Posted By thestatedtruth.com on January 20, 2011
A chart is worth a thousand words, or a couple hundred billion in real, incremental dollars. This is why things have been getting (slightly) better of late, but when it ends…not if, look out below. 2012-2014 look to be very tough years, if we survive the end of the Mayan Calender (Dec 21,2012) that is!
Posted By thestatedtruth.com on January 20, 2011
Hmm…They’re really getting serious about this. These pensions will never survive in the current form. Only a matter of time!
Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.
Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.
Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.
Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.
More at: http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=2&src=busln
Posted By thestatedtruth.com on January 20, 2011
By Al Yoon
NEW YORK (Reuters) – Home prices fell for the 53’rd consecutive month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.
Home prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company said in a report on Monday. Prices fell 0.8 percent over the month.
It is a dubious milestone for the U.S. housing market which has failed to gain much traction despite a host of government programs to reduce delinquencies and encourage demand with temporary tax credits and lower interest rates. Many economists expect further price drops, even if there are some anecdotal signs of growing demand, such as in pending home sales data.
“For the next six to nine months, the larger factors affecting the housing market that will produce more home price declines will be the excess inventory of homes, high negative equity and foreclosure rates, and weakened demand due to elevated employment, Stan Humphries, Zillow’s chief economist, said in a blog post.
Declines are accelerating, and it will take a while before falling unemployment and other signs of economic improvement support the market, Zillow said.
Posted By thestatedtruth.com on January 20, 2011
Stratfor’s Annual Forecast ….Here are some examples of this year’s themes:
– The U.S. is unlikely to withdraw from Iraq as promised in 2011.
– The U.S. economy will grow.
– In Europe, more countries will need bailouts.
– Russian-German relations will strengthen.
– Japan will rot, but it will rot in seclusion.
Here are some pieces:
While Washington looks to extricate itself from Iraq without leaving power in the region unbalanced, farther east China is struggling with its own economic imbalances. STRATFOR has long been perceived as bearish on the Chinese economy. We are less bearish than realistic, and the reality is that the longer an economic miracle continues to be miraculous, the more likely it is to end its amazing run. We cannot help but notice the similarities between China and its East Asian economic predecessors: Japan, South Korea and the Southeast Asian “Tigers.†The Chinese have shown great resilience, but the global economic crisis revealed the weaknesses of China’s export-based model. While government investment now makes up the lion’s share of the Chinese economy, Beijing is walking a very difficult path between rampant inflation and rapid economic slowing.
As China’s leaders search for a solution and try to avoid the social consequences of a slip in either direction, they are also focused on the next major generational leadership transition, slated to begin in 2012. This discourages any radical or daring economic policies, and stability will remain the watchword as the politicians jockey for position. But given the status of the Chinese economy, and the continued effects internationally of the global slowdown, daring policies and ideas are perhaps what China needs. While Beijing is likely to procrastinate in making any radical economic policy changes, and thus avoid the likely short-term chaos that could entail, the longer the leaders delay fundamental action, the worse things may be when the system starts to unravel.
The Global Economy:
The United States will experience moderate to strong growth in 2011. Unlike in other major economies, consumer activity comprises the bulk of the U.S. system — some $10 trillion of the $14 trillion total. That $10 trillion is approximately half of the global consumer market. (The combined BRIC states — Brazil, Russia, India and China — account for less than one-third of that amount). As the U.S. consumer goes, so goes the world.
When measuring what the U.S. consumer is going to do, STRATFOR consults three sets of data: first-time unemployment claims (our preferred method for evaluating current employment trends), retail sales (the actual consumer’s track record), and inventory builds (an indicator of whether or not wholesalers and retailers will be placing new orders, which in turn would require more hires). As 2011 begins, the first two figures look favorable to economic growth, while the last indicates employment may be slow to recover.
STRATFOR pays close attention to two other measures on the economy: The S&P 500 Index indicates investors’ risk appetite, and total bank credit as made available by the U.S. Federal Reserve indicates how functional the financial system is. Because the 2008-2009 recession was financial in origin, STRATFOR pays particular attention to what investors and banks are doing and thinking. Both measures are strongly positive as 2011 begins.
But while the United States may be gearing up for a strong performance, the same is not true elsewhere in the world.
Europe faces a structural problem. The euro was designed for and by the Germans, who want a strong currency and high interest rates to keep inflation in check and to attract the capital required to maximize their high value-added system of first-rate education and infrastructure. The Southern Europeans, in contrast, have economies that do not add nearly as much value. They must remain price competitive to generate growth, and the only reliable means they have of doing that is to sport a weak currency. Put simply, people will pay more for a German car, but they will only pay so much for a Spanish apple.
Yet these economies (and others) are enmeshed into the eurozone. The financial crisis is depressing the euro, which would normally help the southern European states, but Germany’s presence in the eurozone is acting as a sort of life preserver, limiting how far the common currency can sink. The result is a midground currency, prevented from falling to levels that would actually stimulate the south while holding at weaker levels that make the already competitive Germans hypercompetitive. The result will be growth bifurcation, with the Germans experiencing their fastest growth in a generation, and Southern Europe — the region that needs growth the most to emerge from the debt maelstrom — mired in recession.
Consequently, the financial crisis that started sweeping Europe in 2010 is far from over, and STRATFOR forecasts that more states will join Greece and Ireland in the bailout line in 2011. In one bit of good news for the Europeans, STRATFOR projects that the systems the Europeans built in 2010 to handle the financial crisis will prove sufficient to manage Portugal, Belgium, Spain and Austria, the four states facing the highest likelihood of bailouts, respectively.
China:
In China, nearly every government throughout its history has at some point been brought down by social unrest of some kind. Recently, Beijing was concerned that rolling back stimulus policies enacted in late 2008 would put economic growth at risk, and with it employment. STRATFOR has learned that, given these circumstances, Beijing has decided to keep that stimulus intact. This will solve the employment problem, but it comes at the certain price of higher inflation. China’s challenge in 2011 will be to maintain sufficient services and subsidies to keep social forces in check at a time when the country’s economic model will exacerbate inflationary problems.
Germany:
The country where elites are in most trouble is in fact Germany. Berlin has not yet made the case to its own population for Germany’s central role in Europe, and why Germany needs to bail out its neighbors when it has its own economic troubles. In large part this is because if Berlin were to make this case domestically, laying out the advantages Germany gains from the eurozone, it would further breed resentment abroad. With seven state elections in 2011 — four in a short period in February and March — the first evidence of nontraditional political forces’ coming to the forefront could be in Germany. This could accelerate if Berlin is also called upon to rescue one of the other troubled economies within this intense electoral period in the first quarter.
Posted By thestatedtruth.com on January 20, 2011
Bad seats, hey buddy!  Buried in the thousands of pages of the new health bill is this little gem…..
“I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes,â€
        President Obama, April 08, 2010
Â
Beginning January 1, 2013, ObamaCare imposes a 3.8% Medicare tax on unearned income, including the sale of single family homes, townhouses, co-ops, condominiums, and even rental income.
Â
In February 2010, 5.02 million homes were sold, according to the National Association of Realtors. On any given day, the sale of a house, townhome, condominium, co-op, or income from a rental property can push middle-income families over the $250,000 threshold and slam them with a new tax they can’t afford.  Â
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This new ObamaCare tax is the first time the government will apply a 3.8 percent tax on unearned income. This new tax on home sales and unearned income and other Medicare taxes raise taxes more than $210 billion to pay for ObamaCare.  The National Association of Realtors called this new Medicare tax on unearned income “destructive†and “ill-advised†and warned it would hurt job creation.
Posted By thestatedtruth.com on January 19, 2011
Posted By thestatedtruth.com on January 19, 2011
Posted By thestatedtruth.com on January 19, 2011
ICI data for the week ended January 12 showed domestic equity fund  inflows of $3,765 million following last week’s outflow of $4,229. This is the largest inflow going back to 2009.
Bond fund flows in everything but Munis were positive. Non-taxables saw another whopper of an outflow, this time for a total of $2.4 billion.
Posted By thestatedtruth.com on January 18, 2011
At income tax time, did you ever notice when puttting the two words ‘The’ and ‘IRS’ together it spells  — ‘THEIRS’?
Posted By thestatedtruth.com on January 18, 2011
An idea whose time has come! We would ordinarily say “send a letter to your congressman”, but they’re in a self serving mode with these entitlements, so let’s send this to everybody else that you can think of!
Many citizens have no idea that members of Congress retire with the same pay after only one term, or that they specifically exempted themselves from many of the laws they have passed (such as being exempt from any fear of prosecution for sexual harassment) while ordinary citizens must live under those laws. The latest was to exempt themselves from the Healthcare Reform … in all of its forms. That isn’t logical nor fair.
Governors of 35 states have already filed suit against the Federal Government for imposing unlawful burdens upon them. It only takes 38 (of the 50) States to convene a Constitutional Convention.
The 26’th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971…before computers, before e-mail, before cell phones, etc.
Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land…all because of public pressure.
Posted By thestatedtruth.com on January 18, 2011
Dr Joe Duarte has a good feel for this…..With states cutting budgets across the board, where is the growth going to come from?
In San Diego an interesting fight between the city and its unions is developing that could set the stage for how things work out in other places with similar problems. According to San Diego Six.com: “The city faces a 2.1 billion dollar pension deficit” and “The city wants to negotiate a deal with the unions.” The issue is familiar. The city increased pension benefits to workers but did not fund the increases, leaving gaping holes in coverage and setting up the potential for a crisis. But San Diego is not alone. The state of Illinois has recently passed a huge income tax increase due to its budget problems, which are partially due to union related benefits.
In San Diego the city is looking to “for a cap on pensions, an end to all pension related lawsuits, and to keep the current retirement benefits intact.”
In New Jersey, Governor Christie has proposed a $10.5 billion cut to Medicaid in order to cut into the state’s growing deficit problems. According to Bloomberg: “New Jersey has run consecutive annual deficits for a decade.” And overall, Bloomberg reports: “States face deficits that may reach $140 billion in the next fiscal year, according to the Center on Budget and Policy Priorities in Washington.”
And New Jersey is not alone. According to Bloomberg: “New York’s new governor, Democrat Andrew Cuomo, said he wants to lower spending $2.1 billion, the Wall Street Journal reported. Rick Scott, the recently elected Republican governor of Florida, said he is looking to trim the program by $1.8 billion.”
The relationship between budget deficits, pension deficits, and municipal bond defaults has yet to be fully explored by analysts, other than Whitney. But it’s there, and it is quite significant.
The centerpiece of most city’s budgets is property taxes. But with a housing glut and rising foreclosures, the money spigots for cities and states have been shut off or significantly reduced. Municipal governments don’t seem to realize that point just yet. When they do, it will likely mean more moves like the recent income tax hike in Illinois.
More: http://www.joe-duarte.com/index.asp
Posted By thestatedtruth.com on January 18, 2011
This morning, we see Britain’s consumer price index grew in December to an annualized 3.7%. Fuel prices are growing at their fastest pace since July, and food prices are rolling at a rate last seen in May 2009.
Like the U.S. Federal Reserve, the Bank of England has an inflation “sweet spot†of 2%. But Britain’s CPI has been above 3% for 13 months now. Unlike in the United States, even the “core†rate of inflation in the UK is rising at an alarming 2.9%.
Inflation Is Where?
The BLS CPI has shown virtually no movement over the last few years. Much of this is due to the bursting of the housing market. The BLS heavily weights housing. Most Americans spend the most on their housing costs each month. Yet the housing crash has hidden some major inflation in certain items. For example, oil is back up and you need only look at gas prices. For those who shop the cost of food items has gone up last year. Yet retailers have gotten creative with packaging so prices stay the same yet the amount you are receiving has gone down.
Take a look at the price of coffee, wheat, soybeans, orange juice, and other items over the last year. The S&P 500 went up by 13.6 percent but this pales in comparison to other sectors.
Posted By thestatedtruth.com on January 18, 2011
We’ve been talking about this for a while here at TheStatedTruth.com ……..
U.S. public pensions face a shortfall of up to $2.5 trillion, yes trillion.  It will force state and local governments to sell assets and make deep cuts to services, according to the former chairman of New Jersey’s pension fund.
“States face cost pressure, most prominently from retirement benefits and Medicaid [the health programme for the poor],†Orin Kramer told the Financial Times.
“One consequence is that asset sales and privatisation will pick up. The very unfortunate consequence is that various safety nets for the most vulnerable citizens will be cut back.â€
Posted By thestatedtruth.com on January 17, 2011
This read actually makes a lot of sense, and it takes the government out of the picture. We would add one more thing….. that is for most mortgages to be assumable like they used to be. The negative short term draw back is that like everything the government gets involved with, once they leave, there will be pain and no gain for a while.   Why you ask….because the government has basically rigged things in an effort to save everyone. Had this not happened, things (stocks and real estate) would have already reset to a lower level.Â
New System
We can’t rely on the same private mortgage system, which specialized in the production and sale of fraudulent securities and almost vaporized the global financial market. The Dodd-Frank law notwithstanding, credit-rating companies are still on the take, regulators are still on the make, and boards of directors are still on a break. They won’t protect us from Wall Street’s sale of snake oil.
We need a new limited-purpose mortgage system, which confines banks and other mortgage makers to doing just one thing — connecting lenders with borrowers, not leveraging the taxpayer. And we need the government to directly oversee the mortgage initiation process, organize a competitive market in home loans, and fully disclose all the details of mortgages on the Web so investors in these loans will know what they are buying.
This is remarkably easy to accomplish.
Step 1: Set up a new government agency — the Federal Financial Authority. The FFA would hire companies to verify, rate, appraise and disclose mortgage applications. These contractors would work exclusively for the FFA, eliminating any conflict of interest. Liar loans and no-doc loans would be history.
Mutual Funds’ Role
The government would neither endorse nor accept responsibility for appraisals and ratings, and would let borrowers add privately purchased appraisals and ratings to disclosures.
Step 2: Limit buyers of home loans to doing so only through closed-end mortgage mutual funds. If a fund manager chooses poor mortgages, the value of his fund’s shares will fall, but the fund itself won’t go broke. Mortgage defaults will never again lead to financial-sector collapse.
The mutual funds would sell shares up to a closing date, use the proceeds to buy mortgages of the type in which they are specializing, and pay out the cash flow to stockholders. The funds would terminate when the loans mature.
Step 3: Establish an electronic mortgage auction and require mutual funds to purchase loans at this market so borrowers receive the best price (lowest interest rate).
Liquid Market
While mutual funds would buy and hold mortgages, their shares would sell in a secondary market so investors would have liquidity even though their funds’ assets were illiquid. For this secondary market to operate well, it would need to maintain real-time disclosure of all information relevant to the valuation of a given loan.
The mutual funds would, themselves, represent securitizations. But unlike yesterday’s complex mortgage securities, investors would know what they were buying.
Investors seeking safety would purchase funds specializing in loans with larger down payments and shorter maturities. Investors seeking higher returns at the price of more risk would buy funds focused on mortgages with low down payments and longer maturities.
It’s time for the government to move from making home loans to making a mortgage market that works. The limited purpose mortgage system does both.
Laurence Kotlikoff is professor of economics at Boston University, president of Economic Security Planning Inc. and author of Jimmy Stewart Is Dead.†Richard Field is managing director of TYI LLC, a disclosure compliance database and risk- management firm. The opinions expressed their own.)
Posted By thestatedtruth.com on January 16, 2011
Expected tomorrow…. “Approximately 40 politicians” will be included in the next WikiLeaks release.
The list will include “high net worth individuals, multinational conglomerates and financial institutions – hedge funds”.  They are said to be “using secrecy as a screen to hide behind in order to avoid paying tax”. They come from the US, Britain, Germany, Austria and Asia – “from all over”.
Posted By thestatedtruth.com on January 15, 2011
Wikipedia is 10 years old! Â
The site is currently the fifth-most visited Website on the Internet, with about 400 million people visiting each day, looking up information on just about anything — science, math, languages, art, culture, company histories and entries on sports. Â
What is extraordinary about this free encyclopedia, which contains more than 17 million articles in more than 270 languages, is that it is written, edited and self-regulated almost entirely by unpaid volunteers. Wikipedia is overseen by the not-for-profit Wikimedia Foundation, which occupies one floor in an anonymous office building in downtown San Francisco.
Posted By thestatedtruth.com on January 14, 2011
From the one and only Art Cashin on the floor of The New York Stock Exchange!
On this day in 1886, a major American symbol was saved from almost not being a major American symbol. Actually, it was saved from being saved and thus became a major American symbol.
We’ll restate all that in English…..Â
Frederick Auguste Bartholdi had convinced the government of France (where he lived) to commission a sculpture (which he did for a living) of a statue of liberty to award to the U.S. on the centennial of its Independence. Bartholdi settled on a model (his mom who had a face that would curdle milk and a disposition to match – she reportedly drove Fred’s younger brother into an insane asylum). As you further recall, Bartholdi had difficulty finding a way to keep the huge copper statue from toppling. So he asked his pal, Al Eiffel, to design a metal skeleton for the statue. (Eiffel later had a towering success with the concept.)
Anyway that brings us to this day in 1886. So here you have the largest freestanding statue ever created (her index finger is 8 feet long). But to hold such a colossus statue would require a large (and expensive) base or pedestal. That was the problem. Several groups who had promised funding for the pedestal failed to deliver. No pedestal meant no statue – and worse an insult to the French.
To the rescue came corporate America. One household name offered to pay for the base or pedestal. All they sought was the right to carve their slogan or ad on the base. The proposal was considered and then on this day rejected for some strange reason. Who was this beacon of American enterprise who hoped to make the Lady with the Light a bit of billboard -it was the folks who made “Fletcher’s Castoria” that gentle laxative. So much for comings and goings in America. As you recall, Joseph Pulitzer then ran a campaign for “pennies from school children” that eventually financed the pedestal.
Posted By thestatedtruth.com on January 14, 2011
TopRetirements.com gave the most weight to three criteria: taxes, fiscal health and climate. Each of these factors is important, generally speaking, to retirees. On the financial front, high taxes can eat away at limited incomes, while poor fiscal health can force state governments to raise revenue or cut services. A warm climate is a natural draw for many retirees. If those three criteria aren’t among your top priorities, then the low rankings might not influence your decision.
Worst States for Retirement |
 |
| Â 1) Illinois | Poor fiscal health |
| Â 2) California | Expensive, and its finances are in disarray |
| Â 3) New York | Very high taxes, including property taxes |
| Â 4) Rhode Island | Worst-off state in the Northeast; high taxes |
| Â 5) New Jersey | Highest property taxes; pension issues |
| Â 6) Ohio | High unemployment and cold winters |
| Â 7) Wisconsin | High property taxes and frigid weather |
| Â 8) Massachusetts | High cost of living and high property taxes |
| Â 9) Connecticut | Taxes Social Security; high property taxes |
| 10) Nevada | Foreclosure capital of the world |
Posted By thestatedtruth.com on January 14, 2011
Posted By thestatedtruth.com on January 14, 2011
This may happen, but one would think it is more likely to be the by product of a devastating earthquake.Â
California has more risk of catastrophic storms than any other region in the country – even the Southern hurricane states, according to a new study released Thursday.
The two-year study by the U.S. Geological Survey is the most thorough effort yet to assess the potential effects of a “worst-case” storm in California.
It builds on a new understanding of so-called atmospheric rivers, a focusing of high-powered winds that drag a fire hose of tropical moisture across the Pacific Ocean, pointed directly at California for days on end. The state got a relatively tame taste of the phenomenon in December.
The team of experts that developed the scenario can’t say when it will happen. But they do say it has happened in the past and is virtually certain to strike again.
“This storm, with essentially the same probability as a major earthquake, is potentially four to five times more damaging,” said Lucy Jones, USGS chief scientist on the study. “That’s not something that is in the public consciousness.”
Read more: http://www.mcclatchydc.com/2011/01/14/106803/californias-big-one-could-be-a.html#ixzz1B3z4prd3
Posted By thestatedtruth.com on January 14, 2011
The FAO (Food and Agriculture Organization of the United nations) said its food price index jumped 32 percent in the second half of 2010, soaring past the previous record set in 2008.
Strained by rising demand and battered by bad weather, the global food supply chain is stretched to the limit, sending prices soaring and sparking concerns about a repeat of food riots last seen three years ago.
Signs of the strain can be found from Australia to Argentina, Canada to Russia.  “Situations have changed. The supply/demand structures have changed,†Abbassian told the Australian Broadcasting Corp. last week. “Certainly the kind of weather developments we have seen makes us worry a little bit more that it may last much, much longer. Are we prepared for it? Really this is the question.”
Price for grains and other farm products began rising last fall after poor harvests in Canada, Russia and Ukraine tightened global supplies. More recently, hot, dry weather in South America has cut production in Argentina, a major soybean exporter. This month’s flooding in Australia wiped out much of that country’s wheat crop.
As supplies tighten, prices surge. The FAO said its food price index jumped 32 percent in the second half of 2010, soaring past the previous record set in 2008.
Posted By thestatedtruth.com on January 14, 2011
This can only go so far as the consumer is still over indebted and over taxed, while being hit with inflation (the government says no inflation) and flat earning power! Debt (other than homes) still has to be payed back at some point and time.Â
U.S. banks are expanding their loans to consumers for the first time since the credit crisis started and lending standards begin to loosen …..demand for new loans edges higher.
Posted By thestatedtruth.com on January 14, 2011
This from Art Cashin on the floor of The New York Stock Exchange……..Basically the government doesn’t get it!  Last Friday, speaking in Germany, [European Central Bank President] Jean-Claude Trichet said it best: “Monetary policy responsibility cannot substitute for government irresponsibility.â€
Fiery Fedspeak –There were some interesting comments from several Fed presidents yesterday. One eye-opener came from a letter to the SEC written by Jeffrey Lacker, President of the Richmond Fed. Mr. Lacker called for a shift to floating value for money market funds. He fears that the public assumes that the Fed would bail out any fund that was in danger of “breaking the buck†(as they had done in the late fall of 2008).  Shifting to a floating rate would raise the risk of losing some of your principal. That, most likely, would drive money out of the funds into the banking system where it would be insured. This bears watching.
The most eye-popping Fed comments were contained in a speech delivered in New York City by Richard Fisher, President of the Dallas Fed. Among other things, he suggested that QE2 should be the end of the line for monetary policy. He also took a critical view of Congress and of the lack of business acumen at the White House. I think it is a uniquely candid and powerful speech. Go the Dallas Fed website and read the whole thing. It will be a worthwhile exercise.
Just to whet your appetite, here are a couple of samples:
I have been outspoken about the limits of monetary policy as a salve for the nation’s fiscal pathology. The Fed has done much, in my words, to provide the bridge financing until the new Congress gets to work restructuring the tax and regulatory incentives American businesses need to confidently expand their payrolls and capital expenditures here at home.
The Federal Reserve has held rates to nil. We have expanded our balance sheet to unprecedented levels. After much debate?which included strong concern expressed by one member with a formal vote and others, like me, who did not have voting rights in 2010?the FOMC collectively decided in November to temporarily undertake a program to purchase U.S. Treasuries that, when added to previous policy initiatives, roughly means we are purchasing the equivalent of all newly issued Treasury debt through June.
By this action, we have run the risk of being viewed as an accomplice to Congress’ fiscal nonfeasance. To avoid that perception, we must vigilantly protect the integrity of our delicate franchise. There are limits to what we can do on the monetary front to provide the bridge financing to fiscal sanity. Last Friday, speaking in Germany, [European Central Bank President] Jean-Claude Trichet said it best: “Monetary policy responsibility cannot substitute for government irresponsibility.â€
The entire FOMC knows the history and the ruinous fate that is meted out to countries whose central banks take to regularly monetizing government debt. Barring some unexpected shock to the economy or financial system, I think we have reached our limit. I would be wary of further expanding our balance sheet. But here is the essential fact I want to emphasize today: The Fed could not monetize the debt if the debt were not being created by Congress in the first place.
And later:
I don’t believe this has much to do with the Fed. None of my business contacts, large or small, publicly held or private, are complaining about the cost of borrowing, the lack of liquidity or the availability of capital. All express concern about taxes, regulatory burdens and the lack of understanding in Washington of what incentivizes private-sector job creation. All are stymied by a Congress and an executive branch that have appeared to them to be unaware of, if not outright opposed to, what fires the entrepreneurial spirit. Many have begun to feel that opportunities for earning a better and more secure return on investment are larger elsewhere than here at home.
Posted By thestatedtruth.com on January 13, 2011
Self explanatory.  A picture is worth…$1.230 Trillion dollars!
Posted By thestatedtruth.com on January 13, 2011
This is an amazing story!
TUCSON, Ariz. — U.S. Rep. Gabrielle Giffords has passed a “major milestone” on her recovery from a gunshot wound to the head, doctors said Thursday.
The Arizona congresswoman has been sitting up, dangling her legs on the edge of the hospital bed and moving her limbs in response to commands. That’s after she spontaneously opened her eyes during visits with her colleagues Wednesday night. She is able to lift both of her legs on command and is yawning and starting to rub her eyes, doctors said.
“She’s becoming more aware of her surroundings,” trauma chief Dr. Peter Rhee said during a news conference at the University Medical Center in Tucson, Ariz., Thursday.
The next milestone will be removing her breathing tube, and perhaps have her sit in a chair on Friday, said Rhee, who has treated soldiers in Iraq and Afghanistan. Doctors want to make sure Giffords doesn’t regress and are watching for pneumonia and blood clots.
Posted By thestatedtruth.com on January 13, 2011
The storms, which began on Tuesday, sent tons of red mud and torrents of water rushing down mountainsides into homes. At least 348 people have been killed in the last 24 hours as torrential rain triggered mudslides that smashed through towns around Rio de Janeiro in Brazil. Heavy rains earlier in the week killed 13 people in Sao Paulo state, raising the death toll in southern Brazil to 361.
Posted By thestatedtruth.com on January 13, 2011
This will be interesting to say the least!  Even if repeal were to pass the Congress, Obama has said he would veto it.
Posted By thestatedtruth.com on January 13, 2011
ICI just revised the last two data points of 2010 which were originally inflows, to one outflow and one minimal inflow. Â
Looking at last week’s flows, the first of the new year 2011 starts with an equity outflow of $4.2 billion and was the largest one week outflow since early October!
Posted By thestatedtruth.com on January 12, 2011
In this week’s New Statesman, WikiLeaks founder Julian Assange talks to John Pilger about his “insurance” files on Rupert Murdoch and Newscorp – and which country is the real enemy of WikiLeaks.
To read the entire feature, pick up a copy of this week’s New Statesman available on newsstands from tomorrow. Some highlights of the piece are below:
The “technological enemy” of WikiLeaks is not the US – but China, according to Assange.
“China is the worst offender,” when it comes to censorship, says the controversial whistleblower. “China has aggressive and sophisticated interception technology that places itself between every reader inside China and every information source outside China. We’ve been fighting a running battle to make sure we can get information through, and there are now all sorts of ways Chinese readers can get on to our site.”
On Bradley Manning – the US soldier accused of leaking the diplomatic cables to WikiLeaks – Assange says: “I’d never heard his name before it was published in the press.” He argues that the US is trying to use Manning – currently stuck in solitary confinement in the US – to build a case against the WikiLeaks founder:
“Cracking Bradley Manning is the first step,” says the Australian hacker. “The aim clearly is to break him and force a confession that he somehow conspired with me to harm the national security of the United States.”
Such conspiracy would be impossible, according to Assange. “WikiLeaks technology was designed from the very beginning to make sure that we never knew the identities or names of people sub¬mitting material. We are as untraceable as we are uncensorable. That’s the only way to assure sources they are protected.”
Yesterday, Assange’s lawyers warned that if he is extradited to America, he could face the death penalty – for embarrassing the leaders of the US government. “They don’t want the public to know these things and scapegoats must be found,” says Assange.
And despite the pressure the website has been under, reports of trouble at WikiLeaks are greatly exaggerated, claims Assange.
“There is no ‘fall’. We have never published as much as we are now. WikiLeaks is now mirrored on more than 2,000 websites. I can’t keep track of the spin-off sites – those who are doing their own WikiLeaks… If something happens to me or to WikiLeaks, ‘insurance’ files will be released.”
The contents of these files are unknown, but, according to Assange, “[t]hey speak more of the same truth to power.” It is not just government that should be worried about the content of these files, however. “There are 504 US embassy cables on one broadcasting organisation and there are cables on Murdoch and News Corp,” says Assange.
The attempts by the US to indict Assange should worrying the mainstream press, he adds.
“I think what’s emerging in the mainstream media is the awareness that if I can be indicted, other journalists can, too,” says Assange. “Even the New York Times is worried. This used not to be the case. If a whistleblower was prosecuted, publishers and reporters were protected by the First Amendment, which journalists took for granted. That’s being lost.”
More at: http://www.newstatesman.com/blogs/the-staggers/2011/01/china-wikileaks-assange
Posted By thestatedtruth.com on January 12, 2011
We’ve been talking about this, it’s called food inflation and it’s about to get out of hand over the next year because of adverse weather……Grain prices soared after the USDA made a deep cut in its outlook for global supplies.Â
Posted By thestatedtruth.com on January 11, 2011
Posted By thestatedtruth.com on January 11, 2011
Are they kidding….No!  There are 60,000 pages in the current tax code…..Tax reform anybody? How many college educated people do you know that do their own taxes, let’s rephrase that…how many have a tax professional do the job, go ahead…raise your hands….anybody out there without a hand up? How about that!
Posted By thestatedtruth.com on January 11, 2011
LONDON – WikiLeaks will step up its publication schedule of secret documents, founder Julian Assange announced Tuesday, promising more revelations based on the group’s stash of confidential U.S. embassy cables and other leaks. “We are stepping up our publishing for matters related to Cablegate and other materials, “Those will shortly be occurring through our newspaper partners around the world — big and small newspapers and some human rights organizations.”
Posted By thestatedtruth.com on January 10, 2011
If this is plan B, inquiring minds wonder what plan C would look like!
In what may one day be heralded as the formal proposal that proverbially started it all, the Commonwealth of Virginia introduced House Resolution No. 557 to establish a joint subcommittee to “to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System.” In other words, Virginia will study the fallback plan of a “timely adoption of an alternative sound currency that the Commonwealth’s government and citizens may employ without delay in the event of the destruction of the Federal Reserve System’s currency” and avoid or “at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System.” Most importantly as pertain to the currency in question, “Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated ‘legal tender’.”
Whether this resolution will ever get off the ground, and actually find that the world is at great risk should gold not be instituted as a backstop currency, is irrelevant. The mere fact that it is out there, should provide sufficient impetus to other states to consider the ultimate Plan B.
We would urge all legislators carefully read this resolution by clicking below.
            http://lis.virginia.gov/cgi-bin/legp604.exe?111+ful+HJ557+pdf
Posted By thestatedtruth.com on January 10, 2011
No change is good,” says a neurosurgeon who treated the congresswoman. Doctors are monitoring her brain for swelling, which usually peaks three days after an injury.
Rep. Gabrielle Giffords” condition essentially remained unchanged overnight Sunday, doctors at University Medical Center in Tucson said in a Monday news conference.
“No change is good, and we have no change,” said Dr. Michael Lemole, chief of neurosurgery at the medical center and one of the neurosurgeons who cared for Giffords after she was shot Saturday. “She is still following basic commands, and her CAT scans are showing no progression of swelling. Every day that goes by, we are slightly more optimistic.”
Lemole said swelling of the brain typically peaked on the third day after an injury, which would be Tuesday. After that, “we can breathe a collective sigh of relief.”
Surgeons removed most of the left side of her skull Saturday to prevent swelling from compressing her brain and cutting off the flow of blood to her brain stem, which would almost certainly be fatal.
The 9-millimeter bullet fired at her entered the back of her skull and exited through the front, passing only through the left hemisphere and, fortunately, missing the crucial area connecting the two hemispheres of the brain.
Posted By thestatedtruth.com on January 10, 2011
Push will turn into a shove…..Turn out the lights, the party is over! Â
Meredith Whitney’s prediction, which everyone was quick to mock and ridicule, is about to come back with a vengeance. State and Local finances are at risk. This idea is likely to pick up steam along the way.
Some unpleasant news for pensioned workers who believe that their insolvent state will be able to afford ridiculous legacy pensions in perpetuity. According to Pensions and Investment magazines, Newt Gingrich is pushing for legislation that will allow insolvent states to be taken off bailout support and file bankruptcy, in the process allowing them to renege on pension and other benefit obligations promises to state workers.
From P&I: In Part
Proponents of the measure — which include Americans for Tax Reform, a Washington lobby group that fights tax increases — said the legislation is desperately needed to clear the way for struggling states to slash costs before they go belly up, and should be regarded as a preemptive move that could preclude the need for massive federal bailouts.
“It’s in the short-term and long-term interests of government workers and taxpayers to start those reforms now, rather than having to pick up the pieces after a crash landing,†ATR President Grover Nor-quist said in an interview.
“We are working with people inside and outside of Congress on this issue,†said Joe DeSantis, a spokes-man for Mr. Gingrich, whom Mr. DeSantis said is considering a bid to be the Republican presidential candidate in 2012.
“This idea carries major negative financial implications for the states, their creditors and the companies that do business with them,†said Charles Loveless, director of legislation for the American Federation of State, County and Municipal Employees, Washington. “A state going into bankruptcy would send shock waves through the states and could very well undermine our fragile national economic recovery,†he said.
But Mr. Norquist said that, assuming the proposal becomes law, not every state would file for bankruptcy — a right that municipal governments already have under Chapter 9 of the U.S. Bankruptcy Code.
“If you don’t have this (a state bankruptcy process), you have New York, Illinois and California running off the rails because there’s no way to fix their problems … They’ve got these contracts with government workers that you can’t alter,†Mr. Norquist said.ÂÂÂ
Posted By thestatedtruth.com on January 9, 2011
Posted By thestatedtruth.com on January 9, 2011
This is why Gold and Silver has been sought by the smart money!
Brazil has warned that the world is on course for a full-blown “trade war†as it stepped up its rhetoric against exchange rate manipulation.
Guido Mantega, finance minister, told the Financial Times that Brazil was preparing new measures to prevent further appreciation of its currency, the real, and would raise the issue of exchange-rate manipulation at the World Trade Organisation and other global bodies. He said the U.S. and China were among the worst offenders.
“This is a currency war that is turning into a trade war,†Mr Mantega said in his first exclusive interview since Dilma Rousseff, Brazil’s new president, took office on January 1. His comments follow interventions in currency markets by Brazil, Chile and Peru last week and recent sharp rises in the Australian dollar, the Swiss franc and other currencies amid an exodus of investment from the sluggish economies of the U.S. and Europe.
The actions have renewed interest in how to manage destabilising flows of speculative money, with the International Monetary Fund suggesting last week that the world needed rules to govern the use of capital controls.
More at:Â http://www.ft.com/cms/s/0/6316eb4a-1c34-11e0-9b56-00144feab49a.html#axzz1AavK2SlT
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