michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
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Post by michelle on Jun 8, 2007 7:23:25 GMT 4
HOW TO STOP THE NEW WORLD ORDERNote from Michelle:An older but relevant article which is good for a wakeup nudge. Ms. Veon gives very good advice indeed. Haven't most dug their own holes by out of control spending and in fact, allowed the golden handcuffs to be put on with outstretched arms [or rather, pocketbooks]? If you're new to reading here, you can go back through previous posts at Money Masters and Enslaved Taxpayers to learn much on our monetary system and the Federal Reserve [boo, hiss]. HOW TO STOP THE NEW WORLD ORDER By Joan Veon July 12, 2006 NewsWithViews.com For the last 13 years as I have covered global meetings and studied the ever shifting economic and political structure of this New World Order of ours, I have been very saddened to realize that we the people have absolutely no voice in government. Over and over again, the president passes executive orders that bypass Congress and if that was not bad enough, our elected representatives have determined that “they know better than you and me.” Most of the change that is occurring today is because elected officials have decided that we the people are not smart enough to understand and we are being bypassed by them. If that were not bad enough, they go along to get along instead of opposing presidential policy that is out of sync with the Constitution. Furthermore, we have seen the structure of government change as government assets are carved up and sold to the highest bidder through various privatization schemes. Then there is the co-managing of government by corporations and non-governmental organizations known as public-private partnerships. In fact the future structure of government is public-private partnerships. Just ask the people of New Orleans, just look at the Chicago Skyway and the Indiana Toll Road, just look at President Bushes space program of “Moon, Mars and Beyond.” Just look at the report by the Center for Strategic and International Studies on “Public Works, Public Wealth” which basically says government needs deeper pockets: corporations to the rescue! Can you imagine having to pay a toll to use any part of the road you now travel on? Guess again, corporations are about to fight for the right to convert our roadways to toll ways and for any part of infrastructure to be public-private partnership! What gold there is in “them there hills”! This is the tip of the iceberg. Government as we know it is changing as it gives away its power to the highest bidder. Just recently, Norway overthrew their Democratic Socialist government so they can privatize more of their state assets! What that means is that every time a public-private partnership is set up, representative government diminishes. Yes, that’s right. What will happen after all our assets have been divided up among the corporations? You and I will still be paying our taxes to keep the shell of government afloat so they can meet the United Nations Millennium Development Goals of reducing poverty in the world by 50% or to provide foreign aid to bribe various third-world governments in order to comply with the New World Order. Basically, the United States is becoming a feudalistic state. In medieval Europe, feudalism was a system in which the serfs were privileged to live on the estate of a duke or prince in order to be protected by him and his castle moat. In return, the serfs they gave a portion of their crops and paid a monthly wage for this opportunity. Just when I think we have no power, I saw Wall Street and the Federal Reserve reverse their steps last week, and realized WE THE PEOPLE HAVE POWER—IT IS THE ONLY POWER THE MONEY MONSTERS UNDERSTAND: CONSUMER SPENDING! In order to understand our power OVER THE NEW WORLD ORDER, we must understand the present economic system that has come into being. There are four components: the Markets, Capitalism, the Federal Reserve, and a paper-monetary system. The MARKETS Last week, we saw a classic case of how Wall Street and the Federal Reserve needing to save the economy from you and me. All of a sudden, it was announced on September 11 that the oil and gold market rise was over. That same day, CNBC’s Larry Kramer forecasted that oil will never go back to $75bbl, and that it is time to buy drug stocks. The price of gas at the pump began to drop and according to CNBC the next day, “Consumers are feeling better, more secure, and richer over lower energy.” CNBC then went on to show SUV’s and tell us, “Maybe it is time to buy an SUV.” We were then told that GM and Ford are going to lay off and close plants. Ford announced they will no longer manufacturer the gas-guzzling SUV which has been the favorite of Americans for the past 10 years. Between higher interest rates, growing consumer debt spurred on by lower interest rates, and $75bbl. oil, Wall Street changed its tune. In fact they did a little dance. Here and there we have been told that the housing market is slowing down. Some of America’s largest homebuilders now have one year’s supply of new homes. First Toll Brothers, now KB Homes. The housing markets in California, Nevada and Florida have slowed tremendously in light of higher mortgage rates and the Fed’s determination to fight the same inflation they have created. Wall Street would have us believe that the reason for oil dropping from $75bbl to $60 bbl, almost overnight, is a result of the new oil reserve found in the Gulf, even though it will take 7-10 years to bring it on line. The real truth is they are in trouble. CAPITALISM As a result of my experience as an investment professional, I determined several years ago that capitalism is an “ism” like socialism, Fabian socialism, communism, and Marxism. The nature of capitalism is that it has to have new markets, new products, and new customers constantly and continuously, otherwise it will fall and the market will drop and the economy will go into a recession or depression. Capitalism needs constant turnover over money. How fast money changes hands will determine how strong demand is for a product. Capitalism, therefore, is like the game of Pac Man. In that game, the winning goal is to get the Pac Man to eat as much of its enemy before it is eaten, in other words, survival of the fittest. In this regard, Marx was right. Another thing about capitalism, a famous economist by the name of Joseph Schumpeter wrote a book in 1942 by the name of Capitalism, Socialism and Democracy in which he said “In dealing with capitalism, we are dealing with an evolutionary process…capitalism is a form of economic change and not only never is, but never can be stationary.” There it is. Capitalism must have a new product, a new consumer, and a new market. Currently the SUV’s have tanked as a result of the high cost of energy. Look at the prospects for auto companies: sell a new, innovative fuel efficient car to all those families who have SUVs!!! There will be pain for both the company which needs to retool and downsize, and for the family which will now get a greatly reduced trade-in for their gas-guzzler. But for the economy, a new demand has been created that will stimulate it—for a while. Basically this benefit also has a negative. The downside of capitalism is seen in the fact that capitalism over produces. Right now both GM and Ford have a huge inventory of the old gas guzzling models and not enough of the new efficient models. Dealers also have too many SUVs which they will end up taking a loss since there is no longer the demand for the big one. You see, capitalism cannot determine how long the market will demand a particular product or sometimes the variable that will change the demand. The same is true with home builders. With 45 year low interest rates, they could not build them fast enough. Now with higher mortgage rates, there is about a year’s supply of inventory. THE FEDERAL RESERVE The Federal Reserve is a private corporation that was voted the job of managing the monetary system of the United States in 1913 by a quorum of insider legislators who waited for their opposition to go home for the Christmas holidays on December 24 at 11:45 p.m. Basically the Federal Reserve is not federal nor does it have reserves. The truth is that they create money out of thin air and then they charge the U.S. government for borrowing it at “current” interest rates. All you have to do is take a look at the paper money in your wallet. It is a “Federal Reserve Note—This note is legal tender for all debts, public and private.” The Federal Reserve is not the U.S. Treasury. It is a central bank or private corporation controlled by its owners who are private. The Federal Reserve does not issue an annual report nor does it pay taxes on their taxable income. President James A. Garfield said in 1881 that “Whoever controls the volume of money in our country is absolute master of all industry and commerce…and when you realize that the entire system is very easily controlled by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” Dr. Carroll Quigley, Bill Clinton’s mentor at Georgetown University wrote about the purpose of central banks in his book, Tragedy and Hope: [T]he powers of financial capitalism had another far-reaching aim, nothing less than to Create a world system of financial control in private hands able to dominate the political system of each country and economy of the world has a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements. Perhaps what we have seen happen in the last few weeks is the change in market cycles that benefit those in control of creating them. After the crash of the NASDAQ in which $7T changed hands from those who “bought and held” to those who sold, the Federal Reserve dropped interest rates to 45 year lows to stimulate the economy. In early 2005, they began to increase interest rates from 1% to its current rate of 5 ¼%. In doing so, they have changed the economic climate for homes. As a result of easy credit, is the consumer tapped out and not able to buy more which is what the capitalistic system needs? PAPER MONEY SYSTEM In the United States, taking the dollar off the gold standard occurred in two steps: In 1933, Roosevelt confiscated all gold bullion held by private individuals but he allowed foreign countries who had gold dollar certificates to cash them in at the “gold window.” Then in 1971, President Nixon closed the gold window and refused to convert a foreign country’s demand for gold by using the gold backed dollars. At that time, the world system decided to join the U.S. and use a fiat monetary system of plain paper. This unaccountable system of finance benefits only the central banks of the world. Governments can borrow, the central banks can print and charge interest on higher and higher governmental debts. Dr. Carroll Quigley wrote in Tragedy and Hope, When a currency is off the gold standard, fluctuation of exchange [which is then created], can go on indefinitely. The unbalance of international payments is worked out by a shift in exchange rates. The bottom line is the dollar has dropped in value since 1971 by over 70%. Why? Our government deficits escalated to over $11T at this time. Furthermore, in a paper monetary system, usury becomes the order of the day. For Americans, we have seen directly what usury is. In 1980, our government passed the Monetary De-Regulation Act in which they removed ceilings and floors on interest banks had to pay and charge on savings. Bankers can now pay the “going” rate of interest rather than a minimum amount. As an example, on savings accounts banks are paying ¾ of 1% while charging up to 9% on auto loans and 8.25% on second mortgages, besides 18-35% on credit cards. Is this fair? No. Time to stop it. The bottom line is that Wall Street and our central bank made a huge mistake by raising interest rates at the same time when energy was going up. What they now know is that the power of the consumer is gone—or is it? They are not able to put gas in their SUVs and they are not buying new ones. Furthermore, they cannot afford a new home which has doubled in price as a result of 45 year low interest rates. In other words, there is very high inventory of SUVs by all the auto dealers and the home builders. However this is GOOD NEWS BECAUSE IT IS THE CONSUMER WHO HAS SPOKEN. We have the power to bring the system which they created down. Let’s use their system to stop them. It is very simple: STOP BUYING AND STOP CHARGING!!! We have not been using our power properly. Instead, we have agreed to their terms and their system. The Consumer is over extended. While we may not be up to our eyeballs in debt, it is time to get out of their system. We can use their system to make demands to change their hold on us. They need you and me to constantly buy, to determine that we need to look like the magazine pictures of what is acceptable on any given day, they need you and me to prop up their monstrous capitalistic system by buying newer and bigger so they can earn more interest. They need you and me to march to their tune. IT IS TIME TO STOP AND TELL THEM TO MARCH TO OUR TUNE. All this without a bullet being fired. You know what they tell co-dependents. Get healed and then your marriage will change. We can change this evil, feudalistic system by not buying and not charging, emergencies excluded. This is what needs to be done: 1. Get financially well. If you have debt, stop buying until you pay OFF your current debts. If you need something new, start visiting the consignment shops. There are different level of consignment shops from Goodwill to high-ended clothing shops. 2. When you have finished paying off your credit cards, learn to live within your means. We have all been guilty of believing the beautiful advertisements that tell us we too can be beautiful with a new house, new car, new furniture, new kitchen, new shoes, new dress, new tools, etc. Joy comes from within. 3. For things you need, start going to flea markets, neighborhood garage sales, antique stores, and auctions. Read the “For sale” ads. The idea is NOT TO BUY IN THE DEPARTMENT STORES, but from one another. Create an alternative to their system. 4. When you send your credit card payment, write a note saying you can’t afford 18% to 35% and for that reason you are going to close your account. Tell MasterCard and Visa that you are not going to pay 18% any more. Keep one open for emergencies. 5. For Christmas, a retailer’s biggest opportunity to get people to buy, make your Christmas presents this year, next year, and the year after. 6. Start going to your county council meetings and vote down new spending appropriations. The answer is NO to further economic projects that will increase our debt. Tell them NO to usurious interest rates. NO to new bond projects that will increase our burden of debt for many years to come. Vote out the high spenders who advocate “economic growth.” 7. Write to your Congressman and Senator and tell them to repeal the 1980 Monetary De-Regulation Act and return interest rates on credit cards to fair rates instead of Mafia level interest rates and while you are at it, tell them to repeal the Federal Reserve Act. 8. Tell your neighbors, spread the word. STOP BUYING AND STOP CHARGING. Let’s break their dysfunctional system © 2006 Joan Veon - All Rights Reserved -------------------------------------------------------------------------------- Joan Veon is a businesswoman and international reporter, having covered 75 Global meetings around the world in the last ten years. Please visit her website: www.womensgroup.org. To get a copy of her WTO report, send $10.00 to The Women's International Media Group, Inc. P. O. Box 77, Middletown, MD 21769. For an information packet, please call 301-371-0541
E-Mail: jveon@adelphia.netSource: Source: www.newswithviews.com/Veon/joan40.ht
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michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
Posts: 2,100
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Post by michelle on Jul 23, 2007 7:42:53 GMT 4
It’s Official: The Crash of the U.S. Economy has begunAs if we don't have enough bad news here in the US, I regret to inform you of the following. I've been holding off on the economy reporting because of recent news on Bush's Executive Order, criminalizing all of us if we speak out against the adminstration and setting the stage for martial law. [There has also been some funky talk between the US and China, where the US has asked China to bail us out of the housing fiasco we're in, but I'll look for that later and post it.]
This article is eight days old, 3 days before Bush's EO was announced. In this article, please note the following under one of the author's 4 possible future scenarios; creepy, isn't it?:Maybe we’ll finally have a revolution either from the right or the center involving martial law, suspension of the Bill of Rights, etc., combined with some kind of military or forced-labor dictatorship. We’re halfway there anyway. Forget about a revolution from the left. They wouldn’t want to make anyone mad at them for being too radical.I would also refer you to his comment on presidential candidates, Dennis Kucinich and Ron Paul concerning their stance against the Federal Reserve. If you haven't visited their threads here, please check them out under Latest News on the home board......Michelle It’s Official: The Crash of the U.S. Economy has begunby Richard C. Cook Global Research, June 14, 2007 It’s official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite. Pearlstein’s column was titled, “The Takeover Boom, About to Go Bust” and concerned the extraordinary amount of debt vs. operating profits of companies currently subject to leveraged buyouts. In language remarkably alarmist for the usually ultra-bland pages of the Post, Pearlstein wrote, “It is impossible to predict when the magic moment will be reached and everyone finally realizes that the prices being paid for these companies, and the debt taken on to support the acquisitions, are unsustainable. When that happens, it won't be pretty. Across the board, stock prices and company valuations will fall. Banks will announce painful write-offs, some hedge funds will close their doors, and private-equity funds will report disappointing returns. Some companies will be forced into bankruptcy or restructuring.”Further, “Falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes or reduce services, as revenue from capital gains taxes declines. And the combination of reduced wealth and higher interest rates will finally cause consumers to pull back on their debt-financed consumption. It happened after the junk-bond and savings-and-loan collapses of the late 1980s. It happened after the tech and telecom bust of the late '90s. And it will happen this time.” Samuelson’s column, “The End of Cheap Credit,” left the door slightly ajar in case the collapse is not quite so severe. He wrote of rising interest rates, “As the price of money increases, borrowing and the economy might weaken. The deep slump in housing could worsen. We could also discover that the long period of cheap credit has left a nasty residue.” Other writers with less prestigious platforms than the Post have been talking about an approaching financial bust for a couple of years. Among them has been economist Michael Hudson, author of an article on the housing bubble titled, “The New Road to Serfdom” in the May 2006 issue of Harper’s. Hudson has been speaking in interviews of a “break in the chain” of debt payments leading to a “long, slow economic crash,” with “asset deflation,” “mass defaults on mortgages,” and a “huge asset grab” by the rich who are able to protect their cash through money laundering and hedging with foreign currency bonds. Among those poised to profit from the crash is the Carlyle Group, the equity fund that includes the Bush family and other high-profile investors with insider government connections. A January 2007 memorandum to company managers from founding partner William E. Conway, Jr., recently appeared which stated that, when the current “liquidity environment”—i.e., cheap credit—ends, “the buying opportunity will be a once in a lifetime chance.”The fact that the crash is now being announced by the Post shows that it is a done deal. The Bilderbergers, or whomever it is that the Post reports to, have decided. It lets everyone know loud and clear that it’s time to batten down the hatches, run for cover, lay in two years of canned food, shield your assets, whatever. Those left holding the bag will be the ordinary people whose assets are loaded with debt, such as tens of millions of mortgagees, millions of young people with student loans that can never be written off due to the “reformed” 2005 bankruptcy law, or vast numbers of workers with 401(k)s or other pension plans that are locked into the stock market. In other words, it sounds eerily like 2000-2002 except maybe on a much larger scale. Then it was “only” the tenth worse bear market in history, but over a trillion dollars in wealth simply vanished. What makes today’s instance seem particularly unfair is that the preceding recovery that is now ending—the “jobless” one—was so anemic. Neither Perlstein nor Samuelson gets to the bottom of the crisis, though they, like Conway of the Carlyle Group, point to the end of cheap credit. But interest rates are set by people who run central banks and financial institutions. They may be influenced by “the market,” but the market is controlled by people with money who want to maximize their profits. Key to what is going on is that the Federal Reserve is refusing to follow the pattern set during the long reign of Fed Chairman Alan Greenspan in responding to shaky economic trends with lengthy infusions of credit as he did during the dot.com bubble of the 1990s and the housing bubble of 2001-2005. This time around, Greenspan’s successor, Ben Bernanke, is sitting tight. With the economy teetering on the brink, the Fed is allowing rates to remain steady. The Fed claims their policy is due to the danger of rising “core inflation.” But this cannot be true. The biggest consumer item, houses and real estate, is tanking. Officially, unemployment is low, but mainly due to low-paying service jobs. Commodities have edged up, including food and gasoline, but that’s no reason to allow the entire national economy to be submerged. So what is really happening? Actually, it’s simple. The difference today is that China and other large investors from abroad, including Middle Eastern oil magnates, are telling the U.S. that if interest rates come down, thereby devaluing their already-sliding dollar portfolios further, they will no longer support with their investments the bloated U.S. trade and fiscal deficits. Of course we got ourselves into this quandary by shipping our manufacturing to China and other cheap-labor markets over the last generation. “Dollar hegemony” is backfiring. In fact China is using its American dollars to replace the International Monetary Fund as a lender to developing nations in Africa and elsewhere. As an additional insult, China now may be dictating a new generation of economic decline for the American people who are forced to buy their products at Wal-Mart by maxing out what is left of our available credit card debt. About a year ago, a former Reagan Treasury official, now a well-known cable TV commentator, said that China had become “America’s bank” and commented approvingly that “it’s cheaper to print money than make cars anymore.” Ha ha. It is truly staggering that none of the “mainstream” political candidates from either party has attacked this subject on the campaign trail. All are heavily funded by the financier elite who will profit no matter how bad the U.S. economy suffers. Every candidate except Ron Paul and Dennis Kucinich treats the Federal Reserve like the fifth graven image on Mount Rushmore. And even the so-called progressives are silent. The weekend before the Perlstein/ Samuelson articles came out, there was a huge progressive conference in Washington, D.C., called “Taming the Corporate Giant.” Not a single session was devoted to financial issues. What is likely to happen? I’d suggest four possible scenarios:Acceptance by the U.S. population of diminished prosperity and a declining role in the world. Grin and bear it. Live with your parents into your 40s instead of your 30s. Work two or three part-time jobs on the side, if you can find them. Die young if you lose your health care. Declare bankruptcy if you can, or just walk away from your debts until they bring back debtor’s prison like they’ve done in Dubai. Meanwhile, China buys more and more U.S. properties, homes, and businesses, as economists close to the Federal Reserve have suggested. If you’re an enterprising illegal immigrant, have fun continuing to jack up the underground economy, avoid business licenses and taxes, and rent out group houses to your friends. [So many already here!!!...M]Times of economic crisis produce international tension and politicians tend to go to war rather than face the economic music. The classic example is the worldwide depression of the 1930s leading to World War II. Conditions in the coming years could be as bad as they were then. We could have a really big war if the U.S. decides once and for all to haul off and let China, or whomever, have it in the chops. If they don’t want our dollars or our debt any more, how about a few nukes? Maybe we’ll finally have a revolution either from the right or the center involving martial law, suspension of the Bill of Rights, etc., combined with some kind of military or forced-labor dictatorship. We’re halfway there anyway. Forget about a revolution from the left. They wouldn’t want to make anyone mad at them for being too radical. Could there ever be a real try at reform, maybe even an attempt just to get back to the New Deal? Since the causes of the crisis are monetary, so would be the solutions. The first step would be for the Federal Reserve System to be abolished as a bank of issue and a transformation of the nation’s credit system into a genuine public utility by the federal government. This way we could rebuild our manufacturing and public infrastructure and develop an income assurance policy that would benefit everyone. The latter is the only sensible solution. There are monetary reformers who know how to do it if anyone gave them half a chance. Richard C. Cook is the author of “Challenger Revealed: An Insider’s Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age.” A retired federal analyst, his career included work with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, and NASA, followed by twenty-one years with the U.S. Treasury Department. He is now a Washington, D.C.-based writer and consultant. His book “We Hold These Truths: The Hope of Monetary Reform,” will be published later this year. His website is at www.richardccook.com.
Richard C. Cook is a frequent contributor to Global Research. Global Research Articles by Richard C. Cook Source:www.globalresearch.ca/index.php?context=va&aid=5964
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michelle
Administrator
I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
Posts: 2,100
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Post by michelle on Dec 14, 2007 8:22:17 GMT 4
The coming recession: Not an accident The Rich Get Richer Part 1 of 2Note: In its report “State of New York City’s Housing and Neighborhoods 2006” [ www.furmancenter.nyu.edu/SOC2006.htm ], The Furman Center for Real Estate and Urban Policy offers statistics documenting the vast gap between the Wall Street’s bankers and the city’s poor in terms of the housing market.
For example, in the trendy Manhattan districts of Greenwich Village, Soho and Chelsea, as well as in the more traditional quarter of wealth and privilege, the Upper East Side, the percentage of home purchases and refinancing loans that are subprime amount to only about 1 percent, and foreclosures are less than 1 in 1,000.
In contrast, in the South Bronx—the Mott Heaven-Melrose district—where the median household income stands at $15,500, home purchases with subprime loans have grown from 7.1 percent to 40.9 percent between 2002 and 2006; refinancing with subprime loans has escalated from 29.4 percent to 42.4 percent. The home foreclosure rate here hit a high of 23.7 per 1,000 in 2005, which will soon be eclipsed by the current crisis.The coming recession: Not an accidentJames Clay Fuller Tuesday, December 04, 2007 Two things Americans need to realize now about the U.S. economy: First, the downward slide triggered by belated recognition of the subprime mortgage fiasco has a long way to go – and it's going. Recession is certain, and, despite the entire chorus of economists, bankers and government officials to the contrary, a depression such as that of the 1930s is possible. The mortgage mess was the catalyst, but it's only one of many serious problems lurking in the American economy. Second, the present flop and the agonies yet to come are not the result of what honestly could be called an accident or even simple failure to recognize the dangers inherent in the recklessness of the mortgage lenders and their top-of-the-ladder enablers. In fact, though our corporate “news” media didn't tell us so, quite a few people predicted the mortgage collapse. To a degree that would surprise the vast majority of the population, this unholy mess fits into the redesign of the United States drawn by the royalist neocons who hold sway over our economy and our government. (No, not George W. Bush, who hasn't the intellect to design a simple model train layout; I'm talking about the largely faceless people who've manipulated the economy and distorted the government under his nominal leadership.)In plain language, we, the people, are in for a screwing the likes of which hasn't been seen since the 1930s. The very rich will gain enormously, even more than they have since the beginning of the Bush regime. Barring an unlikely recognition very soon of what's going on, and even unlikelier effective action to head the thieves off at the pass, this is going to get ugly to a degree most people can't yet imagine and it will last...for decades, maybe until mankind chokes to death in its own offal. Folks who bother to read this probably already understand the basics of the subprime mortgage collapse: With government regulation of financial institutions –- like almost all government regulation under Bushcheney -– deliberately shrunk to near invisibility, a bunch of hotshot “innovators” hustled millions of people into mortgages they couldn't afford. They lied, they cheated, they conned. And now, of course, the political right says it's the fault of the victims because they didn't understand the terms of the loans and never mind that the loan initiators lied through their teeth. Big “safe” entities, including almost all of the country's high profile financial institutions, bought the loans –- junk that the public was told was absolutely Grade A investment material. The people who originated the loans, having sold one batch, went out and hustled up some more suckers. They did it over and over. The geniuses of our financial institutions kept buying the certain-to-default mortgages, right up until this fall, even though by then tens of thousands of armchair economists such as myself knew beyond doubt that the game was about to go bust. Inevitably, the folks at the bottom of this manure pile, the borrowers, began to default as unrealistically low initial interest rates suddenly jumped to loan-shark levels. The big institutions that bought the bad paper began taking losses, then more losses and still more losses. Their profits behaved like kids on a water slide, but with a lot less laughter. Whooosh. Splash. The effects of such events spread, of course. The big money outfits were hurt as borrowers quit making payments and foreclosures soared. The stocks of the financial institutions have taken major hits, which means their stockholders also were hurt as share prices dropped. The institutions also got distrustful of each other –- hey, the other guy maybe has even more bad loans than you do -- and became reluctant to make loans to each other, which is what the business pages mean when they talk about “loss of liquidity.” If an institution can't borrow, it can't loan. If it can't loan, other businesses can't borrow, and so it goes. Expansion, growth, even day to day operation in some cases, becomes difficult or impossible.Well, most of you know the rest of it. Even the happy talkers admit that more hundreds of thousands, and perhaps millions, of mortgages are going into foreclosure. That means more tightening of credit. It's a downward, self-sustaining spiral. A result not much talked about yet is the fact that as a result of the high numbers of mortgage foreclosures, with more to come, property values are falling throughout the country. That's more true in some places than others, but one report I saw within the past few days said the over-all value of residential property in the United States will be down by 7 percent, at minimum, by the end of next year. And that means that tax bases for cities, school districts, counties and other local governmental bodies fall. And that, in turn, means less property tax income for those governments –- less money for schools, less money for policing, less money for street and road maintenance and all the rest of it.
Under Bushcheney and often, as in Minnesota, under right wing governors and legislators, federal and state money for such expenditures already has been slashed to dangerous levels. That's why school districts across the country have been pushing referenda for increases in property tax levies.Business pages and Fox Republican News, and even less reliably right-wing news outfits, keep talking about how basically strong and resilient the American economy is, and how it can withstand this shock and go on to better things, and how a dollar plunging on international markets and manufacturing shifting to slave labor in poor countries really are good things. Two thirds of a page on last Sunday's New York Times was devoted to such phony reassurances. I have it right her beside me, with my notation at the top: "B.S. page." Just remember the people writing that fiction are the same people who've been telling us how great the economy is even as most people have seen real earnings fall and most of the country's wealth has shifted in just a few years to the richest five percent (or fewer) of Americans. Business Week, of all publications, recently ran an article admitting that “the American Dream,” of social and economic advancement is now essentially a myth. The article noted that, with a very few individual exceptions, the poor stay poor, or get poorer, the middle class is shrinking and the rich go on getting richer. Business Week didn't say so in so many words, but the plain fact is that the United States now is a more class-ridden, class-divided country than England, with all its lords and titled graduates of Eton. To refresh memories: Data from the Congressional Budget Office, confirmed by many economists, shows that between 1973 and 2000, the average real income of the lower 90 percent of Americans fell by 7 percent, while the income of the top 1 percent climbed by 148 percent. During the same period, the income of the top one tenth of 1 percent climbed by 343 percent. And the incomes of the top one hundredth of 1 percent grew by 599 percent. And experts agree the distortion of income distribution has accelerated since Bushcheney came to power in 2000.There also have been several reports recently showing that rather than continuing the upward social and economic mobility that began with Franklin Roosevelt's presidency, we have been going backwards in recent years. Our kids and grandkids, on average, will regress and be poorer and poorer from generation to generation if present trends continue. This all fits beautifully into the neocon plans for our country.
Repeat: It is not accidental.
And, no, that's not hyperbole nor paranoid fantasizing. It's in their writings and their speeches to right wing audiences.Something like the subprime mortgage mess simply had to happen once regulatory bodies were put into the hands of those who are supposed to be regulated, and the Bushcheney White House accomplished that more quickly and completely than any other Republican administration ever managed. Virtually every federal regulatory body now is headed by former lobbyists or lawyers for the industries they supposedly oversee, and once their stints are up, those people will go right back to their very highly paid industry jobs. With no regulation, and given the unbridled greed now flaunted at the top levels of American business, there was no way the bankers were going to let principle or even common sense slow down their grasping for quick profits in whatever dark corners they could reach. And so we have the mortgage mess. And, frankly m'dears, the neocons don't give a damn. Or, rather, they undoubtedly are toasting each other in the inner sancta of the Heritage Foundation and other such places. The very rich, the super rich, will take a few temporary losses in the looming recession (depression?), but as has happened throughout history, while you and I are being told that everything is going to be just fine, they're sheltering major portions of their wealth. Gold and other precious commodities? Shifting dollars to euros or other currencies? I don't know the specifics this time, but I do know my history. And as always happens in major economic downturns, the poor and the middle class lose a portion of their piece of the pie, and the rich get that portion. The “market share” of the rich grows, and the piece we have is smaller, spread more thinly. Even without a major recession, the distribution of wealth and income in this country has shifted rapidly and powerfully to the rich. Republican tax cuts have done nothing for the poor and very little for the middle class; the richest five percent get half of all of the tax cuts by dollar amount. In the 1970s, a corporate chief executive made, on average, 30 times the pay of the average corporate employee; today the CEO makes more than 300 times the income of the average employee. As the rest of us are squeezed in a tight, possibly desperately tight, economy, the rich will be in a position to buy up still more of the country's assets and to bleed us. Those who work for a living are at the mercy of employers when jobs are scarce. Now add to that picture continuing increases in medical costs while insurance availability continues to shrink. And factor in the disappearance of pension plans, quite possibly the deliberate destruction of social security. Consider the deliberate undercutting of organized labor by the U.S. government, begun under Ronald Reagan and continuing since. Definitely figure on further cuts in all sorts of “social programs” such as early childhood education, support for low-income housing, even general public education -- all targets of neocon hatred. Where does that leave us, the great majority? Either stand up and fight, howl at your political “representatives” and pound on their doors, and insist on real representation in government or stay silent and go out and buy knee pads while you can still afford them. posted by James @ 1:25 PM Source: www.jamesclayfuller.com/2007/12/recession-not-accident.html------------------------------------------------------------------------------------ Fear and greed: The financial crisis driving Bush’s subprime mortgage planBy Barry Grey 7 December 2007 The near-panic in financial circles that lies behind the Bush administration’s scheme to freeze some subprime mortgage interest rates is summed up in an article by Washington Post business columnist Steven Pearlstein published on Wednesday under the headline “It’s Not 1929, but It’s the Biggest Mess Since.” Pearlstein writes: “We are only at the beginning of the financial world coming to its senses after the bursting of the biggest credit bubble the world has seen. Everyone seems to acknowledge now that there will be lots of mortgage foreclosures and that house prices will fall nationally for the first time since the Great Depression. Some lenders and hedge funds have failed, while some banks have taken painful write-offs and fired executives. There’s even a growing recognition that a recession in on the horizon. “But let me assure you, you ain’t seen nothing yet.” He then notes that the same financial giants which originated, packaged and resold hundreds of billions of dollars in shaky subprime loans also “originated, packaged, rated and insured home-equity loans, commercial real estate loans, credit card loans and loans to finance corporate buyouts.” Having described the process by which high-interest loans to borrowers with weak credit were leveraged into a massive edifice of cheap credit—and fantastic profits for the banks, mortgage lenders and investment firms—Pearlstein outlines the way in which the collapse of the credit bubble is undermining the stability of the financial system. He continues: “If this sounds like a financial house of cards, that’s because it is. And it is about to come crashing down, with serious consequences not only for banks and investors but for the economy as a whole. “That is not just my opinion. It’s why banks are husbanding their cash and why the outstanding stock of bank loans and commercial paper is shrinking dramatically. “It is why Treasury officials are working overtime on schemes to stem the tide of mortgage foreclosures and provide a new vehicle to buy up CDO assets. “It’s why state and federal budget officials are anticipating sharp decreases in tax revenue next year. “And it is why the Federal Reserve is now willing to toss aside concerns about inflation, the dollar and bailing out Wall Street, and move aggressively to cut interest rates and pump additional funds directly into the banking system. “This may not be 1929. But it’s a good bet that it’s way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of the tech bubble in 2001.” Source: www.wsws.org/articles/2007/dec2007/side-d07.shtmlContinued....
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michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
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Post by michelle on Dec 14, 2007 8:23:26 GMT 4
...continued from previous post:The coming recession: Not an accident The Rich Get Richer Part 2 of 2Bush unveils subprime mortgage scheme to bail out banksBy Barry Grey 7 December 2007 The plan announced by President Bush Thursday to freeze interest rates on some subprime mortgage loans will do nothing to stave off foreclosure for the vast majority of families facing the loss of their homes in the coming months. Bush, flanked by Treasury Secretary Henry Paulson, Housing and Urban Development Secretary Alphonso Jackson, a Federal Reserve Board governor and other federal regulators, announced the plan at a White House press conference only hours after the Mortgage Bankers Association reported that the number of US homes in foreclosure rose to a record level in the third quarter, engulfing 1.7 percent of homes. The number of delinquent mortgages rose to 5.6 percent. Worked out between Treasury Secretary Henry Paulson and major Wall Street banks, mortgage lenders and servicers, and investment funds holding securities backed by subprime loans, the overarching aim of the Bush administration plan is to limit the losses suffered by financial giants from the meltdown of the US housing market and resulting credit crisis. It is estimated that 1.5 million adjustable-rate subprime mortgages, totaling some $400 billion, will reset to higher interest rates over the next 18 months, resulting in the foreclosure of hundreds of thousands of homes and further destabilizing some of the biggest US banks, mutual funds, insurance companies and hedge funds, which hold hundreds of billions in so-called “collateralized debt obligations” (CDOs) backed by bundles of subprime loans. The US housing meltdown has already forced such banking giants as Citigroup and Merrill Lynch to write off tens of billions of dollars in high-risk speculative investments linked to subprime mortgages. The collapse of these inflated assets has eroded confidence in the financial system and produced a credit crunch that has virtually halted US economic growth and threatens to plunge the American economy into a sharp recession. The crisis is poised to intensify as the subprime foreclosure rate, already at 10 percent, spirals higher when the bulk of interest rate resets take effect. It is the crisis on Wall Street, not concern for the plight of millions of families overwhelmed by debt, that has precipitated the intervention of the Bush administration. Under the administration plan, mortgage lenders will voluntarily freeze interest rates for a minority of subprime adjustable-rate borrowers for five years at the entry level—already several percentage points above the interest rates for conventional home loans. Only those subprime borrowers who have kept up with their payments and are deemed able to continue paying the “starter” rate, but unable to sustain the higher rate slated to kick in over the coming months, will be eligible for the freeze.
Subprime borrowers deemed able to pay the higher reset rate, and those considered unable to continue paying the initial, lower rate, will be excluded. This means that the vast majority of low- and middle-income homeowners struggling to meet their mortgage payments and hold onto their homes will receive no relief.Office of Thrift Supervision Director John Reich said earlier this week that the plan could help “tens of thousands” of homeowners—out of the hundreds of thousands, if not millions, who face being thrown onto the street. At the Thursday press conference, Paulson stressed, in response to a reporter’s question, that the Bush administration plan would merely “streamline” the process of mortgage adjustments already being carried out by mortgage lenders seeking to stanch their losses from failed home loans. The plan applies to loans made between January 1, 2005 and July 31, 2007 which are scheduled to reset between January 1, 2008 and July 31, 2010. That automatically excludes $85 billion in these mortgages that are resetting in the final quarter of 2007.Another aspect of the scheme is a speedup of refinancings through the Federal Housing Administration for subprime borrowers who have built up equity in their homes, and a loosening of regulations to allow state and local governments to issue tax-exempt bonds to fund refinancings. While this plan will do little to limit the social disaster facing working class families, communities blighted by vacant homes, and state and local governments deprived of real estate taxes, the politicians and bankers hope that it will be sufficient to stem the erosion of confidence in the credit system and buy time for Wall Street to avert a catastrophic collapse. It will have the immediate benefit of enabling the banks and investment houses to delay writing down billions in bad investments. Treasury Secretary Paulson first announced the plan on Monday at a housing forum sponsored by the Office of Thrift Supervision in Washington. Paulson’s terminology made clear the narrow parameters of the relief being offered to distressed homeowners. He spoke of avoiding “preventable” foreclosures and aiding “able” and “financially responsible” homeowners. Speaking of the most distressed subprime homeowners who have not been able to keep up with their “starter rate” payments and are therefore ineligible for the proposed rate freeze, he acknowledged that some would “become renters again”—meaning they would be forced out of their homes.At one point he read out a toll-free telephone number for struggling subprime borrowers to call, and then quipped that he doubted anyone in the forum audience would be calling the number—a joke that evoked guffaws from his listeners.
This aside was significant. It highlighted the fact that the government-business consortium, which calls itself “Hope Now Alliance,” is entirely a creature of the US financial oligarchy. Paulson himself was chairman and CEO of Goldman Sachs before becoming Bush’s treasury secretary in July of 2006. An assistant to John Ehrlichman in the Nixon administration, Paulson joined Goldman Sachs in 1974. His net worth is estimated at $700 million.
Those with whom Paulson, the Federal Reserve Board and other regulatory officials have been meeting to thrash out differences and reach agreement on the terms of the subprime scheme—top executives from Citigroup, JPMorgan Chase, Wells Fargo, Washington Mutual, Countrywide Financial, the American Securitization Forum—bear primary responsibility for the housing meltdown and widening economic slump, which were the inevitable outcome of their own reckless and shortsighted policies.
They all have a vested interest in shielding the financial establishment from the full consequences—including possible criminal sanctions—of years of rampant speculation and accounting manipulations that concealed the enormous levels of risk and inflated values behind the huge profits and staggering salaries reaped by Wall Street executives.Speculation and fraudBush, Paulson and company place the onus for home foreclosures on “irresponsible” borrowers, but the real estate and credit bubbles that have now burst, victimizing millions of working class and middle class families, were intimately bound up with fraudulent and predatory lending practices that were encouraged by the biggest US banks and investment houses. The New York Times reported on Thursday that Paulson’s former firm, Goldman Sachs, began unloading its mortgages and mortgage-backed securities late last year when subprime defaults began to soar. But the top investment bank continued to package and sell securities backed by subprime mortgages, marketing $6 billion worth of these securities in the first nine months of 2007. The Wall Street Journal on December 3 published a front-page analysis of the over $2.5 trillion in subprime loans made since 2000 showing that “as the number of subprime loans mushroomed, an increasing proportion of them went to people with credit scores high enough to often qualify for conventional loans with far better terms.” The study, carried out for the Journal by the San Francisco research firm First American LoanPerformance, said that 55 percent of all subprime loans in 2005, the peak year of the subprime boom, went to borrowers who met the qualifications for lower-interest conventional mortgages. The proportion rose even higher by the end of 2006, to 61 percent. The basic reason is that the mortgage industry rewarded brokers for persuading borrowers to take a loan with an interest rate higher than that for which the borrower qualified. “On average,” the Journal reported, “US mortgage brokers collected 1.88 percent of the loan amount for originating a subprime loan, compared to 1.48 percent for conforming [conventional] loans, according to Wholesale Access, a mortgage research firm.” Those who were hustled into taking a subprime adjustable-rate mortgage were assured that they would be able to refinance their loans before the reset rates—generally 30 percent higher—kicked in two or three years later because the market values of their homes would have significantly risen in the interim. But the collapse of the housing market and sharp decline in home prices has left many of these borrowers owing more than their homes are now worth. In addition to the financial crisis, politics figures into the administration’s show of concern for distressed homeowners. The economy and the social crisis are increasingly coming to the fore as an election issue according to opinion polls, and the two states with the highest foreclosure rates—Florida and Ohio—are considered battleground states in the 2008 presidential contest. The Democrats are likewise seeking to gain political advantage from the mushrooming foreclosure crisis. Senator Hillary Clinton, the front-runner for the Democratic presidential nomination, this week issued a statement that barely went beyond the minimal measures in the administration’s plan. In addition to a five-year freeze on subprime interest rates, she called for a 90-day moratorium on home foreclosures. This will only marginally delay the coming avalanche in foreclosures, while giving the banks some breathing space to contain the meltdown in CDOs and other exotic securities. Clinton appeared at Nasdaq headquarters in New York on Wednesday and spoke before an audience of finance industry executives, whom she chided for their role in the housing meltdown. This type of posturing is aimed at duping the public, while the politicians of both parties shield the Wall Street firms and multi-millionaire executives who have further enriched themselves by promoting high-interest home loans and engaging in other predatory policies. None of the major Democratic presidential contenders or congressional leaders is calling for serious investigations, including criminal probes, into the subprime crisis. No serious congressional investigation has been launched. There are no calls for a large-scale emergency allocation of public funds to enable working class and middle class homeowners to keep their homes, something that could be paid for simply by rescinding the more than $1 trillion tax cut for the rich enacted by Bush with Democratic support or ending the war in Iraq, which consumes billions of dollars every month.
The fact is neither party will propose any measures that seriously impinge on the vast fortunes and prerogatives of the financial elite, to whom the Democrats, no less than the Republicans, are beholden.The mounting social crisis is the product of the increasingly parasitic and corrupt character of the capitalist system in the US and internationally. Millions of American families are being thrown into conditions approaching destitution as a result of the anarchy of the market and the mad profit frenzy on Wall Street, which have fueled an ever greater concentration of wealth at the very top of society. There can be no progressive solution to the housing crisis outside of an independent political struggle of the working class that directly challenges the entrenched power of Wall Street and advances a socialist program for restructuring the economy along democratic and egalitarian lines. This must include the transformation of the banking and housing industries into publicly-owned and democratically run entities, functioning as part of a planned economy geared to the common good, not corporate profit and the further enrichment of the corporate-financial elite. Source: www.wsws.org/articles/2007/dec2007/subp-d07.shtml------------------------------------------------------------------------------------ Remember, folks, The coming recession: Not an accident Among the millions of working families, single mothers and immigrants will see their modest savings wiped out. Add to them the poor and elderly who took out second mortgages to make ends meet. Many of those who manage to hold onto their homes do so by cutting back on other basic necessities like food, healthcare, clothing, education and transportation. One should not forget that financial stress is a major factor in the break-up of marriages and the negative psychological implications it has on children. Let's take a walk back through time to the Great Depression. No, I didn't live through it, and chances are you didn't either, but I did and do have many elderly friends; I always listen to their stories....Michelle Analyzing the Causes and Consequences of the Great Depression Adapted From: U.S. History For Dummies America had gone through hard times before: a bank panic and depression in the early 1820s, other economic hard times in the late 1830s, the mid-1870s, and the early and mid-1890s. But never did it suffer an economic illness so deep and so long as the Great Depression of the 1930s.Counting the causesEconomists have argued ever since as to just what caused it. But it's safe to say there were a bunch of intertwined things that contributed. Among them: The stock market crash. The stock market soared throughout most of the 1920s, and the more it grew, the more people were eager to pour money into it. Many people bought "on margin," which meant they paid only part of a stock's worth when they bought it, and the rest when they sold it. That worked fine as long as stock prices kept going up. But when the market crashed in late October 1929, they were forced to pay up on stocks that were no longer worth anything. Many more had borrowed money from banks to buy stock, and when the stock market went belly-up, they couldn't repay their loans and the banks were left holding the empty bag. Bank failures. Many small banks, particularly in rural areas, had overextended credit to farmers who, for the most part, had not shared in the prosperity of the 1920s and often could not repay the loans. Big banks, meanwhile, had foolishly made huge loans to foreign countries. Why? So the foreign countries could repay their earlier debts from World War I. When times got tough and the U.S. banks stopped lending, European nations simply defaulted on their outstanding loans. The result of all this was that many banks went bankrupt. Others were forced out of business when depositors panicked and withdrew their money. The closings and panics almost completely shut down the country's banking system. Too many poor people. That may sound goofy, but it's a real reason. While the overall economy had soared in the 1920s, most of the wealth was enjoyed by relatively few Americans. In 1929, half of the families in the country were still living at or below the poverty level. That made them too poor to buy goods and services and too poor to pay their debts. With no markets for their goods, manufacturers had to lay off tens of thousands of workers, which of course just created more poor people. Farm failures. Many American farmers were already having a hard time before the Depression, mostly because they were producing too much and farm product prices were too low. Things were so bad in some areas that farmers burned corn for fuel rather than sell it. Then one of the worst droughts in recorded history hit the Great Plains. The Midwest became known as the "Dust Bowl." Dry winds picked up tons of topsoil and blew it across the prairies, creating huge, suffocating clouds of dirt that buried towns and turned farms into abandoned deserts. Living with the consequences Whatever the causes, the consequences of the Great Depression were staggering. In the cities, thousands of jobless men roamed the streets, looking for work. It wasn't unusual for 2,000 or 3,000 applicants to show up for one or two job openings. If they weren't looking for work, they were looking for food. Bread lines were established to stop people from starving. And more than a million families lost their houses and took up residence in shantytowns made up of tents, packing crates, and the hulks of old cars. They were called "Hoovervilles," a mocking reference to President Hoover, whom many blamed (somewhat unfairly) for the mess the country was in. Thousands of farmers left their homes in states like Oklahoma and Arkansas and headed for the promise of better days in the West, especially California. What they found there, however, was most often a backbreaking existence as migrant laborers, living in squalid camps, and picking fruit for starvation wages. Americans weren't sure what to do. In the summer of 1932, about 20,000 desperate World War I veterans marched on Washington D.C. to claim $1,000 bonuses they had been promised they would get, starting in 1946. When Congress refused to move up the payment schedules, several thousand built a camp of tents and shacks on the banks of the Potomac River and refused to leave. Under orders of President Hoover, federal troops commanded by General Douglas MacArthur used bayonets and gas bombs to rout the squatters. The camp was burned. No one was killed, but the episode left a bad taste in the mouths of many Americans. Shoving aside African Americans, Mexicans, and Native American Indians More than half of African Americans still lived in the South, most as tenant farmers or "sharecroppers," meaning they farmed someone else's land. Almost all of those who worked and weren't farmers held menial jobs that whites hadn't wanted — until the Depression came along. When it did, the African Americans were shoved out of their jobs. As many as 400,000 left the South for cities in the North, which didn't help much. By 1932, it's estimated half of the black U.S. population was on some form of relief. Other minority groups suffered similarly. Mexico had been exempted from the immigration restrictions of the 1920s, and as a result, hundreds of thousands of Mexicans came to the United States, mostly to the Southwest. Prior to the Depression, they were at least tolerated as a ready source of cheap labor. In the 1930s, however, they were pushed out of jobs by desperate whites. Many thousands were deported, even some who were legal U.S. citizens, and as many as 500,000 returned to Mexico. Those of Asian descent, mostly on the West Coast, were likewise pushed out of jobs or relegated to jobs only within their own communities. American Indians had been largely forgotten by the U.S. government since the 1880s, which was not a good thing. The general idea had been to gradually have Indians disappear into the American mainstream. In 1924, Congress made U.S. citizens of all Indians who weren't already citizens, whether they wanted to be or not. But preliminary studies done in the 1920s found that "assimilation" had failed. In 1934, Congress changed direction and passed laws that allowed Indians to retain their cultural identity. Although well meaning, it did little for their economic well-being, and they remained the worst-off of America's minority groups. Keeping women at home — or workWith jobs scarce, a strong feeling prevailed that women should stay home and let men have the jobs. There was even a federal rule that two people in the same family could not both be on the government payroll. But two things occurred that actually increased the number of women in the workforce during the decade. The first was that many families simply could not survive without an extra income. The second was that many men abandoned their families to look for work or because they were ashamed they could not find work. Marriage rates dropped for the first time since the early 1800s. Developing organized laborIf the sun peeked through the Depression's clouds on anyone, it might have been organized labor. The captains of industry and business lost much of their political clout during the 1930s, and new laws made organizing easier. All told there were more than 4,500 strikes in 1937, and labor won more than three-fourths of them. By 1940, more than eight million Americans were members of organized labor. Source: www.dummies.com/WileyCDA/DummiesArticle/id-1232,subcat-POLITICS.html?print=true
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michelle
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Post by michelle on Dec 16, 2007 6:45:39 GMT 4
[related to previous posts]:The coming recession: Not an accident. The Rich Get Richer[glow=red,2,300]Money Masters and Enslaved Taxpayers [/glow] They lied, they cheated, they conned. Part1 of 2[glow=red,2,300]MORTGAGE MELTDOWN[/glow] Interest rate 'freeze' - the real story is [glow=red,2,300]fraud[/glow] Bankers pay lip service to families while scurrying to avert suits, prisonSean Olender Sunday, December 9, 2007 New proposals to ease our great mortgage meltdown keep rolling in. First the Treasury Department urged the creation of a new fund that would buy risky mortgage bonds as a tactic to hide what those bonds were really worth. (Not much.) Then the idea was to use Fannie Mae and Freddie Mac to buy the risky loans, even if it was clear that U.S. taxpayers would eventually be stuck with the bill. But that plan went south after Fannie suffered a new accounting scandal, and Freddie's existing loan losses shot up more than expected. Now, just unveiled Thursday, comes the "freeze," the brainchild of Treasury Secretary Henry Paulson. It sounds good: For five years, mortgage lenders will freeze interest rates on a limited number of "teaser" subprime loans. Other homeowners facing foreclosure will be offered assistance from the Federal Housing Administration. But unfortunately, the "freeze" is just another fraud - and like the other bailout proposals, it has nothing to do with U.S. house prices, with "working families," keeping people in their homes or any of that nonsense. The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value - right now almost 10 times their market worth. The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process. And, to be sure, fraud is everywhere. It's in the loan application documents, and it's in the appraisals. There are e-mails and memos floating around showing that many people in banks, investment banks and appraisal companies - all the way up to senior management - knew about it. I can hear the hum of shredders working overtime, and maybe that is the new "hot" industry to invest in. There are lots of people who would like to muzzle subpoena-happy New York Attorney General Andrew Cuomo to buy time and make this all go away. Cuomo is just inches from getting what he needs to start putting a lot of people in prison. I bet some people are trying right now to make him an offer "he can't refuse." Despite Thursday's ballyhooed new deal with mortgage lenders, does anyone really think that it can ultimately stop fraud lawsuits by mortgage bond investors, many of them spread out across the globe? The catastrophic consequences of bond investors forcing originators to buy back loans at face value are beyond the current media discussion. The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail, resulting in massive taxpayer-funded bailouts of Fannie and Freddie, and even FDIC. The problem isn't just subprime loans. It is the entire mortgage market. As home prices fall, defaults will rise sharply - period. And so will the patience of mortgage bondholders. Different classes of mortgage bonds from various risk pools are owned by different central banks, funds, pensions and investors all over the world. Even your pension or 401(k) might have some of these bonds in it. Perhaps some U.S. government department can make veiled threats to foreign countries to suggest they will suffer unpleasant consequences if their largest holders (central banks and investment funds) don't go along with the plan, but how could it be possible to strong-arm everyone? What would be prudent and logical is for the banks that sold this toxic waste to buy it back and for a lot of people to go to prison. If they knew about the fraud, they should have to buy the bonds back. The time to look into this is before the shredders have worked their magic - not five years from now.Those selling the "freeze" have suggested that mortgage-backed securities investors will benefit because they lose more with rising foreclosures. But with fast-depreciating collateral, the last thing investors in mortgage bonds ought to do is put off foreclosures. Rate freezes are at best a tool for delaying the inevitable foreclosures when even the most optimistic forecasters expect home prices to fall. In October, Goldman Sachs issued a report forecasting an incredible 35 to 40 percent drop in California home prices in the coming few years. To minimize losses, a mortgage bondholder would obviously be better off foreclosing on a home before prices plunge. The goal of the freeze may be to delay bond investors from suing by putting off the big foreclosure wave for several years. But it may also be to stop bond investors from suing. If the investors agreed to loan modifications with the "real" wage and asset information from refinancing borrowers, mortgage originators and bundlers would have an excuse once the foreclosure occurred. They could say, "Fraud? What fraud?! You knew the borrower's real income and asset information later when he refinanced!" The key is to refinance borrowers whose current loans involved fraud in the origination process. And I assure you it was a minority of borrowers whose loans didn't involve fraud. The government is trying to accomplish wide-scale refinancing by tricking bond investors, or by tricking U.S. taxpayers. Guess who will foot the bill now that the FHA is entering the fray? Ultimately, the people in these secret Paulson meetings were probably less worried about saving the mortgage market than with saving themselves. Some might be looking at prison time.As chief of Goldman Sachs, Paulson was involved, to degrees as yet unrevealed, in the mortgage securitization process during the halcyon days of mortgage fraud from 2004 to 2006.
Paulson became the U.S. Treasury secretary on July 10, 2006, after the extent of the debacle was coming into focus for those in the know.Goldman Sachs achieved recent accolades in the markets for having bet heavily against the housing market, while Citigroup, Morgan Stanley, Bear Sterns, Merrill Lynch and others got hammered for failing to time the end of the credit bubble. Goldman Sachs is the only major investment bank in the United States that has emerged as yet unscathed from this debacle. The success of its strategy must have resulted from fairly substantial bets against housing, mortgage banking and related industries, which also means that Goldman Sachs saw this coming at the same time they were bundling and selling these loans. If a mortgage bond investor sues Goldman Sachs to force the institution to buy back loans, could Paulson be forced to testify as to whether Goldman Sachs knew or had reason to know about fraud in the origination process of the loans it was bundling? It is truly amazing that right now everyone in the country is deferring to Paulson and the heads of Countrywide, JPMorgan, Bank of America and others as the best group to work out a solution to this problem. No one is talking about the fact that these people created the problem and profited to the tune of hundreds of billions of dollars from it. I suspect that such a group first sat down and tried to figure out how to protect their financial interests and avoid criminal liability. And then when they agreed on the plan, they decided to sell it as "helping working families stay in their homes." That's why these meetings were secret, and reporters and the public weren't invited. The next time that Paulson is before the Senate Finance Committee, instead of asking, "How much money do you think we should give your banking buddies?" I'd like to see New York Sen. Chuck Schumer ask him what he knew about this staggering fraud at the time he was chief of Goldman Sachs. The Goldman report in October suggests that rampant investor demand is to blame for origination fraud - even though these investors were misled by high credit ratings from bond rating agencies being paid billions by the U.S. investment banks, like Goldman, that were selling the bundled mortgages. This logic is like saying shoppers seeking bargain-priced soup encourage the grocery store owner to steal it. I mean, we're talking about criminal fraud here. We are on the cusp of a mammoth financial crisis, and the Federal Reserve and the U.S. Treasury are trying to limit the liability of their banking friends under the guise of trying to help borrowers. At stake is nothing short of the continued existence of the U.S. banking system. Sean Olender is a San Mateo attorney. Contact us at insight@sfchronicle.com.Source: www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/09/IN5BTNJ2V.DTLContinued...
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michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
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Post by michelle on Dec 16, 2007 6:48:24 GMT 4
...continued from previous post:[related to previous posts][glow=red,2,300]Money Masters and Enslaved Taxpayers [/glow] They lied, they cheated, they conned. Part 2 of 2Ruff Interviews WilliamsDec 7 2007 4:29PM I’m interviewing Dr. Walter John Williams, we call him John. He is a PhD in economics, and the editor of Shadow Government Statistics, a newsletter that is subscribed to mostly by money managers, bank managers, etc. to tell us the truth behind the government statistics that have been manipulated by various methods of reporting. I heard him speak at the International Investment Conference in San Francisco in November, and was very impressed – I’m always impressed with someone who mostly agrees with me. HJR: John, your following is pretty sophisticated? Right? WJW: Yes, mostly professional investors – money managers. We publish an analysis of the government statistics: where they are right, where they are wrong, and the implications if they are wrong, which is generally the case. In fact, what has happened over the years is that changes in method-ologies have been implemented in reporting the key statistics, with the effect that economic statistics seem stronger than real growth, and inflation numbers tend to be weaker than reality, enough so that GDP (Growth Domestic Product) is overstated by three percent; the unemployment rate is really up around 12 percent as most people would look at it, and the inflation rate is now topping 11 percent.HJR: This is very different from the published government statistics. I’ve been very interested in the inflation statistics because it has a direct effect on the investments I’m recommending, particularly gold and silver. If inflation was as low as the government claimed, that would pull some the props out from underneath the gold market. As you know, I am a bull on inflation. I believe it will get a lot worse. I heard you say last night that you thought we are headed for an inflationary depression. I haven’t dared say that. I guess I want to be more acceptable to the world than I should, I guess. But you are unafraid because you have statistics to back up everything you say. WJW: We already have inflation in place. The government is reporting 3½ percent inflation officially, but if you go back to the way it used to be reported before the era of Alan Greenspan and Michael Voskin, that methodology has it up around 11 percent. That is as of today (November 20, 2007). We are seeing inflationary pressures from oil and some from the money supply. The Fed stopped reporting M-3 measure of the money supply in March, 2006. [ see older posts here on this] We primarily use the Fed’s numbers because they still publish most of the components, and I put together M-3 as it would be reported on an ongoing basis. Right now that is up over 15 percent. The less time you saw money grow that high was August, 1971 when Nixon closed the gold window. The big problem with inflation is the fiscal improprieties of the federal government. Starting back at beginning of this decade, Congress mandated that the federal government publish financial statements on the government’s operations along the lines U.S. corporations have to do, using Generally Accepted Accounting Principles (GAAP). Weapons are put into inventory and expensed, and buildings are capitalized as assets and depreciated. They also are accounting for two major items, Social Security and Medicare, in terms of the unfunded liabilities there, and the year-to-year change, discounted for the current value of money that really put forth remarkable statistics when you look at it. In 2006, the official deficit was close to $250 billion, now it is being reported as $162 billion for 2007. In terms of the GAAP statements, the way a corporation would look at it, we don’t have the 2007 numbers yet, but 2006 showed an actual deficit of $4.6 trillion. If the government wanted to balance its books, let’s say it raised taxes 200%, and took 100% of everyone’s wages, corporate profits, etc. the government would still be in deficit. It’s beyond containment from a standard fiscal approach.The other side of it in terms of the political aspects, if you were to slash the spending that is causing the problems, you would have to severely slash Social Security and Medicare. These are the programs that are so severely underfunded. No politician would even consider talking about this; it’s political suicide. There is no feasible way to approach it by raising taxes. So effectively, the federal government is bankrupt! In terms of total obligations, it has a negative net worth of roughly $54 trillion, which is four times the level of GDP. Big governments generally do not go bankrupt. They can repudiate their debt, but the preference is to increase the money supply and pay off in very cheap dollars. As the Federal Reserve continuously monetizes the federal debt, the rapid growth of the money supply causes rapid growth in inflation which becomes hyper-inflation. I would define a hyper-inflation when the largest currency note prior to the inflation (in this case it would be $100 bill in the U.S.) becomes worth more as functional toilet paper than as currency. Then you have a hyper inflation.HJR: It’s not very functional toilet paper, because it doesn’t absorb water well. So it isn’t even any good for that. When I heard you speak at dinner, you mentioned David Walker, the Comptroller General of the U.S. who reported the unfunded liabilities. I wrote about him in my new book. For my subscribers, I’d like to define that term: Unfunded Liabilities means liabilities for which there is no dedicated income and no assets to support it. He said at that time that if we were to meet those obligations starting today, it would take $440,000 from every American family to do so. He was testifying before a very poorly attended subcommittee meeting of the House of Representatives. As you listen to the debates of both the Republican and Democratic parties, no one is even daring to touch on that issue. My personal opinion is that you have to be mad to want to be President, and whoever does get elected for the next four years will probably go down for 50 to 100 years as the Hoover of the 2000s, because he couldn’t stop the juggernaut. I have also assured my subscribers that if they are now getting Social Security they will probably get it until they die. But it’s the under-50 crowd, especially the under-40 crowd, which is paying into it who will never see it, or it won’t buy anything when they start receiving benefits.One member of our party last night that said we should simply cut government spending, getting rid of waste and stupid things government spends money on. My comment to that was that wouldn’t even begin to touch the real problem, which is the unfunded liabilities because they dwarf anything we can do to make government meaner and leaner. They are already meaner, but need to be leaner. The problem we face is beyond the ingenuity of human leadership, but we will someday have to pay the piper with no money to pay him. I used to worry about how we could stop the government from spending money, but it isn’t the discretionary spending the government votes on every year that is the problem, it’s the automatic entitlement programs that are unfunded. Now we have a huge wave of baby boomers going into Social Security. I think now we will probably get our Social Security, but it won’t buy anything later because it will be worthless. WJW: Howard, I completely agree with what you said; I couldn’t have expressed it better. Let me just take it a step further and that is into the hyper-inflationary depression. I contend we are already in a recession, and see the depression coming. GDP numbers have modified over the years, it’s now very difficult to reflect a recession, at least as it was traditionally defined as two consecutive quarters of negative inflation-adjusted GDP growth. In fact, the 2000 recession has been revised away by the Bureau of Economic Analysis, using that definition. You can see this in a number of statistics. Even the growth in payroll employment, although it is over-stated, is only at 1.2 percent. Every time the growth in payroll employment has dropped below 1½ percent, you have a recession in place. We have had a very weak economy for years primarily because of the structural changes tied to the deterioration in our trade position over the decades where significant production jobs are moved off shores; basically U.S. wealth and income has been transferred offshore. In the 1970s, the man of the house would support his family, and the wife would stay home with the kids. Today you may have two or three people working in a family to try to make ends meet, and they can’t keep their income growth up with the pace of inflation. That is being partly reported by the government, and it is worse than the government is reporting because they understate inflation.HJR: Whoever comes up with the current inflation numbers has never bought a tank of gas, never had a medical problem, etc. Everywhere you turn, the things excluded from this data are the things real people have to deal with. Let’s move to what we should do about this on an individual basis. Your letter is written for institutions; my letter is written for the average middle-class American, not even for Wall Street investors, although a lot of them subscribe. The only inflation hedge that has always worked is gold and silver. We are in a commodity bull market, and I’m sure there are a lot of other kinds of mining stocks that would be profitable during that time, but the average guy can’t have a couple of tons of copper dumped on his porch, which he would have to do if he bought a copper contract. But he can go to a coin dealer and pick up gold and silver bullion coins and take them home. By a process of elimination, that is what I have concluded. If you are more sophisticated, there are some things you might do that don’t include gold or silver, but gold or silver is the safest best of all. WJW: You weren’t kidding that you like people who agree with you. Indeed, gold is the primary hedge and there is where the average person should have his holdings. Bullion coins are the best bet. They are portable and liquid. HJR: I watch the TV financial interview shows, and everyone is worried about the falling dollar relative to other currencies. They suggest lots of ways to hedge, but they ignore gold, as Wall Street always does. The safest best is to go to a coin dealer and buy some gold and silver coins, and keep it simple. At this conference here in San Francisco, there are more than 300 gold-mining companies, and they all have great stories. A lot of people are trying to figure out which one is going to be the big hit, which one they should buy. The odds are about five to 95 against them when they do that. If you want to invest in gold or silver-mining stocks, put a list of them on the wall, throw darts at them, and invest in the holes; buy ten and create your own little mutual fund. The odds are then that you might catch a big one. In the last bull market in the ‘70s, the ones that performed the best towards the end of the bull market were the holes in the ground surrounded by liars, because they didn’t have any numbers to define their growth possibilities. If you know a lot about a company, then you’re somewhat limited about what the price can be, but the holes surrounded by liars have no limitations. So keep an eye on them. But that is towards the end of the bull market, if there is an end to this bull market. By Howard Ruff The Ruff Times ***** Howard J. Ruff, the legendary author and financial advisor, has remained in the public eye for more than a quarter of a century. He is founder and editor of The Ruff Times Financial Newsletter. This E-Letter is appeared in the December 7, 2007 issue of The Ruff Times. The newsletter is much more comprehensive and deals with a broad spectrum of middle-class financial issues and includes an Investment Menu from which you can build your portfolio. (You can learn about it here). The Ruff Times has served more than 600,000 subscribers – more than any financial-advisory newsletter in the world. Source: www.kitco.com/ind/ruff/ruff.html------------------------------------------------------------------------------------ Credit crisis reveals widespread accounting manipulation by top US banksBy Joe Kay 27 November 2007 The developing credit crisis in the United States, linked to the bursting of the housing market bubble, is beginning to reveal the accounting manipulations employed by major US banks to engage in speculative activities and hide risks. Several major banks have already announced billions of dollars in losses associated with subprime mortgages, and in the next months are expected to announce tens of billions of dollars in further write-downs. Among those most severely affected is Citigroup—an American financial conglomerate that is the world’s largest company measured by asset value. CNBC reported on Monday that Citigroup is planning major cost-cutting in response to its difficulties, with layoffs of up to 45,000 of the company’s approximately 320,000 employees. In a statement, the bank insisted that reports involving specific numbers of layoffs were “not factual,” but acknowledged that the company is “planning ways in which we can be more efficient and cost effective to position our businesses in line with economic realities.” New cuts would come on top of 17,000 layoffs announced in April. The announcement, coming amidst Wall Street nervousness over the ongoing credit crisis, sent Citigroup’s stock down more than 6 percent. Over the past six months, the price of the company’s stock has fallen nearly 50 percent. Citi led a steep market decline on Monday, with the Dow Jones Industrial Average falling nearly 240 points, more than wiping out its increase on Friday. Chief among the “economic realities” behind Citigroup’s announcement is the credit crisis brought on by record defaults on home mortgages in the United States. Citigroup has already announced a $5 billion write-down related to home mortgages, which provoked the resignation of its CEO Charles Prince. It is expected to announce further losses of up to $11 billion in the fourth quarter. The bank’s exposure could be much greater, however, as it may be forced to acknowledge losses that it had previously kept off its books. An article by Wall Street Journal reporter David Reilly on Monday (“Citi’s $41 Billion Issue: Should it put CDOs On the Balance Sheet?”) noted that the bank faces an “immediate threat” from troubles involving off-balance-sheet entities called collateralized debt obligations (CDOs) The Journal notes that Citigroup “was one of the biggest arrangers of CDOs—products that pools debt, often mortgage securities, and then sell slices with varying degrees of risk.” The bank may be forced to bring these CDOs onto its balance sheet. “If Citigroup had to include an additional $41 billion in CDO assets on its books,” the Journal noted, “that could potentially spur a further $8 billion in write-downs, above and beyond those already signaled, according to a report earlier this month by Howard Mason, an analyst at Sanford C. Bernstein.” Throughout the housing boom of the past several years, the CDOs, and related entities known as structured investment vehicles (SIVs), made substantial returns. SIVs are also off-balance-sheet entities, but are more open-ended, investing in other risky securities, including CDOs. Even those entities closely associated with banks have been nominally independent. The “independence” of these entities has been entirely fraudulent, however. They have been critical for the banks’ bottom line as sources of lucrative fees, buying up mortgages and other assets from their parent banks. As the CDOs and SIVs have faltered with the collapse of the housing bubble, the banks have looked for ways to bail them out. The Journal notes, “Over the summer, [Citigroup] was forced to buy $25 billion in commercial paper issued by its CDO vehicles because investors were no longer interested in the paper. Citigroup already had an $18 billion exposure to these vehicles through other funding it had provided.” The determination with which Citigroup and other banks have scrambled to bail out these investment entities is itself testament to the fact that they were never really independent to begin with. Commenting on the way that major banks were able to shift their risks off their balance sheets, New York Times economic writer Floyd Norris noted in an article published November 16 (“As Bank Profits Grew, Warning Signs Went Unheeded,”), “Instead of being suspicious, many analysts believed that banks had found a new way to prosper. Making a loan and keeping it on the balance sheet until it was repaid was so old-fashioned. It was far better to collect fees for arranging transactions and passing on the risks to others.” In fact, many of these risks were not really transferred. Norris notes that the banks often made arrangements (called “liquidity puts”) with the purchasers of their CDO securities that would allow the purchasers to sell the CDO securities back to the bank if there was no other market. “That risk may have seemed slight when the securitization market was booming. But now the banks are being forced to buy back securities for more than they are worth.” In essence, the puts allowed the banks to sell CDOs and other assets without really selling them. Use of the puts actually increased as the housing market began to unravel, as it was necessary to provide the guarantees in order for the banks to get investors to buy mortgage-backed securities whose value was increasingly in question. The legality of these operations is highly dubious, since part of the intention appears to have been to mislead investors regarding the financial health of the company. Even if the operations by banks were legal, the fact that they were not reported to investors was likely a violation of accounting rules. According to Norris, Citigroup and Bank of America were among those banks that used “liquidity puts” heavily. All of these arrangements amount to attempts by banks to gamble on risky investments without acknowledging the risks they were taking on. As the market for these investments has begun to collapse, the real extent of the losses is only beginning to reveal itself—and no one knows how severe the crisis really is.Most banks were involved in such activities. Earlier this month, the Securities and Exchange Commission opened an investigation into investment bank Merrill Lynch that, according to the Wall Street Journal, is intended to examine how the bank “has been valuing, or ‘marking,’ its mortgage securities and how it has disclosed its positions to investors.” In a November 2 article, the Journal reported that Merrill arranged one deal with a hedge fund to sell $1 billion in commercial paper related to mortgages, while giving the hedge fund the right to sell it back after one year at a set price. The newspaper later corrected its article to note that this deal, similar in many ways to the arrangements at Citigroup, was rejected because the bank determined that it was a violation of accounting rules. Nevertheless, Merrill is highly exposed to the housing markets. Earlier reports suggested that Merrill hid its own exposure to the subprime mortgage crisis by shifting its assets to different parts of the company subject to less strict accounting regulations. (See “Wall Street hides impact of subprime mortgage meltdown”) As late as July 2007 executives at the bank, including former CEO Stan O’Neal, were assuring employees that its mortgage risks were under control. At the end of October, Merrill announced a $7.9 billion write-down, which was followed by O’Neal’s departure. The crisis facing banks is an international phenomenon. The stock market sell off on Monday was provoked in part by an announcement from British-based HSBC—Europe’s largest bank and the world’s fourth largest corporation in terms of assets—that it would bail out two of its SIVs and transfer their assets onto its balance sheet. Since the credit crisis began in full force this summer, banks have scrambled to stave off a reckoning with the enormity of the losses involved. The hope has been that the economic crisis will be short-lived and that the housing market will eventually recover, restoring the value of the assets in question. It is unlikely that this will happen, however, and there is an increasing likelihood of a recession. In an article published in the Financial Times on Sunday (“Wake up to the dangers of a deepening crisis”), Lawrence Summers, former Treasury Secretary in the Clinton Administration, warned, “[T]he odds now favor a US recession that slows growth significantly on a global basis.” Summers noted, “Forward-looking indicators suggest that the housing sector may be in free-fall from what felt like the basement levels of a few months ago.” The initial revelations of accounting manipulations and indications of fraudulent activities are only a small indication of the extent to which the American economy is pervaded by financial speculation and out-and-out criminality.It was the collapse of the dot-com boom in 2001 that ultimately unwound the elaborate structure of corruption at companies such as Enron, WorldCom, and Tyco. These companies were no longer able to perpetuate their fraudulent activities once the stock market ceased its continual upward march. The major banks were heavily involved in the activities exposed at that time. In 2003, Citigroup and JP Morgan Chase were forced to pay out fines for aiding Enron in disguising loans as cash to reduce reported risk and liabilities, thereby defrauding investors. Essentially, the banks gave Enron loans, but cloaked these loans in an apparent purchase of assets. This manipulation improved Enron’s financial reports, which was beneficial for banks that were heavily invested in Enron stock. (See “Citigroup, Morgan Chase fined for Enron deals: corruption at the heights of American finance”) The operations involving CDOs and SIVs bear a certain resemblance in that they too were evidently intended to disguise risk. Much of the risk was ultimately held by the bank itself, but this was not readily apparent to investors. Though the banks were involved in the manipulations at Enron and other companies, the fraud was generally explained by the media and the political establishment as the product of a few “bad apples.” Several executives were put on trial and imprisoned, but the underlying conditions remained and the banks remained largely untouched. The dot-com bubble was quickly replaced by the housing bubble, which had the effect of extending the speculative mania of Wall Street to a much broader section of the economy.The pervasiveness of accounting manipulation is closely linked to the increasingly dominant role that speculation has come to play in the American economy. Vast sums of wealth—including tens and hundreds of millions of dollars to top executives and hedge fund managers—have been made through mechanisms that are largely divorced from any relationship to actual production. The importance of these forms of speculative wealth accumulation has increased as the underlying health of the American economy has decreased. The housing market has been a case in point, as a small layer of the population has made billions through high-risk loans to working class Americans who are now bearing the burden of a crushing level of debt. The loans have been used to transfer wealth into the hands of the ruling elite, and at the same time became a means of speculation.Entities such as CDOs and SIVs were set up as a means for Wall Street to extract enormous profits, while at the same time cloaking the extremely fragile foundation for this supposed economic growth. As the housing market deflates, this whole structure is beginning to unravel. Source: www.wsws.org/articles/2007/nov2007/econ-n27.shtml
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michelle
Administrator
I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
Posts: 2,100
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Post by michelle on Dec 18, 2007 14:47:03 GMT 4
VIDEO:Jim Cramer & Ron Paul Take On The Federal ReserveWATCH: www.youtube.com/watch?v=lmBl9qbjIMIJim Cramer is a bit over the top with his loud voice but Presidential candidate Ron Paul's message is certainly interesting to us, and dovetails with recent posts above. You can read much more on the Federal Reserve [boo, hiss] and our monetary system through out past posts here at Money Masters and Enslaved Taxpayers. Michelle
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michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
Posts: 2,100
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Post by michelle on Dec 19, 2007 15:10:02 GMT 4
Marketwatch.com has noted, "Based on data culled from proxies filed through Oct. 25, CEOs of companies in the Standard & Poor's 500 index received a median year-on year increase of more than 23%, the corporate advocacy group said. More broadly, CEOs saw a median increase of nearly 13%, falling short of last year's median growth rate of nearly 16%."
Given that the median income of the middle class is virtually unchanged, this may explain President Bush's enthusiasm for the economy under his tenure -- claiming that our debt-ridden, mortgage-failing, industrial sliding economy is actually robust and sound. The adjectives apparently apply only to a select few.
Michelle
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michelle
Administrator
I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
Posts: 2,100
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Post by michelle on Dec 29, 2007 2:20:23 GMT 4
Friday, December 21. 2007 Big Oils Profit and PlunderWhile many impoverished American families are shivering in the winter cold for lack of money to pay the oil baron their exorbitant price for home heating oil, ex-oil man, George W. Bush sleeps in a warm White House and relishes his defeat of the Congressional attempt to get rid of $15 billion in unconscionable tax breaks given those same profit-glutted oil companies like ExxonMobil when crude oil was half the price it is today. This is the same George W. Bush who, calling himself a “compassionate conservative” in October 2000 made this promise to the American people: “First and foremost, we’ve got to make sure we fully fund the Low Income Home Energy Assistance Program (LIHEAP), which is a way to help low-income folks, particularly here in the East, pay for their high, high fuel bills.”
So what did this serial promise-breaker propose this year? Mr. Bush wanted to cut the fuel aid program by $379 million! This entire assistance program is funded at about half of the $5 billion that state governors and lawmakers believe is essential to meet the needs of the six million people eligible to apply for such help this year.Everyone in Washington knows that the big, coddled, subsidized oil industry has many politicians over a barrel. When it comes to oily Bush and Cheney though, the global melting industry has these two indentured servants marinated in oil. Look at what ending regulation of natural gas prices has produced: prices up 50 percent since last year. Home heating oil prices are up 30 percent. Bush’s own Energy Department estimates the rise of heating oil costs will impose an average increase of $375 for customers this winter. No way that supply and demand explains this gouge. If a home dweller is too poor to order more than 100 gallons at a time, they get smacked with an extra surcharge of 60 to 70 cents per gallon for delivery.Some states set aside some money. New York State will spend $25 million. Joe Kennedy and Citgo sell discounted heating oil, but that Venezuelan program is undergoing a reduction.Efforts in Congress to impose a windfall-profits tax on the King Kong, record-profit-setting oil companies got nowhere.Two years ago, efforts by Senator Charles Grassley (Rep. Iowa), then chairman of the Senate Finance Committee, begging the major oil giants to slice off a tiny portion of their profits for charitable contributions toward energy assistance for the poor did not receive even the courtesy of a response. I’ve asked members of Congress, including the Black Caucus and the Hispanic Caucus in the House of Representatives to take up this cause vigorously and prominently on behalf of their constituents back home. Have you heard any high-visibility demand from these veteran lawmakers? I haven’t.Even Senator Grassley seems to have despaired. Please note that ExxonMobil alone made $36 billion in profits last year. That’s one company profiting over seven times the amount of dollars needed for energy assistance. Greed, arrogance, callousness and far too much unaccountable power exists in Big Oil and in its White House. Enforcing the antitrust laws and prohibiting organized speculators at the Mercantile Exchange from determining the price of an essential product like petroleum will bring prices down. But there is no action in the White House. No demand from the Congress. Veteran free lance reporter, Lance Tapley has been reporting for The Portland Phoenix newspaper on the price bilking of recipients of energy assistance programs. For thirty years, he writes, the oil dealers have been charging the Maine state housing authority, which administers the LIHEAP program, higher prices than they set for their payment-plan customers, despite the large bulk purchasing by this housing authority. [making big money off the backs of the poor!!!...Michelle]Tapley severely criticizes the failure of Governor John Baldacci for not standing up for poor Maine people at the same time he promotes large subsidies for business and sells off state-owned assets at bargain-basement prices to corporations. Mr. Tapley writes: “The heating oil crisis could be a big test in 2008 for Baldacci and the State House Democrats. The picture will not be pretty if elderly poor people freeze in their trailers while rich Republicans and professional-class Democrats snuggle up in their McMansions or old Colonials…but, with our Democrats, who needs Republicans?” (Contact Lance Tapley at ltapley@adelphia.net) Some day, the tens of millions of poor people in America, most of them working poor, will be heard from. Until now, they have been exhausted, powerless, despairing, fearful and grasping for whatever crumbs fall off the table. History teaches us that such a subdued human condition does not continue indefinitely. Call the White House switchboard (202-456-1414) and your member of Congress (Senate Information: 202-224-3121; House Information: 202-225-3121). Tell them not all these low-income Americans have been sent to oil rich Iraq. Many are here mourning their losses of and injuries to loved ones while they shiver in the cold. Tell them to make those big oil CEOs making as much as $50,000 an hour to ante up. Source:www.nader.org/index.php?/archives/1237-Big-Oils-Profit-and-Plunder.html#extended
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michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
Posts: 2,100
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Post by michelle on Dec 31, 2007 20:52:45 GMT 4
A couple of articles here. The first, from Ralph Nader, is older but I appreciate the anger behind it. The second gives us a look at what an economy crash in the United States means for the rest of the world, especially our poor brothers and sisters....MichelleBanking On a BailoutFriday, August 17. 2007 The corporate capitalists’ knees are shaking a bit. Their manipulation of the sub-prime housing market has led to a spreading credit crunch and liquidity crisis. So it is time for them to call on Uncle Sam – the all purpose bailout man. Only don’t call it a bailout yet. It is just an injection of over $200 billion in the past week to stabilize the heaving financial markets by the European Central Bank and our Federal Reserve. Governments to the rescue – again. My father many years ago asked his children during dinner table conversation: “Why will capitalism always survive?” His answer: “Because socialism will always be used to save it.” As a small businessman himself (a restaurateur), he was not referring to the little guys on Main Street. He was talking about the Big Boys. Today, we call these self-paying CEOs “corporate capitalists.” Central Banks are government regulators after all. Among other impacts, they regulate interest rates. But they are so saturated with banking executives or former banking officials on their Boards, Committees and at the helms, that they see themselves as part and parcel saviors of their banking brethren. Brother Henry M. Paulson, formerly with the Goldman-Sachs investment giant and now U.S. Treasury Secretary just said: “The markets are resilient. They can absorb those losses. We’ve gone through challenging times in the markets, and we will rise to the challenge.” We? Paulson is a government official who is supposed to be worrying about the people first – such as the millions of homeowners who are slated to lose their homes in the next 18 months.How to help these “borrowers, not the wheeler-dealers,” as columnist Paul Krugman described his “workouts, not bailouts” plan in The New York Times (August 17, 2007) should be Paulson’s chief concern. Secretary Paulson did tell The New York Times that federal regulators should try to eliminate fraud and market manipulation and that there needs to be more disclosure of the holdings and actions of hedge funds and other private pools of capital. Well, that’s talk. Where is the action? Krugman, an economist, believes that the current real-estate bubble was “both caused and was fed by widespread malfeasance. Rating agencies like Moody’s Investors Service, which get paid a lot of money for rating mortgage-backed securities,” seemed to be performing much like the major accounting firms that rubber-stamped the inflated, deceptive financial statements of the Enrons and the Worldcoms. Passing on the risks of these mortgage loans through more and more complicated financial transactions, which are in turn bet on by the huge derivatives markets, allows wider transmission of these risk viruses throughout the national and the global financial markets. A kind of dominoes effect sets in and induces panic selling and panic inability to obtain daily commercial loans in the stiffening credit markets. The European Central Bank recently has poured tens of billions of Euros into the global financial system after the giant French bank BNP Paribas SA froze three of its investment funds. If matters get worse, the Central Banks will inject more money into the system. If financial markets start collapsing along with investor confidence, then Uncle Sam will certainly adopt additional direct bailout options. One man – Mervyn King, the Governor of the Bank of England, is the lone central banker who resists intervening in the markets. “Interest rates,” he asserts, “aren’t a policy instrument to protect unwise lenders from the consequences of their unwise decisions.” Bailing out investors and their risky investments would just induce them to take on bigger risks next time, expecting another bailout, he believes. More and more, corporate capitalists in side and beyond the financial markets do not want to behave as capitalists—willing to take the losses along with the profits. They want Washington, D.C., meaning you the taxpayers, to pay for their facilities (as with big time sports stadiums) or take on their losses because they believe that they are too big to be allowed to fail (as with large banks or industrial companies). These corporate capitalists should be exposed when they always say that government is the problem whenever it moves to help the little guys with health and safety regulations, for example, but government is wonderful when the bureaucrats are summoned to perform missions to rescue them from their own greed and folly.Source: www.nader.org/index.php?/archives/1215-Banking-On-a-Bailout.html#extended------------------------------------------------------------------------------------ Falling U.S. Dollar is bad news - Especially for the poorby Mohamed Elmasry (Friday, December 28, 2007) "If the present currency instability is not rectified, the entire world economy could slow down, triggering a global recession. A recession on such a massive scale would hurt us all - but none more than the world’s poor, who will pay more dearly than anyone else for the follies of the rich." Cairo, Egypt -- Excluding the annual exodus of Canadian "snowbirds" heading to the southern U.S. in the next few weeks, and ubiquitous cross-border shoppers looking for Christmas-season bargains, the falling American dollar means bad news for far too many people worldwide. Canadian firms who export to the U.S. (and that includes the great majority of them) are feeling the pinch: their fourth-quarter profits for this year, and even into the first quarter of 2008, will certainly be affected. If manufacturing plant closures in Ontario and Quebec have caused concern this past year, 2008 is set to bring more worries of the same kind. Except for resource-rich Alberta and BC, who seem immune to the effects of the dueling Canada-U.S dollars, the rest of the country will continue to suffer negative effects in months to come. For example, Canadian pension funds invested in U.S. companies have seen the value of their holdings shrink by an average of 10 per cent in recent months. But my primary concern is the global social impact of the falling U.S. dollar. Within and between the affected countries, the net result will be - once again - that the gap between rich and poor widens. Even if the rich do not continue getting richer at the rate they once did, the poor become poorer disproportionately faster: this stems directly from the fact that the rich and powerful have always managed to maintain their status more or less unaffected. The sinking U.S. dollar and the contrasting fast rise of the Euro are causing pain throughout the European Union as well. The aircraft manufacturer of the popular Airbus planes is already losing business to its American rival, Boeing. In fact, with every ten percent gain of the Euro against the U.S. dollar, Airbus loses a staggering $1.48 billion in profits. While the company sells its airplanes in U.S. dollars, only 50 per cent of the building costs are dollar-funded. The result is that Airbus executives are already planning to take most of the company’s manufacturing operations outside of Europe. Airbus is clearly not alone among companies facing sudden strategic challenges due to the ongoing currency crisis. The European Monetary Affairs Commission is predicting only a 2% expansion of the EU economy in 2008 -- down from 2.7% this year. European finance ministers are now complaining that the U.S. dollar has fallen far enough that American Treasury secretary Henry Paulson Jr. should intervene. The falling U.S. dollar has also prompted a number of oil exporting countries - notably Venezuela, Russia, Iran, Libya, Indonesia and Malaysia -- to join a Euros-for-oil club. This will only lead to a further devaluation of the U.S. dollar against the Euro. All of this means that Americans will likely be staying home a lot more next year, rather than traveling to Canada or Europe. The top four U.S. air carriers have all cut back their 2008 seat capacity forecasts between three and five per cent. The only reversal to this pattern would be if the weak dollar attracts an equal number of European and British tourists to the U.S. Although a weaker dollar will make American exports cheaper, thus helping to close the wide U.S. trade deficit, higher-priced imports could cancel out any benefit and even push up the U.S. inflation rate beyond its current two per cent. And as soon as inflation rises, especially after a period of relative stability, fearful consumers will cut back on spending. A further result of the dollar’s continued weakness will be a rise in interest rates, making it more expensive for American consumers to borrow. In Australia, that country’s dollar is now trading near a 23-year high and exporters are already witnessing a marked decline in their share of the global market. But it is actually the world’s working poor - the hundreds of millions who earn less than $1 a day - who will be most gravely affected by the currency catastrophes of the rich. In Egypt, a large percentage of the population falls into the $1-a-day earning category and that includes workers who would be considered educated professionals here in Canada. A recent university graduate lucky enough to get a teaching job in the Egyptian public school system can expect to make 100 Egyptian pounds a month. He or she is paid for only nine months out of 12, making their earnings less than $1 a day. In sub-Saharan Africa, economic uncertainty among cotton farmers and the low-paid workers who depend on their crops, is mounting steadily. Today, cotton is selling for only about 10 percent of what it brought in a decade ago. African cotton is sold on the world market in U.S. dollars, while the local currency is pegged in Euros. The falling of the U.S. dollar seems to be staged as a response against China with its week currency, the Yuan. But when a high-level European delegation recently visited Beijing to express the West’s concern about the under-valued Yuan, the Chinese were not interested. Many analysts are predicting that the falling U.S. dollar will continue to have a negative impact on the world’s economy well into 2008. By February, when the G-7 finance ministers meet in Japan, the trend of their predictions may be even more pronounced. Time will tell if the U.S. economy will suffer sooner from its weak dollar or if the Chinese will stir things up by raising the value of their problematic Yuan. If the present currency instability is not rectified, the entire world economy could slow down, triggering a global recession. A recession on such a massive scale would hurt us all - but none more than the world’s poor, who will pay more dearly than anyone else for the follies of the rich.Mohamed Elmasry is a professor of electrical and computer engineering at the University of Waterloo and national president of the Canadian Islamic Congress. He contributed this article to Media Monitors Network (MMN) from Ontario, Canada. Source: usa.mediamonitors.net/content/view/full/48502
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michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
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Post by michelle on Jan 3, 2008 15:20:43 GMT 4
Interview: Economic 9/11 - WHAT CONDITIONS SET UP THIS ECONOMIC BOMB?Trends in 2008 by Linda Moulton Howe “In 2008, we’re going to see some major, giant financial firms fall as they get hit by an economic 9/11.” - Gerald Celente, The Trends JournalThe Trends Research Institute, Rhinebeck, New York. December 21, 2007 Rhinebeck, New York -On December 19, 2007, the Federal Reserve announced it was lending another $20 billion to American banks in the first of four special “auctions” designed to help alleviate the credit crunch on Wall Street caused by the subprime loan collapse in real estate. That $20 billion brings the total money pumped into the United States financial sector since June 2007, to about half a trillion dollars. In its announcement, the Federal Reserve said it was responding to requests for $61.6 billion in loans from 93 bidders – illustrating strong demand by banks that need short-term funds. Some market experts doubt this latest infusion of cash will help much. Barry Ritholtz, Director of Equity Research for Fusion IQ, told CNN: “This is a crisis of confidence, not of liquidity or rates. The problem is that people made bad loans. There’s nothing the Fed can do to fix this. All they can do is try and reduce anxiety.” And in the December 24, 2007, issue of Newsweek, financial columnist Robert Samuelson wrote about “A Sequel to the Subprime Mess? The obvious danger is another wave of large losses and a chain reaction of fear that paralyzes and cripples investors, particularly banks.” This is exactly the subject that leads off the 2008 Trends list in The Trends Journal written and published by Gerald Celente in Rhinebeck, New York. Mr. Celente has been interviewed by network newscasters for years and his trend predictions are generally correct. This week I talked to him about trends he sees for 2008, beginning with the top of his list: “Economic 9/11.” --- Interview: Economic 9/11Gerald Celente Gerald Celente, Editor and Publisher, The Trends Journal, Rhinebeck, New York: “Economic 9/11, we believe is going to hit the United States in 2008. And just as the World Trade Centers toppled from the top down, we’re going to see the crash happen from the top down as well. This talk about the sub-prime market. Yes, that’s a problem, but nothing compared to when the big firms start failing, when banks go bust, brokerages go out of business. In 2008, we’re going to see some major, giant firms fall and get hit by an economic 9/11. We don’t know what the fuse will look like, but we know that the bomb is set already. And when it’s lit, we believe it’s going to happen before June of 2008. WHAT CONDITIONS SET UP THIS ECONOMIC BOMB? Well, in 2007, we saw the first cracks. But it really needs to be understood that this has been underway for a long time. They (Feds) have been fueling the economy with low interest rates. That’s what got us out of the 2001 recession following the dot com bubble burst. They (Feds) lowered interest rates to 46-year-historic lows. They flooded the world marketplace with cheap dollars. No one wants them anymore, not even lenders in Third World countries. So, what happened in 2007, the cracks became apparent to everyone. Wall Street is in a problem. And what do we have to save the Ship of State from sinking? Well, look ahead – that’s what we do as trend forecasters. We have a know-nothing President and a do-nothing Congress and want-to-be people in waiting that lack the intelligence, integrity, the competence, credentials, character and courage to do what a wise leader would do in times when the ship is sinking. So, we’re saying, it is going down! There is nothing to save it. WHAT WAS IT THAT PROVOKED SO MANY FINANCIAL INSTITUTIONS TO MOVE SO HEAVILY INTO THE SUBPRIME REAL ESTATE MARKET IN THE PAST COUPLE OF YEARS THAT HAS LED TO SUCH A CRISIS? It’s called greed and gambling and it goes well beyond the subprime market. There’s a company in New York, according to The New York Times, that controls about $7 billion worth of real estate. The NYT headline read how brilliant they were that the company did that with only $30 million down. And that’s what all these deals have been. They have been doing these deals with no money down. All of a sudden, Carlisle Real Estate and Blackstone – groups we never heard of before - only those who study these things – and all of a sudden, they are buying major corporations that are worth billions and billions of dollars. They are doing this with fake money. This is why people go to Princeton, Yale, Harvard and Ivy League schools so they can get together and do the big deals. And what they do when things start falling out, they point to the little people. ‘Oh, look at them! They went over their head. They should have read the fine print.’ Subprime is just the crack in the big thing that’s going to happen and the really dirty deals that have been done are on the top – all the leveraged buyouts: Chrysler Corp. being bought out by Cerberus Corp. Who ever heard of Cerberus? Look who is on the Board of Directors: Jack Snow, the former Treasury Secretary. And remember Dan Quayle? They found a job for him – he’s on the Board, too. [ Editor’s Note: On May 14, 2007, Daimler-Chrysler and the private equity firm Cerberus Capital Management announced that Cerberus would buy a controlling stake in Chrysler, ending the troubled eight-year merger of the two automakers. Cerberus Corp., established in 1995, is a technology, video, audio and rich media consulting and design firm based in New York City. Cerberus clients include major Wall Street firms, private equity firms TV networks and national retailers. Cerberus President is Greg Harper.] So, this is what is going on, Linda. It’s bigger than them getting into the greed market and fleecing the little people. They are bringing down the whole system and it’s out of control. The Swiss Bank announced they are going to be selling 250 tons of gold between now and September 2009, so they can buy more money to keep this thing afloat. International Herald Tribune and Associated Press, June 14, 2007. Panic of 2008THIS IS ALL LEADING TO THE SECOND TREND ON THE PANIC OF 2008 – WHAT DO YOU THINK IS GOING TO HAPPEN? Just as when panic struck when 9/11 hit, panic is going to hit the streets again following the economic 9/11. They are not going to know what to do. They are going to be frozen. You know, I just got an email from a publication up where I am – up in the Hudson Valley – from Dutchess Magazine, Hillsdale, NY - It’s a very affluent area – Millbrook and Rhinebeck. We’re in Rhinebeck. And every year, they used to do a cover story of my Trends Journal for the New Year. This year they are not running them because, according to the letter that they sent me, some of their readers and advertisers found the new trends ‘unpalatable.’ They don’t like to hear the truth. www.earthfiles.com/Images/news/T/Trends2008FedBankNewspaperLo.jpgCNNMoney.com, December 19, 2007. The central banks have already pumped in more than half a trillion dollars already! They have been pumping money in ... actually, if you go back to our Trends Journal, the Summer 2007 edition’s mid-year report – we said two weeks before the Dow hit 14000, and the Chinese markets hit their highest level ever – to get ready because we saw a financial crisis hitting. The financial crisis hit exactly on July 24, 2007, when the Dow lost well over 200 points. That was the beginning of the crack. And they (Feds) have been pumping money into the banking system since that time. They’ve had bigger bailouts than even happened after 9/11. It’s out of control! All of the currencies are going to be worth dimes on the dollars in the future, and the first one to go is going to be the American dollar. That’s why one of our big trends for 2008 is ‘Bye, Bye Bucks!’ THAT’S WHERE YOU SAY, ‘AMERICA IS GOING BROKE AND THE WHOLE WORLD KNOWS IT’? Except the Americans! The government says, ‘It’s so good for business. It allows us to export. So all you low-paid workers out there ... Our currency is worth so little that others can now buy our products cheaper.’ So, no longer is ‘Made in America’ a standard of high quality. It means, ‘Buy it cheap.’ That does not build a strong economy. For example, right now the biggest rage in the New York area is foreigners coming over and going to the high-end shopping malls, where they have Versace and that kind of stuff – and going on these wild spending sprees. America has gone from 1st Class to 3rd rate in a blink of an eye! We no longer shop the world for bargains. The dollar is so cheap; they are coming here in droves. And forget the retail. Before you know it, Linda, they (foreigners) are going to buy up this country. If the Federal Reserve lowers interest rates to make Wall Street happy, so they can continue to finance their mega-deals they’ve put together, that crashes the dollar because low interest rates means cheaper dollars. You buy them at less money. And foreigners, as they already are, they are bailing out of U. S. bucks. They are trying to do it in an orderly way so they don’t crash the market. So, the big guys are going to get out first. And you’re going to see them more and more try to prop up the dollar so there is an orderly retreat. We’re saying that by the time the dust settles and the smoke is cleared, ‘the dollars is going to be worth the dime on the dollar’ will be the slogan of the future. The history books will remember 2008 as the ‘panic of 2008.’ HOW DOES THAT LEAD TO THE 4TH ON YOUR LIST, ‘TAX REVOLTS.’ IT SEEMS THAT AT THIS POINT, THE AMERICAN PUBLIC IS INTIMIDATED, OVERWHELMED AND AFRAID OF THEIR GOVERNMENT. THEY ARE AFRAID OF THE IRS. HOW CAN THERE BE A TAX REVOLT IN A NATION THAT HAS BEEN MANAGING AND OPERATING BY FEAR? We think it’s going to happen at the local level. People cannot afford to pay property taxes or school taxes. And when you look at the demographics in every major community, there are more people without children living in those homes – whether single or empty nesters – than people with children. So, they cannot afford the school tax and in most parts of the country, school taxes are based upon property taxes. So, it’s all on the homeowner’s shoulders. You’re going to see a revolt coming there and you’re also going to see revolts regarding property tax rises. As the value of the home becomes less – if you had to pay more when the value went up, then they are going to have to reassess downward now if they are going to be fair about this. Recession and Large Bank CollapsesWHAT WOULD BE THE FIRST SIGNS YOU WOULD BE LOOKING FOR THAT THE UNITED STATES WAS IN A FULL BLOWN RECESSION? Watch for when one of the big firms crashes – like a big bank, when that kind of thing happens. That’s going to be the first signal. THAT’S WHAT WAS GOING TO HAPPEN TO COUNTRYWIDE BANK THIS SUMMER, RIGHT? Right, but even bigger than that. Much bigger – like a Bank of America, not that that is necessarily it, but of that caliber. Look for something big to break. We’re in a recession already. You don’t have to wait for the government’s official statistics. Look at what they do – it’s comparable to when I grew up during the Cold War and what the Soviet Union used to do. They put out this deceptive basket of statistics – they talk about inflation, but we’re not adding in food and fuel. Why not? Well, because according to the pointy-headed professor who says the mean of this line dissects with this line - ... Wait! What do you mean you’re not putting in food and fuel? Who are you talking to, folks? THAT MAKES IT COMPLETELY ARTIFICIAL WHEN THEY TALK ABOUT INFLATION WITHOUT TWO OF THE BIGGEST EXPENSES, WHICH ARE FOOD AND FUEL. It’s criminal. And they are doing the same thing with the unemployment numbers. Once you’re off the rolls, ‘Hey, you’re not looking for work anymore!’ We’re already in a recession! The people are feeling it. Every time that nozzle hits the gas tank, there is panic when people fill up their car. Who can afford this stuff? And these clowns on TV saying, ‘Oh, the consumer is resilient.’ (laughs) We’re warning that there are very rough times ahead and for people to take precaution now. HOW CAN PEOPLE TAKE PRECAUTION WHEN THERE SEEMS TO BE ROCKY FINANCIAL TERRITORY AHEAD OF EVERYBODY, INCLUDING PERHAPS THE RICH AND CORPORATIONS IN THE NEXT FEW MONTHS? One thing is don’t buy anything you don’t need. This Christmas stupidity of going and knocking yourself out to buy a lot of things that people don’t want, that you can’t afford. This is not an intelligent way to make decisions. Conservation EngineersAnd that brings us into another trend, which is positive: Conservation Engineers. How to conserve? How to use what you have for a more efficient way and bring in new materials and processes so that we can conserve more. We don’t call this the Green Movement. It’s the Smart Movement. And that’s what we are going to see, so there is going to be great job opportunities, great entrepreneurial opportunities for people who become conservation engineers, conservation specialists, using products, services and intelligence that brings us out of the Dark Age of Over-Consumption that we’ve been in for so long. OVER-CONSUMPTION HAS BEEN PROVOKED BY A GOVERNMENT THAT BASICALLY SAYS, ‘YOU – CONSUMERS – IT IS YOUR JOB TO GO OUT AND SPEND TO KEEP THE ECONOMY GOING.’ I know – what kind of craziness is this? You’re even hearing people like Warren Buffet – the 2nd richest man in the world – warning the nation that it’s turning into a plutocracy. I mean this is him and he’s intelligent enough to know! [ Editor’s Note: Plutocracy refers to the rule or power through wealth or by the wealthy. In a plutocracy, the degree of economic inequality is high, while the level of social mobility is low. This can apply to a multitude of government systems, as the key elements of plutocracy transcend and often occur concurrently with the features of those systems. The word plutocracy is derived from the ancient Greek root ploutos, meaning wealth and kratein, meaning to rule or to govern.] Aristotle is alleged to have said that the strength of a nation is built on its middle class. And dumb is dangerous. The more ignorant people are, the more desperate they are, the more it hurts all of us. It’s in everyone’s best interest to have an informed, intelligent society. WE ARE IN A COUNTRY THAT HAS BEEN COWED BY A GOVERNMENT POLICY OF FEAR IN ALL DIRECTIONS. PEOPLE ARE AFRAID TO STAND UP FOR THEMSELVES AND THAT’S WHAT MAKES ME WONDER: HOW DO YOU GET TO BETTER STEPS ON YOUR TRENDS, LIKE ‘SMALL IS BIG’ AND ‘HEAL YOURSELF HEALTH CARE’ – HOW DO YOU GET THERE WHEN IT IS THE ENTRENCHED GREED CORPORATIONS THAT DON’T WANT US TO WAKE UP AND CHANGE? The vacuum is so big right now – all of the institutions are failing. You name it – education, health care, military, economic, medical – they are all failing. When the vacuum is this big, it could be filled with anything. It could be filled with more Fascism, bigotry and hypocrisy – or it could be filled with beauty, art, love and understanding and dignity and passion and respect. It’s up to us to fill it. But people have to do it in their individual lives. Devalue American Dollar?The Trends Journal - Winter 2008, Trends Research, Rhinebeck, New York. ANOTHER PARAGRAPH I UNDERLINED UNDER TAX REVOLT – QUOTING FROM YOU – ‘WITH THE DISPARITY BETWEEN RICH AND POOR TRENDING WIDER, 1% OF THE POPULATION TOOK IN 22.2% OF ALL INCOME IN 2005, WHILE THE BOTTOM 50% SALVAGED 12.8%.’ THE GULF BETWEEN THE RICH AND THE REST OF THE STRUGGLING COUNTRY, IS BECOMING SO HUGE IN THE UNITED STATES THAT IT MAKES ME WONDER HOW WILL WE EVER BALANCE OUT AGAIN? They (Feds) are going to balance it out by devaluing the dollar. That’s the way they are going to do it, and the impact is going to be tremendous. You can see what happened in Argentina when they did it and you can see what happened in other countries. The same thing is going to happen here. There will be massive unemployment. We’re going to see the worst economic conditions in the United States in the years ahead that anyone living has ever seen. PEOPLE CAN’T DO ANYTHING UNLESS THEY GO TO BANKS TO BORROW MONEY TO GET THINGS ACCOMPLISHED AND THEN YOU’RE RIGHT BACK DEALING WITH THE PEOPLE WHO PUT US IN THIS PROBLEM IN THE FIRST PLACE. That’s only part of it. Nobody broke people’s arms to go take out home equity loans. They did it on their own free will. And people are spending way beyond their means. Nobody out there forced people to build McMansions or drive SUVs. They did it all on their own. The people have to become more intelligent. They’ve become lazy and information-ignorant. And until they change, nothing is going to change. I believe it is going to change because there are enough people that want it to change. Not everybody is a Paris Hilton fan. TechnoslavesBUT THE FINAL TREND THAT YOU HAVE, TECHNOSLAVES.COM – WHEN I READ THAT, I THOUGHT THAT’S ABSOLUTELY TRUE. THE YOUNGER GENERATION ESPECIALLY IS BECOMING NUMBED BY I-PODS AND X-BOXES AND HOW IN THE WORLD DO YOU EDUCATE A GENERATION THAT IS SO TECHNOSLAVED? They are going to have a very difficult time because they have been built up with this false belief that somehow they are special because they can hit little buttons really fast and move their fingers nimbly over the little keys. It’s a worldwide epidemic. They are becoming technoslaves. Every time that phone rings, it has to be answered as if it is something ranging between life and death is going to be solved in the next few seconds. And it’s not like I haven’t been here and did not know when the whole cell phone thing happened. It’s a choice that I don’t have one. All my friends said, ‘Oh, I’m only going to use it in an emergency.’ But now you’re having a conversation between two people in the flesh and somebody from who knows where? They ring up and your conversation is broken up. The playing field, we believe, is going to be broken down to more and more local. More self-sustaining. You don’t have to get all these products coming from all these countries. So, we see a real breaking down. Actually, we also see a real renaissance. We think this is the end of the Dark Ages and that people are going to start going back to a higher quality. When we raise the quality bar, then everything goes up with it. That’s a strength that the United States has, if we get the kind of leadership that can push us in that kind of direction.” Source:www.earthfiles.com/news.php?ID=1364url for this post: tinyurl.com/38hmvcNote: For complimentary reading see today's post at:Re: Sustainable Development « Reply #27 on 01/03/08 at 2:42pm »
PERIL AND PROMISE: DUANE ELGIN ON SIMPLICITY AND HUMANITY'S FUTURE Part 1 of 2 Go to: tinyurl.com/2f6o68
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michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
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Post by michelle on Jan 24, 2008 14:45:20 GMT 4
People of Color Face Historic Wealth Loss Wednesday, 23 January 2008 A Black Agenda Radio commentary by Glen Ford The subprime lending debacle should cause massive rethinking among those who have long proclaimed that the route to Black equality is through wealth accumulation. In a report titled, "Foreclosed: State of the Dream 2008," United for a Fair Economy details the catastrophic losses inflicted on Blacks and Latinos in the U.S. at the hands of predatory lenders - "the greatest loss of wealth to people of color in modern U.S. history." With more than half of Blacks in many cities caught in the subprime trap - and with even these usurious financing schemes disappearing in the wake of the bubble-burst - the prospects for Blacks to amass wealth have grown bleaker than at any time in living memory. At the current rate, it will take 5,423 years for Blacks to achieve homeowner parity with whites. People of Color Face Historic Wealth Loss A Black Agenda Radio commentary by Glen Ford "It could take more than 5,000 years before Blacks achieve homeowner parity with whites!" The core institutions of American capitalism have condemned Black and Brown America to further centuries of wealth disparity. Now standing at about ten-to-one, the wealth gap between African American and white median households cannot but grow bigger in the wake of the subprime lending catastrophe. The Boston-based United for a Fair Economy recently released a report, detailing the carnage wreaked on people of color by predatory lenders - and it is mind-boggling. The report, titled "Foreclosed: State of the Dream 2008," shows definitively that banks and other lending institutions trapped Blacks and Latinos in predatory lending schemes as a matter of policy. "Even a surface check of the demographics shows," the report says, "that, in city after city, a solid majority of subprime loan recipients were people of color." The very scope of the crime proves that the lending crisis is not the product of Black "culture," but the result of calculated policies, near-uniformly carried out by virtually all of the nation's mortgage lending institutions. This is institutional racism writ large, and indisputable. The money-lenders have already sucked the value out of whole communities, urban and suburban. The wealth loss is staggering: People of color have collectively lost between "$164 billion to $213 billion over the past eight years," with Latinos losing slightly more than African Americans. For the average American, wealth is passed on through the value of homes. That dream, as the report concludes, has been largely foreclosed. Before the crisis hit, it was estimated that it would take 594 years - more than half a millennium! - for Blacks to catch up with whites in household wealth. Now, in the aftermath of the home mortgage massacre, it could take ten times as long - more than 5,000 years! - before Blacks achieve homeowner parity with whites. Looking backward, that stretches from now to when the great pyramids were built. "People of color have collectively lost between $164 billion to $213 billion over the past eight years." If Black wealth creation through home-owning is central to the drive for equality, then the private sector cannot be allowed free reign; they have already proven themselves criminally culpable in the death of dreams. And the crisis is by no means over. The rot extends to the non-mortgage practices of global financial institutions, that bundle worthless paper and trade it like real money. So deeply corrupt are the mega-banks, brokerage houses and finance capitalists of all kinds, the entire planetary house of cards is in danger of collapse. Domestically, cities are already feeling the crunch of diminishing home property taxes - having long ago given away much of their tax base to attract many of the same corporations that created the current crisis. Boarded up houses destroy property values in the surrounding neighborhood, but there are at present no reliable private mechanisms to reverse the devastation. The banks aren't even taking each other's paper - knowing it is as worthless as their own. Forget the sales sloganeering, that owning a home is the "American Dream." Affordable housing is what the people need, whether rental or family-owned - many millions of new units. The private sector cannot - will not - provide affordable housing, since it is more concerned with creating artificially high sale values than with meeting the public's crying needs. Now that the bubble has burst, it should never be allowed to be re-inflated. There is only one alternative, and that is massive public spending on housing that fits the actual needs and budgets of the citizens. That's the very least one can demand from one's government. For Black Agenda Radio, I'm Glen Ford. Source tinyurl.com/2qarhyNote from Michelle: I can't say I agree with the following:"There is only one alternative, and that is massive public spending on housing that fits the actual needs and budgets of the citizens. That's the very least one can demand from one's government."I mean, goverment funded housing and HUD allowed landords to charge way over market price rentals. Many times, government backed housing concentrated the poor or lower incomes in selected areas....This does not create a healthy society, community, or an empowered people.....Michelle
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michelle
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I have broken any attachments I had to the Ascended Masters and their teachings; drains your chi!
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Post by michelle on Feb 2, 2008 4:03:22 GMT 4
Something Had to Give How Oil Burst the American BubbleFinally, an article that hits upon [or at least mentions to a limited extent] some of my long time major bitches about life in the united States...URBAN SPRAWL, which means the ABANDONING of our towns and cities in order to buy bigger homes, which closed schools in our NOW IMPOVERISHED towns and cities, forcing children to RIDE THE BUS to combined school systems closer to the more affluent neighborhoods, away from their homes, families, and THE END of availability of local sports and programs for poorer kids. Beautiful land, pasture and forest was PERMANENTLY DELETED from the surface of our country and PAVED OVER to build schools, malls, and businesses all so the charmed ones in this country could buy totally unnecessary bigger homes TO HEAT in places that they could show off the luxury they could afford, in places where there is no town proper and you have to DRIVE EVERYWHERE....no worry though in their cushy, comfortable, GAS-GUZZLING SUV's, while THE AUTOMOBILE INDUSTRY, as long as the cash was flowing, didn't give a damn to build and give Americans a fleet of economical and gas conserving automobiles. Where are you at now, charmed ones? Stuck on the highway, I'd say.
And from we poorer citizens in the burnt out towns and cities: Thanks for your self interest and lack of foresight. Thank you for the fact that we have no place to shop for goods and groceries except at the Dollar Store [which sells cheap crap and food at the end of its expiration date]. Thank you that our kids have one to two hours taken out of their little lives ridding the bus to school and thanks for excluding them from sports and after school activities because we really can't afford the gas to run them around, or maybe we don't have a car at all...and the public bus service has been cut drastically from our areas. Maybe when schools cut back on busing, they won't be able to go to school at all...cementing the emerging feudalism in our country...MichelleTomgram: Michael Klare, Barreling into Recession posted January 31, 2008 3:35 pm The latest economic news is striking. The U.S. economy has come to a "virtual standstill." The bubble has burst and, with anxious global markets registering the shock, other bubble economies worldwide continue to shudder at the possibility that American consumers might be forced to rein in their decade-long buying spree of imported goods.
Though any reader of newspaper business pages has surely noticed that oil news, oil deals, and oil prices have been front and center, the role of oil in our new economic moment has been underemphasized of late. It's hard even to remember -- now that the price of a barrel of crude oil has hit the $100 mark and still hovers around $91 -- that, in the week after September 11, 2001, oil was still under $20 a barrel. Think of this as another modest accomplishment of the Bush administration, helped along by its rash war in Iraq, which actually took oil off the market. In a mere six years, we've gone from the era of cheap oil to the era of pricy petroleum or "tough oil", with a new spike at the gas pump expected as early as this spring. The results are now there for all to see -- in growing misery at home as well as stunning global financial and power shifts.
Michael Klare has long been ahead of the curve. In the late 1990s, he was already writing about "resource wars" in the coming century; as that century dawned, his next book, Blood and Oil, arrived; and now, just in time for a new global era, his latest book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, is ready to appear. You could say that he saw much of this coming and here he offers us an assessment of the missing role that energy played in the bursting of the American bubble. Tom Something Had to Give How Oil Burst the American BubbleBy Michael T. Klare The economic bubble that lifted the stock market to dizzying heights was sustained as much by cheap oil as by cheap (often fraudulent) mortgages. Likewise, the collapse of the bubble was caused as much by costly (often imported) oil as by record defaults on those improvident mortgages. Oil, in fact, has played a critical, if little commented upon, role in America's current economic enfeeblement -- and it will continue to drain the economy of wealth and vigor for years to come. The great economic mega-bubble arose in the late 1990s, when oil was cheap, times were good, and millions of middle-class families aspired to realize the "American dream" by buying a three (or more) bedroom house on a decent piece of property in a nice, safe suburb with good schools and various other amenities. The hitch: Few such affordable homes were available for sale -- or being built -- within easy commuting range of major metropolitan areas or near public transportation. In the Los Angeles metropolitan area, for example, the median sale price of existing homes rose from $290,000 in 2002 to $446,400 in 2004; similar increases were posted in other major cities and in their older, more desirable suburbs. This left home buyers with two unappealing choices: Take out larger mortgages than they could readily afford, often borrowing from unscrupulous lenders who overlooked their overstretched finances (that is, their "subprime" qualifications); or buy cheaper homes far from their places of work, which ensured long commutes, while hoping that the price of gasoline remained relatively low. Many first-time home buyers wound up doing both -- signing up for crushing mortgages on homes far from their places of work. The result was metastasizing exurban home developments along the beltways that surround major American cities and along the new feeder roads that now stretched into the distant countryside beyond. In some cases, those new homeowners found themselves 30, 40, even 50 miles or more from the urban centers in which their only hope of employment lay. Data released by the U.S. Census Bureau in 2004 showed that virtually all of the fastest growing counties in the country -- those with growth rates of 10% or more -- were located in exurban areas like Loudoun County, Virginia (35 miles west of Washington, D.C.) or Henry County, Georgia (30 miles south of Atlanta). At the same time, cheap oil and changing consumer tastes -- pushed along by relentless advertising campaigns -- led many of the same Americans to trade in their smaller, lighter cars for heavy SUVs or pickup trucks, which, of course, meant only one thing -- a significant increase in oil consumption. According to the Department of Energy, total petroleum use rose from an average of 17 million barrels per day in 1990 to 21 million barrels in 2004, an increase of 24% -- most of it being burned up on American roads. Let the Good Times Roll (into the Exurbs) In 1998, when the bubble was taking shape, crude oil cost about $11 a barrel and the United States produced half of the petroleum it consumed; but that was the last year in which the fundamentals were so positive. American reliance on imported petroleum crossed the 50% threshold that very year and has been rising ever since, while the cost of imported oil hit the $100 per barrel mark this January 2 for the first time, an all-time record (though the price was once briefly higher, as measured in older, less inflated dollars). When that steady price climb, combined with growing dependence on imported petroleum, was translated into the new exurban landscape the economic bubble began to shudder. As a start, there was that ever-increasing outflow of dollars needed just to pay for all those barrels of crude and the resulting surge in America's foreign-trade deficit. Consider this: In 1998, the United States paid approximately $45 billion for its imported oil; in 2007, that bill is likely to have reached $400 billion or more. That constitutes the single largest contribution to America's balance-of-payments deficit and a substantial transfer of wealth from the U.S. economy to those of oil-producing nations. This, in turn, helped weaken the value of the dollar in relation to key foreign currencies, especially the euro and the Japanese yen, boosting the cost of other imported foreign goods and so threatening to fuel inflation at home. Meanwhile, two critical developments kept the cost of oil rising: a dramatic increase in global demand, largely driven by the emergence of China and India as major consuming nations; and a pronounced slowdown in the expansion of global supply, due mainly to a dearth of new discoveries and recurring political disorder in key oil fields already in production. This meant that American energy consumers -- including all those long-distance commuters with crippling mortgages and gas-guzzling SUVs -- had to compete with newly-affluent Chinese and Indian consumers for access to ever more costly supplies of imported petroleum. Something had to give. As the oil import bill kept rising, the value of the dollar kept falling, and inflationary pressures kept building, the country's central bankers responded in classic fashion by raising interest rates. This naturally resulted in substantially higher monthly payments for homeowners with variable-rate mortgages. For many families already stretched to the limit, this would prove the final blow. Forced to default on their mortgages, they then precipitated the subprime crisis by, in effect, puncturing the bubble. Even then, the economy might have had a chance had that crisis not come in tandem with the $100 barrel of oil. By December, consumers were cutting back on nonessential purchases, producing the most disappointing holiday retail season since 2001. When questioned, many indicated that the high cost of gasoline and home-heating fuel had forced them to economize on Christmas gifts, winter vacations, and other indulgences. "If gasoline prices go up, that means there's less to spend on everything else," said David Greenlaw, chief U.S. fixed-income analyst at Morgan Stanley. The high price of gasoline was bad news for another pillar of the economy as well: the auto industry. While Japanese companies were busy rolling out hybrid vehicles and small, fuel-efficient conventional cars, Detroit stuck doggedly to its now-obsolete business model of producing large SUVs and light trucks, which had, in recent years, been the source of most of its profits. Once the price of oil went stratospheric, of course, Americans predictably stopped buying the gas guzzlers, signing what looked like an instant death certificate for an improvident industry. In 1999, for example, Ford sold more than 428,000 mid-sized Explorer SUVs; in the first 11 months of 2007, the equivalent number was 126,930 Explorers (and even that puts a gloss on the corpse, as November was one of the worst months in recent automotive history). An auto industry in decline naturally means that many ancillary industries will be facing contraction, if not disaster. Popping the Bubble Then came January 2. Although oil retreated from the $100 mark by the end of that day on the New York Mercantile Exchange, the damage had been done. Stocks on the New York Stock Exchange plummeted, suffering their worst loss on a New Year debut since 1983. Gold, meanwhile, soared to an all-time high -- a sure indication of international anxiety about the vigor of the U.S. economy. Since then, stock market panics have hit major financial centers around the world. Only a dramatic last-minute decision by the Federal Reserve to reduce overnight lending rates by three-quarters of a point before the markets opened on January 22 averted a further, potentially catastrophic slide in stock prices. Many analysts now believe that a recession is inevitable -- possibly a long and especially painful one. A few are even mentioning the "D" word, for depression. Whatever happens, the American economy will eventually emerge from this crisis significantly weaker, largely because of its now-inescapable dependence on imported oil. Over the past decade, this country has squandered approximately one and a half trillion dollars on imported oil, much of which has been poured down the tanks of grotesquely fuel-inefficient vehicles that were conveying drivers on ever lengthening commutes from the exurbs to employment in center cities. Today, a large share of this money is deposited in so-called sovereign-wealth funds (SWFs). Americans should get used to that phrase. It stands for giant pools of wealth that are under the control of government agencies like the Kuwait Investment Authority and the Abu Dhabi Investment Authority. These SWFs now control approximately $3 trillion in assets, and, with more petrodollars pouring into the petro-states every day, they are projected to hit the $12 trillion mark by 2015. What are those who control the sovereign-wealth funds doing with all this money? For one thing, buying up choice U.S. assets at bargain-basement prices. In the past few months, Persian Gulf SWFs have acquired a significant stake in a number of prominent American firms, giving them a potential say in the future management of these companies. The Kuwait Investment Authority, for example, recently took a $12 billion stake in Citigroup and a $6.5 billion share in Merrill Lynch; the Abu Dhabi Investment Authority acquired a $7.5 billion stake in Citigroup; and Mubadala Development of Abu Dhabi purchased a $1.5 billion share in the privately-held Carlyle Group. These acquisitions are just a small indication of a massive, irreversible shift in wealth and power from the United States to the petro-states of the Middle East and energy-rich Russia. These countries, notes the International Monetary Fund, are believed to have raked in $750 billion in 2007 and are expected to do even better this year -- and each year thereafter. What this means is not just the continuing enfeeblement of the American economy, but an accompanying decline in global political leverage. Nothing better captures the debilitating nature of America's dependence on imported oil than President Bush's humiliating recent performance in Riyadh, Saudi Arabia. He quite literally begged Saudi King Abdullah to increase the kingdom's output of crude oil in order to lower the domestic price of gasoline. "My point to His Majesty is going to be, when consumers have less purchasing power because of high prices of gasoline -- in other words, when it affects their families, it could cause this economy to slow down," he told an interviewer before his royal audience. "If the economy slows down, there will be less barrels of [Saudi] oil purchased." Needless to say, the Saudi leadership dismissed this implied threat for the pathetic bathos it was. The Saudis, indicated Oil Minister Ali al-Naimi, would raise production only "when the market justifies it." With that, they made clear what the whole world now knows: The American bubble has burst -- and it was oil that popped it. Thus are those with an "oil addiction" (as President Bush once termed it) forced to grovel before the select few who can supply the needed fix. Michael Klare, author of Resource Wars and Blood and Oil, is a professor of peace and world security studies at Hampshire College. His newest book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, will be published by Metropolitan Books in April 2008.
Copyright 2008 Michael T. Klare Source:www.tomdispatch.com/post/174888/michael_klare_barreling_into_recession
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michelle
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Post by michelle on Feb 6, 2008 14:28:00 GMT 4
Bush proposes $3.1 trillion spending plan Deficit budget has more for military, less for healthcareBy Michael Kranish and Matt Negrin, Globe Staff and Globe Correspondent February 5, 2008 WASHINGTON - President Bush proposed a $3.1 trillion budget yesterday that includes big increases in military spending, major cuts in payments to healthcare providers, and extensions of tax cuts that benefit the wealthiest Americans. Bush, who inherited a budget surplus, said he expects a near-record deficit of $407 billion when he leaves office next year. Bush sought to increase Pentagon spending by 7.5 percent, to $515 billion - plus $70 billion more for the wars in Iraq and Afghanistan for the coming year. At the same time, Bush proposed cuts in 151 government programs, such as grants for elders' food services and community services for the poor, and reduced spending in several others - including significant reductions in Medicare and Medicaid. Spending in many other programs was frozen. "The budget protects America and encourages economic growth," the president said, urging Congress to pass the budget quickly. He added that the plan reflects that "our top priority is to defend our country, so we fund our military, as well as fund the homeland security." But Senator Kent Conrad, the South Dakota Democrat who chairs the Senate Budget Committee, said Bush is proposing "more deficit-financed war spending, more deficit-financed tax cuts tilted to benefit the wealthiest." The president's proposal, Conrad said, is "a further explosion of debt and the undermining of our nation's economic security." Even some Republicans were skeptical of the budget, including the House Republican Study Committee, made up of 100 conservative members of Congress. The committee said in a statement that the budget "includes too much spending" and expressed concern about the increasing deficit, but said Republicans should fight any Democratic effort to raise taxes. A number of New England legislators complained that the new budget hurts two programs crucial to the region: the Low Income Home Energy Assistance Program, which faces a 22 percent reduction, and the National Institutes of Health medical research program, which won't see any funding increase. Representative Michael Capuano, Democrat of Massachusetts, decried Bush's proposal to cut LIHEAP by $280 million even though it helps the poor pay for heating and home insulation. "LIHEAP numbers now are only servicing something like 15 percent of the people who are eligible, and they want to cut that further?" he said. The NIH funds many medical projects at organizations and universities across the country, including many in Massachusetts. Because of inflation, "level funding" of its budget hurts research groups that rely on federal money, said Alan Dittrich, president of the Massachusetts Society for Medical Research. The organization's members include Partners HealthCare, Harvard University, and Boston University, as well as many other NIH-funded groups. "Each time you don't fund something or reduce it to make it impossible to complete the research, that's an opportunity lost, at least for a while," Dittrich said. The BU Medical Campus gets more than $100 million in NIH grants each year. For the past four years, the school's administration has coped with flat funding or small increases that don't keep pace with inflation. The budget includes the $150 billion economic stimulus package of personal tax rebates and corporate tax cuts that is now before Congress and is expected to be approved soon. The budget also proposes extending temporary tax cuts Bush enacted in 2001 and 2003, which are set to expire in 2010. Bush wants them extended to 2013, which he estimated would cost $635 billion. Many Democrats have proposed maintaining the tax cuts for the middle class but letting them expire for people earning more than $200,000. Under Bush's plan, defense spending would reach $515.4 billion, an increase of roughly 7.5 percent over the previous year, excluding war costs. A big chunk of new defense spending includes $20 billion to expand the Army and the Marine Corps - by 65,000 and 27,000 troops, respectively - by the end of 2010. The increase will pay for more recruiters, advertising campaigns, and larger cash bonuses for recruits and veterans who reenlist. "The defense budget has grown dramatically in the last eight years," said Steve Kosiak, a defense budget analyst at the Center for Strategic and Budgetary Assessments in Washington. "If the administration gets everything it wants, we'll be spending 37 percent more in real terms than in 2000. And that is only the base defense budget. If you add the war-related funding, we will be at or near record levels." The administration yesterday separately requested a down payment of $70 billion for war costs in fiscal year 2009. Pentagon officials said they plan to ask for more later in the year after the president reviews the current force levels in Iraq. The president's spending plan assumes that the economy will grow at 2.7 percent this year, but a recession could reduce tax revenue and add to the deficit. The White House said it expects to save $178 billion over the next five years through cuts in the Medicare health program for the elderly. White House budget director Jim Nussle said the reductions could be made by denying the "inflationary increases for providers," reducing expected payments to doctors and hospitals rather than decreasing benefits to individuals. Such a proposal is bound to attract intense opposition. When Bush took office in 2001, he inherited a surplus of $127 billion from the Clinton administration. That became a record deficit of $413 billion by 2004, which dropped $162 billion last year. Source: www.boston.com/news/nation/washington/articles/2008/02/05/bush_proposes_31_trillion_spending_plan/------------------------------------------------------------------------------------ Worst. Budget. Ever. 2/5/2008 12:27:51 PM Eastern Standard Time From: alerts@truemajorityaction.org He just doesn't get itThe budget President Bush released yesterday proves he's determined, right to the end, to run our economy into the ground. While Americans are losing their jobs and houses he's sticking with the old plan: tax breaks for the rich and the biggest military budget ever (not even counting the war spending).1 This isn't complicated. We need to invest our money in our real priorities. Actually, TrueMajority founder Ben Cohen spells out the whole solution -- in Oreo cookies -- right here. Watch how the cookie crumbles www.truemajorityaction.org/oreos/ , and then send it on to a friend. We're building our campaign to make Congress re-write this budget so that it actually builds America. Experts say money spent on unemployment insurance and food stamps, among other things, would really get money back into circulation and stimulate the economy2 -- instead, about the only place this administration wants to add money is into Pentagon waste. Show a friend that the solution is right in front of us. Matt Holland TrueMajority.org Online Director
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michelle
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Post by michelle on Mar 1, 2008 13:54:55 GMT 4
Rising Inflation Creates Unease in Middle EastRobert F. Worth AMMAN, Jordan — Even as it enriches Arab rulers, the recent oil-price boom is helping to fuel an extraordinary rise in the cost of food and other basic goods that is squeezing this region’s middle class and setting off strikes, demonstrations and occasional riots from Morocco to the Persian Gulf.Here in Jordan, the cost of maintaining fuel subsidies amid the surge in prices forced the government to remove almost all the subsidies this month, sending the price of some fuels up 76 percent overnight. In a devastating domino effect, the cost of basic foods like eggs, potatoes and cucumbers doubled or more. In Saudi Arabia, where inflation had been virtually zero for a decade, it recently reached an official level of 6.5 percent, though unofficial estimates put it much higher. Public protests and boycotts have followed, and 19 prominent clerics posted an unusual statement on the Internet in December warning of a crisis that would cause “theft, cheating, armed robbery and resentment between rich and poor.” The inflation has many causes, from rising global demand for commodities to the monetary constraints of currencies pegged to the weakening American dollar. But one cause is the skyrocketing price of oil itself, which has quadrupled since 2002. It is helping push many ordinary people toward poverty even as it stimulates a new surge of economic growth in the gulf.“Now we have to choose: we either eat or stay warm. We can’t do both,” said Abdul Rahman Abdul Raheem, who works at a clothing shop in a mall in Amman and once dreamed of sending his children to private school. “We’re not really middle class anymore; we’re at the poverty level.” Some governments have tried to soften the impact of high prices by increasing wages or subsidies on foods. Jordan, for instance, has raised the wages of public-sector employees earning less than 300 dinars ($423) a month by 50 dinars ($70). For those earning more than 300 dinars, the raise was 45 dinars, or $64. But that compensates for only a fraction of the price increases, and most people who work in the private sector get no such relief. The fact that the inflation is coinciding with new oil wealth has fed perceptions of corruption and economic injustice, some analysts say.“About two-thirds of Jordanians now believe there is widespread corruption in the public and private sector,” said Mohammed al-Masri, the public opinion director at the Center for Strategic Studies at the University of Jordan. “The middle class is less and less able to afford what they used to, and more and more suspicious.” In a few places the price increases have led to violence. In Yemen, prices for bread and other foods have nearly doubled in the past four months, setting off a string of demonstrations and riots in which at least a dozen people were killed. In Morocco, 34 people were sentenced to prison on Wednesday for participating in riots over food prices, the Moroccan state news service reported. Even tightly controlled Jordan has had nonviolent demonstrations and strikes. Inflation was also a factor — often overlooked — in some recent clashes that were seen as political or sectarian. A confrontation in Beirut between Lebanese Army soldiers and a group of Shiite protesters that left seven people dead started with demonstrations over power cuts and rising bread prices. In Bahrain and the United Arab Emirates, inflation is in the double digits, and foreign workers, who constitute a vast majority of the work force, have gone on strike in recent months because of the declining purchasing power of the money they send home. The workers are paid in currencies that are pegged to the dollar, and the value of their salaries — translated into Indian rupees and other currencies — has dropped significantly. The Middle East’s heavy reliance on food imports has made it especially vulnerable to the global rise in commodity prices over the past year, said George T. Abed, the former governor of the Palestine Monetary Authority and a director at the Institute of International Finance, an organization based in Washington. Corruption, inefficiency and monopolistic economies worsen the impact, as government officials or business owners artificially inflate prices or take a cut of such increases.“For many basic products, we don’t have free market prices, we have monopoly prices,” said Samer Tawil, a former minister of national economy in Jordan. “Oil, cement, rice, meat, sugar: these are all imported almost exclusively by one importer each here. Corruption is one thing when it’s about building a road, but when it affects my food, that’s different.” In the oil-producing gulf countries, governments that are flush with oil money can soften the blow by spending more. The United Arab Emirates increased the salaries of public sector employees by 70 percent this month; Oman raised them 43 percent. Saudi Arabia also raised wages and increased subsidies on some foods. Bahrain set up a $100 million fund to be distributed this year to people most affected by rising prices. But all this government spending has the unfortunate side effect of worsening inflation, economists say. Countries with less oil to sell do not have the same options.In Syria, where oil production is drying up, prices have also risen sharply. Although it has begun to liberalize its rigid socialist economy, the government has repeatedly put off plans to eliminate the subsidies that keep prices artificially low for its citizens, fearing domestic reprisals. Even so, the inflation of the past few months has taken a toll on all but the rich.Thou al-Fakar Hammad, an employee in the contracts office of the Syrian state oil company, has a law degree and earns just less than 15,000 Syrian pounds, or $293, a month, twice the average national wage. His salary was once more than adequate, and until recently he sent half of it to his parents. But rising prices have changed all that, he said. Now he has taken a second job teaching Arabic on weekends to help support his wife and young child. Unable to buy a car, he takes public buses from his two-room apartment just outside Damascus to work. He can afford the better quality diapers for his son to wear only at night and resorts to cheaper ones during the day. He cannot send anything to his parents. “I have to live day to day,” he said. “I can’t budget for everything because, should my child get sick, I’d spend a lot of what I earn on medication for him.” At the same time, a new class of entrepreneurs, most of them with links to the government, has built gaudy mansions and helped transform Damascus, the Syrian capital, with glamorous new restaurants and cafes. That has helped fuel a perception of corruption and unfairness, analysts say. On Wednesday the state-owned newspaper Al Thawra published a poll that found that 450 of 452 Syrians believed that their state institutions were riddled with corruption. “Many people believe that most of the government’s economic policies are adopted to suit the interests of the newly emerging Syrian aristocracy, while disregarding the interests of the poor and lower middle class,” said Marwan al-Kabalan, a political science professor at Damascus University.The same attitudes are visible in Jordan. Even before the subsidies on fuel were removed this month, inflation had badly eroded the average family’s earning power over the past five years, said Mr. Tawil, the former economic minister. Although the official inflation rate for 2007 was 5.4 percent, government studies have shown that middle-income families are spending far more on food and consuming less, he added. Last year a survey by the Economist Intelligence Unit found that Amman was the most expensive Arab capital in cost of living. Mr. Abdul Raheem, the clothing store employee in Amman, said, “No one can be in the government now and be clean.” Meanwhile, his own life has been transformed, Mr. Abdul Raheem said. He ticked off a list of prices: potatoes have jumped to about 76 cents a pound from 32 cents. A carton of 30 eggs went to nearly $4.25 from just above $2; cucumbers rose to 58 cents a pound from about 22. All this in a matter of weeks. “These were always the basics,” he said. “Now they’re luxuries.”With a salary equivalent to $423 and rent at $176, paying for food and fuel exhausts his income, he said. “But we are much better off than others,” he added. “We are the average.” Nawara Mahfoud contributed reporting from Damascus, Syria.Source:www.nytimes.com/2008/02/25/world/middleeast/25economy.html
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