Saturday, September 17, 2011

Bloomberg notices some trees

NYC Mayor compares burgeoning student debt and lack of jobs to revolts and riots in Middle East (link to the Mayor's comments)


Mayor Bloomberg may or may not grasp all of this is going on, but he has noticed the trees on fire, if not the forest behind them.


The student debt is expected to pass one trillion dollars by the end of the year. This figure doesn't count credit card debt held by students or money spent for college by middle class families from second mortgages. Then there is the drain on middle class family wealth that won't be replaced by the slave wages of the new college educated working poor. The high degree of indebtedness by the new working generation will drive down wages across the board even for those who had the family money to pay for school.  

Then you must also consider that this debt is completely phony to begin with. We have a currency based on the issuance of debt. The money used for student debt, credit card debt, mortgages, business loans, on and on all comes from the Federal Reserve who create the money out of thin air and loan it to the rich through their banks and corporations who in turn loan it to the peasants at a stiff markup. There is no reason to do this except to support a class of people who do nothing but consume.

 If they would restrict themselves to sitting around the pool that would be bad enough, but they can help themselves and to try and grab it all for themselves by destroying the middle-class completely. This is being done by endless war to distract the peasants and make them fearful, the theft of business assets by predatory practices and the wholesale outsourcing of jobs to hollow out the economy until it all collapses. 

Friday, September 16, 2011

President Perry knows who he will bomb first


Unemployment continues to track upward with seasonally adjusted initial claims of 428,000 last week, an increase of 11,000 from the previous week's revised figure of 417,000. This is above what is considered the “new normal” of 400,000 claims per week. Prior to the beginning of the New Republican Great Depression, the “normal” number of claims was 275,000. Continued efforts to cut wages by firing workers and replacing them at half pay from the vast pool of the desperate un-employed has pushed the “normal” number up. So even as the number climbs we don’t know if no jobs are being created, or if there are just more low wage jobs being created.

More than half the states had increased claims, the largest increases in initial claims for the week ending September 3 were in Kansas, North Carolina, Washington, New Jersey, and Texas. Wait a minute, Texas has more claims? Where was the “job creator”? Have you noticed that in one breath that Texas Governor Perry will berate President Obama’s efforts to “create” jobs as doomed to failure since everybody knows the government can’t create jobs. But, he will in the next breath proclaim that Obama has destroyed 2.5 million jobs while in office, while at the same time, he (Perry, the government of Texas) has created a million jobs. “Irony” is a country in the Middle East that President Perry will bomb.

New foreclosure actions jumped 33% in August, but the number is still lower than the same month last year. This is considered an indication that banks are becoming more aggressive in initiating foreclosures again after the slowdown caused by flap over the handling of foreclosures in ways best described as criminal. Several more Attorneys General have joined NY’s AG in rejecting a 50 state settlement joined by the Obama Adm with the banks over the mortgage scandal where there isn’t supposed to be any prosecution.

County court records have shown that the wide spread practice of “robo signing” goes back to at least 1997 and was not the product of the “emergency” after the housing bubble burst. Robo Signing is the practice of fabricating documents submitted to the courts that are passed off as “original” loan agreements and other paperwork required by the court to establish the bank‘s right to take the property and to prove the bank took proper steps in dealing with the homeowner.

Often it can’t be determined who really has the right to foreclose on the property, this makes any subsequent deed quite possibly invalid. In fact any house purchased after foreclosure may not have a legitimate title because of the fraudulent actions of banks and their servicing companies. That bargain you purchased from the bank may really belong to some bank in Shanghai who really holds the note, or may revert to the homeowner who was defrauded by a sub-prime lender.

This phony paperwork is often exposed only because the signatures don’t match. The lack of valid signatures is because they have been signed by minimum wage workers passed off as bank officers, and as notaries public who “witnessed” the fake signatures and fabricated affidavits. If you or I submitted this sort of fraud to a court we would be rewarded with long prison term. But, we aren’t rich bankers. We just get to pay for it. www.prairie2.com

Wednesday, September 14, 2011

Van Helsing brings good news to the village


The Obama Administration has come one step closer to ending the scourge of the too big to fail banks ravaging this country. The FDIC board voted 3-0 Tuesday to approve rules under the Dodd-Frank Law that will require the large banks to write their own obituary in advance. In the event of another financial crisis (like they were planning for something unusual, “in the event of another sunrise“), in the inevitable crisis when the big banks can no longer capitalize themselves, these banks will be broken up into component pieces for liquidation instead of being bailed out.

These new rules require banks with $50 billion or more in assets to submit so-called living wills to the FDIC, the Federal Reserve and the Financial Stability Oversight Council and send revised plans annually. Included on this list are Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. The biggest banks must file by July 2012 and smaller ones in another year.

The FDIC says that 124 financial firms or more will be subject to the requirements, 26 of which are U.S. banks or financial firms. The rest are U.S. subsidiaries of banks based in foreign countries. The rules would also apply to 37 federally insured banks and thrifts holding about $3.6 trillion in deposits, or roughly 60 percent of all federally insured deposits.

Regulators would have the power to seize and dismantle banks and companies that threaten the broader financial system, an actual collapse of the banking system is not required for the government to act. They also have the power to designate other firms as potentially threatening the financial system and require them to submit plans.

The breakup plans must include detailed information on a bank's businesses and operations, structure, assets and liabilities, capital cushion held against risk, and how much they owe other big financial institutions. If their operations change, the banks would have to submit revised plans within 45 days. The sort of creative asset and liability shuffling that marked the years leading up to the 2008 collapse would be illegal without notifying the government.

Based on the review of these plans, the banking regulators are empowered to order financial institutions to make changes to their operations, such as selling assets or divisions. They also can reject the plans outright and order banks back to the drawing board.

In short, predatory capitalist banking is dead, and good riddance. Unfortunately the minute Republicans get back into control they will dig up the corpse and reanimate it. In the debate on whether Obama is really a Progressive, this little piece of regulation was something even FDR wasn’t able to achieve. That being said, the monster isn’t dead yet, villagers should continue to sleep with one eye open, torches and pitchforks at the ready.  www.prairie2.com

Tuesday, September 13, 2011

Get used to it, or Fight Back, your choice


The number of Americans living below the poverty line rose to a record 46.2 million last year, according to the new Census numbers. The poverty line is set pretty low however, and since a third of Americans have no net worth, the real number in poverty, or at best only one bad turn away from it, is probably well in excess of 100 million. In fact since medical bills can wipe out a person with a couple of million in assets, who isn’t “poor” in American? Only the few at the top, and that’s the way they like it.

For last year, the median household income was $49,445, falling 2.3 percent from 2009 or a loss of about $1200 in buying power without allowance for inflation. This falling income is driving us steadily toward a downward spiral that is characteristic of a Republican Great Depression. Any “natural” tendencies of the economy to right itself are being skillfully countered by those who would benefit from the disaster. Tax cuts for the rich, government layoffs, wage cuts, cuts in spending, a generalized push for austerity are all the wrong things to do, and they know it.

Kids over 25 who are living with parents increased by over 2 million last year. The number of people doubling up in other living situations was also up sharply. The “good” news is that 20 million Americans were kept out of the poverty classification by Social Security payments and another 3.2 million by extended unemployment benefits.

Times are hard all over as income for the wealthiest 5% of households was down 1.2 percent to only $180,810. The bottom 20% of households, those making $20,000 or less, had their incomes fall 4 percent. The wealthy were down about 2200 dollars on average and the poor were down “only” about 800 dollars for those at the top of that quintile. Clearly the Obama Depression is hurting the job creators and pampering his base.

Those in extreme poverty who make less than half of the poverty line are the fastest growing group. Projections for those numbers if unemployment numbers remain high for the next ten years, as is considered the “new normal”, have been described as disturbing.

In fact, even those who you and I might see as “rich” are being robbed by the 0.3% at the top, but they haven’t figured it out yet. After all, it’s those greedy teachers and social security “welfare queens” that are taking it all. The people at the top are “making money” and that’s a good thing, right? E-e-even if the sharks have run out of middle class fish to eat, and now they’re circling m-m-me. Capitalism is always a good thing, right?

The United States has one of the highest rates of poverty in the developed world. The Paris-based Organization for Economic Cooperation and Development (OECD) tracks economic conditions in 34 countries, and only Chile, Israel and Mexico have higher rates of poverty. Chile was by the way, the first developed country to adopt the Milton Friedman/Chicago School of Economics plan for privatization and non-regulation or unfettered capitalism. This was done after Henry Kissinger and company murdered Chile’s democratically elected government. This is the same economic plan that is being implemented here.  Get used to it, or fight back, your choice.  www.prairie2.com

Cashing Mr Ponzi's Check



Rick Perry has come up with some numbers to authenticate his claim that Social Security is a Ponzi Scheme, and they are real numbers. Rick Perry in a guest Op-Ed in USA Today, “By 2037, retirees will only get roughly 76 cents back for every dollar that is put into Social Security unless reforms are implemented. Imagine how long a traditional retirement or investment plan could survive if it projected investors would lose 24% of their money?”

Well yes, those are truthful numbers, sort of. If nothing changes to improve revenue, then by 2037, beneficiaries (not taxpayers) will only get 76 cents instead of a dollar in benefits. This will continue if nothing is done or the economy doesn’t change in anyway until the Baby Boomers start to die off, and then benefits will start to increase again until they reach 100% in I would guess about 2057, give or take a few years. IF NOTHING IS DONE AND THE ECONOMY DOESN’T CHANGE. When they talk of hundreds of trillions in unfunded obligations, they are just lying. Let me repeat, THEY ARE JUST LYING, PERIOD.

The fact is that the average “taxpayer” who pays FICA will get 97 cents on the dollar as 3 cents go for administration. Some will get much more, those who die early get zip. Fully one third recipients are widows, orphans and the disabled. All of these must have either paid in themselves to be eligible, or their parents if orphans, or their spouse if a widow. Most of this category of recipients will pay in to the system in the future having avoided dying in an orphanage sweatshop, or the brothel for widows. As for the disabled, in Rick Perry’s world they would be taken care of by angels. Just an aside, faith based groups who help the poor get 2/3 of their money from the Feds.

Republicans would “privatize” the Social Security system or in other words funnel it into Wall Street, taking 40% for themselves, like they do with healthcare. They would enhance profits with sweatshop orphanages, brothels, and the disabled better get in good with an angel.

The 401(k), as birthed from the Hellmouth by Ronald Reagan, was supposed to make the demise of Social Security happen as workers would be so enthralled with Capitalism that the would demand the privatization of Social Security. In 2005, George Bush pushed this plan with predictions of a 20,000 Dow and the WSJ was talking that a 35,000 Dow was to be expected by 2020 with the reliability of the sun rise. We now have an 11,000 Dow and my view is that we will see a 1500 Dow in the near future.

The reality is that 401(k)s can not pay off at their current “value”. This is why they don’t let you cash out your 401(k) but you must wait until far into the future. This is the real Ponzi Scheme, the money isn’t there, all money paid out comes from “new” money coming in.  The real “Mr Ponzi” (Wall Street) is taking all the money for himself, except for those who get paid early to make the scheme seem valid. The occasional crash, (blamed on the poor who bought houses) resets the expectations of those who continue to pay in.

Rick Perry maybe so stupid that he doesn’t have a clue how this really works, but he doesn’t care anyway. He knows that if the money goes to Social Security, then he doesn’t get big bribes from the Wall Street bankers, so he know what he “thinks” about it. He’ll repeat the talking points, and cash Mr Ponzi’s check.  www.prairie2.com

Sunday, September 11, 2011

A Few Good Bankers

This is from The Financial Times of London, a humorous rewriting of the way central bankers view themselves (or at least want you to see them). Not as parasites sucking the lifeblood of the planet but as men on the wall protecting you and me from unseen, unfathomable evil. Imagine in Jack Nicholson's voice,



http://ftalphaville.ft.com/blog/2011/09/08/672756/a-few-good-central-bankers/