Insiders, Banks, Credit Card Companies Do Not Believe in a Recovery

Direct mail credit card offers peaked in Q3 of 2006 with approximately 2.1 billion being sent out. In Q3 of 2009 only 391 million have been sent out. In other words, credit card companies definitely don’t believe in the recovery and they certainly don’t believe in the American consumer. On top of this drop, credit card companies are now jacking up fees on good standing customers, adding annual fees for inactivity, and basically acting like your local loan shark. At times they are even charging 79.99 percent interest rates that would make Tony Soprano blush. If we really look at the data, the economy is doing anything but recovering. Actually, it is recovering but for those on Wall Street and the banks. The average American is merely subsidizing their party. By the way, the banks are largely the reason for the decade long housing bubble.
If you really want to see how much insiders believe in this rally, let us look at some details from last week. Insiders for the week with data from Thomson Reuters bought 8.2 million dollars worth of stock during last week. How much was sold? 184 million dollars. This pattern has been occurring the entire rally. Now wouldn’t you think insiders would have a better sense of the true nature of this economic recovery?
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Americans are Preparing for the Great Depression are YOU?
Survival Seeds

12 Places to Go If The World Turns To Hell

War, oil shortages, global warming, nuclear bombs, and economic collapse... All of it seems unlikely, but don't you want to be prepared?
If you have to jump on a plane (or a boat or a train or a hot air balloon) and head for safety, you want to know where in the world you should go.
We've selected places that we expect will remain fortresses of stability, safety, and prosperity no matter what the world throws at it.
Here's where to go:
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GLOBAL DEBT MAP-CHECK YOUR COUNTRY:
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Americans are Preparing for the Great Depression are YOU?
Survival Seeds

Costco to Accept Food Stamps Nationwide

Costco Wholesale plans to accept food stamps at its warehouse stores nationwide, a major shift for a company that earlier this year said it doubted there would be enough demand among customers to warrant accepting food stamps in even one market, New York City.

"The rules are different today," CEO Jim Sinegal said. "People who were in good shape financially all of the sudden are needing some assistance."

He expects Costco to accept food stamps in at least half its roughly 410 U.S. stores by Thanksgiving, including its 28 locations in Washington state.

The decision comes several months after the country's third-largest retailer began a food-stamp test at stores in Queens and Brooklyn, in response to pressure from politicians who asked the company to accept food stamps at an East Harlem store scheduled to open next month.

At first, the Issaquah company balked at the idea, saying it doubted its customers, who pay an annual fee of at least $50 would use food stamps.
LINK HERE

Americans are Preparing for the Great Depression are YOU?
Survival Seeds

American Protesting Big Banks

The protests at the American Bankers Association Conference in Chicago are over, but the campaign of venting anger and criticism against the nation’s largest banks continues.

Today, protesters in Oregon and Washington are planning to walk into local branches of J.P. Morgan Chase and cancel their personal checking and savings accounts. The act is meant to protest CEO James Dimon’s opposition to the Obama Administration’s proposal to create a new consumer protection agency. [Dimon has said the new agency would create cumbersome, costly restrictions and the banks will likely pass those costs onto the consumers.]

The protest groups urge the public to switch their accounts in big banks to community banks. But the financial crisis has tarred small banks, too. Many are reeling from their own excessively risky lending practices, mostly to commercial real-estate developers. About half of the 106 banks to fail this year are small banks with $250 million or less in assets.
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Many Americans are Preparing for the Great Depression:
With Survival Seeds

Black Monday: Ancient History Or Imminent Future?

Once upon a time, the term "Black Monday" was to Wall Street what the name "Lord Voldemort" was to Hogwarts. It turned the air freezing cold and sent traders flinching around every corner in fear of a repeat of the October 19, 1987 or October 28, 1929 meltdown.

Case in point: The 2008 "Black Monday" anniversary. At the time, the U.S. stock market was locked in a ferocious downtrend that included regular, triple-digit daily declines of 400 points and more. Needless to say, when the final two Mondays of October arrived, the least superstitious investors surrounded their portfolios with more good-luck talismans than a Bingo player. See October 19, 2008 AP headline below:

"Black Monday: Stocks Sink As Gloom Seizes Wall Street. Prolonged Economic Turmoil" is seen.

That was then. Today, the usual dread surrounding the back-to-back string of "Black Mondays" is nowhere to be found. In its place, media reports abound of a new, global bull market "shrugging off," "ignoring," and "making a distant memory" of the event.
For one, "gloom" hasn't "seized" the U.S. stock market in quite a while; from its March 2009 low, the Dow has risen more than 50% to above the psychologically important 10,000 level. For another, the mainstream experts insist that today's financial animal is unrecognizable to that of 1987, and especially 1929. In their eyes, it's a completely different -- i.e. safer, smarter, and sounder system.
We beg to differ...
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Now, take a look at these headlines from the week of October 12-17, 2009:

"The Great Recession Is Over." (Reuters) --- "80% of Economists Say The Worst Is Behind Us." (CNN Money) --- "The Bull Is Back" (AP) --- "The Economic Recovery Is Well Underway" (Wall Street Journal)

They're interchangeable -- Eighty years later.
.
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Many Americans are Preparing for the Great Depression:
With Survival Seeds

Ukraine Shutting Down? Its Economic Collapse Not Swine Flu

In Ukraine, schools have been closed, all public events have been banned and restrictions imposed on people’s movements after the country confirmed its first death from H1N1 swine flu.

Prime Minister Yulia Tymoshenko announced a three-week period of precautionary measures and health officials are said to be considering introducing quarantine across the country..

An outbreak of flu and pneumonia has killed 30 people in western Ukraine since mid-October, but until now officials have been insisting the H1N1 strain was not the cause.

A health ministry spokeswoman said not all the dead were tested, but checks on one body have proved positive.
LINK HERE

Putin: Ukraine may fail to pay for gas, again
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Many Americans are Preparing for the Great Depression:
Survival Seeds

Ron Paul: Get Prepared This Will End Badly

Note: Cash For Clunkers Graph
The large-scale government intervention in the economy is going to end badly.

Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.

A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.
Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions.

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What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years.
LINK HERE

GOVERNMENT GDP NUMBERS ARE BOGUS
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Homeless Students and Families Living In Storage Facilities

Maria Maior's son is a football-playing, skateboard-riding, Xbox-loving kid whose home reveals all the trappings of domesticity: a cushy sofa, big-screen TV, a framed poster of Brian Urlacher -- one of the 12-year-old's favorite football players. On most evenings, two big dogs curl up on the carpeting.

The scene could be lifted from any suburban subdivision -- except that it's located not in a den, but in a storage unit.

The boy moved into the 10-foot-by-25-foot bunker about two months ago with his mom and her fiance, after a long run of bad luck and the loss of both of their jobs. His mother didn't not want his name used for this article. "As long as I have my parents, I'm fine with this," Maior's son said of the accommodations. "It's really not that bad."

School district officials said the boy is one of a record number of area students living in motels, campgrounds, shelters, cars and, yes, storage facilities.
LINK HERE

Peter Schiff On Phony GDP Growth (Video)

The US government has a technology, called a printing press... that allows it to produce as many US dollars as it wishes at essentially no cost." - Ben Bernanke

New York State Is So Broke It Steals From Itself To Pay Off Unapproved Debt

The surrealities of a "healthy" economy never end. The latest indication of the new banrkupt normal is New York State itself. A new report by NY state comptroller Thomas DiNapoli entitled "Highway Robbery: State's ailing road and bridges robbed; State siphoned money to pay for operations and debt service" tells you all you need to know about just how prosperous the ailing economy really is. According to DiNapoli, "only one-third of the money in the Highway and Bridge Trust Fund has actually been used to pay for highways and bridges.
The rest has been siphoned off to pay for debt service on back-door borrowing and to fund operational costs for the DMV and the state Department of Transportation." Is that lack of stolen pocket change Mr. DiNapoli can believe in? Apparently not - Mr. DiNapoli's words: "I think outrage and anger is certainly appropriate; we need to channel that into thoughtful public policy." Yet anger is so September 2008. Welcome to the Xanax highs of the new credit bubble.
LINK HERE

International Forecaster: A Great Depression For 5 Years or More

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This is the first time ever that the S&P 500 has ever rallied 60% in six months. The Dow reached 10,000, when it should not have exceeded 8,500. That shows you the distortion and manipulation going on and points up the now blatant activities of the President’s “Working Group on Financial Markets,” which, of course, operates in secret. As a tribute to this phony rally we have lost 2.5 million jobs over its tenure, when two million are normally created. Are there no professionals out there that get it? They cannot all be that dumb, and they are not that dumb. They are engaging in a conspiracy of silence. They want to be thought well by their peers at the club. They do not want to be ostracized in the Wall Street click. We know we were there for 28 years, of course, always on the outside looking in, permanently known as goldie. If you want to see where the US stock market is eventually going take a look at Japan from 1992 to today. 70% losses and still unable to get out of its own way with an economy still in depression. Incidentally, if the US market copies Japan, which we believe it will, we could easily fall to 3,800 to 4,200 on the Dow and we’ll be very lucky if it holds there. Others whose opinion we respect are looking for 2,800. Wall Street is pricing into the market earnings not only for 2010 but 2011 as well, which is very dangerous in such an environment. We are still in the worst credit crisis since the 1930s.
LINK HERE

Gold to Rise to $2,000 Amid ‘Massive’ Inflation, Silver to Soar

Oct. 28 (Bloomberg) -- Gold may rise to a record $2,000 an ounce in the next three years as investors hedge against “massive” inflation sparked by governments printing money, according to Superfund Financial Singapore Pte’s Aaron Smith.

“In the next few years, after the deflation cycle, we’ll see massive inflation,” Managing Director Smith, 30, said in an interview. “Soon, when you go to buy a cup of coffee, you’ll pay $20 or $30 because the dollar won’t be worth anything.”
LINK HERE

Turkey Dropping Dollar in Trade With China and Iran

ANKARA, October 28 (RIA Novosti) - Turkey is switching to national currencies in trade with Iran and China, ending dependence on the U.S. dollar and the euro for about 20% of its commodity turnover, local media reported on Wednesday.
Turkey has already switched to settlements in national currencies with Russia amid weakening confidence in the greenback as the world's major reserve currency. The move was initiated by Turkish President Abdullah Gul during his visit to Moscow in February.
Turkey's decision to make settlements with Iran and China in national currencies was announced during a visit to Iran by Turkish Prime Minister Recep Tayyip Erdogan. The Turkish premier told a Turkish-Iranian business forum on Tuesday that the countries had prepared a legal framework for transition to settlements in national currencies.
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This Recession just became a Depression
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Government Tax Receipts Down 20 Percent Year over Year:
LINK HERE

SAUDI'S DROP USA OIL TRADE CONTRACTS

Saudi Arabia on Wednesday decided to drop the widely used West Texas Intermediate oil contract as the benchmark for pricing its oil, dealing a serious blow to the New York Mercantile Exchange.

The decision by the world’s biggest oil exporter could encourage other producers to abandon the benchmark and threatens the dominance of the world’s most heavily traded oil futures contract. It is the main contract traded on Nymex.

The move reveals the growing discontent of Riyadh and its US refinery customers with WTI after the price of the price of the benchmark became separatedfrom the global oil market this year.

The surge in oil inventories in Cushing, Oklahoma, where WTI is delivered into America’s pipeline system, depressed the value of the WTI against other global benchmarks, throwing the global oil market into disarray.

In January, WTI, which usually trades at a premium of $1-$2 a barrel to Brent, fell sharply, leaving it at a discount of almost $12 – a record gap. This dislocation in the market continued well into the summer.

From January, Saudi Arabia will base the price of oil for its US customers on a new index developed by Argus, the London-based oil pricing company.

The Argus Sour Crude Index will track the price in the physical market of a basket of US Gulf Coast crudes, including Mars, Poseidon and Southern Green Canyon.
LINK HERE

New Zealand: Deep in Debt With No Way Out

The economic crash has seen Treasury dramatically revising its long term outlook for the economy, questioning Government spending in virtually every area, including the eligibility of the pension for 65-year-olds.

Treasury says if spending follows historic trends, the books will remain in the red beyond 2050 and debt will rise to 220 per cent of the country's wealth.

It points to other countries raising the eligibility age for the pension, with Treasury Secretary John Whitehead saying decisions made now can prevent economic disaster later.

Mr Whitehead says making early incremental change reduces the risk around the quality of decision making and gives people time to adjust. The Government has been adamant it won't change the eligibility age.
LINK HERE

Will History Repeat Itself?

Just a reminder: Tomorrow is Oct 29, 2009. 80 years ago, on Oct 29, 1929, the biggest market crash in history occured. Will History repeat Itself?

Is Your Fav Website On List To Block by DHS During Pandemic?

GAO report says feds should regulate Internet traffic to cope with overloads.
"Private Internet providers might need government authorization to block popular websites, the report states, or to reduce residential transmission speeds to make way for commerce". "DHS has not developed a strategy to address potential Internet congestion," the report said.
The GAO report also highlights the lack of knowledge about whether the public, other federal agencies, as well as ISP's would co-operate with any directive to regulate the Internet during a pandemic. DHS's Jerald Levine hinted that the feds would be eager to regulate the web and block websites in the event of a pandemic, stating, "An expectation of unlimited Internet access during a pandemic is not realistic."

The agenda to introduce government control and regulation of the Internet has accelerated since President Obama took office.

The Cybersecurity Act of 2009, introduced by Senators John Rockefeller (D-W. Va.) and Olympia Snowe (R-Maine) in April, gives the president the ability to "declare a cybersecurity emergency" and shut down or limit Internet traffic in any "critical" information network "in the interest of national security." The bill does not define a critical information network or a cybersecurity emergency. That definition would be left to the president, according to a Mother Jones report.
LINK HERE

The American Dream: A Home, Then a Homeless Shelter

There is a certain level of pride and accomplishment associated with being a homeowner. It is, after all, the American Dream. On the flip side, checking into a homeless shelter carries its own stigma. These days, thanks to the foreclosure and economic crisis, growing numbers of people are experiencing both of these extremes as homeowners-turned-homeless.

Growing numbers of homeowners who lost their homes to foreclosure are winding up in homelessness shelters, according to a report released this summer by a coalition of housing and homelessness advocates. (This population is distinctively different than renters evicted from rental property due to foreclosure.) According to the report, foreclosure was rarely a factor leading to homeless three years ago. But in the past year, an average of 10 percent of homeless individuals seeking shelter lost homes to foreclosure.

The NY Times piece details the story of Sheri West who used to run a transitional shelter program and owned her own home. Over a year ago, she lost her house to foreclosure. She spent a year living out of her car and on the couches of friends and family, delaying the inevitable. Finally, she sought a bed in a homeless shelter.

Talk about the ultimate irony.

The part that I found so unsettling about the NY Times piece wasn't the devastation of West's plight. It was her closing quote: "I do want to eventually own a house again," she said. "That's the American dream. That's what everybody wants."

GERALD CELENTE Discussing The Swine Flu Shot and Economy (Listen)
LISTEN HERE

The Beginnings of a Welfare Nation

WASHINGTON (MarketWatch) - The Senate moved closer Tuesday to approving an extension of unemployment benefits for an extra 20 weeks.

The Senate agreed on an 87-13 procedural vote to bring the measure to a final vote, killing a Republican filibuster that had delayed action for more than a week.

If the bill is approved by both chambers on Capitol Hill and is signed by the president, those who cannot find work would be eligible for a maximum of 99 weeks of benefits.

The Senate bill would extend benefits for 14 additional weeks in all states, and an additional six weeks in states with unemployment rate above 8.5%. In September, 26 states and the District of Columbia had unemployment rates above 8.5%.

Nationally, the unemployment rate was 9.8% in September, the highest in 26 years. Most analysts expect the unemployment rate to reach 10% soon and to remain above 9% for at least another year, even if the economy continues to recover.
LINK HERE

Own A Safety Deposit Box? Better Read This

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But while this was the Metropolitan Police's most ambitious operation in its 180-year history, it had nothing to do with national security. Only hours before, at a special briefing, teams from SCD6 (the Economic And Specialist Crime unit) and C019 (Specialist Firearms Command) hunkered down with technicians armed with angle grinders and drills. Also present were dog handlers, their animals trained to sniff out guns, drugs and explosives.
In all, more than 500 officers had gathered to receive orders to raid smart addresses in well-heeled parts of the capital. The locations included three of Britain's largest and most well-established safety-deposit box depositories in Edgware, Hampstead and Park Lane as well as an office and the homes of the three directors of Safe Deposit Centres Ltd, which owned the vaults - two in Hampstead and one in Barnet.
For most of those at the briefing, arriving just before 3pm on June 2 last year, this was the first they had heard of the operation. Secrecy had been paramount and, with so many involved, keeping the operation 'airtight' had been one of the largest headaches in the pre-planning for what was codenamed 'Rize'.
The police rolled through London in a convoy: scores of patrol cars, armed-response vehicles, outriders on their bikes, vans with their windows shielded by metal cages. With a Met film unit recording everything, detectives forced their way past startled security guards, demanding receptionists open the secure doors that led to the normally hushed strong rooms, which in the three centres housed 6,717 safety deposit boxes.
LINK HERE

Councils get ‘Al Capone’ power to seize assets over minor offences
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GMAC Needs More Money To Survive: The Government Bows

In a stark reminder of how some battered financial firms remain dependent on government lifelines, GMAC Financial Services Inc. and the Treasury Department are in advanced talks to prop up the lender with its third helping of taxpayer money, people familiar with the matter said.

The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said. The latest infusion would come in the form of preferred stock. The government's 35.4% stake in the company could increase if existing shares eventually are converted into common equity.
LINK HERE

937,840 Foreclosures Q3, Highest Ever

What recovery? There were 937,840 foreclosures in Q3 in the US, according to RealtyTrac, the highest quarterly level since they starting issuing reports in 2005. Let's take a closer look via giant sexy graphic visualization.

Sure home sales have picked up the past few months, but is it sustainable, or mainly people trying to get in before the new homebuyer tax credit expires in November?

Consumers are more stressed than ever to make their mortgage payments. With hundreds of thousands of Option-ARM mortgages resetting this month, high unemployment, strapped bank accounts and cut credit lines, the housing crisis is far from over.
LINK HERE

Fantasy Housing Numbers a Prelude to the Next U.S. Crash
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Vigilante Home Owners: Torture and Beat Loan Agents

LOS ANGELES --Five people are charged with torturing and robbing two loan modification agents they thought falsely promised to save their home from foreclosure.

Two men were charged Monday with torture, robbery and false imprisonment.

Another man and two women pleaded not guilty to the same charges Friday.
Prosecutors say Daniel Weston and Mary Ann Parmelee hired two loan modification agents in hopes of keeping their home but believed the men took their money and did nothing.

Prosecutors claim the victims were lured to Glendale on Oct. 20, held for hours, beaten and robbed before one escaped.
LINK HERE

Possible Credit Dislocation: Be Warned

I have reason to suspect that the "monetary transmission mechanism" is full of rocks (again), and we are about to have another instance of what could colloquially be called "fun." (Yes, that's sarcasm.)

Here's what we know and what I can deduce from it:

JP Morgan's "cash position" was analyzed by a writer who published on SCRIBD, which showed that actual cash held has deteriorated radically. By more than half in the last year. The deterioration is continuing, not slowing.

I am hearing repeated anecdotes from multiple areas that foreclosed property held by banks with multiple full-price offers that include a financing requirement are being sold instead to people with actual cash at radical reductions from that price. This implies that these financing contingencies are regarded as not only potentially no good but factually no good, as if the banks know for a fact that the credit pipeline will (not might), within weeks or months (in the time required to close), disappear. There is no other rational explanation for this behavior.

Citibank's credit-card terms change implies a willingness to accept and even provoke a complete and intentional destruction of their credit card business as a very high probability outcome, given that nobody in their right mind will accept a 30% interest rate who has an alternative. The obvious implication is that only those who can't transfer balances out will remain and if your credit is that impaired there's a good chance you will default - either intentionally or otherwise. This too implies foreknowledge of a near-complete impending freeze in the credit markets.
LINK HERE

Ready For The Next Crisis?

By Paul Craig Roberts
Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal.

Evidence that the US is a failed state is piling up faster than I can record it.

One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests.

Another conclusive hallmark is rising income inequality as the insiders manipulate economic policy for their enrichment at the expense of everyone else.

Income inequality in the US is now the most extreme of all countries. The 2008 OECD report, "Income Distribution and Poverty in OECD Countries," [PDF]concludes that the US is the country with the highest inequality and poverty rate across the OECD and that since 2000 nowhere has there been such a stark rise in income inequality as in the US.

The OECD finds that in the US the distribution of wealth is even more unequal than the distribution of income.

On October 21, 2009, Business Week reported that a new report from the United Nations Development Program concluded that the US ranked third among states with the worst income inequality. As number one and number two, Hong Kong and Singapore, are both essentially city states, not countries, the US actually has the shame of being the country with the most inequality in the distribution of income.
LINK HERE

Desperate For A Job: Lawyers, Scientists, Engineers, Accountants

NANCY FINK is a career coach for Maryland’s department of labor, running seminars for the most skilled unemployed workers.

For 17 years, she has counseled professionals, business managers, engineers, accountants, scientists — people who are mature, middle-aged, highly motivated, well-educated, well-spoken. But in all that time, she’s never seen so many of the jobless with such impressive skills as this last year. “Last week I had seven lawyers in this room,” she said. “I’ve had lots of folks from TV and The Baltimore Sun. This week I’ve got five human resources directors — I’ve never had that.”

The number of professionals and managers in unemployment programs at this suburban work-force center halfway between Baltimore and Washington is the highest it has been since the state first made this group a target for outplacement support in 1992.
LINK HERE

US Bank Charge-Off Rates Exceed Depression: Moody's
The rate of loan charge-offs by major U.S. banks has exceeded those seen in the early years of the Great Depression as the credit crisis continues to take a toll, Moody's Investors Service said Monday.
LINK HERE

Globe and Mail: North American Monetary Union

The time has come for North American monetary union, Konrad Yakabuski argues in his weekend essay, saying the move is essential for Canadian prosperity.

"If countries as disparate as France, Finland, Italy and Ireland could do it, why couldn't two countries as economically and culturally integrated as Canada and the U.S?" he asks.

Mr. Yakabuski writes that North American monetary union, or NAMU as it was dubbed, has long been a political no-no. Canadian economic nationalists equated common currency with a loss of sovereignty.

"If the past decade has taught us anything, though, it is that Canada enjoys all the inconveniences of a floating exchange rate and independent monetary policy, with precious few of the benefits," Mr. Yakabuski writes. "The protracted low-dollar period wrought an unprecedented widening of the gap between Canadian and U.S. productivity levels, and has left our economy (outside the resource sector) painfully uncompetitive as our currency nears parity with the U.S. dollar."

LINK HERE

Caterpillar reveals huge job cuts
The company has cut about 34,000 full-time and contracted workers globally during the downturn.
LINK HERE

Major Doom: McDonalds Closes in Iceland After Krona Collapse

Oct. 26 (Bloomberg) -- Iceland’s McDonald’s Corp. restaurants will be closed at the end of the month after the collapse of the krona eroded profits at the fast-food chain, McDonald’s franchise holder Lyst ehf said.

McDonald’s in Iceland, which imports most of the ingredients it uses in its meals, will shut after costs doubled over the past year, Lyst said in an e-mailed statement today. The franchise holder said it doesn’t expect the situation to change in the short term.

“We would have to raise our prices by 20 percent to get the margin needed on our products,” Magnus Ogmundsson, Lyst chief executive officer, said in a phone interview. “That would have sent a Big Mac to 780 kronur” ($6.36), compared with the 650 kronur it costs today, he said.

The island’s currency collapsed last year following the failure of Iceland’s biggest banks. Offshore, the krona slumped as much as 80 percent against the euro, while capital restrictions this year have failed to prevent an 8.1 percent decline, making the krona the second-worst performer of the 26 emerging-market currencies tracked by Bloomberg.
LINK HERE

Thousands of Auction Homes in Detroit: Not One Bid

DETROIT (Reuters) – In a crowded ballroom next to a bankrupt casino, what remains of the Detroit property market was being picked over by speculators and mostly discarded.
After five hours of calling out a drumbeat of "no bid" for properties listed in an auction book as thick as a city phone directory, the energy of the county auctioneer began to flag.
"OK," he said. "We only have 300 more pages to go."
There was tired laughter from investors ready to roll the dice on a city that has become a symbol of the collapse of the U.S. auto industry, pressures on the industrial middle-class and intractable problems for the urban poor.
On the auction block in Detroit: almost 9,000 homes and lots in various states of abandonment and decay from the tidy owner-occupied to the burned-out shell claimed by squatters.
Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York's Central Park. Total vacant land in Detroit now occupies an area almost the size of Boston, according to a Detroit Free Press estimate.
LINK HERE

BANKS WORLDWIDE GET READY FOR THE OCTOBER SURPRISE?
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Disney's Iger: Our Movie Business Is Screwed
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The US: The Real Economy and the Fake One

Do you remember the stress tests for the banking system in the US? They were the subject of negotiations by the banks with regards to the outcomes, making them remarkably relaxed stress tests. There was an assumption in the stress tests for an unemployment rate of 8.9% (a curiously precise figure), and 10.3% in 2010. The unemployment rate had already reached 9.8% in September, with expectations of further rises. In other words, the worse case scenario was not indeed the worse case scenario.

Despite this, it appears that business as usual is continuing in the world of banking. When we consider that the stress tests were heavily negotiated and the worse case scenarios are being broken, this is a puzzle.

The real economy is, as you would expect, having an impact upon the banks. Bank of America, the second largest lender against credit cards is reporting massive losses on their lending, and bank failures continue at a shocking pace (106 so far this year). And then there is the exploding numbers of mortgage foreclosures, including prime loans, such that foreclosure counsellors are being deluged with requests for assistance. Commercial real estate loans in default have now reached about 6% of all loans.
LONG READ

Former Fed Chairman Paul Volcker admits the Federal Reserve is private, and he attended Bilderberg Group meetings

On October 15, 2009, We Are Change Boston asked former Federal Reserve Chairman and current Chair of President Obama’s Economic Recovery Advisory Board, Paul Volcker, about the Bilderberg Group.

This short video clip is highly significant for several reasons, including:

1) A former Fed Chairman, Volcker, acknowledges that the Bilderberg Group exists.
2) He acknowledges that he attended their meeting this year (2009), and two or three times previously.
3) He acknowledges the authority and consequences of the Logan Act, which prohibits unauthorized U.S. citizens from negotiating with foreign governments, punishable under federal law with imprisonment up to three years.
4) He indirectly admits that the Federal Reserve is a non-governmental private institution, by implying the Act didn’t apply to his attendance.
5) If he wasn’t given express authorization by President Obama to attend this year’s meeting, he’d be liable for punishment under the Logan Act. Testimony in Congress, under oath, should be sought to determine that.

For those few who are still living in denial about the existence of the Bilderberg Group, or if you’re curious, watch this
LINK HERE

Largest Commercial Lender in U.S to go BANKRUPT

Capmark Financial Group Inc., one of the nation's largest commercial-real-estate lenders, plans to file for bankruptcy as soon as this weekend, a person familiar with the situation said.

The much-expected move underscores the deep problems in the business-property market. After suffering from the collapse in residential mortgages, U.S. banks face steep losses from commercial real-estate loans.
LINK HERE

World Depression at Record Pace. What Recovery is This?

Spain's unemployment rate has remained at 17.9% in the third quarter, the highest in the European Union.
The number of jobless now stands at 4.1 million, the country's statistics agency said.
The Spanish unemployment rate had risen for the previous eight quarters after its construction and debt-fuelled economic boom ended suddenly.
LINK HERE

Britain Fails to Exit Recession/Depression
LINK HERE

Canadian Public Do NOT Believe MEDIA Recovery Lies
LINK HERE

NY TIMES: LINK
Nearly half a million people 65 and older want to work but cannot find a job, this group’s highest unemployment level since the Great Depression.
In fact, there are more Americans 65 and older in the job market today than at any time in history, 6.6 million, compared with 4.1 million in 2001."

15 Months: No Payment on Foreclosed Home

It's been almost a year since Horatio Bernard effectively lost his Baltimore row house to foreclosure and roughly 15 months since he last made a payment on his primary mortgage.
And yet to his amazement and those following his story, Bernard continues living in the home with his ailing mother without any sign of an eviction notice or word from his lender, in this case JP Morgan Chase and then US Bank.
"I haven't paid a dime," Bernard told me, sounding gleeful over the phone.
Earlier this year, Bernard was defiant on staying in his home even though the bank had already tried selling it at auction last November. Bernard, a Liberian immigrant, took a shot at the American dream at a time in 2005 when that dream involved risky subprime loans. On top of that, he'd been victimized by a foreclosure prevention scam by New Hope Modifications, which the New Jersey attorney general since indicted on fraud charges.
"We're as mystified by it as he is," said Joe Cox, a community organizer with the Association of Community Organizations for Reform Now in Baltimore. ACORN, under fire for unrelated allegations that two branches may have helped an activist posing as a pimp avoid taxes, actually spends considerable resources dealing with cases like Bernard's.
LINK HERE

Housing Bust Coming: Canadian Government Biggest Subprime Lender in The World

The largest sub-prime lender in the world is now the Canadian government.'
What do the mid-recession housing boom and the Harper Conservatives' rise in the polls have in common? Answer: the Canada Mortgage and Housing Corporation's massive sub-prime mortgage scheme that is keeping up the appearance of an economic recovery. Reading the newspapers these days, you have to wonder whether Canada was on another planet when the global credit crisis hit. House prices have actually increased in some provinces and now there is a shortage of houses for sale in southern Ontario. Credit is flowing everywhere.

But what few Canadians realize is that the housing market has avoided collapse (prices are down 32 per cent in the U.S.) because the Harper Conservatives directed the CMHC to change the mortgage rules to effectively make the Canadian government the biggest sub-prime lender in the world.
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More Graphs for the Canadians and Housing Collapse Info
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$13 an Hour? 500 Sign Up, 1 Job

When Stacey Ross, C. R. England’s head of corporate recruiting, arrived at her desk at the company’s Salt Lake City headquarters the next Monday, she found about 300 applications in the company’s e-mail inbox. And the fax machine had spit out an inch-and-a-half thick stack of résumés before running out of paper. By the time she pulled the posting off Careerbuilder.com later in the day, she guessed nearly 500 people had applied for the $13-an-hour job. “It was just shocking,” she said. “I had never seen anything so big.”
LINK HERE
Foreclosure Fraud - Guide to Looking up Public Records for Fraud
LINK HERE

Australia Senator: U.S is like Iceland or Germany Before WW2

THE Nationals Senate leader Barnaby Joyce is openly canvassing an economic upheaval that would dwarf the current global financial crisis, triggered by the US defaulting on its sovereign debt within the next few years.

In unusually pessimistic comments for a senior political figure, Senator Joyce said the US Government was running such large deficits and building up so much debt that it was in a similar position to Iceland or Germany before World War II.

In a Senate estimates hearing on Wednesday night, he asked Treasury secretary Ken Henry what would be the implications of an American debt default for the Australian economy.

Dr Henry warned that canvassing extreme scenarios could alarm the community.
(snippet)
'Far from turning around the [George] Bush legacy of deficits and debt, [US president Barack] Obama has made it worse. It has got all the hallmarks of a financial collapse about to happen in America.''

Senator Joyce said investor concerns about the American Government's ability to fund its deficits were already undermining the role of the US dollar in the international trading and financial system.

''The US dollar is almost becoming like junk bonds,'' he said.
LINK HERE

Unemployment Getting Much Worse in 43 States

WASHINGTON (AP) -- Unemployment rose in 23 states last month as the economy struggled to create jobs in the early stages of the recovery.

While layoffs have slowed, companies remain reluctant to hire. Forty-three states reported job losses in September, while only seven gained jobs, the Labor Department said Wednesday.

Wednesday's report underscores the uneven nature of the recovery. The unemployment rate dropped in some Midwestern states as the manufacturing sector improved. But Florida and Nevada, two of the states hit hardest by the housing slump, reported record-high jobless rates.

Some of the states that lost jobs still saw their unemployment rates improve, as discouraged workers gave up looking for work. People who are out of work but no longer looking for jobs aren't counted as officially unemployed.
That trend was evident nationwide in September, as nearly 600,000 people dropped out of the work force, the department reported earlier this month.
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The USA is Now Considered a Failed State

The US has every characteristic of a failed state.
The US government's current operating budget is dependent on foreign financing and money creation.
Too politically weak to be able to advance its interests through diplomacy, the US relies on terrorism and military aggression.

Costs are out of control, and priorities are skewed in the interest of rich organized interest groups at the expense of the vast majority of citizens. For example, war at all cost, which enriches the armaments industry, the officer corps and the financial firms that handle the war's financing, takes precedence over the needs of American citizens. There is no money to provide the uninsured with health care, but Pentagon officials have told the Defense Appropriations Subcommittee in the House that every gallon of gasoline delivered to US troops in Afghanistan costs American taxpayers $400.

"It is a number that we were not aware of and it is worrisome," said Rep. John Murtha, chairman of the subcommittee.

According to reports, the US Marines in Afghanistan use 800,000 gallons of gasoline per day. At $400 per gallon, that comes to a $320,000,000 daily fuel bill for the Marines alone. Only a country totally out of control would squander resources in this way.
While the US government squanders $400 per gallon of gasoline in order to kill women and children in Afghanistan, many millions of Americans have lost their jobs and their homes and are experiencing the kind of misery that is the daily life of poor Third World peoples. Americans are living in their cars and in public parks. America's cities, towns, and states are suffering from the costs of economic dislocations and the reduction in tax revenues from the economy's decline. Yet, Obama has sent more troops to Afghanistan, a country half way around the world that is not a threat to America..
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Besides the New Climate Change Tax: Now a New Financial Trade Tax

The Economic Policy Institute has floated the idea of a national transaction tax that would raise $100 billion to $150 billion a year. The tax, at a rate of 0.1% to 0.25% of the value of the trade, would be levied on all financial transactions, including stock trades.
“We are in a difficult time right now, so people are looking at every opportunity to gain some revenue to fund new initiatives ... why don’t we use it for stimulus or especially health care?” said Representative Stephen Lynch (MA-D), a member of the House Financial Services Committee.

Unnoticed by many, the concept already has found its way into federal law. At the urging of House Democratic leaders, last year’s $700 billion financial-bailout bill contains a provision requiring the president to submit legislation to “recoup” from the financial-services industry any eventual shortfall in the Troubled Asset Relief Program, or TARP.
LINK HERE

82 Year Old Giant Mail Order Business Bankrupt

Few were surprised by the bankruptcy of German mail-order giant Quelle, announced on Tuesday. Now, some 4,000 people will lose their jobs by November with more layoffs to follow. German commentators blame management for the retailer's demise.

With the announcement that Quelle, the 82-year-old flagship of the German mail-order business, would be liquidated, German officials are now scrambling to find a strategy for dealing with the wave of newly jobless.

On Wednesday, Rainer Bomba, the head of Bavaria's regional directorate of the German Federal Employment Agency, told reporters that roughly 4,000 of the company's 7,000 employees would be cut by Nov. 1.
Most of the rest of the company's employees will stay on only for as long as it takes the company to process existing orders, empty its inventories and sell off its assets. Quelle subsidiaries in Austria, Switzerland and Russia, where business has fared much better, are still looking for buyers.

Quelle's parent company, Arcandor, filed for insolvency in June after its request for state aid was rejected.
LINK HERE

How a Crashing Dollar Hides Trends

Many Americans have a hard time wrapping their mind around a declining currency or the hidden tax that is inflation. The U.S. Treasury and Federal Reserve understands this and for decades has exploited this issue to slowly siphon off the buying power of the U.S. dollar. Openly they tell the public that they are for a strong dollar policy but every action they take is guided to slowly debasing the currency. Take for example the current stock market rally. The Dow Jones Industrial Average is up 56 percent from the March lows. A stunning rally only seen one other time in history and we would need to go back to the 1930s for that. Yet at the same time, we have seen a collapse in the U.S. dollar. That is why oil, even though demand is relatively the same, is now back near $80 a barrel.
The Federal Reserve can easily strengthen the U.S. dollar. All they would need to do is increase interest rates to reign in liquidity. Yet this would crush the debt consumption in housing and autos. To show you the insidious way how the value of the currency is being washed away, take a look at the recent Dow rally in terms of Euros, a more stable currency:

LINK HERE

Did the Feds Make this Important Court Decision "Disappear"?
Court Orders Fed to Disclose Emergency Bank Loans
LINK HERE

The U.S Economy Cannot Recover: Simple Arithmetics

It has gone from irritating to nauseating listening to media market-pumpers talking about an “U.S. economic recovery” which has supposedly already begun. Indeed, the hype has gone from a debate about whether the “recession” is over, to an inane debate about whether the U.S. is experiencing a “V-shaped recovery” or may suffer a “double-dip recession” or W-shaped “recovery”.

In the real world, however, all that has occurred is that an U.S. economic collapse, which was in a near-vertical drop, has eased to a more moderate rate of decline. The “double-dip” talked about by some semi-realistic analysts is in fact nothing more than the ongoing collapse regaining downward momentum. There is no “debate” here. It is a matter of simple arithmetic that the U.S. economy cannot recover.

First of all, in the “big picture”, the U.S.'s $11-trillion economy (all that remains once statistical “padding” is removed) is much too small to service the more than $57 trillion in existing public and private debt. Even if we pretend the U.S. still has a $14 trillion economy (despite the government's own numbers that this economy has shrunk by more than 10%), it is still much too small to service its debts. Meanwhile, lurking in the near future are roughly $70 trillion in additional “unfunded liabilities”.
LINK HERE

Monday's Reverse Repo Test A Disaster?

On Monday the Federal Reserve held a major reverse repo test, as was announced by the NY Fed and by Zero Hedge. We have subsequently received several unconfirmed reports that the conducted test has been a disaster (we have calls into the Federal Reserve to confirm or deny this, we are eagerly awaiting their reply). Presumably, after conducting various repos last year, a typical transaction would be in the $1 to $5 billion range. At around the time the financial system was being pulled apart, were two separate $50 billion repo transactions on September 18, 2008, a day when as Paul Kanjorski had highlighted earlier in the year the money market system nearly collapsed as a result of Lehman and AIG's failure, and the Reserve Fund breaking the buck.

Notable about Monday's reverse repo "test" was that it was quite sizable: in the $100 billion ballpark, on parallel with the biggest liquidity extraction from 2008. The outcome was the discovery that the dealer community does not have the capacity to do reverse transactions of this magnitude. As a result the Fed was forced to go directly to the money market industry, which has been speculated as a key source of excess liquidity withdrawals, another topic we discussed previously.
More at ZeroHedge

Bailout Bank Funds: Country Club Dues Paid, Tax Bills, Jets, Parking

NEW YORK -- Even as the nation's biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives.

The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.

Some chief executives, such as Kenneth D. Lewis of Bank of America and Jeffrey M. Peek of CIT Group, the major small-business lender now on the brink of bankruptcy, each received about $100,000 more than a year earlier for personal use of corporate jets. Others saw an increase in the value of chauffeured services, parking or personal security.

Ralph W. Babb Jr., chief executive of Dallas-based lender Comerica, was compensated for a new country club membership, with an initiation fee and dues of more than $200,000. GMAC Financial Services chief executive Alvaro de Molina benefited from a $2.5 million payment from his company to help cover his personal tax bill.
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Niall Ferguson: The Dollar Is Finished And The Chinese Are Dumping It

Economic historian Niall Ferguson warns that China's love affair with the dollar is fading faster than anyone realizes.

TechTicker: "The idea they don't have anywhere else to go or would shoot themselves in the foot if there were a steep decline in the dollar or appreciation of their currency reassures many people in Washington ‘we can relax'," he says. "An appreciation of the renminbi may reduce value of their international reserves but increases the value of every other asset the Chinese own," most notably the commodity assets they have been buying all over the world.

China's "current strategy is to diversify out of dollars and into commodities," Ferguson says. Furthermore, China's recent pact with Brazil to conduct trade in their local currencies is a "sign of the times."

Perhaps most importantly, China's massive stimulus program is helping to generate internal consumption in the People's Republic, meaning local manufacturers are less dependent on exports. Because of the "rapid growth" of Chinese domestic consumption, Ferguson predicts China's international trade surplus could be gone by next year.
LINK HERE

Homes About to get much cheaper: Median prices to 142,000 by 2011?

If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate price. Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.

In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years -- though it underestimated the scope. Mark Zandi, chief economist with Moody's Economy.com, agreed with Fiserv's current assessments. "I think more price declines are coming because the foreclosure crisis is not over," he said.

In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June -- after having already fallen a whopping 48% during the past three years.

If Fiserv's forecast holds, Miami real median home price will tumble to $142,000 by June 2011.
LINK HERE

Vice President Declares an Economic Depression (30 Second Video)

The Entire System as we Know it Will Collapse: Believe it or Not

ARROYO GRANDE, Calif. (MarketWatch) -- Jack Bogle published "The Battle for the Soul of Capitalism" four years ago. The battle's over. The sequel should be titled: "Capitalism Died a Lost Soul." Worse, we've lost "America's Soul." And worldwide the consequences will be catastrophic.

That's why a man like Hong Kong's contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: "The future will be a total disaster, with a collapse of our capitalistic system as we know it today."
No, not just another meltdown, another bear market recession like the one recently triggered by Wall Street's "too-greedy-to-fail" banks. Faber is warning that the entire system of capitalism will collapse. Get it? The engine driving the great "American Economic Empire" for 233 years will collapse, a total disaster, a destiny we created.

OK, deny it. But I'll bet you have a nagging feeling maybe he's right, the end may be near. I have for a long time: I wrote a column back in 1997: "Battling for the Soul of Wall Street." My interest in "The Soul" -- what Jung called the "collective unconscious" -- dates back to my Ph.D. dissertation: "Modern Man in Search of His Soul," a title borrowed from Jung's 1933 book, "Modern Man in Search of a Soul." This battle has been on my mind since my days at Morgan Stanley 30 years ago, witnessing the decline.
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Poverty in America Worse than First Believed: Over 47 Million
Revised formula puts 1 in 6 Americans in poverty
WASHINGTON – The level of poverty in America is even worse than first believed.
A revised formula for calculating medical costs and geographic variations show that approximately 47.4 million Americans last year lived in poverty, 7 million more than the government's official figure.
The disparity occurs because of differing formulas the Census Bureau and the National Academy of Science use for calculating the poverty rate. The NAS formula shows the poverty rate to be at 15.8 percent, or nearly 1 in 6 Americans, according to calculations released this week. That's higher than the 13.2 percent, or 39.8 million, figure made available recently under the original government formula.
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Long Lines at New York City Soup Kitchen (2.5 Min. Video)

Get Ready: The Bubble is About to Burst Again

We did not need to wait until the Dow Jones Industrial Average hit 10,000. It has been clear for some time that global equity markets are bubbling again. On the surface, this looks like 2003 and 2004 when the previous housing, credit, commodity and equity bubbles started to inflate, helped by low nominal interest rates and a lack of inflation. There is one big difference, though. This bubble will burst soon.

So how do we know this is a bubble? My two favourite metrics of stock market valuation are Cape, which stands for the cyclically adjusted price/earnings ratio, and Q. Cape was invented by Robert Shiller, professor of economics and finance at Yale University. It measures the 10-year moving average of the inflation-adjusted p/e ratio. Q is a metric of market capitalisation divided by net worth. Andrew Smithers* has collected the data on Q, a concept invented by the economist James Tobin.
Cape and Q measure different things. Yet they both tend to agree on relative market mispricing most of the time. In mid-September both measures concluded that the US stock market was overvalued by some 35 to 40 per cent. The markets have since gone up a lot more than the moving average of earnings. You can do the maths.
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Chicago Street Showdown: The People vs. Wall Street

The same financial institutions that caused the economic crisis and took billions in taxpayer bailouts are back to earning incredible profits. Meanwhile, Americans face shrinking pensions, rising foreclosures and unemployment, state budget cuts, predatory lending, outrageous overdraft fees, and sky-high credit card interest rates.

The American people want oversight, accountability and common-sense financial reform NOW. This is the classic David vs. Goliath fight, with Wall Street spending millions and millions on lobbying to defeat reforms that would protect the American people and our economy.
JOIN US on October 25-27 for a series of demonstrations when thousands of Americans - retirees, farmers, workers, homeowners, renters, students, clergy, and small business owners - come together on the streets of Chicago to demand a banking system that puts the American people first and a Congress that makes it happen
LINK HERE