,332 Bonus from AIG!

Elizabeth Dole Robin Hayes
By Lisa Zagaroli, McClatchy Newspapers

Some N.C. members of Congress have more than a typical stake in the health of the financial services industry.

Most notable are Rep. Robin Hayes, a Concord Republican, and Sen. Elizabeth Dole, R-N.C., who have substantial personal investments in American International Group, the insurance giant that was rescued by a federal loan.

Hayes had between $2.8 million and $11.5 million of his personal fortune invested in AIG, according to his 2007 personal financial disclosure forms. That was more than any other member of Congress, the Center for Responsive Politics said.

Dole had between $1.1 million and $5.3 million invested in the company's stock. Lawmakers are required to report each asset in ranges, such as $500,000 to $1 million, rather than specific amounts.

Lawmakers may be asked in coming days to vote on a major bailout of the industry, with price tags as high as $700 billion for the White House's initial proposal.

“At the same time members of Congress are sorting out what the cost of this is to taxpayers, there's also a cost and a potential benefit to some of them personally,” said Massie Ritsch, a spokesman for the Center Responsive Politics, a nonprofit watchdog group that examines money in politics.
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Obama Received a $101,332 Bonus from AIG
Link
AIG receipients
HERE

Chief Doubts Chrysler Would Survive Bankruptcy

AUBURN HILLS, Mich. — Chrysler’s chairman cast doubt Monday on whether the struggling automaker could survive a government-sponsored bankruptcy reorganization.

“I hope I’m wrong, but I don’t have a lot of confidence in today’s environment that we can emerge from bankruptcy,” the company’s chief executive and chairman, Robert L. Nardelli, said in an interview.

Chrysler is asking the federal government for $5 billion in loans in addition to $4 billion it had already received. The company says it is in danger of running out of money without more federal aid.

President Obama’s auto task force is considering a variety of options to rescue both Chrysler and General Motors, which is seeking up to $16.6 billion on top of $13.4 billion it has gotten since the end of last year.

Members of the task force, including the former investment bankers Steven A. Rattner and Ron Bloom, met last week with Mr. Nardelli, toured a Chrysler truck plant and reviewed the company’s product plans.

In Chrysler’s restructuring plans, submitted to the Treasury Department on Feb. 17, the automaker estimated that it would require up to $25 billion in government assistance if it were to file for bankruptcy protection.

“Why would the government want to spend $20 to $25 billion, when you can spend $5 billion?” Mr. Nardelli said.

In bankruptcy, a judge could void Chrysler’s labor and supplier contracts and restructure its debt.
But Mr. Nardelli said he feared consumers would shun Chrysler’s cars, trucks and sport utility vehicles if the company sought court protection.
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IMF poised to print billions of dollars in 'global quantitative easing'

Note: All the more reason to BUY GOLD/SILVER for the coming hyperinflation!
The International Monetary Fund is poised to embark on what analysts have described as "global quantitative easing" by printing billions of dollars worth of a global "super-currency" in an unprecedented new effort to address the economic crisis.

By Edmund Conway
Last Updated: 9:07AM GMT 16 Mar 2009

Alistair Darling and senior figures in the US Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression.
Should the move, which is up for discussion by the summit of G20 finance ministers this weekend, be adopted, it will represent a global equivalent of the Bank of England's plan to pump extra cash into the UK economy.


World now in grip of 'Great Recession' warns IMF
However, economists warned that the scheme could cause a major swell of inflation around the world as the newly-created money filters through the system. The idea has been suggested by a number of key figures, including billionaire investor George Soros and US Treasury adviser Ted Truman.
Simon Johnson, former chief economist at the IMF, said: "The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them.
"The objective is to create a windfall of cash. However if everybody goes out and spends the money it could be very inflationary."
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Financial System Far worse than 1929 Depression

THIS ECONOMIC CRISIS doesn't have to be a second Great Depression - if government does nearly everything right, and soon. But if government doesn't do more, and fast, this could be worse than the 1930s. Why? Three big reasons:

Finance: A Doomsday Machine. The financial system is in far worse shape than it was when the stock market crashed in October 1929. In the 1920s, there was a stock market bubble, mainly because people could play the market "on margin," borrowing to invest in stocks. There were also scams like the original Mr. Ponzi's. Like in the present decade, the Federal Reserve helped to enable the game, with low interest rates and few rules.

But today, thanks to "securitization" of loans and the ability of insiders to create exotic and unfathomable financial instruments, the speculative system makes buying stocks on margin look like child's play. In the aftermath of the crash of 2008, the process of sorting it all out and getting banks functioning again is something that markets simply cannot do.

We are not even clear who owns what. The wise guys on Wall Street invented a doomsday machine from which there is no market escape.

In 1929 when the stock market crashed, the banking system was relatively healthy. Bank customers played these speculative games and took the losses, not banks. This time, the banks drank their own Kool-aid.

It took until the awful winter of 1932-'33 for the general depression to fully infect the banking system, and cause over 7,000 banks to fail. But Roosevelt's cure - deposit insurance and a temporary bank holiday to sort out good banks from bad - quickly got the financial system up and running again. Today, the banking mess is still dragging down the real economy, with no effective cure in sight.

Wealth, Deficits, and Demand. The economy now bears all the hallmarks of a depression. Between the housing collapse and the stock market crash, American households are out several trillion dollars (in the 1920s, there were no 401(k) plans and less than 2 percent of Americans owned stock).
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Think recession's bad? Try a CATACLYSM! World finances shaken to roots within a year.

Note: Above is an economist stating that if ALL DEBTS were cancelled we would begin a recovery-Listen.
There is a growing list of educated people predicting the trillions of dollars spent by governments around the world to stimulate a moribund economy will not work.

There's already Peter Schiff, head of Euro Pacific Capital in Connecticut, and Peter Morici, professor at University of Maryland and former chief economist of the U.S. International Trade Commission. And you can add the name of Allan Brennan, manager of economic analysis and forecasting with the Alberta government's Department of Infrastructure and Transportation.

"Stimulus packages will not help the economy at all," Brennan said in a presentation with Dundee Private Investors branch manager Trevor Hamon. "A lot of money is going to banks, but unless you get that money to consumers, things will not improve."
Brennan said that within a year, we will face a cataclysmic event that will shake world finances to the roots, leading to a major period of either deflation or hyperinflation, either of which will rock the global economy. Just what that event will be, he's not sure.
It could be the failure of eastern European countries, or the collapse of the American dollar. If it causes hyperinflation, investors can prosper by letting stock prices plummet for a couple of months, and then invest in commodities, with copper leading the rebound.
Hamon warned that banks have lured people into home-equity lines of credit, and they are now retiring while still in debt.

"In the next couple of years, the art of investing will be not losing your principal," Brennan said. "The way out of this, in the long term, is for people to start saving."

He said the nationalization of banks is inevitable, but it will be done "under the table." He sees the British pound disappearing as an independent currency, the U.S. dollar in peril as the reserve currency, and the euro perhaps splitting into a strong Nordic and weak Latin one.
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Its getting MUCH WORSE! Global Trade COLLAPSING. Worse than GREAT DEPRESSION

Global trade collapsing
Commentary: U.S. exports falling at 49% pace as customers fade away

By MarketWatch
Last update: 12:37 p.m. EDT March 13, 2009Comments: 21
WASHINGTON (MarketWatch) -- For a while, some analysts held out hope that the rest of the world would be spared the devastation of the collapse of the great American credit bubble. The global economy had de-coupled, they said. America's problems were her own.
No one is saying that any more.
In fact, the latest evidence shows that global trade flows are plunging at an alarming rate.
The Commerce Department reported that the volume of U.S. imports from abroad fell 4.6% in January while exports declined 8.6%, the most since the monthly trade figures were first collected in 1992. See full story.More
Over the past five months since the credit crunch intensified, real exports have plunged at a 49% annual rate, while real imports have fallen at a 30% pace.
The pace of the decline is unprecedented in modern times, economists say. "We doubt even during the Great Depression that trade collapsed with such ferocity," said David Greenlaw, an economist for Morgan Stanley.
The Great Recession, as the IMF calls it, has severed a crucial link in the global economy. U.S. consumer spending has been the main engine of growth for the whole world, but that spending was based largely on phantom gains in asset prices that were inflated by that cheap money from abroad that has now been disrupted.
The profits that foreign producers made from selling to America, in turn, created millions of jobs in places such as China, Southeast Asia and the Persian Gulf. That was then: China reported its exports plunged 25% in February compared with a year earlier.
Those jobs are disappearing, sparking a great reverse migration back to rural China, the Philippines and South Asia. In China, an estimated 20 million workers have lost their jobs. It's not just the American economy that needs to adjust to the new reality. The rest of the world will have to re-examine just where growth comes from.
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20/20 and economists all say "No Stimulus"

House Prices may fall another 55% and Britain will be BANKRUPT

House prices may fall by a further 55 percent and there is a "very real probability" that Britain will be bankrupted, a leading investment bank has warned in a private note to clients.
People who bought buy-to-let flats are expected to “begin panic selling” and the average home value could drop below £100,000.
The predictions in a 298-page report from Numis Securities, a City investment bank, are the bleakest yet on the deteriorating state of the British property market.

House prices have already fallen by about 20 per cent over the past year.
However, in the note written last month, Numis said: “Despite UK house prices already having fallen 21% from the peak, we do not believe that the correction is anywhere near over.
“Our core headline forecast is that UK property prices remain between 17% and 39% overvalued based on fair valuation. Moreover, history has shown us that when property…which has experienced a price bubble corrects, the price tends to fall below fair value for a period of time, as confidence in that market remains low. Prices could fall a further 40-55% if the over-correction was as bad as the early 1990s in our view.”
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