Friday, December 31, 2010
Economics and global finance are complicated concepts to fully understand. This is intentionally so. It makes it easier for those in power to deceive by throwing a statistic or two and using the media to push the propaganda of optimism.
Just like when you look up in the sky and see dark clouds, its a signal that rain is coming, economics and finance works in the same way. The problem is since Sept. 2008 and the massive government injection of free money to banks and the stock market, all the normal signs of what makes a healthy v. unhealthy economy are now skewed.
So here's a quick cheat sheet for the everyday person to understand--
1) Stocks- No translation to everyday main street economy or job creation
If stocks go up- bankers get Big bonuses; media & govt tout 'Recovery'
If stocks go down- more stimulus needed; larger national debt
2) Dollar- Fiat currency- pieces of paper not backed by anything
If dollar goes up- people can buy more goods/services with less $$
If dollar goes down- businesses can export cheaper; prices go up, Up, UP
3) Gold- Precious metal that used to back US Dollar until 1971
If gold goes up- dollar is weaker, losing confidence- economy worsening
If gold goes down- dollar strengthens, sincere optimism- economy improves
4) Commodity prices- Corn, Wheat, Soy, Oil, etc...
If they go up- investors making Profits; don't trust stocks, basics cost more
If they go down- investors can make a killing elsewhere; basics cost less
5) Taxes & National Debt
US Govt spends $1.20 for every $1 it takes in with taxes
$19,396,316,137.56 ($19+ billion) - November's Interest on National Debt
Currently at 9.8%- definition of 'unemployed' changed during Clinton
True Unemployment- approximately 18% of Americans
~ Points 1 - 4 apply to all economies, not just USA. There is no correlation between the global markets growing and national economies prospering. The Euro, Yen, etc.. are also pieces of paper backed by nothing. All investors of all nationalities are economic sociopaths- oil can go up.. food can go up.. as long as he/she is making a profit off it.
Questions (these are not a multiple choice 'questions')
1) Who did the Gov't (including the Fed) bail out in 2008 w. your tax $$?
1) Banks and financials like AIG, Goldman Sachs (continuing)
2) Credit card companies like AMEX & Discover- allowed to become 'banks'
3) Foreign banks in various European nations and in Japan
4) Freddie & Fannie Mae (continuing)
5) The automotive industry- Chrysler & GM
6) Non-banking entities like Harley Davidson and McDonald's
7) IMF, which US holds majority in weighted vote-18% (continuing)
8) ECF, which made it possible for EU to bail out some of its member states
2) How to tell if Economy is truly improving?
1) Unemployment drops; people working
2) Jobs provide real wages and benefits- fast food & temping do not count
3) Decreasing stats- # of welfare recipients, food stamps usage, etc..
4) Housing prices stabilize w/out Govt intervention; propping
5) Regain some form of manufacturing base domestically
6) Price of gold per oz. drops
Economics and global finance are very intricate concepts but this basic 'cheat sheet' will allow any person to quickly understand what signs to look for to determine whether there's a sincere recovery on the horizon or just more government and media Lying.
I could answer that question with a very lengthy answer involving really big and complex words and phraseology to convey a position of great importance but then I would be a Liar.
And that's the main function of that position- to Lie.
Not to lie about the statistical findings.. just to always convey false optimism that the housing market is Just turning the corner any moment.. to Lie so that Realtors will have business.
The current chief economist for the National Association of Realtors is Lawrence Yun. He is the one responsible for collecting the housing data, then presenting false positive spin to news media outlets like AP, which then get picked up in thousands of daily newspapers and local TV stations.
Yun's current lie, posted in the news today 12/30/10, was,"Deals are being driven by reduced prices and low interest rates that have created a historically high level of home affordability... Further gains in sales are still needed for the market to reach normal levels of sales activity, but the uptick is encouraging"
This was in response to a report that home sales contracts went up in November. Interestingly, only 24 hours prior, the major news story regarding homes was the beginning of the double-dip in housing based on Case-Schiller figures as home prices continue to drop.
Yun's predecessor was David Lereah. named in Time magazine in 2009 as one of "25 People to Blame for the Financial Crisis".
From the Time article- "When the chief economist at the National Association of Realtors, an industry trade group, tells you the housing market is going to keep on chugging forever, you listen with a grain of salt. But Lereah, who held the position through early 2007, did more than issue rosy forecasts. He regularly trumpeted the infallibility of housing as an investment in interviews, on TV and in his 2005 book, Are You Missing the Real Estate Boom?. Lereah says he grew concerned about the direction of the market in 2006, but consider his January 2007 statement: "It appears we have established a bottom." "
In a Money Magazine article from January 2009, he admits he spun the numbers:
"Q: Were you wrong to be so bullish?
A: I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right inline with most forecasts. The difference was that I put a positive spin on it. It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.
Q: Any regrets?
A: I would not have done anything different. But I was a public spokesman writing about housing having a good future. I was wrong. I have to take responsibility for that. "
A follow up interview with the Wall St Journal from Jan, 2009:
"Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts -- then was left to shoulder the blame when things went sour. "I was there for seven years doing everything they wanted me to,""
While Mr Lereah is no longer working for the NAR, his replacement, Mr Yun is doing the Exact Same Thing- Lying... Conveying a rosy, false positive outlook about the state of the housing and real estate market which an incredibly Lazy media takes at face value without the slightest bit of investigation into its validity.
Thursday, December 30, 2010
~ Newspaper cost --> Two Cents ~
(Sec. of Commerce) Lamont Forecasts Upturn in Business-- "Despite a decline in the industrial activity during 1930 of 20 percent below 1929 and a falling off in the quantity of imports and exports amounting to 30 percent and 20 percent, respectively. Secretary of Commerce (Robert) Lamont, in a statement today, expressed the belief that "the Inherent strength of our economic structure will enable our country to lead the world in a vigorous recovery from the present depression as we have done in the past."
~ Lamont, like so many so-called experts then (as is also the case today) was Wrong. The Great Depression would get worse before it got better, lasting an additional 10 years...
Europe Looks to US for 1931 Leadership -- "On the eve of the new year, Europe turns to the United States for economic leadership. Behind the criticism of America's domination of world business and the effort of many industrial minds to place the blame for the present depression at her door, there is a conviction that the first relief will and must come from the other side of the Atlantic... Thus there is a suggestion in responsible sections of the French press that no European economic union will be enduring unless it " is constituted alongside the United States of America . "To organize a union against the United States, it is asserted, would be as shortsighted as it would be fatal to its development."
~ By the end of W.W.I in 1919, almost every European nation owed the US money through war loans. This gave the US considerable political and economic clout, even amid global Depression. The only nation that would pay back the debt in full was Finland.
Busch Kin Abducted in St. Louis Suburb -- "Adolphus Busch Orthwein, 13 years, son of Mr. and Mrs. Percy J. Orthwein, was kidnapped New Years Eve from the grounds of the Orthwein home in Huntleigh Village, St. Louis County, by a lone negro with a revolver. The boy is a grandson of August A. Busch, president of Annheuser-Busch, Inc., and the great-grandson of the late Adolphus Busch, the brewer. At 7:30 P.M. the Orthwein chauffeur and the boy got into a limousine and started for the August A. Busch home at Grant's Farm, where the boy was to be a guest at a New Year's Eve dinner party. As the car neared Lindbergh Boulevard, still in the Orthwein grounds, a negro stepped suddenly from shrubbery, with a revolver in his hand and stopped the slowly moving car. He forced the chauffeur from the automobile, stepped in and took the wheel himself and drove away. The chauffeur returned to the Orthwein home on foot to notify the family of the kidnapping."
~ The boy was returned unharmed the next day and the kidnapper arrested. In desperate times, people do desperate things... A year later, on March 1, 1932, the Lindbergh baby was kidnapped, with a different end result.
Youth Holds up Cashier of Times Square Movie -- "Desperate because he was lonely and penniless, a young man held up the woman ticket seller of the Cameo Theatre at 138 West Forty-second Street last night, took $229 from her at the point of an imitation pistol made of glass, and, after a brief chase through the street throng of New Year merrymakers, was captured in the Blue Bird Ballroom a few doors away. At the West Thirtieth Street station,where he was held on a charge of robbery, the prisoner said he was Ray Vagnetti, 19 years old, and that he came here from Sandusky, Ohio, two months ago.'"The sight of the New Year's Eve celebrations made me feel more lonely and broke than ever and I must have gone crazy," he said."
~ $229 was quite a bit of money in 1931. Currently, the New York Times charges $2 for a daily paper at a news stand. This is 100x what it was in 1931, which was two cents.. figure $229 back then was equivalent of possessing $22,900 today.
Posted by Susquehanna at Thursday, December 30, 2010
Wednesday, December 29, 2010
Bank of America Buying Naughty Domain Names (PCWorld) -- "It's a common practice among the disgruntled, Internet-savvy customers to create websites with embarrassing domain names to sharpen any axes they have to grind with Corporate America and its executives. When confronted with these guerrilla attacks against their prestige, most companies grin and bear it. That's not the case with Bank of America, which has taken the offensive against offending domain names by buying them up.
The bank has been feverishly registering domains that include the names of its directors and executives combined with "sucks" or "blows," according to Domain Name Wire. Hundreds of domain names were registered by the bank on December 17 alone, Domain Name Wire said.
Among the names registered by the bank to protect its CEO Brian Moynihan, for example, were BrianMoynihanBlows.com, BrianMoynihanSucks.com, BrianTMoynihanBlows.com, and BrianTMoynihanSucks.com. In addition to the .com domains for those names, .net and .org versions were also registered (though .info seems to have escaped the bank's notice).
Other officials receiving domain protection include CFO Charles Noski, Chairman Charles Holliday, and board member Charles Rossotti... Despite its domain buying spree, there is one domain that it can't buy, and it's probably the most important naughty domain of all: bankofamericasucks.com. "
~ Bank of America has bought 439 URLs thus far...
I wonder if they've purchased www.bleepingbleepBankAmerica.com yet?
So instead of resolutions, I am going to be wishing things for 2011- hopefully most if not all what I wish for will come true, but if only one thing does, I will claim my wish list a success
That people would stop their collective herd mentality when it comes to being deceived by government, media and advertisers. This covers everything from believing pronouncements of 'recovery' and other empty-optimism, to understanding that because its the holiday season, you are not legally required to Shop and spend money... also 'Buy 2, get 1 free' is Not a real sale!
That Americans would take the time to learn what's going on economically in this great nation and not just ignorantly assume things will get better
That Americans would also pay more attention and genuinely care about other parts of the world, especially where this global financial crisis is concerned. It is affecting everyone- from Britain and continental Europe to Asia and to some extent, Australia as well.
That our Democrat President would stop acting like a Republican, acting like an articulate version of George W. Bush in his policies; stop possessing an admiration complex and policy 'man-crush' towards Reagan & his principles
That the general public.. the bottom 98%.. stop figuratively and literally bending over and taking it.. stop accepting things as they are. Speak out.. protest.. get pro-active and take a stand
That the general public act more frugal with their money- cut back on going to restaurants and movies, or concerts and sporting events... cut back on unnecessary expenditures and learn to save their hard-earned money for emergencies later on
That bankers, bankers, stock traders and investors who caused the 2008 collapse be arrested and incarcerated while their life possessions are taken from them and sold off at auction, much in the way the government treats drug dealers.
That people take their money out of banks.. stop allowing banks the usage of your money to loan out at 6-9% interest while paying you 0.001% interest in return
That the stock market drop to the 7000-8000 level.. not so much of a drop that the overall economy is adversely affected but enough that many investors lose their shirts and suffer for profiting off the current recession
And the economy is still an incredible mess that is not getting better..
But did you know--
Total U.S. revolving debt (98 percent is credit card debt) is $852.6 billion,
Total U.S. consumer debt: $2.42 trillion
If $50,000 stimulus checks were given to 150 million adult Americans, the total cost would be $7.5 Trillion
So... If the US Govt. had paid off every American's credit card debt, paid off the totality of US consumer debt & let's say, given $50,000 stimulus checks to 150 million adult Americans, the Total cost would be $10.77 Trillion dollars which is 2/3 of the $15 Trillion so far given to the banks and corporations.
Think about that-- every American would have zero debt and a nice amount of $$ in their banks to spend, save or invest and still would have cost less than what has been spent so far.
Why was this never done, nor even contemplated?
Simple- Government from the days of Reagan, believes in trickle-down economics. This is a philosophy where money is given to the banks, businesses and the wealthiest people first because the common people are too ignorant to use the money in as productive manner. So average person needs money? Ah, yes-- give $$ to banks at no interest so they can lend it to you at a profit after tightening credit eligibility. Average person out of work? Ah yes-- give $$ to business in the hope they will start hiring again when in truth, they will pocket the cash while continuing using temp help & underpaying and overworking skeleton crews of workers to maximize corporate profits.
You can not fully take control of your economic life until you fully understand and accept this reality-- Not only does government not care about you as a person, it does not want you to have a truly better life unless its within the parameters of an economic system they set up and control. They believe the economy will not recover until you are not only buying and spending, but getting into debt to do it. And if you personally collapse from the weight of your debt, its inconsequential.. for you, as an individual and your personal survival have absolutely no importance to the Government and its decision making polices... None.
Tuesday, December 28, 2010
Ever see reviews of a movie coming out that is simply glowing-- '5 stars'.. Thumbs Up... Must See!... and while you normally wouldn't see the film, the reviews convince you to go, then when you actually see the film, you find it to be a piece of crap and you walk out before its through? Its because you end up accepting a mob mentality that if A, B & C loved the film, you must go see it and undeniably will love it yourself.
This same mindset works with the news, espec. where economy is concerned.
Here are some headlines from yesterday, 12/27/10 --
Retailers Enjoy Biggest Shopping Boom since 2005 -- Yahoo News
Holiday Shopping Season was a Blessing for Retailers- Pioneer Press
Holiday Shopping Marathon Continues-- Santa Rosa Press Democrat
2010 Holiday Shopping May be Strongest Ever- WRIC Ch. 8 Richmond
Consumer Confidence Shows Surprise Drop in December (CNBC) -- "U.S. consumer confidence unexpectedly deteriorated in December, hurt by increasing worries about the jobs market, according to a private report released on Tuesday. The Conference Board, an industry group, said its index of consumer attitudes slipped to 52.5 in December from an upwardly revised 54.3 in November. The median of forecasts from analysts polled by Reuters was for a reading of 56.0. The expectations index declined to 71.9 in December from 73.6 in November. The present situation index fell to 23.5 from 25.4. Consumers' labor market assessment worsened. The "jobs hard to get" index rose to 46.8% in December from 46.3% last month, while the "jobs plentiful" index dropped to 3.9 percent from 4.3 percent."
Consumer confidence is an economic indicator which measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy. In essence, if the economy expands causing consumer confidence to be higher, consumers will be making more purchases.
When the economy is good, the Index will be between 100-110
Analysts were predicting the consumer confidence index to be 56.0, which would be a rise from November's numbers. They were Wrong. These are professionals who do this for a living and they were Wrong in their computations. It means all those economists that were trumpeted in the mainstream news lately for touting a robust 2011-- they will be Wrong too.
It also confirms A&G's previous posting "The economic Christmas Bucket List"- people did shop in droves this Christmas but it wasn't because they felt confident, optimistic or hopeful about the future. Many people were just worn out from three years of economic misery and determined to have the best damned Christmas possible as if it would be their last.
Every positive indicator of the consumer confidence index fell ... every negative indicator rose.
Here's the part of the Consumer Confidence survey which the media ignored (taken from The Conference Board's website) -- "Consumers' appraisal of present-day conditions was slightly more pessimistic than in November... those claiming business conditions are "good" declined to 7.5 percent from 8.5 percent. Consumers’ assessment of the labor market was less favorable than last month... Those anticipating fewer jobs in the months ahead increased to 19.5 percent from 19.1 percent, while those expecting more jobs declined to 14.3 percent from 15.1 percent. The proportion of consumers expecting an increase in their incomes decreased to 9.9 percent from 11.1 percent."
In summary, the media spent 5-6 weeks conveying "Recovery" and other "happy" nonsense, and wanted you to believe this by a constant drumbeating of that message into your subconscious. The reality is people are nervous and fearful about their future and the direction the nation & global economy is headed.. and rightfully so.
Lastly, if you're curious... The stock market acknowledged those consumer confidence figures and the broader sense of gloom people are feeling, by going Up 35pts as of 3:40p today
Perception -- Reality
I had been racking my brain in futility the past few weeks trying to understand why holiday sales figures are the best in three years when not a single positive action has been taken by the government in over two years to help the bottom 98% of the population in any meaningful way. Where was all this money that was being spent when official unemployment is at 9.8%, unofficially at 18%, people losing their credit, savings.. their homes.. banks not lending, home prices falling, etc..
And finally, after bouncing ideas off someone very smart who is pretty in tune with the mindset of people, by chance the real reason for this holiday season shopping boon dawned on me- Holiday sales went up in 2010 not because people are optimistic or upbeat about the recovery- its actually the opposite.
Many people have given up hope.
For many people who've experienced financial suffering for the past couple years; pinching pennies and trying their best to stay afloat, many have given up and decided instead to celebrate Christmas with a Bang! The mindset being something like this: 'I don't know what 2011 will bring.. don't know if I will have a job or continue receiving unemployment benefits... don't know if I will still be in this home next year at this time.. but I'm not going out like that.. I'm going to make this Christmas the BEST one ever for me and my family!'
And so these people shopped..and shopped & shopped. They maxed out their credit cards.. bought things they knew they couldn't afford but figured they were going bankrupt or being foreclosed upon anyways.. people used $$ meant for their mortgage payment to buy HDTVs and PlayStation3 and iPads and clothes and jewelry.. They were determined to have lots of presents under the tree and live for the moment, because 'tomorrow' was just too bleak to consider.
Many people this holiday season fulfilled their economic 'bucket list' and treated this Christmas as if there would be no other afterwards. AP and other news sources didn't seem to take that into account when writing their pollyanna propaganda fluff pieces touting "The Consumer is Back".
In a truly distorted way, if the 2011 Christmas shopping season is weaker than this year, it means people are rebuilding their economic lives and there's a sincere recovery taking place. If the numbers are stronger next year, then this nation is in a world of serious hurt.
Monday, December 27, 2010
This was not accidental.. it was a propagandistic blitzkrieg to make you and yours feel more confident to spend the little money you have left on presents, or to extend your credit cards either further.
Now that Christmas is over, its interesting the news items appearing today, Monday December 27th...
Bailed-Out Banks Slip Towards Failure (Wall St. Journal) -- "Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing. The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program."
Housing Double-Dip Ahead (CNBC) -- " 'The potential for a significant down-leg in home prices is being underestimated. The unsold existing inventory is still 80% above the historic norm at 3.7 million (unsold homes),' said David Rosenberg, chief economist at Gluskin Sheff"
$5 for a Gallon of Gas in 2012 (CNN Money) -- "The former president of Shell Oil, John Hofmeister, says Americans could be paying $5 for a gallon of gasoline by 2012. In an interview with Platt's Energy Week television, Hofmeister predicted gasoline prices will spike as the global demand for oil increases. "I'm predicting actually the worst outcome over the next two years which takes us to 2012 with higher gasoline prices," he said. Tom Kloza, chief oil analyst with Oil Price Information Service says Americans will see gasoline prices hit the $5 a gallon mark in the next decade... "
Baby Boomers near 65 with Retirements in Jeopardy (AP) -- ""The situation is extremely serious because baby boomers have not saved very effectively for retirement and are still retiring too early," says Olivia Mitchell, director of the Boettner Center for Pensions and Retirement Research at the University of Pennsylvania. There are several reasons to be concerned:
-- The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.
-- Reliance on stocks in retirement plans is greater than ever; 42 percent of those workers now have 401(k)s. But the past decade has been a lost one for stocks, with the Standard & Poor's 500 index posting total returns of just 4 percent since the beginning of 2000.
-- Many retirees banked on their homes as their retirement fund. But the crash in housing prices has slashed almost a third of a typical home's value. Now 22 percent of homeowners, or nearly 11 million people, owe more on their mortgage than their home is worth. Many are boomers.
-- Mortgage Debt. Nearly two in three people age 55 to 64 had a mortgage in 2007, with a median debt of $85,000.
-- Social Security. Nearly 3 out of 4 people file to claim Social Security benefits as soon as they're eligible at age 62. That locks them in at a much lower amount than they would get if they waited.
The monthly checks are about 25 percent less if you retire at 62 instead of full retirement age, which is 66 for those born from 1943 to 1954. If you wait until 70, your check can be 75 to 80 percent more than at 62. So, a boomer who claimed a $1,200 monthly benefit in 2008 at age 62 could have received about $2,000 by holding off until 70.
-- Medical Costs. Health care expenses are soaring, and the availability of retiree benefits is declining. "People cannot fathom how much money will be needed to simply cover out-of-pocket medical care costs," says Mitchell of the University of Pennsylvania.
-- Employment. Boomers both need and want to work longer than previous generations. But unemployment is near 10 percent, and many have lost their jobs. The average unemployment period for those 55 and older was 45 weeks in November. That's 12 weeks longer than for younger job-seekers. It's also more than double the 20-week period this group faced at the beginning of the recession in December 2007."'
~ * ~ You know its funny... between all the 'Black Friday' mayhem and the "Holiday Shoppers are Back!!" declaration by AP just 2 days ago, I didn't see these types of news articles for over a month. It's almost like, I don't know.. the news media sat on these stories during the holidays so not to upset the retailers paying to advertise their Christmas sales. Like the 90s song from C&C Music Factory went.. "Things to make you go Hmm..."
Obviously with the three-day holiday weekend, there was little to no financial/economic news and even if so, not desiring to be 'bah humbug' on Christmas, 'A&G' took a few days off.
Now that the presents have been opened and the turkey (or ham, goose,etc..) has been eaten, its time to focus once again on the economic state of the nation. Before Christmas, I ran across a very good column written on Dec 23 in Yahoo Finance which I thought was very sincere...
The Eye of the Recession's Storm (Yahoo Finance)-- "Is the recession really (not just technically) over? Is the economy coming back? Are jobs coming back? Obviously, the answers to those questions depend upon whom you talk with. As the old saying goes, “If your neighbor loses his job, we’re in a recession. If you lose your job, we’re in a depression.” "
"Here in America, the economic news is still pretty dire. A recent survey of college seniors revealed that 85 percent said they planned on moving back in with Mom and Dad. They simply can’t find jobs. The October 25, 2010, edition of USA Today ran the headline: For Many Over 55, Debt Defers Dreams: Recession Strips Away Savings, Jobs. The article states, “The unemployment rate for Americans 55 and older was 7.2% in September, a major increase from 2.9% in September 2006.”"
"Overseas, the news isn’t much better. The British government recently announced austerity programs that will cut 500,000 government jobs and cut welfare payments drastically. The French rioted in the streets, protesting the retirement age being raised two years from 60 to 62. Japan is now sending work overseas, which means more unemployment in Japan. The Yen’s strength makes Japanese products more expensive. So they seek lower-wage countries to manufacture their products. Toyota is set to produce 57 percent of its product overseas, up from 48 percent in 2005. Nissan will produce 71 percent overseas, up from 66 percent just last year. Bye-bye, Japanese jobs."
"The mortgage mess is only getting worse, not better. Many people aren’t paying their mortgages because they don’t have a job. Yet there are a growing number of people who have jobs but who are also refusing to pay their mortgage. A medical doctor friend of mine confirmed this growing trend. He said the doctors he works with, doctors who make a lot of money, are buying a lower-priced second home and then defaulting on their primary residence. If this trend turns into an avalanche, the real estate market will crash again. "
"The second half of the storm is about to hit. The leading edge of the storm was the subprime mortgage defaults, the storm that hit in 2007. The trailing edge of the storm will be the defaults of people who are solid citizens, people who have good jobs and good credit. How severe the second front of the storm will be is yet to be seen. If there are more people (like the highly paid doctors) who don’t want to pay for a house that is going down in value, the second half of the storm will be very severe."
"So is the recession really over? For some, the recession has been like Hurricane Katrina. They have lost everything in the storm but now the levies are about to break and the flooding will begin. For others, the recession never started. The reality is, unfortunately, that it’s far from over."
Friday, December 24, 2010
During the first winter of World War I, a Truce of ceasefires took place along the Western Front around Christmas of 1914. Through the week leading up to Christmas, parties of German and British soldiers began to exchange seasonal greetings and songs between their trenches; on occasion, the tension was reduced to the point that individuals would walk across to talk to their opposite numbers bearing gifts. On Christmas Eve and Christmas Day, many soldiers from both sides – as well as, to a lesser degree, from French units – independently ventured into 'no man's land', where they mingled, exchanging food and souvenirs. As well as joint burial ceremonies, several meetings ended in carol-singing, or – famously – games of football (soccer).
The video is a lesser known Paul McCartney song from 1983 called "Pipes of Peace" which depicts that famous Truce with Paul playing both a British and German soldier. Enjoy~
Posted by Susquehanna at Friday, December 24, 2010
Thursday, December 23, 2010
The United States is not the only nation desperately trying to steer its populace into putting all their life savings into the risky casino-like Ponzi scheme known as the stock market...
From the UK Telegraph-- Investors told forget savings accounts, think of shares: "Britain's 38 million savers have been urged to invest their money in the stock market after being warned that for many of them it is now a "waste of time" putting their cash into a savings account. The warning came after official figures indicated that the cost of living had increased once again in November, making it nearly impossible to earn a real rate of return on any bank or building society savings product."
It is the same situation across the pond in Great Britain as it is in the US- those in government in charge of finance have purposely destroyed the rate of return on savings in order to keep interest rates low to spur more borrowing and indebtedness. So savings accounts and more secure venues to place one's money are getting pennies on the dollar in terms of interest rate of return based on 2-3years ago.
The US, Britain and even Japan want as much money going into the stock market as possible so they don't have to subsidize it any further and that the banks & financials can have another revenue stream to cover the combined tens of Trillions of dollars in toxic debts they still secretly possess on their balance sheets but through accounting tricks and government encouragement to avoid panic & riots, are able to avoid disclosing.
The most horrid part is this.. the current ratio of Wall Street insiders selling to buying is 80 to 1. In simple terms, Wall St itself nor the London Stock Exchange believes in this rally but are desperate for fresh money to push up their stagnant and falling positions
The most horrid part is this.. the current ratio of Wall Street insiders selling to buying is 80 to 1. In simple terms, Wall St itself nor the London Stock Exchange believes in this rally but are desperate for fresh money to push up their stagnant and falling positions
"If you're in your 20s and are just starting to save for retirement, you've seen the market drop 55%, climb 88%, and drop again in a short span...If you're in your 30s and have been saving for the past decade, you've seen the stock market return essentially 0%," said Vanguard Chief Executive Bill McNabb
~ The stock market is one big Ponzi scheme and it keeps rising Solely because of hundreds upon hundreds of billions of dollars of fresh money injected by the Fed in the hopes it can re-attract young & mom & pop investors back so that eventually the government can take its money back out.
Very informative video from Russia Today- an interview that pretty much covers all the major economic themes in a very calm, thoughtful manner that "A&G" have been addressing since its inception... video is 11min, 30sec.
Wednesday, December 22, 2010
So why does the mainstream media distort truth? Two reasons- the advertisers want it and we the people tend to want it.
If the network news and 24hr news channels conveyed the current economic situation in an honest way and spent as much time focusing on the lower and middle class as they do the well-to-do investor, it would paint a very bleak picture of this nation and where we are headed. Advertisers would pull their sponsorship, networks would lose revenue, corporate profits would dwindle causing drop in stock prices, investors would be upset and people would lose money.
No way that will ever be allowed to happen. So you will get 98% of the population completely ignored in its coverage and lots of focus on Lindsay Lohan, the Kardashians and adorable footage of kittens playing with puppies.
The corporate driven mainstream media is in existence to make a profit. If people tune out and turn off because the coverage is too honest and sincere, ratings drop and money is lost. So news is catered to the public's need to not be truly informed.
And when the media touts 'Recovery', everyone is happy with the lie: the government that doesn't want to incite panic and protest, the media that doesn't want to lose viewership or advertisers, or be responsible for civil disobedience, those who are advertising who need people to believe "recovery" so they will spend their last dollars on the crap being advertised, and the people themselves who know things are real bad but wish to treat the economy like a self-affirmation-- that if you tell yourself things are better long enough, it eventually becomes a self-fulfilling prophesy and becomes Truth.
Finance and economic news can be complicated and at times as dry as burnt toast. It also tends to be quite abstract and detached from daily realities most people have. Then when you add the psychological equation of corporate media and government telling you we've been in 'recovery' since June 2009 and that the banks and financials are to be saved at all cost while you can go eat cake, there tends to grow a mindset it people that its their fault for the economic crisis.
Some people honestly believe its their fault they are out of work or still can't find work... their fault they can't pay their mortgages or credit cards.. their fault that economically things are so bad when the rest of the nation is recovered... Of course this is all BS..
Its not everyday people's fault that companies refuse to hire unless its temp work and at wages 15-35% below pre-2008 levels, while collectively sitting on close to 2 trillion in cash reserves. Or that the government has pumped over $14trillion dollars since Sept 2008 to the global banking system in the US, Europe and Asia, in order to artificially pump the stock market up while completely ignoring mainstream America. Or that through NAFTA and other trade treaties, manufacturing jobs have been shipped to all far points of the globe, turning the US into a service based economy. Or that to get a decent paying job, you have to acquire tens upon tens of thousands of dollars in student debt (potentially hundreds of thousands in debt if acquiring Masters degrees or Doctorates) which you can not get rid of even in bankruptcy.
A theme that A&G continually tries to convey is that there are Two Americas. One could argue that this has always been the case, but the gap between the two has widened considerably in the past two years. The above video shows Camden, NJ- a city gripped with poverty and despair, drugs and crime yet where half its police force and one-third its firefighters will be unemployed by mid January. While government focuses on helping make the rich even richer via tax cuts and phony Dow Jones, others are made suffer..
Tuesday, December 21, 2010
Taking a break from economic/finance related commentary today to share interesting and historical facts about Christmas with some cheerful, festive pix mixed in... Enjoy~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
The tradition of burning a Yule log actually has its roots in ancient Scandinavia. Supposedly the Yule log was a source of good luck and its remnants were saved to inspire good fortune throughout the year. It was such a widely held belief that people even threw the ashes in wells to make the water safer to drink.
The annual Christmas pudding was more than just a tasty treat. Small items were placed in them which had the power to predict what the New Year would bring. Coins were associated with a gain in wealth, a ring was a sign of an imminent marriage and a button signified extended bachelorhood. This idea actually goes back to the middle ages where the cake being served on the Twelfth Night would come complete with a hidden bean. Whoever found this bean was declared “king” for that one night.
Christmas was illegal in England from 1647-1660. This was enforced by the then leader Oliver Cromwell who believed it was immoral to hold celebrations on one of the holiest days of the year. The celebration of Christmas was therefore a criminal offence which could lead to an individual being arrested if he or she was found guilty of condoning any revelry during the period.
The first President to decorate a Christmas tree was Franklin Pierce- 1856.
Martin Luther is actually said to be the first person to put candles on a tree. (The decorated wooden Xmas pyramid was also popular then!) The tree became popular in Europe and America in the 18th century and the Victorians started decorating them with candies and cakes hung with ribbon. Woolworth (a department store) began selling manufactured Xmas ornaments in 1880 and the custom became big very fast. The first electronically lighted Xmas tree appeared in 1882.
Rudolph" was actually created by Montgomery Ward in the late 1930's for a holiday promotion
Christmas is sometimes referred to as X-Mas because the Greek letter "x" is the first letter of the Greek word for Christ, Xristos. "Xmas" therefore means "Christ's Mass." The abbreviation has been around since at least the sixteenth century and is not, as some people have claimed, an attempt to take the "Christ" out of "Christmas" and make it a secular holiday.
Many Christmas customs are carryovers from pre-Christian celebrations. Hanging gifts on trees is supposed to stem from tree worship of the Druids, and the belief that the tree was the giver of all good things. The Druids are also partly responsible for the use of mistletoe at Christmastime. They regarded the mistletoe as sacred, made certain that it never touched the ground, and dedicated it to the Goddess of Love, which explains the kissing that goes on under it. Originally, when a boy kissed a girl, he plucked a berry from the cluster and presented it to her. When the berries were gone, so were the kisses.
A wreath with holly, red berries and other decorations began from at least the 17th century. Holly, with its sharply pointed leaves, symbolised the thorns in Christ's crown-of-thorns. Red berries symbolised the drops of Christ's blood. A wreath at Christmas signified a home that celebrated to birth of Christ.
Hanging the Christmas stocking on the hearth on Christmas Eve in the hope that it will be filled with presents the next morning is a custom that goes back about 400 years. It derived from the custom in Holland of children placing wooden shoes next to the hearth the night before the arrival of St. Nicholas. The children would fill their shoes with straw and food for St Nicholas's for the donkey that carried the gifts. In exchange he would leave them a small gift such as small cakes, fruits and other gifts.
Posted by Susquehanna at Tuesday, December 21, 2010
Monday, December 20, 2010
Following article is from Huffington Post in its entirety The link to the article which provides an accompanying video from 60 Minutes can be found 'Here'
State Budget Crisis 'Largest Threat To The US Economy --
"The future looks bleak for state and local government budgets.
Even as states struggle to cut services, many could soon be in the position of New Jersey, California and Illinois, facing billion-dollar deficits that, unlike the Federal deficit, must be filled. And there's no easy way to repair the budget: When local governments' problems worsen, it becomes more expensive to borrow money. New Jersey governor Chris Christie, who has ruthlessly slashed funding for state programs, might soon see other states following his lead, 60 Minutes reports.
The debt markets tend to punish the weak. When municipal bonds seem risky, investors demand higher yields, forcing already strapped governments to pay more for loans. The higher cost of borrowing spurs yet more borrowing, the Wall Street Journal notes, creating a vicious cycle for local government budgets. If the local governments default in large enough numbers, the bond markets could spread the pain to healthy governments as well, initiating a large-scale crisis, the WSJ notes.
"The first words out of my mouth are usually an apology," Illinois comptroller Dan Hynes told 60 minutes.
The state is six months behind paying about $5 billion in bills, Hynes said. States across the nation face a similar squeeze. California is looking at a $19 billion deficit. New Jersey will face a $10 billion deficit next year, 60 Minutes reports.
Christie has carved more than a fourth from New Jersey's budget. In addition to slashing education funds, he infamously killed a tunnel project, which many said would have been a boon for state's economy.
"The bottom line is I don't have the money," Christie told 60 minutes. "I can't pay people for those jobs if I don't have the money to pay them."
In September, prominent analyst Meredith Whitney, who made her name predicting Citigroup's troubles, compared municipal governments to banks pre-crisis.
"The similarities between the states and the banks are extreme, to the extent that states have been spending dramatically, growing leverage dramatically," Whitney said in September. "You borrow from future dollars to benefit the present, basically generational robbery."
Bond markets can exacerbate the problem, as investors help push state funding costs up. "It's a downward spiral," George Rusnak, national director of fixed income for Wells Fargo, told the WSJ.
In her 60 Minutes interview, Whitney issued an even more stark summation of the crisis. "It has tentacles as wide as anything I've seen," Whitney said. "I think next to housing this is the single most important issue in the United States, and certainly the largest threat to the U.S. economy." "
Posted by Susquehanna at Monday, December 20, 2010
Sunday, December 19, 2010
Ajax Cleaner 15 cents
Alka Selzer 39 cents
Apples 15 cents for 1 pound
Bananas 12 cents per pound
Bathroom Tissue 13 cents
Birds Eye Cool Whip 38 cents
Campbells Tomato Soup 10 cents
Cantaloupe 89 cents for 3
Celery 38 cents
Clorox bleach 38 cents
Cranberries 29 cents per pound
Crest Toothpaste 77 cents
Dogs Food $1.00 for 12 cans
Fresh Grapes 59 cents per pound
Fresh Strawberries 29 cents per pound
Fresh Turkey 43 cents per pound
Frozen french Fries 69 cents for 5 pounds
Frozen Pumpkin Pies 79 cents
Frozen Vegetables 25 cents for 2 pks
Fruit Cocktail 20 cents per can
Grape jelly 25 cents
Grapefruit 99 cents for 10
Ground Round 79 Cents per pound
Head and Shoulder Shampoo 79 cents
Heinz ketchup 19 cents
Idaho Potatoes 98 cents for 10 pounds
Jersey Maid Yogurt 19 cents
Jiffy Peanut Butter 59 cents
Joy Liquid detergent 49 cents
Large AA Eggs 59 cents per dozen
Lettuce 10 cents each
Lifebouy Soup 19 cents per bar
Medium Eggs 25 cents per dozen
Mortons Frozen Dinners $1.00 for 3
Onions 9 cents per pound
Oranges 7 cents per pound
Oscar Meyer Bacon 88 cents per pound
Pork Chops 59 cents per pound
Potatoes Chips 89 cents 24 oz bag
Potatoes 9 cents per pound
Sirloin Steak $1.19 per pound
Sliced Boiled Ham $1.39 per pound
Sliced bread 25 cents per loaf
Star Kist Tuna 29 cents per can
Sugar 39 cents for 5 pounds
Sweet Corn 79 cents for 10
Tomatoes 99 cents for 4 pounds
Turkeys 58 cents per pound
Watermelon 10 cents per pound
Posted by Susquehanna at Sunday, December 19, 2010
Saturday, December 18, 2010
Oh yes- unemployment benefits were extended for 13 months.. For some ~
Tax Law Won't Help People Who Used Up Jobless Aid (AP) -- "Unemployment benefits will be restored for millions of Americans under the tax-cut measure President Barack Obama signed into law Friday. Sylvia Kittrell of Orlando, Fla., isn't among them. A social worker unemployed for more than two years, she's one of hundreds of thousands who will get no help from the new law because they've already used up all the benefits available to them. "I have no money," Kittrell says. "Everything is gone." "
"In the 24 states with unemployment rates of at least 8.5 percent, the unemployed can receive benefits for up to 99 weeks. In other states, they get less than 99 weeks -- in some cases as few as 60 weeks, according to the Center for Budget and Policy Priorities. The new law restores, for 13 more months, the 99-week maximum. But it provides no further benefits to people who have reached the limit in their state... The Labor Department says it doesn't know how many Americans have used up all their unemployment benefits, but the number reaches well into the hundreds of thousands."
"Sen. Debbie Stabenow, D-Mich., in August introduced legislation that would help the 99ers by tacking on 20 more weeks of benefits in states with unemployment of 7.5 percent or more. But her bill has gone nowhere in a Congress that's been reluctant to spend more federal money to jolt the economy. "They have to be taken care of," says a supporter, Rep. Sheila Jackson Lee, D-Texas. "They are next to be homeless. They are the people who have hit the wall through no fault of their own." "
"They're people like Kittrell, who ran out of unemployment benefits over the summer. Without her $224 weekly unemployment check, Kittrell has been getting by on food stamps and occasional contributions from her 84-year-old mother and grown son. She says her job search has been fruitless. Potential employers keep telling her she's overqualified. Her savings are long gone. She's about to be evicted from her apartment. "It's the worst situation a human being can be in," says Kittrell, who turned 58 on Thursday. "What am I to do? Keep praying. I keep praying for a miracle." "
Among those nearing the end of their 99-week maximum in benefits is Jean Wilson, 55, an engineer from Valrico, Fla., who lost her $58,000-a-year job in February 2009. Since then, she's collected about $544 in unemployment benefits every two weeks. That isn't even enough to cover her $1,200-a-month mortgage.
Having run out of savings, Wilson is now draining her retirement account. In a state with 12 percent unemployment, Wilson says, "It's not like I'm not looking. There's no jobs out there." "
Posted by Susquehanna at Saturday, December 18, 2010
Friday, December 17, 2010
Super-wealthy people saved 3% on their taxes..
Ok, let's see how much that is...
If a person made $500k/yr, that's $15,000 less taxes
If a person made $1 mill/yr, that's $30,000 less taxes- enough to buy a car
If a person made $5 mill/yr, that's $150,000 less taxes- enough for a 2nd home
If a person made $10mill/yr, that's $300,000 less taxes- 2nd home or 10 cars
If a person made $20mill/yr, that's $600,000 less taxes- 2nd home and 10 cars
Now.. The poorest people would have had to pay 5% more.. So...
If a person made $13k/yr, that's $650 less taxes
If a person made $18k/yr, that's $900 less taxes
~ So, in order for a poor person to save a few hundred dollars in taxes, the wealthiest got to save hundreds of thousands... the poor got their breadcrumbs.. the wealthy thank you for all the loaves.
~ This means for about 1 in 4 single family homes, what is owed on the home (mortgage) is greater than what the homeowner would receive if the home was sold to a buyer. This is called being "under water"
Hmmm.. Nevermind.. I'm sure things will get better if I wish and "Hope"
Admittedly it gets tiring at times to keep pointing out the obvious- that corporate controlled media is untrustworthy, especially where economy and finance is concerned, but since most people are unaware how intense the blitzkreig of empty happy-optimism news is released to the general public, A&G must continue to point out the Truth as often as need be...
All headlines from Dec 14th- 16th, 2010 --
The optimistic headline...
Strong Week for Economy Raises Optimism for 2011 (AP) -- "Buoyed by a string of hopeful government reports on layoffs, factory production and consumer spending, economists are predicting that hiring and even housing will pick up in 2011 and make it a better year after all... Even the beleaguered housing market is looking a little better. Housing starts rose slightly in November after two months of declines"
~ Pardon my French but complete utter bullshit, especially about housing on the 'up'.. As I've written in previous posting, the total equity in housing has dropped $1.9 TRILLION dollars in 2010 alone. Unemployment has risen to 9.8% officially though unofficially its closer to 18%. Consumer debt is up.. National Debt is up and the passing of the extension of the Bush tax cuts will add another $900 Billion dollars in debt which will need to be repaid with interest one day by you, your children, grandkids, and so on..
And now, the truth...
Americans Not So Optimistic for 2011, Poll says (Reuters) -- "Americans are ringing out 2010 on a worried note, feeling grim about the job market, the cost of living and their retirement savings, according to a poll released on Wednesday. Three-quarters of those surveyed are dissatisfied with national conditions, and nearly half fear the economy will take a long time to recover, according to the poll by the Pew Research Center for the People & the Press. Nearly nine in ten describe U.S. economic conditions as poor or fair..."
Weaker Growth of World Economy in 2011 (AP) -- "Braving high unemployment and unsustainable levels of debt and budget deficits in Europe and the U.S., the world economy is expected to slow in 2011 with economists cutting their forecasts for growth in developed countries. In a preview of its economic report for 2011 early in December, the United Nations said it expects the world economy to grow by 3.1 percent in 2011 and 3.5 percent in 2012. That's lower than the 2010 expected growth of 3.6 percent - and far from enough to help recover jobs lost because of the economic crisis. "The recovery of the world economy has started to lose momentum since the middle of 2010, and all indicators point at weaker global economic growth," the report said... Among the downside risks cited were renewed declines in house prices in the U.S. and tensions in foreign exchange markets that could prompt protectionist responses."
~ Funny how if you look hard enough, you can find nuggets of Truth amid the mush... Some people like being lied to.. personally, I don't.
Thursday, December 16, 2010
"Many people think that overall credit card debt is decreasing just because consumers paid down over $43 billion in debt during the first quarter of 2010. However, this is merely a reflection of what occurred in the same quarter last year. Numbers from the second and third quarters of 2010 show that—like in 2009—consumer debt is actually rising... consumer credit card debt increased by almost $6.5 billion in the third quarter of 2010 alone."
"So how did Card Hub come to the conclusion that credit card debt is really rising, when the contrary is being so widely reported? ...credit card charge-offs must also be factored in."
"Credit card companies are required to charge-off debt that is 180 days delinquent. When debt is charged off it does not disappear, credit card companies merely have to take it off their books... So failing to account for charged-off debt leads to distorted overall numbers because it is essentially like pretending that some of the most serious credit card debt that consumer have merely does not exist."
"At the end of Q2 2010, there was $800.3 billion in outstanding consumer credit card debt. This amount decreased by roughly $10.3 billion during Q3 2010, but credit card issuers also charged-off almost $16.8 billion during this same period.
"This $16.8 billion amount did not vanish, however; companies simply no longer counted it because it was written off. Therefore, the actual existing debt is the outstanding debt ($790 billion) plus the charged-off debt ($16.8 billion), or $806.8 billion total."
"So what may appear on the surface as a $10.3 billion drop in debt was really a $6.8 billion increase when charged-off debt is factored in."
Summary: People still spending & charging as if there never was/is a financial crisis and many choosing not to pay what they owe.
And some people are aware that it is a publically traded commodity..
Yesterday, 12/15/10, gold finished the day at a value of $1386.20
So what exactly does an ounce of gold look like?
It looks like this:
It weighs 1/6th of an iPod... or a little less than 3 Oreo cookies..
And it is worth at the moment $1386.20.. In late 2007 it was worth $790
That's an increase of 75% in 3 years.. Why is it so high?
Because investors do not trust fiat paper currency like dollars..
Investors see the value of the dollar, as a piece of paper backed by nothing..
They also know in spite of millions of silly people shopping like crazy, and everyone declaring 'recovery', the global economy is in a truly horrible shape
They see the dollar being weakened-- purposely... by our own government, weakening the purchasing power for hundreds of millions of Americans so that businesses can make greater profits via increased exports while people have to work longer and harder to buy the same goods and services as before.
The simplest and easiest way to gauge for yourself how our financial health is of the US and globally, is to watch the price of gold.. the higher it goes, the worse things are..
The chorus goes as follows...
"And I'm Proud to be an American
Where at least I know I'm free
And I won't forget the men who died
Who gave that right to me..
And I gladly stand up next to you
And defend her still today..
Cause there aint no doubt I love this land..
God Bless the USA"
At the risk of offending some, more updated & accurate lyrics would have been...
"And I'm proud to be an American
Where at least i know I am free..
To be trapped in debt servitude
For an eternity..
And I meekly stand up next to you
To compare the biggest cars..
Cause there aint no doubt I'm poorer than you
In the land of Stripes and Stars"
That's 262,339 families.. If you assume by guesstimation that 25% are single people, 25% are couples with say 1 child and the remaining 50% are couples with no children, that means over 520,000 people
Here's a brief quiz on Spain and their current economic situation...
1) What is the official unemployment of Spain as of Sept, 2010?
Answer: C Over 1 in 5 Spaniards can't find work
2) What is the official unemployment rate of Spaniards betw. 15-24 years old?
a- approximately 7%
b- approximately 17%
c- approximately 26%
d- approximately 43%
3) If a person in Spain can't afford to pay his/her debts anymore, what happens?
a- he/she goes bankrupt like in the US and all debts are forgiven
b- he/she goes bankrupt and 50% of total debt is forgiven
c- he/she is responsible for debts till day he/she dies
d- he/she is responsible for debts until he/she turns 75, then dismissed
Ans: C A person in Spain can never get a truly fresh start unlike in the US
4) Moody's said on 12/15/10 that Spain's banks need to be recapitalized- how much did Moody's say the banks needed?
a- 24 billion euro ($32 billion US)
b- 48 billion euro ($64 billion US)
c- 90 billion euro ($120billion US)
d- 120 billion euro ($160 billion US)
Ans: C That's just for the banks' balance sheets- no job creation
5) What is the total public & private debt of Spain?
a- 2.7% of GDP (Gross Domestic Product)
b- 270% of GDP
c- 27.0% of GDP
d- 100% of GDP
Ans: B The total public & private debt is about 3x more than revenue it brings in
6) There are 40million people in Spain.. how many unsold properties?
c- 1.2 million
d- 1.6 million
Feliz Navidad y dios bendice a los trabajadores de España ~