Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Saturday, December 10, 2011

Telegraph: 'Eurozone banking system on the edge of collapse'

But no amount of facts, history, logic and reason can convince the Democrat Party that their Utopia, the European social welfare state, is dead.

The eurozone banking system is on the edge of collapse as major lenders begin to run out of the assets they need to keep vital funding lines open.

10:01PM GMT 09 Dec 2011

Senior analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.

The European Central Bank admitted it had held meetings about providing emergency funding to the region's struggling banks, however City figures said a "collateral crunch" was looming.

"If anyone thinks things are getting better then they simply don't understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank.

Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding. [And] lenders are increasingly distrustful about funding one another.

... [Some] think the eurozone banks are heading for a catastrophe and the worry is growing that a major bank could collapse within weeks... Moody's on Friday downgraded France's three largest banks, BNP Paribas, Credit Agricole and Societe Generale in light of what the US rating agency said were "liquidity and funding constraints"... Two weeks ago, rumours abounded that it was the near failure of a major French lender that had been the trigger for a massive co-ordinated intervention by the world's largest central banks to shore up the banking system.

The delusional politiconomist Paul Krugman hardest hit.


Why Barack Obama Chose Osawatomie For His Speech Attacking Capitalism

The reactions to Barack Obama's speech in Osawatomie, Kansas this week were, if nothing else, consistent:

• It "sounded like what you'd expect to hear in Caracas or Buenos Aires."
• "Those who pride themselves on belonging to the party of smart people should be embarrassed."
• The speech "was deceitful, inaccurate, revisionist, and demagogic... a recreation, a fabrication if you will, of history, economics, and philosophy into a Pandoran construct of collectivist statism whereby society can demand the individual’s obedience and obeisance."
• The speech was "a thick coat of whitewash layered all over it, and the failure of the last three years lies underneath."
• The "elected president of the United States said in Osawatomie, Kansas, trying to be Teddy Roosevelt, that the United States of America has never worked. That is a quote, 'has never worked.'"
• A "Marxist attack on America."

Why did Obama choose, of all places, Osawatomie? One of the new media's living legends, Trevor Loudon, explains:

Why would Barack Obama choose to give a controversial speech attacking American capitalism in Osawatomie, Kansas? Hang on? Where have I heard that name before? Osawatomie? ...back in the ’70s? Weather Underground terrorists… Bill Ayers, Bernardine Dohrn. Didn’t Obama used to hang out with those guys?

I remember! Osawatomie was the publication of the Weather Underground!

No, surely it's a coincidence...

I'm certain Mr. Loudon wrote that sentence with a wink at the end. The choice of Osawatomie was a signal, a coded message, a symbolic flag-raising for the progressive Left.

The Marxist class-warfare rhetoric, which divides one American against the other and which is utterly foreign to this nation, is going full-bore for the Obama reelection campaign. 2012 is our last chance to save this Republic from the Fabian counter revolution.


Update: Osawatomie: the Weather Underground newspaper

Friday, December 09, 2011

Leading actuarial firm: health care premiums to rise up to 85% thanks to resurgence of deadly Bubonic Plague and Obamacare but mostly Obamacare

Milliman is one of the world's leading actuarial firms. One of its specialties is helping insurers appropriately and competitively price their products. And its latest report on the effects of Obamacare on health insurance premiums is decidedly problematic for "the middle class". And the rich. And, of course, the poor. That is, all Americans, irrespective of class, religion, race, creed or other arbitrary segments Democrats use to divide us.

The report, conducted by Milliman, Inc., projects the impacts of the federal health care reform law starting in 2014, when most of the law's provisions go into effect. The report shows significant changes that will increase premiums while expanding government programs.

Specifically, Milliman's report projects that individual premiums in Ohio could increase by as much as 55 to 85% in 2014, not including the current medical trend which has been an average increase of 7 to 8% nationwide each year. Moreover, some individuals may see their premiums increase by 90 to 130% depending on their current health status...

...In addition to significant changes to premium rates, more than one million Ohioans are expected to join the State's Medicaid rolls in 2014 and more than 500,000 are expected to join the government-subsidized individual exchange. Consequently, as many as half of all Ohioans could be enrolled in some type of government-subsidized health coverage, including Medicare, when the law is fully implemented.

...[Worse still,] small businesses offering health insurance to their employees will see their premiums increase 5% to 15% in 2014 with the Health Insurance Tax (HIT)... The HIT is part of the Patient Protection and Affordable Care Act (PPACA) and will be levied on health insurance companies that operate in the fully-insured marketplace, where nearly all small businesses purchase their premiums. It will reduce take-home pay for the average employee with a family plan by $500 every year over the next decade, impacting the 12 million employees and self-employed who purchase insurance in the individual market and the 26 million employees who are covered by their employer.

I could have imagined it, but didn't the president promise that -- when Obamacare passed -- our health insurance premiums would immediately drop by an average of $2,500 a year?

Or was that only for union bosses?


Thursday, December 08, 2011

It's another Obama record! Feds run deficit for 38th straight month

Of course, when you blow $840 billion on a "Stimulus" package -- and then never pass another budget -- this news really can't come as much of a surprise.

The federal government ran a $139 billion deficit in November, marking the 38th straight month in the red, according to a preliminary estimate the Congressional Budget Office released Wednesday.

...That suggests the deals President Obama and Congress struck in April and again over the summer to limit spending are not having much effect in actually reducing outlays.

Interest payments on the debt continue to rise at the fastest rate of any category of spending, jumping 12.4 percent this year. Social Security and Medicare spending were also up.

Meanwhile, defense spending is down nearly 7 percent, driven by lower procurement. And spending on unemployment benefits is down markedly, nearly 26 percent lower at this point than it was last year. Education spending also has declined after the expiration of parts of Mr. Obama’s 2009 stimulus.

...The government hasn’t run a surplus since September 2008 [Bush!], just before the Wall Street collapse near the end of the Bush administration. That is by far the longest streak in records dating back to the 1980s. Before the current streak, the government had never gone an entire year without running a surplus in at least one month.

I have a few questions for John Boehner, Mitch McConnell and our other feckless GOP leaders.

How freaking hard is it for you to share the above chart, which depicts the Democrats' calamitous spending plans?

How hard is it to mention a shocking, double-digit rise in interest payments -- a sure recipe for disaster -- every time you open your mouths?

How hard is it for you to discuss this outrageous monthly deficit record in every single press conference?

Folks, if we don't elect the most conservative candidates possible in 2012, men and women who believe in and honor the Constitution, I fear the grand American experiment may be at its end. Not from Nazism, Communism, Islamism or any other external enemy, but from within -- at the hands of insidious counter-revolutionaries dedicated to dividing us by race, income, religion and class.


Investment Tip: Make 343% On Your Money With Easy-to-Buy, Low-Risk Greek Bonds*

*Of course, I'm not an investment professional, so your mileage may vary.

Word from Europe is that its central bank (the ECB) is prohibited from buying the massive amounts of PIIGS debt that will soon need refinancing, the latest rumour-o-the-week (gratuitous limey spelling) that had ramped equity prices.

The main news in today's European roundup is the reiteration by ECB president Mario Draghi EU Treaty Prohibits "Monetary Financing":

At a news conference in Frankfurt, European Central Bank President Mario Draghi said on Thursday that the European Union treaty prohibits "monetary financing." He was responding to a reporter's question about why the central bank doesn't ramp up its bond-buying program...

...The market has rallied for weeks on expectation the ECB would eventually get around to a massive bond buying program. The irony is Draghi personally fueled rumors the CEB would step up purchases...

So Draghi got out of this what he wanted: A big plunge in Italian and Spanish debt yields, by doing nothing more than yapping.

The second irony is that Draghi is in essence a liar. He cannot come out and say the ECB is providing "monetary financing" with its bond purchases, even though that is exactly what the ECB is doing.

The bond market is saying that the PIIGS' debt -- incurred by the massive social welfare states that the Obama Democrats are duplicating here -- will never be paid back.

The equity markets have yet to admit defeat.

One is wrong and one is right. I leave that choice as an exercise for the reader.


Tragedy for Legacy Media: 'Income Inequality' Straw-man Transformed Into Smoldering Pile of Ashes By Cato's Alan Reynolds

Over the past few months, you've probably read a series of propaganda pieces articles describing America's increased 'income inequality'. You know the template: the rich keep getting richer at the expense of everyone else; America has a static class structure in which no one moves up or down; and zero-sum economics idiocy promoted by the likes of the execrable Paul Krugman. A series of propagandists, including Krugman, have used this chart to illustrate how the top 1% are ripping everyone off.

But the Cato Institute's Alan Reynolds wondered, "Why did the report stop at 2007?"

A recent report from the Congressional Budget Office says, "The share of income received by the top 1% grew from about 8% in 1979 to over 17% in 2007."

This news caused quite a stir, feeding the left's obsession with inequality. Washington Post columnist Eugene Robinson, for example, said this "jaw-dropping report" shows "why the Occupy Wall Street protests have struck such a nerve." The New York Times opined that the study is "likely to have a major impact on the debate in Congress over the fairness of federal tax and spending policies."

But here's a question: Why did the report stop at 2007? The CBO didn't say, although its report briefly acknowledged—in a footnote—that "high income taxpayers had especially large declines in adjusted gross income between 2007 and 2009."

No kidding. Once these two years are brought into the picture, the share of after-tax income of the top 1% by my estimate fell to 11.3% in 2009 from the 17.3% that the CBO reported for 2007.

The larger truth is that recessions always destroy wealth and small business incomes at the top. Perhaps those who obsess over income shares should welcome stock market crashes and deep recessions because such calamities invariably reduce "inequality." Of course, the same recessions also increase poverty and unemployment.

The only thing I can conclude is that crackpots like Paul Krugman want more stock market crashes and deep recessions. Which perhaps explains his affection for Barack Obama.

And why he must believe that countries with the least income inequality -- like North Korea -- are just swell.


Hat tips: TaxProf and Mark Levin.

Wednesday, December 07, 2011

'Income Inequality' is just another form of diversity: so why do liberals hate diversity?

President Obama's speech in Kansas yesterday was breathtaking for its level of dishonesty. Over and over, with a cadence not dissimilar to that of a used-car salesman, the president decried the lack of "fairness" in our society.

The word "fairness" and its derivatives were mentioned by the president more than a dozen times.

But life itself is unfair. And no one and nothing on Earth can change that, even if you tried to create a totalitarian police state like North Korea's.

• It's not fair that I don't play basketball like LeBron James.

• It's not fair that I can't play a guitar like Eric Clapton.

• It's not fair that I didn't invent Google like Larry Page.

• It's not fair that I haven't invested as well as Warren Buffet.

• It's not fair that I've never worked as hard as Tesla.

• It's not fair that I'm taller than most people.

• It's not fair that most people sing better than me.

• It's not fair that Al Gore invented the Internet first.

To be human is to be unique, to be different than everyone else. It is your uniqueness that makes you special, whether Barack Obama thinks that is unfair or not. For liberals to place you -- a unique, wonderful individual with God-given talents and shortcomings -- in some sort of bucket, in some made-up class, so he can manipulate you or secure your vote, well, it's not just cynical. It's un-American.

And what is "fair" when it comes to society as a whole?

Say I am a businessman about to invent a cancer-fighting drug, but the money I was going to use for that research was ripped from me by the government in the name of "fairness"; how is that fair for the people who could have been saved by that drug?

Is it fair for the government to steal money and claim they're able to use it more efficiently than thousands upon thousands of entrepreneurs, businesspeople, investors, scientists and engineers?

Is it fair for the government to create arbitrary classes of people based upon their income -- and then decide who should have their money confiscated and who should receive that money as gifts to buy their votes?

And who are these geniuses -- these masterminds of humankind -- who can decide what's "fair" and what's "unfair" for all of humanity?

They are Marxists, following the template of all of the failed Statists who've come before them, dividing us, building straw-men and, ultimately, obliterating the civil society. Which is why we must crush them and their vessel -- the Democrat Party -- at the ballot box in 2012.


Hat tip: Mark Levin.

Report: How Open Borders Policies Led to the Mortgage Meltdown

A little-publicized article in the Norfolk Crime Examiner two years ago featured a startling interview with a mortgage auditor. This man "personally audited thousands of sub prime loans."

The auditor found that "[o]ver 50% of the subprimes were for cash-out refi’s. Regardless of the loan criteria used to pull random samplings for audits, the majority of the last names were Hispanic. The loans I audited were primarily in CA, NV, AZ, FL, CO, compare those to the states with the highest number of foreclosures [and] illegal aliens."

Are these figures plausible? It appears so. A June 2007 MarketWatch article confirmed that "...[m]ore than half of subprime loans are actually cash-out refinance loans... we see subprime offers all-over the place: 'consolidate your debts' or 'tap you home's equity,' the ads read. As Lee puts it, why not pay off credit cards with 18% annual interest rates with a 9% loan?"

"Cash-out refi's" -- for those unfamiliar with the term -- are situations where a loan is refinanced and cash taken out of excess equity in the home. The excess equity could have been provided by a massive run-up in prices or simply a fraudulent appraisal.

The auditor observed that, "[o]ne borrower stole the [social security number] of a retiree and took out $3.5 million in loans, turned around and did cash-out refi’s, then fled the country. The retiree was left with ruined credit, $3.5 million in loans and trouble with the IRS."

Interestingly, cash-out refi's hit a 16-year high in late 2006.

Because subprime cash-out refi's were known to have higher default rates well before this, a reckoning could have been predicted by regulators.

"During the bailout, I called my Congressman and other leadership including Barney Frank and asked if there was a provision within the Bill that prohibited illegal aliens from being bailed out…..the answer was no. I asked if there was a provision in the Bill that helped homeowners that did not take out subprimes but are faced with losing their home due to the negative impact of subprimes and was told... no. So in other words, those that committed crimes to obtain the loans will get a helping hand to bail them out, compliments of the US [t]axpayer!"

"Of course, we all know that, on October 26, 2001, President Bush signed the USA Patriot Act. However, I would wager to say that almost no one knows that contained in section 326(b) of the USA Patriot Act is a provision that allows US banks to accept Mexican Matricula Consular cards (MCCs) as a valid form of ID for opening bank accounts."

"It should be noted that while... Congress ordered American banks to recognize these Mexican-issued cards, there is not one Mexican bank which accepts their own government’s Matricula Consular card as a valid form of ID, because the bearer’s identity is basically untraceable."

In fact, members of the House Judiciary Committee confirm that Mexican banks do not accept Matricula Consular cards as valid identification.

In 2004, a Congressional effort to limit the use of MCCs was defeated by a consortium of financial institutions, immigrants’ rights groups, consumer groups, and many others. These organizations had formed a loose coalition to defeat, again, limitations on the use of consular ID cards by banks, credit unions, thrifts and other financial institutions.

By a vote of 222 to 177, the House passed a bipartisan amendment (HA 754), introduced by Representatives Barney Frank (D-MA), Pastor (D-AZ), Hinojosa (D-TX), Oxley (R-OH) and Kolbe (R-AZ). It prohibited the Treasury Dept. from implementing regulations regarding the acceptance of FCCs by financial institutions.

But prior to that hearing, the FBI was adamantly opposed to the use of MCCs as valid identification. Assistant Director Steve McCraw's testimony before Congress in 2003 was blunt: "...consular ID cards are primarily being utilized by illegal aliens in the United States. Foreign nationals who are present in the U.S. legally have the ability to use various alternative forms of identification -- most notably a passport -- for the purposes of opening bank accounts..."

The FBI identified a variety of problems with MCCs:

* There was no centralized database of MCCs
* There were no interconnected, local databases of MCCs and, therefore, no way to authenticate the validity of a card
* MCCs could be obtained with little -- and sometimes -- no documentation whatsoever
* MCCs were easily forged (90% in circulation had no security features at all)

In 2003, Gabriel Manjarrez, Senior Vice President and Hispanic Marketing Executive of Bank of America testified before the House Subcommittee on Financial Institutions and Consumer Credit. He explained, "...The first program I want to discuss is our initiative to accept the use of the Mexican consulate ID, the Matricula Consular. We developed this initiative [in 2001] because we wanted to make it easier for Mexican citizens living in the USA to have access to banking services from Bank of America... Today, every single Bank of America banking center recognizes the Matricula Consular as a valid form of identification."

At least a dozen U.S. banks and mortgage insurers offered home loan programs targeted at illegal aliens.

And anecodotal evidence would appear to confirm alarming abuse of the system; the infamous $720,000 mortgage to two pairs of illegal immigrants with a combined annual income of less than $50,000 comes to mind.

Consider the findings of the auditor: "Over 50% of the sub primes were for cash-out refi’s. Regardless of the loan criteria used to pull random samplings for audits, the majority of the last names were Hispanic. The loans I audited were primarily in CA, NV, AZ, FL, CO, compare those to the states with the highest number of foreclosures & illegal aliens."

* * * * * * * * *

Those who have supported open borders policies -- on either side of the aisle -- seem to have contributed mightily to the mortgage crisis. And someday we might actually get legacy media to tell the entire story of the mortgage meltdown.


Tuesday, December 06, 2011

It begins: bank runs break out in Greece, following the contours of the sovereign debt crisis

Following the path of the sovereign debt crisis, the Eurozone's bank runs have begun.

Anxious Greeks Emptying Their Bank Accounts


Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending -- and are inadvertently making the recession even worse.

Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament... the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion ... [but] the Greeks today only have €170 billion in savings -- almost 30 percent less than at the start of 2010.

...Nikoloudis has detected a further trend. At first, it was just a few people trying to withdraw large sums of money. Now it's large numbers of people moving small sums. Ypatia K., a 55-year-old bank worker from Athens, can confirm that. "The customers, especially small savers, have recently been withdrawing sums of €3,000, €4,000 or €5,000. That was panic," she said.

For those who insist it couldn't happen here, a word of caution: it can and it has, as recently as 2008.

The 2008 financial crisis displayed characteristics of a classic bank run, but people holding bank accounts weren't the ones scrambling to get their cash. It was lenders demanding their money from other financial institutions.

Indeed, today's panics are more likely to involve major financial institutions and are largely hidden from plain sight until they are severe enough to trigger plunging stock prices, bankruptcies, layoffs and rising unemployment. And the current European crisis is a reminder that some of the vulnerabilities exposed in 2008 still exist.

These panics often originate in the shadows of the banking system, where major financial institutions do business with one another... [and] the size of shadow-banking activities [are] roughly $60 trillion as of 2010—a sum that represents 25% to 30% of the total global financial system.

At best, shadow banking offers financial institutions a source of funding and liquidity on a day-to-day basis. At worst, it allows the buildup of leverage and systemic risk, as the 2008 financial crisis revealed. Gary Gorton, a Yale University professor and leading researcher in this field, has documented that the crisis was effectively "a run by banks and firms on other banks."

...Given the speed that Europe's debt crisis is unfolding, however, any measures that could help fend off future shadow-banking panics risk coming too late.

The propagand-conomist Paul Krugman -- a proponent of the debt-ridden European social welfare state -- hardest hit.


Oops! Chart Proves Obama's Housing Policies Have Been a Complete and Utter Cluster-Fail

This is why the President runs around the country -- when he's not golfing or vacationing -- talking about how great the future will be if only Congress would stop blocking his agenda. Because, like all liberals, he can never, ever look back at the past, the results of his previous decisions, which are uniformly disastrous.

A few days ago we presented an analysis by ConvergEx showing that due to the very close historical correlation between home prices and employment, it is the Fed's view that the only way to stimulate employment (aside from such BLS shennanigans as pretending that despite the natural growth of the labor force by 90k a month to keep up with population, those willing to work are in fact declining) is to raise home prices. Raising home prices by definition means either reducing supply - an event which is proving impossible with shadow inventory in the millions and rising, even as thousands of new delinquent mortgages appear each day... or increasing demand. It is the latter that the Fed targets, by attempting to make mortgage rates ever cheaper via LSAP, Operation Twist or other Treasury curve interventions that attempt to push down long-dated yields ever lower. This works in theory. In practice, however, as the chart below demonstrates, the Fed's entire [Zero Interest Rate] policy over the past several years has been one abysmal failure (for everyone expect those with immediate access to the Fed's zero interest rate capital - i.e., the Primary Dealers)...

...What appears very clearly on this chart is that despite ever declining mortgage rates, there is simply no interest in home turnover, and sales are at record low levels due to lack of demand, and lack of desire to sell into a bidless market, in essence causing the entire housing market to halt.

...And this makes intuitive sense: the bulk of home owners who can take advantage of cheap credit are those who already have a mortgage and at best will refi into a cheaper one. For everyone else, either the bank's admissions criteria are too stringent, or the potential borrower is simply convinced that a year from today, the 30-year mortgage rate will be another 1% lower (most likely with 100% justification). As such there is absolutely no drive to naturally restart the housing market (one can commence here a discussion of how central planning destroys every market it infect like a lethal virus, but we will spare that for another, more preachy night). For now we will leave you with this chart which proves beyond a reasonable doubt that the Fed's primary mandate: to lower the unemployment rate (by boosting home prices) has been a failure...

Oh, for the love of...! Now I'm gonna have to add another item to The Complete List of President Obama's Historic Firsts™.


Monday, December 05, 2011

A picture from President Obama's post-Constitutional America

I'm shocked. SHOCKED, I say.

I was strolling around the waterfront fish market in DC on Saturday, admiring the whole octopi, the squid, lobsters, jumbo crab legs and Maryland blue crabs for sale.

Imagine my surprise when I spotted this sign above a pile of crabs.

...But this is all good news, according to this administration. Remember, food stamps stimulate the economy!

Say, did someone mention another Obama record?

...according to the latest update from the Supplemental Nutrition Assistance Program (SNAP), some 423,000 Americans found their way to minimum way subsistence, courtesy of Food Stamp handouts from Uncle Sam. Since the start of the Second Great Depression, food stamp participation has increased by 18.7 million, and is now at an all time higher 46.3 million.

All Bush's fault, or something. At least the chart below appears to be plateauing... Actually, sorry, no. It isn't.

Not to worry, folks.

At least the USDA has an excellent handle on how food stamps are being used.

Sorry. I couldn't restrain my chortle.


Hat tip: Occam's Razor X.

Bizarre Coincidence: Right-to-Work States Superior In Every Way for the 'Workers'

Why, this must be some sort of statistical -- how you say in English? -- anomaly. Turns out that states which force employees to join unions against their will are inferior to right-to-work states using about any economic measure you can think of.

The term 'Tax Freedom Day' was coined by the Tax Foundation, a nonpartisan think thank. It translates to "the day when Americans... finally have earned enough money to pay off their total [federal, state and local] tax bill for the year."

Notice the eight-day difference between right-to-work and forced unionization states. For those of you who live in the latter, you spend eight days every year working for the unions.

Which is the way the self-professed Marxist union bosses like Andy Stern and Dick Trumka want it.


America's Problem

Doug writes:

If you don’t already believe we’re headed for a potential disaster in America, just take a look at this Kleiner Perkins chart.


I blame Bush. Plus Millard Fillmore. But mostly Bush.

And definitely not the Stimulus package of 2009 that has been built into the baseline budget every year since.


Sunday, December 04, 2011

Euro-Bomb!

Guess the one word that describes the Eurozone (hint: it starts with 'S' and ends with 'crewed').

In simple terms, this is the stark reality: now that debt and risk have been repriced, Europe's debts are completely, totally unpayable. There is no way to keep adding to the Matterhorn of debt at the old cheap rate of interest, and there is no way to roll over the trillions of euros in debt that are coming due at the old near-zero rates.

Never mind actually paying down debt, sovereign, corporate and private--the repricing of risk and debt mean even the interest payments are unpayable. Consider this chart of one tiny slice of total EU debt:

There is no way to push the repricing genie back in the bottle, and so there is no way to roll over this debt and add to it--and to support the high-cost structure of Euroland's welfare-state governments and their astounding debt, then debt must be added, and in staggering quantities.

...[The] repricing has already occurred, and cannot be revoked or shoved back in the bottle. The Great European Debt Bubble has already burst, and so now it boils down to a simple choice: debt serfdom or open rebellion against the banks that profited so handsomely from the euro-fantasy.

There is no middle ground, as the debt cannot be repaid, not now and not in the future. It cannot be reshuffled, masked, or hidden; it can only be renounced.

It's your choice, Europe; choose wisely. If you want a model for sanity and growth, look to Iceland. They renounced their unpayable debts and debt-serfdom, and let the market reprice their currency, debt and risk. The nightmare is past for them; they chose wisely. Now it's your turn to choose.

The debt-serfdom will fall to you, not the banks or your Elites.

And if you find yourself mildly amused by the collapse of Europe's social democrat welfare states, a word of warning. We're next.


Can you guess what the 'worst-run states in America' award-winners have in common?

The financial website 24/7 Wall St. analyzed the worst-run states in America. Can you guess what the worst three states have in common?

48. Michigan
> State debt per capita: $2,963 (21st lowest)
> Pct. without health insurance: 12.4% (18th lowest)
> Pct. below poverty line: 15.7% (15th highest)
> Unemployment: 11.1% (3rd highest)

Michigan has arguably suffered more than any state in post-industrial America. The state is one of just four with a credit rating of AA-, although its debt per capita is actually below average. The state ranks among the worst in the country for violent crime, unemployment, foreclosures and home price decline.
Source: (September, 2011): From the Census Bureau’s American Community Survey for 2010, the percentage of residents 25 or older with a high school diploma

49. Illinois
> State debt per capita: $4,424 (13th highest)
> Pct. without health insurance: 13.8% (23rd lowest)
> Pct. below poverty line: 13.1% (25th lowest)
> Unemployment: 10% (10th highest)

Illinois has fallen from 43rd last year to the overall second-worst run state in the country. The state performs poorly in most categories, but is worst when it comes to its credit rating. Illinois has a credit rating of A+, the second worst given to any state, behind only California. The state has been on credit watch since 2008 because of budget shortfalls and legal challenges against then-governor Rod Blagojevich.

50. California
> State debt per capita: $3,660 (21st highest)
> Pct. without health insurance: 18.5% (8th highest)
> Pct. below poverty line: 14.5% (tied for 21st highest)
> Unemployment: 11.9% (2nd highest)

California has moved down one slot on from last year to earn the title of the worst-run state in the country. In the fiscal year 2009, the state spent $430 billion, roughly 14% of all the money spent by states in that year. Compared to its revenue, the state spent too much — California had the 10th lowest revenue per person, and spent the 15th most per person. California is the only state in the country to be rated A-, the lowest rating ever given to a state by S&P. Despite the huge amount the state spends each year, conditions remain poor. California has the second-lowest percentage of adults with a high school diploma in the country, the second-highest foreclosure rate and is tied for the second highest unemployment rate in the U.S.

What they have in common is this:

• Decades of unchecked Democrat control at every level of government

• Massive, bloated, public sector unions that are intertwined with the Democrat Party and demand increasing percentages of the economy; they have but one aim: to enrich themselves at the expense of the taxpayer

• Sanctuary cities that attract illegals, programs that offer easy access to welfare payments and government subsistence programs, high rates of single-parent families, and therefore high levels of urban crime

You would think that someone in legacy media would actually analyze this data and report on it, but then again, I've always been a dreamer.


Saturday, December 03, 2011

Chilling Chart From Yesterday's Reported Drop in Unemployment: "6,278,000 people are unaccounted for"

Mike Shedlock and one of his readers dissect the propaganda that was yesterday's 'positive' unemployment report.

...If you look at the average labor force growth from 1948 to 2007 of 1,579,000 the labor force should have expanded by 6,316,000 2008-2011. Instead the labor force expanded by a mere 38,000!

Thus, 6,278,000 people are unaccounted for in the unemployment numbers based on historical averages... The unemployment numbers using this historical trend method show the following numbers for November in these years:

Unemployment Rate Adjusted for Population Growth

2007 4.7%
2008 7.3%
2009 11.7%
2010 12.4%
2011 12.2%


I am sure it is just coincidence, but it is interesting to note that the flat lining of the labor force began in earnest with the Obama administration.

Six million people missing. Six million gone from the labor force.

Hopefully you won't hate me and -- not to trivialize the real thing in the least -- but I can't keep myself from thinking that President Obama is the architect of an economic holocaust.


Excellent News: Your Federal Government Training IT Workers In Asia and Europe... So They Can Outsource American Jobs

Gee, but there's nothing to cut!

U.S. Supports the Development of the IT Sector in Kyrgyzstan


The U.S. Government, through the United States Agency for International Development’s Local Development Program, will for the first time conduct a roundtable in partnership with IT experts from Kyrgyzstan. The roundtable will take place on November 29, at 15.30, at the Park Hotel (87 Orozbekova str., Bishkek).

In other words, your tax dollars are helping to strengthen the technology sector in Asia.

This comes on the heels of last year's news that the U.S. is training thousands of foreign workers as potential outsourcers of American jobs.

U.S. To Train 3,000 Offshore IT Workers


Despite President Obama's pledge to retain more hi-tech jobs in the U.S., a federal agency run by a hand-picked Obama appointee has launched a $36 million program to train workers, including 3,000 specialists in IT and related functions, in South Asia...

...Following their training, the tech workers will be placed with outsourcing vendors in the region that provide offshore IT and business services to American companies looking to take advantage of the Asian subcontinent's low labor costs...

...USAID is contributing about $10 million to the effort

USAID is also funding an effort in Armenia to train IT workers for additional outsourcing of American jobs, though it won't say how much it's spending there.

Criminal stupidity or naked malevolence: which is it?


Friday, December 02, 2011

The only unemployment chart you need to see today

Courtesy of Calculated Risk -- via Business Insider -- comes a chart that helps illustrate the real unemployment situation.

This is why the situation seems so dire. Why people are walking around in a daze. Why your neighbors are worried and glum.

Forbes editor Vahan Janjigian explains

...the unemployment rate has been very high for quite some time. If you look at the U6 figure [Ed: now 15.6%], which includes people who are working part-time, the underemployed because they can’t find a full-time job, or people who have simply given up looking for work; that figure is always extremely high.

But there is another figure I like to focus on. It is called the participation rate. That figure has really been plummeting... Now this figure is never 100%, because, of course, there are some people who are capable of working who aren’t working. An 18-year-old who is in school, for example, is not going to be working. Someone who chooses to be a stay-at-home mom or dad is not going to be working, or somebody who is 65 years old and retired but is capable of working is not going to be working.

So in a healthy economy, we would expect this figure to be somewhere above 70%. It is currently down at 64%, which means that there are a lot of people who cannot find jobs—they want to be working, they can’t find jobs.

With that context in mind, please consider these headlines:

No matter how the dying, legacy media tries to spin it, no matter how the administration twists arms at the Bureau of Labor Statistics to make things look rosier, the facts are clear:

The American economy is dying under this President.


King warns of 'spiral' into systemic economic crisis and... weakened banks

The governor of the Bank of England, Sir Mervyn King, offered some disturbing and silly remarks to the public today.

Eurozone woes have created “an exceptionally threatening environment” as falling government bond prices, eroding confidence and asset fire sales threaten to “spiral” into a systemic financial crisis, the governor of the Bank of England has warned... King urged the UK financial system to continue building up capital against an “extraordinarily serious” situation it had not created and could not solve.

“The crisis in the euro area is one of solvency not liquidity. And the interconnectedness of major banks means the banking systems and economies around the world are all affected. Only the governments directly involved can find a way out of this crisis,” he said.

Underscoring their concern, Sir Mervyn and Hector Sants, head of the Financial Services Authority, revealed that the watchdog was allowing UK banks to dip into their liquidity buffers when they encountered funding squeezes.

Far be it from me to second-guess a genius like Sir Mervyn, but doesn't alerting the public to potential shortages of liquid capital at retail financial institutions risk, er, bank runs?


Thursday, December 01, 2011

"The United States is quickly becoming a post-industrial, neo-Third World country"

It's truly sad what Statism has wrought.

The U.S. workforce has declined by approximately 6.5% since its year 2000 peak to roughly 58.2% of working age adults and the U.S. now suffers chronic unemployment of 9.1%. Although the workforce grew in the 1980s and 1990s, as dual income families became the norm, the size of the workforce is shrinking due to a lack of economic opportunity...

...Officially, long-term unemployment is 16.5% and the ranks of the long-term unemployed (those jobless for 27 weeks and over) include 5.9 million, 42.4% of those unemployed. However, prior to the Clinton administration, unemployment measures included workers who are now no longer counted as part of the workforce. Using the more accurate pre-Clinton criteria, unemployment exceeds 22%, only 3% below the worst point (24.9%) of the Great Depression...

...if household income is adjusted for inflation, most American families have grown significantly poorer over the past ten years. In 2010, for example, real median household income fell 2.3%. Although the average wage has risen steadily in nominal terms, dwindling purchasing power is a reality for most Americans. When adjusted for inflation, the wages of most Americans have not kept up with the Consumer Price Index (CPI)...

...Although CPI is sufficient to illustrate declining real wages, CPI does not measure the cost of living in a realistic way. According to economist John Williams of Shadow Government Statistics, CPI systematically understates inflation...

...The U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), commonly known as “food stamps,” serves 45.8 million households as of May 2011. The program now feeds 1 in 8 Americans and nearly 1 in 4 children...

The United States is quickly becoming a post industrial neo-Third World country. Partly as a consequence of worsening unemployment and lack of economic opportunity, falling real wages and household incomes [and] growing poverty, the U.S. government faces a historic fiscal crisis.

...Barring fundamental reforms or a hyperinflationary collapse of the U.S. dollar (due to the fiscal problems of the U.S. government), the deterioration of the U.S. economy will continue and accelerate. As the U.S. economy continues its decline, public health, nutrition and education, as well as the country’s infrastructure, will visibly deteriorate and the Third World status of the United States will become apparent.

Only one question remains: when will Democrats stop embarrassing themselves by blaming Bush?

After all, they've controlled Congress for five freaking years and the Presidency for three.

And. Things. Just. Keep. Getting. Worse.