Al Peia's Blog: October 13, 2010 posts

Business / Economic / Financial

[ This link to a somewhat more cumulative blog posts page will precede current days news since most all topics remain current in terms of impact and longer-term effect and can be searched by topical index term more easily. The same is provided since the blog site http://alpeiablog.blogspot.com has just been censored as to size by google which is typical for google as nsa / cia / gov’t shill as more are becoming aware of. The same is true for microsoft, another co. that’s seen their best days and relies on the government to maintain their monopoly. Up to now the better page http://www.scribd.com/alpeia is provided for ease of formatting and clarity thereby while the Washington Post page is the real deal but without formatting http://www.washingtonpost.com/wp-srv/community/mypost/index.html?plckPersonaPage=PersonaComments&plckUserId=alpeia&newspaperUserId=alpeia ]

This is an especially great opportunity to sell / take profits! The unemployment numbers came in decidedly worse than expected along with other negative data (and in the ‘wrong direction’, that spin accorded ‘down but not as bad as before’ b*** s*** ) yet the market has rallied like no tomorrow with used home foreclosure / distressed sales, though abated owing to ‘foreclosuregate’, the other ‘heralded’ good news. Moreover, the dumbo lemmings of Europe have jumped on the fraudulent defacto bankrupt american crazy train propelled to the precipice also as if no tomorrow. This is about keeping the suckers sucked in with the help of a market-frothing pre-election debased dollar for favorable currency translation and paper (but not real when measured in, ie., gold, etc.) profits which preceded the last crisis, inflating a bubble as in the last crisis to facilitate the churn-and-earn, particularly with computerized (and high frequency) trades and which commissions they’ll get again on the way down. There is nothing to support these overbought stock prices, fundamentally or otherwise. These are desperate criminals ‘at work’. Even wall street shill, the senile Buffett is saying we’re still in a recession (depression). Buffett: We're Still in a Recession [ Wow! A moment of lucidity from senile Buffet which belies his prior ‘rosy wall street shill talk’, but his greater candor is welcomed nonetheless although the ‘d’ (for depression) word is more appropriate and accurate.] Roche ‘Warren Buffett disagrees with the NBER. He says we’re still in a recession and likely to remain in a recession for quite a while. These comments are far more tempered than the ones that were published last week. Of course, my favorite part in this clip is where he says the U.S. government did the right thing in responding to the crisis. They certainly did the right thing for Berkshire Hathaway (BRK.A) shareholders. Whether or not they did the right thing for America is a whole other story…’ [ And, of course we now know that it wasn’t the right thing for america … The question inevitably becomes, ‘Who’s manipulating who, what, and why? After all, we know defacto bankrupt america’s pervasively corrupt! ]

Economists Herald New Great Depression The world is currently experiencing the modern day equivalent of the Great Depression, according to a prominent economist who has added his voice to scores of others now forecasting ongoing economic doom on a scale not seen since the 1930s.) , and my position and that of demographer Dent (This is a global depression. This is a secular bear market in a global depression. The past up move was a manipulated bull (s***) cycle in a secular bear market. This has been a typically manipulated bubble as has preceded the prior crashes with great regularity that the wall street frauds and insiders commission and sell into. This is a typical wall street churn and earn pass the hot potato scam / fraud as in prior crashes’. This national decline, economic and otherwise, will not end until justice is served and the wall street frauds et als are criminally prosecuted, jailed, fined, and disgorgement imposed. Krugman: It's All Downhill From Here Cullen Roche Love him or hate him Paul Krugman has been awfully right with regards to the macro picture in the last few years. He’s one of the rare economists who had the foresight to see the housing bubble and the likelihood of economic downturn that would result from it. Krugman recently caused a stir when he said the US economy was headed for the third depression. He isn’t back down from that outlook:

I’ve had a couple of conversations lately with people who follow politics and public affairs, but aren’t that close to the economic discussion — and I’ve discovered that there are two comforting delusions still out there.

Delusion #1 is that we’re on the road to recovery, just more slowly than we’d like; to be fair, the White House keeps saying this.

But it’s not at all true. GDP is growing below potential; employment, even if you focus just on private employment, is growing more slowly than the working-age population. If you ask how long it will take us to return to, say, 5 percent unemployment on the current track, the answer is forever.

Delusion #2 is the belief that the stimulus may yet do the trick, because there are still substantial funds unspent. I tried to deal with this last year. The level of GDP depends not on total funds spent, but on the rate at which funds are being spent, which has already peaked; GDP growth on the rate of change in the rate at which funds are being spent, which peaked last year. It’s all downhill from here.

If you can ignore the schizophrenic market for just a second it’s hard to reject Krugman’s macro outlook. The private sector has been running on fumes since the debt bubble burst in 2007. The government’s extraordinary actions helped bolster the economy, but merely papered over what was a very weak private sector. As we see the government step aside it’s difficult to imagine that the weakness at the private sector won’t again be exposed for what it really is.
Here Are 13 Signs That We’re Actually In A Depression Right Now Gregory White | David Rosenberg has outlined, in his latest letter, the 13 reasons with this so-called recovery is actually a depression… David Rosenberg has outlined, in his latest letter, the 13 reasons with this so-called recovery is actually a depression.Rosenberg sums it up like this:

This is what a depression is all about — an economy that 33 months after a recession begins, with zero policy rates, a stuffed central bank sheet, and a 10% deficit-to-GDP ratio, is still in need of government help for its sustenance.

Harry Dent, Jr. Economy will be in a Depression by 2011
The worst of this next depression is likely to hit between mid-2010 and mid-2013, especially around early 2011, but if the banking system continues to implode a deep downturn or depression could begin sometime in 2009 instead of 2010.
Dow will Fall to 3,800 – 4,500 by 2012
Nasdaq will Fall Below 1,100, its 2002 low, by late 2010 or mid-2012 at the latest.
Inflation will Increase until mid- 2010 and then turn to Deflation
Interest Rates will Increase
U.S. Dollar will Decline
Housing will Decline by 40 – 60% from Today’s Levels
Greatest Economic and Banking Crisis since the 1930s will Occur Between 2010 and 2012). ]

Survey: Half of Wall Street expects bigger bonus this year (Washington Post) [ This is nothing short of incredible … What they should be expecting, for the sake of the nation and the world, is an 8 by 10 jail cell! ] Bloomberg The percentage anticipating a bigger bonus increased from last year.

Wall Street: The Speed Traders - 60 Minutes - CBS NewsOct 10, 2010 ... 60 Minutes on CBS News: Wall Street: The Speed Traders - Steve Kroft gets a rare look inside the secretive world of "high-frequency trading ... www.cbsnews.com/video/watch/?id=6945451n [ CBS 60 minutes should be lauded for ‘daring to go where no man dare to go before’, particularly pre-election. Video Robot Traders of the NYSE ‘In a secret new building in new jersey ‘( meaningfully lawless, pervasively corrupt, multi-ethnic mob-infested/controlled jersey / http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm / , the perfect venue for this fraud )’, high-speed computers decide which stocks to buy and sell. Could this kind of automated "trading floor" lead to Wall Street's next "flash crash"?’ ( I’ve included this web site archived file of the transcript of the segment with links to the CBS videos, here http://albertpeia.com/highfrequencytradingcbs60minutes.htm ) I add the following personal observation with regard to a comment made by the only ‘high frequency trader’ who agreed to be interviewed; viz., that the ’process’ was all ‘math’. Unfortunately, investing, investments, security analysis / valuation, is not just math. Indeed, in my MBA Finance ( NYU GBA, eve program which included professors actually successfully working on the street ) I can attest to the complexity of the math / algorithms underlying the financial theory of investing for which there were no ‘short-cuts’ to understanding (Modigliani / Miller, Nobel Prize Winners , for example, were a royal ‘pain in the a ’, the material being far more complex than the far more voluminous but much more easily synthesized law school fare.) The problem with said theory is that it’s just not how it’s done on wall street but rather, geared to being descriptive after the fact because invariably, if used as an investing approach you would find yourself a loser or at best, a tandem market performer (‘Random Walk Down Wall Street’, the ‘Random Monkey’, etc.). Day to day, week to week, the ‘random stroll’ is hard to dispute; yet, behind the scenes a different story of manipulation unfolds; which manipulation has become extremely efficient via lightning speed computerized churn and earn trades, and hence, very lucrative but debilitating to the nation. The churning and earning (commissions) is the end in itself. The math for streams of payments and alternatively receipts, and present values thereof is indeed math, and an actual application of same would be the insolvency, for example, of social security, etc.. I had the fortunate experience to have met with a successful wall street executive (chairman, executive committee, institutional research / brokerage house) who was talking up a career for me on wall street and whom I thought highly of owing to his accomplishments and candor, ie., what you read in , for example, the wall street journal, was total b* s***, etc.. ( In his world there were few if any grey areas; ie., among others, there were only two kinds of people; viz., people with money, and people who want money. Of course, I knew this to be false based upon such individuals as my Pastor who Confirmed me and who easily could have been a lawyer, uncorrupt judge, etc., and of times past in the u.s. and no longer apposite a career soldier, law enforcers, teachers, artists, etc.). The point is, wall street wasn’t straight then, and far worse, certainly not today. No, the high frequency trades are a scam of great modern day proportion, which eat into the productive capabilities and value of the nation which is set forth elsewhere on my site and evidenced by this continuing debacle and national decline today. A good programmer can easily mask and obfuscate the scam with seemingly lightning fast moves which purport to be rational, but are but symptomatic of an economically (self-)destructive exercise for all but the greedy criminally insane on wall street today. As, if not more, important for civilized society is an unwillingness to do anything for money (ie., fraudulent wall street, mob, drug cartels, criminals, etc.; which of course is the problem confronting america particularly, and the world generally. ]

The Root of the Problem The Inflation Trader [ I think it unfortunate that most fail to properly weight in their analysis the irrevocable structural shift that has occurred in the defacto bankrupt u.s. and which cannot be undone. The ‘powers that be’ literally gave up (sold out) the american store (ie., technology transfers for money, protracted treasury depleting and geopolitically unwise wars, perma-frauds on wall street without prosecution, pervasive corruption at all levels including all three branches of the u.s. government, etc., covered elsewhere on this site.) Then of course there’s the insurmountable debt and interest thereon which is now eating into real (not fake) GDP along with other unserviceable promises exacerbating the magnitude of the nations defacto insolvency. ] ‘Your view of something often depends on the position from which you view it. I don’t mean this in the Theory-Of-Relativity sense that a moving observer perceives time differently from the stationary observer, although it is true there too of course. I mean it in the more prosaic sense that a tightrope seems higher when you are standing on it than when you are looking at it from below. As observers of the economy, our initial position – our ‘null hypothesis,’ as I sometimes refer to it – will very much drive our response to economic data; our market position may, if we are not very careful about it, affect our view of the likely future direction of the market. The Federal Reserve yesterday released the minutes of their most-recent meeting, and it looks to me as if their perspective about the necessity of quantitative easing is more biased than we had previously believed. While the minutes reflected (as they often have, especially over the last two years) a diversity of opinion, the following notation grabbed my attention:

Several members noted that unless the pace of economic recovery strengthened or underlying inflation moved back toward a level consistent with the Committee’s mandate, they would consider it appropriate to take action soon.

Notice the subtle difference between this and what actually was agreed to be released as the FOMC’s statement for that meeting:

Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.

“Longer run” in the second phrase seems to conflict with “soon” in the first phrase, making it appear that the official statement was a compromise with at least several members pushing for action “soon.” But that cadre also sets the bar quite low. They aren’t saying the Fed should ease further if things get worse, but that they should ease if things don’t get better quickly enough.That’s a very activist slant. While this group appears to be in the minority, we know from the various speeches that it isn’t a minority of one. QE certainly appears more likely every day that we don’t get positive blow-out economic news.

What is the justification for easing on the basis of a too-slow improvement? I imagine much of this concerns a fairly obscure debate about whether economic growth is “unit root” or not. Stay with me here. This sounds esoteric, but it matters.

It isn’t important to understand the mathematics behind determining whether a time series is generated by a process with a unit root; if you’re interested, you can read the Wikipedia article on ‘unit root.’ * For our purposes, what is important to understand is this: if economic output is not unit root but is rather trend-stationary, then over time the economy will tend to return to the trend level of output. If economic output is unit root, then a shock to the economy such as we have experienced will not naturally be followed by a return to the prior level of output. Actually, the Wikipedia chart is pretty helpful at understanding this – see below (chart). This picture taken from the Wikipedia article on "unit root" (see above for link)

So, the red line is what we have experienced the last few years (stylistically, not literally). If growth is “unit root” then the trend basically picks up from where output is in the immediate aftermath of the shock; if growth is trend-stationary then the recovery should see a period of faster-than-trend growth to get output back to the prior trend level. Note that in both cases, we are assuming no specific contribution from monetary policy. If you believe that growth is trend-stationary, then monetary policy merely serves to get growth back to trend more quickly, thereby minimizing the welfare loss from the output gap (schematically, the area between the dotted line and the “actual” red/blue line). Thereafter, monetary policy takes the pedal off the metal and lets growth converge with trend. If, on the other hand, you believe that growth is unit root, then monetary policy is either trying to arrest the decline in the red line to put the economy back on the green line, or it is (dangerously) trying to accelerate growth back to a “trend” that is not really a trend. I expect this is the substance of Hoenig’s objection – if we’re back near the green line, and output is unit root, then goosing the economy more “will lead to future imbalances that undermine stable long-run growth” (the phrase from the FOMC statement where Hoenig’s dissent was noted).

Clearly, most of the Committee doesn’t believe that output is unit root, because if it did then it would tend to be more suspicious of the ability of Fed policy to reduce that welfare loss. It is true that it is difficult to reject the unit root hypothesis for many economic time series – the ratio of noise to signal in economic data means it tends to be pretty hard to reject many hypotheses that are in the ballpark of being reasonable. But it matters. Problems like this, where the downside to being incorrect are possibly quite large compared to the upside to being right, argue against dramatic Fed action. However, the sense of heroism inculcated in us at a young age by Superman’s exploits argue in favor of heroic measures. Most of us, though, aren’t actually bulletproof. I will make one final observation about this that throws another wrench in the works. What if we don’t know where the dotted line in the picture above actually lies? Long-term economic growth has changed over time as the economy has matured, as population growth changed, and for other reasons. Suppose the unobservable dotted line actually intersects the right-end of the red line? In that case, the current debate takes a totally different patina. If trend growth has actually slowed down in the last decade, then arguably the economic and financial crisis may just have been returning us down to the real trend. In that case, further aggressive Fed action would be essentially trying to restore those dangerous imbalances. This, too, could be part of Hoenig’s argument. And this possibility, too, argues for conservative policy actions.

In economics, unfortunately, we don’t have a map we can look at where a bright red dot indicates You Are Here. But wherever we are, it seems that an increasingly influential minority at the Fed wants to be somewhere else. They are likely to get their wish. The markets responded to all of this yesterday in sleepy fashion, with one exception. The VIX plunged, dropping not only below 20 for the first time since April but also dropping below 19. The degree of confidence being expressed by the stock market here, heading into earnings season followed by a difficult holiday sales season, is chilling. It is hard to let go of suddenly-performing equities, but I am making sales here of some of my lower-yielding and less-conservative equity holdings. Other than some import price data today, there is little on the calendar. Chairman Bernanke is giving a speech on business innovation, but be alert for Q&A.

*Wikipedia: ‘Economists debate whether various economic statistics, especially output, have a unit root or are trend stationary. The issue is particularly popular in the literature on business cycles. Research on the subject began with Nelson and Plosser (1982) ^[1] whose paper on GNP and other output aggregates failed to reject the unit root hypothesis for these series. Since then, a debate—entwined with technical disputes on statistical methods—has ensued. Some economists^[2] argue that GDP has a unit root or structural break, implying that economic downturns result in permanently lower GDP levels in the long run. Other economists argue that GDP is trend-stationary: That is, when GDP dips below trend during a downturn it later returns to the level implied by the trend so that there is no permanent decrease in output. While the literature on the unit root hypothesis may consist of arcane debate on statistical methods, the implications of the hypothesis can have concrete implications for economic forecasts and policies.’

Bernanke Is Heading Into His 'Japanese' Phase Econophile ‘BEN BERNANKE , [ (no-recession helicopter) Ben (b.s. for b*** s*** shalom) Bernanke (oj the juice man), like his predecessor senile greenspun he’s pathetically incompetent ], SHOULD BE RELIEVED OF HIS POST. I say this in response to Jon Hilsenrath's latest article in the Wall Street Journal on the Fed, "Fed Chief Gets Set to Apply Lessons of Japan's History." I would re-entitle the article, "Fed Chief Gets Set to Repeat Mistakes of Japan's History." This is a fascinating article. Some tidbits:

As a Princeton professor in the 1990s, Ben Bernanke lectured Japanese officials for mishandling their economy. ...

Mr. Bernanke's mission, in part, is to make sure the U.S. stays off the path trod by Japan. Yet it's proving harder than he thought when he was offering advice to officials overseas.

Japan's stock market peaked in 1989 and its property bubble popped two years later. Since then, it has averaged annual growth of just 0.7%. Its national government debt has soared to more than 200% of its national output. And in seven of the past 10 years its consumer prices have fallen.

All this happened even though the Bank of Japan has held short-term interest rates at or near zero since 1999 and has taken other stimulative steps such as buying government bonds and short-term corporate debt.

The gist of the article is that back then Professor Bernanke chastised the Bank of Japan for failing to take bold decisive steps to thwart deflation. Among his recommendations was to do a lot more quantitative easing ((QE) than they had been doing. They should have acted sooner with more QE, and they should have left interest rates low (basically zero) longer. He urged them to set an inflation rate of 1% a year until they rekindled inflation. But guess what: it didn't work. Nothing worked.

Japan's experience remains a puzzle. Japanese policy makers over time tried many ideas the U.S. academics promoted. They pushed interest rates to zero and committed to keeping them there until deflation reversed. Ultimately the Bank of Japan tried quantitative easing, increasing its holdings of loans, securities and other assets by 42% between 2001 and 2006.

For a time, the policies seemed to get traction. Japan averaged annual growth of 2.4% from 2004 to 2007. A long spell of falling consumer prices showed signs of abating. But then came the global recession of 2008. Japan's economy contracted 5.2% in 2009, and deflation was back.

"I don't think any model would have predicted the degree of persistence of Japan's problems," says Mark Gertler, a New York University professor and former coauthor with Mr. Bernanke. "It is pretty hard to account for."

Japan's deflation has turned out to be the deepest mystery of all. Economists expected that a little deflation would turn into an ever-more-dangerous spiral: As consumer prices fell, the burdens of rising real interest rates could worsen, damaging the finances of banks, households and businesses and sinking the economy even deeper, as happened during the Great Depression. ... Rather than spiral, deflation in Japan has stuck at around 1% a year.

Now the BOJ officials which Professor Bernanke criticized are having their chuckle at Chairman Bernanke:

Kunio Okina, a former Bank of Japan official whose research was attacked by the academics, says they didn't pay much attention to the risks associated with such measures. Their stance was that the BOJ "should jump with its eyes closed," Mr. Okina says. "There is a big difference between when they were having a carefree discussion about the BOJ's monetary policy and when it becomes a real problem to themselves."

This should be a schadenfreude moment but the fact remains that Bernanke is in charge of our economy and he's doing all the wrong things.

In January, 2009 I wrote an article on this topic, The Japanese Disease, about the policies undertaken by Japan:

By looking at Japan in the 1990′s and early 2000′s we can see the results of a Keynesian solution to a set of facts almost identical to our present situation. The “solution” caused a 15-year (1990–2005) stagnation of the Japanese economy. ...

Here’s the Japanese experience which is startlingly similar to our present situation.

1. They started with a huge credit expansion. Their discount rate was cut from 4.4% to 2.5% in 1986-1987.

2. Real estate and equity prices soared.

3. To counter the speculative boom, the discount rate was raised in 1989-1990 from 2.5% to 6% and their markets crashed.

4. The Nikkei went from 40,000 in 1989 to 11,000 in 2005. Real estate values plummeted 80%.

5. GDP grew at only 1.17% from 1992 to 2003.

6. Unemployment went from 2.1% in 1991 to 4.7% by 2004 (a very high rate in Japan).

7. Consumption and investment fell dramatically.

8. Banks were not lending.

What was the response of the government to this crisis?

1. In order to kick-start the economy, the government went on an infrastructure spending binge and cut taxes.

2. From 1992 to 1995 they spent ¥65.5 trillion on projects and cut taxes.

3. In 1998 they cut taxes ¥2 trillion.

4. In 1998 they spent another ¥40.6 trillion on spending stimulus.

5. In 1999 they spent another ¥18 trillion in fiscal stimulus.

6. In 2000 they tried another ¥11 trillion spending package.

7. They set up a ¥20 trillion fund to lend directly to businesses (the Financial Investment and Loan Program [FILP]).

8. To try and push money into the system the Bank of Japan and Ministry of Finance bought more than half of existing government bonds from the private market at a cost of ¥2.22 trillion.

9. Trying monetary policy, they lowered the discount rate from 4.5% in 1991, 3.5% in 1992, 1.75% 1993-1994, to 0.5% 1995-2003.

10. They set up a $524 billion bailout fund in 1998 to buy stock in failing banks or nationalize them.

It is estimated that the Japanese spent about $1 trillion about (¥135 trillion) to cure their financial problems. But the problems lingered, banks remained weak, lending and investment was severely reduced, unemployment was high, government debt went to more than 150% of GDP, and the yen devalued. Nothing seemed to work.

Still nothing has worked and the Japanese keep trying the same failed policies over and over.

Now, there are substantial differences between the US and Japan which is why I believe we will not have prolonged deflation like they have experienced. In October, 2009 I wrote an article, "Will We Have a Lost Decade(s) Like Japan?" which explores the substantial differences between the US and Japan which, in my opinion, will not take us down the path of continuous deflation. Today the Fed published its minutes for its September, 2010 FOMC meeting and there was nothing that we didn't already know. They said that the economy is not doing as well as they expected, that it could get worse, and if necessary they will print money through QE, soon. Bernanke will teach the Japanese a lesson in the proper way to run and economy. He will pump money until we have inflation because he fears deflation more than inflation. Because he doesn't understand the real lessons of Japan, we will have stagflation, and his successor will probably try the same failed remedies to save us from that too. Disclosure: No positions

The Coming Bomb From Helicopter Ben Epeneter ‘At the Federal Open Market Committee meeting on November 2nd and 3rd, the Federal Reserve may be ready to buy anywhere from $500 billion to $1 trillion of US Treasuries and mortgages from banks, financial institutions, and the open market, an operation generally known as printing money. Federal Reserve Chairman Ben Bernancke, New York Fed President William Dudley, Chicago President Charles Evans, the Boston President, and others are targeting a 2% inflation rate (the CPI is now about 1%). Their hope is that unemployment will be substantially reduced, gross domestic product will increase, and hope and happiness will return. We think the size of this money-printing operation qualifies as a "bomb" to the markets. Here's five reasons why it's a bomb and won't work as planned.
An increase in the inflation rate quite possibly already in the pipeline. Since Chairman (Helicopter Ben) Bernancke announced his intentions at the August Jackson Hole Wyoming conference, prices for gold, oil, copper, steel, platinum and other precious commodities have risen substantially. These price increases will eventually find their way into the final cost of goods and services you and I buy. An inflation rate of 2% could happen without any further action by the Federal Reserve.
Limited inflation targeting will not work as shown by history. Former Federal Reserve Chairman William McChesney Martin retired in 1970, but during his tenure, he testified before the Senate Finance Committee, "There is no validity whatever in the idea that any inflation, once accepted, can be confined to moderate proportions." The experience of the 70's seems to support his statement. During the 50's and 60's it was thought that some inflation was good for the economy. Looks those who forgot history are putting forth again the idea that limited inflation is good.
Businesses won't borrow until they have confidence that other costs won't go up. The real problem that Federal Reserve money printing doesn't address is the reluctance of business owners to hire more workers and expand business until they know what the costs are going to be (such as health insurance) and what the income tax rate will be (such as the Bush tax cut extension). In addition, owners are struggling with new regulations imposed upon them
Banks won't lend. Banks are building their capital bases and their lending standards have increased. Lending activity is down because of those reasons and providing more cash will not affect lending activity much if any.
The cost/benefit analysis doesn't support it. The Federal Reserve has modeled what would happen if they printed $500 billion of new money. The interest rate on the benchmark 10-yr Treasury note would decrease by .15% or 15 basis points. Unemployment would decrease by 0.2%. GDP would increase by 0.2%. We would ask whether the cost of inflation to the United States as a whole is worth the benefits as modeled by the Fed…’

California governor debate turns into verbal brawl (Reuters) [ California, like the rest of the nation, is such a disaster that I’m disinclined to even comment upon the political scyllas and charybdises nationwide, except in the most glaring instances. Meg Whitman’s membership on the Goldman Sachs board, her $120 million payment to herself then laying off 10% of the company’s workforce, is such an instance. Come on! This is a no-brainer for California … Congratulations Governor Brown! ]

Gold hits record as Fed signal sinks dollar Vancouver Sun | Gold surged to a record high at $1,367.65 an ounce on Wednesday and silver to a 30-year peak.

85% of Americans Angry About Economy, Fuels Republican Advantage ABC News | All told, 85 percent of Americans are either angry about the economy or at least dissatisfied with it, according to the survey, produced for ABC and Yahoo! News by Langer Research Associates.

Fed declares it MUST create inflation! Uncommon Wisdom | Exactly one month ago today, I wrote that Fed Chief Ben Bernanke would soon “pull out nuclear-sized bombs to try and destroy the debt crisis that is affecting the world.”

Gold sets a new record; silver hits 30yr high Gold surged nearly 2% to a record high near $1,375 an ounce yesterday, boosted by worries over dollar depreciation after the Federal Reserve signalled it would start buying government debt again to stimulate the economy.

Gold Surges After Japan Says It Is Considering New QE And Geithner Guarantees Currency Wars A quick look at gold price action demonstrates that someone somewhere is actively debasing currencies. An even quicker scan of headlines confirms this to be the case: per Reuters “Bank of Japan Governor Masaaki Shirakawa said on Wednesday the central bank will consider expanding a new scheme for buying assets ranging from government bonds to exchange-traded funds when deemed necessary.”

Gold futures rise above $1,360 as dollar falls Gold futures resumed their run higher, hitting an intraday high of $1,362 an ounce on Wednesday, as weakness in the U.S. dollar spurred demand for the precious metal.

White House rejects foreclosure moratorium The Obama administration rejected calls for a nationwide moratorium on housing foreclosures amid fears that such a move could cripple an already slow recovery of the U.S. housing market.

(10-13-10) Dow 11,096 +76 Nasdaq 2,441 +23 S&P 500 1,178 +8 [CLOSE- OIL $83.01 (-54% for year 2008) (RECORD TRADING HIGH $147.27) GAS $2.74 (reg. gas in LAND OF FRUITS AND NUTS $3.11 REG./ $3.26 MID-GRADE/ $3.35 PREM./ $3.69 DIESEL) / GOLD $1,371 (+24% for year 2009) / SILVER $23.98 (+47% for year 2009) PLATINUM $1,705 (+56% for year 2009) / DOLLAR= .71 EURO, 81 YEN, .62 POUND STERLING, ETC. (How low can you go - LOWER)/ 10 YR NOTE YIELD 2.43% …..… AP Business Highlights ...Yahoo Market Update... T. Rowe Price Weekly Recap – Stocks / Bonds / Currencies - Domestic / International This Is a Secular Bear Market and The End of Buy and Hold … and Hope MARKET MANIPULATION AND HOW THE LATEST BUBBLE-FRAUD PRE-COMING CRASH IS BEING ACCOMPLISHED 3-11-10 6 Theories On Why the Stock Market Has Rallied 3-9-10 [archived website file] Risks Lurk for ETF Investors The bull market that never was/were beyond wall street b.s. when measured in gold Property Values Projected to Fall 12% in 2010 Jan 31, 2010 The Week Ahead: Risk Is Off the Cliff; Unwind Has Begun Jan 31, 2010 01-13-10 Forecast for 2010 from Seeking Alpha Contributor THE COMING MARKET CRASH / CORRECTION 1-28-10 Maierhofer (01-15-10) 11 Clear Signs Economy Sinking Economic Black Hole 1-22-10: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover Current Economic / Fiscal Charts Trendsresearch.com forecast for 2009 1-7-10 Crash is coming! ‘WORST ECONOMIC COLLAPSE EVER’ Must Read Economic / Financial Data This Depression is just beginning The coming depression… thecomingdepression.net MUST READ: JEREMY GRANTHAM’S QUARTERLY UPDATE 25 January 2010 (850 on the S&P) by TPC The Next Wave of Collapse is Coming Sooner than you think Sliding Back Into the Great Depression ABSOLUTELY, ABSURDLY, RIDICULOUS! SELL / TAKE PROFITS WHILE YOU CAN SINCE MUCH, MUCH WORSE TO COME!

National / World

New 9/11 Footage Reveals WTC 7 Explosions Paul Joseph Watson | Video clip NIST fought tooth and nail to keep secret contains clear audible booms as eyewitness describes “continuing explosions” from direction of Building 7.

We’re Under Attack: Support Alternative Media in the Infowar Alex Jones & Aaron Dykes | Make no mistake, the Infowar is under attack. The establishment is alerted to the work that Infowarriors everywhere have done. Now, to continue fighting back in full force, we need your help.

Head of Investigator in Falcon Lake Case Delivered to Mexican Military Kurt Nimmo | The murder of Rolando Armando Flores Villegas points to involvement of drug cartel in the slaying of David Michael Hartley.

Alex Jones: Total Economic Implosion and Bondage by Design [ It’s here where I part ways with Jones et als inasmuch as, though they will attempt to have same serve their typically nefarious ends, these ‘so-called elites’ (there really is no such thing in this worldly reality except in their own warped minds) are but incompetent vegetables (Jones gives them much too much credit, although their incompetence does play a significant role in this pathetic state of the world), but indeed many of them criminally insane and who should be incarcerated for real crimes. ] Infowars.com | The global elite have engineered a total economic collapse.

Ron Paul: Dollar Collapse Will Spur 2012 Presidential Run Paul Joseph Watson | Congressman indicates that worsening financial picture will re-ignite the Revolution.

New 9/11 Footage Reveals WTC 7 Explosions Newly obtained 9/11 eyewitness footage that NIST fought tooth and nail to keep secret contains what appears to be the sound of explosions coming from the vicinity of WTC 7 after the collapse of the twin towers, offering yet more startling evidence that the building, which was not hit by a plane yet collapsed demolition style, was deliberately imploded.

Jesse Ventura: US should abolish inherently corrupt political parties A dozen years after shocking the nation with an upset win as an Independent candidate in the 1998 Minnesota gubernatorial election, former wrestler Jesse Ventura doesn’t support third parties anymore.

Gallup: 46 Percent Say Federal Gov’t ‘Poses Immediate Threat’ to Rights and Freedoms of Ordinary Citizens; Only 51 Percent Say It Does Not The percentage of Americans who think the federal government poses “an immediate threat” to the rights and freedoms of ordinary citizens has increased significantly over the last seven years, rising from 30 percent to 46 percent, according to a Gallup poll conducted Sept. 13-16 and released today.

We’re Under Attack: Support Alternative Media in the Infowar This video is a chronicle of everything we’ve done here in the Infowar. We ask that you help get it out to everyone you know and tell them to join us live this Thursday, October 14th for an historic 24-hour broadcast to generate support and get out the word as far as we can.

Goldman Sachs Predicts Gold To Hit $1650 Within 12 Months Goldman Sachs expects the dollar to plummet following another round of quantitative easing and has raised its forecast for the gold price to $1,650 per ounce within the next 12 months.

3.5 Million On The Streets And Rising: As French Strikes Escalate, Just How Serious Is The Situation? Even as everyone in America seems to have anywhere between 2 and 4 opinions on Fraudclosure now that the topic is firmly planted in the MSM newsflow, things in Europe are not looking any better, even though most people there shun McMansions for their grandmothers’ houses.

Chicago Reporters Work as Rahm’s Press Thugs; Threaten Radio Host Asking Tough Questions We’ve often said that the media “protects” President Obama but this video from WIND radio host and Big Blogs contributor William Kelly shows this allegation literally.

‘Intl. lobby supports Israel’s crimes’ Former US Congresswoman Cynthia McKinney says a strongly-financed lobby throughout the world has helped Israel violate international law.

`Drudgereport: NEW NORMAL: Long Recovery Looks Like a Recession (Depression) ...`
`Fed Mulls Raising Inflation Expectations to Boost Economy...`
`Gold Hits Another Record...`
`Pension protests escalate in France...`
`Sarkozy stands firm...`
`Strikes shut Eiffel Tower... Blankley: The White House Bunker So Soon?`

French protestors vow to continue strike (Washington Post) [ Hey … wake up … it’s not just in France … and, you’ll see unrest here also as coddling the frauds on wall street will make blood boil! ]Air and rail service throughout the country was disrupted by the protests -- the fourth in a month.

FDIC may seek $1 billion from failed-bank executives (Washington Post) [ Isn’t this exactly what the DOJ should be doing vis-à-vis the frauds on wall street; and additionally, the wall street frauds et als should as well be criminally prosecuted, jailed, fined, and disgorgement imposed.] The agency has authorized lawsuits against more than 50 officers and directors of failed banks across the country.

Obama and oil: How politics spilled into policy (Washington Post) [ There are many reasons to fault wobama for his flawed, failed presidency; but this is not one of them; he gets a pass here. It was all BP. ]Fundamental questions weren't pursued because top administration officials generally accepted the conventional view of the industry's safety record.

Families remember USS Cole 10 years later (Washington Post) [ If only Americans remembered the USS LIBERTY, they’d understand the israeli albatross strangling and bleeding the life out of america as they have since that fateful day.] In the Middle East, it's still 1947 (Washington Post) [ Indeed it should be! Among the few times the cia was correct, and they’ve been trying to put square pegs in round holes ever since, to america’s substantial detriment. I wonder what what those american sailors of the US Liberty killed by the israelis would say? USS Liberty Survivor Threatened by Unknown Israeli This is what happened to Phillip F. Tourney, decorated war hero and survivor of Israel’s premeditated attack on the USS Liberty 43 years ago. On the evening of Aug. 6, Tourney was verbally threatened by a foreign national claiming to work for the government of israel. As for the purported disdain shown for war mongerer netanayahu, if only wobama’s actions matched his words, the same would represent a major plus for him and the nation of america, so sorely in need of pluses whether the same be budgetary or economic or geopolitical. In fact, for America to abrogate 1948 would guarantee America’s survival, prosperity, and global hegemony in the most positive sense. ]

Attorneys general to initiate foreclosure probe (Washington Post) [Wow! Sounds like a plan! … The only thing certain in defacto bankrupt america today is uncertainty! Government Prepares To Seize Private Pensions Paul Joseph Watson | ‘Massive wealth confiscation program would replace 401(k) system with Social Security-run ponzi scheme. … US Drops From First To Seventh In Average Wealth Per Adult, Behind Singapore, Sweden, And… France As if we needed more warnings that the US is rapidly losing its position as the world’s superpower and wealth aggregator, is the following chart from Credit Suisse, which ranks the top 10 countries in the world in terms of average wealth per adult.] Attorneys general from dozens of states are set to announce Wednesday a joint investigation into the nation's biggest lenders, but will stop short of calling for a moratorium on foreclosures in their jurisdictions, officials said.

Fed leaning toward more stimulus, meeting minutes show (Washington Post) [ Most U.S. Stocks Gain on Bets Fed Will Act to Stimulate Economy [ The problem here is that stimulating stock prices and fraudulent wall street is quite the opposite of stimulating the economy. ] Survey: Half of Wall Street expects bigger bonus this year (Washington Post) [ This is nothing short of incredible … What they should be expecting, for the sake of the nation and the world, is an 8 by 10 jail cell! ] Bloomberg The percentage anticipating a bigger bonus increased from last year. For Markets, Bad News Seems to Be Good News which of course was the scenario just before the last crash when stocks were floating on air and b* s*.

Last Time VIX Got This Low Stocks Had Problems Wiggin ‘Fear is looking cheap again. The Volatility Index fell Monday to 18.98, its lowest level since April 29. That date happens to fall a few days after the Dow and the S&P hit their post-2007 highs, and a few days before the May 6 “flash crash.” If you’re not familiar with the VIX, it’s a measure of fear in the market, based on what people are paying for options on the S&P 500 Index. (chart) Today, even as fear rises ever so slightly, the VIX struggles to break through 20. “We are getting close to extreme territory,” said Chris Mayer on April 12, when the VIX sat below 16. “We are near the limits of what that great rubber band of life will absorb before it snaps back. The VIX usually hovers between 10-20. So we are not quite there yet, but the tension is building.” He went on to cite some of the factors: “The financial system is still a rather creaky affair. Leverage is still high. Banks remain under-capitalized. The credit cycle has not yet run its full course, as there are still significant credit losses hiding in the cupboards of banks. “Then there are the governments of the world. The US has awful credit metrics. It is bleeding money and owes huge debts. The states are also bleeding money and have large debts, including giant gaps in unfunded pension liabilities. They are perhaps worse off, because unlike the US government, the states cannot print their own money. Then there is the EU. And Japan.” How much of this has changed, six months later to the day?’ ]Many Federal Reserve policymakers were leaning toward new action to boost the economy at their last meeting, but decided to gather additional information and more carefully analyze their strategy before making any moves, according to minutes of the meeting.

A Look at Small Business Sentiment, Cautious Consumers and the Stealth Recession Short ‘The latest issue of the NFIB Small Business Economic Trends is out today (download PDF). The heavily watched Small Business Optimism Index rose fractionally from 88.8 to 89.0. Here's a comment from the opening of the report:

The increase is certainly not a significant move, but at least it did not fall. Still, the Index remains in recession territory. The downturn may be officially over, but small business owners have for the most part seen no evidence of it.

The first chart below taken from the report with a line at 100 and some highlights added to help us visualize that dramatic change in small-business sentiment that accompanied the Great Financial Crisis. Compare, for example the Optimism Index of the past three years with the readings in 2000-2003 with the collapse of the Tech Bubble. (chart) The next chart is an overlay of the Optimism Index since 2005 with a 91-day moving average of the Consumer Metrics Institute's Weighted Composite Index, which I regularly monitor here. (chart) The chart suggests that the government's stimulus measures had a temporary impact consumer discretionary spending but little or no impact on small business sentiment. To paraphrase the new NFIB report, the recession may officially be over, but the Small Business Optimism Index is still in recession territory. Disclosure: No positions’

Wall Street: The Speed Traders - 60 Minutes - CBS NewsOct 10, 2010 ... 60 Minutes on CBS News: Wall Street: The Speed Traders - Steve Kroft gets a rare look inside the secretive world of "high-frequency trading ... www.cbsnews.com/video/watch/?id=6945451n [ CBS 60 minutes should be lauded for ‘daring to go where no man dare to go before’, particularly pre-election. Video Robot Traders of the NYSE ‘In a secret new building in new jersey ‘( meaningfully lawless, pervasively corrupt, multi-ethnic mob-infested/controlled jersey / http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm / , the perfect venue for this fraud )’, high-speed computers decide which stocks to buy and sell. Could this kind of automated "trading floor" lead to Wall Street's next "flash crash"?’ ( I’ve included this web site archived file of the transcript of the segment with links to the CBS videos, here http://albertpeia.com/highfrequencytradingcbs60minutes.htm ) I add the following personal observation with regard to a comment made by the only ‘high frequency trader’ who agreed to be interviewed; viz., that the ’process’ was all ‘math’. Unfortunately, investing, investments, security analysis / valuation, is not just math. Indeed, in my MBA Finance ( NYU GBA, eve program which included professors actually successfully working on the street ) I can attest to the complexity of the math / algorithms underlying the financial theory of investing for which there were no ‘short-cuts’ to understanding (Modigliani / Miller, Nobel Prize Winners , for example, were a royal ‘pain in the a ’, the material being far more complex than the far more voluminous but much more easily synthesized law school fare.) The problem with said theory is that it’s just not how it’s done on wall street but rather, geared to being descriptive after the fact because invariably, if used as an investing approach you would find yourself a loser or at best, a tandem market performer (‘Random Walk Down Wall Street’, the ‘Random Monkey’, etc.). Day to day, week to week, the ‘random stroll’ is hard to dispute; yet, behind the scenes a different story of manipulation unfolds; which manipulation has become extremely efficient via lightning speed computerized churn and earn trades, and hence, very lucrative but debilitating to the nation. The churning and earning (commissions) is the end in itself. The math for streams of payments and alternatively receipts, and present values thereof is indeed math, and an actual application of same would be the insolvency, for example, of social security, etc.. I had the fortunate experience to have met with a successful wall street executive (chairman, executive committee, institutional research / brokerage house) who was talking up a career for me on wall street and whom I thought highly of owing to his accomplishments and candor, ie., what you read in , for example, the wall street journal, was total b* s***, etc.. ( In his world there were few if any grey areas; ie., among others, there were only two kinds of people; viz., people with money, and people who want money. Of course, I knew this to be false based upon such individuals as my Pastor who Confirmed me and who easily could have been a lawyer, uncorrupt judge, etc., and of times past in the u.s. and no longer apposite a career soldier, law enforcers, teachers, artists, etc.). The point is, wall street wasn’t straight then, and far worse, certainly not today. No, the high frequency trades are a scam of great modern day proportion, which eat into the productive capabilities and value of the nation which is set forth elsewhere on my site and evidenced by this continuing debacle and national decline today. A good programmer can easily mask and obfuscate the scam with seemingly lightning fast moves which purport to be rational, but are but symptomatic of an economically (self-)destructive exercise for all but the greedy criminally insane on wall street today. As, if not more, important for civilized society is an unwillingness to do anything for money (ie., fraudulent wall street, mob, drug cartels, criminals, etc.; which of course is the problem confronting america particularly, and the world generally. ]

Dr. Doom Is Gloomy Once Again

Buying High, Selling Low Still Popular After All These Years

Report: Price tag for 'basic economic security' rising (Washington Post) [ Yeah … my mistake for not including virginia in the corrupt ‘national sinkhole’ category, from direct personal experience! The glaring problem is also the multi-ethnic mob-infested, corrupt, overly extravagant and costly ny-nj-ct metropolitan area (but particularly new york / wall street and new jersey) sinkhole / drain for the rest of the nation. [ http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm ] The study grew out of research in which people were asked what would make them feel financially safe.

Government Prepares To Seize Private Pensions Paul Joseph Watson | ‘Massive wealth confiscation program would replace 401(k) system with Social Security-run ponzi scheme. The government is preparing to seize the private 401(k) pensions of millions of Americans while enforcing an additional 5 per cent payroll tax as part of a new bailout program that will empower the Social Security Administration to redistribute pension funds in a frightening example of big government gone wild. Public pension plans have been so aggressively looted already by the government that cities and counties face a $574 billion funding gap, according to a CNBC report. That black hole is set to be filled by a new proposal that will “fairly” distribute taxpayer-funded pensions to everyone, by confiscating the private wealth of millions of Americans. Its proponents express staggering arrogance in thinking that they can just steal money people have worked for decades to accrue as if it’s their own. Not only would the government confiscate 401(k) pensions, it would also impose a mandatory 5 per cent payroll tax payable by everyone, according to a hearing chaired last week by Sen. Tom Harkin (D-Iowa), Chairman of the Health, Education, Labor and Pensions (HELP) Committee. “This would, of course, be a sister government ponzi scheme working in tandem with Social Security, the primary purpose being to give big government politicians additional taxpayer funds to raid to pay for their out-of-control spending,” writes Connie Hair. The hearing was a platform for advocates of Guaranteed Retirement Accounts (GRAs), a program authored by Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York. Back in November 2008, Ghilarducci testified to Congress that 401(k)s and IRAs should be confiscated and converted into universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration. “You don’t hold hearings on something you don’t intend to do,” points out the Market Ticker blog. “I hate it when I’m right. I hate it even more when tens of millions of Americans are going to get reamed to pay for the crimes of the handful on Wall Street, and their crony enablers in Washington DC.”…’

Obama calls for $50 billion infrastructure initiative (Washington Post) [ Talk about late to the game and election-time politicking. Down the tubes / sinkholes in Afghanistan, Pakistan, even still Iraq, etc., went the u.s. treasury. What was he thinking … certainly not of his campaign promises which would have made all the difference in the world if he did. ]The president says the strategy would not only improve the economy in the long run but also create good jobs now.

Obama intensifies attack on Chamber (Washington Post) [ Wow! I’d call this a glass-house story if there ever was one! Drudgereport: `GOP Leaders Slam Obama Over Foreign Contributions 'Lie'...` `FLASHBACK: Obama Accepting Untraceable Donations...` ] The president continues attacks on the U.S. Chamber of Commerce for its alleged foreign influence within the Republican caucus, whether through support for outsourcing jobs by major U.S. corporations or through overseas money making its way into the coffers of GOP-leaning interest groups.

Prospects for national foreclosure moratorium dim (Washington Post) [ For ya, agin’ ya … it’s hard to keep up … that spinning head of their’s, not yours. ] Administration officials worry that a moratorium could have a significant impact on the economic recovery.

More Bad News: 10 Things You Should Know About The Latest Economic Numbers The Economic Collapse | We are in such a rapid decline that it is hard for most Americans to even comprehend it.

We Are Looking at Trillion-Dollar Plus Annual Interest Payments on U.S. Debt Owens Krugman: We’re Going To Have To Default On Our Debt One Way Or Another Some dour commentary from Paul Krugman this morning on the implications of our monster debt. Economists Herald New Great Depression The world is currently experiencing the modern day equivalent of the Great Depression, according to a prominent economist who has added his voice to scores of others now forecasting ongoing economic doom on a scale not seen since the 1930s.) , and my position and that of demographer Dent ( Prechter and many others are also in this camp although I believe he does not factor in sufficiently the debasement of the u.s. currency / dollar in arriving at his numbers which do however, at 1,000 on the DOW reflect real, as opposed to inflated values of 3-4,000 owing to the ever more worthless Weimar dollars which provides ‘spin material’ for the wall street frauds but is really quite ominous going forward, and very detrimental in real economic terms.) [This is a global depression. This is a secular bear market in a global depression. The past up move was a manipulated bull (s*) cycle in a secular bear market. This has been a typically manipulated bubble as has preceded the prior crashes with great regularity that the wall street frauds and insiders commission and sell into. This is a typical wall street churn and earn pass the hot potato scam / fraud as in prior crashes’. This national decline, economic and otherwise, will not end until justice is served and the wall street frauds et als are criminally prosecuted, jailed, fined, and disgorgement imposed.] [ The reason for the necessity of prosecution is founded in the circumstances surrounding and the mindset of what one would deem ‘antisocial personalities’ (disorders) ( I prefer the prior descriptor of such as psychopathic; the euphemistic ‘sociopathic’ was ‘far too understanding’ in my view of the social / environmental factors allegedly giving rise to such negative / destructive behaviors. I don’t buy it.) Specifically, accepted studies / findings have concluded that the essential defect in those with antisocial (psychopathic) personality disorders is an inability to respond normally to fear-inducing stimuli, leading in turn to an inability to inhibit responses that should, but, as with wall street, have not resulted in punishment. Thus, while I think most on wall street have proven themselves criminally insane (for the money, ie., Stewart, ‘Den of Thieves’ / ‘Liar’s Poker’, the most recent financial debacle / crisis, which continues to this day); at the least, owing to a lack of fear of prosecution / punishment, they have become defacto sociopathic / psychopathic. ] Krugman: It's All Downhill From Here Cullen Roche Love him or hate him Paul Krugman has been awfully right with regards to the macro picture in the last few years. He’s one of the rare economists who had the foresight to see the housing bubble and the likelihood of economic downturn that would result from it. Krugman recently caused a stir when he said the US economy was headed for the third depression. Here Are 13 Signs That We’re Actually In A Depression Right Now Gregory White** | David Rosenberg has outlined, in his latest letter, the 13 reasons with this so-called recovery is actually a depression… David Rosenberg has outlined, in his latest letter, the 13 reasons with this so-called recovery is actually a depression.Rosenberg sums it up like this:

This is what a depression is all about — an economy that 33 months after a recession begins, with zero policy rates, a stuffed central bank sheet, and a 10% deficit-to-GDP ratio, is still in need of government help for its sustenance.

Obama and oil: How politics spilled into policy (Washington Post) [ There are many reasons to fault wobama for his flawed, failed presidency; but this is not one of them; he gets a pass here. It was all BP. ]Fundamental questions weren't pursued because top administration officials generally accepted the conventional view of the industry's safety record.

Three Horrifying Facts About the US Debt “Situation” Phoenix Capital Research | The US Fed is now the second largest owner of US Treasuries.

Dollar Tumbles as Fed Prepares to Print More Money Reuters | The Fed may lead the way into more aggressive quantitative easing, which is seen knocking the dollar lower.

Marc Faber Says World Heading for `Major Inflection Point’ Global markets are heading for an “important turning point” as interest rates begin to rise within about three months and the U.S. dollar gains, according to investor Marc Faber.

A Detailed Look At Global Wealth Distribution By now it should be common knowledge to everyone that in American society, the top wealthiest 1 percentile controls all the political power, holds half the wealth, and pays what is claimed to be the bulk of the taxes (despite mile wide tax loopholes and Swiss bank accounts).

Max Keiser: They Are Going To Take The U.S Economy Down Max Keiser reports on how the “failing US Economy is going off-line”.

Government Prepares To Seize Private Pensions Paul Joseph Watson | ‘Massive wealth confiscation program would replace 401(k) system with Social Security-run ponzi scheme. … US Drops From First To Seventh In Average Wealth Per Adult, Behind Singapore, Sweden, And… France As if we needed more warnings that the US is rapidly losing its position as the world’s superpower and wealth aggregator, is the following chart from Credit Suisse, which ranks the top 10 countries in the world in terms of average wealth per adult.

Ron Paul Says a 2012 Run Depends On Fall of U.S. Dollar Hot on Call | Texas Rep. Ron Paul (R) told reporters Saturday that the bulk of the economic crisis is yet to come, and that a White House ’12 bid largely hinges on his anticipated fall of the U.S. dollar.

Obama will not ban home repossessions ‘fraud’ BBC | The White House has ruled out a temporary ban on the repossession of homes, despite a growing row over alleged malpractice.

The Fed’s QE2 — Speeding Our Demise America’s Faltering Empire | The Federal Reserve would like to return to the Glory Days of the Bubble Era (1995-2007).

National / World

Sarah Palin: The Next Teleprompter Reader in the White House [ Not gonna’ happen … she’s just too embarrassingly dumb … and all that fake macho / zionist b* s* … unless her gal o’donnel casts a spell … which is a whole new ball game … witches … really … how ‘bout dumb ***s …. she’s really dumb enough to press the button. ] ? Kurt Nimmo | In 2008, Tea Party Sarah trekked to New York to kiss Henry Kissinger’s ring.

French Workers Threaten General Strike in Response to Austerity Kurt Nimmo | In France, workers and students may soon revisit May, 1968, when a general strike shut down the country.

Update on New Hampshire Thugs Snatching Baby Girl Infowars.com | Story is now national news.

Obama Has Lost Almost Half Of Former Supporters With just three weeks to go until the midterm elections, a significant national poll indicates that Barack Obama has lost almost half of his support base since taking office, and while voters are turning away from the Democrats, they are also still turning away from Republicans.

Update on New Hampshire Thugs Snatching Baby Girl: Oath Keepers plans rally Oath Keepers founder Stewart Rhodes and John Irish confirm that court used Irish’s association with the group in order to snatch newborn baby.

Sarah Palin: The Next Teleprompter Reader in the White House? [ Not gonna’ happen … she’s just too embarrassingly dumb … unless her gal o’donnel casts a spell … which is a whole new ball game … witches … really … how ‘bout dumb *****s ... and all that fake macho / zionist b* s*** ... she’s really dumb enough to press the button. ] It looks like the establishment is grooming Tea Party Sarah for a run. She says as much in the Newsmax interview below.

French Workers Threaten General Strike in Response to Austerity In France, workers and students may soon revisit May, 1968. French president Nicolas Sarkozy and the French unions are locking horns over pension reforms.

Government Prepares To Seize Private Pensions The government is preparing to seize the private 401(k) pensions of millions of Americans while enforcing an additional 5 per cent payroll tax as part of a new bailout program that will empower the Social Security Administration to redistribute pension funds in a frightening example of big government gone wild.

Israeli MP: Shoot child rock throwers An Israeli lawmaker has backed the shooting of Palestinians that throw rocks at settler cars, saying even children should also be targeted.

Israeli prime minister offers conditional settlements freeze (Washington Post ) [ Déjà vu all over again? Now why is there a familiar ring to this story … maybe ‘cause of the ‘been there done that ‘ reality. It’s really quite incredible since israel’s in violation of u.n. resolutions (242, 338, etc.), international law, nuclear proliferation treaty, a drain on the the u.s. globally / domestically, etc.. The u.s. / international community should impose a resolution. ]

Hostage accidently killed by rescuers? (Washington Post) [ Winning hearts and minds … riiiiight! ]

Drudgereport: RASMUSSEN: 63% Angry at Policies of Federal Government; 43% Very Angry... America on 'brink of a Second Revolution'... [ This is more real than most people can imagine! ]SHE'S A WHAT?
BROWN CAMP CALLS HER A 'W**RE'...
SHOCK AUDIO... Biden: 'If We Lose, We're Going To Play Hell'..POLL: BUSH PULLS EVEN WITH OBAMA [ WOW! THE ULTIMATE INSULT … WELL, AS I’VE BEEN SAYING, THERE’S VERY LITTLE DIFFERENCE … YET, WOBAMA HAD THE EASIEST ACT IN THE WORLD TO FOLLOW AND BLEW IT … OR THEM, BY NOT DOING WHAT HE CAMPAIGNED AND WON ON … BUT STILL, BUSH THE WAR CRIMINAL, MORON, INCOMPETENT, ETC., DOESN’T EVEN WARRANT A MENTION, SO DUMB AND PATHETIC WAS HE … POOR WOBAMA]JOBLESS RATE TOPS 9.5% FOR 14 STRAIGHT MONTHS... USA Won't Recover Lost Jobs 'Until March 2020' At Current Pace … (and they’re still dreamin’) ... Buchanan: Food Stamp Nation... WSJ: Dem unleash IRS and Justice on donors to political opponents … ( but still no wall street fraud prosecutions … they must be payin’ the big bucks ) ....
GOP Leaders Slam Obama Over Foreign Contributions 'Lie'...
FLASHBACK: Obama Accepting Untraceable Donations...
Dem attack ad sets 'new low for mud'...

REPORT: Brown's wife, not campaign aide, called Whitman a 'w****' … [ I’d be more concerned with the rudy giuliani kiss of death endorsement and the folowing seemingly indefensible actions ... Brown Lays Out Sharp Contrast with Billionaire Opponent in Two New ... Oct 1, 2010 ... The first ad highlights Jerry Brown's fiscal prudence and job creation ... when she paid herself $120 million right before the company laid off 10% of its workers.]

Dollar continues plunge as 'currency war' concerns linger...
Putin Selling First EURO Bonds...
China Reserves May Hit $2.5 Trillion...
Regulators planning worldwide rules for large firms...
420 banks demand 1-world currency...

FDIC may seek $1 billion from failed-bank executives (Washington Post) [ Isn’t this exactly what the DOJ should be doing vis-à-vis the frauds on wall street; and additionally, the wall street frauds et als should as well be criminally prosecuted, jailed, fined, and disgorgement imposed.] The agency has authorized lawsuits against more than 50 officers and directors of failed banks across the country.

MICROSOFT issues its biggest-ever security fix... Tue Oct 12, 2010 5:36pm EDT
* Microsoft addresses record 49 flaws in its software
* Affects Windows, Internet Explorer, Office
* Fixes vulnerability exploited by Stuxnet virus (Adds details on Stuxnet virus, comments from researcher)
By Jim Finkle BOSTON, Oct 12 (Reuters) - Microsoft Corp (MSFT.O) issued its biggest-ever security fix on Tuesday, including repairs to its ubiquitous Windows operating system and Internet browser for flaws that could let hackers take control of a PC.The new patches aim to fix a number of vulnerabilities including the notorious Stuxnet virus that attacked an Iranian nuclear power plant and other industrial control systems around the world.Microsoft said four of the new patches -- software updates that write over glitches -- were of the highest priority and should be deployed immediately to protect users from potential criminal attacks on the Windows operating systems.Microsoft said it also repaired other less serious security weaknesses in Windows, along with security problems in its widely used Office software for PCs and Microsoft Server software for business computers.Microsoft released 16 security patches to address 49 problems in its products, many of which were discovered by outside researchers who seek out such vulnerabilities to win cash bounties as well as notoriety for their technical prowess."This is a huge jump," said Amol Sarwate, a research manager with computer security provider Qualys Inc. "I think the reason for it is that more and more people are out there looking for vulnerabilities."The geeks who report such vulnerabilities to software makers are known as "white hat" hackers. Sarwate warned that there are also plenty of "black hats," or criminal hackers who look for vulnerabilities in software that they can exploit to launch attacks on computer systems.Indeed, the world's biggest software maker said that the patches released on Tuesday include software to fix a vulnerability exploited by the Stuxnet virus -- a malicious program that attacks PCs used to run power plants and other infrastructure running Siemens (SIEGn.DE) industrial control systems.The virus, which infected computers at Iran's Bushehr nuclear power plant, was discovered over the summer. Security research Symantec said that it detected the highest concentration of the virus on computer systems in Iran, though it was also spotted in Indonesia, India, the United States, Australia, Britain, Malaysia and Pakistan.So far Microsoft has patched three of the four vulnerabilities exploited by Stuxnet's unknown creators.The total of 49 vulnerabilities exceeds the previous record of 34, which was set in October 2009 and matched in June and August of this year.The constant patching of PCs is a time-consuming process for corporate users, who need to test the fixes before they deploy them to make sure they do not cause machines to crash because of compatibility problems with existing software. (Reporting by Jim Finkle. Editing by Robert MacMillan, Gary Hill)

The Two Parties in a Race to the Fiscal Bottom The Daily Bail ‘Polticians lie. The national debt clock tells the truth. Brand new David Stockman interview with the Fiscal Times.

---

David Stockman, the former budget director during Ronald Reagan’s first term, speaks out on the Obama presidency, the state of the economy, the Bush tax cuts, and what the midterm results might do to the Democratic agenda.

The Bush tax cuts are “unaffordable,’’ he says. Extending them would be a “travesty.” President Obama’s stimulus program was “futile.” Ben S. Bernanke, the Federal Reserve chairman, is undermining the whole economy.

Today, Stockman says,

“I invest in anything that Bernanke can’t destroy, including gold, canned beans, bottled water and flashlight batteries.”

Stockman, Reagan’s budget director from 1981 to 1985, initially became famous for his zeal in slashing government spending on almost everything except defense. Less government and lower taxes, he fervently believed, would ultimately mean more prosperity for everyone. But he will be best remembered for confessing, in an interview with William Greider for The Atlantic Monthly, his disillusionment with the “supply-side” economic policies that led to soaring deficits under Reagan. “None of us really understands what’s going on with all these numbers,’’ he declared, along with many other criticisms that nearly got him fired.

The Fiscal Times [TFT]: What should the president and Congress do about the Bush tax cuts this year?

David Stockman [DS]:

The two parties are in a race to the fiscal bottom to see which one can bury our children and grandchildren deeper in debt. The Republicans were utterly untruthful when they recently pledged no tax increases for anyone, anytime, ever. The Democrats are just as bad — running their usual campaign of political terror on social security and other entitlements while loudly exempting all except the top 2 percent of taxpayers from paying more for the massively underfunded government they insist we need.

In effect, we undertook a national leveraged buyout, raising total credit market debt to $52 trillion, which represented a 3.6X leverage ratio against national income or GDP.

The fact is, the Bush tax cuts were unaffordable when enacted a decade ago. Now, two unfinanced wars later, and after a massive Wall Street bailout and trillion-dollar stimulus spending spree, it is nothing less than a fiscal travesty to continue adding $300 billion per year to the national debt. This is especially true since these tax cuts go to the top 50 percent of households, which can get by, if need be, with the surfeit of consumption goods they accumulated during the bubble years. So Congress should allow the Bush tax cuts to expire for everyone. By doing nothing, the government would be committing its first act of fiscal truth-telling in decades.

TFT: Should the government provide more stimulus for the economy, or cut spending to bring the deficit down?

DS: We are not in a conventional business cycle recovery, so stimulus is futile and just adds needlessly to the $9 trillion of Treasury paper already floating dangerously around world financial markets. Instead, after 40 years of profligate accumulation of public and private debt, and reckless money-printing by the Fed, we had an economic crash landing, which left us with an enduring structural breakdown, not just a cyclical downturn.

The only solution is a long period of debt deflation, downsizing and economic rehabilitation, including a sustained downshift in consumption and corresponding rise in national savings.

Continue reading the Stockman interview at the Fiscal Times

Author's Disclosure: None’

My Weekly Market Forecast: Currency Pairs Edition Summers ‘… On this side of the pond, some 43 million Americans (13% of the total population) are officially living in poverty. The jobs numbers are a joke and all talk of recovery has been manufactured via accounting gimmicks or full-scale fraud. I’m detailing more of this in tomorrow’s article, but for the sake of this week’s forecast, I’m simply trying to point out that the US economy is on the brink of full-scale disaster and at some point (possibly this week) this reality could (will) hit the stock market…’

Markets Continue to Rise Despite Poor Data Equedia Network Corporation‘…It doesn't matter what economic data is being thrown at us. The markets have continued to soar despite poor economic numbers, growth, and scandals. But eventually, these numbers will catch up with the markets.It's no secret that the Obama administration is doing whatever it can to help fuel the growth in the stock market ahead of the midterm elections in November. He has to. The stock market has become a leading indicator for confidence in our economy and judging by Obama's approval rating, the Democrats could easily lose their power in the Senate. That's why they have continuously pumped money into the markets …’

Meaningless Monday: Rethinking That Round Earth Idea Davis ‘… As I mentioned, because other countries aren’t as stupid as we imagine, we need to create 3 dollars in order to borrow 1. That gives us $1 more debt (out of 10) and $2 less value to our remaining pile. How long can that go on? One reason our currency creation is so inefficient is because the people we are giving the money to, the Banks, aren’t willing to invest it in America either. They have their own debt holes to fill and most of the money we give them goes into a derivatives ($200Tn and rising) juggling scheme that makes them look solvent and masks their very, very questionable asset bases.

The banks take the money the Fed is dumping on them and speculate in commodities and foreign currencies and THEN they buy some TBills in order to keep the treadmill running. This forces asset bubbles in things like gold and oil but they too are a complete illusion because it’s only the idiots with dollars that are buying them - the rest of the World stopped chasing shiny metals in June but the flat-Earthers in the US just didn’t seem to get the message. Here’s gold priced in Euros, which is DOWN 8% in 3 months! (chart)

Our stock markets, of course, look just even worse - down 10% to the Euro in the last 3 months, but that won’t stop the MSM from engaging in the Grand Delusion that they are feeding to the voters this month - that everything is somehow going according to plan (what plan?) and happy days are just around the corner - as long as Americans can keep pretending the World is not round at all but a neat little square with our great nation on top and in the center.

Well, there’s a lot to be said for getting out while you’re on top - or at least while there are still enough people fooled into believing you are on top. As the Joker says in the "what plan?" link above - Nobody panics when things go according to plan, EVEN WHEN THE PLAN IS HORRIFYING!

That’s what we have now, a horrifying plan to prop up the US Economy based on the belief that the US is the center of the universe and that the rest of the World will be fooled by our fiscal nonsense. As you can see from the gold chart and the S&P chart - we stopped fooling them a long time ago. What will happen when we can no longer fool ourselves?

It’s a meaningless semi-holiday in America - a day the bulls can only pray will be quiet, because all my charting indicates that real activity is very likely to come to the downside this week.’

Bad News Is Still Good News Nyaradi ‘Last week was all about “bad news being good” and the Fed and QE2. The news was almost uniformly bad, and regarding QE2 the questions were about how much and when and how much is already priced into the markets?

Everything else including mixed earnings reports, “Foreclosure Gate” and an almost unbelievably bad employment report on Friday was overshadowed by the promise of more “punch in the punchbowl” from Dr. Bernanke and his cohorts at the Federal Reserve.

In a continuation of the “bad news is good news” theme, markets were able to rally up to significant resistance and remain vastly overbought while gold continued its tear and the dollar remained under attack.

The only question that seems to remain is whether or not Dr. Bernanke will be able to offset the ongoing torrent of negative news and keep our economic ship afloat.

Looking At My Screens

On the technical front, markets certainly remain in dangerous territory. RSI is at levels that typically precede significant corrections and prices are up against the May highs and significant resistance there. We also see stochastic at overbought levels and investor sentiment at excessively bullish levels.

Contrary to prevailing popular opinion, stock prices can go down as well as up.

The View from 35,000 Feet

On a fundamental level, “bad news continued to be good” as the unemployment report was a disaster and “Foreclosuregate” threatens to freeze the entire real estate market and even threaten the financial system for some unknown period of time.

On the employment front, the economy shed 95,000 jobs instead of a projected small gain and this fact alone has led to the market expecting a new round of quantitative easing coming out of the Feds next meeting. The decline in non farm payrolls wasn’t the only bad news as U6 rose to 17.1% from 16.7%, indicating a higher level of underemployment than last month even as the overall unemployment rate remained static at 9.6%.

There are now fewer people working in America than there were two years ago and for those working, the average workweek remained flat at about 32 hours, indicating no imminent change in hiring by companies.

The other piece of almost unbelievable news was the announcement that many foreclosures are in jeopardy because they may not have been carried out correctly. Allegations of fraud are flying and in response to the flap, foreclosures have been halted in many states including the suspension of foreclosure activities by Bank of America in all 50 states. The crisis seems to be set to widen with the announcement that 40 states attorneys general are joining forces to launch an investigation into these allegations as early as Tuesday.

This is a complex and murky issue but basically it seems to throw into question the validity of thousands of foreclosures that have taken place and present the possibility that this situation could literally freeze the foreclosure process for some unknown period of time.

The ramifications go beyond a frozen real estate market in that it also could spread to big banks like Bank of America (BAC), JP Morgan (JPM) and Citigroup (C) which are highly active in this field and by preventing them from offloading these non performing loans from their balance sheets for some unknown period of time.

Estimates of potential fines could range as high as $10 Billion in Ohio alone for one company being targeted by the Ohio Attorney General and one can only guess about how deep and black this hole might be.

And finally, a couple of notes regarding QE 2 came from the President of the St. Louis Fed who said that its quite possible they could wait until the December meeting to initiate QE2 and a word of warning from the IMF’s chief economist who said on CNBC, “I don’t think we should fool ourselves. We have used most of the monetary ammunition we have.”

What It All Means

So, all in all, this is a fine kettle of fish.

The entire global equities market is betting that “Big Ben” can save the world yet again and that he’ll start in November. Meanwhile we have a dramatically slowing economy that can’t generate even a small level of job growth and the potential for a massive implosion in the real estate and credit world involving a gigantic asset class, Residential Mortgage Backed Securities.

I’ve said before that you can’t make this kind of stuff up and, unfortunately, that’s still true today as we face the beginning of what could be an almost irrelevant earnings season.’

Fed's Yellen: Possible that low rates feed bubbles (Reuters) [ Another one of those daah! moments as if the ‘senile greenspun / no-recession helicopter ben’ debacle, along with other missteps, isn’t testament to that. ]

America’s Third World Economy Paul Craig Roberts | The latest jobs report issued shows that America’s transformation into a third world economy continues.

More Bad News: 10 Things You Should Know About The Latest Economic Numbers The Economic Collapse | We are in such a rapid decline that it is hard for most Americans to even comprehend it.

Foreclosure Freeze: JPMorgan Chase, GMAC Deny “Robo-Signers” Led to Inappropriate Foreclosures Carlo Gabriel Simbajon | “Robo-signers,” a termed coined by Iowa assistant attorney general, Patrick Madigan, refer to bank employees or contractors who signed off on mortgage documents without reading or checking them.

Worldwide Hyperinflation Race FSK’s Guide to Reality | Aiming for stable exchange rates, other countries are also inflating their money.

Gold Rises as Bankster Currency War Gains Momentum Globalist loan sharks feign worry. Unemployment is so bad in the United States, the government is thinking about slapping tariffs on cheap Chinese slave labor products.

Dollar falls as ‘currency war’ concerns linger The dollar fell against the euro and yen on Monday after the world’s top finance officials failed to reach a consensus on measures to head off what some see as a looming “currency war”, analysts said.

Foreclosuregate If you work in the mortgage industry or for a title insurer, you might not want to make any plans for the next six months. Foreclosuregate is about to explode. It is being alleged that many prominent mortgage lenders have been using materially flawed paperwork to evict homeowners.

Fed Intervention Could Lead to ‘Flash Crash’: Strategist The stock market is at risk of another flash crash because of the Federal Reserve’s liquidity-boosting measures, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC Monday.

National / World

Confirmed: Court Did Rely on Oath Keeper Association to Take Baby Stewart Rhodes | Either you defend the Constitution for everyone, or we may as well just scrap it and let government agencies and judges do whatever they want to those they deem bad.

Gold Rises as Bankster Currency War Gains Momentum Kurt Nimmo | A global currency war will crash national economies and foment social chaos of the sort the globalists will exploit in order to sell their world government agenda.

Feds Treat Baby-Snatch Protesters Like Terrorists Paul Joseph Watson | FBI brings bomb dogs to hospital demonstration in effort to smear dissent against state kidnapping of children on political grounds as domestic extremism

Inflation to Make All Americans Billionaires By 2020 National Inflation Association | When our government creates inflation with the goal of generating higher incomes, the real incomes of Americans always decline dramatically.

7/7 Investigation Day One: “All Conspiracy Theories Have No Basis” Over five years after the London bombings of July 7, 2005 took place, an inquest set up to explore the attacks has declared on day one that any deviations from the official version of events has no basis in evidence.

CONFIRMED: Court Did Rely on Oath Keeper Association to Take Baby There has been some confusion about this case, leading some commentators to believe that the reference to John Irish’s “association” with Oath Keepers was in some other document, rather than in the affidavit relied on by the Court’s Order. Alex Jones’ site, in an effort to protect the privacy of the family, posted excerpts from two different documents, leading some to question where the reference actually was.

Holdren 1969 : The Science Is Settled – Everyone Starving Before The Year 2000 Turns out we have all been dead for over a decade. So what are we arguing about? Holdren wrote this in 1969. Real Science Oct 11, 2010 Turns out we have all been dead for over a decade. So what are we arguing about? Holdren wrote this in 1969.

World food production must double in the period 1965-2000 to stay even; it must triple if nutrition is to be brought up to minimum requirements. That there is insufficient additional, good quality agricultural land available in the world to meet these needs is so well documented (Borgstrom, 1965) that we will not belabor the point here.

Then he went into a long diatribe about how we are going to run out of water, energy, food, land – and that the heat from nuclear power plants is going to destroy the climate.

A more easily evaluated problem is the tremendous quantity of waste heat generated at nuclear installations (to say nothing of the usable power output, which, as with power from whatever source, must also ultimately be dissipated as heat). Both have potentially disastrous effects on the local and world ecological and climatological balance.

This guy must be the life of the party. After a dozen pages of psychotic disaster prediction, he gets to the punch line. He wants to snip men’s private parts.

If we may safely rule out circumvention of the Second Law or the divorce of energy requirements from population size, this suggests that, whatever science and technology may accomplish, population growth must be stopped.

But it cannot be emphasized enough that if the population control measures are not initiated immediately and effectively, all the technology man can bring to bear will not fend off the misery to come.’0 Therefore, confronted as we are with limited resources of time and money, we must consider carefully what fraction of our effort should be applied to the cure of the disease itself instead of to the temporary relief of the symptoms. We should ask, for example, how many vasectomies could be performed by a program funded with the 1.8 billion dollars required to build a single nuclear agro-industrial complex, and what the relative impact on the problem would be in both the short and long terms. The decision for population control will be opposed by growth-minded economists and businessmen, by nationalistic statesmen, by zealous religious leaders, and by the myopic and well-fed of every description. It is therefore incumbent on all who sense the limitations of technology and the fragility of the environmental balance to make themselves heard above the hollow, optimistic chorus-to convince society and its leaders that there is no alternative but the cessation of our irresponsible, all-demanding, and all-consuming population growth.

In other words, he proposed forced sterilization based on his hair-brained theories. His reward for being dangerous, wrong and anti-democratic? Obama made him his science advisor.

FDIC may seek $1 billion from failed-bank executives (Washington Post) [ Isn’t this exactly what the DOJ should be doing vis-à-vis the frauds on wall street; and additionally, the wall street frauds et als should as well be criminally prosecuted, jailed, fined, and disgorgement imposed.] The agency has authorized lawsuits against more than 50 officers and directors of failed banks across the country.

Jobless numbers pose challenge for Obama, Democrats (Washington Post) [ My God! You can’t make this stuff up. The lunatics are running the asylum; even the senile ones like the co-architect of the current debacle, greenspun. Challenge? I’d say Gordian Knot. And, importantly, no swords allowed … they’re all in Afghanistan, Pakistan, Iraq, etc… ]The latest report, showing the unemployment rate remained at 9.6 percent, is the last before crucial midterm elections in which the troubled job market has emerged as a paramount issue.

Chorus builds for foreclosure moratorium (Washington Post) [ Sounds like a plan! After all, foreclosures and recoveries, like oil and water (golly, I must still have BP / gulf spill on the brain), they don’t mix. And, we all know as per no-recession helicopter ben, we’re in recovery mode, green shoots and all! ] Pressure for a nationwide moratorium mounted Friday when Bank of America, the nation's largest bank, halted evictions in all 50 states and Senate Majority Leader Harry M. Reid (D-Nev.), who is locked in a tight reelection campaign, called on other major lenders to follow suit.

Buyer anxiety mounts as foreclosure deals freeze / Homeowners' dreams in limbo (Washington Post) [ Ah! That’s not so bad … you know … being in limbo, that is … after all, as the lobotomized VP Biden has warned, ‘Drudgereport: Biden: 'If We Lose, We're Going To Play Hell'..’ … so that place between heaven and hell (limbo) ain’t lookin’ so bad … compared to hell that is.] While impact of halted sales has been worse in regions where lenders need court orders to seize homes, D.C. area market has also been affected.

Arab League backs Palestinian refusal on talks unless Israel halts West Bank settlements (Washington Post) [ Lots of backslappin’ in israel mission accomplished … yeah, another fine mess they’ve gotten the world into … another set of peace talks down the drain, again sabotaged by the israelis … not that the israelis had anything in mind other than literally … to talk … out of both sides of the mouths. ]

Bulls Celebrate Bad News: Dave's Daily ‘The unemployment report came in "worse than expected" but in this Orwellian environment when the mantra is: "good news is good and bad news is better", well then, that's the way we roll. Bulls like the notion of more QE, zero interest rates and Washington gridlock. As to the latter, distrust of government competence and fiscal discipline has never been more universal. So we rallied... However, things weren't all peaches and cream since chip equipment maker Novellus (NVLS) issued a warning pulling down its shares and dragging others down with it. And, while it may seem nice that many banks are halting foreclosure procedures it really just postpones the inevitable and makes things harder for shareholders--unless another bailout is in the works. Markets are "forward-looking" and if the current theory holds, there must be a lot of bad news ahead! …’

The Real World vs. the Stock Market Reitmeister ‘September's Employment Situation was worse than expected Friday morning. Yet bad news is good news these days for those who think a second round of Fed quantitative easing (QE2) will bolster the markets. So stocks bolted into positive territory on the day, pushing up to Dow 11,000.

It’s an odd dichotomy. We have a somewhat improving economy. Yet the average person does not feel better about the situation. That’s because either they or someone close to them is out of work. (The classic economic joke is that a Recession is when your neighbor is out of work. A Depression is when you are.)

Along these lines I noticed something odd today. I drove to my children’s school for Parent-Teacher conferences. The school is 14 miles away along fairly busy roads. On the route are three McDonalds. That sounds fairly normal. But then I saw five Cash for Gold locations. Two of them are brand new; the other three came around just over the past couple years.

Yes, gold prices are high… but the real reason for the existence of these places is for people to trade in family heirlooms for cash because they are going broke. Then throw in all the vacant stores and it’s hard to get a sense that things are truly getting better.

So why are corporate profits going higher? Three main reasons:

1) Major cost cutting. Mostly on the staffing side of the equation. So each dollar in revenue produces more profit.

2) Modestly improving US economy moves up revenue a bit. Combine that with #1 above and it creates attractive year over year profit growth.

3) About half of US corporate profits these days come from overseas. Europe may be weak, but growth in China, India, Brazil etc. more than makes up for that shortfall.

This is why healthy corporate profits and a rising stock market seem to be disconnected from the realities in our own backyards. The good news is that conditions in the US should keep modestly improving, which certainly bolsters the case for the stock market going forward. Combine this with the alternatives to the stock market right now are not attractive.

Holding cash? No thanks.

Treasuries? That bubble is going to pop sometime (and yes I would recommend buying TBF or TBT for when that party takes place).

Gold? That is getting frothy right now. I might be tempted to pick up some on a pull back. But my history of trading gold is poor. In my long term account I’ve been riding the bull rally since 2002 when prices were around $300 per ounce. Still have plenty of shares on hand, mostly GDX (gold miners ETF).

There is lots in store next week when earnings season heats up. If good results combine with healthy guidance for the future, then the market will move to the recent highs of Dow 11,300. If the results are poor, then we'll probably see a retrace to the 50/200 day moving averages which are converged at around 10,500. My bet is that we do make it to 11,300. I'm not expecting much beyond that til next year.

My Two Cents

During the day I read many other investment articles of interest. Here are links to some new ones with my two cents added underneath.

Rail Traffic Maintains Year High Levels (Todd Sullivan)

There are a lot of estimate increases recently for the major rails. This is a very positive sign going into earnings season. I recently picked up some UNP because of it. But no shame in CSX Corp. (CSX), Kansas City Southern (KSU), Norfolk Southern (NSC) etc.

Gaining Traction with Caterpillar? (Ray Merola)

All the fundamentals are going right for them including the recent drop in the US dollar making their exports more attractive. I personally prefer Cummins (CMI) and Joy Global (JOYG). But no shame in owning CAT.

We Don't Need QE2 (Calafia Beach Pundit)

Agreed. No shortage of money. And no person in their right mind would hold cash right now if they felt there wasn't a better way to get a return. So if they are not risking that money it's because the reward isn't there. That is the problem.

Disclosure: I own shares in JOYG, CMI and UNP

Bank of America halting all foreclosure sales The Washington Post | Bank of America said Friday it is halting all foreclosure sales and foreclosure proceedings nationwide while it reviews the documents being used to justify homeowner evictions.

Three Horrifying Facts About the US Debt “Situation” Phoenix Capital Research | The US Fed is now the second largest owner of US Treasuries.

Dollar Tumbles as Fed Prepares to Print More Money Reuters | The Fed may lead the way into more aggressive quantitative easing, which is seen knocking the dollar lower.

Federal Reserve Officials: Americans Are Saving Too Much Money So We Need To Purposely Generate More Inflation To Get Them Spending Again Some top Federal Reserve officials have come up with a really bizarre proposal for stimulating the U.S. economy. As unbelievable as it sounds, what they actually propose to do is to purposely raise the rate of inflation so that Americans will stop saving so much money and will start spending wildly again.

World Risks Greater Depression if Currency Tensions Escalate: Mobius Rising tensions amid an escalating global currency war has sparked talk of capital controls, but such a move would be dire for markets, warned Mark Mobius, executive chairman of Templeton Emerging Markets Group on CNBC Friday.

Grayson Sends Letter To Geithner, Bernanke Demanding Foreclosure Freeze, Warns Of Systemic Bank Failure Risk Alan Grayson is back on the scene, having sent a letter to Financial Stability Oversight Council which includes pretty much all of Wall Street’s pawns, including Bernanke, Geithner, Bair, Gensler, Walsh, and DeMarco, in which he asks the FSOC to “suspend foreclosures until this problem is understood and its ramifications dealt with.”

--------------------------------------------------------------------------------------------------------------------

The news was bad on the jobs front, but stocks rally anyway. The new b* s* story, things so bad that more fiat Weimar dollar currency will be injected into ‘the system’ (QE, etc.) and presumably find their way to stocks for the old ‘churn-and-earn’. This is a great opportunity to sell / take profits since, beyond the ‘anything goes’ pre-election spin, market-frothing, etc., there’s much, much worse to come. Previously: This is so owing to the irrevocable structural shift (discussed many times on this site) that has occurred in the most negative sense for the defacto bankrupt u.s.. The ol’ days are done! It’s a whole new ballgame. The following is a pragmatic summary explanation of the short-term that is not, nor ever has been sustainable since the money for the churn-and-earn worth less paper movement has to come from some real place which is downside all the way for solid and real economic growth (don’t forget; the so-called minds that brought on this continued debacle for which frauds they’ve not been prosecuted are, with the help of legislated mark to anything accounting rule changes and churn-and-earn high frequency programmed trading, now flush with the proceeds of their multi-trillion dollar fraud / scam. Indeed, they’re shootin’ for 500 dollar loaves of bread and 1 dollar stocks selling for like amount

THE NEW WALL STREET FRAUD / SCAM- `An easy to understand, illustrative, simple (if not simplistic) analogy, though not perfect, to wall street’s current scam / fraud with corrupt fed / government cooperation is as follows:`

(These Amounts Are Not Real But Illustrative)

`$1 share of stock`

$1 paper dollar

$1 piece of gold

$1 loaf of bread

$1 bond

$1 cd

Valuation after doubling amount of money (printing, QE, etc.) in dollars

$2

(but the very temporary spike less than that accorded hard assets)

$1

$2

$1

It is axiomatic that inflation bankrupts the lender (as a simplistic rule). Indeed, the bond and cd (both loans, your assets) are still worth the debased $1 though they buy but half the real, hard assets ie., gold, precious metals, commodities, etc. (hence, the appreciation we’ve seen). The share of stock, though paper, seems to enjoy an advantage over the aforesaid debt instruments particularly in light of the artificial demand that the computerized buy programs along with the QE funds made available to stimulate demand for these paper shares and the spin accorded same. The problem is, while the churn and earn commissions are also eating away at the surplus funds which are artificially enhancing demand for the paper shares of stock, the quality of earnings and the stability of the earnings (higher costs, etc.) of the companies of said paper shares are negatively impacted which historically has ended quite badly for all but the frauds on wall street. Moreover, unless they’re complete fools, who would buy debt instruments in such an environment, least of all those from defacto bankrupt america. There has never, nor could there be an exception to this bad outcome since no new value is created by increasing the amount of money by printing more and the debasement thereof, particularly where there has been an irrevocable structural shift in real economic terms precluding same and now as well, a deficit scenario that is insurmountable and has begun to eat into GDP. The foregoing also is an attempt to drive / herd investors into stocks which enables the insiders to sell high as well as to churn and commission the artificial bubble, however ephemeral.

The glaring problem is also the multi-ethnic mob-infested, corrupt, overly extravagant and costly ny-nj-ct metropolitan area (but particularly new york / wall street and new jersey) sinkhole / drain for the rest of the nation.

We Are Looking at Trillion-Dollar Plus Annual Interest Payments on U.S. Debt Owens Krugman: We’re Going To Have To Default On Our Debt One Way Or Another Some dour commentary from Paul Krugman this morning on the implications of our monster debt. Economists Herald New Great Depression The world is currently experiencing the modern day equivalent of the Great Depression, according to a prominent economist who has added his voice to scores of others now forecasting ongoing economic doom on a scale not seen since the 1930s.) , and my position and that of demographer Dent ( Prechter and many others are also in this camp although I believe he does not factor in sufficiently the debasement of the u.s. currency / dollar in arriving at his numbers which do however, at 1,000 on the DOW reflect real, as opposed to inflated values of 3-4,000 owing to the ever more worthless Weimar dollars which provides ‘spin material’ for the wall street frauds but is really quite ominous going forward, and very detrimental in real economic terms.) [This is a global depression. This is a secular bear market in a global depression. The past up move was a manipulated bull (s*) cycle in a secular bear market. This has been a typically manipulated bubble as has preceded the prior crashes with great regularity that the wall street frauds and insiders commission and sell into. This is a typical wall street churn and earn pass the hot potato scam / fraud as in prior crashes’. This national decline, economic and otherwise, will not end until justice is served and the wall street frauds et als are criminally prosecuted, jailed, fined, and disgorgement imposed.] [ The reason for the necessity of prosecution is founded in the circumstances surrounding and the mindset of what one would deem ‘antisocial personalities’ (disorders) ( I prefer the prior descriptor of such as psychopathic; the euphemistic ‘sociopathic’ was ‘far too understanding’ in my view of the social / environmental factors allegedly giving rise to such negative / destructive behaviors. I don’t buy it.) Specifically, accepted studies / findings have concluded that the essential defect in those with antisocial (psychopathic) personality disorders is an inability to respond normally to fear-inducing stimuli, leading in turn to an inability to inhibit responses that should, but, as with wall street, have not resulted in punishment. Thus, while I think most on wall street have proven themselves criminally insane (for the money, ie., Stewart, ‘Den of Thieves’ / ‘Liar’s Poker’, the most recent financial debacle / crisis, which continues to this day); at the least, owing to a lack of fear of prosecution / punishment, they have become defacto sociopathic / psychopathic. ] Krugman: It's All Downhill From Here Cullen Roche Love him or hate him Paul Krugman has been awfully right with regards to the macro picture in the last few years. He’s one of the rare economists who had the foresight to see the housing bubble and the likelihood of economic downturn that would result from it. Krugman recently caused a stir when he said the US economy was headed for the third depression. Here Are 13 Signs That We’re Actually In A Depression Right Now Gregory White** | David Rosenberg has outlined, in his latest letter, the 13 reasons with this so-called recovery is actually a depression… David Rosenberg has outlined, in his latest letter, the 13 reasons with this so-called recovery is actually a depression.Rosenberg sums it up like this:

This is what a depression is all about — an economy that 33 months after a recession begins, with zero policy rates, a stuffed central bank sheet, and a 10% deficit-to-GDP ratio, is still in need of government help for its sustenance.

Harry Dent, Jr. Economy will be in a Depression by 2011

The worst of this next depression is likely to hit between mid-2010 and mid-2013, especially around early 2011, but if the banking system continues to implode a deep downturn or depression could begin sometime in 2009 instead of 2010.
Dow will Fall to 3,800 – 4,500 by 2012 Nasdaq will Fall Below 1,100, its 2002 low, by late 2010 or mid-2012 at the latest. Inflation will Increase until mid- 2010 and then turn to Deflation Interest Rates will Increase U.S. Dollar will Decline Housing will Decline by 40 – 60% from Today’s Levels Greatest Economic and Banking Crisis since the 1930s will Occur Between 2010 and 2012).

Just a push of the computer programmed trade button and off we go, reality / valuation / economics be damned. In real security analysis (very simplified / summarized), as opposed to the continued frauds on wall street, one must begin with the largest and most significant aggregate (a simple word picture / analogy: ‘rising tide lifts all boats’). If you get this right, the probabilities in your favor are substantially enhanced. From there, you want leading industries, and leading companies within said leading industries (again, larger aggregates then picks, to enhance probabilities, not guarantees, in your favor). Your time frame, 1-3-5 yrs tops for projections, (including income statement/EPS, balance sheet, and applying an appropriate P/E – a detailed, multi-faceted approach beyond what could be described in this summary); and, that’s all they are, projections. Beyond that time frame, your guess. On fraudulent wall street, every day, though already discounted in large part (6-8 mos, approx.), the market spins, churns, and with lightning fast computerized high-frequency trade programs commissions in huge volumes like no other time in financial history when real valuation meant something, with no net economic value added, but very lucrative to the frauds on wall street, which ultimately is a net detriment to the economy / the nation /and other industries as we’ve seen and as described elsewhere on this site and in these posts http://albertpeia.com . Preposterously, they even sometimes refer to seasonal factors as if hearing them for the first time and ‘explaining’ an up move (almost invariably already discounted). Today, they shrugged off the deepening economic reality despite the election year frothing / manipulations.

UNDERSTANDING THE ( LAST BUT ONGOING SINCE WORTHLESS TOXIC ASSETS / PAPER, THE PRODUCTS OF THEIR FRAUD, NOW MARKED TO ANYTHING AS PER LEGISLATED FASB RULE CHANGE STILL OUT THERE IN THE MANY TRILLIONS) GREAT WALL STREET FRAUD (summarized - as posted on this site on the dates as indicated)
*(12-30-07) The best and easiest to understand analogy, though not perfect, to the wall street markets is the kiting of checks at lightning computerized trading speed on which commissions are taken although there is nothing of real value underlying their fraudulent scheme. (10-10-08) Now to bring this analogy closer to the current crisis, assume as is the case of the worthless sub-prime securities, there is no charge off/debit as is ordinarily the case with a cleared check and the worthless 'collateralized sub-prime security' is repackaged, resold, recommissioned based upon as collateral the original worthless security which is in turn repackaged, resold, recommissioned based upon as collateral the subsequent worthless security, and so on to the tune of (hundreds of) trillions of this worthless, fraudulent paper (blatent securities fraud which must be prosecuted and fraudulently derived profits disgorged).
*(12-31-07) HIGH FREQUENCY PROGRAMMED TRADING: The ubiquitous computerization of wall street functions, the enhancement/advance/integration of the said computer equipment/peripherals in terms of computing power and speed, along with the concomitant advance/sophistication of the programming concerning same has enhanced the ability of the frauds on wall street to effect their frauds with blinding speed vis-à-vis the funds entrusted to their care by way of programmed trades, ie., buy, sell, stop limits, etc.. An example (though not perfect) is illustrative: Dow drops 200 points as programmed sell orders kick in with some not so fudged negative news. Nothing changes but the following day the market rises 205 points on programmed buy orders (a little higher despite the absence of any positive news). Hence, the huge swings which have become ever so more prevalent. Though nothing has changed, hundreds of millions of dollars without relation to any value added (in economic terms, service, etc.) is taken in commissions (percentages, points, spreads) by the frauds on wall street on huge computerized trading volume (hence, the multi-billion dollar bonuses on top of huge salaries, etc.). The fact is that these funds entrusted to them are so large that such computerized “buys” can simulate other than rational demand causing prices to rise solely to generate huge commissions to them and new funds coming in (as in a ponzi scheme). The corrupt government has been complicit in terms of false economic reports, legislation protecting the fraud (ie., exemption from RICO accountability, etc.), while the courts are also corrupt facilitators (ie., new york, new jersey, california, etc., and similarly don’t count on arbitration panels). There was a time when transaction costs mattered in financial investment decisions. The trades/commissions are not a net positive for the economy but are indeed of great benefit to the recipients of same (who like termites eat away at other peoples’ money, and whose marginal propensity to consume is less than those allocating their monies /pensions /401ks/savings etc.; hence, the mess to follow). Finally, the NASDAQ/tech has become the “safe haven” but in reality as in the dot.com bust days are just the great story without much fundamental understanding that keeps the fraudulent ball rolling.
(1-01-08) Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Very Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital via, ie., ipo’S), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.
*(1-3-08) $14 billion ($21 billion in 2006) in bonuses to the lunatic/frauds on wall street for a commissionable (sub prime bundled) fraud well done, inflation up, dollar down, oil prices up, manufacturing down; one analyst/reporter/journalist from inside sources pegs the sub-prime dollar value of the shilled worthless paper at $516 TRILLION (even a percentage of same renders the problem unfixable-hence, culpable parties must be held accountable and disgorge their ill-gotten gains from, ie., commissioning worthless paper, taking a point here or there and fraudulently passing same on, ad infinitum, etc.). Of course there are also a plethora of garden-variety frauds as always, ie., 10-B-5, insider trading, etc..

*(10-10-08) Now to bring the initial check-kiting analogy closer to the current crisis, realize as is the case of the worthless sub-prime securities, there is no charge-off/debit as is ordinarily the case with a cleared check and the worthless 'collateralized sub-prime security' is repackaged, resold, recommissioned based upon (collateralized by) as collateral the original worthless security which is in turn repackaged, resold, recommissioned based upon as collateral the subsequent worthless security, and so on (a geometric progression) to the tune of (hundreds of) trillions of this worthless, fraudulent paper (blatent/flagrant securities fraud which must be prosecuted and fraudulently derived profits disgorged).

THE BAILOUT FRAUD/SCAM

This is not brain surgery and the fraud, bonuses/compensation (mortgages, subprime and otherwise, are only a relatively small portion of the fraud / scam providing “cover / collateral” for the worthless but heavily commissioned paper over and over again in a multiplicity of different forms of worthless paper) in the mega-billions should first be disgorged before taxpayers are forced to pony up and pay the frauds again for their fraud which caused the problem in the first instance, must be prosecuted. It should also be noted that despite the rhetoric, the wall street bailout will NOT solve the crisis or eliminate the economic pain except to make permanent the fraudulent wealth transfer to the most well healed heals/frauds/criminals in the nation who caused the so-called crisis by their greed/corruption/fraud.

Stocks surge to highest level in nearly five months (Washington Post) [ Come on! The service sector? That non-productive morass of paper pushin’, commissionin’, make-work sector, in an election year no less, the impetus for a market rally along with Japan’s zero interest rate prep for yet another lost decade … I don’t think so! What total b*** s***.

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Jobless numbers pose challenge for Obama, Democrats (Washington Post) [ My God! You can’t make this stuff up. The lunatics are running the asylum; even the senile ones like the co-architect of the current debacle, greenspun. Challenge? I’d say Gordian Knot. And, importantly, no swords allowed … they’re all in Afghanistan, Pakistan, Iraq, etc… ]The latest report, showing the unemployment rate remained at 9.6 percent, is the last before crucial midterm elections in which the troubled job market has emerged as a paramount issue.

Chorus builds for foreclosure moratorium (Washington Post) [ Sounds like a plan! After all, foreclosures and recoveries, like oil and water (golly, I must still have BP / gulf spill on the brain), they don’t mix. And, we all know as per no-recession helicopter ben, we’re in recovery mode, green shoots and all! ] Pressure for a nationwide moratorium mounted Friday when Bank of America, the nation's largest bank, halted evictions in all 50 states and Senate Majority Leader Harry M. Reid (D-Nev.), who is locked in a tight reelection campaign, called on other major lenders to follow suit.

Arab League backs Palestinian refusal on talks unless Israel halts West Bank settlements (Washington Post) [ Lots of backslappin’ in israel mission accomplished … yeah, another fine mess they’ve gotten the world into … another set of peace talks down the drain, again sabotaged by the israelis … not that the israelis had anything in mind other than literally … to talk … out of both sides of the mouths. ]

So why are corporate profits going higher? Three main reasons:

1) Major cost cutting. Mostly on the staffing side of the equation. So each dollar in revenue produces more profit.

2) Modestly improving US economy moves up revenue a bit. Combine that with #1 above and it creates attractive year over year profit growth.

3) About half of US corporate profits these days come from overseas. Europe may be weak, but growth in China, India, Brazil etc. more than makes up for that shortfall.

Holding cash? No thanks.

Treasuries? That bubble is going to pop sometime (and yes I would recommend buying TBF or TBT for when that party takes place).

My Two Cents

During the day I read many other investment articles of interest. Here are links to some new ones with my two cents added underneath.

Rail Traffic Maintains Year High Levels (Todd Sullivan)

Gaining Traction with Caterpillar? (Ray Merola)

We Don't Need QE2 (Calafia Beach Pundit)

Disclosure: I own shares in JOYG, CMI and UNP

Bank of America halting all foreclosure sales The Washington Post | Bank of America said Friday it is halting all foreclosure sales and foreclosure proceedings nationwide while it reviews the documents being used to justify homeowner evictions.

Three Horrifying Facts About the US Debt “Situation” Phoenix Capital Research | The US Fed is now the second largest owner of US Treasuries.

Dollar Tumbles as Fed Prepares to Print More Money Reuters | The Fed may lead the way into more aggressive quantitative easing, which is seen knocking the dollar lower.

Federal Reserve Officials: Americans Are Saving Too Much Money So We Need To Purposely Generate More Inflation To Get Them Spending Again Some top Federal Reserve officials have come up with a really bizarre proposal for stimulating the U.S. economy. As unbelievable as it sounds, what they actually propose to do is to purposely raise the rate of inflation so that Americans will stop saving so much money and will start spending wildly again.

World Risks Greater Depression if Currency Tensions Escalate: Mobius Rising tensions amid an escalating global currency war has sparked talk of capital controls, but such a move would be dire for markets, warned Mark Mobius, executive chairman of Templeton Emerging Markets Group on CNBC Friday.

Grayson Sends Letter To Geithner, Bernanke Demanding Foreclosure Freeze, Warns Of Systemic Bank Failure Risk Alan Grayson is back on the scene, having sent a letter to Financial Stability Oversight Council which includes pretty much all of Wall Street’s pawns, including Bernanke, Geithner, Bair, Gensler, Walsh, and DeMarco, in which he asks the FSOC to “suspend foreclosures until this problem is understood and its ramifications dealt with.”

Fed weighs a more focused response (Washington Post) [ Yeah! And, they better be quick about it because, when it comes to the fed, the plethora of rumors of their imminent demise are NOT greatly exaggerated. Drudgereport: America on 'brink of a Second Revolution'... [This is more real than most people can imagine! ] The Fed is dead, maybe by 2012 Paul B. Farrell - MarketWatch ARROYO GRANDE, Calif. (MarketWatch) — ‘OK, so Nassim Nicholas Taleb, the “Black Swan” author, actually said: “The Fed won’t exist in 25 years.” Warning: It’ll happen much sooner, fallout of the coming Second American Revolution. It’s inevitable: Wall Street banks control the Federal Reserve system , it’s their personal piggy bank. They’ve already done so much damage, yet have more control than ever. Tea-party activists in their own words Tea-party activists talk to Russ Britt on what their movement represents. Warning: That’s a set-up. They will eventually destroy capitalism, democracy, and the dollar’s global reserve-currency status. They will self-destruct before 2035 … maybe as early as 2012 … most likely by 2020. Last week we cheered the Tea Party for starting the countdown to the Second American Revolution. Our timeline is crucial to understanding the historic implications of Taleb’s prediction that the Fed is dying, that it’s only a matter of time before a revolution triggers class warfare forcing America to dump capitalism, eliminate our corrupt system of lobbying, come up with a new workable form of government, and create a new economy without a banking system ruled by Wall Street. Read 'America on the brink of a Second Revolution.' …’ ]As the Federal Reserve considers what steps it might take to try to boost growth, attention has focused on whether the Fed might buy an enormous quantity of bonds to flood the economy with some specific amount of money.

IMF official by day, author of financial thriller by night (Washington Post) [ Because you can’t make this stuff up, if he sticks to reality (truth stranger than fiction), ie., magnitude of the extant fraud, debacle, etc., it will be a doozy! ]The chief of the agency's policy review division has written a book that's not for the faint of heart.

Afghanistan: U.S. and Afghans at odds over Kabul Bank reform (Washington Post) [ Wow! Given defacto bankrupt america’s continued and covered-up financial debacle, any Afghan resistance to the american model / modus operandi is tantamount to ‘proof of life (rationality)’. ]

Firms use record piles of cash to buy back stock, not create jobs (Washington Post) [ And just when we thought that fake government pre-election labor reports (expected by fraudulent wallstreet, ie., 10-8-10, etc.) was the only market frothing fixed game in town. ] Plus these companies are buying back their stock in droves.

White House says Obama will not sign foreclosure bill [ Oooooh, whoops … Sounds like a plan!] Consumer advocates and state officials argue legislation would make it difficult for homeowners to challenge documents prepared in other states. [When talking about the pervasively corrupt american legal / judicial system, you’re truly talking about tips of the iceberg! Judges rule without title, lenders can't foreclose (Washington Post) [ Rules of law? I didn’t think they cared. That’s certainly the direct experience I’ve had with the pervasively corrupt american legal / judicial system (along with the other two branches of the u.s. government and defact bankrupt america generally). Court decisions could call into doubt the ownership of mortgages, raising urgent challenges for both the real estate market, wider financial system. Connecticut, California join probe of Ally (Washington Post) [I’d be much more impressed if they initiated a probe of more readily discernible criminal offenses in violation of the RICO Act http://albertpeia.com Frauds/Liars (sic-lawyers)Covering Up for Other Frauds/Liars (sic-lawyers). In Productive Societies as China, Japan, etc., Fraudulent Liars (sic-lawyers) and the Fraudulent u.s. System They're a Part of Are Unheard Of/Non-existent. List of Files Regarding Filed Attorney Grievance Against Fraud coan et als Or Here For A Clearer View Of Filed Grievance Complaint, Response, Exhibits, and Related RICO Filings Note the Committee of Frauds/Liars (sic-lawyers). Included are DOJ Rep., State Court Rep., State Atty. General Office Rep., and even a Vegetable Garden yale law prof who probably never practiced law in his life. How Pathetic! http://albertpeia.com/fbiofficela91310 ] Justice: FBI improperly opened probes (Washington Post) [ I just hope they’re as zealous (in probing readily discernible crime) with regard to my RICO matters and the corruption in the (judicial / legal) process since, in the final analysis, it will have been the corruption within that will have brought the nation down irrevocably and totally.

October 5, 2010 (*see infra)

Steven M. Martinez, Assistant Director In Charge
Federal Bureau of Investigation, USDOJ
11000 Wilshire Blvd., Suite 1700

Los Angeles, CA 90024

Dear Sir:

I enclose herewith 3 copies of the within DVD rom autorun disk (which will open in your computer’s browser) as per your office’s request as made this day (the disk and contents have been scanned by Avast, McAfee, and Norton which I’ve installed on my computer to prevent viral attacks / infection and are without threat). I also include 1 copy of the DVD as filed with the subject court as referenced therein (which files are also included on the aforesaid 3 disks in a separate folder named ‘112208opocoan’). The (civil) RICO action (as you’re aware, the RICO Act is a criminal statute which provides a civil remedy, including treble damages and attorney fees, as an incentive for private prosecution of said claims probably owing to the fact that the USDOJ seems somewhat overwhelmed and in need of such assistance given the seriousness and prevalence of said violations of law which have a corrupting influence on the process, and which corruption is pervasive). A grievance complaint against Coan was also filed concurrently with the subject action and held in abeyance pending resolution of the action which was illegally dismissed without any supporting law and in contravention of the Order of The Honorable Robert N. Chatigny, Chief Judge, USDC, District Connecticut. The files below the horizontal rule are the referenced documents as filed. (Owing to the damage to the financial interests of both the U.S. and the District of Congresswoman Roybal-Allard, viz., Los Angeles, the Qui Tam provisions of the Federal False Claims Act probably would apply and I would absent resolution seek to refer the within to a firm with expertise in that area of the law with which I am not familiar).

The document in 5 pages under penalty of perjury I was asked to forward to the FBI office in New Haven is probably the best and most concise summary of the case RICO Summary to FBI Under Penalty of Perjury at Their Request (5 pages) [ ricosummarytoFBIunderpenaltyofperjury.pdf ].

The correspondence I received from the Congresswoman by way of email attachment (apparent but typical problem with my mail) along with my response thereto is included on the 3 disks as fbicorrespondencereyes.htm . With regard to the calls to the FBI’s LA and New Haven, CT offices: There was one call to the LA office and I was referred to the Long Beach, CA office where I personally met with FBI Agent Jeff Hayes to whom I gave probative evidentiary documents of the money laundering which he confirmed as indicative of same (he was transferred from said office within approximately a month of said meeting and his location was not disclosed to me upon inquiry). The matter was assigned to FBI Agent Ron Barndollar and we remained in touch for in excess of a decade until he abruptly retired (our last conversation prior to his retirement related to the case and parenthetically, Rudy Giuliani whose father I stated had been an enforcer for the mob to which he registered disbelief and requested I prove it, which I did – he served 12 years in prison, aggravated assault/manslaughter? – and no, there is no Chinese wall of separation – Andrew Maloney’s the one that prosecuted gotti).

In contradistinction to the statement in said correspondence, there is a plethora of information including evidence supporting the claims set forth in the RICO VERIFIED COMPLAINT (see infra). Such includes and as set forth in the case, inter alia,

A judgment had been entered in my favor in the case, United States District Court Case #3:93cv02065(AWT)(USDCJ Alvin Thompson), worth approximately now in excess of $300,000 remains unaccounted for and which could be used for payment to creditors, Los Angeles, etc..
Counsel Robert Sullivan on my behalf documented by way of certification upon investigation that Alan Shiff, USBCJ, had falsely stated a dismissal upon which false statement he predicated a retaliatory and spurious contempt proceeding against me causing substantial damage, and for which he sought Judicial Notice of those and related proceedings as did I in some of my filings.
The Order of Dismissal With Prejudice by Alan Shiff, USBCJ, owing to Defendant Coan’s failure to file anything whatsoever by the court’s deadline causing creditors and me substantial damages: [ Shiff Order of Dismissal With Prejudice on Coan’s Failure to File Page 1 Page 2 ]
Defendant Coan had filed an action against me to prevent me from suing him which necessitated me to fly to Connecticut for a hearing before The Honorable Robert N. Chatigny, Chief Judge, USDC, District of Connecticut, who denied Coan’s requested relief as to Coan but precluded my action against Shiff (although there is no immunity, judicial or otherwise, for criminal acts, ie., fraud connected with a case under Title 11, USC, etc.) . [ transcript in pertinent part - crossexamofcoanbypeia.pdf ]
Newly appointed judge, Maryanne Trump Barry, Donald Trump’s sister, was assigned the RICO case despite the conflict of interest in light of hundreds of thousands of dollars of illegal (drug) money being laundered through the Trump casinos by the RICO defendants, and despite my motion to recuse her which motion she heard herself and denied, and U.S. Trustee Hugh Leonard with whom I met personally refused to join or file a separate motion to recuse and not long thereafter left said office for private practice at Cole, Shotz, et als on retainer with the RICO defendants as his primary client.
Probative and evidentiary documents, affidavits, exhibits, including those turned over to FBI Agent Jeff Hayes in Long Beach, CA, had been given to Assistant U.S. Attorney Jonathan Lacey with whom I met personally at the U.S. Attorney’s Office in Newark, N.J., at which time Samuel Alito was U.S. Attorney, and went over said documents and their probative value with him. Within approximately a month thereafter upon inquiry I was told that Jonathon Lacey was no longer with the office, that the file/documents could not be located, and that there was no further information available concerning contacting him or his location. I thereupon delivered by hand, copies of said documents to the office of then U.S. Attorney Alito, addressed to him, with assurance they would go directly to him. In addition to being inept [ I looked in on the one mob case he had brought, bungled, lost (accidently on purpose?) since I was suing some mob-connected under RICO and the court (I had known / previously met outside of court the judge Ackerman through a client) was absolute bedlam and a total joke since incompetent corrupt Alito brought in all 20 mob defendants (rather than prosecute one or a few to flip them first) who feigning illness had beds/cots in the courtroom along with their moans during testimony and had the jury in stitches. As much as I hate the mob, it truly was funny, if not so tragic.], Alito is also corrupt (and maybe corrupt because he is inept). After a reasonable (but still rather short) time I called to determine the status and was told that Alito was no longer with the Office of the U.S. Attorney, that he was (appointed) a federal judge, and that neither the documents nor any file or record of same could be located. Alito did parley the same / cover-up into quid pro quo direct lifetime appointment to the Court of Appeals, 3^rd circuit, despite the absence of judicial experience or successful tenure as U.S. Attorney (Maryanne Trump Barry as well). This is the same Sam Alito that now sits on the purported highest court in the land. The real application of the illegal rule ‘don’t ask, don’t tell’.

There is applicable insurance / surety coverage and neither LA, nor creditors, nor I should continue to have been damaged by this brazened corrupt and illegal scenario, which should be resolved in accordance with the meaningful rules of law apposite thereto.

Sincerely,

Albert L. Peia

611 E. 5^th Street, #404

Los Angeles, CA 90013

(213) ******* (cell phone)

(213) 622-3745 (listed land line but there are unresolved problems with the line, computer connection may be the reason but I hesitate to chance greater non-performance / worsening by their ‘fix’ so cell phone best for contact).

----------

*The foregoing and as indicated therein was previously send 9-14-10 but delivery confirmation was flawed as set forth below and my inquiries to the u.s. postal service rebuffed (I believe tampered with inasmuch as your office could not locate same). This cover letter (9-13-10) is on the 3 disks with navigable hyperlinks to the subject files for ease of reference, including the files in the RICO action as indicated.

-----

Label/Receipt Number: 0310 1230 0000 0862 8183

Expected Delivery Date: September 15, 2010

Class: Priority Mail®

Service(s): Delivery Confirmation™

Status: Delivered

Your item was delivered at 10:14 am on September 15, 2010 in LOS ANGELES, CA 90024.

Track and Confirm

Enter Label/Receipt Number.

Enter Label / Receipt Number.

Detailed Results:

Bullet Delivered, September 15, 2010, 10:14 am, LOS ANGELES, CA 90024

Bullet Arrival at Post Office, September 15, 2010, 4:12 am, LOS ANGELES, CA 90024

Bullet Processed through Sort Facility, September 14, 2010, 8:29 pm, LOS ANGELES, CA 90052

Bullet Acceptance, September 14, 2010, 4:04 pm, LOS ANGELES, CA 90017

----

Sent Postage Prepaid: United States Mail - VIA Priority Mail, Delivery Confirmation and VIA Certified Mail this 5th day of October, 2010.

Signed: ___________________________________

Albert L. Peia

Wednesday, October 13, 2010

October 13, 2010 posts

Business / Economic / Financial

This is what a depression is all about — an economy that 33 months after a recession begins, with zero policy rates, a stuffed central bank sheet, and a 10% deficit-to-GDP ratio, is still in need of government help for its sustenance.

Survey: Half of Wall Street expects bigger bonus this year (Washington Post) [ This is nothing short of incredible … What they should be expecting, for the sake of the nation and the world, is an 8 by 10 jail cell! ] Bloomberg The percentage anticipating a bigger bonus increased from last year.

Gold hits record as Fed signal sinks dollar Vancouver Sun | Gold surged to a record high at $1,367.65 an ounce on Wednesday and silver to a 30-year peak.

85% of Americans Angry About Economy, Fuels Republican Advantage ABC News | All told, 85 percent of Americans are either angry about the economy or at least dissatisfied with it, according to the survey, produced for ABC and Yahoo! News by Langer Research Associates.

Fed declares it MUST create inflation! Uncommon Wisdom | Exactly one month ago today, I wrote that Fed Chief Ben Bernanke would soon “pull out nuclear-sized bombs to try and destroy the debt crisis that is affecting the world.”

Gold sets a new record; silver hits 30yr high Gold surged nearly 2% to a record high near $1,375 an ounce yesterday, boosted by worries over dollar depreciation after the Federal Reserve signalled it would start buying government debt again to stimulate the economy.

Gold futures rise above $1,360 as dollar falls Gold futures resumed their run higher, hitting an intraday high of $1,362 an ounce on Wednesday, as weakness in the U.S. dollar spurred demand for the precious metal.

White House rejects foreclosure moratorium The Obama administration rejected calls for a nationwide moratorium on housing foreclosures amid fears that such a move could cripple an already slow recovery of the U.S. housing market.

National / World

New 9/11 Footage Reveals WTC 7 Explosions Paul Joseph Watson | Video clip NIST fought tooth and nail to keep secret contains clear audible booms as eyewitness describes “continuing explosions” from direction of Building 7.

We’re Under Attack: Support Alternative Media in the Infowar Alex Jones & Aaron Dykes | Make no mistake, the Infowar is under attack. The establishment is alerted to the work that Infowarriors everywhere have done. Now, to continue fighting back in full force, we need your help.

Head of Investigator in Falcon Lake Case Delivered to Mexican Military Kurt Nimmo | The murder of Rolando Armando Flores Villegas points to involvement of drug cartel in the slaying of David Michael Hartley.

Ron Paul: Dollar Collapse Will Spur 2012 Presidential Run Paul Joseph Watson | Congressman indicates that worsening financial picture will re-ignite the Revolution.

Jesse Ventura: US should abolish inherently corrupt political parties A dozen years after shocking the nation with an upset win as an Independent candidate in the 1998 Minnesota gubernatorial election, former wrestler Jesse Ventura doesn’t support third parties anymore.

Goldman Sachs Predicts Gold To Hit $1650 Within 12 Months Goldman Sachs expects the dollar to plummet following another round of quantitative easing and has raised its forecast for the gold price to $1,650 per ounce within the next 12 months.

Chicago Reporters Work as Rahm’s Press Thugs; Threaten Radio Host Asking Tough Questions We’ve often said that the media “protects” President Obama but this video from WIND radio host and Big Blogs contributor William Kelly shows this allegation literally.

‘Intl. lobby supports Israel’s crimes’ Former US Congresswoman Cynthia McKinney says a strongly-financed lobby throughout the world has helped Israel violate international law.

Drudgereport: NEW NORMAL: Long Recovery Looks Like a Recession (Depression) ...Fed Mulls Raising Inflation Expectations to Boost Economy... Gold Hits Another Record...Pension protests escalate in France... Sarkozy stands firm...Strikes shut Eiffel Tower...Blankley: The White House Bunker So Soon?

Prospects for national foreclosure moratorium dim (Washington Post) [ For ya, agin’ ya … it’s hard to keep up … that spinning head of their’s, not yours. ] Administration officials worry that a moratorium could have a significant impact on the economic recovery.

This is what a depression is all about — an economy that 33 months after a recession begins, with zero policy rates, a stuffed central bank sheet, and a 10% deficit-to-GDP ratio, is still in need of government help for its sustenance.

Three Horrifying Facts About the US Debt “Situation” Phoenix Capital Research | The US Fed is now the second largest owner of US Treasuries.

Dollar Tumbles as Fed Prepares to Print More Money Reuters | The Fed may lead the way into more aggressive quantitative easing, which is seen knocking the dollar lower.

Marc Faber Says World Heading for `Major Inflection Point’ Global markets are heading for an “important turning point” as interest rates begin to rise within about three months and the U.S. dollar gains, according to investor Marc Faber.

Max Keiser: They Are Going To Take The U.S Economy Down Max Keiser reports on how the “failing US Economy is going off-line”.

Ron Paul Says a 2012 Run Depends On Fall of U.S. Dollar Hot on Call | Texas Rep. Ron Paul (R) told reporters Saturday that the bulk of the economic crisis is yet to come, and that a White House ’12 bid largely hinges on his anticipated fall of the U.S. dollar.

Obama will not ban home repossessions ‘fraud’ BBC | The White House has ruled out a temporary ban on the repossession of homes, despite a growing row over alleged malpractice.

The Fed’s QE2 — Speeding Our Demise America’s Faltering Empire | The Federal Reserve would like to return to the Glory Days of the Bubble Era (1995-2007).

National / World

French Workers Threaten General Strike in Response to Austerity Kurt Nimmo | In France, workers and students may soon revisit May, 1968, when a general strike shut down the country.

Update on New Hampshire Thugs Snatching Baby Girl Infowars.com | Story is now national news.

Update on New Hampshire Thugs Snatching Baby Girl: Oath Keepers plans rally Oath Keepers founder Stewart Rhodes and John Irish confirm that court used Irish’s association with the group in order to snatch newborn baby.

French Workers Threaten General Strike in Response to Austerity In France, workers and students may soon revisit May, 1968. French president Nicolas Sarkozy and the French unions are locking horns over pension reforms.

Fed's Yellen: Possible that low rates feed bubbles (Reuters) [ Another one of those daah! moments as if the ‘senile greenspun / no-recession helicopter ben’ debacle, along with other missteps, isn’t testament to that. ]

America’s Third World Economy Paul Craig Roberts | The latest jobs report issued shows that America’s transformation into a third world economy continues.

More Bad News: 10 Things You Should Know About The Latest Economic Numbers The Economic Collapse | We are in such a rapid decline that it is hard for most Americans to even comprehend it.

Worldwide Hyperinflation Race FSK’s Guide to Reality | Aiming for stable exchange rates, other countries are also inflating their money.

Gold Rises as Bankster Currency War Gains Momentum Globalist loan sharks feign worry. Unemployment is so bad in the United States, the government is thinking about slapping tariffs on cheap Chinese slave labor products.

Dollar falls as ‘currency war’ concerns linger The dollar fell against the euro and yen on Monday after the world’s top finance officials failed to reach a consensus on measures to head off what some see as a looming “currency war”, analysts said.

Foreclosuregate If you work in the mortgage industry or for a title insurer, you might not want to make any plans for the next six months. Foreclosuregate is about to explode. It is being alleged that many prominent mortgage lenders have been using materially flawed paperwork to evict homeowners.

Fed Intervention Could Lead to ‘Flash Crash’: Strategist The stock market is at risk of another flash crash because of the Federal Reserve’s liquidity-boosting measures, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC Monday.

National / World

Confirmed: Court Did Rely on Oath Keeper Association to Take Baby Stewart Rhodes | Either you defend the Constitution for everyone, or we may as well just scrap it and let government agencies and judges do whatever they want to those they deem bad.

Gold Rises as Bankster Currency War Gains Momentum Kurt Nimmo | A global currency war will crash national economies and foment social chaos of the sort the globalists will exploit in order to sell their world government agenda.

Feds Treat Baby-Snatch Protesters Like Terrorists Paul Joseph Watson | FBI brings bomb dogs to hospital demonstration in effort to smear dissent against state kidnapping of children on political grounds as domestic extremism

Inflation to Make All Americans Billionaires By 2020 National Inflation Association | When our government creates inflation with the goal of generating higher incomes, the real incomes of Americans always decline dramatically.

7/7 Investigation Day One: “All Conspiracy Theories Have No Basis” Over five years after the London bombings of July 7, 2005 took place, an inquest set up to explore the attacks has declared on day one that any deviations from the official version of events has no basis in evidence.

Bank of America halting all foreclosure sales The Washington Post | Bank of America said Friday it is halting all foreclosure sales and foreclosure proceedings nationwide while it reviews the documents being used to justify homeowner evictions.

Three Horrifying Facts About the US Debt “Situation” Phoenix Capital Research | The US Fed is now the second largest owner of US Treasuries.

Dollar Tumbles as Fed Prepares to Print More Money Reuters | The Fed may lead the way into more aggressive quantitative easing, which is seen knocking the dollar lower.

World Risks Greater Depression if Currency Tensions Escalate: Mobius Rising tensions amid an escalating global currency war has sparked talk of capital controls, but such a move would be dire for markets, warned Mark Mobius, executive chairman of Templeton Emerging Markets Group on CNBC Friday.

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THE NEW WALL STREET FRAUD / SCAM- An easy to understand, illustrative, simple (if not simplistic) analogy, though not perfect, to wall street’s current scam / fraud with corrupt fed / government cooperation is as follows:

(These Amounts Are Not Real But Illustrative)

$1 share of stock

THE NEW WALL STREET FRAUD / SCAM- `An easy to understand, illustrative, simple (if not simplistic) analogy, though not perfect, to wall street’s current scam / fraud with corrupt fed / government cooperation is as follows:`

`$1 share of stock`