Posted By thestatedtruth.com on October 12, 2011

Warren Buffett’s son Howard speaks his mind…on class warfare, the disparity has never been greater.  The wealthiest 1% of all Americans now own more than a third of all the wealth in the United States.The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.

From Bloomberg:

Howard Buffett, the Berkshire Hathaway Inc. (BRK/A) director and son of Chairman Warren Buffett, said Wall Street protesters were provoked by abuses from corporations amid a widening disparity between rich and poor.  Over the past 15 years, “we saw large corporations really screw people.”

“There has never been a larger gap between earnings in this country,” said Howard Buffett, who was in Des Moines to deliver a speech at the World Food Prize conference. “There has never been a time in my lifetime when the government is going to cut an incredible amount of programs that support poor people and feed them.”

“There has been class warfare going on,” Warren Buffett, 81, said in a Sept. 30 interview with Charlie Rose on PBS. “It’s just that my class is winning. And my class isn’t just winning, I mean we’re killing them.”

Warren Buffett has backed some of the biggest financial firms while chiding bankers for excesses in risk-taking and compensation. Omaha, Nebraska-based Berkshire invested $700 million in Salomon Inc. in 1987, $5 billion in Goldman Sachs Group Inc. in 2008 and $5 billion in Bank of America this year. Buffett, the father, has compared Wall Street to “a church that’s running raffles on the weekend.”

Wall Street “does a lot of good things and then it has this casino,” Buffett said in October 2010. “One of the problems we still have is we have unbalanced incentives for managers of huge financial institutions.”

Blackrock Chief Executive Officer Laurence D. Fink and Jim Chanos of hedge fund Kynikos Associates said this month they understand the anger directed at financial companies. Bill Gross, who runs the biggest bond fund at Pacific Investment Management Co., said in a Twitter post that wage earners are fighting back after three decades of class warfare in which they were “being shot at.” Citigroup CEO Vikram Pandit said yesterday he’d be happy to talk with protesters.

Category: Commentary, Economy, Finance, National News, Wall Street | 49 Comments »
Tags: Casino, Class Warfare, Corporate Abuse, Earnings Gap, Howard Buffett, Raffles On Wall Street, Wall Street Protesrers, Warren Buffett

Posted By thestatedtruth.com on October 12, 2011

Remember one thing…when people are broke, they have nothing to lose.  The “system” as we have known it, is going down.  There is a reason for the protests going on around the world.  Politicians and corporate America, need to get real. We are in the early stages of a huge class war – the rich vs. everybody else…the poor are broke and the middle classes are struggling for their financial lives.

From today’s WSJ:

Key parts of the U.S. supply chain have some troubling news: The traditional holiday peak in shipping volumes has disappeared.  This is unprecedented except for 2008-2009.

Both the Port of Los Angeles and the Port of Long Beach, which together account for more than 40% of imports into the U.S., say the rise in shipments that typically begins in July and lasts through early fall didn’t happen this year. Instead, Dick Steinke, executive director of the Port of Long Beach, says shipping volumes have posted two consecutive months of declines, and he’s anticipating a double-digit drop for September. The last time the port experienced no peak was during the height of the recession in 2009, he says. Before that, the phenomenon was unprecedented.

Rail companies and other shippers are reporting similar news.

Category: Commentary, Economy, National News, Retail, Wall Street, World News | 22 Comments »
Tags: Shipping Volumes, Supply Chain

Posted By thestatedtruth.com on October 11, 2011

At a recent computer expo (COMDEX), Bill Gates reportedly compared the computer industry with the auto industry and stated:‘If Ford had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1,000 miles to the gallon.’ Did he really say that?

Upon some thought, here is the retort ….

If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics:

1. For no reason whatsoever, your car would crash………..Twice a day.

2. Every time they repainted the lines in the road, you would have to buy a new car.

3. Occasionally your car would die on the freeway for no reason. You would have to pull to the side of the road, close all of the windows, shut off the car, restart it, and reopen the windows before you could continue.

4. Occasionally, executing a maneuver such as a left turn would cause your car to shut down and refuse to restart, in which case you would have to reinstall the engine.

5. Macintosh would make a car that was powered by the sun, was reliable, five times as fast and twice as easy to drive – but would run on only five percent of the roads.

6. The oil, water temperature, and alternator warning lights would all be replaced by a single ‘This Car Has Performed An Illegal Operation’ warning light. 

7. The airbag system would ask ‘Are you sure?’ before deploying.

8. Occasionally, for no reason whatsoever, your car would lock you out and refuse to let you in until you simultaneously lifted the door handle, turned the key and grabbed hold of the radio antenna.

9. Every time a new car was introduced car buyers would have to learn how to drive all over again because none of the controls would operate in the same manner as the old car.

10. You’d have to press the ‘Start’ button to turn the engine off.

Category: Inspirational, Jokes, Technology, Tid Bits | 549 Comments »
Tags: Car vs Computer

Posted By thestatedtruth.com on October 11, 2011

Looks like trouble…for this Wall Street fat cat!  

Category: Commentary, Pictures, Wall Street | 54 Comments »
Tags: Leaning The Wrong Way, Trouble

Posted By thestatedtruth.com on October 11, 2011

What’s coming at us over the next few years, will likely make 2008 look like a warm up!  Nevertheless, … analysts are expecting another earnings season of double-digit growth (the eighth quarter in a row), yep…even though corporate earnings as a percentage of GDP are in the area of all time record levels seen only 4 other times in history, levels that have in the past shown multi year declines according to Bill Gross at PIMCO.  You’ve been warned.

Here is the reality of our financial system today:

Ben Bernanke issued his own statement of warning, stating that the recovery is “close to faltering.”

The IMF and the Bank of England have recently warned that the world is facing a “financial meltdown” and possibly “the worst financial crisis in history.”

The recent manufacturing survey posted its second consecutive month of contraction. As ZeroHedge noted, collapse in this economic metric has been greater than any two-month period in the last ten years, including 2008.

This has all happened while interest rates are at the lowest level in recorded history.  What happens one day in the future when interest rates move up…it’s inevitable at some point!

So here we are…..

• The European banking system is facing a systemic collapse, and when they go down, they will likely take everyone else down with them…including Asia, Japan, China and the U.S.
• The U.S. economy has rolled over and is in a confirmed double dip in the context of a larger depression, but denial is huge here.
• The Central Banks and regulators have admitted we are peering into the abyss and they have no clue what to do.  Why is that?  Because they nor anyone else has ever seen this set up before!

Category: Commentary, Economy, National News, Personal Net Worth, Wall Street, World News | 387 Comments »
Tags: Disaster, national economy, Warm Up, Worse

Posted By thestatedtruth.com on October 9, 2011

What a joke….Read my lips…There should be no bonuses until the losses are all made up.  Period. No exceptions. None. Capice!

CalPERS, the California state  pension fund, which serves more than 1.6 million public employees, retirees and their families, estimated its unfunded liabilities at $38.6 billion on July 1, 2008, it’s bigger now!  CalPERS currently has assets totaling about $218 billion.

This is why there are riots in New York and Wall Street, this is the reason. People have had enough, they’re fed up…..CalPERS gives top execs $4.5 million in new bonuses for its most recent year ended June 30, 2011.  Back in 2008-2009….the fund lost $59 billion (almost 1/3 of it’s value) and the bonuses increased 8%!

Back in 2008-2009….the fund lost $59 billion, the money went to money heaven and the bonuses increased 8%!  Are they kidding…NO!

Real estate was the hardest-hit investment category in the CalPERS portfolio during the 2008-09 fiscal year, suffering from the same property devaluations felt across the country. That portfolio lost 47.9 percent of its value over the fiscal year. (yep, in just one year).  Yet CalPERS awarded the portfolio’s senior investment manager, Ted Eliopoulos, a $93,941 bonus on top of his $333,124 salary, which was 8 percent higher than the previous year.

According to CalPERS’ 2008-2009 annual report, the global equity portfolio saw a 26 percent decline in U.S. stocks and a 32.4 percent drop in international stocks during 2008-09. Eric Baggesen, the senior investment officer for global equity, received a 6 percent raise, bumping his salary up from $300,000 to $318,000 in the 2008-09 year. He also received bonuses totaling $254,186 over the two-year period.

Category: Commentary, Economy, National News, Pensions and Retirement, Real Estate, Wall Street | 949 Comments »
Tags: Calpers, pensions, under funded pensions

Posted By thestatedtruth.com on October 9, 2011

Dexia’s Belgian Bank To Be 100% Nationalized…

They are talking Good Bank, Bad Bank….the good assets are put into a “good bank” that will operate going forward and is owned by the governments of France and Belgium, the bad bank assets (worthless?) will be in another bank to handle all of the troublesome crap….

 “The governments of France, Belgium and Luxembourg reached agreement on Sunday on a rescue package for Dexia , which will be put to the stricken Franco-Belgian bank’s board later in the day for approval. “The governments… have reaffirmed their solidarity in finding a solution to secure the future of Dexia,” said a statement from the office of Belgium’s caretaker Prime Minister Yves Leterme. “The suggested solution, which is also the result of intense consultations with all partners involved, will be submitted to Dexia’s Board of Directors for approval.”

Belgium and France may also have agreed that they will guarantee 60 percent and 40 percent, respectively, of the refinancing of about 120 billion euros ($160 billion) of bonds and loans held by Paris- and Brussels-based Dexia, sources said. Proceeds from the sale of Dexia’s profitable units will go to mitigate losses of what will be left of Dexia, which will form a bad bank, sources said.

“Belgium received approval from France to buy as much as 100 percent of Dexia SA (DEXB)’s Belgian consumer bank as part of proposals to dismantle the French-Belgian lender, people with knowledge of the talks said. [Good Bank is fully nationalized; only Dexia’s approval is now needed, and that has not come yet…]

www.zerohedge.com

Category: Commentary, Economy, Finance, National News, Wall Street, World News | 818 Comments »
Tags: Dreia Disaster, Europes Bad Banks, Good Bank Bad Bank

Posted By thestatedtruth.com on October 9, 2011

The Daily Reckoning……It’s Top Secret

This from an episode of Frontline called “Top Secret America.”…..One example is the Office of the Director of National Intelligence. According to Dana Priest the DNI started as 11 people in the Old Executive Office Building. In short order, it grew to a couple of hundred people and moved to a bigger building. It had two floors in the massive Defense Intelligence Agency building. Still, it grew. “So they moved to some of the priciest real estate in the Washington area,” Priest says. “And now they are gigantic — 500,000 square feet, five Wal-Marts stacked on top of each other.”

Consider that in 2002, there were 34 new organizations created to work at the top-secret level. In 2003, government created 39 more; in 2004, 30 more; in 2005, another 35; and more each year since. “Every year,” Priest goes on, “more than two dozen, sometimes three dozen, entirely new federal organizations dedicated to counter terrorism [were] being created after Sept. 11.”

And this…Priest talked about how she discovered that nearly a million people have top-secret clearance. That’s 2.5 times the population of Washington, D.C. There are 1,900 companies and 1,100 federal organizations that work at the top-secret level

From an episode of Frontline, called “Top Secret America:

Chris Mayer of www.TheDailyReckoning.com reviews this:

” It’s based on the work of Dana Priest and William Arkin. I admire Priest, who is a legendary reporter at The Washington Post. Her expertise is on matters of intelligence and the “war on terror.”

What Priest uncovered as part of a near two-year investigation was a secret America growing up in the wake of Sept. 11. After Sept. 11, America’s intelligence, surveillance and counter-terrorism agencies basically got a blank check to fund their efforts. The CIA got a billion dollars right away. So did the National Security Agency (NSA). “What we found in the years immediately after Sept. 11 was that the existing agencies grew enormously,” Priest says. “They doubled in size, many of them, and new organizations were created as well, big ones.”

There was a boom in new agencies geared to fighting this new war. Consider that in 2002, there were 34 new organizations created to work at the top-secret level. In 2003, government created 39 more; in 2004, 30 more; in 2005, another 35; and more each year since. “Every year,” Priest goes on, “more than two dozen, sometimes three dozen, entirely new federal organizations dedicated to counterterrorism [were] being created after Sept. 11.”

And each agency, after its creation, grew and grew. One example is the Office of the Director of National Intelligence. The DNI started as 11 people in the Old Executive Office Building. In short order, it grew to a couple of hundred people and moved to a bigger building. It had two floors in the massive Defense Intelligence Agency building. Still, it grew. “So they moved to some of the priciest real estate in the Washington area,” Priest says. “And now they are gigantic — 500,000 square feet, five Wal-Marts stacked on top of each other.”

At the conference, the big topic of discussion was defense spending. Everyone is expecting defense-spending cuts. They are inevitable. And this will affect many of the companies at the conference because they have large defense businesses.

But there is one aspect of defense spending that isn’t going go to go down. In fact, broader government spending on intelligence and surveillance and covert warfare is only to go up.

What’s going to be cut are the traditional battlefield programs. The big stuff: Tanks. Submarines. No one is going to let the air out of a ballooning secret America. “No one’s talking about turning them off,” Priest says. “It’s not like they’ve got mobile trailers that they’re up in, and then when the floods recede, they’re going to take them away.”

The rules also changed, greasing the skids. Government made it easier to higher contractors to skirt the slow process of hiring more federal workers. Now, when they want to grow quickly, they turn to the private sector. Priest talks about how the big defense contractors — CACI, Lockheed Martin, L-3 — and others saw this boom in intelligence, surveillance and the like.

The “war on terror” is not one that needs tanks and submarines and fighter jets. It needs to gather information. It needs to analyze that information. It needs surveillance equipment. Smart weaponry. Unmanned drones. It’s a top-secret America.

Priest talked about how she discovered that nearly a million people have top-secret clearance. That’s 2.5 times the population of Washington, D.C. There are 1,900 companies and 1,100 federal organizations that work at the top-secret level.

I am not going to pass judgment on what’s happening here. You can decide for yourself. I would encourage you to read Dana Priest’s and William Arkin’s work. There is a lot out there on the web, too, in addition to a book, plus the Frontline episode.

Some of their work is mind-blowing. If you were to start talking about this stuff at a dinner party, your friends would think you were a conspiracy theorist. But this is real. I mean, we’re talking about massive nondescript buildings in the Washington area that might be one or two floors up, but go 10 stories down. One of the guys on TV said they have shops and restaurants down there “just for them.” I’ll never look at the Washington suburbs in quite the same way again. What are they all doing? No one knows for sure.

www.thedailyreckoning.com

Category: Commentary, Economy, National News, National Security, News Letters, World News | 104 Comments »
Tags: Government, national security, Top Secret Clearance, Wow

Posted By thestatedtruth.com on October 9, 2011

Here’s the real reason for the Wall Street protests….Extreme inequality is the hallmark of a dysfunctional economy, dominated by a financial sector that is driven as much by speculation, gouging and government backing as by productive investment.  That sums it up!

Robert Reich, President Clinton’s Secretary of Labor said recently – The top one half of 1 percent of the population now owns over 28 percent of the nation’s total wealth. He goes on to say ‘Wealth over $7.2 million should be subject to a 2 percent surtax. (Notice he said wealth, not income!).  After all, the top one half of 1 percent now own over 28 percent of the nation’s total wealth. Such a tax on them would yield $70 billion a year.” According to an analysis by Yale’s Bruce Ackerman and Anne Alstott, that would generate at least half of $1.5 trillion deficit-reduction target over ten years set for the supercommittee.

Before the recession according to the NY Times, the top 1 percent owned 23.5% of the nations total wealth. And if we go back to the late 1970s, the top 1 percent owned only “10” percent.

This from the New York Times pretty much sums things up!

Let’s repeat this: Extreme inequality is the hallmark of a dysfunctional economy, dominated by a financial sector that is driven as much by speculation, gouging and government backing as by productive investment.

When the protesters say they represent 99 percent of Americans, they are referring to the concentration of income in today’s deeply unequal society. Before the recession, the share of income held by those in the top 1 percent of households was 23.5 percent, the highest since 1928 and more than double the 10 percent level of the late 1970s.

In the last few years, for instance, corporate profits (which flow largely to the wealthy) have reached their highest level as a share of the economy since 1950, while worker pay as a share of the economy is at its lowest point since the mid-1950s.

Income gains at the top would not be as worrisome as they are if the middle class and the poor were also gaining. But working-age households saw their real income decline in the first decade of this century. The recession and its aftermath have only accelerated the decline.

Research shows that such extreme inequality correlates to a host of ills, including lower levels of educational attainment, poorer health and less public investment. It also skews political power, because policy almost invariably reflects the views of upper-income Americans versus those of lower-income Americans.

Category: Commentary, Economy, National News, Personal Net Worth, Wall Street, World News | 448 Comments »
Tags: Lights Out, Rich Man Poor Man, Wealth Inequality

Posted By thestatedtruth.com on October 7, 2011

Category: Commentary, National News, Wall Street, World News | 589 Comments »
Tags: Financial Stinker, Skunky

Posted By thestatedtruth.com on October 7, 2011

Our immediate question that comes to mind is: What happens when a computer virus attacks the new highly technological automobiles. Answer: There will be a few less cars on the highway, that’s because the average car is over 10 years old, and all things considered, there really aren’t that many of the new versions around…The new car business will be a growth business once we get through our depression.  But that’s a few years away at best.

Wired Magazine reports, a viral infestation has just struck the U.S. drone fleet. “A computer virus has infected the cockpits of America’s Predator and Reaper drones, logging pilots’ every keystroke as they remotely fly missions over Afghanistan and other warzones. The virus, first detected nearly two weeks ago by the military’s Host-Based Security System, has not prevented pilots at Creech Air Force Base in Nevada from flying their missions overseas.

More:

“We keep wiping it off, and it keeps coming back,” says a source familiar with the network infection, one of three that told Danger Room about the virus. “We think it’s benign. But we just don’t know.”

Despite their widespread use, the drone systems are known to have
security flaws. Many Reapers and Predators don’t encrypt the video they
transmit to  American troops on the ground. In the summer of 2009, U.S.
forces discovered “days and days and hours and hours of the drone footage on the laptops of Iraqi insurgents. A $26 piece of software allowed the militants to capture the video.

Category: Commentary, Economy, National News, National Security | 265 Comments »
Tags: Computer Virus, Drones, New Autos

Posted By thestatedtruth.com on October 7, 2011

The consumer has hit a wall with credit growth, and can’t handle any more agony, while the government is borrowing like a drunk sailor.

www.zerohedge.com

Category: Charts and Graphs, Commentary, Economy, Interest Rates, Bonds, National News, Pensions and Retirement, Personal Net Worth, Wall Street | 48 Comments »
Tags: consumer credit, Government Borrowing, Hitting A Wall

Posted By thestatedtruth.com on October 7, 2011

So, the consumer is still tapped out….duh.  The government is the only one that doesn’t see this.

The consumer credit number was dreadfully bad. It printed -$9.5bn against an expectation of +$8bn and vs  prior year of $12bn.

And…We just saw the first drop in non-revolving credit in a year. This is credit that goes out for car purchases and school loans, logically speaking maybe student loans have hit a wall ?  This is the biggest swing in the MoM contraction (or momentum deceleration) since May 1998!

What we have is a six standard-deviation deceleration (based on the last 60 years of history).

www.zerohedge.com

Category: Commentary, Economy, National News, Wall Street | 462 Comments »
Tags: consumer credit, Crdit Contraction

Posted By thestatedtruth.com on October 6, 2011

IMF Advisor Robert Shapiro comments on the European financial crisis: “In The Absence Of A Credible Plan We Will Have A Global Financial Meltdown In Two To Three Weeks”

Rest assured this is unlikely to happen, because it’s a game of dominoes. Once the first one goes down, they all go down!  And da boys in Europe know it. On the other hand…maybe stupid is their middle name.

From Zero Hedge……..

In an interview with IMF advisor Robert Shapiro, : “If they can not address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system. We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected. All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world. This would be a crisis that would be in my view more serrious than the crisis in 2008…. What we don’t know the state of credit default swaps held by banks against sovereign debt and against European banks, nor do we know the state of CDS held by British banks, nor are we certain of how certain the exposure of British banks is to the Ireland sovereign debt problems.”

Category: Commentary, Economy, National News, Wall Street, World News | 49 Comments »
Tags: banks, Credit, European Dominoes, Sovereign Debt, World Debt Problem

Posted By thestatedtruth.com on October 5, 2011

Follow the bouncing ball…

Robert Reich takes to the dusty trail a whole lot better then Congress or the White House does.  Will someone please take off those blinders!

Today Ben Bernanke added his voice to those who are worried about Europe’s debt crisis.

But why exactly should America be so concerned? Yes, we export to Europe – but those exports aren’t going to dry up. And in any event, they’re tiny compared to the size of the U.S. economy.

If you want the real reason, follow the money. A Greek (or Irish or Spanish or Italian or Portugese) default would have roughly the same effect on our financial system as the implosion of Lehman Brothers in 2008.

Financial chaos.

Investors are already getting the scent. Stocks slumped to 13-month low on Monday as investors dumped Wall Street bank shares.

The Street has lent only about $7 billion to Greece, as of the end of last year, according to the Bank for International Settlements. That’s no big deal.

But a default by Greece or any other of Europe’s debt-burdened nations could easily pummel German and French banks, which have lent Greece (and the other wobbly European countries) far more.

That’s where Wall Street comes in. Big Wall Street banks have lent German and French banks a bundle.

The Street’s total exposure to the euro zone totals about $2.7 trillion. Its exposure to to France and Germany accounts for nearly half the total.

And it’s not just Wall Street’s loans to German and French banks that are worrisome. Wall Street has also insured or bet on all sorts of derivatives emanating from Europe – on energy, currency, interest rates, and foreign exchange swaps. If a German or French bank goes down, the ripple effects are incalculable.

Get it? Follow the money: If Greece goes down, investors start fleeing Ireland, Spain, Italy, and Portugal as well. All of this sends big French and German banks reeling. If one of these banks collapses, or show signs of major strain, Wall Street is in big trouble. Possibly even bigger trouble than it was in after Lehman Brothers went down.

That’s why shares of the biggest U.S. banks have been falling for the past month. Morgan Stanley closed Monday at its lowest since December 2008 – and the cost of insuring Morgan’s debt has jumped to levels not seen since November 2008.

It’s rumored that Morgan could lose as much as $30 billion if some French and German banks fail. (That’s from Federal Financial Institutions Examination Council, which tracks all cross-border exposure of major banks.)

$30 billion is roughly $2 billion more than the assets Morgan owns (in terms of current market capitalization.)

But Morgan says its exposure to French banks is zero. Why the discrepancy? Morgan has probably taken out insurance against its loans to European banks, as well as collateral from them. So Morgan feels as if it’s not exposed.

But does anyone remember something spelled AIG? That was the giant insurance firm that went bust when Wall Street began going under. Wall Street thought it had insured its bets with AIG. Turned out, AIG couldn’t pay up.

Haven’t we been here before?

Republicans and Wall Street executives who continue to yell about Dodd-Frank overkill are dead wrong. The fact no one seems to know Morgan’s exposure to European banks or derivatives – or that of most other giant Wall Street banks – shows Dodd-Frank didn’t go nearly far enough.

Regulators still don’t know what’s happening on the Street. They have no clear picture of the derivatives exposure of giant U.S. financial institutions.

Which is why Washington officials are terrified – and why Treasury Secretary Tim Geithner keeps begging European officials to bail out Greece and the other deeply-indebted European nations.

Several months ago, when the European debt crisis first became apparent, Wall Street banks said not to worry. They had little or no exposure to Europe’s problems. The Federal Reserve said the same. In July, Ben Bernanke reassured Congress the exposure of U.S. banks to European nations in trouble was “quite small.”

Now we’re hearing a different tune.

Make no mistake. The United States wants Europe to bail out its deeply indebted nations so they can repay what they owe big European banks. Otherwise, those banks could implode — taking Wall Street with them.

One of the many ironies here is some badly-indebted European nations (Ireland is the best example) went deeply into debt in the first place bailing out their banks from the crisis that began on Wall Street.

Full circle.

In other words, Greece isn’t the real problem. Nor is Ireland, Italy, Portugal, or Spain. The real problem is the financial system — centered on Wall Street. And we still haven’t solved it.

Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His “Marketplace” commentaries can be found on publicradio.com and iTunes. He is also Common Cause’s board chairman.

www.robertreich.org 

Category: Commentary, Economy, National News, Wall Street | 464 Comments »
Tags: Bank Bailouts, Robert Reich, Wall Street

Posted By thestatedtruth.com on October 4, 2011

The Fed has used most of its tools (already) to help the economy. It said it expects to keep interest rates ultra low into 2013, maybe longer. Congress is tying to cut, not raise, spending. Europe is resisting bold steps to save its most troubled economies. The bottom line is a recession is on the verge (probably happened already) of seizing Europe and eventually spreading around the world.

Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday of what most of America has sensed for some time: The economic recovery, such as it is, “is close to faltering.”

The Fed chief was asked about protests around Wall Street, which went on for an 18th day as demonstrators railed against corporate greed and expressed frustration over the economy.

Bernanke replied: “I think people are quite unhappy with the state of the economy and what’s happening. They blame, with some justification, the problems in the financial sector for getting us into this mess. And they’re dissatisfied with the policy response here in Washington. And at some level, I can’t blame them.”

Bernanke said he believes the Fed’s latest move to help the economy would be “meaningful but not an enormous support” for the economy. The program, known as Operation Twist, is designed to lower long-term interest rates so people and businesses will spend more money.

Category: Commentary, Economy, National News, Wall Street | 429 Comments »
Tags: Bernanke, Economy, Fed, Tough Times

Posted By thestatedtruth.com on October 3, 2011

Hmm…Question: Why is Dexia in trouble? Dexia bank in Belgium has total liabilities equal to 180% of GDP of Belgium according to Harvey Organ.

Category: Commentary, Economy, National News, Wall Street | 545 Comments »
Tags: Banking Nightmare, European Bankers, In Trouble

Posted By thestatedtruth.com on October 3, 2011

We should say this is a horrific economic crisis that’s about to get (out of) hand…..Debt is a very cruel master. It will almost always bring more pain and suffering than you anticipated. It is easy to get into debt, but it is very difficult to get out of debt. In the end, we will see that the debt-fueled prosperity that the western world has been enjoying for decades was just an illusion.

You can never solve a debt problem with more debt, which is what governments are trying to do, it has never worked. The next several years are going to be incredibly clear on why debt is bad.When the dominoes start to fall, we are going to witness a financial avalanche which is going to destroy the finances of millions of people. But you have been warned….don’t let this warning go unheeded! 

All across the western world, governments and major banks are rapidly becoming insolvent. So far, the powers that be are keeping all of the balls in the air by throwing around lots of bailout money. But now the political will for more bailouts is drying up and the number of troubled entities seems to grow by the day. Right now the western world is facing a debt crisis that is absolutely unprecedented in world history. Europe has had a tremendously difficult time just trying to keep Greece afloat, and several much larger European countries are now on the verge of a major financial crisis. In addition, there is a growing number of very large financial institutions all over the western world that are also rapidly approaching a day of reckoning.

If things go really badly, things could totally fall apart in a few weeks. But more likely it will be a few more months until the juggling act ends.

Right now, the banking system in Europe is coming apart at the seams. Because the global financial system is so interconnected today, when major European banks start to fail it is going to have a cascading effect across the United States and Asia as well.

The financial crisis of 2008 plunged us into the deepest recession since the Great Depression.

The next financial crisis could potentially hit the world even harder.

The following are 12 quotes from insiders that are warning about the horrific economic crisis that is almost here….

#1 George Soros: “Financial markets are driving the world towards another Great Depression with incalculable political consequences. The authorities, particularly in Europe, have lost control of the situation.”

#2 PIMCO CEO Mohammed El-Erian: “These are all signs of an institutional run on French banks. If it persists, the banks would have no choice but to delever their balance sheets in a very drastic and disorderly fashion. Retail depositors would get edgy and be tempted to follow trading and institutional clients through the exit doors. Europe would thus be thrown into a full-blown banking crisis that aggravates the sovereign debt trap, renders certain another economic recession, and significantly worsens the outlook for the global economy.”

#3 Attila Szalay-Berzeviczy, global head of securities services at UniCredit SpA (Italy’s largest bank): “The only remaining question is how many days the hopeless rearguard action of European governments and the European Central Bank can keep up Greece’s spirits.”

#4 Stefan Homburg, the head of Germany’s Institute for Public Finance: “The euro is nearing its ugly end. A collapse of monetary union now appears unavoidable.”

#5 EU Parliament Member Nigel Farage: “I think the worst in the financial system is yet to come, a possible cataclysm and if that happens the gold price could go (higher) to a number that we simply cannot, at this moment, even imagine.”

#6 Carl Weinberg, the chief economist at High Frequency Economics: “At this point, our base case is that Greece will default within weeks.”

#7 Goldman Sachs strategist Alan Brazil: “Solving a debt problem with more debt has not solved the underlying problem. In the US, Treasury debt growth financed the US consumer but has not had enough of an impact on job growth. Can the US continue to depreciate the world’s base currency?”

#8 International Labour Organization director general Juan Somavia recently stated that total unemployment could “increase by some 20m to a total of 40m in G20 countries” by the end of 2012.

#9 Deutsche Bank CEO Josef Ackerman: “It is an open secret that numerous European banks would not survive having to revalue sovereign debt held on the banking book at market levels.”

#10 Alastair Newton, a strategist for Nomura Securities in London “We believe that we are just about to enter a critical period for the eurozone and that the threat of some sort of break-up between now and year-end is greater than it has been at any time since the start of the crisis”

#11 Ann Barnhardt, head of Barnhardt Capital Management, Inc.: “It’s over. There is no coming back from this. The only thing that can happen is a total and complete collapse of EVERYTHING we now know, and humanity starts from scratch. And if you think that this collapse is going to play out without one hell of a big hot war, you are sadly, sadly mistaken.”

#12 Lakshman Achuthan of ECR: “When I call a recession…that means that process is starting to feed on itself, which means that you can yell and scream and you can write a big check, but it’s not going to stop.”

*****

In my opinion, the epicenter of the “next wave” of the financial collapse is going to be in Europe. But that does not mean that the United States is going to be okay. The reality is that the United States never recovered from the last recession and there are already a lot of signs that we are getting ready to enter another major recession. A major financial collapse in Europe would just accelerate our plunge into a new economic crisis.

If you want to read something that will really scare you, then you should check out what Dr. Philippa Malmgren is saying. Dr. Philippa Malmgren is the President and founder of Principalis Asset Management. She is also a former member of the Bush economic team.

Malmgren is claiming that Germany is seriously considering bringing back the Deutschmark. In fact, she claims that Germany is very busy printing new currency up. In a list of things that we could see happen over the next few months, she included the following….

“The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up.”

This is quite a claim for someone to be making. You would think that someone that used to work in the White House would not make such a claim unless it was based on something solid.

If Germany did decide to leave the euro, you would see an implosion of the euro that would be truly historic.

The only way that the euro would have had a chance of working is if all of the governments using the euro would have kept debt levels very low.

Unfortunately, the financial systems of the western world are designed to push governments into high levels of debt.

The truth is that the euro was doomed from the very beginning.

Now we are approaching a day of reckoning. We have been living in the greatest debt bubble in the history of the world, but the bubble is ending. There are several ways that the powers that be could handle this, but all of them will lead to greater financial instability.

In the end, we will see that the debt-fueled prosperity that the western world has been enjoying for decades was just an illusion.

Debt is a very cruel master. It will almost always bring more pain and suffering than you anticipated. It is easy to get into debt, but it can be very difficult to get out of debt.

There is no way that the western world can unwind this debt spiral easily.

The only way that another massive economic crisis can be put off for even a little while would be for the powers that be to “kick the can down the road” a little farther by creating even more debt.

But in the end, you can never solve a debt problem with more debt.

The next several years are going to be an incredibly clear illustration of why debt is bad.

When the dominoes start to fall, we are going to witness a financial avalanche which is going to destroy the finances of millions of people.

Parts from www.zerohedge.com

Category: Commentary, Economy, Finance, Inspirational, National News, Personal Net Worth, Wall Street | 49 Comments »
Tags: Europe Banks, Financial Warnings, Insolvent Banks

Posted By thestatedtruth.com on October 2, 2011

This is how depressions start, and don’t think for a moment that the United States doesn’t know it…..one mistake turns into many.  Europe has many.  It starts in Europe, then given time it moves around the world. 

Dexia, one of Belgiums largest banks is tying its best not to go night night (no problem, the Europeans will save them because they have no other choices), as Europe stands on the cusp of a second banking crisis.  Fully aware, France is frantically trying to do a Euro recapitalisation of its top 5 banks. 

It appears that the inter-bank lending markets are failing in Europe. France and Belgium race to rescue Dexia, which has 35,000 employees and 8 million customers.

Category: Commentary, Economy, National News, Wall Street, World News | 52 Comments »
Tags: Europe Banks, World Banks

Posted By thestatedtruth.com on October 1, 2011

It doesn’t sound like much to (all of a sudden) charge everyone $5 a month to use a bank debit card, but it’s the principle of the matter with the bankers becoming more hated by the day. To make things worse for this ill advised bankers decision, we have a tested model here…just look at Netflix, which instituted a $6/month price hike about two months ago… and is now fighting for survival. From a game theory perspective for the big banks, “everyone has to do it, or nobody will do it.”  It sounds like the small town banks just got revived!  The ball is in their court.

Category: Commentary, Economy, Finance, National News, Wall Street | 43 Comments »
Tags: Bankers, Debit Charges

Posted By thestatedtruth.com on September 30, 2011

Back in 2001 Polaroid went night night (Bankrupt).  The digital age has not been friendly to the old guard since.  Next to potentially see it’s lights go out would appear to be Eastman Kodak….Of course Kodak says no way Jose, but give us a break, that’s what they all say just before the fat lady sings!

Eastman Kodak Co. (EK) said the company has no intention to file for bankruptcy and is “committed to meeting all” obligations.

“Kodak remains focused on meeting its commitments to customers and suppliers, and on delivering on its strategy to become a profitable, sustainable digital company,” the company said in a statement.

Tidbit….Eastman Kodak  has hired law firm Jones Day for restructuring advice… while last week it pulled $160 million from its credit line. Hmm. And Kodak has burned $847 million during the first half of this year.  Geez, how much did you say?  Yep that number is right according to the WSJ!

According to The Wall Street Journal:

Jones Day’s best-known restructuring lawyer, Corinne Ball, represented Chrysler on its historic government-brokered bankruptcy, and is currently advising Hostess Brands Inc. on restructuring options.

Category: Commentary, Economy, National News, Wall Street | 2,579 Comments »
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Posted By thestatedtruth.com on September 30, 2011

The top one half of 1 percent of the population now owns over 28 percent of the nation’s total wealth.  Are they kidding?  And the Republicans don’t want to raise taxes on the rich…..They should be ashamed of themselves, but they’re not. 

This from RobertReich.org

The President’s modest proposals to raise taxes on the rich – limiting their tax deductions, ending the Bush tax cut for incomes over $250,000, and making sure the rich pay at the same rate as average Americans – don’t come close to paying for what American families need.

Marginal tax rates should be raised at the top, and more tax brackets should be added for incomes over $500,000, over $1,500,000, over $5 million. The capital gains tax should be as high as that on ordinary income.

Wealth over $7.2 million should be subject to a 2 percent surtax. After all, the top one half of 1 percent now owns over 28 percent of the nation’s total wealth. Such a tax on them would yield $70 billion a year. According to an analysis by Yale’s Bruce Ackerman and Anne Alstott, that would generate at least half of $1.5 trillion deficit-reduction target over ten years set for the supercommittee.

Category: Commentary, Economy, National News, Pensions and Retirement, Personal Net Worth, Wall Street | 86 Comments »
Tags:

Posted By thestatedtruth.com on September 29, 2011

Hmm…Did you know that U.S. military spending equals that of all other military spending combined in the world.

Category: Commentary, Economy, National News, National Security | 379 Comments »
Tags: Defense Spending, Military Spending

Posted By thestatedtruth.com on September 29, 2011

Pending home sales fell 1.2 percent in August after dropping 1.3 percent the previous month, the National Association of Realtors said.

Homeowner sentiment also dropped to the lowest ever, falling to minus 49.5 from minus 47.1. Earlier this week, the S&P/Case-Shiller index of property values in 20 cities fell 4.1 percent in July from the same month in 2010. The home-price barometer has dropped for 10 consecutive months.

Category: Commentary, Economy, National News, Real Estate, Wall Street | 434 Comments »
Tags: Pending Home Sales, Property Values, RFeal Estate

Posted By thestatedtruth.com on September 29, 2011

Are we heading for a depression or do we just feel depressed…..Ugh, we’ll let you know in a few months!

Consumer confidence slumped last week to the second-lowest level on record as Americans grew more concerned with their financial situation while the buying climate for most things worsened.

The Bloomberg Consumer Comfort Index dropped to minus 53 in the period ended Sept. 25 from minus 52.1 the prior week. The comfort gauge showed the share of households saying it was a bad time to buy needed goods and services climbed to the highest level in three years, raising the risk that the biggest part of the economy will slow heading into the holiday shopping season. A lack of jobs and growing concern that policy makers will be unable to spur the recovery may keep sentiment depressed.

Category: Commentary, Economy, National News | 629 Comments »
Tags: Consumer Confidence

Posted By thestatedtruth.com on September 29, 2011

Soo…The next thing coming is to re-modify the re-modified loans….that should kick the can down the road for another year or so.  That way the bankers can collect on this years bonus money.

One in five homeowners whose mortgages were modified under a program aimed at reducing foreclosures defaulted again within a year after their payments were cut, the U.S. Comptroller of the Currency reported today.

Twenty percent of modified loans were at least 90 days delinquent within a year in the second quarter, according to the Comptroller’s “Mortgage Metrics Report.”

Mortgage delinquencies have increased amid slow economic growth and a U.S. unemployment rate that’s been 9 percent or higher since April. Default notices sent to delinquent homeowners surged 33 percent in August from the previous month, RealtyTrac Inc. said on Sept. 15.

Total loan modifications and alternative payment plans for delinquent borrowers fell to 456,397 in the three months ending June 30, down 19 percent from a year earlier, according to the Comptroller’s report. That included a 35 percent decline in modifications through the government’s Home Affordable Modification Program, which granted 70,071 new payment plans during the quarter.

Category: Commentary, Economy, National News, Real Estate, Wall Street | 1,832 Comments »
Tags: banks, Re-modify Loans, Real Estate

Posted By thestatedtruth.com on September 26, 2011

“Problem is, too many in Washington have less than half a brain.”

Robert Reich

Monday, September 26, 2011

Seems like only yesterday conservative nabobs of negativity predicted America’s ballooning budget deficit would generate soaring inflation and crippling costs of additional federal borrowing.

Remember Standard & Poor’s downgrade of the United States? Recall the intense worry about investors’ confidence in government bonds — America’s IOUs?

Hmmm.

Last week ten-year yields on U.S. Treasuries closed at 1.83 percent.

In other words, they were wrong.

In fact, it’s cheaper than ever for the United States to borrow. That’s because global investors desperately want the safety of dollars. Almost everywhere else on the globe is riskier. Europe is in a debt crisis, many developing nations are gripped by fears the contagion will spread to them, Japan remains in critical condition, China’s growth is slowing.

Put this together with two other facts:

Unemployment in America remains sky-high. 14 million Americans are out of work and 25 million are looking for full-time jobs.

The nation’s infrastructure is crumbling. Our roads, bridges, water and sewer systems, subways, gas pipelines, ports, airports, and school buildings are desperately in need of repair. Deferred maintenance is taking a huge toll.

Now connect the dots. Anyone with half a brain will see this is the ideal time to borrow money from the rest of the world to put Americans to work rebuilding the nation’s infrastructure.

Problem is, too many in Washington have less than half a brain.

Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His “Marketplace” commentaries can be found on publicradio.com and iTunes. He is also Common Cause’s board chairman.

www.robertreich.org

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News | 496 Comments »
Tags: Infrastructure, Rebuild

Posted By thestatedtruth.com on September 26, 2011

Hmm….Gasoline deliveries fell to a 10-year low but prices haven’t…while year-to-date product consumption (including heating oil and diesel) averaged 19.1 million a day, down only 0.3% from a year ago.

Bloomberg reported from API (American Petroleum Institute) that distillate fuel deliveries, which include diesel and heating oil, hit record highs, rising 11% year-over-year to 4.15 million b/d for the August month, while motor gasoline deliveries fell to a 10-year low. Overall, year-to-date product consumption averaged 19.1 million a day, down 0.3% from a year ago.

Category: Commentary, Commodities, Economy, National News | 1,065 Comments »
Tags: Distillate Fuel, Gasoline, Motor Oil

Posted By thestatedtruth.com on September 26, 2011

Concerning the stock markets, a proven technique has been when in doubt, run for the hills…..

From The Wall Street Journal:

In a historic retreat, investors world-wide during the three months through August pulled some $92 billion out of stock funds in the developed markets, according to data provider EPFR Global—an exodus that more than reversed the total amount of money investors had put into those funds since stocks bottomed in 2009. The withdrawals matched the worst three-month period during the depths of the financial crisis.

And….. In the first three weeks of September another $25 billion was withdrawn from developed-market stock funds. Last week the Dow Jones Industrial Average suffered its worst one-week decline since October 2008. It is down 16% from its late-April peak.

“People were holding out hope that we were going back to normal,” says Philip Poole, global head of investment strategy at HSBC Asset Management, which oversees $103 billion. “We’re not going back to normal. The post-crisis world will be different…but that message takes a long time to hammer home.”

Category: Charts and Graphs, Commentary, Economy, National News, Pictures, Real Estate, Wall Street | 50 Comments »
Tags: Crash And Burn, Main Street Woes, Run Baby Run, Wall Street Woes, Wipeout

Posted By thestatedtruth.com on September 25, 2011

And so it goes…Former U.S. Treasury Secretary Lawrence Summers “I’ve been to 20 years of IMF meetings, and there’s not been a prior meeting at which matters have had more gravity and at which I’ve been more concerned about the future of the global economy.”

Billionaire investor George Soros said “something needs to be done” to safeguard Europe’s banks because Greece may be unable to avoid default.

From Bloomberg:

PIMCO Pacific Investment Management Co., which runs the world’s biggest bond fund, is forecasting advanced economies to stall over the next year with Europe sliding into recession, underscoring mounting investor concern about the global economic outlook.

There will be little to no economic growth in industrial nations during the coming 12 months as Europe’s economy shrinks by 1 percent to 2 percent and the U.S. stagnates, said Mohamed El-Erian, chief executive officer of Newport Beach, California-based Pimco. That will leave worldwide expansion at about 2.5 percent, less than the 4 percent forecast by the International Monetary Fund this year and next.

Such gloomy sentiment dominated weekend talks of policy makers, investors and bankers in Washington, where the International Monetary Fund and World Bank held their annual meetings. The Dow Jones Industrial Average suffered its biggest loss since 2008 last week as the U.S. Federal Reserve said risks to its economy had increased and Europe’s debt crisis went unresolved.

“For the next 12 months, the global economy will slow materially with advanced economies struggling to grow much above zero,” El-Erian said in a Sept. 24 interview in Washington.“Emerging economies will maintain faster growth, albeit not as high as the last 12 months.”

Former U.S. Treasury Secretary Lawrence Summers said he has been to 20 years of IMF meetings, and “there’s not been a prior meeting at which matters have had more gravity and at which I’ve been more concerned about the future of the global economy.”

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, World News | 552 Comments »
Tags: Economy, IMF Meetings;Lawrence Summers

Posted By thestatedtruth.com on September 25, 2011

Here is an idea who’s time has come.    Let’s call it the Congressional Reform Act of 2011.

Term Limits. 12 years only, one of the possible options below.

A. Two Six-year Senate terms
B. Six Two-year House terms
C. One Six-year Senate term and three Two-Year House terms

2. No Tenure / No Pension. A Congressman collects a salary while in office and receives no pay when they are out of office.

3. Congress (past , present and future) participates in Social Security.  All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people.

4. Congress can purchase their own retirement plan, just as all Americans do.

5. Congress will no longer vote themselves a pay raise. Congressional pay will rise will match Social Security.

6. Congress loses their current health care system and participates in the same health care system as the American people.

7. Congress must equally abide by all laws they impose on the American people.

8. All contracts with past and present Congressmen are void effective 1/1/12.

We the American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves.

Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home to what ever they do. 

LET’S FIX CONGRESS!!!!!   It’s your call……..

Category: Commentary | 737 Comments »
Tags: Broken Congress, Fix Congress, New Rules

Posted By thestatedtruth.com on September 22, 2011

A five-metric-ton dead research satellite will crash into Earth tomorrow, the largest such object to make an uncontrolled landing since 1979, NASA said.

The National Aeronautics and Space Administration said the satellite, which has a 1-in-3,200 chance of injuring or killing a person on landing, won’t hit North America. It said it was too early to “predict the time and location of re-entry with any more certainty,” in a release today.

NASA expects 26 “potentially hazardous” objects from the Upper Atmosphere Research Satellite to survive, with a total weight of 532 kilograms (1,172 pounds), spread over an area 500 miles long (804 kilometers). The rest will be destroyed as the satellite passes through the atmosphere.

Category: Commentary, Economy, National News | 5,168 Comments »
Tags: Earth, Sattelite

Posted By thestatedtruth.com on September 22, 2011

The world is on the eve of the next financial crisis, with sovereign debt its epicenter, according to Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., manager of the worlds biggest bond fund.  El-Erian ranks as one of the smartest financial guys in the bussiness universe.

Category: Commentary, Economy, National News, Wall Street | 401 Comments »
Tags: debt, Financial Crisis, PIMCO, Sovereign Debt

Posted By thestatedtruth.com on September 20, 2011

California capitulates, says growth is dead for the time being….but economists have been slow learners about understanding the negative dynamics for California.  Senior economist David Shulman argues basically that the economy is so far down, it can’t really fall that much more. But to assume such a (stupid) thing in the current environment makes no sense!

From the Orange County Register:

California’s unemployment rate, which had been coming down earlier this year, is now expected to remain at 12% through 2012, according to UCLA’s quarterly economic forecast released today.

The one hopeful note for Orange County and other coastal counties is that Nickelsburg thinks jobs are likely to come back faster here due to higher concentrations of high tech, innovation and knowledge-based activities.

The downside is that recovery in the inland communities will drag on for years. He said those areas may not see a return to pre-recession job levels until 2017 or 2018 — or even longer.

Senior economist David Shulman argues basically that the economy is so far down, it can’t really fall that much more.  Wrong!

“Simply put, the three sectors that would normally put the economy into recession are already depressed — housing, consumer durables and inventories,” he wrote. “Even if housing starts drop to new lows, this sector of the economy has shriveled so much that it would only have a modest impact on economic activity.”  

In other words, having housing starts drop from 2 million units a year to 600,000 had a much bigger impact than if they fall from 600,000 to 300,000 now, he said.

“Thus, if we are to have a new recession, it would have to come from a collapse in exports, a generalized decline in consumer spending with a resultant decline in business investment,” Shulman said. “(Those are) all plausible, but we are not forecasting that eventuality.”

Category: Commentary, Economy, National News | 510 Comments »
Tags: california jobless

Posted By thestatedtruth.com on September 18, 2011

We have literally buried our young college students with a debt burden that will change their lives for decades. But nobody’s paying attention as the colleges need every penny they can get.  Looking at the chart below, it’s shocking to see that student debt has almost quadrupled in less then three years! Shocking!

The unemployment rate for people aged between 20 to 24 years was 24.5% in August, up from 23.1% in July. The unemployment rate for this population range averaged 15% from 2002 through the end of 2007. However, as the labor market continued to struggle, the unemployment rate for persons between 20 and 24 years of age rose to 25.7% in November 2009 and has remained elevated over the past two years. Not to mention that the unemployment rate for the civilian labor force has been above 9% since May 2009. Additionally we suspect the increased cost of tuition is forcing students to take out larger loans in order to pay for rising education costs.

www.zerohedge.com

Category: Charts and Graphs, Commentary, Education and Schooling, National News | 579 Comments »
Tags: College Loans, Education Loans, School Debt

Posted By thestatedtruth.com on September 18, 2011

We’ve gone over this before, but it looks like the idea is catching on….Grey bearded baby boomers are in trouble…..but many don’t even know it!  Deutsche Bank, in a new report expects stock market investors to lose about 10% of their money — in real terms — over the next 10 years, while the economy goes through 3 recessions! Did they say three? Yep

‘Demography is destiny,’ said Auguste Comte. ‘It works the other way around too,’ he might have added. If they thought they were going to live longer, America’s most ubiquitous age cohort — the baby boomers — might continue to buy stocks. Instead, the cold hand of the grave is on their shoulders and on the whole economy. The boomers are retiring at the rate of 10,000 per day over the next 18 years. They will sell stocks to finance their remaining years.

Mortality has doomed the stock market, says the S.F. Fed. P/E ratios will likely be cut in half. Investors are unlikely to see their stocks return to 2010 levels, says the report, until 2027. And this assumes that US companies will continue to grow profits as they did since 1954. Not very likely. Because democracy, energy, and financial quackery are destiny too. Jointly and severally, they are responsible for the biggest financial debacle in history.

This week, Deutsche Bank came out with a report of its own. It, too, is confident that the “Golden Age” — 1982-2007 — is over. In its place is a “Grey Age.” Instead of the nominal 12.8% gains of the Golden Age, investors have gotten returns of — 2.8% per annum for the last 4 years. Deutsche Bank expects stock market investors to lose about 10% of their money — in real terms — over the next 10 years, while the economy goes through 3 recessions!

www.thedailyreckoning.com

Category: Commentary, Economy, National News, Pensions and Retirement, Personal Net Worth, Wall Street | 886 Comments »
Tags: Baby Boomers, Dmographic, retired

Posted By thestatedtruth.com on September 17, 2011

So far the record low interest rates have only kicked the can down the road by allowing desperate debt to prolong its misery.  History will likely show this to be a catastrophic economic mistake.  In the process, we have destroyed the retirement class by forcing them into higher risk assets.

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Personal Net Worth, Wall Street, World News | 470 Comments »
Tags: Interest rates, Low Interest Rates

Posted By thestatedtruth.com on September 16, 2011

Yep, here is the way it went down… U.S. Treasury Secretary Timothy Geithner goes to Europe, and gives a lesson on the benefits of borrowing more money to jump start European economies and save the Euro, then speaks of ‘catastrophic risk’,  but Austrian Finance Minister Maria Fekter found it “peculiar” to be lectured by the U.S., a country with higher aggregate debt than the euro area, while a host of other finance ministers said the U.S. should “get its own house in order”.  Bottom line…what this really means is negative growth everywhere.

“We have slightly different views from time to time with our U.S. colleagues when it comes to fiscal stimulus packages,” Luxembourg Prime Minister Jean-Claude Juncker told reporters today after chairing the meeting in Wroclaw, Poland. “We don’t see any room for maneuver in the euro area which could allow us to launch new fiscal stimulus packages. That will not be possible.”

Europe’s economy will barely grow in the second half of 2011, a casualty of the debt buildup that 256 billion euros ($353 billion) in aid for Greece, Ireland and Portugal has failed to extinguish.

Geithner made little headway with a call for Europe to boost the capacity of the 440 billion-euro rescue fund, known as the European Financial Stability Facility, by enabling it to tap the European Central Bank.

“We are not discussing the increase or the expansion of the EFSF with a non-member of the euro area,” he said. German Finance Minister Wolfgang Schaeuble spoke of a “very intensive but friendly discussion” and Austrian Finance Minister Maria Fekter found it “peculiar” to be lectured by the U.S., a country with higher aggregate debt than the euro area.

Category: Commentary, Economy, National News, World News | 935 Comments »
Tags: borrowing money, economies, euro, Lecture, lesson

Posted By thestatedtruth.com on September 16, 2011

But these figures speak for themselves….we continue to expect negative numbers over the next few years, actually into 2014.

Net worth for households and non-profit groups decreased by $149 billion, a 1 percent drop at an annual pace, to $58.5 trillion, the Federal Reserve said today in its flow of funds report from Washington. It rose at a 7.4 percent rate in the previous three months. Housing wealth decreased for a fourth consecutive quarter from April to June.

Since reaching a five-year low of $49.5 trillion in the first quarter of 2009, net worth has improved by $8.94 trillion. That still leaves it $7.4 trillion below the record high of $65.9 trillion reached in the quarter ended June 2007, six months before the recession began.

The value of real estate decreased by $98.6 billion in the second quarter after dropping by $219 billion in the previous three months.

Owners’ equity as a share of total real-estate holdings held at 38.6 percent last quarter, today’s report showed.

Category: Commentary, Economy, Finance, National News, Personal Net Worth | 103 Comments »
Tags: Household Net Worth, personal net worth, Real Estate Equity

Posted By thestatedtruth.com on September 16, 2011

So why is it so hard to convince people in high places about this?  Well, because those who sit on top, often can’t see through the clouds.  Governments are first to come to mind. 

From The Wall Street Journal:

The income of the typical American family — long the envy of much of the world — has dropped for the third year in a row and is now roughly where it was in 1996 when adjusted for inflation.

The income of a household considered to be at the statistical middle fell 2.3% to an inflation-adjusted $49,445 in 2010, which is 7.1% below its 1999 peak, the Census Bureau said.

The Census Bureau’s annual snapshot of living standards offered a new set of statistics to show how devastating the recession was and how disappointing the recovery has been. For a huge swath of American families, the gains of the boom of the 2000s have been wiped out.

Earnings of the typical man who works full-time year round fell, and are lower — adjusted for inflation — than in 1978. Earnings for women, meanwhile, are a relative bright spot: Median incomes have been rising in recent years and rose again last year, though women still make 77 cents for every dollar earned by comparably employed men.

Category: Commentary, Economy, National News, Personal Net Worth, Wall Street | 49 Comments »
Tags: Census, Earnings, Pay