January 31, 2012

Breaking:5 Major US banks face massive (trillions) default on credit default swaps within weeks

The 5 US largest banks have 96% of credit default swaps out there. As Euro defaults kick in, parties become contractually obligated to make huge payouts to the relevant derivative partners. We are talking amounts potentially in the tens of TRILLIONS, due to insane levels of leverage. Morgan Stanley will be the first to go, followed by Wells Fargo, Citibank, and JP Morgan. Goldman Sachs, as usual, is the least exposed if a credit default event is declared, IMHO.

Watch the actions of ISDA, (International Swaps and Derivatives Association) http://www2.isda.org/ they in charge of determining when a "credit event" occurs.

The interviewee, Jim Sinclair, is a billionaire, 50+ year investor, one of the 'old lions' of Wall Street. Sinclair’s father, Bert Seligman was the business partner of the legendary Jesse Livermore, the "Great Bear of Wall Street" (Livermore traded from the 1890's to 1940).

January 31, 2012

Latest Congressional Budget Outlook For 2012-2022 Released, Says Real Unemployment Rate Is 10%

http://www.zerohedge.com/news/latest-congressional-budget-outlook-2012-2022-released

What do the NAR, Consumer Confidence and CBO forecasts have in common? If you said, "they are all completely worthless" you are absolutely correct. Alas, the market needs to "trade" off numbers, which is why the just released CBO numbers apparently are important... And the fact that the CBO predicted negative $2.5 trillion in net debt by 2011 back in 2001 is largely ignored. http://www.zerohedge.com/news/speaking-credibility-here-cbos-2001-forecast-which-predicted-negative-25-trillion-net-debt-2011 Anyway, here are some of the highlights. 2012 Deficit: $1.1 trillion; 2013 Deficit: $0.6 - yes, we are cackling like mad too... Unemployment to remain above 8% in 2012 and 2013; will be around 7% by end of 2015; to drop to 5.25% by end of 2022.

This forecast is utterly idiotic and is completely unattainable unless the US workforce drops to all time lows and the US economy generates 300,000 jobs a month for 10 years. Needless to say, CBO assumes the best of all worlds in this meaningless forecast. But here is the kicker: "Had that portion of the decline in the labor force participation rate since 2007 that is attributable to neither the aging of the baby boomers nor the downturn in the business cycle (on the basis of the experience in previous downturns) not occurred, the unemployment rate in the fourth quarter of 2011 would have been about 1¼ percentage points higher than the actual rate of 8.7 percent" translation: CBO just admitted that the BLS numbers are bogus and real unemployment is 10%. Thank you



Here is the CBO's alternative forecast which is a little closer to reality:

CBO has developed budget projections under an “alternative fiscal scenario,” assuming—instead of current law—that certain tax provisions that have recently expired or are set to expire (including most of the provisions in the 2010 tax act but excluding the Social Security payroll tax reduction) are instead extended, that the AMT is indexed for inflation after 2011 (starting from the 2011 exemption amount), that Medicare’s payment rates for physicians’ services are held constant, and that the automatic enforcement procedures of the Budget Control Act do not take effect. Under this scenario, deficits from 2013 through 2022 would average 5.4 percent of GDP, compared with the 1.5 percent in the baseline.

Some views on SSN and Medicare...............

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much more at link above

the full document: http://www.scribd.com/document_downloads/79972330?extension=pdf&from=embed

January 31, 2012

Goldman Sachs cooked Greece books, banking fraud expands globally (Max Keiser versus a banker tool)

Greece is being pressured to give all control of the Greek budget to the European Union, which it says threatens its national sovereignty.

January 31, 2012

A Dying Country: Japan to lose 30% of population over next 50 years,40% of remaining will be 65 yrs+

http://www.irishtimes.com/newspaper/world/2012/0131/1224311002007.html

THE JAPANESE government has published stark new evidence that the nation is on the cusp of a demographic crisis, forecasting that its population will shrink by 30 per cent in the next half century. A report released yesterday estimates that by 2060 the number of people in the Asian powerhouse will have fallen from 128 million to about 87 million, and almost 40 per cent of them will be 65 or older.

The report by the National Institute of Population and Social Security Research warns that by 2110 the number of Japanese will further plummet to 42.9 million – a third of the current population – “if things remain unchanged”. Japan’s population began falling in 2004 and is ageing faster than any other on the planet. Over 22 per cent of Japanese are already 65 or older and women now have roughly 1.3 children each, well below the population replacement rate.

Experts have warned for years that the inverted population pyramid is a harbinger of economic and social disaster, but the latest prediction by the institute, which is affiliated to Japan’s health and welfare ministry, is one of the most alarming yet. “This is Japan’s biggest problem,” said Florian Coulmas, who heads the Tokyo-based German Institute for Japanese Studies.

“It affects every aspect of the country’s society, economy, culture and polity. Japan is ahead of the rest of the world. That requires adjustments that no other country has had to make in the absence of war, epidemics or famine. But Japanese politics is totally incompetent. The politicians haven’t woken up to the fact that this is a national crisis.”

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January 30, 2012

Breaking : Freddie Mac Caught Betting Billions Against Homeowners During Recession

http://finance.yahoo.com/blogs/daily-ticker/freddie-mac-betting-against-homeowners-latest-gse-outrage-164015828.html

NPR and ProPublica released an explosive report http://www.npr.org/2012/01/30/145995636/freddie-mac-betting-against-struggling-homeowners Monday that found government-owned mortgage giant Freddie Mac betting against the very homeowners it is supposed to help. According to the news article, the investment division of Freddie Mac (or as Henry calls it, Freddie's "gambling desk&quot placed billions of dollars of bets against homeowners who were trying to refinance their mortgages at lower rates.

According to NPR/ProPublica's review of public documents, Freddie Mac invested in securities called "inverse floaters," which receive all the interest payments from specified mortgage-backed securities. "If lots of people 'pre-pay' their old loans and refinance into new, cheaper ones, then Freddie Mac starts to lose money," ProPublica's Jesse Eisinger and NPR's Chris Arnold explain. "If people can't refinance, then Freddie wins because it continues to receive that flow of older, higher interest payments."

Although Freddie Mac's bets are legal, they're highly offensive. Rightly or not, many Americans blame Freddie Mac and Fannie Mae -- which was not mentioned in the NPR/ProPublica report -- for the housing boom and subsequent bust. Nearly all Americans would agree these companies should not be focused on generating profits, now that they are officially wards of the state and are using taxpayer dollars to make these bets, as Aaron and Henry discuss in the accompanying video.

Freddie Mac plays a significant role in determining mortgage rates and is one of the "gatekeepers" with the power to decide whether a homeowner can refinance at a lower rate. If homeowners can reduce their mortgage payments, then Freddie Mac loses money. Hence the conflict of interest and the concern Freddie has been turning down refi requests in order to benefit its proprietary trades.

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When is enough financial rape enough for the average American?

January 30, 2012

A Social Justice Quiz

http://www.counterpunch.org/2012/01/30/a-social-justice-quiz/

13 Questions


Question One. The combined pay of the 299 highest paid CEOs in the US is enough to support how many median salary jobs?

45,000? 83,000? 102,325?

Two. The median net worth of black households in the US is $2,200. What is the median net worth of white households in the US?

$4,400? $44,000? $97,000?

Three. The US Department of Housing and Urban Development issues a national survey every year listing fair market rents for every county in the US. HUD also suggests renters should pay no more than 30 percent of their income on housing costs. In how many of the USA’s 3068 counties can someone who works full-time and earns the federal minimum wage pay 30% of their income and find a one-bedroom apartment at the fair market rental amount?

19? 368? 1974?

Four. How much must the typical U.S. worker earn per hour to rent a two-bedroom apartment if that worker dedicates thirty percent of his income, as HUD suggests, to rent and utilities?

$9.39? $14.63? $18.46?



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January 30, 2012

The Report That Will Blow Up The Eurozone + Chart of the Day: The Baltic Dry Index Plummets

http://www.businessinsider.com/the-report-that-will-blow-up-the-eurozone-2012-1


No, I’m not talking about the fact that Germany and Holland want to take over as the de facto government in Greece, as Noah Barkin writes for Reuters (that they want to do it through Brussels is a mere technicality).

Germany wants Greece to give up budget control http://www.reuters.com/article/2012/01/27/us-eurozone-greece-germany-idUSTRE80Q1ZF20120127

Germany is pushing for Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package, a European source told Reuters on Friday. "There are internal discussions within the Euro group and proposals, one of which comes from Germany, on how to constructively treat country aid programs that are continuously off track, whether this can simply be ignored or whether we say that's enough," the source said. The source added that under the proposals European institutions already operating in Greece should be given "certain decision-making powers" over fiscal policy. "This could be carried out even more stringently through external expertise," the source said.

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The report I refer to in the title requires a little background info:

In Holland, where I'll be for a few more days, there's a "rogue" right-wing party named PVV (Party for Freedom). It has no cabinet ministers, but the minority moderate right-wing government needs its support to stay in the saddle. The PVV, like other European right-wingers, is, among many other things, against much of what the European Union stands for. It's certainly against the Euro, and the bailouts with Dutch taxpayer money of countries like Greece and Portugal.

A few months ago, the PVV announced they had commissioned a report from British financial consultancy firm Lombard Street Research on the economic consequences of staying in the Eurozone versus returning to the guilder. That report is about to be published "within days". It will prove to be highly explosive material. And the PVV will do all it possibly can to make sure it receives a lot of media attention. It may tear down the incumbent government, which is a heavy advocate of all things Europe, and which will have to quit once the PVV support dies, but for that party that's not the no. 1 concern. And if and when Holland has a large scale discussion on the report and the issues it raises, Germany won't be able to ignore it and stay behind. And then, neither will France.

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Chart of the Day: The Baltic Dry Index

http://www.efinancialnews.com/story/2012-01-25/chart-of-day-baltic-dry-shipping-rates-fall?mod=mostread-PE




The index – often used as a proxy for the health of the global economy as it reflects the prices charged for shipping commodities such as metals, coal or grain around the world – has fallen by 61% since October. The index was at 842 at yesterday’s close – down from its 12-month high of 2173 last October.

Nick Bullman, managing partner at risk consultant Check Risks, said the index is a good way of looking at the risks to the global economy, “as it tends to be where they hit first”. According to Bullman, its initial collapse in October was driven primarily by a fall-off in demand from China, where declining housing prices pushed purchasing managers to cut back on orders for the raw materials whose transport the Baltic Dry Index reflects.

He said: “This collapse looks similar to the falls we saw in the Baltic Dry ahead of the recessions of the late 1970s and early 1990s – but this drop is actually steeper.” Bullman added that it was also a more direct indicator of global economic health than government-produced statistics. “Personally, I’m not interested in employment data and GDP figures because they’re manipulated,” he said.

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January 29, 2012

Femen topless protest video: 'Gangsta party in Davos'

Three topless Ukrainian protesters were detained on Saturday while trying to break into an invitation-only gathering of international CEOs and political leaders to call attention to the needs of the world's poor. After a complicated journey to reach the heavily guarded Swiss resort town of Davos, the women arrived at the entrance to the congress centre where the World Economic Forum takes place every year. With temperatures around freezing in the snow-filled town, they took off their tops and climbed a fence before being detained. Davos police spokesman Thomas Hobi said the three women were taken to the police station and their papers were checked.

The activists are from the group Femen, which has become popular in Ukraine for staging small, half-naked protests to highlight a range of issues including oppression of political opposition. They have also conducted protests in some other countries.

January 29, 2012

Feb 15 marks the 2 year anniversary of the book/call to action for the 99% movement,here it is again

Full Report: The Economic Elite Vs. The People of the United States of America

http://ampedstatus.com/full-report-the-economic-elite-vs-the-people-of-the-united-states-of-america/

This report was originally released as a six-part series. The first part was published on February 15, 2010. The last part was published on February 27, 2010.

——-I: Casualties of Economic Terrorism, Surveying the Damage
——-II: The Rise of the Economic Elite
——-III: Exposing Our Enemy: Meet the Economic Elite
——-IV: The Financial Coup d’Etat
——-V: Overcoming the Divide and Conquer Strategy
——-VI: How to Fight Back and Win: Common Ground Issues That Must Be Won


“The American oligarchy spares no pains in promoting the belief that it does not exist,
but the success of its disappearing act depends on equally strenuous efforts
on the part of an American public anxious to believe in egalitarian fictions
and unwilling to see what is hidden in plain sight.”

– Michael Lind, To Have and to Have Not


It’s time for 99% of Americans to mobilize and aggressively move on common sense political reforms.


Yes, of course, we all have very strong differences of opinion on many issues. However, like our Founding Fathers before us, we must put aside our differences and unite to fight a common enemy. It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99% of the US population no longer has political representation. The US economy, government and tax system are now blatantly rigged against us.


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get the full text at the 1st link above

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DU Flashback

here is the first Anonymous video released in support of Operation Empire State Rebellion (which is now known as OWS)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x562537


it's on. Anonymous launches new social group-A99 Operation Empire State Rebellion - Communication #1

January 29, 2012

On the Edge with Max Keiser - Economic collapse in the Western nations with Dr Michael Hudson

In this edition of the show Max interviews the author Michael Hudson from Michael-Hudson.com

In this episode Max talks to Michael about the economic collapse in the Western nations and how this collapse gap thesis applies to the European economies currently experiencing a huge crisis.