Posted By thestatedtruth.com on October 6, 2010

The IMF said global growth will slow more than expected as advanced economies slash budgets amid a continuing sovereign debt crisis.

Category: Commentary, Economy, National News, Wall Street | No Comments »
Tags: budgets, gdp cut, imf budget

Posted By thestatedtruth.com on October 5, 2010

Category: Commentary, Economy, Finance, National News, News Letters, Wall Street, World News | No Comments »
Tags: musical chairs

Posted By thestatedtruth.com on October 5, 2010

Category: Commentary, National News, Weather | No Comments »
Tags: cold weather, coldest winter in 100 years, gulf stream, russia cold weather

Posted By thestatedtruth.com on October 5, 2010

From Art cashin on the floor of  The New York Stock Exchange……

Not Quite What They Seem – Our UBS pal in London, Andy Lees, put out an eye-opening piece on China this morning.  Andy sees China becoming more vulnerable because of their growing energy dependence.  The piece is too big to fully reproduce but here are some key parts:

Conventional wisdom is that the western world has entered a period of contraction, that the US is falling from its pedestal and that China is regaining the position it lost 500 odd years ago as the dominant power in the world. This kind of superficial picture is worse than that spouted in the 1950’s and 1960’s involving the extrapolation of former Soviet growth to the point where Khrushchev famously declared “We will bury you”.  Like the Soviet Union, China’s economic strength has mainly been driven by factor mobilisation rather than efficiency and productivity gains, explaining why Green GDP (its total balance sheet) is said to be flat over the last 20 years – (the Chinese government actually published a form of Green GDP in 2006 re 2004 data which supported this finding, but the following year they blocked the publication and stopped its use). It uses more energy than the US economy which is about twice the size, and nearly five times as much as Japan’s economy which is of similar size. It clearly uses more labour and according to The World’s Water 2008 – 2009, it uses ten times the water per unit of industrial output than developed countries in general. As with the Soviet Union, state direction of capital means that imbalances can be sustained for a long period of time, only being limited by the exhaustion of resources or by social unrest, which is only likely if the economy is slowing down, hence why China will continue to drive at full speed into the eventual brick wall.

As resource countries benefit, they suffer from the so-called Dutch Disease. As oil exports become more valuable driving the currency higher, the competitiveness of other domestic industries deteriorates causing imports to rise and exports to fall. Within the country itself, the high returns available from the oil industry act as a magnet to capital, increasing the cost of funding for other industries. Some sort of capital control or internal subsidy is therefore necessary to maintain the value added within the country. This acts to hollow out the energy importers and cause large international imbalances to continue accumulating; it taxes efficiency and rewards inefficiency unlike a free market which would do exactly the opposite. The reason this is relevant to China and its capital controls is that, as the world’s largest energy producer by some margin, it also suffers from the Dutch Disease. Without capital controls its natural inefficiencies mean it is unlikely to be able to compete on the world markets or even domestically against foreign imports.

Andy goes on to point out that China has managed to use its vast coal reserves as a crutch.  Those reserves will not sustain its energy needs in coming years.  Andy also notes that China may be hearing footsteps in the trading area.  Several smaller Asian nations are selling much more than China.  Japan has pulled dead even on trade.  Even Mexico is gaining market share at China’s expense.

Here’s how Andy concludes his thoughtful piece:

We are told that China has been the main driver of global growth in recent years as indeed it has. We shouldn’t forget however that by using its massive production of fossil fuels to impose capital controls on the rest of us, this growth has to a large extent simply been transferred from abroad, and in particular it has been taken from investment in productivity advancement. Though quite stunning, China’s growth has been at the expense of global economic advancement as it has used its fuel to support inefficient domestic industry rather than export the fuel to countries that could produce more with the energy. To be fair to China, not many countries wanted their coal as it didn’t necessarily suit our greener credentials; it was preferential to see China pollute its own environment and sell us the goods. It is here where the US could quite easily turn the table back on China by imposing an equalising tax on the embedded carbon within all manufactured goods. This would likely get wide public support and would go down extremely well in Japan and Europe. As very energy efficient manufacturers, it would effectively offset the impact of NAFTA and help tie them more closely to a US centric bloc, the scale of which would dwarf China and therefore gradually isolate it. Whilst I would generally not support taxes as an efficient method of allocating capital, in this circumstance it’s actually quite clever, taxing inefficiency. Whether such measures are imposed or not, the fact that capital is being allocated badly will eventually result in an economic bust for China in just the same way that it did for the USSR.

Category: Commentary, National News, Wall Street, World News | No Comments »
Tags: art cashin, China, from the floor of the new york stock exchange

Posted By thestatedtruth.com on October 5, 2010

Stratfor

October 5, 2010 | 0903 GMT

.

 By George Friedman

The U.S. government issued a warning Oct. 3 advising Americans traveling to Europe to be “vigilant.” U.S. intelligence apparently has acquired information indicating that al Qaeda is planning to carry out attacks in European cities similar to those carried out in Mumbai, India, in November 2008. In Mumbai, attackers armed with firearms, grenades and small, timed explosive devices targeted hotels frequented by Western tourists and other buildings in an attack that took three days to put down.

European security forces are far better trained and prepared than their Indian counterparts, and such an attack would be unlikely to last for hours, much less days, in a European country. Still, armed assaults conducted by suicide operatives could be expected to cause many casualties and certainly create a dramatic disruption to economic and social life.

The first question to ask about the Oct. 3 warning, which lacked specific and actionable intelligence, is how someone can be vigilant against such an attack. There are some specific steps that people can and should take to practice good situational awareness as well as some common-sense travel-security precautions. But if you find yourself sleeping in a hotel room as gunmen attack the building, rush to your floor and start entering rooms, a government warning simply to be vigilant would have very little meaning.

The world is awash in intelligence about terrorism. Most of it is meaningless speculation, a conversation intercepted between two Arabs about how they’d love to blow up London Bridge. The problem, of course, is how to distinguish between idle chatter and actual attack planning. There is no science involved in this, but there are obvious guidelines. Are the people known to be associated with radical Islamists? Do they have the intent and capability to conduct such an attack? Were any specific details mentioned in the conversation that can be vetted? Is there other intelligence to support the plot discussed in the conversation?

The problem is that what appears quite obvious in the telling is much more ambiguous in reality. At any given point, the government could reasonably raise the alert level if it wished. That it doesn’t raise it more frequently is tied to three things. First, the intelligence is frequently too ambiguous to act on. Second, raising the alert level warns people without really giving them any sense of what to do about it. Third, it can compromise the sources of its intelligence.

The current warning is a perfect example of the problem. We do not know what intelligence the U.S. government received that prompted the warning, and I suspect that the public descriptions of the intelligence do not reveal everything that the government knows. We do know that a German citizen was arrested in Afghanistan in July and has allegedly provided information regarding this threat, but there are likely other sources contributing to the warning, since the U.S. government considered the intelligence sufficient to cause concern. The Obama administration leaked on Saturday that it might issue the warning, and indeed it did.

The government did not recommend that Americans not travel to Europe. That would have affected the economy and infuriated Europeans. Leaving tourism aside, since tourism season is largely over, a lot of business is transacted by Americans in Europe. The government simply suggested vigilance. Short of barring travel, there was nothing effective the government could do. So it shifted the burden to travelers. If no attack occurs, nothing is lost. If an attack occurs, the government can point to the warning and the advice. Those hurt or killed would not have been vigilant.

I do not mean to belittle the U.S. government on this. Having picked up the intelligence it can warn the public or not. The public has a right to know, and the government is bound by law and executive order to provide threat information. But the reason that its advice is so vague is that there is no better advice to give. The government is not so much washing its hands of the situation as acknowledging that there is not much that anyone can do aside from the security measures travelers should already be practicing.

The alert serves another purpose beyond alerting the public. It communicates to the attackers that their attack has been detected if not penetrated, and that the risks of the attack have pyramided. Since these are most likely suicide attackers not expecting to live through the attack, the danger is not in death. It is that the Americans or the Europeans might have sufficient intelligence available to thwart the attack. From the terrorist point of view, losing attackers to death or capture while failing to inflict damage is the worst of all possible scenarios. Trained operatives are scarce, and like any strategic weapon they must be husbanded and, when used, cause maximum damage. When the attackers do not know what Western intelligence knows, their risk of failure is increased along with the incentive to cancel the attack. A government warning, therefore, can prevent an attack.

In addition, a public warning can set off a hunt for the leak within al Qaeda. Communications might be shut down while the weakness is examined. Members of the organization might be brought under suspicion. The warning can generate intense uncertainty within al Qaeda as to how much Western intelligence knows. The warning, if it correlates with an active plot, indicates a breach of security, and a breach of security can lead to a witch-hunt that can paralyze an organization.

Therefore, the warning might well have served a purpose, but the purpose was not necessarily to empower citizens to protect themselves from terrorists. Indeed, there might have been two purposes. One might have been to disrupt the attack and the attackers. The other might have been to cover the government if an attack came.

In either case, it has to be recognized that this sort of warning breeds cynicism among the public. If the warning is intended to empower citizens, it engenders a sense of helplessness, and if no attack occurs, it can also lead to alert fatigue. What the government is saying to its citizenry is that, in the end, it cannot guarantee that there won’t be an attack and therefore its citizens are on their own. The problem with that statement is not that the government isn’t doing its job but that the job cannot be done. The government can reduce the threat of terrorism. It cannot eliminate it.

This brings us to the strategic point. The defeat of jihadist terror cells cannot be accomplished defensively. Homeland security can mitigate the threat, but it can never eliminate it. The only way to eliminate it is to destroy all jihadist cells and prevent the formation of new cells by other movements or by individuals forming new movements, and this requires not just destroying existing organizations but also the radical ideology that underlies them. To achieve this, the United States and its allies would have to completely penetrate a population of about 1.3 billion people and detect every meeting of four or five people planning to create a terrorist cell. And this impossible task would not even address the problem of lone-wolf terrorists. It is simply impossible to completely dominate and police the entire world, and any effort to do so would undoubtedly induce even more people to turn to terrorism in opposition to the global police state.

Will Rogers was asked what he might do to deal with the German U-boat threat in World War I. He said he would boil away the Atlantic, revealing the location of the U-boats that could then be destroyed. Asked how he would do this, he answered that that was a technical question and he was a policymaker.

The idea of suppressing jihadist terrorism through direct military action in the Islamic world would be an idea Will Rogers would have appreciated. It is a superb plan from a policymaking perspective. It suffers only from the problem of technical implementation. Even native Muslim governments motivated to suppress Islamic terrorism, like those in Egypt, Saudi Arabia, Algeria or Yemen, can’t achieve this goal absolutely. The idea that American troops, outnumbered and not speaking the language or understanding the culture, can do this is simply not grounded in reality.

The United States and Europe are going to be attacked by jihadist terrorists from time to time, and innocent people are going to be killed, perhaps in the thousands again. The United States and its allies can minimize the threat through covert actions and strong defenses, but they cannot eliminate it. The hapless warning to be vigilant that was issued this past weekend is the implicit admission of this fact.

This is not a failure of will or governance. The United States can’t conceivably mount the force needed to occupy the Islamic world, let alone pacify it to the point where it can’t be a base for terrorists. Given that the United States can’t do this in Afghanistan, the idea that it might spread this war throughout the Islamic world is unsupportable.

The United States and Europe are therefore dealing with a threat that cannot be stopped by their actions. The only conceivably effective actions would be those taken by Muslim governments, and even those are unlikely to be effective. There is a deeply embedded element within a small segment of the Islamic world that is prepared to conduct terror attacks, and this element will occasionally be successful.

All people hate to feel helpless, and this trait is particularly strong among Americans. There is a belief that America can do anything and that something can and should be done to eliminate terrorism and not just mitigate it. Some Americans believe sufficiently ruthless military action can do it. Others believe that reaching out in friendship might do it. In the end, the terrorist element will not be moved by either approach, and no amount of vigilance (or new bureaucracies) will stop them.

It would follow then that the West will have to live with the terrorist threat for the foreseeable future. This does not mean that military, intelligence, diplomatic, law-enforcement or financial action should be stopped. Causing most terrorist attempts to end in failure is an obviously desirable end. It not only blocks the particular action but also discourages others. But the West will have to accept that there are no measures that will eliminate the threat entirely. The danger will persist.

Effort must be made to suppress it, but the level of effort has to be proportional not to the moral insult of the terrorist act but to considerations of other interests beyond counterterrorism. The United States has an interest in suppressing terrorism. Beyond a certain level of effort, it will reach a point of diminishing returns. Worse, by becoming narrowly focused on counterterrorism and over-committing resources to it, the United States will leave other situations unattended as it focuses excessively on a situation it cannot improve.

The request that Americans be vigilant in Europe represents the limits of power on the question of terrorism. There is nothing else that can be done and what can be done is being done. It also drives home the fact that the United States and the West in general cannot focus all of its power on solving a problem that is beyond its power to solve. The long war against terrorism will not be the only war fought in the coming years. The threat of jihadism must be put in perspective and the effort aligned with what is effective. The world is a dangerous place, as they say, and jihadism is only one of the dangers.

Reprinting or republication of this report on websites is authorized by prominently displaying the following sentence, including the hyperlink to STRATFOR, at the beginning or end of the report.

“Terrorism, Vigilance and the Limits of the War on Terror is republished with permission of STRATFOR.”
 

http://www.stratfor.com

Category: Commentary, Economy, National News, National Security, World News | No Comments »
Tags: stratfor, terrorism, war

Posted By thestatedtruth.com on October 4, 2010

The Mortgage Mess as it affectionately is called seems to be getting new names with each passing day – the latest one is, quite appropriately RoboSigning Scandal  During today’s CNBC Kudlow segment Diana Ollick  confirms various so far unfounded rumors that the government is planning to institute a 90 day foreclosure moratorium as it deals with the realization of just how big and pervasive the mortgage problem is, and even worse will soon be. Larry Kudlow noted that this is the “housing equivalent of the credit financial meltdown” and that “this is going to go on for ever.” The biggest issue that is now developing is the fact that title insurers (firms such as Fidelity National, First American, Stewart Info and Old Republic) are refusing to insure mortgages in foreclosure or otherwise, uncertain as to who actually owns the title. And for all those who believe this will merely keep prices artificially high,  there is very bad news – the problem with the title insurers walking away on fears of lawsuits is that no lender will be willing to write a mortgage without title insurance, meaning that suddenly the up-front component of home purchases will either have to surge, or home prices will have to fall by a like amount as there is simply not enough equity (money) to cover the resulting debt deficiency.

Kudlow: “We’re not talking just a few weeks, or a few months. This sounds like a long, drawn-out, bureaucratic, robotic process with lawyers, and oh my gosh.” Another implication: a veritable bonanza for both lawyers and defaulters, the former of whom will end up making billions in legal fees while the latter will be able to live mortgage free for years, while continuing to be the ultimate consumer.

Another important topic discussed is the fact that due to decades of faulty securitizations, suddenly no bank knows who owns what. Courtesy of several trillion in now title-undefined mortgages, which in turn form the basis for thousands of CDOs, which in turn are split up into millions of tranches, and includes the complicity of Fannie, Freddie and private label, it is the banks and their clients that have shot themselves in the foot: as other have noted, very soon, the entire MBS process can and very may grind to a halt.

As mentioned earlier, Ollick confirms that according to rumors, the government is going to impose “some kind of 90 day foreclosure moratorium on the banks which would melt down the housing market.” In fact Congressman Merkley already indicated he is for a foreclosure moratorium.

At the end of the day: the one true loser, is the law-abiding, conscientious, tax and mortgage paying middle class American, who is now preparing for TARP 2 as the banks will all almost definitely need to run to another bailout because of this catastrophe.

Must watch 10 minute discussion of this important story.

More at: www.zerohedge.com

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Real Estate | 48 Comments »
Tags: foreclosures, real estate title insurance

Posted By thestatedtruth.com on October 4, 2010

Possible targets in the suspected European terror plot are pre-security areas in at least five major European airports, a law enforcement official told ABC News. Authorities believe terror teams are preparing to mount a commando like attack featuring small units and small firearms modeled after the Mumbai attack two years ago.

The State Department issued a highly unusual “Travel Alert” Sunday for “potential terrorist attacks in Europe,” saying U.S. citizens are “reminded of the potential for terrorists to attack public transportation systems and other tourist infrastructure.”

Category: Commentary, National News, National Security | 49 Comments »
Tags: terrist, terror

Posted By thestatedtruth.com on October 4, 2010

 Recovery, what recovery!

Category: Commentary, Economy, Finance, National News | No Comments »
Tags: bankruptcy, consumer bankruptcies

Posted By thestatedtruth.com on October 3, 2010

The government already has unveiled guidelines for free enterprise activities in 178 fields, as part of the plan to absorb workers set to be laid off into a newly-expanded private sector. Cuba is the only communist country in the Americas, that business is all government-run.

New reforms will allow Cubans to become accountants, masseuses, park custodians, or even open small fruit and vegetable stores, according to the rules set out in the state-run daily Granma.  But many have doubts about the experiment’s ability to absorb so many former state workers.

“It is true that some families could be hard hit during the implementation of this measure,” the official Cuban Communist Party newspaper Granma allowed. “But behind them will be the humanist Revolution, evaluating and offering solutions based on real possibilities.”

Category: Commentary, Economy, National News, World News | No Comments »
Tags: communits/capitalist mix, Cuba

Posted By thestatedtruth.com on October 1, 2010

Data from the new Census report created the following income distribution chart:

So…..35% of U.S. households live on $35,000 or less.    Those making more than $100,000 fall under the top 20 percent category.  But the real income disparity shows up clearly once you go over the $200,000 range.  The top 20 percent of Americans made close to 50 percent of all income while those below the poverty line made up 3.4 percent.  This ratio of 14.5 to 1 is the highest on record.  In 2008 the ratio was at 13.6 and back in 1968 it was 7.69.

More at: http://www.mybudget360.com/

Category: Commentary, Economy, Finance, National News, Personal Net Worth | 46 Comments »
Tags: household income, income distribution

Posted By thestatedtruth.com on October 1, 2010

By ALAN ZIBEL

October 1, 2010

WASHINGTON -  Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.

The move adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

Bank of America isn’t able to estimate how many homeowners’ cases will be affected, Dan Frahm, a spokesman for the Charlotte, N.C.-based bank, said Friday. He said the bank plans to resubmit corrected documents within several weeks.

Two other companies, Ally Financial Inc.’s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public.

The document problems could cause thousands of homeowners to contest foreclosures that are in the works or have been completed. If the problems turn up at other lenders, a foreclosure crisis that’s already likely to drag on for several more years could persist even longer. Analysts caution that most homeowners facing foreclosure are still likely to lose their homes.

State attorneys general, who enforce foreclosure laws, are stepping up pressure on the industry.

On Friday, Connecticut Attorney General Richard Blumenthal asked a state court to freeze all home foreclosures for 60 days. Doing so “should stop a foreclosure steamroller based on defective documents,” he said.

And California Attorney General Jerry Brown called on JPMorgan to suspend foreclosures unless it could show it complied with a state consumer protection law. The law requires lenders to contact borrowers at risk of foreclosure to determine whether they qualify for mortgage assistance.

More at: http://www.washingtonpost.com/wp-dyn/content/article/2010/10/01/AR2010100105392_pf.html

Category: Commentary, Economy, National News, Real Estate, Wall Street | No Comments »
Tags: bad mortgages, bank owned, foreclosures

Posted By thestatedtruth.com on September 30, 2010

The U.S. Postal Service was denied a proposed increase in rates after its regulator said the agency couldn’t justify the request. The decision left the price of first-class stamps unchanged at 44 cents.

The Postal Regulatory Commission in Washington today said the service couldn’t support a proposal for an average increase of 5.6 percent when the inflation rate is only 0.6 percent. The postal service said the recession has cut mail volume and revenue.

“There will be no rate increases as a result of our decision for any class of mail,” Ruth Goldway, chairman of the regulatory commission, said today at a Washington news conference.

Category: Commentary, Economy, National News | No Comments »
Tags: postage stamp rate, postal service

Posted By thestatedtruth.com on September 30, 2010

September 30, 2010

 

 

The Eiffel Tower was evacuated Sept. 28 after an anonymous bomb threat against the symbolic Parisian tourist attraction was phoned in; no explosive device was found. The day before the Eiffel Tower threat, French authorities closed the Gare Saint-Lazare in central Paris after an abandoned package, later determined innocuous, was spotted in the train station.

These two incidents serve as the latest reminders of the current apprehension in France that a terrorist attack is imminent. This concern was expressed in a very public way Sept. 11, when Bernard Squarcini, the head of France’s Central Directorate of Interior Intelligence (known by its French acronym, DCRI), told French newspaper Le Journal du Dimanche that the risk of an attack in France has never been higher. Never is a long time, and France has long faced terrorist threats, making this statement quite remarkable.

Squarcini has noted in recent interviews that the combination of France’s history as a colonial power, its military involvement in Afghanistan and the impending French ban on veils that cover the full face and body (niqabs and burqas) combined to influence this threat environment.

A Month of Threats

After the French Senate approved the burqa ban Sept. 14 — which will go into effect next March — a bomb threat against the Eiffel Tower was called in that evening, causing French authorities to evacuate the site and sweep it for explosive devices.

On Sept. 16, five French citizens were abducted from the Nigerien uranium-mining town of Arlit in an operation later claimed by al Qaeda in the Islamic Maghreb (AQIM), a claim French Defense Minister Herve Morin later assessed as valid. In July, French Prime Minister Francois Fillon declared that France was at war with the North African al Qaeda franchise after the group killed a French hostage it had kidnapped in April. Fillon’s announcement came three days after the end of a four-day French-Mauritanian offensive against AQIM militants that resulted in the deaths of several militants. After the offensive, AQIM branded French President Nicolas Sarkozy an enemy of Allah and warned France that it would not rest until it had avenged the deaths of its fighters.

French officials have also received unsubstantiated reports from foreign liaison services of plans for suicide bombings in Paris. National Police Chief Frederic Pechenard told Europe 1 radio Sept. 22 that in addition to the threatening statements from AQIM, the French have received specific information that the group is working to target France.

On Sept. 6, Der Spiegel reported that authorities were investigating reports provided by the United States that a German-born Islamist extremist arrested in Afghanistan has warned of possible terrorist attacks in Germany and elsewhere in Europe — including France — planned by jihadists based in Pakistan. This story hit the English-language media Sept. 28, and included reports that the threat may have involved plans to launch Mumbai-like armed assaults in multiple targets in Europe.

In the words of Squarcini to the press, these combined incidents mean “all the blinkers are on red.” This statement is strikingly similar to one in the 9/11 Commission Report attributed to then-CIA Director George Tenet, who said that in July 2001 “the system was blinking red.”

While an examination of the current threat situation in France is interesting, it is equally interesting to observe the way that the French are handling their threat warnings in the media.

The Threat Environment in France

While its neighbors such as Spain and the United Kingdom have suffered bloody attacks since 9/11, the French so far apparently have been spared — although there are some who suspect the yet-unsolved June 2009 crash of Air France Flight 447 may have resulted from foul play, along with the explosion at the AZF fertilizer plant in September 2001.

France has long been squarely in the crosshairs of jihadist groups such as AQIM. This is due not only to its former colonial involvement in North Africa but also to its continued support of governments in countries like Morocco, Algeria and Tunisia deemed un-Islamic by jihadists. It is also due to France’s military commitment in Afghanistan. Moreover, on the domestic side, France has a significant Muslim minority largely segregated in slums known in French as “banlieues” outside France’s major cities. A significant proportion of the young Muslim men who live in these areas are unemployed and disaffected. This disaffection has been displayed periodically in the form of large-scale riots such as those in October 2005 and November 2007, both of which resulted in massive property destruction and produced the worst civil unrest in France since the late 1960s. While not all those involved in the riots were Muslims, Muslims did play a significant and visible role in them.

Moves by the French government such as the burqa ban have stoked these tensions and feelings of anger and alienation. The ban, like the 2004 ban against headscarves in French schools, angered not only jihadists but also some mainstream Muslims in France and beyond.

Still, other than a minor bombing outside the the Indonesian Embassy in Paris in October 2004, France has seemingly been spared the type of attacks seen in Madrid in March 2004 and London in July 2005. And this is in spite of the fact that France has had to deal with Islamist militants for far longer than its neighbors. Algerian Islamist militants staged a series of attacks involving gas canisters filled with nails and bolts on the Paris subway system in 1995 and 1996, and during the 1980s France experienced a rash of terrorist attacks. In 1981 and 1982, a group known as the Lebanese Armed Revolutionary Faction attacked a series of diplomatic and military targets in several French cities. Algerian militants also hijacked an Air France flight in December 1994, a situation resolved when personnel from the French Groupe d’Intervention de la Gendarmerie Nationale (GIGN) stormed the aircraft in Marseilles and killed all four hijackers.

“Shoe Bomber” Richard Reid, who is serving a life sentence in the United States for trying to blow up a Paris-to-Miami flight with an explosives-stuffed shoe in December 2001, staged his attack out of France.

In 2001, French authorities broke up a French-Algerian terrorist cell planning to attack the U.S. Embassy in Paris. The six militants, some of whom French authorities had linked to terrorist training camps in Afghanistan, were convicted and sentenced to lengthy prison terms.

Also in 2001, Algerian extremists were convicted in connection with an aborted plot to attack a Christmas market at Strasbourg Cathedral on New Year’s Eve 2000.

In January 2005, French police arrested a cell of alleged Chechen and Algerian militants, charging members with plotting terrorist attacks in Western Europe. According to French authorities, the group planned attacks against government and Jewish targets in the United Kingdom as well as against Russian diplomatic and business targets in Western and Central Europe. Other targets included tourist attractions and crowds in the United Kingdom and France and French train stations.

More recently, in October 2009, French particle physicist Adlene Hicheur and his brother, Halim, who holds a Ph.D. in physiology and biomechanics, were arrested and charged with helping AQIM plan terrorist attacks in France.

In the final analysis, France is clearly overdue for a successful jihadist attack, and has been overdue for several years now. Perhaps the only thing that has spared the country has been a combination of proactive, skillful police and intelligence work — the kind that resulted in the thwarted attempts discussed above — and a little bit of luck.

Alerts

France has a national security alert system called the Vigipirate, which has four levels:

• Yellow, which means there is an uncertain threat.
• Orange, which signifies there is a plausible threat.
• Red, which signals a highly probable threat.
• Scarlet, which indicates a certain or known threat.

The Vigipirate level has been set at red since the aftermath of the July 2005 London bombings. This level is probably justified given that France is overdue for an attack, and French authorities undoubtedly have been busy investigating a large number of potential threats since the decision was made to raise the level to red. Still, as we have long discussed, this type of warning system has a tendency to get some attention when the levels are initially raised, but after five years of living at level red, French citizens are undoubtedly experiencing some degree of alert fatigue — and this is why Squarcini’s recent statements are so interesting. Apparently, he does not have the type of hard intelligence required to raise the threat level to scarlet — or perhaps the French government does not want to run the political risk of the backlash to the restrictive security measures they would have to institute if they raised the level. Such measures could include dramatically increasing security personnel and checkpoints and closing certain metro stops, train stations and airports, all things that could be incredibly disruptive.

Generally speaking, a figure like Squarcini would not provide the type of warnings he has recently shared in the press if his service had a firm grasp on the suspects behind the plot(s) about which he is concerned. For example, the FBI felt it had good coverage of groups plotting attacks in some of the recent thwarted plots in the United States, including the group arrested in May 2009 and charged with plotting to bomb two Jewish targets in the Bronx and shoot down a military aircraft at an Air National Guard base. In such a case, the director of the FBI did not feel the need to alert the public to the threat; he believed his agents had everything under control. Therefore, that Squarcini is providing this warning indicates his service does not have a handle on the threat or threats.

Information about a pending threat is not released to the public lightly, because such information could well compromise the source of the intelligence and endanger the investigation into the people behind the plot. This would only be done in situations where one has little or no control over the potential threat. There are numerous factors that would influence the decision to release such information.

Perhaps one of the first is that in a democracy, where public officials and their parties can be held responsible for failure to prevent an attack — as the Aznar government in Spain was following the Madrid train bombings — information pertaining to pending threats may also be released to protect governments from future liability. Following every major attack in a democratic nation, there is always an investigation that seeks to determine who knew what about the threat and when. Making threat information public can spare politicians from falling victim to a witch hunt.

Alternatively, some suggest that French authorities are being pressured to make such warnings to distract the public from domestic problems and Sarkozy’s low popularity. Many also believe the French government has been using its campaign against the Roma as such a distraction. Sarkozy, widely perceived as law-and-order oriented and tough on crime and terrorism, is indeed struggling politically. While the current warnings may provide such a beneficial distraction for Sarkozy, it is our assessment that the terrorist threat to France is very real, and is not being fabricated for political purposes.

Warnings also can be issued in an effort to pre-empt an attack. In cases in which authorities have intelligence that a plot is in the works, but insufficient information to identify the plotters or make arrests, announcing that a plot has been uncovered and security has been increased is seen as a way to discourage a planned attack. With the devolution of the jihadist threat from one based upon a central al Qaeda group to one based upon regional franchises, small cells and lone wolves, it is more difficult to gather intelligence that indicates the existence of these diverse actors, much less information pertaining to their intent and capabilities. In such a murky environment, threat information is often incomplete at best.

Whatever Squarcini’s motive, his warning should serve to shake the French public out of the alert fatigue associated with spending five years at the red level. This should cause the public (and cops on the beat) to increase their situational awareness and report suspicious behavior. The suspicious package seen at the Gare Saint-Lazare on Monday may well have been reported as a result of this increased awareness.

As the jihadist threat becomes almost as diffuse as the criminal threat, ordinary citizens who practice good situational awareness are an increasingly important national security resource — a complex network of eyeballs and brains that Squarcini may have been attempting to activate with his warning. With the burqa ban scheduled to begin next spring, French troops in Afghanistan and the ongoing conflict with AQIM, the threats are likely to continue for the near term — meaning France will remain on alert.

Reprinting or republication of this report on websites is authorized by prominently displaying the following sentence, including the hyperlink to STRATFOR, at the beginning or end of the report.

“Terror Threats and Alerts in France is republished with permission of STRATFOR.”

Read more: Terror Threats and Alerts in France | STRATFOR 

Category: Commentary, National News, National Security, Wall Street, World News | No Comments »
Tags: France terror alerts, France terror threats, stratfor

Posted By thestatedtruth.com on September 29, 2010

Money flows have shown limited effects on markets recently. The Government and trading robots are now in total control.  This unusual minimal negative effect would not have happened in the 1970-2000 markets.

 

ICI has just reported that in the week ended September 22, domestic equity mutual funds saw a 21st sequential outflow of $2.5 billion, bringing the total Year To Date to over $70 billion. and $16 billion worth in September   Also, according to ICI’s latest flow Trend tracker, total cash at mutual funds has just barely budged in August, creeping up to 3.5% from 3.4% in July, and 4% a year earlier.   The annual redemptions from stock funds, which as of August 2010 have hit a multi-year high of 25.8%, a number that has risen progressively from the 23.6% a year earlier.

Cumulative flows:

 

Category: Charts and Graphs, Commentary, Economy, National News, Wall Street | No Comments »
Tags: mutual fund outflows, stockm market outflows

Posted By thestatedtruth.com on September 29, 2010

People with a credit score below 620 who want a loan were unlikely to receive even one quote, according to real-estate web site Zillow.com, even if they offered a down payment of 15%-25% for a home.  Zillow notes that 29% of Americans have a credit score this low, according to data provided by myFICO.com.

“Today’s tighter credit is a predictable response by banks after the foreclosure crisis, but also keeps a cap on housing demand.  This effects the greater housing market recovery,” said Zillow chief economist Stan Humphries.

And…..According to a new report from Pew Research,  Americans find themselves in a tough situation. Pew separates its respondents into two groups, one that “held its own” — 45%,  and another that “lost ground” — 55%.

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Wall Street | No Comments »
Tags: credit scores, FICA score

Posted By thestatedtruth.com on September 29, 2010

Thoughts from Art Cashin on the floor of The New York Stock Exchange

“The months of May and October have always broken hearts on Wall Street.  In fact when I studied under the Moose Head (at Eberlins) it was a frequent subject.  Prior to 1929 it was almost logical.  We were an agrarian society and huge chunks of money shifted from city banks to country banks (and vice versa) at planting time and harvest time.  The resulting temporary dislocations in bank assets caused spasms of tight money and down drafts in the stock market.  But after 1929 it kept happening even though we had more smokestacks than haystacks.  Additionally, the creation of the Federal Reserve in 1913 should have smoothed out any imbalances in money shifts.  Anyway it makes the debate interesting.”

This year we have to take seasonal patterns with a grain of salt that you would need a wheelbarrow to carry.  The Rosh Hashanah seasonality didn’t work.  The Autumnal Equinox seasonality didn’t work.  And, we’re on the mark to close out the strongest September since 1939.  Sometimes the groundhog strikes out.

Why the change this year you may ask…..It would apear that the government has much more control of the markets then it ever had before in the age of the new normal!

Category: Commentary, Economy, National News, Wall Street | No Comments »
Tags: art cashin, stock market, stocks

Posted By thestatedtruth.com on September 28, 2010

Category: Commentary, Economy, Interest Rates, Bonds, National News, Wall Street | No Comments »
Tags: bond defaut, muni bond default

Posted By thestatedtruth.com on September 28, 2010

September 28,2010

Stephen Ohlemacher

Associated Press     

WASHINGTON – A group of 47 House Democrats are telling party leaders they want to continue Bush-era tax cuts on investment income, breaking ranks with President Barack Obama and exposing divisions among Democrats over their party’s pre-election message about taxes.

The lawmakers, led by Rep. John Adler, D-N.J., have sent a letter to House Speaker Nancy Pelosi saying they strongly support extending the current tax rates on capital gains and dividends.

“Raising taxes on capital gains and dividends could discourage individuals and businesses from saving and investing,” said the letter, dated Friday and released Tuesday. “We urge you to maintain the current tax rate for both dividend and long-term capital gains taxes.”

Tax cuts enacted in 2003 set the top tax rate on capital gains and dividends at 15 percent. Those tax cuts expire at the end of the year, and Obama wants to let the top tax rate on capital gains and dividends increase to 20 percent for individuals making more than $200,000 and married couples making more than $250,000.

Democratic leaders in Congress had been pushing for a vote to extend middle-class tax cuts before lawmakers go home to campaign for the Nov. 2 congressional election. But action on the tax cuts was postponed until after the election when Democrats could not agree on how to proceed.

With no vote on the tax cuts scheduled before the election, Democrats are left writing letters to their leaders to publicize their positions.

Category: Commentary, Economy, National News, Retail, Wall Street | No Comments »
Tags: bush tax cuts, tax cuts

Posted By thestatedtruth.com on September 28, 2010

The Conference Board’s sentiment index declined to 48.5 this month, lower than the median forecast of economists surveyed by Bloomberg News and the weakest level since February, according to figures from the New York-based private research group today. In another report home prices cooled, hurt by a slump in sales following the end of a government tax incentive.

Household purchases, which account for about 70 percent of the world’s largest economy, may be constrained by a jobless rate this is projected to average more than 9 percent through 2011. 

The Conference Board’s measures of present conditions and expectations for the next six months both dropped, today’s report showed. Fewer respondents thought more jobs would become available and the share of those who expected incomes to rise fell to the lowest since February.

There is reason for consumers to worry about jobs. U.S. chief executive officers turned less optimistic in the third quarter as fewer projected sales and hiring will improve, a survey showed. The Business Roundtable’s economic outlook index fell for the first time since the beginning of 2009.

“The pace of recovery in output and employment has slowed in recent months,” Federal Reserve policy makers said in their statement last week after meeting on interest rates. “Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.”

More at: http://www.bloomberg.com/news/2010-09-28/u-s-consumer-confidence-declines-more-than-forecast-to-a-seven-month-low.html

Category: Commentary, Economy, Finance, National News, Real Estate, Wall Street, World News | No Comments »
Tags: sentiment index survey

Posted By thestatedtruth.com on September 28, 2010

For the first time in at least a century, the proportion of  U.S. adults between 25 and 34 who have never been married exceeded those who are married, according to data released Tuesday by the Census Bureau.

In 2009, the proportion of adults 25 to 34 who had never been married was 46.3%, compared to 44.9% for those who were married, this is a modern day first.

Category: Commentary, National News, Tid Bits, World News | No Comments »
Tags: marrage, proportion of married couples

Posted By thestatedtruth.com on September 27, 2010

Heightened Terror Threats In Europe

Category: Commentary, Commodities, Economy, Finance, Gold and Silver, National News, National Security, Oil and Nat Gas, Wall Street, World News | No Comments »
Tags: cia drones, national security, terror threat, unmanned drone aircraft

Posted By thestatedtruth.com on September 27, 2010

Los Angeles breaks heat record……Monday was the hottest day ever recorded in downtown L.A. as the weather station at USC hit the 113-degree mark, breaking the old all-time high of 112 set on June 26, 1990. It makes Monday the hottest day ever since records in downtown L.A. started being kept in 1877, said Stuart Seto of the National Weather Service, the record was impressive, “especially after such a cool summer.”

Category: National News, Weather | No Comments »
Tags: los angeles heat record, so california heat wave

Posted By thestatedtruth.com on September 27, 2010

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Outliers, Pensions and Retirement, Real Estate, Wall Street, World News | No Comments »
Tags: defaults, op-ed, Paul Krugman

Posted By thestatedtruth.com on September 26, 2010

Category: Commentary, Economy, Finance, National News, National Security, Technology, Wall Street | No Comments »
Tags: computer worm, cyber computer worm, cyber warfare

Posted By thestatedtruth.com on September 26, 2010

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest with any CTA, fund, or program mentioned here or elsewhere. Before seeking any advisor’s services or making an investment in a fund, investors must read and examine thoroughly the respective disclosure document or offering memorandum. Since these firms and Mauldin receive fees from the funds they recommend/market, they only recommend/market products with which they have been able to negotiate fee arrangements.

You have permission to publish this article electronically or in print as long as the following is included:

 

Category: Charts and Graphs, Commentary, Economy, Finance, Interest Rates, Bonds, National News, News Letters, Real Estate, Wall Street | 132 Comments »
Tags: newsletters, thoughts from the frontline, Wall Street

Posted By thestatedtruth.com on September 24, 2010

Two years after the financial crisis, the federal government has stepped in to stabilize a crucial part of the credit-union sector knocked down by losses on subprime mortgages. A summary of an article from the Wall Street Journal is reviewed below.

Regulators announced Friday a rescue of the nation’s wholesale credit unions, underpinned by a federal guarantee valued at $30 billion or more. Wholesale unions don’t deal with the general public but provide essential back-office services to thousands of other credit unions across the U.S.   The majority of retail credit unions are thought to be sound, but they are exposed to the losses through the industry’s insurance fund.

Friday’s moves include the seizure of three wholesale credit unions, plus an unusual plan by government officials to manage $50 billion of troubled assets inherited from failed institutions. To help fund the rescue, the National Credit Union Administration plans to issue $30 billion to $35 billion in government-guaranteed bonds, backed by the shaky mortgage-related assets.

Members United Corporate Federal Credit Union in Warrenville, Ill., Southwest Corporate Federal Credit Union of Plano, Texas, and Constitution Corporate Federal Credit Union, Wallingford, Conn., which had a total of $19.67 billion in assets as of July, were taken into conservatorship by federal regulators.

Losses on the mortgage-backed securities held by the five seized credit unions are expected by regulators to total about $15 billion. Wiping out the capital of the failed institutions will cover a chunk of those losses. But the remaining $7 billion to $9.2 billion eventually will be passed along to the nation’s 7,445 federally insured credit unions in the form of future assessments.

In an effort to minimize and spread out losses that must be absorbed by the credit-union industry, regulators said they will move all the risky securities into a good bank-bad bank structure. NCUA officials will manage the $50 billion portfolio, or “bad bank,” of the failed wholesale institutions.

Friday’s moves could deepen tensions between regulators and retail credit unions that withstood the financial crisis and resent having to bear financial costs caused by the mistakes of wholesale institutions.

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Real Estate, Wall Street | No Comments »
Tags: credit unions, major credit unions, wholesale credit unions

Posted By thestatedtruth.com on September 23, 2010

The cutoff for the Forbes 400 wealthiest americans list is back up to $1 billion after falling to $950 million last year, and on average they are down about 13% from the high mark a few years ago.

Bill Gates, the co-founder of Microsoft Corp., remains the richest American with estimated assets of $54 billion, according to Forbes magazine’s annual ranking of the 400 wealthiest Americans.

Warren Buffett, the chief executive officer of Berkshire Hathaway Inc., ranks second in the U.S. with $45 billion, according to the list published yesterday. Gates, 54, and Buffett, 80, were Nos. 1 and 2 last year.

The number of list members whose wealth declined this year is 85 compared with 314 in 2009, while wealth increased for 217 members. The total worth of the 400 rose by 8 percent to $1.37 trillion, still below the 2008 total of $1.57 trillion.

“They’ve recovered, but we’re still so far off from 2008,” Luisa Kroll, global wealth editor for Forbes, said in a telephone interview.

Facebook Inc. CEO Mark Zuckerberg, 26, who is tied for No. 35 on the list, saw his wealth jump 245 percent to $6.9 billion, the largest percentage increase of anyone on the list. “Very few are at an all-time high, with the exception of how phenomenally well Facebook is doing,” said Kroll, who is based in New York.

California has the most people on the list, with 83, followed by New York, with 64. Texas has 45 members and Florida has 26.

Sixteen new people joined the list this year, including Dustin Moskovitz, a co-founder of Facebook who left the social networking site in 2008. He has a net worth of $1.4 billion, tying him for No. 290. Moskovitz, 26, is the youngest person on the list.

The oldest is philanthropist David Rockefeller Sr., 95, who is tied for No. 153 with $2.4 billion.

Raj Rajaratnam, 53, founder of Galleon Group LLC, who is under indictment for insider trading and is due to go to trial next year, dropped off the list along with 33 others. Rajaratnam has denied the charges.

There are 42 women on the list, led by Christy Walton, 55, and 60-year-old Alice Walton, of the family that controls Wal- Mart Stores Inc. They rank Nos. 4 and 8. Jim Walton ranks seventh with $20.1 billion and S. Robson Walton is No. 9 with $19.7 billion.

New York City Mayor Michael Bloomberg is ranked 10th with $18 billion. Bloomberg, 68, is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.

The other members in the top 10 are Oracle Corp. CEO Larry Ellison, 66, at No. 3 with $27 billion. Charles Koch, the 74- year-old chairman and CEO of Koch Industries Inc., tied for fifth with his brother David Koch, 70, with $21.5 billion.

Talk-show host and television executive Oprah Winfrey, 56, is tied at No. 130 with $2.7 billion. Mark Cuban, the 52-year- old Dallas Mavericks owner is tied for No. 144 with $2.5 billion. Bill Gross, 66, who manages the world’s biggest bond fund at Pacific Investment Management Co., is tied at No. 170 with $2.1 billion. Meg Whitman, 54, the former EBay Inc. CEO who is running for California governor, has $1.2 billion, tying her for No. 332.

More at: http://www.bloomberg.com/news/2010-09-22/bill-gates-tops-forbes-400-ranking-of-richest-americans-with-54-billion.html

Category: Commentary, Economy, Inspirational, National News | No Comments »
Tags: american billionaires, americas wealthiest individuals, wealthiest americans

Posted By thestatedtruth.com on September 23, 2010

Three out of every five Americans are overweight. One in five are obese. Indeed, there are only two areas (one state, Colorado, and Washington DC) where obesity rates are under 20%.

Nearly three in four of us don’t get enough sleep.  Almost one third of us report having trouble falling asleep EVERY night. And almost half of us report that day-time sleepiness interferes with normal activities including work.

Category: Commentary, Economy, National News | No Comments »
Tags: interesting facts, tid bits

Posted By thestatedtruth.com on September 23, 2010

According to David Rosenberg of Gluskin Sheff:

• Wages & salaries are still down 3.7% from the prior peak;
• Corporate profits are still down 20% from the peak;
• Real GDP is still down 1.3% from the peak;
• Industrial production is still down 7.2% from the peak;
• Employment is still down 5.5% from the peak;
• Retail sales are still down 4.5% from the peak;
• Manufacturing orders are still down 22.1% from the peak;
• Manufacturing shipments are still down 12.5% from the peak;
• Exports are still down 9.2% from the peak;
• Housing starts are still down 63.5% from the peak;
• New home sales are still down 68.9% from the peak;
• Existing home sales are still down 41.2% from the peak;
• Non-residential construction is still down 35.7% from the peak.

Category: Commentary, Economy, National News, Personal Net Worth, Real Estate, Wall Street | No Comments »
Tags: economic facts, Economy

Posted By thestatedtruth.com on September 23, 2010

Is there a message to Congress in this!

House Republicans announced a governing agenda today that would cut federal spending, extend expiring tax cuts and repeal the Democrats’ health-care law.

The program was released by party leaders at a hardware store in Sterling, Virginia, as Republicans make their case to voters to retake the House majority in the Nov. 2 elections.

The first priority, according to Representative Mike Pence of Indiana, is the extension of Bush-era tax cuts.

“It’s the top of the list to get the economy moving again right now,” Pence said today on Bloomberg Television. “There would be almost nothing more important that Congress could do right now.” He called on House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid to take all of the proposals for extensions of 2001 and 2003 tax cuts to a vote.

Titled “A Pledge to America,” the plan is patterned after House Republicans’ “Contract with America” from 1994. Republicans unveiled the earlier plan six weeks before elections in which they gained the majority for the first time in 40 years. House Republican leader John Boehner of Ohio was an architect of the 1994 plan and the new version. Democrats regained the House majority in 2006.

“It’s a governing agenda that could be enacted tomorrow,” Boehner said at the event in Virginia. “These are the things the American people are demanding,” he said. “Republicans stand ready to get it done.”

http://www.bloomberg.com/news/2010-09-22/house-republican-plan-said-to-seek-health-law-repeal-new-jobs.html

Category: Commentary, Economy, Healthcare and Science, National News, Pensions and Retirement, Wall Street | No Comments »
Tags: healthcare, spending cuts, tax cuts

Posted By thestatedtruth.com on September 23, 2010

Category: Commentary, Economy, National News | No Comments »
Tags: economic growth, tax hikes, tax wealth

Posted By thestatedtruth.com on September 23, 2010

Sorry, But The Answer Of Too Much Debt Is Not More Debt

In Price Is Knowledge

If you told Rip van Bondtrader that gold had risen to a record during his decade-long slumber, he’d want to know what the inflation outlook was, and how badly he’d gotten killed on his bond investments. He’d be astonished to discover that he’s made a total return of about 8 percent since January on Treasuries maturing in more than a year.

“What makes the gold story so interesting is that bullion has so many different correlations — with inflation, with the dollar, with interest rates, with political uncertainty,” according to David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto. “This year, for example, gold has shifted from being a commodity toward being a currency — the classic role as a monetary metal that is no government’s liability.”

Gold may be screaming more about a general mistrust of the securities markets than about the prospect of rising prices. Rip, though, would be similarly horrified to see cotton trading near a 15-year high at more than $1 a pound, or wheat surging more than 30 percent in the past year, helping to drive a UBS/Bloomberg index of food prices up by about 28 percent. The official figures say inflation is dormant; the phrase “lies, damned lies and statistics” springs to mind.

Lots of Clever People Don’t Believe in Currencies

Even the majority of finance professionals who don’t see any need to back currencies with precious metals are haunted by the thought of the central bank printing presses whirring into action. And, with every nation in the world trying to export its way out of trouble, the beggar-thy-neighbor race to devalue currencies will only gather pace in the coming months.

Folk wisdom claims that bumble bees defy the laws of physics because their power-to-weight ratio should be insufficient to allow flight. Luckily, because the bees don’t know this, they happily take off, buzz around and land, buoyed by blissful ignorance. Similarly, no sane investor would ever buy a stock or a bond if they stopped to consider the inverted- pyramid mathematics of an ageing, death-resistant population, a slump in birthrates, and the New Normal of spectacularly low returns in a post-bubble environment.

How on Earth is society going to pay pensions to this growing army of old people? If granddad does what investment theory says he should and socks his nest egg (assuming he even has one) into the ultra safety of Treasuries, earning a record- low yield of less than 0.45 percent on two-year securities, how will he afford his medications? Many countries and companies are probably bankrupt once you account properly for their future obligations; some problems, though, are too big and too intractable and too downright scary for polite conversation.

The recent surge in the price of wheat as a summer-singed Russia banned exports should have been a sign that food security is a global tinderbox waiting to flare. Everyone has read the stories about Chinese officials wandering around Africa buying agricultural rights that last for decades; no-one wants to really consider the consequences of not being able to feed their kids.

While the West was tinkering with its crops to grow allegedly environmentally friendly fuel for our automobile obsession, the nation that takes the long view was snapping up long-term leases on the world’s bread boxes. In the not-too distant future, water rights may drive nations that currently share rivers.  They will divide into those geographically fortunate enough to be the source of those waterways, and those risking drought and deprivation.

The Inflationary Consequences of John Maynard Keynes

Inflation is always and everywhere a monetary phenomenon, according to Milton Friedman, who has been eclipsed in recent years by his chief competitor, John Maynard Keynes. Every bond investor suspects that chucking billions of dollars into the global economy builds a bed of kindling; nobody wants to shout “fire!” in a crowded trade.

The Answer to Too Much Debt Is Not More Debt

Lending to governments is not risk-free, whether that government is Argentina, Iceland, Ireland or the U.S. These days, when you buy government debt, you are taking on the credit risk of the global financial system because that is what the too-big-to-fail doctrine has saddled the world’s taxpayers with.

Category: Commentary, Commodities, Finance, Gold and Silver, National News, Pensions and Retirement, Personal Net Worth, Wall Street, World News | No Comments »
Tags: cotton, country debt, debt, Economy, gold, pensions, silver, too much debt

Posted By thestatedtruth.com on September 23, 2010

This May Be Just The Begining As The Entire World Slows!  It’s A Process…..And It Will Likely Take Time To Totally Unfold.

 

U.S. Jobless Claims Jump

The number of U.S. workers filing new claims for jobless benefits unexpectedly rose by 12,000 to 465,000 last week, as labor weakness persists.

Ireland  GDP
Drops Unexpectedly

Ireland had a surprise decline in its second-quarter gross domestic product.  This has created more concerns over Dublin’s ability to repay its debts without outside help.

Euro-Zone Output Heads South 

The euro zone’s private-sector output growth slowed sharply to a seven-month low in September and is on course to slow further in the fourth quarter. The Euro-zone purchasing managers’ indexes (PMI)  came in much weaker than anticipated at 53.8 this month down  from 56.2 in August, suggesting that the area’s economy is slowing down even more rapidly than had been forecast.

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Wall Street | No Comments »
Tags: economic slow down, world economic slow down

Posted By thestatedtruth.com on September 22, 2010

Category: Charts and Graphs, Commentary, Economy, Finance, National News, Pensions and Retirement, Personal Net Worth, Wall Street | No Comments »
Tags: equity outflows, mutual fund outflows, outflows

Posted By thestatedtruth.com on September 22, 2010

Next up….Currency evolved hyper inflation caused by the Fed’s actions to save the world, as the dollar becomes worth much less and commodities without debt attached go vertical (such as food, gold, silver, farm land etc.).   The only real question seems to be when, not if.

 In the U.S. we are trying to work through the legacy of accumulating lots of debt. Consider this lamentable fact: 14% of all residential mortgages are either in delinquency or foreclosure.

Commercial real estate loans are in a similar state of distress.

At the same time, US government spending is going vertical.  It’s the worst of all worlds!

Category: Charts and Graphs, Commentary, Economy, Finance, Interest Rates, Bonds, National News, Personal Net Worth, Real Estate, Wall Street | No Comments »
Tags: commercial real estate, defaults, Real Estate, spending rises

Posted By thestatedtruth.com on September 22, 2010

Talk about tough times out there, this shopping habit says it all.

Bloomberg:  Wal-Mart CEO

“I don’t need to tell you that our cus­tomer remains challenged…You need not go farther than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m. customers start to come in and shop, fill their grocery basket with ba­sic items – baby formula, milk, bread, eggs – and continue to shop and mill about the store until midnight when government electronic benefits cards get activated, and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and signifi­cantly higher.”     Walmart CFO

Category: Commentary, Economy, National News, Pensions and Retirement, Retail, Wall Street | No Comments »
Tags: entitlements, food stamps, retail, walmart

Posted By thestatedtruth.com on September 21, 2010

From Art Cashin on the floor of the New York Stock Exchange……….

China– Getting solid data out of China is never an easy task.  The problem raises constant questioning of the validity of any data.  That having been said, there are stunning numbers circulating on the real estate situation in China.

There are said to be over 35 million vacant residential units in China.  They are not vacant due to foreclosures.  They are vacant because the owners never moved in.  They are, it is said, protection against inflation.

This is possible, we are told, because there is no meaningful real estate tax in China.  So, instead of buying gold and such, folks buy a house or a condo.

Realizing this, the government is said to be considering the imposition of national real estate tax, maybe as early as next month.  We’ll watch this with interest.

Category: Commentary, Gold and Silver, National News, Real Estate, World News | No Comments »
Tags: china real estate

Posted By thestatedtruth.com on September 20, 2010

“An incredible 14% of the nearly 54 million first liens in the country are now either delinquent or in default” the Real Estate Channel’s Keith Jurow, observes. “To come up with a total for the shadow inventory, let’s first add the total number of loans in default to those delinquent 90 days or more since we know that these loans are headed for foreclosure or a short sale. That comes to 4.5 million properties. Based on the cure rate for loans delinquent at least 60 days, we will add 95% of those 60-day delinquencies. That is an additional 723,000 residences. For the same reason, we will add 70% of those delinquent for at least 30 days – 1.25 million properties.

“And, of course, let’s not forget the REOs that have not yet been placed on MLS listings by the bank servicers,” Jurow continues. “We’ll be conservative and estimate them at 500,000.

“Adding all of these together, we come up with a total of roughly 6.97 million residences which are almost certainly going to be thrown onto the resale market as distressed properties at some point in the not- too-distant future. This massive number of homes will put enormous downward pressure on sale prices. To believe that prices are firming now is to completely ignore this shadow inventory.

www.thedailyreckoning.com

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Real Estate, Wall Street | No Comments »
Tags: delinquent, foreclosures, Real Estate, shadow inventory

Posted By thestatedtruth.com on September 20, 2010

According to calculations from the Federal Reserve, household wealth tumbled a whopping $17 trillion during the crisis – or about 27%. Since the depths of the crisis, however, Americans have recovered about $5 trillion of household wealth. Only $12 trillion to go!

For perspective, $12 trillion is nearly equal to one year’s US GDP. It’s not easy recovering that much wealth…especially not when the recovery operation relies heavily upon the housing market. Residential real estate accounts for 32 percent of household net worth; stocks account for a much smaller percentage. So household wealth can’t do a whole lot of recovering without a recovery in housing…and that’s not happening yet.

www.thedailyreckoning.com

Category: Charts and Graphs, Commentary, Economy, National News, Pensions and Retirement, Personal Net Worth, Real Estate, Wall Street | No Comments »
Tags: household wealth, household worth, net worth, personal net worth

Posted By thestatedtruth.com on September 18, 2010

Category: Charts and Graphs, Commentary, National News, Pictures | 170 Comments »
Tags: largest countries by land mass