Posted By thestatedtruth.com on July 4, 2011

Today commemorates the day of the Declaration of Independence for the United States Of America.  It was on this day, July 4, 1776 that the United States declared its independence from the Kingdom of Great Britain.  It is also known as …..The Fourth of July,  The Glorious Fourth and The Fourth and is a federal holiday in the United States.  

From the outset, Americans celebrated independence on July 4, the date shown on the Declaration of Independence, rather than on July 2, the date the resolution of independence was approved in a closed session of Congress.

In a remarkable coincidence, John Adams and Thomas Jefferson, the only signers of the Declaration of Independence later to serve as Presidents of the United States, both died on the same day: July 4, 1826, which was the 50th anniversary of the Declaration. Although not a signer of the Declaration of Independence, James Monroe, the Fifth President of the United States also died on July 4, 1831.

Observances Of Note

• In 1777, thirteen gunshots were fired, once at morning and again as evening fell, on July 4 in Bristol, Rhode Island. Philadelphia celebrated the first anniversary in a manner a modern American would find quite familiar: an official dinner for the Continental Congress, toasts, 13-gun salutes, speeches, prayers, music, parades, troop reviews, and fireworks. Ships were decked with red, white, and blue bunting.
• In 1778, General George Washington marked July 4 with a double ration of rum for his soldiers and an artillery salute. Across the Atlantic Ocean, ambassadors John Adams and Benjamin Franklin held a dinner for their fellow Americans in Paris, France.
• In 1779, July 4 fell on a Sunday. The holiday was celebrated on Monday, July 5.
• In 1781, the Massachusetts General Court became the first state legislature to recognize July 4 as a state celebration.
• In 1783, Moravians in Salem, North Carolina, held a celebration of July 4 with a challenging music program assembled by Johann Friedrich Peter. This work was titled “The Psalm of Joy”.
• In 1791 the first recorded use of the name “Independence Day” occurred.
• In 1870, the U.S. Congress made Independence Day an unpaid holiday for federal employees.
• In 1938, Congress changed Independence Day to a paid federal holiday.

More at: http://en.wikipedia.org/wiki/Independence_Day_(United_States) 

Category: Commentary, Inspirational, National News, Pictures | 5 Comments »
Tags: 4Th of July, Fireworks, Fourth of July, Independence Day, July 4th

Posted By thestatedtruth.com on July 3, 2011

Should be a surprise, bet nobody guessed it.

Charles Shaw is the name of the best selling wine in the world and it’s priced at $1.99 per bottle.  It’s called Two Buck Chuck (Cabernet Sauvignon, White Zinfandel, Merlot, Chardonnay, and Sauvignon Blanc), and is sold exclusively by Trader Joe’s stores in the U.S., but recently also in Australia.  Incidentally, we know this wine very well, and have yet to come across anybody that could identify it as a (very) cheap wine without seeing the bottle first.  So now you know! 

Out west in California there’s a small chain of stores set up like a South Seas trading post.  They started out as “Pronto Markets” back in 1958, but decided by 1966 that its main competition 7-Eleven stores, would knock them out if changes weren’t made. Joe Columbe changed the name and the theme in 1967.  He called it Trader Joe’s, after himself and gave it an iconic South Seas trading post look. Soon there after business started to boom.  As of June 2011, Trader Joe’s had a total of 358 stores, mostly in Southern California and is still privately owned.  The May 2009 issue of Consumer Reportsranked Trader Joe’s the second-best supermarket chain in the nation, after Wegmans.

^{Supermarket Newsestimates that Trader Joe’s total sales for 2009 were $8 billion, which gave it a ranking of No. 21 on the list of “SN’s Top 75 Retailers for 2011.”   Trader Joe’s sells what Fortune magazine recently estimated to be $1,750 in merchandise per square foot, more than double the sales generated by Whole Foods Market.}

Category: Commentary, Economy, National News, Retail | 771 Comments »
Tags: Grocery, retail, Trader Joe's, Wine

Posted By thestatedtruth.com on July 3, 2011

Charlie Munger, billionaire Warren Buffett’s vice chairman of Berkshire Hathaway, imparts his  wisdom at the final Wesco annual shareholders meeting in Pasadena, California.  Berkshire now owns Wesco.

In business and in personal affairs, be patient but aggressive when you know what you want, Munger advised. He also stressed the importance of continuous learning. His current field of study: Astrophysics.

(Astrophysics (Greek: Astro – meaning “star”, and Greek: physis – φύσις – meaning “nature”) is the branch of astronomy that deals with the physics of the universe, including the physical properties of celestial objects, as well as their interactions and behavior.)

Munger used his opening remarks at the Wesco Annual Meeting to take another jab at the “megalomania” of bankers who he says brought on the real estate bubble of the last decade. A lot of banking, he said, had become “gambling in drag.”He also said some of Wall Street’s computerized traders were the equivalent of “letting rats into the granaries.”

Not surprisingly, some asked his advice on individual stocks. He said Coca-Cola Co., a longtime Berkshire stock holding, was “not nearly as good a business as 20 years ago,” but that as major companies go, it still was “one of my favorites.”

Munger also praised Costco Wholesale Corp., on whose board he sits. The retailer “is about as admirable a capitalist enterprise as ever existed,” Munger said.

More at: www.latimes.com

Category: Commentary, Economy, Finance, National News, Real Estate, Wall Street | 49 Comments »
Tags: Berkshire, Buiness, Charlie Munger, Observations, Warren Buffett

Posted By thestatedtruth.com on July 1, 2011

Records are made to be broken, especially in the foodstamp program!

The USDA,  just released an updade of April participation numbrs in the Supplemental Nutrition Assistance Program (SNAP), better known as  the “foodstamps” program, and it showed another record, of 44.647 million people, an increase from May’s 44.587 million.

www.zerohedge.com

Category: Commentary, Economy, National News, Wall Street | 118 Comments »
Tags: Food Assistance, Foodstamps, SNAP

Posted By thestatedtruth.com on June 30, 2011

Amazon just escalated a stink with California over Internet taxes….and emailed the termination of its affiliate advertising program to 25,000 websites.  Bad seats…hey buddy, front row behind a pole!!

Gov. Jerry Brown has signed into law California’s tax on Internet sales through affiliate advertising which will immediately cut small-business website revenue 20% to 30%, experts say.

The bill, AB 28X, takes effect immediately. The state Board of Equalization says the tax will raise $200 million a year, but critics claim it will raise nothing because online retailers will end their affiliate programs rather than collect the tax.

Category: Commentary, Economy, National News, Wall Street | 5 Comments »
Tags: Amazon, California Stink, Internet taxes

Posted By thestatedtruth.com on June 30, 2011

Agree…..but the economy may not improve for years….we’re in the new normal, best to get used to it!

Former President Bill Clinton sees a possible way past the bipartisan impasse over raising the debt limit: agree to cut spending AND raise taxes, but do neither until later, after the economy improves.

“If they [the Republicans] said, look, that now is not the time for big tax increases to harm the recovery, they would be right,” Clinton told ABC News in an exclusive interview at the Clinton Global Initiative America conference in Chicago. “But it’s also right to say that now’s not the time for big spending cuts.

“What I’d like to see them do is agree on the outlines of a 10-year plan and agree not to start either the revenue hikes or the spending cuts until we’ve got this recovery underway,” Clinton added. “The confidence that the Republicans say would be given to investors with a budget plan, they’d get whether we started this year or next year or the year after that, for that matter.”

More at: http://abcnews.go.com/Politics/bill-clinton-exclusive-proposes-debt-impasse-deal-fears/story?id=13963218

Category: Commentary, Economy, National News, Wall Street | 13 Comments »
Tags: Bipartisan, Clinton, Cutting Spending, new normal, raising taxes

Posted By thestatedtruth.com on June 29, 2011

                                      Manganese Brass Dollar Coins

       

                                           Picture from Wikipedia

As these bronze looking Manganese brass dollar coins  enter circulation, they soon start looking greenish and of course, ugly.  So the question is… why would anyone want them in one or more pockets?

In the basement of a Baltimore vault the size of a soccer field, 1 billion dollar coins are just sitting there at a cost of .30 each. Thanks, Congress.

NPR’s Planet Money reporters recently investigated the $1 presidential coin program, which was a Congressional effort to get more $1 coins into circulation while also trying to be educational.

The problem is that nobody really wants them. Well, not nobody. Sixty percent of the coins make it into circulation. But that other 40 percent? They’re sitting in vaults. In fact, the Fed’s even running out of space for them.

Each coin costs the government 30 cents to make, so the piles in those vaults have cost the government $300 million so far, according to NPR.

The whole thing started in 2005, when the Presidential $1 Coin Act was written into law. While the legislation seemed to have good intentions, when the U.S. Mint started producing the coins a couple years later, the demand just wasn’t there. I mean, had you even heard of the presidential $1 coins, let alone seen one?

At the same time, the legislation mandated that a certain number of Sacagawea coins be made in conjunction with the presidential coins, which has now amounted to one Sacagawea for every four presidents. And I think we know how well those coins went over.

Considering our national debt, couldn’t we just use all that money to help pay some of that off? Well, not exactly. The coins in the vault aren’t exactly money yet. They haven’t been funneled into the financial system, so in the meantime, they have no real-world value until a bank or a collector actually buys them.

At the moment, the program is still moving forward, and NPR projects that by the time it’s finished, 2 billion coins could be sitting in the Fed’s vaults. Next up for minting is our 19^th president, Rutherford B. Hayes.

Read more: http://moneyland.time.com/2011/06/29/inside-the-fed%e2%80%99s-vault-1-billion-worth-of-unused-coins/#ixzz1QjTszrXC

 

 

Category: Commentary, Commodities, Economy, Finance, National News, Tid Bits, Wall Street | 55 Comments »
Tags: $1 Coin, Dollar Coins, One Dollar Coins

Posted By thestatedtruth.com on June 28, 2011

Interest rates are at record 100 year lows, but even so, the world is sporting an unusually slow learning curve!  Logically speaking, if interest rates were to climb,  it would be “lights out, game over” and the mother of all depressions.  Something to think about since no one else seems to be interested.

BIS is warning of higher rates to come. “All financial crises, especially those generated by a credit-fuelled property price boom, leave long-lasting wreckage”Bank for International Settlements…

With the Economy still in a hungover mood from the last crisis, the World has not learnt much. We have banks that are rather leveraged again, just like some of the central banks. The ECB has a gearing of around 24 times, and would be insolvent overnight if Greece defaults. Fed has expanded it’s balance sheet hugely. What has caused the boom in many assets? What if rates start going higher?

www.zerohedge.com

Category: Charts and Graphs, Commentary, Economy, Finance, Interest Rates, Bonds, National News, Real Estate, Wall Street | 11,927 Comments »
Tags: defaults, Depression, Interest rates, Rising Interest Rates

Posted By thestatedtruth.com on June 28, 2011

This is what we have to look forward to……2012 is supposed to be worse then 2011 for government, state and local jobs.  That’s why this is going to be called the LOST decade!

In March 2010, the U.S. economy finally began to add jobs again. Every month since then, private sector employment has grown. Yet almost every month since then, state and local governments have cut jobs. Without those layoffs, the U.S. labor market would have 326,000 more people employed through May 2011. Here’s a chart showing job growth with and without the impact of state and local government cuts:

You can see that the jobs picture looks better if you exclude the effect of state and local government layoffs. The only real outlier was October 2010, when state and local governments added 31,000 jobs.

www.dailyreckoning.com 

Category: Charts and Graphs, Commentary, Economy, National News, Wall Street | 63 Comments »
Tags: Government, Job Growth, Lack Of Jobs, Local Government Jobs, State

Posted By thestatedtruth.com on June 28, 2011

From MarketWatch.com …….Yep, PIMCO, the same one that Bill Gross founded.  So PIMCO says we have inflation, Jim Rogers says we have inflation and Lunch Pale Jack says we got inflation…but the U.S. Federal Reserve says pay attention everyone…the kind of inflation you all are looking at doesn’t count!  Ok, that explains it!

– Inflation set to increase in next 3-5 years, says Pimco

– Rising commodity prices are not “transitory”

– By focusing on core inflation, Fed could risk making policy error

NEW YORK (MarketWatch) — Prospects of higher commodity prices and currency shifts will drive global inflation higher in the next few years, according to a report released Monday by Pacific Investment Management Co., the world’s largest bond fund.

The upward push from commodity prices also raises risks of a monetary-policy error by the U.S. Federal Reserve and other central banks.

Pimco expects inflation in the developed economies, including the U.S., “to average about 3% and developing market inflation to average about 5% over the secular horizon,” which is generally considered the next three to five years.

“The Goldilocks days of the ’90s where nations could have strong growth and low inflation simultaneously are gone,” says portfolio manager and Managing Director Mihir Worah, who outlined Pimco’s thinking in a Q&A article obtained exclusively by Dow Jones Newswires.

The two major catalysts will be rising commodity prices and shifts in exchange rates.

In Pimco’s view, market imbalances will keep commodity prices rising generally in coming years, with more of the inflationary pressures hitting emerging markets since commodities are a bigger share of their consumption.

Emerging markets were once a source of disinflation for developed economies because cheap imports from nations such as China held down inflation in Europe and the U.S. Higher commodity prices will change that dynamic.

“Commodities trade on global markets and to the extent that emerging markets are going through a particularly commodity and energy intensive phase of growth, their consumption affects what U.S. consumers pay, for example, at the gas station,” says Worah.

Currencies will also be a large driver of inflation.

“We anticipate policymakers in the developed world will attempt to make their economies more competitive via a cheaper currency, which likely will, for net importers like the U.S., lead to higher inflation,” says Worah.

At the same time, he says, emerging economies that need to combat domestic inflation will let their currencies appreciate. According to Worah, “This is another channel by which emerging markets may export inflation to developed nations that buy their goods.”

Pimco doesn’t view the recent increases in commodity prices as “transitory.” Total inflation rates could diverge from core rates that exclude food and energy–and core rates are the focus of central banks such as the Fed.

Consequently, Fed officials could make a policy error, says Worah.

“If, as we expect, headline inflation continues to outpace core inflation, or if the gap widens,” he says, “there is a risk central bankers could lose credibility over time, causing an unanchoring of inflation expectations.

“That could raise the risk of monetary policy error” if the Fed “allows steady erosion in consumers’ purchasing power,” he says.

Category: Commentary, Economy, National News, Wall Street | 213 Comments »
Tags: inflation, No Inflation

Posted By thestatedtruth.com on June 27, 2011

If not for the massive government gift giving (stimulus), we would be in a depression.

Report: Government to pass private sector as primary lender in U.S. According to Investor’s Business Daily, citing Federal Reserve data, the U.S. government, perhaps “as early as this quarter” is likely to “displace the private sector as the biggest source of outstanding home mortgages and consumer credit.” According to the report: “At the end of Q1, government-financed home mortgages and consumer credit outstanding totaled $6.32 trillion, up from $4.40 trillion at the end of 2006. Private-sector financed loans fell to $6.58 trillion from $8.48 trillion over the same span.” Back  in 2006 the private sector lent consumers $2 for every $1 dollar lent by the government, the report added.

Dr Joe Duarte

Category: Commentary, Economy, National News, Wall Street | 35 Comments »
Tags: Government Lending, Stimulus

Posted By thestatedtruth.com on June 27, 2011

Remember the old saying, you’re only as strong as the weakest link….or links which is the case more often now days.  Looks like the dominoes in Ireland are falling.  They’re not alone.

“Ireland is screwed,” said a local expert. “Our property developers are broke. And they owe a lot of money to the banks. So they’re broke too. And the banks owe a lot of money to the government, so the government is broke too. And now they’re taxing pension funds and our houses aren’t worth anything, so we’re all broke.”

By way of example, lets review a lovely Georgian house…set on 400 acres…with its own ocean beach. It had been fixed up and was offered for sale for 12 million euros. Then, the crisis hit. Now, the asking price is 7.5 million.

“That’s the asking price,” said the realtor. “Naturally, in this market, the actual sales price might be a bit lower.”

How much lower is anyone’s guess. Houses in Dublin are selling for about half what they fetched a few years ago. And there are abandoned projects all over the country. Take a group of houses built near the coast. They were the equivalent of Irish McMansions…large houses with thatched roofs on small lots. There were about 12 of them…offered for sale at about $800,000 each.

“Well, that was bad timing. The developer had to cut the price in half. They’re now selling for about $400,000,” the agent explained.

“How many have you sold?”

“None.”

Category: Commentary, Economy, Interest Rates, Bonds, National News, Real Estate, Wall Street, World News | 711 Comments »
Tags: dominoes, Homes, Ireland, Real Estate

Posted By thestatedtruth.com on June 27, 2011

There she blows, it was just a matter of time…..are there now any doubts that Frank McCourt has a nose as long as Pinocchio’s.  Worth as much as 1 Billion dollars……dream on, first of all Frank McCourt was the only bidder when he bought the Dodgers back in 2004 according to the commissioner…..and he paid $430 million financed mostly by debt owed to News Corp. and that was because?  Uh, because News Corp couldn’t find any other buyers, so they carried the paper themselves.

The Los Angeles Dodgers filed for bankruptcy protection after Major League Baseball rejected a television deal with Fox Sports, leaving team owner Frank McCourt unable to make payroll this week.

Major League Baseball Commissioner Bud Selig last week said the 17-year TV-rights deal, which McCourt valued at about $3 billion, would harm the franchise in the long term. Baseball took over the Dodgers’ business operations about two months ago.

The team listed assets of as much as $1 billion and debt of as much as $500 million in a Chapter 11 petition filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Manny Ramirez, who last played for the Dodgers in 2010 and retired from the Tampa Bay Rays in April, is listed as the largest unsecured creditor with a claim of about $21 million.

The Dodgers received a commitment for a $150 million loan from Highbridge Principal Strategies LLC, a JPMorgan Chase & Co. unit, to support operations during the team’s bankruptcy, according to court documents. The loan’s interest rate is the London interbank offered rate, or Libor, plus 7 percent.

The team doesn’t have enough cash to make payroll June 30 and needs access to at least $20 million to do so, according to court papers. Earlier this year, McCourt obtained a $30 million personal loan from Fox Sports and used $23.5 million of it to fund the Dodgers’ payroll and other expenses, according to court papers.

http://www.bloomberg.com/news/2011-06-27/los-angeles-dodgers-file-for-chapter-11-bankruptcy-seek-television-deal.html

Category: Commentary, Economy, Finance, National News, Wall Street | 42 Comments »
Tags: Bankrupt Dodgers, Baseball, Broke Dodgers, LA Dodgers Go BK

Posted By thestatedtruth.com on June 27, 2011

Greece is a goner….it sounds like a run on the Greek banks are just around the corner….the ECU needs to move on to bigger fish, like Spain.

Today, as part of its Weekly Credit Outlook, Moody’s issued for the first time a very stark warning that should the rate of attrition in domestic deposits (and to see where these are going merely look at the daily EURCHF chart) persist, or accelerate, the results would be disastrous, “a sustained decline of deposits by more than 35% (roughly equal to the consolidated banking system’s liquid assets and ECB funding availability) within a short period of time, would cause a severe shortage of cash among banks.”   “With the decline in customer deposits, we expect Greek banks to find it increasingly challenging to reduce their ECB funding dependence, which is their primary objective based on their funding plans committed to the Central Bank of Greece.”

Spanish Banks Hiding Over $70 Billion In Bad Real Estate, El Confidencial Finds!

Last year, in “The Ticking Time Bomb That Are The Spanish Cajas”, it was said “Cajas are likely hiding losses on home loans by taking non-performing mortgages out of securitized pools. Absent this unsymmetrical onboarding of risk, the overall deterioration of the broader pool would have become ineligible as collateral in ECB refi operations.” it was also noted that at 264 bps, Spain CDS “is cheaper than a deserted Salamanca hotel.” (it is 320 bps today and soon going much wider). So now that Ireland (of all bankrupt countries) is slinging feces in a desperate attempt at distraction and pointing fingers at Spain, it is logical that the mainstream media would once again remind the world that Spain’s financial system is effectively hollow, and that the greatest mystery in the financial world continues to be that Spanish CDS is not trading 2 or 3 times wider than where it is now. As Bloomberg says  “Spanish banks have 50 billion euros ($70.7 billion) in unrecognised problematic real estate assets, El Confidencial reported, citing a report by the Boston Consulting Group. The consulting group estimates that Spanish banks need between 20 billion euros and 30 billion euros in additional capital and that Spain’s bank rescue fund, known as the FROB, could end up taking over 20 percent of the banking industry, El Confidencial added.”  

  www.zerohedge.com

Category: Commentary, Economy, Finance, National News, Wall Street, World News | 56 Comments »
Tags: Greece, Greek Banks, Kicking The Can, Moody's On Greece, Run On Banks

Posted By thestatedtruth.com on June 27, 2011

What George Soros really means is that they’re about to kick the can down the road again and save the big banks of the world, again….at least until bonus time!

George Soros, Chairman of Soros Fund Management and famous for breaking the Bank of England in 1992, has warned that “we are on the verge of an economic collapse which starts, let’s say, in Greece but it could easily spread.” Soros said that the “financial system remains extremely vulnerable.” Soros added that “there are fundamental flaws that need to be corrected.” The core flaw, says Soros, is that the euro is not backed by a political union or joint treasury, so when something goes wrong with a participating country, there is “no provision for correction.” It is “probably inevitable” that highly indebted countries will be given a way to quit the euro.

The 80-year-old investor said that the “financial system remains extremely vulnerable.”

Soros added that “there are fundamental flaws that need to be corrected.”  The core flaw, says Soros, is that the euro is not backed by a political union or joint treasury, so when something goes wrong with a participating country, there is “no provision for correction.”

Soros said that it is “probably inevitable” that highly indebted countries will be given a way to quit the euro.

Gold has been the strongest currency in the world in recent years and all major fiat currencies, including the Swiss franc, have fallen against it. Should Greece revert to drachmas, Ireland to punts, Spain to pesetas, Italy to lira and Portugal to escudos, these countries would suffer massive inflation and the price of gold would surge in terms of these local currencies.

The risk of contagion in the Eurozone and indeed a global financial contagion remains real. Peripheral European bond markets are under pressure again today with 10 year bond yields in Ireland rising to over 12.1% and to over 11.65% in Portugal.

European leaders are preparing for a default by Greece. The German finance minister, Wolfgang Schaeuble, said yesterday that Europe is preparing “for the worst”.

www.zerohedge.com

Category: Commentary, Economy, Finance, National News, Wall Street, World News | 217 Comments »
Tags: Economic Collapse, Euroe Broke, Soros, World Economics

Posted By thestatedtruth.com on June 26, 2011

From The Wall Street Journal…..

Today, U.S. consumers have more mortgage and credit-card debt than they did five years ago.  Given the difficulties of paying down debt, “you have to get comfortable with the idea that it’s going to take a long time for the markets to adjust and for the economy to get back on solid footing,” says Tom Luster, director of investment-grade-bond research at Eaton Vance Investment Managers. History shows “that when people have borrowed too much, they stop borrowing and interest rates stay very low for a very long time,” he says.

The Federal Reserve is just days away from ending one of the major steps to aid the U.S. economy—but the effort has done little to solve the original problem: The government and individuals alike are still heavily in debt.

Around the globe, the inability of governments and households to reduce their debt continues to cast a shadow over Western economies and the financial health of individuals. Today, U.S. consumers have more mortgage and credit-card debt than they did five years ago, and the U.S. budget deficit is worsening. At the same time, European governments are having to throw billions more euros at Greece to keep it afloat.

The repercussions are likely to play out for years to come in the form of patchy economic growth, further government market intervention—such as last week’s decision by oil-consuming nations to release more oil onto the markets—and frequent financial-market swings.

The fundamental problem is that reversing the trend of piling on the debt requires some combination of cutting spending, growing income or the economy, and inflation. But wage growth is stagnant and home prices, which underpin much of the debt problem, are still falling.

Meanwhile, in a vicious circle, businesses aren’t hiring or investing because they know consumers are tapped out. Banks, for their part, are hoarding cash, being stingy with new loans.

Unlike the aftermath of typical recessions, simply lowering interest rates hasn’t been enough to get growth back on track, economists say. Central-bank efforts have boosted financial markets in the short term—raising stock prices and significantly lowering interest rates—but they have been unable to push people and governments to whittle down debt.

Quite the opposite has been the case. The lowered cost of borrowing has enabled individuals and governments to delay taking measures to change the way they spend and save.

Category: Charts and Graphs, Commentary, Economy, Interest Rates, Bonds, National News, Wall Street, World News | 75 Comments »
Tags: Consumers, debt, Paying Down Debt

Posted By thestatedtruth.com on June 26, 2011

Drinking water at certain times of the day are thought to maximize its effectiveness on the body, we will review some of these many reasons below……

2 glasses of water after waking up – could help activate internal organs

1 glass of water 30 minutes before a meal – could help digestion

1 glass of water before taking a bath – could help lower blood pressure

1 glass of water before going to bed – could help avoid a stroke or heart attack

Also, it’s said that….. water at bed time will help prevent night time leg cramps. Why, you might ask?  Well, it’s because leg muscles are seeking hydration of which without, they cramp up…. .So now you know!

 

Category: Commentary, National News, Tid Bits, Wall Street | 1 Comment »
Tags: H2O, tid bits, Water Tid Bits, Water Water

Posted By thestatedtruth.com on June 24, 2011

From Eric Janszen of I-Tulip fame…..Eric thinks this is how things are shaping up.  So, we can expect to see the years 2013-2014 look pretty darn negative! Then we’ll have to see.

Can we escape the moderate but persistent output gap trap we are in today? Remember, we need at least three years of 4% plus GDP growth to return to trend output growth rate and full employment without inflation.

Annual real GDP growth has declined from 5% to 3% over the past 105 years as the US economy matured.

Real GDP exceeded 4% per year for three years in only six instances in US history:

1. The New Deal
2. WWII
3. Post-war Era
4. Tax Cut Boom
5. The Great Inflation
6. Technology Bubble Boom

None of these options are available to us now.

As a net external debtor, we lack the public credit to execute a New New Deal.

We lack the productive capacity and trade position we had after WWII to experience an export-led industrial boom.

Our tax rates are already relatively low compared to where they were in the early 1960s.

As a debtor, even modest inflation will backfire and create disproportionally high interest rates that slow the economy.

The housing bubble, $10 trillion as it was, barely closed the output gap opened by the collapse of the tech bubble, and left an even bigger output gap in its wake.

That leaves either a major war not on US soil or this:

1. Write down a significant portion of the credit bubble era debt and boost private sector with tax policy that directs investment way from the FIRE Economy and toward the Productive Economy, with a focus on energy efficiency.

Not likely. The debt represents a flow of payments to the creditor class that runs the country.

2. Continue to use public funds to grow the money supply as private sector borrowing remains too weak to do so and monetary policy became ineffective long ago.

This implies a political stalemate that causes the US to continue to crawl through the output gap by moving private debt to public account ala Japan since 1992 until we run out of public credit.

But before that happens, the US needs a way out.

3. That way out is a conflict in Asia over oil that is developing now as Cold War II in the Middle East and North Africa, that will develop into a hot war as the Peak Cheap Oil Cycle takes its political toll.

http://www.itulip.com/forums/blog.php

Category: Commentary, Economy, Finance, National News, Wall Street | 176 Comments »
Tags: Business 101, Economics, Real GDP

Posted By thestatedtruth.com on June 23, 2011

This is a lead bowling ball going down hill….the first pin to be hit is New Jersey!  And even more interesting, Democrats control both houses of the Legislature…. and union membership is among the highest in the country.  Go figure!

From The New York Times……

TRENTON — New Jersey lawmakers on Thursday approved a broad rollback of benefits for 750,000 government workers and retirees in a major victory for Gov. Chris Christie and a once-unthinkable setback for the state’s powerful public employee unions.

The Assembly passed the bill 46 to 32, as Republicans and a few Democrats defied raucous protests by thousands of people whose chants, vowing electoral revenge, shook the State House. Leaders in the State Senate said their chamber, which had already passed a slightly different version of the bill, would approve the Assembly version on Monday. Mr. Christie, a Republican, was expected to sign the measure into law quickly.

In a statement released after the vote, Mr. Christie said, “We are putting the people first and daring to touch the third rail of politics in order to bring reform to an unsustainable system.”

The legislation will sharply increase what state and local workers must contribute for their health insurance and pensions, suspend cost-of-living increases to retirees’ pension checks, raise retirement ages and curb the unions’ contract bargaining rights. It will save local and state governments $132 billion over the next 30 years, by the administration’s estimate, and give the troubled benefit systems a sounder financial footing, mostly by shifting costs onto workers.

The legislation applies to all state employees and to a much larger number of county, town and school district workers, because most local governments participate in the state-run pension and health care systems. When it is fully phased in, after four years, the average government worker will pay several thousand dollars more into the benefit funds.

Category: Commentary, Economy, Finance, Healthcare and Science, National News, Pensions and Retirement, Wall Street | 53 Comments »
Tags:

Posted By thestatedtruth.com on June 22, 2011

Considering that we’re in the summer buying season, this is bad news…..

Purchases of existing homes fell 3.8% in May from the prior month to an annual rate of 4.81 million homes. At that pace, sales this year would drop below last year’s 13-year low of 4.91 million.

At the same time, the price of the median home fell nearly 5% year- over-year to $166,700, which is roughly the same price of a median home nine years ago. “An unemployment rate hovering around 9% and tight credit standards,” Bloomberg News observes, “mean it may take years to absorb the 1.8 million distressed properties on the market that are weighing down home values.”

The National Association of Realtors (NAR) provides a more comprehensive explanation for the housing market’s persistent weakness – an explanation tinged with vitriol. In the NAR’s 18-page, lavishly illustrated “Realtors Confidence Index” report for May 2011, the Association’s Chief Economist, Lawrence Yun, blames both the soft economy and the “perverse new banking mindset” for the housing market’s difficulties.

But after a brief nod to the soft economy, Yun pillories the banking industry for its refusal to lend. “Adding to the challenge is the fact that banks are not lending,” he says flatly. “Banks are still hoarding cash and contracting lending activity…[They] are adding profits to their bottom lines, due partly from their ability to access money on the cheap, thanks to government backing of deposits, and by buying tradable assets such as realtors in government bonds. The inevitable too-big-too-fail taxpayer bailout if something were to go wrong is also quite reassuring for the large banks.

“In the ‘good old days,'” Yun continues, “there used to be a rule: the 3-6-3 banking rule. The bank would offer 3% interest to depositors, charge 6% on loans, and then be on the golf course by 3:00 p.m. That rubric has now been replaced with a new one: give nothing to depositors, give nothing to those who want to borrow, buy tradable assets, get an easy 3% yield from government bonds, and pretend to work long hours to justify a high salary and bonus. Partly because of this perverse new banking mindset…pending home sales in April took a tumble, falling 11% from the previous month.”

The substance of Yun’s scathing rebuke of the banking industry is not nearly as surprising as its source. Historically, the NAR and the banking industry relied on a close symbiosis to nourish themselves. Whatever was good for one of them was automatically good for the other. Easy credit nourished the housing bubble, just as the housing bubble fattened bank profits and provided the wherewithal to continue extending easy credit.

www.dailyreckonning.com

Category: Commentary, Economy, National News, Real Estate, Wall Street | 58 Comments »
Tags: Home Sales, housing, Real Estate, Realtors

Posted By thestatedtruth.com on June 19, 2011

From Washington’s Blog…………..

WOWT Reports: [Fort Calhoun Nuclear Power Plant’s chief nuclear officer, Dave Bannister] said for the plant to get to a disaster level, floodwater would have to rise three and a half feet above where it stands now.

The Kansas City Star Notes:  The endless complexities have made prediction a tough task, said
Ross Wolford, a hydrologist working long days for the National Weather Service in order to try to predict the river’s flow.“We don’t have, nor does the Corps or anyone else have, a hydraulic model of what the [Missouri] river’s going to do,” Wolford said. “There’s a lot of art in the way we estimate.”

The Journal Star Points Out:  The flood begins higher up, at places like Dark Horse Lake in the Bitterroots, [Montana] where another 2 inches of snow fell late this week, landing on the 8 feet still on the ground.“It’s all starting here,” said Jim Brusda with the National Weather Service in Great Falls, Mont. “It’s going to flow back down there toward Nebraska” …“People who have been here 50 years, 70 years, say they haven’t seen anything like this … And there’s a lot of water to come” …And as the snow-fed Missouri crosses Montana, it’s collecting record rainfall, too. Some areas received 10 inches in three weeks; 3 inches fell on a town in northeast Montana between Thursday and Friday.  The rain is expected to continue through the weekend. An even stronger storm system could surface next week.

From Japan: Monju

The New York Times has a must-read report on a situation at a reactor hundreds of miles from Fukushima which hasn’t turned into a catastrophe net, but could become a large-scale disaster:

Three hundred miles southwest of Fukushima, at a nuclear reactor perched on the slopes of this rustic peninsula, engineers are engaged in another precarious struggle.

The Monju prototype fast-breeder reactor — a long-troubled national project — has been in a precarious state of shutdown since a 3.3-ton device crashed into the reactor’s inner vessel, cutting off access to the plutonium and uranium fuel rods at its core.

Engineers have tried repeatedly since the accident last August to recover the device, which appears to have gotten stuck. They will make another attempt as early as next week.

But critics warn that the recovery process is fraught with dangers because the plant uses large quantities of liquid sodium, a highly flammable substance, to cool the nuclear fuel.

***

Prefecture and city officials found that the operator had tampered with video images of the fire to hide the scale of the disaster. A top manager at the plant recently committed suicide, on the day that Japan’s atomic energy agency announced that efforts to recover the device would cost almost $21.9 million. And, like several other reactors, Monju lies on an active fault.

More at: http://www.zerohedge.com/article/global-nuclear-update

Category: Commentary, Economy, National News, National Security, News Letters, Outliers, Weather | 49 Comments »
Tags: Nuclear Power Updates

Posted By thestatedtruth.com on June 18, 2011

Retirements are changing more then anyone thought possible.

From… The Wall Street Journal

Several factors are driving the trend toward older people earning and working less, from the sour economy to downsizing and the fact that employers have been moved to more “performance-based” pay, which often translates into smaller pay increases, as well as pay freezes.

While the financial crisis and recession have exacerbated the trend, it isn’t new. IRS filings for pension plans show that a decade ago, large employers assumed steep drops in the rate of salary growth as employees aged. Boeing Co., Hershey Co., Sears Holdings Corp. and Xerox Corp., for example, assumed salaries for a 25-year-old would increase by 7% to 13% a year, but that the rate of increase would fall steadily thereafter, generally reaching the 3% range by age 50. With inflation, this means that salaries remain flat in one’s final decade or two on the job.

Many large companies estimate what you will receive in Social Security benefits and subtract half that amount from your pension. But they may overestimate what you will receive from Social Security, reducing your pension too much. That is because they assume their current and former employees work 35 years and that their pay grows at a certain rate. You have the right to have your employer calculate your pension using your actual earnings history.

Such strategies might seem like a radical departure from the classic “save 10% of your income” strategy financial advisers used to push. Then again, “all the maxims of retirement have totally changed,” says Mr. Scott. “You can’t play by the same old rules.”

More at: www.wsj.com

Category: Commentary, National News, Pensions and Retirement, Wall Street | 717 Comments »
Tags: Retirement Facts, Salary;Employers Retirement

Posted By thestatedtruth.com on June 18, 2011

So, what does the federal government say about all of this?…….Uh, we never promised anyone a Rose Garden!

Bloomberg:

Little Rock, Arkansas, has stopped replacing aging police cars. Mesa, Arizona, is losing $5 million a year from thousands of vacant homes that aren’t paying utility bills. Providence, Rhode Island, closed schools, fired teachers and may cut almost a fifth of its police force.

“Even with all that, we’re still looking at a huge tax increase,” said Providence Mayor Angel Taveras, who proposed a $15 million boost in property levies. “Mayors are having to make difficult decisions. They are making them in Boston, New York, Newark, Detroit, all across the country.”

U.S. mayors gathered in Baltimore for their annual meeting this weekend say they are being squeezed by rising costs, tax collections below their peak and cuts from states and the federal government that threaten their nascent financial stability. While state governments are showing signs of emerging from the fiscal crisis caused by the recession, cities are still waiting for recovery, the mayors say.

“The big pieces aren’t coming back,” said Little Rock Mayor Mark Stodola. “They’re not coming back fast at all.”

Property-tax collection, a key revenue source for cities, dropped during the last three months of 2010 at the fastest pace since housing prices peaked as assessments were lowered, U.S. Census data show. Prices have dropped further this year.

At the conference, which began yesterday, mayors voiced concern that the federal government and the states, seeking to rein in their own budget deficits, will only make cities’ struggles worse. For the next fiscal year, 42 states and the District of Columbia have closed, or are working to close, $103 billion in budget gaps, the Washington-based Center on Budget and Policy Priorities said yesterday.

More at: http://www.bloomberg.com/news/2011-06-18/u-s-mayors-find-few-recovery-signs-as-cutbacks-pose-new-risks.html

Category: Commentary, Economy, National News, Real Estate, Wall Street | 472 Comments »
Tags: Cities, Government, taxes

Posted By thestatedtruth.com on June 18, 2011

There is good news here, and not so good news……..in a nutshell, the economy is flat and not growing but not collapsing either.  That sort of sums it up, the good and the bad!

By Lee Adler

Month to date Federal withholding taxes as of June 15 were down 5.5% from last year, negating the monthly gain shown in May. That gain was primarily due to the calendar anomaly of a payment date for a biweekly and semimonthly pay period for many employees coming on June 1 last year. That resulted in an understatement in May’s 2010 receipts and an overstatement for June last year. Therefore the 5.5% decline so far this month versus last June makes things look worse than they are. The truth is that tax receipts over the last rolling monthly period are about even with last year, suggesting that the economy has stalled, but has not collapsed to the degree implied by a 5.5% decline.

The one month moving average of daily withholding tax collections is at about the same level as last year. May’s gains have dissipated. The 13 week moving average is sinking fast and should be hitting bottom now. It is at roughly the same level as last year. Normal seasonality has a flat period through Q3, with a drop into the low in September/October. If this drops below last year’s level from here, then the economy probably is in free fall. That would be very bad news in terms of the levels of debt the Treasury must float in the months ahead.

Source: www.thewallstreetexaminer.com

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Wall Street | 586 Comments »
Tags: Federal Tax Payments, Tax Collections, Tax Reciets

Posted By thestatedtruth.com on June 15, 2011

The gap between spending and revenues has never been larger!

The American consumer is tapped.  Just look at the outstanding debt count:

-over $10 trillion in mortgage debt

-$1 trillion in student loan debt

-over $750 billion in credit card debt

We also have billions more in automotive debt.  This is simply unsustainable and we reached the apex reflected in our earlier chart where household debt equaled GDP at a near perfect one ratio. This sacrifice has come at the expense of the middle class since the top 1 percent have actually seen significant wealth gains over the last few decades.

For more: www.mybudget360.com

Category: Charts and Graphs, Commentary, Economy, National News, News Letters, Wall Street | 43 Comments »
Tags: Gap, GDP Gap, Revenues, spending

Posted By thestatedtruth.com on June 15, 2011

It’s a sign of the times and also why generations of workers are screwed for as far as the eye can see….main street Jack and Jill see little if any government stimulus drift down to him or her.  It’s the sad but real truth.  The better question though is ….How do we fix this?  The common answer from the powers that are, go something like this…..”my people will get back to your people on this”.  Then it’s forgotten.

In a recent report surveying working Americans (workers) the data reflects what we already know.  This so-called recovery really isn’t a recovery for working and middle class Americans.  Those with less than $25,000 in household savings have ballooned and this figure has more than doubled in four short years.  In 2007 at the peak of the debt bubble only 19 percent of these people felt not at all confident regarding their retirement.  First, this reflects the psychological delusion that somehow the credit cards and home equity would keep flowing forever.  However, this quickly reversed and now 43 percent in this group worry about retirement.  Notice all the older workers at Wal-Mart?  Mind you that one out of three Americans has no savings at all.

Now let’s look at the top group of retirees with $250,000 or more.  This number is actually up from the 2007 crisis.  So what you have is a larger number of Americans unable to save but those involved deeply in the stock market are growing at a healthy rate.  This reflects favorable government policies and bailouts to institutions that favor the wealthy.  The top 1 percent are benefitting from the banking graft being perpetrated on the working and middle class of America.  Unlike the 1950s through 1960s the growth in wealth is not benefitting all groups.  Nothing wrong with growing the financial base of a country but…….

www.mybudget360.com

Category: Charts and Graphs, Commentary, Economy, National News, News Letters, Pensions and Retirement, Personal Net Worth, Wall Street | 81 Comments »
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Posted By thestatedtruth.com on June 14, 2011

China and Russia are moving up on the Gold holdings chart… but the IMF is selling everything that’s not nailed down.  Otherwise it all stays pretty much the same. 

The Gold production rankings are as follows and listed in order of production……China, Australia, South Africa,USA, Russia and Peru. 

Category: Charts and Graphs, Commentary, Gold and Silver, National News, Wall Street, World News | 473 Comments »
Tags: Gold Holdings By Country, World Gold Holdings

Posted By thestatedtruth.com on June 14, 2011

Interesting comments from The Inger Letter….

Category: Charts and Graphs, Commentary, National News, Oil and Nat Gas, Wall Street | 51 Comments »
Tags: Oil Reserves, World Oil Reserves

Posted By thestatedtruth.com on June 13, 2011

The price of everything is going up….only a dumb bell doesn’t believe we have inflation!  And the biggest dumb bell of them all….uh, who is that over there in line, Uncle Sammy….is that you?

As the summer tourist season begins, the Walt Disney Co. announced an increase in ticket prices at Walt Disney World Resort in Orlando and Disneyland Resort in Anaheim.

As of Sunday, one-day passes for the Disney theme parks in Anaheim increased 5.3%, from $76 to $80. A three-day pass to visit Disneyland and nearby Disney California Adventure Park jumped 8.7%, from $206 to $224. Annual passes for Southern California residents, among the most popular ticket option, increased 8.1%, from $184 to $199.

Category: Commentary, Economy, National News, Wall Street | 536 Comments »
Tags: Disney Hikes Prices

Posted By thestatedtruth.com on June 13, 2011

Greece goes down, just a matter of when! The Greece bonds are now considered junk by rating standards. The big question is does Greece take down the whole Euro complex?

Greece was branded with the world’s lowest credit rating by Standard & Poor’s, which said the nation is “increasingly likely” to face a debt restructuring and the first sovereign default in the euro area’s history.

The move to CCC from B reflects “our view that there is a significantly higher likelihood of one or more defaults,” S&P said in a statement yesterday. “Risks for the implementation of Greece’s EU/IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required.”

Category: Commentary, Economy, Interest Rates, Bonds, National News, World News | 353 Comments »
Tags: EU Greece Bonds, Greece, Greek Bonds, Junk Bonds

Posted By thestatedtruth.com on June 13, 2011

We’ve just had 100 year floods, now it looks like we have the 100 year drought………About 94 percent of Texas was in a state of severe, extreme or exceptional drought as of June 7, according to the U.S. Drought Monitor compiled by the U.S. Agriculture Department and the National Drought Mitigation Center. The October-through-May period was the state’s driest since record-keeping began in 1895, said Texas State Climatologist John Nielsen-Gammon.

It’s the worst Texas drought since record-keeping began 116 years ago, it may change the oil and natural- gas drilling boom because of rationed water supplies crucial to energy exploration.

In the hardest-hit areas, water-management districts are warning residents and businesses to curtail usage from rivers, lakes and aquifers. The shortage is forcing oil companies to go farther afield to buy water from farmers, irrigation districts and municipalities, said Erasmo Yarrito Jr., the state’s overseer of water supplies from the Rio Grande River.

Concern over water usage is especially acute in southern Texas’s Eagle Ford Shale area because drilling there is more water-intensive than other regions, said Robert Mace, a deputy executive administrator of the Texas Water Development Board.

The water crisis in Texas, the biggest oil- and gas- producing state in the U.S., highlights a continuing debate in North America and Europe over the impact on water supplies of an oil and gas production technique called hydraulic fracturing. Environmental groups are concerned the so-called fracking method may pose a contamination threat, while farmers in arid regions like south Texas face growing competition for scarce water.

Along the Rio Grande River, where border towns such as Laredo supply workers and equipment for the drilling boom, most areas have received less than 2 inches (5 centimeters) of rain since Oct. 1, the National Weather Service said.

Farmers, landowners, environmental activists and state oil industry regulators gathered on June 10 at the University of Texas Health Center in Laredo to discuss the potential impact of fracking on water, air and public health, one of several such meetings that have been held across the state this year.

13 Million Gallons

The Eagle Ford’s peculiar geology means it takes three to four times as much water to fracture as the Barnett Shale near Fort Worth, said Mace, of the state water board. Fracking a single Eagle Ford well requires as much as 13 million gallons of water, enough to supply the cooking, washing and drinking needs of 40 adults for an entire year, he said.

“This is not the drilling your grandparents knew in west Texas,” said Sharon Wilson, an organizer for Earthworks’ Oil and Gas Accountability Project, which lobbies for tougher government regulation of oil drillers. “It’s a heavy industrial activity with massive amounts of water and chemicals.”

More from www.bloomberg.com

Category: Commentary, Commodities, Economy, National News, Weather | 11,939 Comments »
Tags: 100 year drought, Drought, hundred year drought

Posted By thestatedtruth.com on June 11, 2011

Fat chance of this debt ever getting cut in a timely manor other then by default!  Debt is the reason that the world goes into another recession or controlled depression at some point!  Just a matter of time.

$26,172 isn’t some magic number, it’s the amount of debt the average U.S. household would need to cut to bring balance sheets back to 1990’s levels.

Americans have made only small progress in paring back their debt, but it’s mostly been cutting their credit-card use and walking away from mortgages and other loans.  In the first quarter of 2011, households owed $13.3 trillion, an amount equal to 18.4% of total household assets….but to get back to 14.4% last seen in the 1990’s, households would have to shed a combined $2.9 trillion of debt or about double what we’ve already seen.

Chat and some stats from: www.wsj.com

Category: Commentary, Economy, Finance, National News, Personal Net Worth, Wall Street | 482 Comments »
Tags: debt, household debt

Posted By thestatedtruth.com on June 11, 2011

And that’s saying a lot!

Category: Commentary, Pictures | 72 Comments »
Tags: 2, 600 Posts, the stated truth

Posted By thestatedtruth.com on June 10, 2011

Yep!  Makes sense, doesn’t it?

www.ingerletter.com

Category: Charts and Graphs, Commentary, Economy, National News, Real Estate, Wall Street | 750 Comments »
Tags: consumer spending, Real Estate Assets

Posted By thestatedtruth.com on June 9, 2011

About a year ago Zero Hedge posted an article…..”Record Number Of Americans Using Retirement Funds As Source Of Immediate Cash” after a report by Fidelity uncovered that “plan participants with loans outstanding against their 401(k) accounts had reached 22 percent versus 20 percent a year earlier.”  Well guess what?  The new number is now 30% and growing like a weed.  CBS News explains that raiding your 401(k) is so easy even a caveman can do it!

On “The Early Show” today financial journalist and Newsweek columnist Joanne Lipman said, “Right now we have 30% of the people with a 401(k) taking a loan against it, which is a new historic high. And the problem is this is growing like crazy: By 2014, we’re expecting to see 30 million people take loans against their 401(k)s.

 Parts from www.zerohedge.com

Category: Commentary, Economy, National News, Pensions and Retirement, Personal Net Worth, Wall Street | 966 Comments »
Tags: 401k Plans, pensions, retired, retirement accounts

Posted By thestatedtruth.com on June 9, 2011

Household wealth in the U.S. climbed by $943 billion in the first quarter of 2011 according to the Federal Reserve’s flow of funds report out of Washington,  as rising stock market share prices outstripped declines in home values.  From the peak in June 2007 to the low in 2009 the losses from all asset groups combined were -24.9% of assets.  As of now (1st quarter 2011) the losses off the high of all asset groups combined is -13.55%.  We have a chart posted below of how things looked at the highs in 2007……

Bloomberg:  Net worth for households and non-profit groups increased at a 6.8 percent annual pace, the Federal Reserve said today in its flow of funds report from Washington. American households also cut debt for a 12th consecutive quarter.

“The easy part of the repair of balance sheets may be behind us,” Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said before the report. “It’ll be tougher to get big increases in household wealth. We need to at least see house prices showing signs they are approaching stability.”

Since reaching a five-year low of $49.4 trillion in the first quarter of 2009, net worth has improved by $8.7 trillion. That still leaves it $7.7 trillion below the record high of $65.8 trillion reached in the quarter ended June 2007, six months before the recession began.

http://www.bloomberg.com/news/2011-06-09/household-worth-in-u-s-rises-by-943-billion-as-stocks-offset-home-prices.html

Category: Charts and Graphs, Commentary, Economy, National News, Pensions and Retirement, Personal Net Worth, Real Estate, Wall Street | 2,251 Comments »
Tags: household worth, net worth, persoanl net worth

Posted By thestatedtruth.com on June 8, 2011

Bill Gross has been on a roll talking about this……….Governments such as the U.S. are intentionally keeping interest rates artificially low to help reduce record debt levels, setting up investors up for a “pocket picking.” The U.S. has done little to reduce the size of the excess liabilities accumulated, Pimco wrote in what it called a secular outlook saying the amount of marketable debt outstanding has more than doubled to $97 trillion since the start of the financial crisis.

Pacific Investment Management Co.’s Bill Gross said foreigners are questioning the dollar’s role as the world’s reserve currency because of U.S. policies that keep borrowing rates low to reduce the nation’s debt burden.

Gross, manager of world’s biggest mutual fund, reiterated that investors should avoid U.S. Treasuries because they’re not being compensated for the risk of inflation. Investors should buy debt of nations that maintain better fiscal and monetary policies such as Canada, Germany and Mexico, he said.

“If you’re a foreign holder of dollars,” you should be concerned, Gross said, speaking today in Chicago at the 2011 Morningstar Investment Conference. “Ultimately, they too begin to question, and are already starting to, the soundness of a Treasury bill, bond or note.”

Under a strategy that economist Carmen Reinhart has described as “financial repression,” governments require banks, pension funds and other financial institutions to hold government debt, ostensibly for reasons related to the safety and soundness of the organizations, Gross said.

Such a situation is occurring now and is intolerable because almost four years since the start of the financial crisis, the U.S. has done little to reduce the size of the excess liabilities accumulated, Pimco wrote in what it called a secular outlook last month. The amount of marketable debt outstanding has more than doubled to $97 trillion since the start of the financial crisis.

Full article at: http://www.bloomberg.com/news/2011-06-08/gross-says-u-s-policy-prompting-foreigners-to-question-dollar.html

Category: Commentary, Economy, Interest Rates, Bonds, National News, Pensions and Retirement, Wall Street | 30 Comments »
Tags: debt, Interest rates, u.s. debt, U.S. Interest Rates

Posted By thestatedtruth.com on June 7, 2011

You won’t hear this from the government…..the gap between spending commitments and revenue last year equals more than one-third of the nation’s gross domestic product.

From USA Today:

The federal government’s financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit, a USA TODAY analysis shows.

The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.

This gap between spending commitments and revenue last year equals more than one-third of the nation’s gross domestic product.

Category: Commentary, Economy, Interest Rates, Bonds, National News, Wall Street | 624 Comments »
Tags: broke, debt, obligations, U.S. government

Posted By thestatedtruth.com on June 6, 2011

Is an education really worth the cost?  In many cases the answer is YES, but in many other cases the answer is NO, and especially involving  “for profit trade schools”!

The cost of education is becoming onerous and student loans are littered with financial landmines.  Many are given to students to attend for-profit schools that will yield very little return on investment in the market aside from stockholders and corporate leaders.  The uglier side also includes the inability to discharge student loans in bankruptcy.  Americans have the ability to discharge mortgage debt if they are unable to pay their home payment.  Businesses have the power to renegotiate contracts and loans with banks.  Yet we somehow have managed to recreate debtor’s prison except it comes in the form of a student loan.  Another dirty secret comes from the financial institutions gouging students with additional fees on top of the original loan balance.  The higher education bubble is popping and the long-term implications loom large for our struggling economy.

One of the implicit tenets we live by in America is the ability to fail and comeback from setbacks.  Currently this idea has been usurped by the giant financial organizations and has excluded virtually every other American.  You have luxury hotels imploding and banks simply dishing billion dollar bad bets to the American taxpayer.  At the core of the too big to fail bailouts is the notion that banks made horribly bad bets and needed to walk away.  So they did by saddling the American taxpayer with the bill.  Yet with student loans banks are lending to anyone and everyone willing to attend any questionable institution.  The due diligence is comical and the corruption that is occurring is similar to the mortgage boiler rooms that were dishing out subprime loans to any person that walked in through the front door.  The stories of student loan purgatory are starting to fill the internet.  Take a look at this post from “Frank” over at Student Loan Justice:

“I graduated from law school in December of 97. I have paid on my student loans off and on over the past 9+ years and have paid back an estimated $75,000 on a loan that when I graduated was a little of $100,000. When I last checked the pay off amount it was over $135,000 and thats with paying $75,000 + over the past 9 years. I owe more on it now than when I took them out !! One of my loans is in default, they claim I owe them $23,000+ (which somehow jumped from $17,000 in a span of about 30 days) My two other lenders are close to defaulting and I am unsure if I should just let them default…”

This is one of the darker sides of student loans that are kept hidden by the banks and the government.  Many lenders gouge students when they encounter problems.  Unlike a credit card for example, when you have really extraordinary problems you have an exit hatch with bankruptcy.  Ideally lenders are doing enough due diligence to learn their lesson.  Yet with student loans the market keeps increasing as for-profit schools and other institutions increase tuition and saddle students like Frank above with insane amounts of loans.  First, they have this person stuck in a modern day debtor’s prison.  No way out.  Next, they compound the misery by tacking on fee after fee.  If Frank was unable to pay the initial amount what use is it adding more and more on top of it?  The ugly side of the industry is they realize that they will have to milk the student as much as possible on the front-end.  The government guarantees most loans so many lenders care not if a student really has any ability to pay the loan back in the future.  These lenders quickly say, “well Frank shouldn’t have signed.”  This cynical attitude is what is expected especially when the lender isn’t using his money.  How about we ask the same lender to use their own money if they really feel many of these students warrant the current amount of loans being issued?

The acceleration and growth of student loan debt is incredible:

The cost of going to college has outpaced every category of living by a very wide margin.  It is hard to believe but the cost of college has even surpassed the now historic housing bubble.

So what should a student do?  We would suggest you review the school, cost and expected earnings potential of your type of major.  Then we would aggressively negotiate the educational contract because in most cases there are ways to cut the educational expense.  Everything is negotiable, think of it in terms of buying a car.  The better deal you can cut for yourself, the lower your payments will be, and the more money you will save in the long run.  And in this case above all others, a penny saved is a penny earned.

From http://www.mybudget360.com

Category: Charts and Graphs, Commentary, Economy, Education and Schooling, National News, Wall Street | 9,398 Comments »
Tags: college, education, schools

Posted By thestatedtruth.com on June 6, 2011

So, what’s  in  a AAA ranking?  Triple AAA rankings are the highest mark given to companies considered to be the lowest risk investments.  It means “Prime Maximum Safety” and they are assigned by S&P and Fitch.  Rankings from other rating agencies use a slightly different labeling system, such as Aaa used by Moodys but it represents basically the same thing. 

In the early 1970s, about 60 US companies possessed a AAA rating. A decade later, that number had tumbled to 30. By the early 1990s, the ranks of AAA credits had dwindled to nearly 20, and when the new millennium dawned, only nine AAA companies remained. Seven companies managed to retain this prestigious ranking until 2009, when Berkshire Hathaway and GE slipped into the AA ranks.

Today, only five US companies can boast a AAA rating:

• Automatic Data Processing (ADP)
• Exxon Mobil (XOM)
• Johnson & Johnson (JNJ)
• Microsoft (MSFT)
• Pfizer (PFE)

www.dailyreckoning.com

Category: Commentary, Economy, Finance | 510 Comments »
Tags: