Posted By thestatedtruth.com on April 10, 2011

Here is why things are broken for baby boomers, and unlikely to get a lot better any time soon!

The interesting thing about the post-war baby boom and our guns-and-butter generation isn’t what happened during or as a result of this population tidal wave, but what didn’t happen:  the birth rate in America abruptly fell during the mid-60s, and continued to fall even through to today.  Compounding the problem, on one hand you have increasing life expectancies and the expansion of benefits placing financial burdens on the retirement system.  On the other hand, increasingly competitive labor markets and trade liberalization placed further importance on education and technological adoption, which both increased the displacement of workers as the domestic value chain moved upstream and delayed the entry of individuals into the labor pool well into their 20s as they traded off starting a family for attaining college educations.  These lengthened dependant obligations (from both ends of the curve) have necessitated longer workforce tenures, and are simultaneously acting as an artificial floor to wages for those already at the peak of their earnings trajectory while creating a ceiling as the next generation is kept in an advancement holding pattern, denied the skills and experience needed to achieve their own maximum earnings potential.  The divide between rich and poor is as much a generational problem as it is access to education, technology, and capital resources.

 

The other interesting thing about the post-war baby boom was the impact on the savings rate.  The rising percentage of income coming from transfer payments (i.e. entitlement programs) as a result of displacement on one end of the economic spectrum coupled with multiple streams of household income and smaller family sizes on the other drove an insatiable consumer demand that depressed the household savings rate, increased demand for foreign goods, and lowered borrowing costs as a vicious cycle was created.  Attempts at intervening in the markets to protect trade and standards of living did little more than fuel government spending as the domestic value chain moved even higher, displacing more workers and shifting the demand for low-wage labor overseas.

www.zerohedge.com

Category: Commentary, Economy, Education and Schooling, National News, Wall Street | 12,106 Comments »
Tags: Baby Boomers, Birth Rate, education, Guns and Butter

Posted By thestatedtruth.com on April 9, 2011

From Chapter 4 Of The Book Endgame:

What it shows is that employment is very skewed, as is income. This was as of the end of 2009, but the principle is the same.

The clear problem in the United States is this: If the highly skilled have 2.5 percent unemployment, how do you reduce that? You can’t. That is probably the natural frictional rate of unemployment, that is, people naturally moving between jobs or geographies. Faster economic growth or more money supply won’t bring down a 2.5 percent unemployment rate.

There are clear trends developing. Those who have attained a higher level of education are not suffering to nearly the same extent as those at the lower end of the educational scale. Indeed, conditions for certain highly skilled workers could be described as tight.

Furthermore, those who find themselves out of work are on average out of work longer now. The average time of unemployment has sharply increased from less than 20 weeks only two years ago to more than 30 weeks now—a 50 percent increase. Those unemployed for shorter lengths of time now make up much less of the total than they used to.

The majority of unemployed workers are instead primarily those in a chronic state of joblessness. Such people find it ever harder to get back into employment as their skills become rusty. This phenomenon is not confined to the United States. A similar pattern is developing in the United Kingdom and throughout the developed world. The stories of chronic unemployment in Portugal, where fewer than 30% have high school degrees, have been everywhere of late, as Portugal becomes the latest of the euro-area countries to need funding help.

John Mauldin

Category: Commentary, Economy, Education and Schooling, National News, Personal Net Worth, Wall Street | 437 Comments »
Tags: Book End Game, Employment Charts, john mauldin

Posted By thestatedtruth.com on April 9, 2011

More warning signals for the stock market………just the opposite of the bottom!

Category: Charts and Graphs, Commentary, Economy, National News, Wall Street | 2 Comments »
Tags: Bull-Bears, stock market, Wall Street

Posted By thestatedtruth.com on April 8, 2011

It’s here and now folks, the widening gap between declining incomes and higher costs has been filled with borrowed money. Now that borrowing has reached its limit,  the consumer economy is devolving.  Here is what it means.

The cost structure of the entire U.S. economy has bloated to unsustainable levels.

Here’s the basic mechanism: when money is “free,” costs rise. If you had to explain why sickcare in the U.S. consumes 17% of our nation’s GDP while other developed nations provide universal care for half that cost per capita (7-9% of their GDP), the answer boils down to “there’s an unlimited amount of free money here for sickcare.” There are no real limits on Medicaid or Medicare spending, and none on insurance cartels (it’s a free market for health insurance, except there’s only two providers in your area and their prices are the same–welcome to a “free market,” hahahahaha).

In other words, thanks to lack of competition via Central State-granted quasi-monopolies to cartels, and virtually unlimited sums of money for Federal programs, then the sky’s the limit on cost.

If Medicare limits the cost of an MRI, just triple the number of MRIs you give. Don’t laugh–that’s exactly what happens. Then there’s the hundreds of billions of dollars in outright fraud the system routinely pays.

You provide endless free money, costs go up. Look at the education cartel, another parasitic system latched onto the Central State. Once you enable students to borrow $36,000 a year, then magically the costs of a year in college (or for-profit school offering  “skills” that do no more for the hapless student than a high school diploma) rise to $36,000.

The same dynamic results when oceans of credit are available: assets inflate into bubbles, and costs rise concurrently. The commercial space that once was valued at $1 million magically rises to $3 million when cheap, abundant credit sparks a real estate bubble. As hot money chases higher returns, the costs of servicing that debt rise with every flip and purchase. And it’s not just debt servicing which costs more as a result–property taxes jump, too.

After a few lucrative flips, the new owner is staggering under a huge mortgage and crushing property taxes. So the space which only a few years ago rented for $1 a square foot now costs $3.50 a foot, just for the owner to break even.

That pushes the higher costs down on the small business tenant, who sees their profits vanish. When business sours in the inevitable credit-bubble bust downturn, then the tenant bails, and the landlord is underwater.

Bureaucracies and institutions may suffer from Baumol’s Disease, but they also suffer from the Ratchet Effect: they only know how to add expenses and scale up. Productivity, Baumol’s Disease and the Cliff Just Ahead (December 8, 2010) Baumol’s Disease describes the rising costs of sectors whose productivity gains lag behind more productive sectors. Thus education costs more even as manufactured goods fall in price, as labor-intensive education doesn’t lend itself to leaps in productivity.

But Baumol’s Disease doesn’t explain why fighter aircraft now cost $300 million each when the “best of the best” five years ago cost $56 million, or how Medicare has leaped from $52 billion a year to $600 billion a year in a decade. Nor does it explain why property taxes have risen 60% above inflation in the past 10 years.

What does explain these gigantic increases is monopoly powers granted to cartels by unaccountable State fiefdoms. With the Federal government able to borrow and spend without any visible limits, then the sky’s the limit on everything from MRI tests to Medicaid to foreign wars. With the public unable to opt out of local government, then local government expands and passes the costs onto the private-sector tax donkeys.

Real wages have been stagnant for decades–but in the last decade, they actually fell by 8%. Median household income of the U.S. fell from over $52,000 in 1999 to $49,777 in 2010: The Lost Decade.

As costs for medical care, education, property taxes, etc. skyrocketed far above inflation, credit-driven asset bubbles drove up the cost of housing. Tax policies provided ample incentives to borrowers while super-low interest rates punished savers.

The key feature of financialization is that the outsized profits and opportunities come not from producing goods and services but from leveraging, borrowing, obscuring risk and gaming widely ignored regulations. Banks made money not from prudent loans but from taking $1 in deposits and originating $50 of risk-laden loans from that paltry capital. Wall Street reaped billions by packaging high-risk mortgages as “low-risk” investments.

The housing bubble offered the ambitious debt serf a rare opportunity to lie and leverage just like Wall Street. Anyone with sufficient chutzpah could buy a number of houses with no-document “liar loans” with option-adjustable rate loans at super-low rates of interest, hold the homes for a few months and then flip them for profits.

A few thousand dollars in closing and carrying costs could be leveraged into tens of thousands of dollars in profits which could then be pyramided into more leverage.

Debt serfs soon discovered a key difference between their own reckless speculation and Wall Street’s reckless speculation: the over-leveraged debt serf was chided as irresponsible when his mini-empire of debt collapsed in a heap, while Wall Street was “saved” by trillions of dollars in Federal cash, credit, backstops and guarantees.

With incomes declining, assets imploding and reckless banks suddenly risk-averse, consumers can no longer borrow to fill the widening gap between their income and their consumption. Not to worry–the Federal government has stepped in and borrowed and blown the $5 trillion that the consumer would have borrowed in the past four years if he’d been able to. (Make that $6.5 trillion by October 2012.)

So now one unsustainable course of debt expansion has been replaced by another unsustainable course of debt expansion. The apologists and apparatchiks of the Status Quo keep claiming that the State is borrowing 11% of GDP only until private demand roars back to life.

This conveniently overlooks the fact that the private sector has been squeezed by declining incomes and rising costs to the point that it no longer has any discretionary spending money nor does it have the leverage to borrow more. It also no longer has enough assets to support reckless bubble borrowing.

Debt has this funny characteristic: interest must be paid. Even at low interest rates, this interest becomes an ever-larger drag on income. At some point the interest costs take every last dollar of disposable income, and carefree consumption disappears from the economy.

That point was reached in 2008. The Federal debt orgy has simply created an illusory stability and normalcy via “extend and pretend” manipulation and intervention. But the debt serf and his bubble-era mini-empire of expanding debt has been insolvent for three years. The two-decade game of backfilling the widening gap between stagnant income and carefree consumption can no longer be filled with borrowed money.

www.zerohedge.com

Category: Charts and Graphs, Commentary, Economy, Finance, National News, Personal Net Worth, Wall Street | 3 Comments »
Tags: Consumer Economy, Declining Incomes, Higher Costs, inflation, Stagflation

Posted By thestatedtruth.com on April 8, 2011

Nobody seems to be paying attention to this…..

From the WSJ:

Mall vacancies hit their highest level in at least 11 years in the first quarter, new figures from real-estate research company Reis Inc. showed. In the top 80 U.S. markets, the average vacancy rate was 9.1%, up from 8.7%.

The outlook is especially bad for strip malls and other neighborhood shopping centers. Their vacancy rate is expected to top 11.1% later this year, up from 10.9%, Reis predicts. That would be the highest level since 1990.

In 2005, the mall-vacancy rate hit a low of 5.1%. For strip centers the boom-time low vacancy rate was 6.7% that same year.

Not all retail properties have suffered as much, especially on the high end. Large, publicly traded mall owners like Simon Property Group Inc. and Taubman Centers Inc., which tend to own top-tier properties, have trimmed their vacancy rates to 7% or lower and lifted their lease rates in the past year, buoying their stock.

But a broader glut has struck some of the exurbs that saw heavy housing development during the boom, where malls and strip centers built for growth that never came. More than one billion square feet of retail space was added in the 54 largest U.S. markets since the start of 2000, according to CoStar Group’s Property & Portfolio Research Inc. of Boston.

Category: Charts and Graphs, Commentary, Economy, National News, Real Estate, Wall Street | 49 Comments »
Tags: Malls In Trouble, REIT Mall Owners, Vacant Malls

Posted By thestatedtruth.com on April 8, 2011

The Middle East is a fuse looking for a match….

Syrian security forces opened fire on tens of thousands of protesters across several cities Friday, killing at least 20 people, wounding hundreds and forcing residents to turn mosques into makeshift hospitals.

Category: Commentary, Economy, National News, National Security, World News | 49 Comments »
Tags: Middle East, Syria Blows

Posted By thestatedtruth.com on April 7, 2011

Surprisingly, revolving credit, or credit cards, actually fell during this period, down 4%.

Non-revolving credit, which includes student, auto, and other loans, increased by 7.7%

Category: Commentary, Economy, National News, Wall Street | 28 Comments »
Tags: consumer credit, Non-revolving consumer credit

Posted By thestatedtruth.com on April 7, 2011

The top 1 percent have over 40 percent of all financial wealth in this country.

And…The top 1 percent has never done so well in relative terms.  In fact we would have to go back to the years prior to the Great Depression to find such a glaring divide with income inequality:

Source:  Center on Budget and Policy Priorities

www.mybudget360.com

Category: Commentary, Economy, National News, Personal Net Worth, Wall Street | 48 Comments »
Tags: Financial Wealth, Rich, Top 1% of Wealth

Posted By thestatedtruth.com on April 6, 2011

Portugal has been saying we are good, we don’t need help…they have been saying it over and over…Now, Portugal says we need help fast!  The dominoes are falling in Europe, and we haven’t seen anything yet!

Running out of money and paralyzed by a political crisis, Portugal said it would ask the European Union for a financial bailout—setting up a crucial test of the bloc’s emboldened efforts to contain its sovereign-debt crisis.

Portugal will seek a bailout from the European Union after the nation’s political crisis pushed borrowing costs to record levels and forced it to become the third euro-region country needing a rescue.

“I tried everything but we came to a moment that not taking this decision would bring risks we can’t afford,” Prime Minister Jose Socrates said in a televised statement from Lisbon late yesterday. “The government decided to make a request for financial aid to the European Commission.”

The ECB is forecast to raise its benchmark rate by a quarter point to 1.25 percent, according to the median forecast in a Bloomberg News survey, to counter inflationary pressures in the aftermath of a jump in oil and other commodity costs. The step risks deepening Europe’s sovereign-debt woes, said David Blanchflower, a former Bank of England policy maker.

“This could be another big mistake because then the cross hairs move to Spain,” which has an unemployment rate in excess of 20 percent and a housing market dominated by variable-rate mortgages, Blanchflower, a professor of economics at Dartmouth College in New Hampshire, said in an interview with Bloomberg Television. The probability of Spain needing a rescue “took a big jump upwards” after Portugal’s decision, he said.

Category: Commentary, Economy, Interest Rates, Bonds, National News, Wall Street, World News | 313 Comments »
Tags: ECU, Europe In Truble, Portugal Lights Out, Spain in Pain

Posted By thestatedtruth.com on April 5, 2011

Did You Know…..More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined.  Even more interesting are some of the state ratios.

Consider this statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees.

Every state in America today except for two—Indiana and Wisconsin—has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budget deficit in the history of the states. The not-so Golden State now has an incredible 2.4 million government employees—twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida’s ratio is more than 3 to 1. So is New York’s.

Don’t expect a reversal of this trend anytime soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in these times of economic turbulence. When 23-year-olds aren’t willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.

So where are the productivity gains in government? Lets first consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.

But education is an industry where we measure performance backwards: We gauge school performance not by outputs, but by inputs. If quality falls, we say we didn’t pay teachers enough or we need smaller class sizes or newer schools. If education had undergone the same productivity revolution that manufacturing has, we would have half as many educators, smaller school budgets, and higher graduation rates and test scores.

The same is true of almost all other government services.  One way that private companies spur productivity is by firing underperforming employees and rewarding excellence. In government employment, tenure for teachers and near lifetime employment for other civil servants shields workers from this basic system of reward and punishment. It is a system that breeds mediocrity, which is what we’ve gotten.

Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services—fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers. But unions have blocked many of those efforts and public employees maintain that they are underpaid relative to equally qualified private-sector workers.

Food for thought!

Category: Commentary, National News, Wall Street, World News | 38 Comments »
Tags: Broken System, Federal Workers, Government Retirements, Government Workers

Posted By thestatedtruth.com on April 5, 2011

At least it’s a start…..Congress passes a measure known as the “1099 repeal” because it would relieve businesses of having to file 1099 tax forms for any person or company to which they pay at least $600 in a year.

Congress on Tuesday passed the first major changes to last year’s health care law, undoing both a burdensome paperwork requirement for small businesses and rewriting part of the way the health exchange subsidies are paid for.

The changes are complex and don’t affect the fundamental operations of the health law, but Republicans said they are symbolic nonetheless because they mark the first repeals of significant provisions from Democrats’ signature legislative achievement under President Obama.

The bill passed the Senate on Tuesday with strong bipartisan support, 87-12, and goes to Mr. Obama, who will face a big test over whether to sign it. He has said he wants to repeal the paperwork requirement, but the administration has objected to rewriting the way subsidies in the exchange are funded, arguing it may make people less enthusiastic about joining.

After the bill passed, White House press secretary Jay Carney said Mr. Obama is “open to working with Republicans and Democrats to improve the health reform law, and we are pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses.”

Sen. Orrin G. Hatch, Utah Republican, called the bill “a down payment on total repeal of the onerous health care law.”

The measure has become known as the “1099 repeal” because it would relieve businesses of having to file 1099 tax forms for any person or company to which they pay at least $600 in a year.

“Passing the 1099 repeal exemplifies why I came to the United States Senate,” said Sen. Mike Johanns, Nebraska Republican, who has led the fight for repeal in the upper chamber.

The bill marks a major victory for House Republicans, who wrote the bill the Senate passed.

The 1099 filing requirement was included in last year’s health law to try to raise money to pay for some of the new benefits. The goal was to try to force companies to accurately report their finances, which would make it easier to check whether they are complying on their taxes.

But small businesses immediately complained the new paperwork could cost them tens of thousands of dollars a year to hire staff to comply.

More at:http://www.washingtontimes.com/news/2011/apr/5/congress-makes-first-major-dent-health-care-law/

Category: Commentary, Economy, National News | 48 Comments »
Tags: 1099 repeal bill, Obama healthcare, Obama Healthcare Attacked

Posted By thestatedtruth.com on April 3, 2011

The Fed Q Ratio (chart below) is signaling a warning for stocks……it is saying that we are currently at a level seen only 6 times since 1900!  So lets look at this in terms of the Kress Cycles between now and Sept-October (the approximate date of the Kress 6 Year Cycle high  This is where we could see a market top setup. From that possible top,(if) the Kress Cycle is right, then we will rapidly head down into the Kress 120 year Grand Super Cycle  low. When analyzing the impact of the yearly cycles it’s important to keep in mind that the final 12% of the duration of any cycle is the “hard down” phase.  The 120-year cycle’s hard down phase began 14 years prior from 2014, which was 2000.  This says Kress, “was the peak of the nation’s economic expansion, the beginning of economic winter, and the terminal high.” 

The 120-year cycle includes two 60-year cycles, which also answers to the economic long wave (also known as the Kondratieff Wave, or K Wave).  The K Wave tracks the four economic phases of the credit cycle from boom to bust.  Applying the 12% “hard down” rule of thumb, 7 ¼ years retroactive from the scheduled 2014 Grand Super Cycle bottom is mid-2007.  “This period began the ‘hard down’ phase of economic winter prior to the ‘credit crash’ and the beginning of deflation,” writes Kress.  “Of greater significance,” he adds, “the current 60-year [cycle] is the fourth which completes the series which began with the first 120-year which transformed America into an independent country as we know it today.”  The inference here is that when the current 120-year/60-year cycles bottom in 2014, the United States will experience a dynamic revolutionary transformation.  We’ll leave you with this ending tid bit……

Kress observes, “With all of SineScope’s cycles being in the down phase for the first time since 1890, the potential for the worst of anything to occur exists.  This elicits some very disarming implications for the U.S.A. and our lifestyles for the next three years.” 

This is of course is if we survive the Dec 21, 2012 end of the Mayan calendar! (half kidding aside)…..

Definition of the Q-Ratio:  The Q Ratio is a method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. It’s a fairly simple concept. The Q Ratio is the total price of the market divided by the replacement cost of all its companies. The data for making the calculation comes from the Federal Reserve Z.1 Flow of Funds Accounts of the United States, which is released quarterly for data that is already over two months old.

Category: Charts and Graphs, Commentary, Economy, National News, Wall Street | 71 Comments »
Tags: Feds Q Ratio, Q Ratio, Stock Market Tid Bits, Stocks Overvalued

Posted By thestatedtruth.com on April 3, 2011

Over the next decade, a million things could happen, the least of them we think is $4 trillion in spending cuts.

From The Wall Street Journal:

House Republicans will propose slashing federal spending by more than $4 trillion over the next decade, by capping spending, overhauling entitlement programs and revamping the tax system, the chairman of the Budget Committee said.

Category: Commentary, Economy, National News, Wall Street, World News | 683 Comments »
Tags: 4 Trillion In Cuts, Budget Cuts, spending cuts, U.S. Spending Cuts

Posted By thestatedtruth.com on April 1, 2011

The total foodstamp participation in January hit an all time record 44,187,831 according to the USDA.  The average amount recieved per participent is $132.81 per month.  We might add that we are in an economic recovrey….but the GDP growth looks to be about the rate of inflation, which means if we buy the same things as we did last year, it’s costing us about 2.5-3% more, so for every $100 spent last year it’s costing us $102.50 to $103.00 this year.  That works out to about the rate of GDP growth.

Category: Commentary, Economy, National News | 3,393 Comments »
Tags: food stamps, food stamps hits new record

Posted By thestatedtruth.com on April 1, 2011

Governments are STUPID……Last week we found out that fewer new houses were sold in February than in any month since they started keeping records in 1963….yep, the more you give somebody, the more they become reliant on it, then when it stops, they don’t know what to do.  We’re seeing this same thing happen over and over.  Still the morons in government can’t get a wrap on it.  It’s really just basic economics 101.  Definitely not rocket science!     

Category: Commentary, Economy, Interest Rates, Bonds, National Security, Real Estate, Wall Street, World News | 591 Comments »
Tags: Real Estate, real estate pending sales

Posted By thestatedtruth.com on March 31, 2011

To see the real story, just look at the charts…..

The top 1 percent  control 42 percent of all financial wealth.

Growing Inequality…the middle class vs. the rich

Growing Inequality…in income

Source:  Social Security

Does this look like a recovery to you?  

More and More Food Stamps……and no end in sight

And Real Estate values are falling fast while mortgage debt is only slightly lower….

We have now created the seeds of discontent…..a nightmare on elm street in an economic sense!

http://www.mybudget360.com/financial-scam-of-the-century-2010-added-600000-millionaire-wealthy-derive-profits-from-stocks/

Category: Commentary, Economy, Interest Rates, Bonds, National News, Pensions and Retirement, Personal Net Worth, Real Estate, Wall Street | 11,723 Comments »
Tags: millionaires, net worth, persoanl net worth, Rich Man Poor Man, Wealthy

Posted By thestatedtruth.com on March 31, 2011

So you want your power to come from a nuclear reactor do you……A nuclear expert has warned that it might be 50-100 years before melting fuel rods can be safely removed from Japan’s Fukushima nuclear plant.  Two new experts say capping the damaged reactors with concrete is not an option.  They had better get together with the japanese government which just yesterday seemed to have a different idea on the matter of capping the reactor in cement.

Water is still being poured into the damaged reactors to cool melting fuel rods.

But one expert says the radiation leaks will be ongoing and it could take 50 to 100 years before the nuclear fuel rods have completely cooled and been removed.

“The final thing is that the reactors will have to be closed and the fuel removed, and that is 50 to 100 years away.

“It means that the workers and the site will have to be intensely controlled for a very long period of time.”

Two new experts agree capping the damaged reactors with concrete is not an option.

Meanwhile the Wall Street Journal says it has obtained disaster-readiness plans which show the facility only had one satellite phone and a single stretcher in case of an accident.

Category: Commentary, National News, World News | 49 Comments »
Tags: Japan Nuclear Reactor, Nuclear disaster, Nuclear Experts

Posted By thestatedtruth.com on March 31, 2011

Wait a minute, hasn’t the government been saying inflation wouldn’t be a problem?   Yes, they have… it won’t be the first time that they’ve lied to us. 

Food shortages are coming this summer……along with serious price increases.  U.S. consumers face “serious” inflation in the months ahead for clothing, food and other products, the head of Wal-Mart’s U.S. operations warned Wednesday talking to USA Today.

 

The world’s largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.

Still, inflation is “going to be serious,” Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY’s editorial board. “We’re seeing cost increases starting to come through at a pretty rapid rate.”

Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.

“Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along,” Long says. “Except for fuel costs, U.S. consumers haven’t seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory.”

Consumer prices — or the consumer price index — rose 0.5% in February, the most since mid-2009, largely because of surging food and gasoline prices. Core inflation, which excludes volatile food and energy costs, rose a more modest 0.2%, though that still exceeded estimates.

Add to this the shock that was today’s grains report:

Farmers will struggle to replenish rapidly shrinking U.S. grain stocks this year, despite plans to sow the most land to corn since World War Two and near-record acreage to soybeans, two U.S. government reports showed on Thursday.

Chicago corn prices surged their daily limit, while soybeans and wheat jumped more than 3 percent as traders looked past higher-than-expected figures in the Department of Agriculture’s annual planting survey to focus on inventories, which fell much more than forecast.

The report underscored the fact that U.S. farmers are now reaching the limits of arable land in the world’s biggest crop exporter, with increased corn sowing coming at the expense of soybeans and cotton. The spring wheat crop, while among the biggest in decades, could yet shrink.

This year’s spring planting season in the world’s biggest crop exporter is being watched more closely than ever by countries fearful that further increases in already record-high food prices could stoke unrest.

An analysis of the data based on the acreage estimates and historical yields suggested that the corn harvest could be the largest ever and soybeans the third-largest.

But that would still leave corn inventories at the end of the 2011/12 season at the equivalent of just three-weeks’ supply, and soybeans would dwindle to scarcely 10 days’ cover. Analysts say prices must rise high enough to reduce demand.

“This turns us back to having to ration the corn,” said Charlie Sernatinger, analyst at ABN Amro.

May corn jumped 30 cents to $6.93-1/4 a bushel, hitting the daily exchange limit; options trading suggested further gains to more than $7.15, near the post-2008 peak of $7.35 hit on March 4. Soybeans jumped to over $14.18 and wheat recouped part of its 20 percent slump since mid-February.

Category: Commentary, Commodities, Economy, National News, Wall Street, World News | 722 Comments »
Tags: Commodities Shortages, Consumer Inflation, Crop Inflation, Walmart Inflation

Posted By thestatedtruth.com on March 30, 2011

Some sound advice….It’s going to be a long negative haul for housing and there is nothing on the horizon, such as an improving economy, lower unemployment, or climbing wages to stem the flow. There were simply too many homes built during the boom phases at affordability rates that didn’t make sense. Those who can afford to buy a home under the new loan standards will be the ultimate beneficiaries of the bust. But, why rush?

According To Real Estate Data Analytics Firm CoreLogic:

11.1 million residential properties, or 23.1% of all U.S. homes, were in negative equity at Dec. 31 [Q4], up from 10.8 million, or 22.5%, the prior quarter. The total negative equity held by the nation’s homeowners rose to $751 billion for the fourth quarter from $744 billion at Sept. 30, but down from $800 billion a year earlier. The number of upside down mortgages declined through the first three quarters of 2010, as more properties were foreclosed upon. …

The data analytics firm said another 2.4 million homeowners had less than 5% equity in their property in the fourth quarter, indicating 27.9% of all mortgages are in negative equity or near-negative equity.

CoreLogic said total negative equity is set to rise another 10 points if home prices fall 5% to 10% as projected in 2011.

That means that 13.5 homeowners (27.9%!) are in serious trouble with their homes.

Banks’ REO inventory is now 30x greater than foreclosure sales volume. That won’t help either.

It’s going to be a long negative haul for housing and there is nothing on the horizon, such as an improving economy, lower unemployment, and climbing wages to stem the flow. There were simply too many homes built during the boom phases at affordability rates that didn’t make sense (malinvestment). Those who can afford to buy a home under the new loan standards will be the ultimate beneficiaries of the bust. But, why rush?

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Real Estate, Wall Street | 350 Comments »
Tags: CoreLogic, Data Analytics Real Estae, Real Estate

Posted By thestatedtruth.com on March 30, 2011

Looks like the Japanese nuclear power plant is going to be a total loss and we haven’t been told the whole story about Japan’s nuclear disaster…..so here we go with an update.  Chief Cabinet Secretary Yukio Edano ruled out the possibility that the two undamaged reactors at Tokyo Electric Power Co.’s six-unit Dai-Ichi plant would be salvaged.  Dismantling the plant and decontaminating the site may take 30 years and cost Tokyo Electric more than 1 trillion yen ($12 billion), engineers and analysts said. The government hasn’t ruled out pouring concrete over the whole facility. 

Japan will consider pouring concrete into its crippled Fukushima atomic plant to reduce radiation and contain the worst nuclear disaster in 25 years.

Chief Cabinet Secretary Yukio Edano yesterday ruled out the possibility that the two undamaged reactors at Tokyo Electric Power Co.’s six-unit Dai-Ichi plant would be salvaged. Units 1 through 4 suffered from explosions, presumed meltdowns and corrosion from seawater sprayed on radioactive fuel rods after a March 11 earthquake and tsunami cut power to reactor cooling systems.

Workers have averted the threat of a total meltdown by injecting water into the damaged reactors for the past two weeks. The complex’s six units are connected with the power grid and two are using temporary motor-driven pumps. Work to repair the plant’s monitoring and cooling systems has been hampered by discoveries of hazardous radioactive water.

The risk to workers might be greater than previously thought because melted fuel in the No. 1 reactor building may be causing isolated, uncontrolled nuclear chain reactions, Denis Flory, nuclear safety director for the International Atomic Energy Agency, said at a press conference in Vienna.

Dismantling the Plant

Tokyo Electric mixed boron, an element that absorbs neutrons and hinders nuclear fission, with emergency cooling water to prevent accidental chain reactions, Kathryn Higley, head of nuclear engineering and radiation health physics at Oregon State University in Corvallis, said in an e-mail.

Dismantling the plant and decontaminating the site may take 30 years and cost Tokyo Electric more than 1 trillion yen ($12 billion), engineers and analysts said. The government hasn’t ruled out pouring concrete over the whole facility as one way to shut it down, Edano said at a press conference.

Dumping concrete on the plant would serve a second purpose: it would trap contaminated water, said Tony Roulstone, an atomic engineer who directs the University of Cambridge’s masters program in nuclear energy.

Immobilizing the Water

“They need to immobilize this water and they need something to soak it up,” he said. “You don’t want to create another hazard, but you need to get it away from the reactors.”

The process will take longer than the 12 years needed to decommission the Three Mile Island reactor in Pennsylvania following a partial meltdown in 1979, said Hironobu Unesaki, a nuclear engineering professor at Kyoto University.

Tokyo Electric’s shareholders may be wiped out by clean-up costs and liabilities stemming from the nuclear accident, the worst since Chernobyl. The company faces claims of as much as 11 trillion yen if the crisis lasts two years and potential takeover by the government, according to a March 29 Bank of America Merrill Lynch report.

Among proposals being considered to contain the disaster, Japan may use a special fabric to cover reactors and curb the spread of airborne radiation. The plant probably is covered by a layer of radioactive dust that may contain plutonium, a radioactive element that can cause cancer when inhaled, Higley said.

www.bloomberg.com

Category: Commentary, National News, World News | 42 Comments »
Tags: Japanese Nuclear Disaster, Nuclear disaster

Posted By thestatedtruth.com on March 29, 2011

Robert Shiller today said that inflation adjusted economic statistics are clearly in the double dip.  U.S. single family home prices fell for the seventh month in a row in January, according to the S&P/Case-Shiller index of prices.  

In four cities, prices were at their lowest for 11 years, with the overall index down 0.2% between December and January.  The average annual price fall across the 20 cities was 3.1%.

S&P’s David Blitzer said there could be worse to come: “The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery.”Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future.”

“The February Mortgage Monitor report released by Lender Processing Services, Inc. (NYSE: LPS) shows that while delinquencies continue to decline, an enormous backlog of foreclosures still exists with overhang at every level. As of the end of February, foreclosure inventory levels stand at more than 30 times monthly foreclosure sales volume, indicating this backlog will continue for quite some time. Ultimately, these foreclosures will most likely reenter the market as REO properties, putting even more downward pressure on U.S. home values,  more troubling is that the Option-ARM trap is finally slamming shut: “February’s data also showed a 23 percent increase in Option ARM foreclosures over the last six months, far more than any other product type. In terms of absolute numbers, Option ARM foreclosures stand at 18.8 percent, a higher level than Subprime foreclosures ever reached.  In addition, deterioration continues in the Non-Agency Prime segment. Both Jumbo and Conforming Non-Agency Prime loans showed increases in foreclosures and were the only product areas with increases in delinquencies.”

Category: Commentary, Economy, Interest Rates, Bonds, National News, Real Estate, Wall Street | 397 Comments »
Tags: house delinquency, real estate bank owned, real estate foreclosures, Shiller

Posted By thestatedtruth.com on March 29, 2011

We’ve been looking for big changes in Cuba, and in fact we know of a particular person that went to Cuba to visit relatives recently and has returned back to the U.S., He says things are turning for the better, it’s definitely different.  One thing is for certain,  the money will pour into Cuba when the changes come.  Why you say….simply because there are a lot of rich Cubans living in the U.S.,  that’s official!

Dividing Old Havana from Chinatown is Cuba’s Capitolio Nacional, a monumental edifice with a fateful past. El Capitolio was conceived during the Roaring ’20s, when the island led the world in sugar exports and the future seemed sky blue.

President Gerardo Machado dreamed of turning Cuba into the Switzerland of the Americas. He decided that his 4 million countrymen needed a domed capitol building even taller and more ornate than the one he toured in Washington. So Cuba’s Congress dutifully poured 3% of the country’s GDP into their new home. (This would be akin to the US Congress spending $420 billion for a new office today, but let’s not give them any ideas…)

It took 8,000 skilled Cuban laborers just three years to complete El Capitolio, which featured gilt ceilings, a giant diamond embedded into the pristine marble floor and the world’s third-largest indoor statue. However, the showy project couldn’t have been more poorly timed. Work completed in 1929, just as America’s stock market crashed and the Great Depression unfolded.

The Smoot-Hawley tariffs crushed Cuban sugar prices by 74%. When El Capitolio’s ribbon was cut in 1931, Cuba’s economy lay in tatters. Machado was forced out of office, and his dream building would perform congressional service for only 28 years before Fidel Castro’s revolutionaries swept into Havana and opted for more austere premises. I don’t need to recite the history from here, which you probably well know.

The winds of change are gathering in Cuba, though. Since Fidel Castro’s health nearly failed in 2006, power has passed to his younger brother, Raul Castro. Raul has quietly reshuffled more than 30 cabinet members to prepare his party and people for a sweeping economic policy overhaul – Perestroika al Cubano. Even the semi-retired Fidel seems to have glumly accepted that change is inevitable, candidly admitting to a visiting US journalist that “the Cuban model doesn’t even work for us anymore.”

The global economic crisis whacked Cuba hard. Venezuela cut back on its largesse as its own economy worsened. Tourism and remittances softened, while nickel export prices tanked. Furthermore, three severe hurricanes left a wake of destruction in 2008. Unable to service Cuba’s estimated $21 billion foreign debt, and running out of generous leftist patrons to hit up, Raul Castro has, apparently, decided he has little choice but to pry open Cuba’s economy.

Castro’s wild card is Cuba’s oil and gas reserves. The island currently produces 60,000 bbl a day. But its US-facing northern waters hold an estimated 5-20 billion barrels of oil and 20 trillion cubic feet of natural gas. (Note: This compares with 29 billion barrels of oil reserves in the entire US.) Accessing this undersea oil requires the sophisticated drilling technology the US excels in. But as long as sanctions remain in place, the US oil majors are excluded from that bonanza. Amidst the applause of oil industry lobbyists, the dance for reengagement has begun, with both partners taking some unprecedented steps.

Raul Castro has issued a far-reaching five-year road map for Cuba’s future economic reform. The proposed changes would put Cuba on a very similar path to that taken by China in the 1980s and Vietnam in the 1990s. Here are some of the ideas: permit real estate transactions amongst Cubans, merge the two-tier currency system, close down inefficient state enterprises, decentralize state ownership, facilitate private ownership of businesses, distribute idle land to farmers, open state-owned wholesale markets and further encourage foreign investment – particularly in tourism.

In recent months, some planned reforms have already been implemented in an effort to delay Cuba’s impending insolvency. Costly subsidies on sugar and personal care products are being scaled back. The government announced plans to shed 500,000 state workers (that’s 10% of the country’s government work force in a country where 85% of workers work for the state) and guide them somehow into the private sector.

Cubans are being encouraged to grow and sell their own fruits and vegetables. The government is inviting foreign investors to develop 10 golf course estates in Cuba, with a new law allowing 99-year land leases to foreign buyers of plots in such projects. In the old days of Fidel’s revolution, such policies were unthinkable.

So what is the potential for a liberalized Cuban economy?

Just look 90 miles across the straits to Florida. A million Cuban- Americans call Miami home. Cuba has 60% of Florida’s population and 80% of its landmass, but greater natural resources and a much longer coastline, so one might conclude that the two are of comparable overall potential.

Perhaps to underscore their similarities, remember the fact that England and Spain cleanly swapped the two in 1763. Today, Florida’s economy is 12 times larger than Cuba’s. One reason is that Florida gets 20 times as many tourists as Cuba, plus an inflow of affluent retirees.

When the US government stops restricting its citizens from traveling to Cuba, the island will become an instant tourist magnet. Offering short flights, sunny beaches, cool music, “old world” architecture and cheap surgery, Cuba should have no problem drawing several million American tourists a year, as further-away destinations like Costa Rica have done.

Should reforms become comprehensive enough, agriculture seems an obvious investment play: Half the land is arable, labor is cheap and rain is plentiful. Cuba’s once-vaunted sugar industry stands in disarray, with 80% of the old mills shut down. However, today’s high sugar prices provide ample incentive to revive the sector, along with other traditional crops such as cigar tobacco.

Despite its long coastline, fisheries and aquaculture remain largely overlooked. Cuba is a world-class producer of nickel, but other mineral deposits remain underexploited. And then there’s the oil. The entire power system needs to be updated, financial services developed, retailing expanded – the opportunities seem endless.

Beyond the subsidized basics, most consumer goods have to be imported, and imports draw heavy duties. Telecom services are costly due to government monopolization and inefficiency. The list goes on. In this environment, it is tough for most Cubans to get by unless they receive remittances, tourist gratuities or tea money.

All in all, we eagerly await the implementation of Cuba’s economic reforms. As this process unfolds, Cuba could transform into one of the world’s most attractive frontier investment destinations. America has a long track record of turning bitter rivals into productive partners (a recent example being Vietnam), and re-engagement with Cuba could be one of Obama’s most notable foreign policy legacies.

Some frontier investors are not waiting for that and are already investing in Cuba. While 100% foreign ownership is permitted, most investors enter joint ventures with Cuban state enterprises, which typically contribute land, labor and sometimes capital. Over 250 such joint ventures exist, mostly for specific sectors or projects. Investments are made in foreign currency, eliminating exchange rate issues, and there are no restrictions on capital repatriation. Corporate income tax is 30% for joint ventures and 35% for wholly owned foreign companies, but tax holidays of five-seven years are available.

A few Cuba-focused investment groups have been established that non-US investors can access. Canada-listed Sherritt Group is a major player in Cuban nickel mining and, formerly, telecoms. A private investment group backed by European investors, Coral Capital has restored Havana’s historic Saratoga Hotel, which was recently ranked by Conde Nast as the 16th best hotel in the world. Coral is now planning a number of golf course, marina, housing and hotel projects, as is Leisure Canada, a Canada-listed investment vehicle.

Regards,

 

Category: Commentary, Economy, National News, Wall Street, World News | 2 Comments »
Tags: Changes In Cuba, Cuba, Cuba Changes, Cuba Investment, Free Cuba

Posted By thestatedtruth.com on March 29, 2011

News is leaking out of Japan on the nuclear reactors, no pun intended…..General Electric experts are talking of  a blob of nuclear lava as an end result of a total melt down on unit 2 which appears to be a total loss.  If true, the “experts” say it should take away the risk of explosion!  Workers are still trying to cool three other ractors involved to keep the fuel rods from melting down.

From the Guardian:

The radioactive core in a reactor at the crippled Fukushima nuclear power  plant appears to have melted through the bottom of its containment vessel and on to a concrete floor, experts say, raising fears of a major release of radiation at the site.

The warning follows an analysis by a leading U.S. expert of radiation levels at the plant. Readings from reactor two at the site have been made public by the Japanese authorities and Tepco, the utility that operates it.

Richard Lahey, who was head of safety research for boiling-water reactors at General Electricwhen the company installed the units at Fukushima, told the Guardian workers at the site appeared to have “lost the race” to save the reactor, but said there was no danger of a Chernobyl-style catastrophe.

Workers have been pumping water into three reactors at the stricken plant in a desperate bid to keep the fuel rods from melting down, but the fuel is at least partially exposed in all the reactors.

At least part of the molten core, which includes melted fuel rods and zirconium alloy cladding, seemed to have sunk through the steel “lower head” of the pressure vessel around reactor two, Lahey said.

“The indications we have, from the reactor to radiation readings and the materials they are seeing, suggest that the core has melted through the bottom of the pressure vessel in unit two, and at least some of it is down on the floor of the drywell,” Lahey said. “I hope I am wrong, but that is certainly what the evidence is pointing towards.”

The good news is that the next step will not be a Chernobyl type explosion, or so the GE expert believes, but a far more “benign” radioactive lava escalation.

The major concern when molten fuel breaches a containment vessel is that it reacts with the concrete floor of the drywell underneath, releasing radioactive gases into the surrounding area. At Fukushima, the drywell has been flooded with seawater, which will cool any molten fuel that escapes from the reactor and reduce the amount of radioactive gas released.

Lahey said: “It won’t come out as one big glob; it’ll come out like lava, and that is good because it’s easier to cool.”

The drywell is surrounded by a secondary steel-and-concrete structure designed to keep radioactive material from escaping into the environment. But an earlier hydrogen explosion at the reactor may have damaged this.

www.zerohedge.com

Category: Commentary, Economy, National News, National Security, World News | 2 Comments »
Tags: G.E. Nuclear, Japan Nuclear Core Meltdown, nuclear power

Posted By thestatedtruth.com on March 28, 2011

Category: Charts and Graphs, Commentary, National News, Wall Street | 12,537 Comments »
Tags: walmart, Walmart's Second Biggest Market

Posted By thestatedtruth.com on March 28, 2011

They gotta be kidding…… Nope                                                          

Question: Why can’t Japanese electrical power be moved around such a small country? 

Answer:  Electrical power can’t be moved for a simple, stunning reason. The northern half of Japan uses 100 volt, 50 hertz (cycles per second) electricity and the southern half uses 100 volt, 60 hertz. If you pump 60 hertz electricity into a 50 hertz system (or vice versa) you’ll burn out motors and start fires. It simply cannot be done. Tokyo sits near the southern edge of the 50 hertz area and there are only four converting stations that can convert power into the other hertz. The bottom line is that it may never had mattered, except for the perfect storm.

James Anderson  MAR 28, 2011

Tokyo Electric Power Co. said Sunday it will resume implementing rolling blackouts partially Monday morning in the Kanto region, and depending on the demand situation for electricity, it may carry them out in the late afternoon and evening as well.

Looking at a map, Kanto is the Tokyo metropolitan area. The earthquake was 17 days ago, and the damage in the Tokyo area was not that severe. Granted, the nuclear plants are down, but Japan isn’t a very big country. Why can’t power be moved from the southern/western parts of Japan to Tokyo which, in my humble opinion, seems to be a pretty important part of the Japanese economy?

The answer is electrical power can’t be moved for a simple, stunning reason. The northern half of Japan uses 100 volt, 50 hertz (cycles per second) electricity and the southern half uses 100 volt, 60 hertz. If you pump 60 hertz electricity into a 50 hertz system (or vice versa) you’ll burn out motors and start fires. It simply cannot be done. Tokyo sits near the southern edge of the 50 hertz area and there are only four converting stations that can convert power into the other hertz. Here’s a map of the country and a geographic breakdown.

The four converting plants can convert 60 hertz to 50 hertz, but their capacity is too small to alleviate the power shortage in the Tokyo area. Thus, you get rolling blackouts every business day. To make matters worse, it’s spring. Power demands are lower than the summer when air-conditioning demand peaks. Trying to build new converting plants will take a long time, quite possibly years, as will any new power plants.

A quick search of global electrical systems by country seems to indicate that Japan is the only country with a split electrical grid. It’s actually mind boggling. It’s worse than third world. How their political system let this happen is beyond the scope of this article, but the bottom line is that Tokyo, the city, is in for a long period of very difficult business conditions that has to affect Japan’s GDP. Tokyo Electric, the utility, will be under intense pressure to get back its generating capacity, and I have to believe they will try to get the “undamaged” units 5 and 6 back on line. How that plays out will be very interesting to watch. In the mean time, I’m not buying into any GDP bounce from increased construction activity when the Tokyo metropolitan area continues with rolling blackouts for months, if not a couple of years.

http://www.minyanville.com/articles/print.php?a=33590

Category: Commentary, Economy, National News, National Security, Wall Street, World News | 95 Comments »
Tags: japan, Japanese Electrical Grid

Posted By thestatedtruth.com on March 26, 2011

Category: Commentary, National News | 79 Comments »
Tags: Map Of Nulear Power, Nuclear Power Map

Posted By thestatedtruth.com on March 24, 2011

Our only questions is: Why is this drop unexpected?

Orders for long-lasting goods unexpectedly fell in February, raising concern over the sustainability of the rebound in U.S. business investment.

Bookings for goods meant to last at least three years dropped 0.9 percent after a 3.6 percent gain the prior month that was larger than initially reported, the Commerce Department said today in Washington. Other reports showed fewer Americans filed claims for jobless benefits last week, and consumer comfort dropped to the lowest level in seven months.

The data on orders stands in contrast to other reports this month that showed production picked up in February and factory purchasing managers were more optimistic. While rising exports to China and other emerging economies will benefit manufacturers like Texas Instruments Inc. (TXN), the need for U.S. companies to replace outdated equipment may not be as pressing as earlier in the recovery.

“There is a risk that capital spending will be flat in the first half of the year,” said Harm Bandholz, chief U.S. economist at UniCredit Global Research in New York.

www.bloomberg.com

Category: Commentary, Economy, National News, Wall Street | 39 Comments »
Tags: Durable Goods

Posted By thestatedtruth.com on March 23, 2011

We have world changes in the Middle East.  We have peak oil production. We have inevitable hyperinflation. But all the attention is currently on Japan,  as markets forget the growing foundation of international dislocation.

Stay focused…… Stay disciplined.

www.jsmineset.com

Category: Commentary, Economy, Gold and Silver, National News, National Security, Oil and Nat Gas, Wall Street, World News | 11,680 Comments »
Tags: dominoes, gold, Middle East

Posted By thestatedtruth.com on March 23, 2011

Of course nobody is going to own up to it…….The Coast Guard has yet to put forth an official estimate of the volume of crude that has made landfall, but Mr. Edwards said that it “appears to be more than a few gallons of oil.”

HOUSTON — The U.S. Coast Guard said Wednesday that oil that has recently washed onto Louisiana beaches is similar to crude that leaked over the weekend from an oil company’s idle offshore platform. But the company, Houston-based Anglo-Suisse Offshore Partners LLC, begs to differ.

Initial tests show that oil fouling a half mile worth of beaches, spread over 30 miles of shoreline, and a crude release from the Anglo-Suisse platform “are a close match,” Chief Petty Officer John Edwards told Dow Jones Newswires. But Anglo-Suisse said through a spokeswoman that fewer than five gallons of oil spilled from the well, which it was trying to permanently seal over the weekend; the company says it has begun an investigation in order to prove that the crude that began washing ashore is not its fault. The well, drilled in shallow water, is located 30 miles offshore.

In a written statement, Anglo-Suisse said it was “surprised by this suggestion” that its oil could have ended on the shore, but the company said it was nevertheless helping clean up the spill.

The spat further muddles the mystery about the origin of the crude, a hard puzzle to solve in a region that’s full of underwater pipelines, platforms and wells, many of them decades old. Anglo-Suisse’s willingness to help despite its misgivings also illustrates the heightened sensitivity that has followed every potential oil spill since BP PLC’s Deepwater Horizon disaster last year. The Coast Guard has downplayed the theory that the oil that just washed ashore could come from the Deepwater Horizon spill, saying that it isn’t weathered enough.

Previously the Coast Guard had been paying for clean-up and containment efforts from the Oil Spill Liability Trust Fund, which holds oil royalties for such incidents.

Kelly Kimberly, a spokeswoman for Anglo-Suisse said that the five gallons of oil leaked from the well over the course of three days starting Friday, as crews worked to permanently seal a platform that hadn’t been producing oil since 2005.

The Coast Guard has yet to put forth an official estimate of the volume of crude that has made landfall, but Mr. Edwards said that it “appears to be more than a few gallons of oil.”

Category: Commentary, Economy, National News, Oil and Nat Gas, World News | 7,326 Comments »
Tags: Gulf Of Mexico Oil Slick, New Gulf Oil Leak

Posted By thestatedtruth.com on March 23, 2011

Well, records are made to be broken…..At just 250,000 annualized, this was the lowest annualized new home sales number ever.  The government continues to say we have a recovery, they are right to some degree. The problem is the whole recovery is being supported by the government….anyone care to guess what will happen without that support. 

 U.S. New-Home Sales Unexpectedly Fall to Lowest on Record

Purchases of new U.S. homes unexpectedly declined in February to the slowest pace on record and prices dropped to the lowest level since December 2003, adding to evidence the industry is floundering.

Sales decreased 16.9 percent to a 250,000 annual pace, figures from the Commerce Department showed today in Washington. Economists surveyed by Bloomberg News projected a gain to a 290,000 rate, according to the median estimate. The median price fell 8.9 percent from the same month in 2010.

Builders are struggling to compete with existing homes as foreclosures add to the overhang of unsold properties and drive down values. The figures underscore the Federal Reserve’s view that the housing market “continues to be depressed” even as the rest of the economy improves.

“We’ve got this tug of war going on where we’ve got this very weak housing sector and a manufacturing sector that’s doing fine,” said Brian Jones, an economist at Societe Generale in New York, whose 240,000 forecast was the lowest in the Bloomberg survey. “The new and existing home sales numbers were abysmal”.

Previously owned home purchases dropped 9.6 percent in February, figures from the National Association of Realtors showed two days ago. The median home price fell to a 9-year-low, while the supply of unsold properties rose.

Purchases in February declined to record lows in three of the four U.S. regions. Sales slumped 57 percent in the Northeast, 28 percent in the Midwest and 15 percent in the West. The South showed a 6.3 percent decrease.

The median sales price dropped to $202,100 in February from $221,900 a year earlier, today’s report showed. Last month’s median price was the lowest since $196,000 in December 2003. The share of homes sold for $500,000 or more fell in February, matching January 2009 as the lowest on record.

The supply of homes at the current sales rate rose to 8.9 month’s worth from 7.4 months in January. There were 186,000 new houses on the market at the end of February, the same as a month earlier.

Category: Commentary, Economy, Interest Rates, Bonds, Real Estate, Wall Street, World News | 405 Comments »
Tags: New Home Sales, Real Estate

Posted By thestatedtruth.com on March 23, 2011

The Middle East is on fire…….Israel next up.  One mishap and the whole Middle East could go up in smoke!

• INTERIOR MINISTER ELI ISHAI SAYS SITUATION DETERIORATING
• ISHAI SAYS ISRAEL MAY HAVE TO ACT IF DETERIORATION CONTINUES
• ISHAI LINKS JERUSALEM BOMBING TO ITAMAR STABBING, GAZA VIOLENCE
• ISHAI SPEAKS ON ISRAEL ARMY RADIO

Category: Commentary, National News, Wall Street, World News | 2,725 Comments »
Tags: Israel, Middle East

Posted By thestatedtruth.com on March 23, 2011

Next Up: Government resignation, crisis, bail out, etc. We’ve already seen the drill elsewhere…….

Just In: Portugal’s Prime Minister José Sócrates tendered his resignation after Parliament rejected a new government austerity plan.

PORTUGUESE PARLIAMENT REJECTS GOVERNMENT’S DEFICIT-CUTTING PLAN
PORTUGAL’S PARLIAMENT BACKS RESOLUTION AGAINST GOVERNMENT PLAN

Category: Commentary, Economy, National News, Wall Street, World News | 3 Comments »
Tags: Portugal Votes No On Austerity

Posted By thestatedtruth.com on March 22, 2011

The United States is on a fiscal path towards insolvency and policymakers are at a “tipping point,” according to Dallas Federal Reserve Bank President Richard Fisher.

“If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when,” Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt. “The short-term negotiations are very important, I look at this as a tipping point.”  But he added he was confident in the Americans’ ability to take the right decisions and said the country would avoid insolvency.  “I think we are at the beginning of the process and it’s going to be very painful,” he added.

Fisher earlier said the U.S. economic recovery is gathering momentum, adding that he personally was extremely vigilant on inflation pressures.

“We are all mindful of this phenomenon. Speaking personally, I am concerned and I am going to be extremely vigilant on that front,” Fisher said in an interview with CNBC.

He added that he does not support the Fed embarking on an additional round of quantitative easing.

“Barring some extraordinary circumstance I cannot forsee…I would vote against a QE3,” Fisher told CNBC. “I don’t think it’s necessary. Again, we have a self-sustaining recovery.”

More at: http://www.cnbc.com/id/42209447

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Wall Street, World News | 48 Comments »
Tags: Dallas Fed Fisher, Fed Tipping Point, federal reserve

Posted By thestatedtruth.com on March 21, 2011

We have a long long way to go before this problem goes away!

TEPCO managed to restore the power supply to its radioactive power plant. The key problem at hand has not been fixed at all. Not even close. According to New York Daily News: “Cooling pumps at one of Japan’s crippled nuclear reactors are damaged beyond repair and will need to be replaced, officials learned Monday. The revelation dashed hopes for a quick resolution to the ongoing nuclear catastrophe at the leaking Fukushima Dai-ichi plant. An emergency order has been placed for new pumps for Unit 2 at the plant, but it’s unclear how quickly they would arrive, officials said.”

More from New York Daily News:

Engineers have worked around the clock to restore power to the facility, but damage caused by the earthquake and tsunami means it may take weeks to repair the required systems, officials warn.

“We have experienced a very huge disaster that has caused very large damage at a nuclear power generation plant on a scale that we had not expected,” said Hidehiko Nishiyama of Japan’s Nuclear and Industrial Safety Agency.

Although some headway was made toward bringing less-affected reactors on-line, conditions at the plant remained volatile.

Workers were temporarily evacuated Monday after plumes of mysterious gray smoke rose from a leaking reactor.

Officials said there was no sign of an explosion and that they had not detected any rise in radiation levels.

Meanwhile, officials with the U.S. Nuclear Regulatory Commission upgraded their assessment of the situation at the plant, saying it appeared the reactor cores at the most damaged facilities remained contained.

“I would say optimistically that things appear to be on the verge of stabilizing,” said Bill Borchardt, the NRC’s executive director for operations.

www.zerohedge.com

Category: Commentary, Economy, National News, National Security, Wall Street, World News | 936 Comments »
Tags: Japan Nuclear Accident, TEPCO

Posted By thestatedtruth.com on March 21, 2011

Black Swans everywhere……

• ISRAELI WARPLANES HIT HAMAS MILITARY SITE IN GAZA, XINHUA SAYS
• ISRAELI GAZA ATTACKS INJURE FIVE PEOPLE, AL-ARABIYA REPORTS
• ISRAELI WARPLANES FLYING OVER GAZA, AL-ARABIYA REPORTS

Category: Commentary, National News, National Security, Wall Street, World News | 42 Comments »
Tags: Israelb Bombs Hamas

Posted By thestatedtruth.com on March 21, 2011

Category: Commentary, Economy, Finance, National News, Real Estate, World News | 872 Comments »
Tags: home prices, Home Sales, Real Estate, real estate cycles

Posted By thestatedtruth.com on March 19, 2011

Question….Do governments ever tell the truth?  Doesn’t seem so.

The NRC said in the 1980’s that it was estimated that there was a 50% chance of a nuclear meltdown within the next 20 years,  which would be so large that it would contaminate an area the size of the State of Pennsylvania, and would result in huge numbers of a fatalities, and which would cause damage in the hundreds of billions of dollars (in 1980s dollars). Those reports were kept secret for decades.

From The Washington Blog……..

Santa Susana

As a History Chanel special notes, a nuclear meltdown occurred at the world’s first commercial reactor only 30 miles from downtown Los Angeles, and only 7 miles from the community of Canoga Park and the San Fernando Valley area of Los Angeles.

Specifically, in 1959, there was a meltdown of one-third of the nuclear reactors at the Santa Susana field laboratory operated by Rocketdyne, releasing – according to some scientists’ estimates – 240 times as much radiation as Three Mile Island.

But the Atomic Energy Commission lied and said only there was only 1 partially damaged rod, and no real problems. In fact, the AEC kept the meltdown a state secret for 20 years.

There were other major accidents at that reactor facility, which the AEC and Nuclear Regulatory Commission covered up as well.

Kyshtm

Two years earlier, a Russian government reactor at Kyshtm melted down in an accident which some claim was even worse than Chernobyl. The Soviet government hid the accident, pretending that it was creating a new “nature reserve” to keep people out of the huge swath of contaminated land. Journalist Anna Gyorgy alleges that the results of a freedom of information act request show that the CIA knew about the accident at the time, but kept it secret to prevent adverse consequences for the fledgling American nuclear industry.

1980s Studies and Hearings In 1982, the House Committee on Interior and Insular Affairs received a secret report received from the Nuclear Regulatory Commission called “Calculation of Reactor Accident Consequences 2”. In that report and other reports by the NRC in the 1980s, it was estimated that there was a 50% chance of a nuclear meltdown within the next 20 years which would be so large that it would contaminate an area the size of the State of Pennsylvania, which would result in huge numbers of a fatalities, and which would cause damage in the hundreds of billions of dollars (in 1980s dollars). Those reports were kept secret for decades. Admission By Former Russian Leader Former soviet leader Mikhail Gorbachev said on camera for a Discovery Network special (“The Battle of Chernobyl”) that the Soviets and Americans have each hidden a number of nuclear accidents from the public.

In light of the foregoing, the following quote from the San Jose Mercury News may not seem so far-fetched:

EPA officials, however, refused to answer questions or make staff members available to explain the exact location and number of monitors, or the levels of radiation, if any, being recorded at existing monitors in California. Margot Perez-Sullivan, a spokeswoman at the EPA’s regional headquarters in San Francisco, said the agency’s written statement would stand on its own.Critics said the public needs more information.”It’s disappointing,” said Bill Magavern, director of Sierra Club California. “I have a strong suspicion that EPA is being silenced by those in the federal government who don’t want anything to stand in the way of a nuclear power expansion in this country, heavily subsidized by taxpayer money.”

Category: Commentary, National News, National Security, Technology, Wall Street, World News | 4 Comments »
Tags: AEC Lies, Freedom of Information Act, Meltdown, NRC Lies, Nuclear Lies, nuclear power

Posted By thestatedtruth.com on March 19, 2011

Are we seeing the start of WW III…..?

U.S. and coalition forces launched military strikes against Libya, gambling that a rapid and substantial attack could knock out loyalist support for Gadhafi.

Gaza Fires 50 Mortars Into Israel, Heaviest Barrage In Two Years…..

Israel is sure to bring even more geopolitical tension, especially with Iran adn Syria already on edge following their own violent protests (and arguably looking for a political scapegoat).

BBC reports that “Palestinian militants in Gaza have fired dozens of missiles into southern Israel in what appears to be their heaviest such barrage in two years. About 50 mortars were fired – two Israelis were hurt, Israel says.” Never one to step away from an escalation, Israel replied in kind: “Israeli tanks later shelled targets in the coastal strip, wounding at least five people, Palestinian officials say.”

Category: Commentary, National News, National Security, Wall Street, World News | 18 Comments »
Tags: Libya Oil;Libya Gaddafi, Middle East Powder Keg, WW III

Posted By thestatedtruth.com on March 19, 2011

Notice if you will, the house in the chart below is upside down…..how appropriate!

One hundred years of the government’s attempts to mute the natural business cycle are slowly and painfully coming to an end.  A period where the government proactively encouraged consumption until it became 70% of the economy, we produced very little, and our savings rate reached zero.  A period where home ownership was promoted as the ultimate supreme goal until the last citizen that could fog a mirror yet was least able to afford it was suckered in.  As this leveraged consumption pyramid is finally ending, the government and central bank have embarked on one final mission to prop it up using the same tools that got us here in the first place: more leverage.  Only this time on a logarithmic scale.  Unfortunately, the scale is so large that it will not only guarantee an endgame, but it will accelerate it.  The visual below contains a few pieces of evidence that seem to confirm this, namely that over a ten year period: the consumer is stuck with an underwater balance sheet and the Fed’s attempt to create yet another bubble is only making it worse; outside of government efforts, the economy is unable to generate  sustainable job growth; and finally, the leverage scheme is so large that it no longer has a positive impact on growth (“debt saturation”).

www.zerohedge.com

Category: Charts and Graphs, Economy, Finance, Interest Rates, Bonds, National News, Personal Net Worth, Real Estate, Wall Street | 4,494 Comments »
Tags: Keynesian Cycle, Keynesian End Game, net worth, personal net worth

Posted By thestatedtruth.com on March 19, 2011

Defaults have lopped $822 billion off U.S. household debt since mid-2008!  These loans were not payed off, but it looks that way with many of the statistics…..

One of the puzzles of the recovery has been how U.S. households have managed to shed some $658 billion in mortgage, credit-card and other consumer debt over the past two and a half years: Are they really paying it down, or are they just giving up and defaulting?

The latest data from the Federal Reserve suggest defaults have played a big role in debt declines and that “paying down” would be a misnomer.  Based on the Fed data, banks’ and investors’ charge-offs, the result of defaults, have lopped $822 billion off households’ debt load from mid-2008 to the end of 2010. In other words, net of defaults consumers actually only borrowed an added net $163 billion.

That calculation alone, though, doesn’t provide a full picture of consumers’ change in behavior. They may be adding debt, but they’re doing so at a much slower pace than during the housing and credit boom. Net of defaults, household debt grew at an average annualized rate of only about 0.5% from mid-2008 to the end of 2010. That compares to about 10.5% in the preceding decade, a difference of 10 percentage points.

Category: Charts and Graphs, Commentary, Economy, Finance, National News, Wall Street | 1 Comment »
Tags: bank loans, consumer debt, household debt