January 13, 2011 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 . The following is the cumulative archive of blog posts / topics for 2010 as the new year starts anew: http://albertpeia.com/December312010postsarchive.htm or PDF formatted version
http://albertpeia.com/December312010postsarchive.pdf ]

Bond Panic to Weigh on Stocks Cadora ‘Despite the stock market's seemingly inexorable rise, clues to a coming crisis continue to build, promising not only to bring down equity prices sooner rather than later, but also to make the correction much more severe than most expect. As readers of my Member Letter know, I have been anticipating a dollar crisis to visit markets sometime in the first half of 2011, spurred by an exodus from bonds as the Federal Reserve continues its malfeasant policies. In now seems the dollar crisis will be paired with a panic in the municipal bond market.
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The Illinois legislature's decision to raise taxes as a means to fill its budget gap sets an ominous tone for the municipal bond market. The message is clear: politicians will attempt to drain taxpayer resources rather than control outrageous spending habits. In other words, the root of the budget problem will be ignored. This direction is bearish not only for munis, but also for the economy.

A muni bond meltdown will be detrimental to the dollar in more than one way, not the least of which comes from the dollar's chief persecutor, Ben Bernanke. Despite Bernanke's persistent denials that the Fed would step in to bail out a state government, pressure will grow on him to do so as the crisis worsens. It will be interesting to see if his political will fails him again.

Higher interest rates from bond markets ... both municipal and Federal ... will do no favors for the stock market. In fact, a sense of crisis will exacerbate an equity decline. I have proposed to readers that when this crisis hits, stocks will fall in tandem with the dollar rather than being supported by its decline. That period of positive correlation may be just in front of us.

The stock market itself is looking quite exhausted. According to my cycle analysis, equities are due for a dive into a yearly low. Several market indicators also suggest the time is ripe for stocks to roll over.

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Consider also that the respectable work performed over at sentimentrader.com shows several sentiment extremes ... all bearish for the equity outlook ... including a very large gap between smart money and dumb money confidence. The stage is set for a significant stock market correction and this week's breakdown in the muni bond market may provide the needed catalyst.’

Merck Hurts, Stocks Stagger After Jobless Claims

Tech-Heavy ETF Hits Short-Term Extreme - High Probability of Reverting to Mean? Cowder ‘It was just another day in the park for the bulls. The continued push since the gap became higher on Jan. 3 has managed to push the tech-heavy QQQQ into a short-term “very overbought” extreme with an RSI (2) at 98.4. As I always state, when an ETF typically reaches an extreme of this manner, the market fades over the short-term (1-3 days). A move that pushes QQQQ lower would likely close the gap at $54.62, which would mean a 3.5% loss for the QQQQ.

A move like this would certainly be advantageous for my current open positions in both the High-Probability and Mean-Reversion strategy. Yes, I took a position later in the afternoon in the tech-heavy index and so far I like the probability on this one. All of the short-term technical indicators that I follow are reading extremes, so I had no choice but to take a position.

Intel (INTC) comes out after the bell tomorrow and should be quite the catalyst for the QQQQ’s next move. I would love to say that the next move is definitely going to be bearish over the short-term, but as we all know in trading, even when M-R probability is leaning heavily towards your side, there are no guarantees.

Short-Term High-Probability, Mean-Reversion Indicator – as of close 1/11/10

Benchmark ETFs

• S&P 500 (SPY) – 83.7 (very overbought)
• Dow Jones (DIA) –75.3 (overbought)
• Russell 2000 (IWM) – 69.3 (neutral)
• NASDAQ 100 (QQQQ) – 90.2 (very overbought) / RSI (2) – 98.5

Sector ETFs

• Biotech (IBB) – 76.8 (overbought)
• Consumer Discretionary (XLY) – 57.0 (neutral)
• Health Care (XLV) – 83.1 (very overbought)
• Financial (XLF) – 74.1 (overbought)
• Energy (XLE) – 79.8 (overbought)
• Gold Miners (GDX) – 42.3 (neutral)
• Industrial (XLI) – 90.9 (overbought) / RSI (2) – 98.7
• Materials (XLB) – 81.9 (very overbought)
• Real Estate (IYR) – 54.5 (neutral)
• Retail (RTH) – 48.9 (neutral)
• Semiconductor (SMH) – 88.6 (very overbought)
• United States Oil Fund (USO) – 65.2 (neutral)
• Utilities (XLU) – 64.6 (neutral)

International ETFs

• Brazil (EWZ) – 69.8 (neutral)
• China 25 (FXI) – 73.1 (overbought)
• EAFE (EFA) – 73.5 (overbought)
• South Korea (EWY) – 75.4 (overbought)

Commodity ETFs

• Gold (GLD) – 56.5 (neutral)

Ultra Extremes

• Small Cap Bear 3x (TZA) – 29.1 (oversold)
• Small-Cap Bull 3x (TNA) – 69.4 (neutral)
• UltraLong QQQQ (QLD) – 91.5 (very overbought) / RSI (2) – 98.8
• Ultra Long S&P 500 (SSO) – 84.3 (very overbought)
• Ultra Short S&P 500 (SDS) – 15.5 (very oversold)
• UltraShort 20+ Treasury (TBT) – 62.8 (neutral)

Disclosure: I am short QQQQ.

Stocks Slip on Economic Data Disappointment, Oil Pullback Midnight Trader ‘4:10 PM, Jan 13, 2011 --

• NYSE down 3.76 (-0.1%) to 8,119.22
• DJIA down 23.54 (-0.2%) to 11,732
• S&P 500 down 2.20 (-0.2%) to 1,284
• Nasdaq down 2.04 (-0.1%) to 2,735

GLOBAL SENTIMENT

• Hang Seng up 0.47%
• Nikkei up 0.73%
• FTSE down 0.44%

UPSIDE MOVERS
(+) JDSU gains on analyst price target hike.
(+) XCO exploring strategic alternatives.
(+) AAPL gets analyst price target hike.
(+) MU upgraded.
(+) TM upgraded.
(+) MRO moving forward with plans to spin off downstream.

DOWNSIDE MOVERS
(-) INFY misses profit estimate.
(-) LEDS warns for sequential decline in revenue.
(-) WSM slips despite raising guidance.
(-) DRWI continues sharp evening drop that followed
(-) BBBB continues evening dip seen after announcing acquisition, backing guidance.

MARKET DIRECTION

Stock averages close modestly lower, having recovered from fresh session lows hit late in the chopping trading session. Declines followed economic uncertainty. Stocks had improved around midday as oil crossed into positive territory before it ended back in the red. Rising jobless benefits claims stumped stocks out of the gate this morning.

Blue-chip issue Merck & Co. (MRK) fell 6.7% to $34.63 after announcing that clinical trials of its cardiovascular drug vorapaxar would be discontinued for some patients. Merck fell the most among the 30 stocks that make up the DJIA.

Despite broad S&P weakness, Whole Foods Market Inc. (WFMI) jumped over 5%, and is up some 80% over the past year, after an analyst said that the company's shares would continue to rise because its customers are willing to pay higher costs for food.

The U.S. economy should grow around 3% to 4% this year, a healthier clip than in 2010 but not enough to bring down unemployment as much as policymakers would like, Federal Reserve Chairman Ben Bernanke said on Thursday in a speech.

The number of U.S. workers who filed new applications for jobless benefits jumped 35,000 last week to 445,000, the highest level in more than two months. Government official attributed the sharp increase largely to administrative backlogs, MarketWatch reported. Economists polled by MarketWatch had expected initial claims in the week ended Jan. 8 to fall to a seasonally adjusted 405,000. Last week s claims were revised up by 1,000 to 410,000. The less-volatile four-week average of new claims rose a much smaller 5,500 to 416,500.

U.S. wholesale prices climbed 1.1% in December, largely owing to a spike in gasoline prices, the Labor Department reported Thursday. The seasonally adjusted increase in producer prices last month was the biggest since last January, according to government data. Core producer prices, which exclude the volatile food and energy categories, rose 0.2% - in line with Wall Street expectations.

The last of the trio of reports, the U.S. trade deficit narrowed for a fourth straight month in November, defying economist predictions for a rebound. The nation's trade deficit contracted a slight 0.3% to $38.3 billion from a revised $38.4 billion in October, the Commerce Department said.

Overseas, the Bank of England and European Central Bank left monetary policy unchanged. European markets have been unable to extend yesterday's rally, as investors digest large bond issues across the region.

Crude futures settled modestly lower, finishing under $92 after spending most of the session in positive territory. Oil for February delivery retreated 46 cents, or 0.5%, to $91.40 a barrel after hitting a fresh two-year high. Gold ends higher after a reversal late in the day. February futures close up $1.20 or 0.1% at $1,387 an ounce.

In company news:

Target (TGT) shares are higher after it announced today that it is set to open stores in Canada beginning in 2013 after signing an agreement to purchase 220 leases from Zellers, a unit of Hudson Bay. The purchase agreement is valued at C$1.825 billion.

Marathon Oil Corp. (MRO) is higher following news it is moving forward with plans to spin off its downstream business, creating two highly focused energy companies.

Shares of American International Group (AIG) gained as a Bloomberg report said that new investors in the bailed-out insurance giant may want the firm to be ready to pick a successor. The current CEO, Robert Benmosche, began treatment for cancer in October. Benmosche doubled shareholders' money in his first 17 months in office.

Shares of Oilsands Quest (BQI) are down sharply after saying a detailed review of its core assets at Axe Lake, Wallace Creek and Raven Ridge show the resource base in these areas could support three projects with the potential for producing, in aggregate, 100,000 barrels a day of bitumen.

General Electric (GE) slips after inking a deal to buy Lineage Power Holdings, a privately held company. The deal, which is the latest in a string of acquisitions by GE, is valued at $520 million and is expected to help tap into the growth in data centers, electronic devices and telecommunications, the company stated.

In other company news, Blackboard Inc. (BBBB) continued its evening drop after moving to acquire Presidium Inc. for about $53 million in cash, excluding transaction costs. Blackboard previously owned a 10% equity stake in Presidium. It also reaffirmed its Q4 and FY10 financial guidance and provided initial financial guidance for the Q1 and FY11, saying it anticipates a $0.24-a-share adjusted Q1 profit on about $114.1 mln in revenues, topping the Thomson Reuters consensus for revenues but missing EPS estimates.

Infosys Technologies (INFY) fell after it said Q3 profit was 17.8 billion rupees, below estimates for 18.2 billion, according to a Reuters poll. It expects its dollar revenue to rise 25.7% to 26.1% in the year ending March, below analysts' expectations of 27% to 28%, Reuters reports. The revenue growth forecast was, however, higher than the 24% to 25% rise estimated previously by the company.

Research in Motion (RIMM) gained after it said it had given a solution ahead of a Jan. 31 target date that enables Indian wireless carriers lawful access to consumer services including the BlackBerry Messenger, but excludes access to corporate emails.’

Initial Jobless Claims Rise 35,000 ‘NEW YORK (TheStreet) -- The number of Americans filing unemployment claims unexpectedly rose last week, the Labor Department said early Thursday. The advance figure for seasonally adjusted initial claims increased by 35,000 to 445,000 in the week ended Jan.8, the highest level since October. Economists were expecting initial claims to drop to 405,000, according to consensus estimates from Bloomberg. Estimates ranged from 400,000 to 415,000…’

An Amazing Statistic About Our Abnormal Market [ The only thing amazing is that no one has come forth to state how preposterous this ‘modern day miracle of computerized programming technology’ can make unreality so appealingly and seemingly real that all are swept away with this tsunami of b*** s*** until it’s too late, which as preceding other crashes, seems furthest from thoughts, mind, and plausibility until invariably, grim reality comes a-calling and this scenario as before will end as before especially quite badly. ] ‘Rev Shark at Realmoney.com posted an amazing statistic which I believe he found at sentimenttrader.com.

According to Sentimentrader.com, the S&P 500 has now gone 92 days without closing below its 50-day moving average. That has only happened 17 times since 1928. But what is really amazing is that over the past 30 days, we haven't closed below the 10-day moving average even once. That has never happened in the last 82 years of market history.

As I've stated multiple times, it is not the rally we are experiencing that is strange, it is the total inability to pullback at any point that is boggling to anyone who has more than 6 months of market history under their belt.

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Don't forget in September and October we did not close below the 13 day moving average for 2 months in a row. Indeed other than a hiccup caused by Ireland, we might be working on the 5th month of no pullbacks.

This is an abnormal market. Anyone using historical context to trade is lost at sea. Congratulations to Mr. Brian Sack, the Bernank, and his POMO crew for making a mockery of traditional somewhat 'free' markets

Nevertheless, balance sheet policy can still lower longer-term borrowing costs for many households and businesses, and it adds to household wealth by keeping asset prices higher than they otherwise would be.

Amen Brian. In the future I'd just eliminate the middle man (primary dealers) and just buy SPY futures directly on a daily basis, much more efficient than our current charade. Granted that removes the Wizard of Oz effect (don't look behind the curtain - it's magic), but at least it would be intellectually honest. (I know, I know - primary dealers don't "buy stock directly" blah blah)

[Jan 6, 2010: Charles Biderman of TrimTabs Claims US Government Supporting Stock Market]’

13% Thursday - When Will You Capitulate? Davis ‘It’s starting! [chart] The last of the bears are now capitulating. We’re hearing it in Member Chat and we’re reading it in analyst reports and we’re seeing the fund managers on TV – it is very out of vogue to be a bear.

Just a few weeks ago, I pointed out to Members how few bears remained by saying "Look to your left, look to your right, look in front of you and look behind you – you would be the only bear." That was way back when "only" 20% of investors were bearish – as of yesterday, we lost 1/3 of those poor creatures and now only 13% of the market is bearish. Now you can look diagonally as well and you’ll STILL be the only bear!

Certainly the market seems to be proving the primary axiom of "You can’t fight the Fed." Pretty much no matter what happens, the market goes up. Bryan Leighton from Traddr! makes a good point saying: "It’s a neutral to positive market and the only thing that can change that is some sort of surprise event out of Europe or out of Asia or something major out of the US that the Fed is not ready for or prepared for. If they are prepared for it – it will not happen – it will not have a major effect on the markets."

That’s the reality we’re dealing with out there. As long as the Fed and their pet IBanks are running the markets and as long as volume is at 3-year lows, allowing the TradeBots to control each move – then it is wrong to be a bear. But, is it 87% wrong? 87% bullish sentiment isn’t just "very" bullish – it’s a new, historic high. It’s like going to a fight where the entire crowd only cheers for one guy which, like professional wrestling, would be an automatic indication that the game must be fake, Fake, FAKE!

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As you can see from this longer-term chart, we are as extremely bullish now as we were extremely bearish in the two worst market events of the past quarter-century. Much the way that Black Monday of 1987 and the Crashes of 2008/9 were unique buying opportunities at 15% bullish, this may be a unique shorting opportunity at 15% bearish that you are not likely to see again for decades.

As an optimist, it was easy for me to say 'buy' when I was one of the 15% still bullish in March of 2009 – don’t expect the same conviction from me about selling in January of 2011. We are generally bullish. We are long-term bullish. BUT – and it’s a Big But (not to mention blasphemy) – I don’t think The Bernank is either all powerful or infallible and I do believe that "some sort of surprise event out of Europe or out of Asia or something major out of the US" could happen at any moment so, as I said yesterday – we remain short-term cautious between now and April, even as the rest of the market marches towards 99% bullish around us.

This does not stop us from making some bullish plays – in fact Scott of Sabrient just reviewed the 4 Dark Horse Trader’s Hedge plays we’ve been tracking in a virtual portfolio since the fall and the only problem we’ve been having is they are too successful as the stocks have been outpacing our expectations and we have to let go of both Veeco Instruments (VECO) (with a 36% profit in 5 months) and World Acceptance Corp. (WRLD) (with a 25% profit in 3 months) because the stocks performed so well that they’re not worth adjusting our hedges anymore. That’s why we like our bullish to neutral Buy/Write Strategy, we can’t be harmed to the upside, only forced to take our profits off the table and find anther partner to dance with – which isn’t a bad forced discipline on stocks that are running ahead of 100% annual gains.

Could we make more money by just "going for it" and being 100% bullish? Sure we could, and once inflation takes hold and begins to snowball the markets higher, that is exactly what we’re going to do but, as I have pointed out before – missing the first 100% move up in the Zimbabwe Stock Exchange wasn’t a big deal since it was followed by moves of 1,000%, 1,000,000%, 1,000,000,000% and 1,000,000,000,000% before the markets finally calmed down. On the other hand, people who participated in Brazil’s 100% run in 8 months that began in October of 2007 found themselves right back where they started just 4 months later.

We participated 100% bullishly since our June 26th Buy List, which was followed by July 7th’s "9 Fabulous Dow Plays Plus a Chip Shot," July 26th's "Turning $10K to $50K by Jan 21st" (halfway there), August 29th’s "Defending Your Portfolio With Dividends" and September 3rd’s "September’s Dozen." That’s how we played the rally from S&P 1,030 to 1,160 (10%).

On October 3rd, I put up "October’s Overbought Eight" and they were AMZN, BIDU, CMG, FSLR, MOS, NFLX, PCLN and TLT. Needless to say, we got stopped out of most of those pretty quickly and that led to a Q4 version of "Defending Your Portfolio With Dividends" on October 23rd (S&P 1,180) and we rode those out through December 11th, when we got tired of waiting for a correction and (at S&P 1,240) went with "Breakout Defense – 5,000% in 5 Trades or Less" and those were followed with December 25th’s (S&P 1,256) "Secret Santa’s Inflation Hedges for 2011" also with a few trades aimed at making around 500% should the rally continue.

So why is it, with only one bearish Member Portfolio in 7 months, that I feel like I might be too bearish? Well, for one thing – I’m getting lonely. I work on the Web and my colleagues in the MSM and the Blogosphere have pretty much all found religion and developed an almost unshakable faith in The Bernank, in China, in Corporate America, in Commodities – you name it, they think it can’t go wrong. So much so that the VIX, which measures the market’s expectation of stock market volatility over the next 30 day period, has dropped all the way to 16.

Now 16 isn’t "low" for the VIX, it’s actually about the historic average. It is, however a far cry from 89 in 2008 and 48 as recently as May and if you tell me I now have less to worry about today than I did in 2007 when we were still in the middle of a major rally and 60% of investors were bullish and the VIX was in the mid-20s, I have to ask you why? 10% more people are unemployed than in 2007, the World is $18Tn more in debt than it was then, Inflation has tripled (although you can argue that playing inflation IS the bullish premise), Global GDP projections are 1/2 of what they were, Banks are unstable, States are unstable and Nations are unstable yet I am supposed to buy Netflix (NFLX) (we are short) with a p/e multiple of 71.50 or AMZN with a p/e of 74.50 (we want to be short) based primarily on my faith that the Great Bernanke in the sky would not let anything bad happen to my investments?

Well sorry, call me an atheist, call it blasphemy, but I do not have 100% faith in the Great Bernanke in the sky. I may have had 60% faith and I may have even had 70% faith but I DO NOT have 87% faith that Bernanke will overcome all those MASSIVE, SCARY, DANGEROUS Global obstacles that are still littering the investing landscape and take us to the promised land of S&P 1,500. Does that make me bearish or sensibly cautious? When 87% of the market is bullish, then sensibly cautious looks a lot like bearish, doesn’t it?

Perhaps that’s why people like the right Reverend Jim Cramer and his Cult of the MoMo Stocks irritate me lately. That man has FAITH! Well, either faith or he’s being paid off by fund managers to pimp their stocks so they can dump them on Jimmy’s fanatical followers while they pick up whatever he’s chasing people out of on the cheap – it’s hard to tell….

I was the lone bullish preacher in the wilderness in March of 2009 so I have seen the promised land of recovery and, unlike Dr. King, who said "I may not get there with you" and was, unfortunately, right, I fully intend to get there and I want us all to get there with our portfolios intact so we will continue to hedge the market following the sound policy advocated by Ronald Reagan when dealing with the Russians, which was: "Trust — but verify."

I pointed out on the first trading day of 2011 that we expected January to be heavily manipulated right up to expiration. Assuming Lloyd and Co. were lazy and using the same Alpha 2 Bot program they ran last January, we were looking for a 300 point run that tops out at 11,850 on the Dow and 1,285 on the S&P and we hit goal on the S&P yesterday, to the penny of where I said we’d be on Jan 3rd – trusted and verified. Now we will see how the next 7 market sessions play out into expiration day. If we pop higher – we’re off the pattern and we’ll have to consider leaving the 13%, shouting hallelujah and joining the crowd but, if we flatline or fail to hold – then you can expect the first Member Portfolio of 2011 to be a bearish one!’

Jobless claims jump, wholesale food costs surge Reuters | U.S. jobless claims jumped to their highest level since October last week while food and energy costs lifted producer prices in December.

S&P, Moody’s Warn On U.S. Credit Rating Two leading credit rating companies have cautioned the U.S. on its credit rating, expressing concern over a deteriorating fiscal situation that they say needs correction.

‘Burst banks flood world as banksters sell water to people’ Max Keiser looks at all the scandal behind the financial news headlines.

Corporate Media Portrays Loughner as Gold and Silver Advocate Chadwick Matlin, a guest contributor writing for Reuters, attempts to connect Jared Lee Loughner to the growing movement for sound money in the United States.

The Looming Threat of National Debt As the United States hurtles closer to the 100% debt to GDP mark—95.5% as of today—it becomes important to assess whether unsustainable national debt will be a chronic problem to plague the United States for generations to come.

14 Eye Opening Statistics Which Reveal Just How Dramatically The U.S. Economy Has Collapsed Since 2007 Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago. ‘The Economic Collapse Jan 10, 2011

’Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago. Back in 2007, unemployment was very low, good jobs were much easier to get, far fewer Americans were living in poverty or enrolled in welfare programs and government finances were in much better shape. Of course most of this prosperity was fueled by massive amounts of debt, but at least times were better. Unfortunately, things have really deteriorated over the last several years. Since 2007, unemployment has skyrocketed, foreclosures have set new all-time records, personal bankruptcies have soared and U.S. government debt has gotten completely and totally out of control. Poll after poll has shown that Americans are now far less optimistic about the future than they were in 2007. It is almost as if the past few years have literally sucked the hope out of millions upon millions of Americans.

Sadly, our economic situation is continually getting worse. Every month the United States loses more factories. Every month the United States loses more jobs. Every month the collective wealth of U.S. citizens continues to decline. Every month the federal government goes into even more debt. Every month state and local governments go into even more debt.

Unfortunately, things are going to get even worse in the years ahead. Right now we look back on 2005, 2006 and 2007 as “good times”, but in a few years we will look back on 2010 and 2011 as “good times”.

We are in the midst of a long-term economic decline, and the very bad economic choices that we have been making as a nation for decades are now starting to really catch up with us.

So as horrible as you may think that things are now, just keep in mind that things are going to continue to deteriorate in the years ahead.

But for the moment, let us remember how far we have fallen over the past few years. The following are 14 eye opening statistics which reveal just how dramatically the U.S. economy has collapsed since 2007….

#1 In November 2007, the official U.S. unemployment rate was just 4.7 percent. Today, the official U.S. unemployment rate is 9.4 percent.

#2 In November 2007, 18.8% of unemployed Americans had been out of work for 27 weeks or longer. Today that percentage is up to 41.9%.

#3 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#4 Nearly 10 million Americans now receive unemployment insurance, whichis almost four times as many as were receiving it back in 2007.

#5 More than half of the U.S. labor force (55 percent) has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers” since the “recession” began in December 2007.

#6 According to one analysis, the United States has lost a total of approximately 10.5 million jobs since 2007.

#7 As 2007 began, only 26 million Americans were on food stamps. Today, an all-time record of 43.2 million Americans are enrolled in the food stamp program.

#8 In 2007, the U.S. government held a total of $725 billion in mortgage debt. As of the middle of 2010, the U.S. government held a total of $5.148 trillion in mortgage debt.

#9 In the year prior to the “official” beginning of the most recent recession in 2007, the IRS filed just 684,000 tax liens against U.S. taxpayers. During 2010, the IRS filed over a million tax liens against U.S. taxpayers.

#10 From the year 2000 through the year 2007, there were 27 bank failures in the United States. From 2008 through 2010, there were 314 bank failures in the United States.

#11 According to the U.S. Department of Housing and Urban Development, the number of U.S. families with children living in homeless sheltersincreased from 131,000 to 170,000 between 2007 and 2009.

#12 In 2007, one poll found that 43 percent of Americans were living “paycheck to paycheck”. Sadly, according to a survey released very close to the end of 2010, approximately 55 percent of all Americans are now living paycheck to paycheck.

#13 In 2007, the “official” federal budget deficit was just 161 billion dollars. In 2010, the “official” federal budget deficit was approximately 1.3 trillion dollars.

#14 As 2007 began, the U.S. national debt was just under 8.7 trillion dollars. Today, the U.S. national debt has just surpassed 14 trillion dollars and it continues to soar into the stratosphere.

So is there any hope that we can turn all of this around?

Unfortunately, the massive amount of debt that we have piled up as a society over the last several decades has made that impossible.

If you add up all forms of debt (government debt, business debt, individual debt), it comes to approximately 360 percent of GDP. It is the biggest debt bubble in the history of the world.

If the federal government and our state governments stop borrowing and spending so much money, our economy would collapse. But if they keep borrowing and spending so much money they will continually make the eventual economic collapse even worse.

We are in the terminal stages of the most horrific debt spiral the world has ever seen, and when the debt spiral gets stopped the house of cards is going to finally come down for good.

So enjoy these times while you still have them. Yes, today is not nearly as prosperous as 2007 was, but today is most definitely a whole lot better than 2015 or 2020 is going to be.

Sadly, we could have avoided this financial disaster completely if only we had listened more carefully to those that founded this nation. Once upon a time, Thomas Jefferson said the following….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.’

Tipping Point: 25 Signs That The Coming Financial Collapse Is Now Closer Then Ever The financial collapse that so many of us have been anticipating is seemingly closer then ever. Over the past several weeks, there have been a host of ominous signs for the U.S. economy.

The Economic Collapse
Dec 17, 2010

The financial collapse that so many of us have been anticipating is seemingly closer then ever. Over the past several weeks, there have been a host of ominous signs for the U.S. economy. Yields on U.S. Treasuries have moved up rapidly and Moody’s is publicly warning that it may have to cut the rating on U.S. government debt soon. Mortgage rates are also moving up aggressively. The euro and the U.S. dollar both look incredibly shaky. Jobs continue to be shipped out of the United States at a blistering pace as our politicians stand by and do nothing. Confidence in U.S. government debt around the globe continues to decline. State and local governments that are drowning in debt across the United States are savagely cutting back on even essential social services and are coming up with increasingly “creative” ways of getting more money out of all of us. Meanwhile, tremor after tremor continues to strike the world financial system. So does this mean that we have almost reached a tipping point? Is the world on the verge of a major financial collapse?

Let’s hope not, but with each passing week the financial news just seems to get eve worse. Not only is U.S. government debt spinning wildly toward a breaking point, but many U.S. states (such as California) are in such horrific financial condition that they are beginning to resemble banana republics.

But it is not just the United States that is in trouble. Nightmarish debt problems in Greece, Spain, Portugal, Ireland, Italy, Belgium and several other European nations threaten to crash the euro at any time. In fact, many economists are now openly debating which will collapse first – the euro or the U.S. dollar.

Sadly, this is the inevitable result of constructing a global financial system on debt. All debt bubbles eventually collapse. Currently we are living in the biggest debt bubble in the history of the world, and when this one bursts it is going to be a disaster of truly historic proportions.

So will we reach a tipping point soon? Well, the following are 25 signs that the financial collapse is rapidly getting closer….

#1 The official U.S. unemployment rate has not been beneath 9 percent since April 2009.

#2 According to the U.S. Census Bureau, there are currently 6.3 million vacant homes in the United States that are either for sale or for rent.

#3 It is being projected that the U.S. trade deficit with China could hit 270 billion dollars for the entire year of 2010.

#4 Back in 2000, 7.2 percent of blue collar workers were either unemployed or underemployed. Today that figure is up to 19.5 percent.

#5 The Chinese government has accumulated approximately $2.65 trillion in total foreign exchange reserves. They have drained this wealth from the economies of other nations (such as the United States) and instead of reinvesting all of it they are just sitting on much of it. This is creating tremendous imbalances in the global economy.

#6 Since the year 2000, we have lost 10% of our middle class jobs. In the year 2000 there were approximately 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.

#7 The United States now employs about the same number of people in manufacturing as it did back in 1940. Considering the fact that we had 132 million people living in this country in 1940 and that we have well over 300 million people living in this country today, that is a very sobering statistic.

#8 According to CoreLogic, U.S. housing prices have now declined for three months in a row.

#9 The average rate on a 30 year fixed rate mortgage soared 11 basis points just this past week. As mortgage rates continue to push higher it is going to make it even more difficult for American families to afford homes.

#10 22.5 percent of all residential mortgages in the United States were in negative equity as of the end of the third quarter of 2010.

#11 The U.S. monetary base has more than doubled since the beginning of the most recent recession.

#12 U.S. Treasury yields have been rising steadily during the 4th quarter of 2010 and recently hit a six-month high.

#13 Incoming governor Jerry Brown is scrambling to find $29 billion more to cut from the California state budget. The following quote from Brown about the desperate condition of California state finances is not going to do much to inspire confidence in California’s financial situation around the globe….

“We’ve been living in fantasy land. It is much worse than I thought. I’m shocked.”

#14 24.3 percent of the residents of El Centro, California are currently unemployed.

#15 The average home in Merced, California has declined in value by 63 percent over the past four years.

#16 Detroit Mayor Dave Bing has come up with a new way to save money. He wants to cut 20 percent of Detroit off from essential social services such as road repairs, police patrols, functioning street lights and garbage collection.

#17 The second most dangerous city in the United States – Camden, New Jersey – is about to lay off about half its police in a desperate attempt to save money.

#18 In 2010, 55 percent of Americans between the ages of 60 and 64 were in the labor market. Ten years ago, that number was just 47 percent. More older Americans than ever find that they have to keep working just to survive.

#19 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

#20 The U.S. government budget deficit increased to a whopping $150.4 billion last month, which represented the biggest November budget deficit on record.

#21 The U.S. government is somehow going to have to roll over existing debt and finance new debt that is equivalent to 27.8 percent of GDP in 2011.

#22 The United States had been the leading consumer of energy on the globe for about 100 years, but this past summer China took over the number one spot.

#23 According to an absolutely stunning new poll, 40 percent of all U.S. doctors plan to bail out of the profession over the next three years.

#24 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#25 All over the United States, local governments have begun instituting “police response fees”. For example, New York Mayor Michael Bloomberg has come up with a plan under which a fee of $365 would be charged if police are called to respond to an automobile accident where no injuries are involved. If there are injuries as a result of the crash that is going to cost extra.

16 Nightmarish Economic Trends To Watch Carefully In 2011 The American Dream Dec 15, 2010 ‘If you only watch the “economic pundits” on television, it can be very confusing to figure out exactly what is happening with the U.S. economy. One pundit will pull out a couple statistics that got a little bit better over the past month and claim that we have entered a time of solid recovery. Another pundit will pull out a couple statistics that got a little worse over the past month and claim that we are headed for trouble. So what is the truth? Well, if you really want to get a clear idea of what is really going on you have to look at the long-term trends. There are some economic trends which just keep getting worse year after year after year, and it is those trends that tell the real story of the decline of our economic system.

As you examine the long-term trends, you quickly come to realize that the U.S. is trapped in an endless spiral of debt, the middle class is being wiped out, the U.S. dollar is being destroyed and America is rapidly becoming a post-industrial wasteland.

Posted below are 16 nightmarish economic trends to watch carefully in 2011. It is becoming exceedingly apparent that unless something is done rapidly we are heading for an economic collapse of unprecedented magnitude….

#1 Do you want to see something scary? Just check out the chart below. Since the beginning of the economic downturn, the U.S. monetary base has more than doubled. But don’t worry – Federal Reserve Chairman Ben Bernanke has promised us that this could never cause inflation. In fact, Bernanke says that we need to inject even more dollars into the economy. So if you are alarmed by the chart below, you are just being irrational according to Bernanke….

[chart]

#2 Thousands of our factories, millions of our jobs and hundreds of billions of dollars of our national wealth continue to be shipped overseas. In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year. In the month of August alone, the U.S. trade deficit with China was over 28 billion dollars. Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

#3 The United States is rapidly becoming a post-industrial wasteland. Back in 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent and it continues to fall. Sadly, the truth is that America is being deindustrialized. As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#4 The number of Americans that have been out of work for an extended period of time has absolutely exploded over the last few years. As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#5 The middle class continues to be squeezed out of existence. According to a poll taken in 2009, 61 percent of Americans ”always or usually” live paycheck to paycheck. That was up substantially from 49 percent in 2008 and 43 percent in 2007.

#6 The number of Americans living in poverty is absolutely skyrocketing. 42.9 million Americans are now on food stamps, and one out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government. Unfortunately, many of those that have been hardest hit by this economic downturn have been children. According to one new study, approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.

#7 Many American families have been pushed beyond the breaking point during this economic downturn. Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008. The final number for 2010 is expected to be even higher.

#8 The U.S. real estate market continues to stagnate. During the third quarter of 2010, 67 percent of mortgages in Nevada were “underwater”, 49 percent of mortgages in Arizona were “underwater” and 46 percent of mortgages in Florida were “underwater”. So what happens if home prices go down even more?

#9 More elderly Americans than ever are being forced to put off retirement and continue working. In 2010, 55 percent of Americans between the ages of 60 and 64 were in the labor market. Ten years ago, that number was just 47 percent. Unfortunately, it looks like this problem will only get worse in the years ahead. In America today, approximately half of all workers have less than $2000 saved up for retirement.

#10 In the United States today, there are simply far too many retirees and not nearly enough workers to support them. Back in 1950 each retiree’s Social Security benefit was paid for by 16 workers. Today, each retiree’s Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projected that there will be approximately two workers for each retiree.

#11 Financial assets continue to become concentrated in fewer and fewer hands. For example, the “big four” U.S. banks (Citigroup, JPMorgan Chase, Bank of America and Wells Fargo) had approximately 22 percent of all deposits in FDIC-insured institutions back in 2000. As of the middle of 2009 that figure was up to 39 percent.

#12 The Federal Reserve has been destroying the value of the U.S. dollar for decades. Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power. An item that cost $20.00 in 1970 would cost you $112.35 today. An item that cost $20.00 in 1913 would cost you $440.33 today.

#13 Commodity prices continue to soar into the stratosphere. Ten years ago, the price of a barrel of oil hovered around 20 to 30 dollars most of the time. Today, the price of oil is rapidly closing in on 100 dollars a barrel and there are now fears that it could soon go much higher than that.

#14 Federal government spending is completely and totally out of control. The U.S. government budget deficit increased to a whopping $150.4 billion last month, which represented the biggest November deficit on record. But our politicians can’t seem to break their addiction to debt. In fact, Democrats are trying to ram through a 1,924 page, 1.1 trillion dollar spending bill in the final days of the lame-duck session of Congress before the Republicans take control of the House of Representatives next year.

#15 The U.S. national debt is rapidly closing in on 14 trillion dollars. It is more than 13 times larger than it was just 30 short years ago. According to an official U.S. Treasury Department report to Congress, the U.S. national debt is projected to climb to an estimated $19.6 trillion by 2015.

#16 Unfortunately, the official government numbers grossly understate the horrific nature of the crisis we are facing. John Williams of Shadow Government Statistics has calculated that if the federal government would have used GAAP accounting standards to measure the federal budget deficit for 2009, it would have been approximately 8.8 trillion dollars. Not only that, but John Williams now says that U.S. government debt is so wildly out of control that it is mathematically impossible for us to “grow” our way out of it….

The government’s finances not only are out of control, but the actual deficit is not containable. Put into perspective, if the government were to raise taxes so as to seize 100% of all wages, salaries and corporate profits, it still would be showing an annual deficit using GAAP accounting on a consistent basis. In like manner, given current revenues, if it stopped spending every penny (including defense and homeland security) other than for Social Security and Medicare obligations, the government still would be showing an annual deficit. Further, the U.S. has no potential way to grow out of this shortfall.

The more one examines the U.S. economic situation, the more depressing it becomes. The U.S. financial system is trapped inside a horrific debt spiral and we are headed straight for economic oblivion.

If our leaders attempt to interrupt the debt spiral it will plunge our economy into a depression. If our leaders attempt to keep the debt spiral going for several more years it will just make the eventual crash even worse. Either way, we are headed for a financial implosion that will be truly historic.

The debt-fueled good times that we have been enjoying for the last several decades are rapidly coming to an end. Unfortunately for the tens of millions of Americans that are already suffering, our economic problems are only going to get worse in the years ahead.’

Jobless Recovery?: 25 Unemployment Statistics That Are Almost Too Depressing To Read ‘… Unemployment is up again! That’s right – even though Wall Street is swimming in cash and the Obama administration is declaring that “the recession is over”, the U.S. unemployment rate has gone even higher. So are you enjoying the jobless recovery? Economic Collapse Blog Dec 4, 2010 ‘Guess what? Unemployment is up again! That’s right – even though Wall Street is swimming in cash and the Obama administration is declaring that “the recession is over”, the U.S. unemployment rate has gone even higher ... Times are really, really tough and unfortunately the long-term outlook is very bleak. We should have compassion on those who are out of work right now, because soon many of us may join them.

The following are 25 unemployment statistics that are almost too depressing to read….

#1 According to the Bureau of Labor Statistics, the U.S. unemployment rate for November was 9.8 percent. This was up from 9.6 percent in October, and it continues a trend of depressingly high unemployment rates. The official unemployment number has been at 9.5 percent or higher for well over a year at this point.

#2 In November 2006, the “official” U.S. unemployment rate was just 4.5 percent.

#3 Most economists had been expecting the U.S. economy to add about 150,000 jobs in November. Instead, it only added 39,000.

#4 In the United States today, there are over 15 million people who are “officially” considered to be unemployed for statistical purposes. But everyone knows that the “real” number is even much larger than that.

#5 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#6 The number of “persons not in the labor force” in the United States recently set another new all-time record.

#7 It now takes the average unemployed American over 33 weeks to find a job.

#8 When you throw in “discouraged workers” and “underemployed workers”, the “real” unemployment rate in the state of California is actually about 22 percent.

#9 In America today there are not nearly enough jobs for everyone. In fact, there are now approximately 5 unemployed Americans for every single job opening.

#10 According to The New York Times, Americans that have been unemployed for five weeks or less are three times more likely to find a new job in the coming month than Americans that have been unemployed for over a year.

#11 The U.S. economy would need to create 235,120 new jobs a month to get the unemployment rate down to pre-recession levels by 2016. Does anyone think that there is even a prayer that is going to happen?

#12 There are 9 million Americans that are working part-time for “economic reasons”. In other words, those Americans would gladly take full-time jobs if they could get them, but all they have been able to find is part-time work.

#13 In 2009, total wages, median wages, and average wages all declined in the United States.

#14 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#15 The United States has lost at least 7.5 million jobs since the recession began.

#16 Today, only about 40 percent of Ford Motor Company’s 178,000 workers are employed in North America, and a big percentage of those jobs are in Canada and Mexico.

#17 In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.

#18 Earlier this year, one poll found that 28% of all American households had at least one member that was looking for a full-time job.

#19 In the United States today, over 18,000 parking lot attendants have college degrees.

#20 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#21 As the employment situation continues to stagnate, millions of American families have decided to cut back on things such as insurance coverage. For example, the percentage of American households that have life insurance coverage is at its lowest level in 50 years.

#22 Unless Congress acts, and there is no indication that is going to happen, approximately 2 million Americans will stop receiving unemployment checks over the next couple of months.

#23 A poll that was released by the Pew Research Center back in June discovered that an astounding 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the economic downturn began.

#24 According to Richard McCormack, the United States has lost over 42,000 factories (and counting) since 2001.

#25 In the United States today, 317,000 waiters and waitresses have college degrees.

But this is what we get for creating the biggest debt bubble in the history of the world. For decades we have been digging a deeper hole for ourselves by going into increasingly larger amounts of debt. In America today, our entire economy is based on debt. Even our money is debt. We were fools if we ever thought this could go on forever. Just think about it. Have you ever gone out and run up a bunch of debt? It can be a lot of fun sitting behind the wheel of a new car, running your credit cards up to the limit and buying a beautiful big house that you cannot afford. But in the end what happens? It always catches up with you. Well, our collective debt is starting to catch up with us. There is a sea of red ink on every level of American society. It is only a matter of time before it destroys our economy. IF YOU THINK THAT THINGS ARE BAD NOW, JUST WAIT. THINGS ARE GOING TO GET A WHOLE LOT WORSE. A HORRIFIC ECONOMIC COLLAPSE IS COMING, AND IT IS GOING TO BE VERY, VERY PAINFUL.’

Howard Davidowitz on the Economy: "Here Are the Numbers ... WE'RE BROKE!" 11-25-10 ‘The U.S. economy "is a complete disaster," Howard Davidowitz declared here in July, the most recent in a string of dire predictions from Tech Ticker's most entertaining guest.On the eve of Thanksgiving, I asked Davidowitz if he had any regrets, or was ready to throw in the towel given recent signs of economic revival. Are you kidding me? "Here are the numbers...we're broke," Davidowitz declares, noting the U.S. government goes $5 billion deeper into debt every day and is facing $1 trillion-plus annual deficits for the next decade. "In other words, we're bankrupt."As with the economy, Davidowitz is unwaveringly consistent in his views on President Obama, calling him "deranged, dysfunctional and discredited."Results of the midterm election show "the people of this country think we are in a catastrophe," he says. "I'm with them."Check the accompanying video for more of Howard's unfettered opinions and stay tuned for additional clips from this interview. And...Happy Thanksgiving! Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com’

Timid Tuesday: Is it Safe? Davis ‘… This is how we pay off our current debts and I think bondholders are simply happy to get anything out of a country that admits it owes $15Tn (1/4 of global GDP) but probably owes closer to $60Tn (entire global GDP) in the form of unfunded liabilities. The funniest thing about this (and you have to laugh) is to see Conservative pundits get on TV and talk about how we need to cut $100Bn worth of discretionary spending to "fix" this (while continuing to spend $1Tn on the military and $1Tn on tax cuts for the top 1% each year). There is no fixing this and even a Republican said you can’t fool all of the people all of the time. THIS HOUSE OF CARDS IS TEETERING FOLKS – PLEASE BE CAREFUL OUT THERE! ‘

17 Things Worrying Investors Lloyd's Wall of Worry

Worry Count: 17


CHINA: 1,330,044,605 people can’t be wrong.

The PIIGS: Fasten your seatbelts. It’s gonna be a long, bumpy, expensive, weird, (insert your own adjective here) freak show of a ride.

CALIFORNIA AND THE OTHER 49 STATES: Not yet as dire as “The PIIGS”. Might I suggest the classier moniker of “The Prosciuttos” for the American basket-case states?

QE II: Gobble?

U.S. ECONOMY: The “Punky Brewster” of the global economic landscape.

UNEMPLOYMENT: Only thing worse than losing your job, losing your unemployment check. At least there’s the holiday season to cheer everyone up (read: heavy sarcasm).

TAXES: Praying to the Financial Market Gods that we don’t have another TARP-like vote fiasco.

OBAMA ADMINISTRATION PART II: Still two years before the Pres. election and the peanut gallery is already pleading for a Hail Mary Pass to get them back in the game.

HFT: Instead of beating up these liquidity supplying traders, let’s honor them with their very own stock exchange. But wait -- with no retail saps to pick-off they will never get that Day 1 opening bell tick. Perfect.

XMAS 2010: As my professor friend Nick says, “Nowadays Americans are dining off of two menus – The Million Dollar and the $0.99 Cent.” And both are pissed about it.

CURRENCIES: Poor Mr. Greenback. Does someone need a hug?

HOUSING CRISIS: Price Stabilization – Are we there yet? Just a little bit more. Are we there yet? Just a little bit more. Are we there yet? Just a little bit more….

INFLATION/DEFLATION: Fed Chief Ben B. comes out swinging from his heels in defense of inflation promotion. Don’t punch yourself out as this one is likely to go the distance.

COMMODITIES: Corrected but still sky high; fortunately these prices are only affecting core, basic, life-sustaining necessities and sparing our electronic gadgets and plus-sized SUVs. Whew!

INSIDER TRADING: Another black eye for Hedge Funds. I estimate that makes black eye number 6,597.

INTEREST RATES: South Korea and China slowly turning up the dial to “11”. On the other hand the U.S. has removed the dial altogether. This never ends well….

NORTH KOREA: Here we go again.

Consumer confidence down, LiveLeak.com - Loonie closes above U.S. dollar … dollar for first time closes below parity on Canadian loonie … hey, hey, hey … 'Huge' stock decline — but not yet MarketWatch - Brimelow ‘Commentary: Adens … ‘mega trend’ looks grim … The Adens expect a hyperinflationary collapse … ‘ Oh come on! Manipulated dollar decline with inflated earnings, stock prices thereby, etc., … we’ve seen this all before … the last few crashes … Jobless rate jumps to 9.8% as hiring slows (Washington Post) [ The reality is not a mystery! The nation’s been thrown under the bus for the greater good (wealth) of the very few (frauds on wall street, etc.); wall street giving out record bonuses from their accomplished fraud (with no-recession b.s. bernanke help) of $144 BILLION: Come on! This is gettin’ even more downright ridiculous (if that’s even possible)! Pending home foreclosure / distress sales up, oil prices (and oil stocks) up, debased dollar down, plus a little familiar ‘better than expected’ thrown in along with prospects of a ‘no-recession bernanke’ market-frothing bull session on 60 minutes and, voila, suckers’ rally into the close to keep the suckers suckered! What’s good for the frauds on wall street is bad for just about everyone else which includes the vast majority of people and businesses, domestically and globally, as current dollar manipulation / debasement ultimately results in higher costs and loss of purchasing power (ie., oil, etc.). Clearly, this is one of those fraudulent wealth transfers to the frauds on wall street et als which will ultimately be paid for by those who least are in a position to afford it, courtesy of the ever more worthless Weimar dollar, etc., inflating earnings, eps, lowering p/e multiples, etc., see infra. This is an especially great time to sell / take profits while you can since there's much worse to come! Previous: Rosy numbers on consumer sentiment, unemployment (far better than private forecasts) from the government prior to the holiday so-called ‘shop till you drop’? How can anyone believe anything they say? Najerian interviewed by Motek chimes in with the reason for good retail cheer; viz., people have stopped paying their mortgages and are using the funds to purchase retail goods; while Davidowitz adds that with record numbers of americans on food stamps, real unemployment at 17+, and wall street giving out record bonuses from their accomplished fraud (with no-recession b.s. bernanke help) of $144 BILLION … the high end stores / jewelers will do well … daaaaah! And, with insiders and wall street frauds selling into the bubble as preceded last crash, this is an especially great opportunity to sell / take profits! Suckers’ rally on light volume, full moon, and government complicity (false data / reports) to keep suckers suckered (easy for the wall street frauds to do with just a mouse click / push of the button – and, they know all those technical trade lines that are easy to program in this current phase of the scam/fraud with the debased dollar). Keep in mind, the totally mindless blather from the ‘cottage industries’ of and fraudulent wall street itself in talking up lower P/E multiples when the same is a direct result of the debasement of the dollar and the consequent manipulation / translation (not real, see Davis, infra) which preceded the financial crisis / last crash. Unemployment, trade, deficit, etc., numbers continue 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) [ Davis: ‘… all profits are inflated by 10% (from falling, debased dollar) and that 10% is the E that gets divided from the P and gives us a much better price/multiple to hang our hats on and that gets investors to BUYBUYBUY …’ The bull market that never was / were beyond wall street b.s. when measured in gold ] This is a great opportunity to sell / take profits (these lower dollar, hyperinflationary currency manipulations / translations to froth paper stocks will end quite badly as in last crash)! This is a global depression. This is a secular bear market in a global depression. The past up moves were manipulated bull (s***) cycles (at best) 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 ‘programmed computerized high-frequency churn and earn pass the hot potato scam / fraud as in prior crashes ( widely reported, high-frequency trading routinely accounts for more than 50% of daily U.S. equity trading volume and regularly approaches 70%. )’. 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 Stock Market's Long Decline Has Begun Smith ]

(1-13-11) Dow 11,731 -24 Nasdaq 2,735 -2 S&P 500 1,283 -2 [CLOSE- OIL $92.15 (-54% for year 2008) (RECORD TRADING HIGH $147.27) GAS $3.00 (reg. gas in LAND OF FRUITS AND NUTS $3.20 REG./ $3.29 MID-GRADE/ $3.39 PREM./ $3.79 DIESEL) / GOLD $1,387 (+24% for year 2009) / SILVER $29.26 (+47% for year 2009) PLATINUM $1,809 (+56% for year 2009) / DOLLAR= .74 EURO, 82 YEN, .63 POUND STERLING, ETC. (How low can you go - LOWER)/ http://www.federalreserve.gov/releases/h15/update 10 YR NOTE YIELD 3.30% …..… 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

Rand Paul: Reaction To Arizona Shooting Manufactured Out Of Rahm Emanuel Playbook Steve Watson | A serious crisis should never be allowed to go to waste.

The Tea Party Deception Paul Joseph Watson | Political scientist Joel Skousen lifts the lid on the hidden power that controls both parties.

Oklahoma Homeland Security’s Says ‘Controversial Debate’ Suspicious Behavior Jason Douglass | Oklahoma Office of Homeland Security has started a new initiative ‘Red Dirt Ready’ to induct neighbors into a neighborhood spy program.

Attempt by Obama Operatives to Turn Memorial Into Political Rally Backfires Kurt Nimmo | The creepy zombie-like Obama supporters we endured during the election returned in force and completely overshadowed any solemnity intended for the dead.

‘Stop. Think. Connect’ DHS Announces New Fear Agenda Jason Douglass | Cyber Security Coordinator announces a new PSA video challenge from Department of Homeland Security for the ‘Stop. Think. Connect’ campaign.

Rand Paul: Reaction To Arizona Shooting Manufactured Out Of Rahm Emanuel Playbook Kentucky Senator Rand Paul has hit out at politicians and those in the media that have attempted to use the tragic shooting in Arizona as a political point scoring exercise.

See Something, Say Something: Loughner Bought Bullets at Walmart In December of last year, DHS boss Janet Napolitano announced a government program with the participation of the slave goods trader Walmart to report terrorists and other miscreants.

Attempt by Obama Operatives to Turn Memorial Into Political Rally Backfires On Wednesday night in Tucson, Arizona, Obama and the Democrats disrespected the dead and turned a memorial into a cheap and tawdry political rally for the re-election campaign of Barry Obama.

Third gun control bill proposed since Tucson shootings High-profile gun violence has historically renewed legislative interest in the cause of gun control, and the shootings of twenty people in Tucson, Arizona is no exception — only this time, the measures face steeper hurdles than before.

The Tea Party Deception Joel Skousen, editor of World Affairs Brief, was the chairman of the Conservative National Committee in the 1980′s. In this exclusive video interview for Prison Planet.tv members, Skousen talks about the hidden power structure that controls politicians of both parties from behind the scenes, the nature of the manipulated press, the reality behind the tea party, and the ongoing conspiracy to create a one world dictatorship.

Political Hacks Still Seek To Exploit Shootings Before Bodies Are Buried Even a broken clock is right twice a day, and just for a change President Obama got was correct in his speech last night when he said that people should stop exploiting the Tucson tragedy as a political opportunity to point the finger.

New Jersey Congressman Calls for Federal Reserve Audit [ They should audit corrupt, mob infested jersey as well. ] Recently while visiting Washington D.C., members of the South New Jersey Tyranny Response Team had the opportunity to interview the Congressman for New Jersey’s 2nd District, Frank A. LoBiondo.

Housing Slump Worse than the Great Depression The Zillow Home Value Index has now fallen 26% since its peak in June 2006. That’s more than the 25.9% decline in the Depression-era years between 1928 and 1933.

Mexico drug wars have killed 35,000 people in four years A total of 34,612 people have died in drug-related killings in Mexico in the four years since President Felipe Calderón declared an offensive against cartels shortly after taking office, officials said tonight.

Riots rage in Chile as gas price hike fuels flames of anger Riots are raging in southern Chile with two women killed and four others injured. Protesters are out in anger at gas price increases, which are reportedly due to troubles experienced by the state-owned petroleum company. 21 people have been arrested. With gas one of the country’s main imports, the price rise counters promises made by the country’s President Pinera.

US military chief predicts ‘more violence’ in Afghanistan in 2011 The top US military officer said Wednesday he sees an increase in bloodshed in Afghanistan as allied forces step up their offensive against the Taliban.

New Chinese arms aimed at US: military chief China’s new weapons programs, including the J-20 stealth aircraft, appear to be directed against the UnitedStates, the highest-ranking USmilitary officer said Wednesday.

Drudgereport: Jobless Claims Jump, Wholesale Food Costs Surge...
EYES ON OPEC AS OIL NEARS $100
House set to vote on healthcare repeal...
Tunisian Rioters Overwhelm Police Near Capital...
FT: What chance a US default?
S&P, MOODY'S Warn On Credit Rating...
CITI still too big after 'ad hoc' bailout...
WILL THE FED NEED A BAILOUT?
Banks repossess 1 million homes in 2010...
May Jump 20% in 2011...
Biden arrives in Baghdad 'to celebrate'... Lobotomy Joe’s arrival as Violence kills 3, wounds 14...
Wrestling Coach Put on Leave for Insulting Obama, Challenging Him to Fight...
Politician Wants License Plates -- For Bikes…
School Hands Out Misdemeanor Tickets To Elementary School Students... [Data shows the tickets can cost a family as much as $500. ]
81-Year-Old Woman Bodyslammed, Mugged Inside NYC Subway Station -- By Another Woman...
CHICAGOLAND: Gang rape of girl, 14, recorded on cellphone...

Contours of a large and lasting American presence in Iraq starting to take shape (Washington Post) [ Wow! Sounds like a plan … though hardly embraced by all; viz; the vast majorities in Iraq, Afghanistan, and defacto bankrupt america are against this with dire prospective consequences to follow. U.S. Promises to be in Afghanistan Beyond 2014 [ Defacto bankrupt america can afford it! Riiiiight! Sounds like a plan … for enhanced heroin production, war profiteering, etc., benefiting the few to the detriment of the many. ]New York Times | Biden met with Karzai and promised a lasting American commitment to the country well beyond 2014, when NATO forces are scheduled to turn over security of the nation to Afghan forces. ]

Treasury secretary urges China to accelerate currency reform (Washington Post) [ Riiiiight! Well that sounds like something the Chinese will buy into, coming from defacto bankrupt america … sounds like a plan … for fantasyland! ] Beijing’s policy is hampering U.S. competitiveness and harming the Chinese economy, Geithner says.

Economic recovery is on track (Washington Post) [ What? That (as per fed) no-recession recession (depression) thing’s over. Certainly for the frauds on wall street who caused the thing in the first place that’s true with the new bubble and at what now insurmountable cost (record $14 trillion plus debt – Faber: US will be using 30% of total tax revenues just to pay interest on the national debt within a few years … see, infra … )Fed's beige book reports gains in manufacturing and retail sectors. Housing industry remains weak.

E.U. seeks to expand bailout fund to calm markets (Washington Post) [Nyaradi The Sick Man Tries to Save the Terminally Ill ( I can’t recall the specific phrase, but applied here it goes something like this, ‘Japan with a debt to GDP ratio of 200% is going to save Europe, but who’s going to save Japan’. Let’s get real here as the u.s. house-building with decks, as in Titanics and reshuffled / rearranged deck chairs, of cards, as in ‘houses of cards’, becomes insanely ubiquitous worldwide and will systemically (now globally) end quite badly. This is an especially great opportunity to sell / take profits since there is much, much worse to come. ) Nyaradi ‘It was a quiet day yesterday for ETFs and stocks in world markets as most exchange traded funds recovered recent losses amid reduced tensions in Europe.Incredibly, Japan’s intent to buy European bonds was the catalyst for the more positive atmosphere in Europe, and as the title of this article suggests, this is truly the sick man trying to save the terminally ill…see infra… ’ ] Nations expand the scope of the euro-zone bailout fund, saying more support is necessary as investors worry about the prospects of Portugal and Spain.

ANALYSIS | Palin's 'blood libel' comment backfires Washington Post) [ God knows I’m no fan of sarah palin’s although I am constrained to admit that as a fan of Saturday Night Live, I do appreciate her contribution to comedic content in the show. That said, this new ‘tempest in a teapot’ of her own making is a bit overdone. After all, it should be common knowledge by now, to put it mildly, that she is quite dumb; and, like that burnt out, dumb, war criminal and moron, dumbya bush (see , ie., bushisms from bush the brain-damaged moron http://albertpeia.com/bushisms.htm), she also has trouble with words; more specifically, the meanings of words. But it is also true that wobama and his ilk have trouble with words and their meaning, particularly when those spoken words are measured against what he does, his ilk never seeming to discern the glaring difference … wobama the ‘b’ for b*** s***. Lamentably (by her) and unexpectedly for palin was her failure to fully understand ‘that jewish thing’ attached to the phrase and the tender sensibilities of those who previously have been among the ranks of what seems more and more to be a somewhat offbeat fanclub of sorts. Yeah, that ‘never hear the end of it’ jewish stereotype of paranoid sensibilities to religious / ethnic prejudice / slur behind some word, phrase, or even a sneeze (spielberg’s childhood memories) can wind up turning around and biting you in you’re a** ! Previously: Krauthammer: Beyond Ariz., a reckless charge (Washington Post) [ If it were only that simple; viz., a palin ( I’ve previously said I’m more concerned with her level of stupidity, dumb enough in an infantile way to prove she had gonads by pressing the button – never goin’ to happen, her being in that position), a beck, a bush, a wobama (Drudgereport: OBAMA FLASHBACK: 'If They Bring a Knife to the Fight, We Bring a Gun'... ), etc., there’d be hope for pervasively corrupt defacto bankrupt america. The fact is, the problem is inherent to america / americans themselves as I previously wrote here and reiterate: Will: Half-baked explanations for tragedy (Washington Post) [ Half-baked? Charlatans? The foregoing are in no short supply in defacto bankrupt, meaningfully lawless, pervasively corrupt, fraud prevalent america. See, for example, RICO case http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm . Moreover, Mr. Will as an oftimes apologist for war criminal, pervasively fraud-prone, defacto bankrupt, etc., america, with crime rates exceeding by far those of any other so-called civilized nations, might indeed find himself among those he’s so categorized. Among the last separate page sections to my website will be a somewhat detailed psychoanalytic evolutionary profile of the u.s. (one might ask who am I to do so which is fair comment to which I would reply, read it, or not, your choice). However, for the nonce, let me say that the it is no small coincidence that the 20^th century has been dubbed ‘the american century’. That the 20^th century has been considered the bloodiest is at once the natural concomitant of the foregoing reality. Keeping in mind the so-called ‘selective’ processes in both insurance (adverse) and evolutionary (Darwinian) terms, and as well, the psychology of it all from a behavioral perspective, america has indeed evolved. From the genocide of indigenous populations, to outlandish propaganda in support of same (ie., that ‘manifest destiny’ balderdash with overtones of religiosity spoonfed since elementary school, etc.), to contrived conflict / war, such, euphemistically bad behavior has been reinforced, some of which conditioning not always purposeful, ie., the ever greater frauds perpetrated on wall street for which there have been in large part no real punitive consequences to the perpetrators; but, to the contrary, great financial rewards though substantially detrimental to the majority. Despite the surface appeal, that oft asserted ‘blue-blood’ distinction doesn’t pass muster. Aside from the few seeking seeking religious freedom (ie., Puritans among some others), most then new americans were such disaffected rejects of their former homelands that desperation at best was motivation for travel to the wilds of the ‘so-called new world’ as opposed to intelligent, rational choice; criminals, mentally ill, the not-so-bright but ruthless populating the new nation in disparate numbers toward the ends consistent with greed and common criminality, corruption, and venality. As of the age of the dinosaurs, the american century has passed into the annals of a history replete with self-generating terrorism within and without (that blowback thing). DRUDGEREPORT: NATION SHOCKED: CONGRESSWOMAN SHOT IN TUCSON
]

The Sick Man Tries to Save the Terminally Ill [ I can’t recall the specific phrase, but applied here it goes something like this, ‘Japan with a debt to GDP ratio of 200% is going to save Europe, but who’s going to save Japan’. Let’s get real here as the u.s. house-building with decks, as in Titanics and reshuffled / rearranged deck chairs, of cards, as in ‘houses of cards’, becomes insanely ubiquitous worldwide and will systemically (now globally) end quite badly. This is an especially great opportunity to sell / take profits since there is much, much worse to come. ] Nyaradi ‘It was a quiet day yesterday for ETFs and stocks in world markets as most exchange traded funds recovered recent losses amid reduced tensions in Europe.

Incredibly, Japan’s intent to buy European bonds was the catalyst for the more positive atmosphere in Europe, and as the title of this article suggests, this is truly the sick man trying to save the terminally ill.

The soap opera in Europe, like every soap opera, is getting boring. It starts with rising interest rates and credit default swap rates which is met by the concerned government proclaiming that they’re totally solvent and will never need a bailout which ends up to be exactly what happens.

Portugal will be selling 10 year notes today, Wednesday, and its ten year debt has stood largely above 7% in recent days. When rates in Greece and Ireland hit these levels, bailouts came within days in both cases. Italy and Spain go to the bond trough this week, as well, and so it will be an active few days in Europe.

Bottom line; get ready for an ECB bailout of Portugal coming soon, possibly this week.

At home, we move into earnings season, Illinois is moving towards an income tax increase to deal with its budget deficit while Governor Brown in California begins to sell his austerity plans.

Daily Moves for Major ETFs:

Dow Jones Industrials: (NYSEArca: DIA) +0.30%

Russell 2000: (NYSEArca: IWM) -0.47%

NASDAQ 100: (NasdaqGM: QQQQ) +0.41%

S&P 500 Index: (NYSEArca: SPY) +0.37%

MSCI Emerging Markets:(NYSEArca: EEM) +1.06%

MSCI China (NYSEArca: FXI) +1.13%

Gold (NYSEArca: GLD) +0.59%

7-10 Year Treasuries: (NYSEArca: IEF) -0.39%

20+ Year Treasuries: (NYSEArca: TLT) -0.56%

VIX -3.71%

U.S. Dollar (NYSE:Arca: (NYSE:Arca: UUP) -0.08%

The major indexes remain overvalued and overbought on a technical and fundamental basis and so Wall Street Sector Selector remains in “Yellow Flag” status, expecting choppy to lower prices ahead.’

Lunch with Marc Faber: Predictions and Insights Sinn – ‘Tuesday I had the pleasure of meeting Marc Faber for the first time and I thoroughly enjoyed his detailed, logical, and smooth-flowing presentation. Faber is good on television, but he is much better live as he is more open with regard to his disdain for Bernanke, Greenspan, Krugman et al. He even ended the Q&A portion by saying ‘I hope you have a better idea of what to do with your wealth, but what you do with your client’s wealth is another story’. Below I have listed the main concepts that Faber’s presentation impressed on my thinking:

Key takeaways from Marc Faber Luncheon- January 11, 2011

The Eurozone is worse off than even the U.S. at this point because they lack a single fiscal authority. It is difficult to implement a federal/super-sovereign approach in the Eurozone due to challenge of implementing a single taxing authority with supervisory and enforcement powers.

When asked about the possibility of dividing the Eurozone into a north and south euro, he dismissed this idea as being very unlikely.

The most likely path forward for the Eurozone will be for the ECB to continue to monetize the sovereign debt of the weaker Member States. He also stressed the point that the ultimate solution will be highly political and unpredictable and that there will be plenty of ‘noise’ on the way to the final outcome.

Faber is concerned about a slowdown in China and India over the next 3-6 months. China currently has negative real interest rates and may need to raise rates over 100 basis points in order to bring the real interest rate back near zero. He also mentioned that he had recently reduced his investment exposure to China and India.

Faber seemed most bullish on the price of oil and pointed out that Chinese consumers consume only 2 barrels of oil per capita/year while US consumers consume over 20 barrels of oil per capita/year.

Faber pointed out how under leveraged Asian consumers are compared to Western European/ US consumers. He cited that only 10% of Vietnamese have a bank account which demonstrates how much room there is for leveraging in Asia.

·He was VERY bearish on U.S. government debt long term and even pointed to a chart of US 10-year note yields over the past 60 years. He then waved the laser pointer to indicate that yields will eventually go past the early 1980s highs.

·He illustrated the performance of Mexican government bonds and the peso currency from the late 1970s to 1988. The peso lost 98% of its value vs. the US dollar and Mexican bonds performed horribly while Mexican equities priced in US dollars ended the 10-year period slightly positive.

Finally, Faber pointed out that there is potential for geopolitical tensions between China and India as they compete for natural resources (oil, water). He pointed out that China and India share the Brahmaputra River. There has been continued speculation that China plans to build a dam on the river in order to divert water to the North of the country (Doug Kass also mentioned the possibility of a military conflict between China and India over this river in his year end predictions for 2011). In addition, Faber explained that China isn’t happy about the US recommendation that India join the UN Security Council.

Oddly enough, I agree with almost everything Dr. Faber discussed. However, I doubt that gold will undergo a 20% correction this year (I would say 10-15% is the maximum unless there were to be a complete paradigm shift in monetary policy from the ECB/Fed). The crowd was most amused by Dr. Faber’s disdainful comments about Messieurs Bernanke, Greenspan, and Krugman.

While I agree with the latter two, I believe Chairman Bernanke is doing the only thing he can do with the terrible hand he has been dealt. I also believe the possibility of a military confrontation between China and India is extremely remote due to the potential magnitude of the consequences. Dr. Faber managed to cause me to be even more concerned about the state of the US fiscal situation than I already was. I didn’t think that was possible, but when he explained the US would be using 30% of total tax revenues just to pay interest on the national debt within a few years, I realized the situation was more serious than even I had realized. Disclosure: I am long GLD.’

Cupcake Capitalism Offers Hope for New Bubble: Jonathan Weil Weil ‘The first thing every prospective investor should know about Crumbs Holdings LLC, which operates 34 cupcake shops, is that there was an error in the first sentence of its Jan. 10 press release announcing the New York retailer’s planned public listing on the Nasdaq Stock Market.

Crumbs called itself the “creator of the gourmet cupcake.” The claim is false. Crumbs didn’t create the gourmet cupcake. I did, or at least that’s how I choose to remember it.

It was a glorious Sunday morning in October 1976. I was six years old. My mom helped me follow the instructions on a box of Duncan Hines cake mix. I added Frosted Flakes to the icing, spread the sugary goo on top of my creations, and dubbed them Jonny’s Chocolate Crunchcakes. They were Gr-r-reat!

Crumbs executives say they plan to expand to 200 locations within four years, a sixfold increase. They’ll have no need for a traditional initial public offering, though. Crumbs plans to do a reverse merger with a publicly traded shell company called 57th Street General Acquisition Corp.

It’s easy to dismiss the cupcake craze’s arrival on Wall Street as just another indicator of a world gone mad, because it is. Yet there’s a serious point here, too. This may be one of the most hopeful signs in a long time that the economic boom-to- bust cycle may be returning to boom again.

Think about it. Would a chain of stores selling outsourced $4.50 cupcakes have stood a chance at luring stock-market investors three years ago, when the banking crisis was driving the world into a global recession? No way. Yet now the red velvet carpet is out for the likes of Crumbs Bake Shop. The opportunities for other entrepreneurs seem endless.

Master Plan

Before long, sophisticated investors may once again line up to throw money at sure-fire concepts like iron-on T-shirts and collectible plush toys. This must be good news, whether you’re a central banker or a maxed-out office worker buying a caramel apple on credit. It’s evidence that our global economic leaders’ master plan is working. That would be to spend our way out of the last bubble’s wreckage with money we don’t have, until we can create a new bubble to wealth-effect our troubles away.

To be sure, the news from Crumbs doesn’t signal an actual bubble, only the promise of one. But it does tempt us to consider that there may be real bubbles, even monstrous ones, soon. To accomplish this, we’ll need the titans of industry and finance to remain united in pressing for the common good. And there’s positive news on this front.

Remorse-Free Zone

This week Barclays Plc’s chief executive, Robert Diamond, told British parliamentarians it’s time for banks to stop apologizing and start rebuilding confidence. “There was a period of remorse and apology for banks. That period needs to be over,” he told a House of Commons committee in London.

When this period of remorse supposedly occurred, I’m not sure. What matters, though, is that the world now appears to be coming around to Diamond’s way of thinking, which is that we must all agree to be confident.

Similarly, last week President Barack Obama picked a top JPMorgan Chase & Co. banker and former Fannie Mae board member, William Daley, to be his new chief of staff. Amazingly, hardly anyone complained. It seems Americans are too busy trying to figure out how to buy pre-IPO shares of Facebook and Twitter. Distrust of Wall Street is so 2009.

You also can see the seeds of this new era in our corporate leaders’ math. The same day Crumbs said it would go public, Groupon Inc., which claims to have been called “the fastest growing company ever” by Forbes magazine, issued a press release under this headline: “Groupon Raises, Like, A Billion Dollars.” Actually the amount was $950 million. But we can all agree that a billion grabs more attention.

All of which shows there’s hope for the world’s economy to return quickly to rapid growth, as long as we work together to figure out how we can get in all these new bubbles and sell at just the right time, before everyone else figures out when that is. Then we can be rich again. That is, until the next bust, by which time we’ll have moved on to even bigger booms.

All we have to do is believe. Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.) To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net ‘

Bernanke to Broke States: Go Suck an Egg Infowars.com | Trillions for international banksters, nothing for the states.

Could the U.S. central bank go broke? Reuters | The U.S. Federal Reserve’s journey to the outer limits of monetary policy is raising concerns about how hard it will be to withdraw trillions of dollars in stimulus from the banking system when the time is right.

Gold prices at record amid reports of dollar’s demise Guardian.co.uk | Reports of secret talks over ending the dollar pricing of oil and money flows into commodities as fears of inflation grow.

Sanders Says Bernanke Ducks Request for Details on Fed Loans Vermont Senator Bernard Sanders, whose legislative provision forced the Federal Reserve to disclose last month the recipients of $3.3 trillion in financial-crisis aid, said Chairman Ben S. Bernanke ducked his request for more details about the loans.

Home price drops exceed Great Depression Home prices fell for the 53rd consecutive month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.

Downturn’s Ugly Trademark: Steep, Lasting Drop in Wages In California, former auto worker Maria Gregg was out of work five months last year before landing a new job—at a nearly 20% pay cut.

Primary Dealers Leech Off Fed’s Currency Destruction While Estonia is burning its currency to keep warm and celebrate joining the Euro, the United States is defiling its currency in a wholly American way—by giving it to Wall Street.

National / World

Corporate Media Portrays Loughner as Gold and Silver Advocate Kurt Nimmo | Loughner’s irrational currency ramblings offer the establishment a chance to tarnish a growing movement calling for the elimination of the Federal Reserve.

Arizona Shooter Was On Powerful Hallucinogens Steve Watson | Friend says “He would admit to seeing the sky as orange and the grass as blue”.

Welcome To The Reservation Paul Joseph Watson | American Indian activist Russell Means explains how history has come full circle.

Was Loughner In Love With Congresswoman Giffords? Paul Joseph Watson | Gunman’s disinterest in politics fails to explain dangerous obsession that began several years ago.

Palin: “When was it less heated? Back in those “calm days” when political figures literally settled their differences with dueling pistols?” Sarah Palin | President Reagan said, “We must reject the idea that every time a law’s broken, society is guilty rather than the lawbreaker. It is time to restore the American precept that each individual is accountable for his actions.”

Arizona Shooter Was On Powerful Hallucinogens As with practically every other high profile shooting case in recent memory, it appears that the suspect was using psychotropic drugs, substances that significantly alter areas of the brain associated with perception, mood, consciousness, cognition, and behavior.

Was Loughner In Love With Congresswoman Giffords? Now that the contrived idea that heated political rhetoric from conservatives has been rejected as a motivation behind Jared Lee Loughner’s tragic rampage in which Congresswoman Gabrielle Giffords was targeted, Loughner’s documented obsession with Giffords indicates that he may have been infatuated with the Arizona Democrat.

Welcome To The Reservation American Indian Russell Means gives an eye-opening 90 minute interview in which he explains how Native Americans and Americans in general are all imprisoned within one huge reservation. “The history of the American and the history of the Indian have now come full circle and are intertwined in the dictatorial policies of those that control the monetary system of America,” remarks Means.

He did not watch TV. He disliked the news. He didn’t listen to political radio Regarding the high-pitched talk radio and cable news political rhetoric, Osler says his friend didn’t even watch the news.

Officers stopped suspect on day of Ariz. shooting; Police Say They Visited Tucson Suspect’s Home Even Before Rampage TUCSON — The police were sent to the home where Jared L. Loughner lived with his family on more than one occasion before the attack here on Saturday that left a congresswoman fighting for her life and six others dead, the Pima County Sheriff’s Department said on Tuesday.

Arizona Shooting Suspect Wrote `Die Bitch’ on Giffords Letter Jared Loughner, accused of shooting U.S. Representative Gabrielle Giffords in the Tucson, Arizona attack that killed six people and wounded 14, wrote “die b*****” and “die cops” on a letter he received from the lawmaker in 2007, officials said.

U.S. Promises to be in Afghanistan Beyond 2014 [ Defacto bankrupt america can afford it! Riiiiight! Sounds like a plan … for enhanced heroin production, war profiteering, etc., benefiting the few to the detriment of the many. ]New York Times | Biden met with Karzai and promised a lasting American commitment to the country well beyond 2014, when NATO forces are scheduled to turn over security of the nation to Afghan forces.

‘US behind instability in Lebanon’ Press TV | Iran’s ambassador to Beirut says Washington’s interferences resulted in the failure of Saudi Arabian and Syrian efforts to stabilize Lebanon.

China stealth jet upstages US defence chief’s visit US Defense Secretary Robert Gates on Wednesday toured China’s nuclear command centre to end what he called a “very successful” visit — one upstaged by a bold display of Beijing’s advanced weaponry

Drudgereport: World moves closer to food price shock...
OIL NEARS $100...
Soaring commodities...
PALIN CALLS OUT MEDIA 'BLOOD LIBEL'...
VIDEO...
Death Threats at 'Unprecedented Level,' Aides Say...
ABCNEWS: She 'once again has found a way to become part of the story'...
CBSNEWS: 'Plays the victim card'...
NBCNEWS: 'Ignorant' for using 'blood libel' term...
Assange claims 'insurance' files on Rupert Murdoch; Says China Top Threat to WIKILEAKS... ‘In this week's New Statesman, WikiLeaks founder Julian Assange talks to John Pilger about Bradley Manning, his "insurance" files on Rupert Murdoch and Newscorp - and which country is the real enemy of WikiLeaks. To read the entire feature, pick up a copy of this week's New Statesman available on newsstands from tomorrow. Some highlights of the piece are below: The "technological enemy" of WikiLeaks is not the US - but China, according to Assange. "China is the worst offender," when it comes to censorship, says the controversial whistleblower. "China has aggressive and sophisticated interception technology that places itself between every reader inside China and every information source outside China. We've been fighting a running battle to make sure we can get information through, and there are now all sorts of ways Chinese readers can get on to our site." On Bradley Manning - the US soldier accused of leaking the diplomatic cables to WikiLeaks - Assange says: "I'd never heard his name before it was published in the press." He argues that the US is trying to use Manning - currently stuck in solitary confinement in the US - to build a case against the WikiLeaks founder: "Cracking Bradley Manning is the first step," says the Australian hacker. "The aim clearly is to break him and force a confession that he somehow conspired with me to harm the national security of the United States." Such conspiracy would be impossible, according to Assange. "WikiLeaks technology was designed from the very beginning to make sure that we never knew the identities or names of people sub¬mitting material. We are as untraceable as we are uncensorable. That's the only way to assure sources they are protected." Yesterday, Assange's lawyers warned that if he is extradited to America, he could face the death penalty - for embarrassing the leaders of the US government. "They don't want the public to know these things and scapegoats must be found," says Assange. And despite the pressure the website has been under, reports of trouble at WikiLeaks are greatly exaggerated, claims Assange. "There is no 'fall'. We have never published as much as we are now. WikiLeaks is now mirrored on more than 2,000 websites. I can't keep track of the spin-off sites - those who are doing their own WikiLeaks... If something happens to me or to WikiLeaks, 'insurance' files will be released." The contents of these files are unknown, but, according to Assange, "[t]hey speak more of the same truth to power." It is not just government that should be worried about the content of these files, however. "There are 504 US embassy cables on one broadcasting organisation and there are cables on Murdoch and News Corp," says Assange. The attempts by the US to indict Assange should worrying the mainstream press, he adds. "I think what's emerging in the mainstream media is the awareness that if I can be indicted, other journalists can, too," says Assange. "Even the New York Times is worried. This used not to be the case. If a whistleblower was prosecuted, publishers and reporters were protected by the First Amendment, which journalists took for granted. That's being lost."

Goldman Sachs self-eval calls for disclosure of operations (Washington Post) [ Self-evaluation? Goldman-sachs? Don’t make me laugh! … Oh, right … they don’t cheat, they just steal / defraud! ] Goldman is trying to turn the page on a bad year (as in huge bonuses … that bad … riiiight!) .

Chinese military tests fighter jet ahead of Hu's meeting with Gates (Washington Post) [ China tests stealth aircraft before Gates, Hu meet (Post, January 11, 2011; 6:12 PM) Chinese general to visit U.S. base in small sign of thawing military ties (Post, January 12, 2011; 1:21 AM) Small sign of thawing? Yeah, maybe … so small you’d need a electron microscope to see it … as gates melted at the prospect of China’s latest new addition to their defensive arsenal, which they can afford, as defacto bankrupt america drowns in perpetual, contrived / self-created / self-destructive wars. ]

China's exchange reserves hit record level (Washington Post) [ Relations, relationship, reserves. I’d say proportional … as in terms of, ie., rationality … as in, ie., relative abundance; viz., China having substantially greater reserves and rationality than irrationally, pervasively corrupt, meaningfully lawless, perpetual war despite defacto bankrupt america. ] The thorniest problem in economic relations between the United States and China is getting worse, just as the world's two biggest economies prepare for a summit next week in Washington.

Meyerson: Culture of paranoia (Washington Post) [ That ‘for us or again’ us’ dichotomy that flourished with unbridled enthusiasm and encouragement by lesser brains typified by burnt out war criminal and moron dumbya bush & co certainly gained traction with the bushlander failed regimes; but, truth be told, to the surprise of many, the same mindless approach to all things domestic and international has under wobama’s failed regime proved to be the coup de grace, the ‘straw that broke the camel’s back, etc.. Indeed, the continuation of the perpetual war policy despite the defacto bankruptcy of the nation has made wobama’s failed presidency merely icing on what has become the american upside down cake. From no pros of the frauds on wall street to increased war spending and runaway deficits, wobama the ‘b’ for b*** s*** has proven the more america ‘changes’ the more america stays the same … in rate of decline, that is. Talk radio … all b*** s*** with a few convenient facts interspersed for relevance. I’d say liberal talk radio is worse in that if they’re not comin’ down hard on wobama (I presume they’re not), then all their rhetoric in the bush years was hot air. And hot air is what they are which is the reason d’etre for that little on/off switch which is all the censorship that’s needed. That’s what I use for the blowhards … and it works extremely well! ]

Four Financial Farces That Will End in Disaster Summers ‘At this point the news out of the financial world is more insane than … well, just about anything.

Farce #1: Japan Can Bail Out Anything.

First off, Japan, which has a debt to GDP ratio of 200%, is bailing out Europe, which has a smaller but equally disturbing debt problem. Yes, one broke country (Japan) is now trying to bail out an entire economic union, despite the fact that it hasn't succeeded in managing its own finances or economy in over 20 years.Indeed, the idea that Japan could bail out anyone when it’s failed to create any substantial economic growth despite spending trillions of yen should give you an idea of just how out of control the entire financial system has become. We are literally in the end game now. Unless Martians come down and start bailing out Earth, the Great Sovereign Default will be in full effect within the next six months.

Farce #2: Inflation Is at 1%.

Meanwhile, Ben Bernanke claims that inflation in the U.S. is at 1%. President Obama has to maintain that this is a fact with a straight face next week when he meets with French President Nicolas Sarkozy, who is witnessing food riots in Algeria due to soaring food prices.The Fed has claimed inflation is under control for months now, proving that its members must not eat food, drive cars, or know how to read. Indeed, in order to ignore rising prices in the U.S., you would literally have to not shop for groceries, not pump gas into your car, not read the newspaper, and not have access to the Internet or any financial news outlet.I sincerely hope that the Fed is not run by folks who fit this description, but after reading the next two farces, I’m not so sure.

Farce #3: QE Is Working.

Various Fed officials have stepped forward to claim that its Quantitative Easing program has worked. Correct me if I’m wrong, but I thought the whole purpose of QE was to lower interest rates.How then do you explain the following? [chart]As you can see, interest rates have soared since the Fed implemented QE 2. It’s not like QE has helped the U.S. economy either; food stamp usage has hit new records since it began.And yet the Fed claims that QE is not only working, but we need more of it. However, even that farce pales compared to the next and final financial farce of today’s essay.

Farce #4: The Folks Managing the Fed’s QE Efforts Have No Investing Experience.

Then, of course, there’s the recent revelation that the Fed’s monetary policies involving the purchasing of trillions of U.S. Treasuries are in the hands of folks aged 26, 29, and 34, none of whom have any investing experience whatsoever.And they’re in charge of buying up trillions in U.S. debt.If, at this point, it’s not clear that the entire financial system is not a disaster waiting to happen, then I don’t know what else to say. Indeed, our entire system is built on fraud and managed by folks who don’t know what they’re doing. And if you think they’ll steer us to safety, consider that around the globe we’re already beginning to see signs of systemic collapse.Indeed, I believe we are in fact on the verge of another round of deflation which will take prices down across the board as the U.S. dollar rallies. However, this period will be short-lived as it will be followed by a U.S. dollar collapse soon after.At that point, the next stage is the paper currency collapse, the stage at which inflation accelerates as the U.S. dollar collapses, destroying purchasing power while inflation hedges explode higher.Some, like the most popular picks (gold and silver bullion), will record strong gains. However, others (the ones that 99.9% of the investment world are currently clueless about), will go absolutely parabolic.’

Volume Still Incredibly Weak: Dave's Daily - ‘Words fail me frankly, but I'll attempt a posting here knowing volume remains incredibly weak as markets are supported primarily by Ben's POMO activities. As the Fed was buying 5-year bonds, the Treasury was selling 3-year notes--um, left hand, right hand. Markets did get a boost early by an upgrade of HPQ by UBS combined with easing tensions in the habitually troubled euro zone. To the latter, the Japanese said they'd be buyers of euro zone debt to show support for the region. Trouble is, will the EU reciprocate? Alcoa's earnings report, complex as always, was greeted by some selling. Verizon announced it would feature the iPhone which led to some light selling of VZ and AAPL--such is the level of conviction currently…’

Janney Technical Analyst Sees 3-5% Correction In S&P 500 'Looming' Coleman ‘Janney Capital Markets’ technical analyst Dan Wantrobski sent a note to clients Tuesday afternoon saying that he’s moved into the bear’s camp.A 3-5% correction on the S&P 500 index is “looming,” he added, with the first stop being the benchmark’s 50-day moving average.The S&P 500’s 50-day moving average, an often-mentioned short-term indicator, is currently sitting at 1228, says the analyst.

His main points include:

• Major technical indicators are not only sending signals of being overbought, but key metrics are already starting to “roll-over.”
• Few bears can be found as main street investors move off the sidelines from fixed income to equities.
• Recent margin interest on the NYSE shows a large two-month spike. That suggests, according to Wantrobski, more investors are “leveraging up.”
• Small - and mid- cap indexes both have made lower ‘lows’ and higher ‘highs’ in the past few days as the large-cap focused S&P 500 tested the 1276-1278 range. “We think this is a sign of breadth deterioration,” Wantrobski wrote.
• The ‘fear index’ measuring volatility moves of futures tracking the S&P 500, or the VIX, appears oversold.

“The VIX has hit levels that in the past two years accompanied corrections in the market. True, the VIX could actually breakdown and head even lower from here- but if it holds support at 15 (currently it’s 17.06), it would suggestive of a market turn, in our opinion,” Wantrobski wrote.

The worst positioned sectors, he finds, are (with a representative ETF): Retail (XRT), Consumer Staples (XLP), Telecom (IYZ) and Gold (GLD).Of course, a close proxy for the blue chip benchmark is the SPDR S&P 500 (SPY).’

Sam Stovall: Extreme Bullishness a Concern - Stocks Will Probably Correct Levy ‘Sam Stovall is chief investment strategist at Standard & Poor’s Equity Research as well as the author of The Seven Rules of Wall Street and the column Stovall's Sector Watch, a page on Spoutlook.com.

Harlan Levy: How do you rate the jobs situation, and what are the implications for this year?

Sam Stovall: I was disappointed from a payroll perspective but was encouraged from an unemployment rate standpoint. What’s more I was encouraged to see a decline in the number of the underemployed, because it implies that the drop in the unemployment rate was not due to job seekers giving up in frustration.

However, the jobs situation is still the biggest impediment to the stock market’s performance in 2011. S&P Chief Econoist David Wyss continues to believe that unemployment will likely remain above 9 percent for all of 2011 and that this will remain a jobless economic and stock market recovery.

If, however, we find that the payroll picture improves more rapidly than anticipated, we believe the upward trajectory in economic and market performance will accelerate.

H.L.: The level of investor optimism about the stock market seems extreme these days. How bullish are you on stocks?

S.S.: I do think that the extreme level of investor optimism is something to be concerned about in the near term, but it does not stop me from being optimistic for the longer term. The recent spate of better-than-expected economic reports combined with the still strong forecasted increase in earnings supports the seasonal tendency for the S&P 500 to be strong in both the January and the first-quarter of a president’s third year in office.

That said, the stock market usually gives investors a second opportunity to get back in at lower prices. By that I mean since World War II 89 percent of the time the S&P 500 has been lower at some point in the new year as compared with the closing level of the prior year. Of course, past performance is no guarantee of future results, and this year’s market action might fail to take a breather, but I doubt it. So I don’t think it’s wise to be chasing returns right now, because nearly nine times out of every 10 the market in the new year trades about 9 percent below the closing level of the prior year.

H.L.: Has the stock market priced in the massive debts of the states and cities and towns?

S.S.: That’s a very good question. I’m not really sure. The market seems to go back and forth between fear and complacency as it relates to debt on a variety of levels, be it sovereign, state, local, or personal. When it comes to the states’ debts, they’re facing monumental obligations that they may have a very hard time fulfilling. California is certainly substantially larger than the economies of Greece and Ireland, and if you add Illinois to the equation, there would be substantial reason to be worried should these states default on their obligations.

Based on the absence of meaningful discussion of a potential default, that leads me to believe that the market does not expect default to be a likely outcome. I’m worried that we’re putting it on the back burner, but it’s obviously not affecting the market. It’s the outlook of the bears versus the outlook of the bulls. Bears focus on structural problems , things that take years to materialize, whereas bulls tend to look at nearer term events and basically say the trend is my friend until it ends. Chances are the bears will eventually be proved correct, but people ignore the bears because it takes so long. By then a lot of people have just stopped listening. I don’t know that they should not be ignoring it. The market tends to evaluate everything and attempts to put it in perspective. Sometimes they’re wrong -- like when it came to housing and the financial crisis -- and they might be ignoring it currently at their own peril later on.

That’s why I always think it’s wise to use both fundamental and technical analysis, since fundamentals tell you what and technicals tell you when. Right now the fundamentals are positive from a mainstream Gross Domestic Product perspective as well as a corporate earnings standpoint, but there are a lot of potential pitfalls from housing, unemployment, and debt that may yet materialize. Technically speaking, however, the trend is still our friend and implies further upside. Should these worries be moved from the back burner to the front burner once again, the charts will likely give us advanced warning.

H.L.: What sectors of the economy look healthy and which don’t?

S.S.: All sectors of the S&P 500 are expected to post positive year-over year results in the fourth quarter of 2010 as well as the full year of 2010 and in 2011. The strongest earnings increases in 2011 are likely to be seen in the cyclical areas of the economy, such as industrials, technology, energy, and materials.

The defensive areas, which are also typically slow-growth areas, are likely to be just that, the laggards in corporate profit growth this year.

H.L.: Will the dollar stay strong, and if so is that bad for stocks, the way it recently has been?

S.S.: The dollar may decline from a technical perspective in the near term as it undulates between support and resistance, yet should the U.S. economy continue to improve and interest rates gradually work their way higher, that would likely cause the dollar to remain firm rather than force it into a renewed downward direction. It’s neither good nor bad, because investors will look at the firmer dollar as a confirmation that our economy is improving.

H.L.: Now that the Republicans are in control of the House of Representatives, will their promises of massive spending cuts and elimination of business regulations end up killing the recovery?

S.S.: We believe that because the Democrats still control the Senate that we probably won’t see the steamrolling effect of the Republican-controlled House and its impact on spending cuts that people worry about materializing in 2011. They will still have to get a buy-in from the Democrats. So it may curtail increased spending, but it probably won’t lead to draconian spending cuts.’

The Three Biggest Risks in Today's Market Leeb ‘Last week I sat down with some fellow market players for an extended conversation about the opportunities and risks investors face today. The most productive questions we asked ourselves were “What could go wrong in 2011 and beyond?” and “What can we do about it?” Of the many possible disasters that emerged, here are my top three candidates.

• RISK #1: GERMANY AND THE EURO. Germany is the strongest economy within Europe at the moment. Ironically, it's also the nation that would suffer the worst from any break-up of either the EU or the euro.

This is more than just a case of “the bigger they are, the harder they fall.” We’ve said before that Germany's greatest advantage today is its participation in the euro. Having its currency tied to many smaller and weaker European nations effectively gives Germany the most undervalued currency among developed nations. In terms of the German economy, the euro is more undervalued than even the Chinese yuan. Such a cheap currency gives Germany an edge in selling exports to other nations.

Of course, whenever you take advantage of a situation, you become vulnerable to any change in it. Germany has certainly taken advantage of the weak euro: Exports now make up 40% of the German economy and virtually all of its growth is export-driven.

If the euro were to break up, Germany would be forced to adopt a new currency that would be valued fairly on the world stage. Its exports would plunge, sending its economy into a deep recession. Such an event could provoke disharmony if not separatist movements among the 16 states that make up the German republic. (Let's recall that economic illness in Germany once led to the rise of Hitler and World War II.) The risk is that a serious German recession could cause a return of the pre-Bismarck era when competition among states made war commonplace within Europe.

Equally worrying is Germany's trade balance with China. Before 2009, China was the only significant country with which Germany ran a deficit. Now that deficit has become a surplus, but the change is not a positive, since it is the result of Germany's decision to sell high-tech goods to China.

As has happened before, China will likely seize upon the opportunity to re-engineer Germany's technology, create its own high-tech product lines, and export them at cheaper prices. Germany could then lose another big advantage.

Of course, neither of these potential events would be worse for Germany than the break-up of the EU itself. We doubt this will happen, at least not for some time, because it would take a policy mistake of gigantic proportions. The member states have a strong motivation to keep the EU together and avoid the depression that would surely follow. Nonetheless, mistakes have been made before.

• RISK #2: OIL. As we pointed out last week, rather than thinking about whenthe world's oil will run out, we should instead think about when supply/demand pressure forces prices to escalate. Looking at oil prices as a function of demand, we see a curve that is notably convex. That is, every small increase in demand or small drop in production leads to a sharply higher oil price.

For instance, today we have a short-term interruption of the Trans-Alaskan oil pipeline which affects less than 1% of the world's oil supply. Yet it has resulted in a 1.5% jump in oil prices.

Any unexpected increase in oil demand from China or the other developing nations, or another unexpected drop in production, could send oil prices to the moon. It would be a replay of 2008, with an equally disastrous deflationary end.

We assume you are well enough off to withstand a jump in gasoline prices without a serious decline in your lifestyle. However, there are millions of Americans with incomes under $60,000 a year who could not tolerate $5 a gallon gasoline without cutting back spending in other areas. Falling consumer spending could spell curtains for the recovery.

• RISK #3: LOSS OF THE AMERICAN DREAM. Though we talk a lot about China, it’s only because we love America and hate to see other nations taking the right measures while our leaders fall behind in their duty. Recently, two articles in the New York Times made us aware of yet another area where the U.S. is missing the boat that China is catching.

The first article discussed how much easier it is for a young person to get into a top U.S. college if one of their parents went there. In fact, the legacy advantage gives people a 7X greater likelihood of admission.

We need not remind you that the American Dream was that anyone, regardless of their background, could achieve success through hard work and/or natural talent. It was the dream of creating a meritocracy, where the biggest rewards go to the individuals who most deserve them. By contrast, the legacy advantage rewards people for simply having the right parents. It is a step towards creating a hereditary upper class, or a plutocracy – exactly the opposite of what America is all about.

China, on the other hand, doles out opportunities to young people according to how well they score on tests. The second NYT article, written by Nicholas Kristof, discussed Hou Yifan, a 16-year-old Chinese girl from a poor background who is now the top female chess player in the world. Hou's talent was supported by training and financing from the Chinese government. Kristof's point, which we agree with, is that China invests in talent, regardless of its origins.

China's government may not be democratic, but it is built upon the principles of a meritocracy. It recruits and nurtures the brightest and the best. Consequently, Xi Jinping, China's heir apparent to current leader Hu Jintao, started his career as a farm laborer. His father was a poor tea trader who spent 16 years in prison for his politics. (Offhand, we don't recall the last U.S. President who came from such humble beginnings. Certainly, there have been very few since Andrew Jackson.) Suffice it to say that fewer U.S. leaders today have come from poor backgrounds than ever before - which suggests that many highly talented young people are finding the doorway to the American Dream barred against them.

If the U.S. is to retain its standing in the world, we need to get our act together. We need to make sure the best talent is nurtured and rewarded, not wasted. We need to maintain leadership in vital technologies. We need to rethink political correctness (that is, we need to embrace ideas that are true regardless whether they serve vested interests).

As Defense Secretary Gates learned on his recent visit to China, the country has the flexibility to expand its military while the U.S. is now looking at cutbacks. China is also planning to spend $1.5 trillion on new high-tech industries that will increase its energy supplies and efficiency. The only solution the U.S. seems willing to consider is more offshore drilling. We must stop being so complacent.

Meanwhile, so long as we are looking at convex curves in not only oil prices but also copper and other commodities, we will continue to invest for the next exponential advance. Gold remains the safest long-term investment you can make today as a hedge against deflation and inflation. Buy either gold stocks or bullion ETFs.’

Could the U.S. central bank go broke? Reuters | The U.S. Federal Reserve’s journey to the outer limits of monetary policy is raising concerns about how hard it will be to withdraw trillions of dollars in stimulus from the banking system when the time is right.

Fed’s bond-buying could soon backfire: Plosser The U.S. Federal Reserve’s aggressive bond-buying plan could soon backfire unless the central bank gradually changes course to head off inflation, a top Fed official known for his hawkish stance said on Tuesday.

Toward Sensible Monetary Policy Last week the 112th Congress was sworn in. I am pleased that I will be chairing the Monetary Policy Subcommittee of the Financial Services Committee, which has oversight of the Federal Reserve. Obviously, this position will facilitate my efforts to ensure the Fed provides the American people with more information about what they have been doing with and to our money

‘Not Owning Gold is a Form of Insanity’: Chartist Gold will eventually rally exponentially and investors who don’t own the precious metal are “insane,” and may be showing “masochistic tendencies,” Robin Griffiths, technical strategist at Cazenove Capital, told CNBC.

Virginia Creates Subcommittee To Study Monetary Alternatives In Case Of Terminal Fed “Breakdown”, Considers Gold As Option In what may one day be heralded as the formal proposal that proverbially started it all, the Commonwealth of Virginia introduced House Resolution No. 557 to establish a joint subcommittee to “to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System.”

Gold prices at record amid reports of dollar’s demise Guardian.co.uk | Reports of secret talks over ending the dollar pricing of oil and money flows into commodities as fears of inflation grow.

America’s housing bubble still deflating Guardian.co.uk| As they failed to spot the bubble, most economists seem oblivious of the threat of further market falls to come.

National / World

DHS Ties Arizona Attack to “Lone Wolf” Terrorism Kurt Nimmo | DHS and the FBI sent bulletin to local law enforcement after Rep. Giffords and others were shot in Arizona.

Liberal Media was Already Prepared for Violence in Tucson Matt Ryan | The terrible shooting in Tucson, Arizona was the act of a 22-year-old that was immediately profiled as a tea party member.

Another Mass Animal Die-off Jason Douglass | Thousand of gizzard shad dying along the Chicago lakefront.

Gun Grabbing Congress Critters Come Out of Woodwork After Giffords Shooting Kurt Nimmo | Statist gun-grabbers will not rest until the Second Amendment is stricken from the Bill of Rights.

Tone Down The Rhetoric… Mr President The use of words and phrases like “take aim”, “reload” and “shoot down”, despite their metaphorical intention, is to blame for the random act of violence committed by one psychopath in Arizona on Sunday, according to scores of frothing media hacks and political lawmakers. If this is so why not highlight a speech given by then presidential candidate Obama in 2008, in which he triumphantly stated “If They Bring a Knife to the Fight, We Bring a Gun”?

WikiLeaks chief: Charge Palin, Huckabee with ‘incitements to kill’ The editor-in-chief of WikiLeaks called on US authorities to seek charges against high-profile Republicans Sarah Palin and Mike Huckabee for “incitements to kill” by the use of “violent rhetoric” against the anti- secrecy outlet.

Arizona Sheriff Dever Says Killer Alone Is Responsible for Shooting; ‘Frightening’ to ‘Lay Blame on Anyone Else’s Doorstep’ Cochise County Sheriff Larry Dever said he does not understand why his friend and colleague, Pima County Sheriff Clarence Dupnik, would suggest at a news conference following Saturday’s shooting in Tucson that political ideology played a role in the tragedy.

Pima County Sheriff Dupnik Blamed Right Wing for Slaughter But Details Emerge of Multiple Contacts between Jared Loughner and the Sheriffs office over Multiple Death Threats Only the left can get away with pointing their bloody fingers at everyone else.

Backup Communications System Was ‘Miraculously’ Switched on for ‘Exercise Mode’ and Ready for Use on 9/11 [ It is also especially noteworthy that NORAD was ordered to stand down that day! ] ]A special backup network that allows communications between government and military agencies to continue during emergencies was “miraculously” switched on the day before 9/11, and so was already operational when the terrorist attacks in New York and at the Pentagon took place.

Establishment Ignores Violent Rhetoric From Eco-Leftists While the establishment has invoked the supposed threat of vitriolic “right-wing rhetoric” as a tool with which to bludgeon freedom of speech in response to the Tucson shootings, it has conspired to sweep under the carpet far more extreme and threatening language and images used by leftists in the context of the climate change debate, rhetoric that has led directly to crimes and murders.

WikiLeaks: Julian Assange ‘faces execution or Guantánamo detention’ Julian Assange, the founder of WikiLeaks, could be at “real risk” of the death penalty or detention in Guantánamo Bay if he is extradited to Sweden on accusations of rape and sexual assault, his lawyers claim.

US could be in Afghanistan after 2014, says Biden US Vice President Joe Biden said Tuesday that the United States will not withdraw its troops from Afghanistan completely in 2014 if Afghans did not want his country to do so.

Judge Sides With GATA, Orders Fed To Present Her With Its Classified Gold Records For Private Review Our friends at GATA report an interesting development in its multi-year confrontation with the Fed, namely that the organization has “scored a small but perhaps auspicious victory over the Federal Reserve in our lawsuit seeking access to the Fed’s secret gold files.

Gerald Celente: Internet nuke bomb waiting to go off Gerald Celente, the founder of the Trends Research Institute, believes that the Internet will empower the youth of the world to unite to start a revolution that will overthrow the existing deadlocked elitist establishment. He predicts that in 2011 every citizen is going to realize that the Great Recession the world has been living through is actually a Great Depression, because the American establishment is “running out of schemes.”

William Daley’s JP Morgan Stock: Obama’s Next Chief Of Staff Has Millions Invested President Barack Obama’s next chief of staff holds more than $7.6 million worth of stock in JPMorgan Chase, according to a regulatory filing.

‘CIA-created Frankenstein’: US turns blind eye on terrorist? A former CIA operative, who’s wanted in Venezuela and Cuba for terrorist attacks throughout Latin America, has gone on trial in the U.S. But that’s not why Luis Posada Carriles is in court. Instead, he’s being charged with lying to immigration officers. RT’s Jihan Hafiz looks at why the U.S. is turning a blind eye to an alleged terrorist.

Islamic group is CIA front, ex-Turkish intel chief says Washington Post | A memoir by a top former Turkish intelligence official claims that a worldwide moderate Islamic movement based in Pennsylvania has been providing cover for the CIA since the mid-1990s.

WikiLeaks: Julian Assange ‘faces execution or Guantánamo detention’ Guardian | Skeleton argument outlined by Australian’s defence team claims he could face rendition to US if extradited to Sweden.

Iran claims to have smashed ‘Mossad spy ring’ The Telegraph UK | Iran claims it has broken up a ‘Mossad ring’ allegedly behind the murder of an Iranian nuclear scientist in Tehran last year.

U.S. Embassy Turned a Blind Eye as Suspected CIA Banker Allen Stanford Bilked Investors, Secret Cables Reveal IntelDaily.com | Secret Cables Reveals U.S. Embassy Provided Political Cover to Suspected CIA Banker Allen Stanford while he expanded his empire.

israeli warplanes in fresh strikes on Gaza killing freedom seeking civilians: witnesses (AFP) yet amazingly, the Christ-killers say as per netanayahu: Palestinians 'walking away' from peace (AFP)

Drudgereport: SILENCE: RI Gov. bans state employees from speaking on talkradio...
Dem Congressman: If Violent Rhetoric Didn't Cause This Shooting -- It Will Cause Next One!
BILL CLINTON: 'WE NEED TO BE CAREFUL ABOUT THINGS WE SAY' … [ How about, OR DO! ] ...
OBAMA FLASHBACK: 'If They Bring a Knife to the Fight, We Bring a Gun'...
Dem rep urging 'civility' had called for FL guv candidate to be shot...
NEW PUSH FOR 'FAIRNESS DOCTRINE'...
MSNBC Matthews Cites Radio Stars Mark Levin, Michael Savage As Reason For AZ Shooting...
Dem Senator Fundraises Off Murders...
PISTOL SALES SURGE AFTER AZ SHOOTING

Snow in 49 states including Hawaii…[Sounds like that ‘Global Warming Thing’…Riiiiight!] ...
Bank of China Brings Yuan Trading to USA...
China Stealth Test Upstages Gates, Hu...
France our biggest ally, declares Obama: President's blow to Special Relationship with Britain...
Sarkozy to be subject of 'hugely embarrassing' film...

Merger would create largest U.S. utility (Washington Post) [ Well, sounds like a plan. That trend to ‘bigger the better’ / too big to fail thing. Down only a penny in today’s trading. I’d call that a vote of confidence by fraudulent wall street. Why, you can almost hear the wall street frauds cheering to the tune of that familiar cheer, ‘We must, we must … increase the nation’s potential economic bust … the bigger the better, the lesser the vetter … the better the government boys will like us.! ] Duke Energy announces a $13.7 billion merger deal with Raleigh, N.C.-based Progress Energy.

Watchdog over Afghan reconstruction resigns (Washington Post) [ Wow! Sounds like he really meant business … which also meant, congress ‘hearing footsteps’ so to speak, that he had to go. After all, applying a stringent standard that promises to do something about fraud and corruption is a standard that would threaten the entire u.s. government … all three branches. ] Arnold Fields, the head of the office charged with investigating corruption in the multibillion-dollar effort to rebuild Afghanistan has resigned, the White House said, following congressional demands that he be replaced.

Government contractor ATS shifts gears (Washington Post) [ Now granted … this is northern virginia, alphabet soup kitchen territory (part of the Washington d.c. governement mob)… rivaled in corruption only by such other pervasively mob infested states as jersey (multi-ethnic mob), new york (Italian, jewish, irish, wall street), Connecticut (whatever new york and d.c. says, mob), California (multi-ethnic mob, young gangs movin’ up, local government / bureaucracies mob), and of course the corrupt courts in all 5, but there’s somethin’ strange in the neighborhood here. I mean, 1 weak or I mean 1 week tenure and probably want to just give him some money. "We need to do something to get those shareholders replaced by other shareholders - whether it be one big shareholder or several smaller ones," said Bersoff, ‘who was the company's previous chief executive.’ This is the first statement of its kind I’ve ever encountered in modern day finance, such as it is. Then there’s that ‘government contractor thing’. Could it be that the michael corleones of the cia want to ‘legitimize’ their enterprises which have included illicit drugs, arms, etc.? All we really know is that Sidney … Fuchs. ] CEO Sidney E. Fuchs resigns as the company announces its intention to pursue strategic alternatives, including a possible sale.

China as Europe's white knight? (Washington Post) [ White knight? I don’t think so. Yellow night and day, I think yes. Not to impugn their motives, but the Book of Ecclesiastes said it well: "What has been is what will be, and what has been done is what will be done; and there is nothing new under the sun"

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www.thewrap.com/.../cinema-libre-acquires-economic-hit-man-19179 - Cached

] Traders are speculating that cash-rich China may step in and buy hard-hit European bonds.

Will: Half-baked explanations for tragedy (Washington Post) [ Half-baked? Charlatans? The foregoing are in no short supply in defacto bankrupt, meaningfully lawless, pervasively corrupt, fraud prevalent america. See, for example, RICO case http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm . Moreover, Mr. Will as an oftimes apologist for war criminal, pervasively fraud-prone, defacto bankrupt, etc., america, with crime rates exceeding by far those of any other so-called civilized nations, might indeed find himself among those he’s so categorized. Among the last separate page sections to my website will be a somewhat detailed psychoanalytic evolutionary profile of the u.s. (one might ask who am I to do so which is fair comment to which I would reply, read it, or not, your choice). However, for the nonce, let me say that the it is no small coincidence that the 20^th century has been dubbed ‘the american century’. That the 20^th century has been considered the bloodiest is at once the natural concomitant of the foregoing reality. Keeping in mind the so-called ‘selective’ processes in both insurance (adverse) and evolutionary (Darwinian) terms, and as well, the psychology of it all from a behavioral perspective, america has indeed evolved. From the genocide of indigenous populations, to outlandish propaganda in support of same (ie., that ‘manifest destiny’ balderdash with overtones of religiosity spoonfed since elementary school, etc.), to contrived conflict / war, such, euphemistically bad behavior has been reinforced, some of which conditioning not always purposeful, ie., the ever greater frauds perpetrated on wall street for which there have been in large part no real punitive consequences to the perpetrators; but, to the contrary, great financial rewards though substantially detrimental to the majority. Despite the surface appeal, that oft asserted ‘blue-blood’ distinction doesn’t pass muster. Aside from the few seeking seeking religious freedom (ie., Puritans among some others), most then new americans were such disaffected rejects of their former homelands that desperation at best was motivation for travel to the wilds of the ‘so-called new world’ as opposed to intelligent, rational choice; criminals, mentally ill, the not-so-bright but ruthless populating the new nation in disparate numbers toward the ends consistent with greed and common criminality, corruption, and venality. As of the age of the dinosaurs, the american century has passed into the annals of a history replete with self-generating terrorism within and without (that blowback thing). DRUDGEREPORT: NATION SHOCKED: CONGRESSWOMAN SHOT IN TUCSON
SCARY FREAK!
THE DEVIL MADE HIM DO IT: TUCSON SHOOTER'S TWISTED SKULL SHRINE...
Described by Classmate as 'Left-Wing Pothead'...
Family of suspect blocks FBI access to house...
Shooter Smirks in Court, Smiles for Mug Shot...
Was registered independent; Didn't vote in Nov. '10 election...
'SHERIFF' BLAMES RUSH LIMBAUGH FOR MASSACRE?
CONGRESSWOMAN READIES GUN CONTROL BILL...
Dem planning bill that would outlaw 'threatening' lawmakers...
...'use language or symbols that could be perceived as inciting violence'
OBAMA FLASHBACK: 'If They Bring a Knife to the Fight, We Bring a Gun'...
SAFEWAY MASSACRE... UPDATE...
SLAIN JUDGE WANTED TO TALK TO REP. ABOUT SURGE IN BORDER CRIME...
WIRE...
Suspect scrawled: 'I planned ahead'...
Obsessed With Mind Control...
Described by Classmate as 'Left-Wing Pothead'...
Trade war looming, warns Brazil...
Tensions rise in currency wars...
Pressure on Portugal heightens...
GLOBAL ORDER: Sarkozy takes case to Obama as food prices soar...
Greece borrowing rates hit new record...
Pentagon concerned over China's rapid development of new weapons...
Economists foretell of U.S. decline, China's ascension...
SAFEWAY MASSACRE...
VIDEO...
6 Dead, 12 injured...
Dem Rep. Gabrielle Giffords shot through brain; critical after surgery, doctors 'optimistic'...
Federal Judge Killed...
WIRE...
CAPITOL POLICE URGES CONGRESS TO TAKE PRECAUTIONS...
BOEHNER: 'An attack on one who serves is an attack on all who serve'...
OBAMA: 'UNSPEAKABLE TRAGEDY'...
Gunman ID'ed as Jared Loughner, 22... YOUTUBE...PHOTOS...
Obsessed With Mind Control...
MYSPACE GENERATION: Suspect Says Goodbye Online: 'Please don't be mad at me -- I cannot rest'...
14 decapitated bodies found in Mexico resort city...
NUMBER OF COMBAT INJURIES IN AFGHANISTAN APPROACHES IRAQ-WAR LEVELS...
WIKILEAKS: US demanding our TWITTER account info...
WIKILEAKS demands GOOGLE and FACEBOOK unseal US subpoenas...
New data collected from sensors left on moon in 1971 [ Riiiiight! … and if you’ve seen the beginning of 2001:Space Odyssey (the monolith), you’ve already seen it! ] ...
Euro Crisis Roars to Forefront...
Portugal's debt worries worsen...
UN warns Greece on anti-migrant fence...
NJ police: Man seeking 'portal to hell' stabbed 2...

Go to following pages for above links:
http://www.albertpeia.com/currentopics2ndqtr10108.htm
http://www.albertpeia.com
http://www.albertpeia.com/alresume.htm

http://www.albertpeia.com/wallstreetlunacy2ndqtr10108.htm

http://www.scribd.com/alpeia

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