ΩΩThe US trade gap gapes even wider than ever as our budget deficit deepens even faster and Congress is all tied in knots, trying to pretend to reform the banking system while not changing the status quo. And world debts defy reality as everyone uses the US to fix their own economies including flooding the US with exports and keeping the dollar strong while letting us bleed red ink all over the planet.
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U.S. Economy: Trade Gap Widens as Growth Rebounds (Update1) – Bloomberg.com
The trade deficit in the U.S. widened in March to the highest level in more than a year as imports climbed faster than exports, adding to evidence of the global recovery from the worst recession in the post-World War II era. The gap grew 2.5 percent to $40.4 billion, in line with the median forecast in a Bloomberg News survey, Commerce Department figures showed today in Washington. The value of goods sold overseas and those purchased abroad, led by a surge in oil demand, rose to the highest levels since October 2008….
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THIS is the true big news! As I predicted, once the global depression was pretty much capped by a massive US surge in funny money via the Federal Reserve and the US Treasury coupled with wild US government overspending, our trade deficit, which shrank during the global downturn, would resume its deadly course of getting worse and worse, every quarter. This terrible depression fixed nothing at all! We still have virtually zero protection from imports.
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…The Treasury Department also reported today that the U.S. posted its largest April budget deficit on record as receipts declined. The excess of spending over revenue rose to $82.7 billion compared with a $20.9 billion gap in April 2009.
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ΩΩSo here we go again: record trade deficits coupled with even worse government spending deficits. This is, of course, utterly unsustainable. The principal amounts involved, that is, the aggregate collection of charges against our infrastructure and labor, is climbing steeply. The ZIRP rates being laid on this ever-rolling short term debt bonds is enabling this sort of wild deficit lifestyle but not forever. Eventually, interest rates will suddenly climb. We can’t say when but it is inevitable.
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ΩΩThe US has an advantage over all other nations: we run trade deficits with virtually everyone so everyone has a vested interest in keeping this immense sea of red ink flowing so that the trades can continue. This gives the US public the illusion that debts don’t matter. They don’t….for now. But eventually, will matter a great deal. We don’t need to passively wait to see what happens next. History tells us exactly what will happen next. Say, the looting of China when it went bankrupt in the early 19th century, for example, or the USSR going bankrupt and then being looted and broken into a thousand pieces.
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Has U.S. Debt Lost Its Safe Haven Status? – Forbes.com
It was also the first auction since the Treasury began trimming the size of its sales – thanks to a surge of income-tax receipts. The $38 billion in three-year notes offered Tuesday was $2 billion smaller than the $40 billion sold at each of the previous six auctions.
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This is almost as pathetic as the Pentagon announcing painful cuts of $10 billion from a bloated budget of over $700 billion. Burp. Big barking deal! The three year note auction is nearly the same as Greece’s debt needs this year. Greece has to tighten its own belt while the US lets its belt out another notch. The US is like on the show, ‘The Biggest Loser’ only the other contestants are losing weight while the US gorges on food and gets fatter and fatter while the hosts cheer it all on.
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So, the US weighs in at 600 pounds while the rest have anorexia! Starving, literally starving all other nations to feed our debt addiction is leading to the US being viewed in a very negative way and we shouldn’t let this go passively into the future: we lose not only face but real power as well as any moral bearings we need to operate in the real world. When we go down and are forced to starve, this will be extremely popular. .
Next up: $24 billion in 10-year notes Wednesday and $16 billion in 30-year bonds on Thursday. The 10-year sale is $1 billion smaller than last month’s; the size of the 30-year sale is unchanged….
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Why is the vast bulk of our debts always being the shortest term? Are we paying them off? No? HAHAHA. Nope. This is a ruse. The long term debt is less than 20% of the debt being sold. This is madness. We barely balanced our budget for exactly 2 years in the last 35 years! .
…In a note to clients Tuesday, William O’Donnell, head of U.S. Treasury strategy at Royal Bank of Scotland, drew a scenario of chastened governments resolving to tackle their debts. “What’s clear is that debtor nations now have to face the full attention and wrath of the financial markets,” he wrote. “The looming actions by debtor nations to cut outlays/obligations while looking for windows to raise taxes/revenues will almost certainly be highly disinflationary.” That would prevent central banks from raising short-term interest rates, driving investors back into the higher-paying long end of the Treasury market, and Uncle Sam’s embrace.
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ΩΩOK: Japan, a major, major G7 power, has been mired in a ZIRP depression for nearly 20 years and counting. Now, all of the EU is going to join Japan in this dark hole? And the US won’t? Japan merrily continues to add more and more government debt but this is 95% internal so they don’t care but Europe is on the same dangerous road the US is on: owing to everyone. Everyone owes everyone in this web of IOUs which constantly threatens to unravel. If Europe goes into a Japanese-style depression, the US will slide into this, too.
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ΩΩThis leaves independent power, China, to be the inflationary part of the world’s economic engine system! The US can’t run both huge trade deficits and huge government spending at the same time unless China wants us to do this and evidently, China is going to allow this, I THINK. China is still pretty pissed about how we treat the creditor power of this planet.
Gulf of Mexico oil leak: BP release first photo – Telegraph
ΩΩThe US must reform our entire economic system and of course, our entire banking system. Also, our stock markets are obviously f*cked to all hell at this point. Everything is very much broken. But the status quo keeps on bobbing up. This requires literally many trillions of government IOUs sucking up all the mess. The ongoing collapses are very much like the oil flow in the Gulf: nothing is fixed so the oozy black gunk continues to pour into the ocean, killing everything.
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ΩΩCongress is spinning its wheels, trying to change course without changing any fundamentals which are causing this massive oily gunk economic mess. Time to visit the Roman Senate where gladiator games are played but the fighting is rigged…do pay attention to the actual votes here!…there is a lot of sound and fury but whenever they discuss the Derivatives Beast, suddenly, the will to fight vanishes even as some Senators pretend to be interested in stopping this monster from eating our entire economy. Note too, no one bothers to worry about the trade deficit.
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Volcker Questions ‘Extensive Reach’ of Lincoln Swaps Provision – Bloomberg.com
Former Federal Reserve Chairman Paul Volcker questioned “the extensive reach” of a Senate proposal (by the Republicans who aren’t in power) to bar swaps dealing by commercial banks, joining regulators and lawmakers criticizing the regulatory-overhaul measure. Senator Blanche Lincoln’s proposal “goes well beyond” restrictions on proprietary trading included elsewhere in the financial-rules bill that “satisfy my concerns on and those of many others with respect to bank trading in derivatives,” Volcker wrote in a May 6 letter sent to Lincoln, according to a copy obtained by Bloomberg News.
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They want to keep this monster alive. Why? Simple: it is responsible for the ZIRP system! It enables wild, zero-true-capital-based lending. That is, people can lend nearly for free so why have any restrictions on lending? This also enables the Japanese carry trade business, the other thing that produced a ton of easy lending that flooded the entire planet with money. Mostly, US dollars.
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Volcker, an outside economic adviser to President Barack Obama, joins Federal Deposit Insurance Corp. Chairman Sheila Bair and Fed Chairman Ben S. Bernanke in faulting the measure, which would deny swaps traders bank privileges such as access to the Fed’s discount lending window and FDIC deposit guarantees. Lincoln has said the provision would simplify banks’ portfolios, eliminating risk that led to the economic crisis.
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ΩΩDamn, the gnomes who borrow money in order to play the derivative swap markets won’t be able to go to the Federal Reserve for 0.4% interest loans if their bets suck??? HAHAHAHA. Oops! As for the FDIC: wasn’t that set up to protect widows and orphans, not sex-crazed derivative dealers operating in the world’s biggest investment houses? Since the swap market destroyed world banking, it is obviously NON FUNCTIONAL and should be TERMINATED.
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ΩΩThe entire premise was, this ‘spread risk’ and thus, less capital was needed to create loans and so more loans could be made and everyone loved this since it meant even illegal aliens with no known income could buy $450,000 houses in Sacramento, California! Whoopee! It is hard to go back to the boring old days of banking that ran from 1933-1971 (Nixon and Burns end the gold peg to the dollar, unleashing the forces which ravage us today).
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Here is a good article to read which talks about this mess in a very engaging way. The Financial Power Elite – Monthly Review
Only twice before in the last century—after the 1907 Bank Panic and following the 1929 Stock Market Crash—has outrage directed at U.S. financial elites reached today’s level, in the wake of the Great Financial Crisis of 2007-2009. A Time magazine poll in late October 2009 revealed that 71 percent of the public believed that limits should be imposed on the compensation of Wall Street executives; 67 percent wanted the government to force executive pay cuts on Wall Street firms that received federal bailout money; and 58 percent agreed that Wall Street exerted too much influence over government economic recovery policy…
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Congress is very aware that the People want some blood. But they have to walk this tightrope: don’t bite the hands that feed Congress billions in bribes!
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…The period after the Great Depression and up to the 1970s has been referred to by Paul Krugman as the era of “boring banking”: “The banking industry that emerged from that collapse [in the 1930s] was tightly regulated, far less colorful than it had been before the Depression, and far less lucrative for those who ran it. Banking became boring, partly because banks were so conservative. Household debt, which had fallen sharply as a percentage of G.D.P. during the Depression and World War II, stayed far below pre-1930s levels.”10 In the 1960s the relative power of the financial sector in U.S. capitalism declined. Investment banking, which had been so important in its heyday in the opening decades of the twentieth century, declined in power and influence.
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You want banking to be boring!!! Bubbles mean feeding frenzies and hysteria and this always leads to crashes. Sober, slow, suspicious bankers are a brake on wild, irresponsible enthusiasm. THE CAVE OF WEALTH AND DEATH PT 3: WIZARDS « Culture of Life News I have a video and cartoons about all of this. Everyone loves playing risky games, this makes money, everyone hates boring, safe things, this is not at all lucrative!
.The graph below makes this very clear. In 1982, when boring banking was being killed (everyone hates Miz Safety!) finance took up less than 8% of our wealth. Oil ate the lion’s share due to the Iran Iraq War. Note that manufacturing was the next most lucrative thing!
By 2007, manufacturing shrank to where money gaming used to be while money gaming shot upwards even further than oil during the Iran/Iraq war! It eats an immense 28% of our GDP! Nearly 4X manufacturing! It used to be HALF of manufacturing. This is very connected to our immense trade deficits! Up until 2004, media/entertainment grew bigger and bigger compared to manufacturing and then, in 2002, dwarfed manufacturing, more than 2X bigger but suddenly collapsed to parity with the dying manufacturing sector.
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Matters are made more complicated by the existence of the “too big to fail” problem. For financial interests, this provides a strong incentive to merge in order to secure automatic bailout status. This both enhances the profits of firms that are seen as having obtained too big to fail status (giving them “economies of scale” derived from their greater security), and creates what are called “moral hazards,” since such firms are likely to take bigger risks. Coupled with the general drive to financialization, too big to fail generates conditions that threaten to overwhelm the lender of last resort function of the state. A further layer of complexity and uncontrollability is added by what Yves Smith, founder of the influential Naked Capitalism financial Web site, has called “the heart of darkness”: the shadow banking system, or black hole of unregulated (and unregulatable) financial innovations, including bank conduits (such as structured investment vehicles), repos, credit default swaps, etc. The system is so opaque and risk-permeated that any restraints imposed threaten to destabilize the whole financial house of cards.
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ΩΩAnd this is why all the big shots are shooting at anyone who even suggests we regulate or better still, terminate all of these dark pool splash games! They desperately want to keep growing their share of the GDP pie! So these evil clowns get over 50% of our GDP, 70% of our GDP! To the limits! Well, we must limit them before they eliminate us! We cannot survive as a nation with manufacturing 1% of the GDP while banking is 90% of our GDP. This is just lunacy. So why not stop it now before it is too late? Now, let’s go to that dark pool, the US Senate. No horses are ‘elected’….yet. But Caligula will eventually do this for us.
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Fed’s Comeback ‘Punch’ Wins Senate Fights on Rates, Oversight – Bloomberg.com
U.S. senators voted 90-9 today to void a provision in regulatory-overhaul legislation that would have stripped the Fed of oversight of 5,000 banks with less than $50 billion in assets. Yesterday, senators rejected a measure to allow continuous congressional audits of Fed policies. The wins mark a shift in favor of Fed Chairman Ben S. Bernanke, who in January won a second term by a 70-30 vote in the chamber, the most opposition in history. Fed officials and banks lobbied lawmakers over concerns about potential political interference with monetary policy and a diminished role for the regional Fed banks, which directly supervise firms and help set interest rates.
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ΩΩThe GOP Senators who voted against Bernanke did it knowing their votes wouldn’t matter. Note that they rush in and vote, nearly uniformly, for him when the real dirt hits the rubbery road. How stupid is all of this? The mess we are in is very political! And did the Fed protect us from this mess?
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ΩΩNO! The Fed CAUSED this mess! Along with Congress! And Wall Street! All of them worked hard to short shrift manufacturing and supplant it with banking as our top economic system! Good grief! All these people should be ashamed! And none of the laws fix our decimation of manufacturing. This is barely discussed. But stopping the Fed will stop the growth of the flora and fauna of Wall Street that is strangling our real economy which is…manufacturing and production systems!
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RealClearPolitics – Politics – May 12, 2010 – Senate lets Fed retain oversight of smaller banks
The U.S. Senate has voted to ban mortgage brokers from being paid by offering higher interest rates on loans, and to require that borrowers prove they can repay their loans. The provision passed 63-36…The Senate defeated a Republican amendment that would have required mortgage borrowers to make a minimum 5 percent downpayment. That measure also would have eliminated a requirement that mortgage lenders retain 5 percent of any mortgages they resell in the securities market.
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ΩΩHere again, the GOP merrily proposes something they know will not pass. Never, ever did they do squat diddley when they ruled the roost. But now, they can pretend to be good reformers knowing that this is futile just as the Democrats played the EXACT same game when they were out of power. Populism is great when one can’t change anything but get one iota of power and blam! Suddenly, the populist becomes an elitist and can’t hear the masses anymore.
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ΩΩOf course, lenders should hold at least a miserable 5% of mortgages they originate! I say, make it 20%. Down payments should be 20%, too. This forces people to save before going house hunting and this capitalizes the mortgage system. The fiction of banking is now totally dead: ALL mortgages except maybe 10% end up inside our government lending houses! So why have these bankers involved at all? Obviously, this is a scam: pretending we have banks when the only bank is our Treasury and our Treasury isn’t a bank, a private bank, the Fed, is the bank! Gah! My head hurts!
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ΩΩHere is some of the debate about the bill Congress passed which is but a most feeble stab at fixing a hideous mess: Republican.Senate.Gov – Floor Updates
Floor — Landrieu, Warner, Isakson, Snowe Wednesday, May 12, 2010 at 11:37 AM
Restoring American Financial Stability Act of 2010 (S. 3217)
Senator Landrieu: (11:09 AM)
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“I offer it on behalf of myself and the good senator from Georgia, Senator Isakson, whose expertise on housing matters is well known. Also on behalf of Senator Warner, Senator Hagan, Senator Tester, Lincoln, Levin, Burr and Hutchison. We have broad and deep bipartisan support for this amendment. The reason we do, Mr. President, is because it is a good amendment and it more specifically addresses the risk retention provisions currently in the bill by helping to eliminate the excessive risk-taking we saw in the home mortgage market between 2004 and 2007. Without raising interest rates for those home buyers who have maintained good credit, document their income assets and finance their home the old-fashioned way, back to the basics with savings.”
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There wasn’t enough bipartisan support for these changes. Why? Well, the pretend mortgage/banking system that died in 2008 has to keep up the fiction that we don’t need ANY capital at all to lend money to anyone who wants to buy a house with cheap loans! Gah!
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Senator Warner: (11:10 AM)
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“I think, as those of us on the committee, when we were drafting the legislation, we wanted to make sure that the mortgage securitization process, the originators of mortgages had skin in the game. And I think as we went through this process and working particularly with the expertise of the senator from Georgia, we realize while skin in the game is important, it is more of the underlying quality of the mortgage. And if we’ve got mortgages that have that 20% down with a high FICO score, the same level of skin in the game is not required. I think this amendment stays true to the intent of the Banking Committee bill. I’m glad the chairman of the Banking Committee is supportive of it. I think this is an amendment that refines and improves the legislation.”
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Senator Isakson: (11:12 AM)
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“What Senator Landrieu is saying is we’re not going back when we make zero-down, interest-only, reverse amortization loans anymore, but we are going to make the good old days loan, where there is a down payment, where there’s skin in the game, where there’s an income-to-debt ratio and where the borrower is qualified to borrow the money that they’re borrowing. The only risk retention that will be required is when somebody is making a bad loan which means people will stop making bad loans which means this bill and this amendment will address the measure that led to the failure in the housing market. I commend Senator Landrieu for her original offer of the amendment.”
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Senator Snowe: (11:15 AM)
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“Again, I want to thank the chairman for working with me to forge a compromise on this particular amendment that gives small businesses certainty that they will be exempted from the consumer financial protection bureau to the degree that they’re not involved in financial products that will be regulated under this legislation. This amendment will modify a provision in the underlying legislation that could unintentionally ensnare small businesses within the financial protection bureau if they were to have engaged in financial products and services such as selling goods, services or credit through an installment program…
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…My amendment creates a quick and easy brightline test for small businesses. One, firms that fall under the Small Business Administration classification system, the classification small businesses use to file their taxes and qualify the SBA programs and services would be exempt so long as the small business extends credit for the sale of nonfinancial goods and does not securitize its debt. It means that a doctor’s office would be exempted if it has less than $10 million in revenue. A jeweler would be exempt if it has revenues below $7 million. And a grocery store would be exempt if it has revenues under $27 million. As a result of this modification, business owners would know for certainty if they were defined as small businesses by the SBA standards, they would be exempt.”
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“In addition, if a business is in its first year of existence, it would be considered a small business if it’s reasonably expected to fall under the SBA’s size standard. This simple measuring stick provides objective criteria for small firms and has also been endorsed by the National Federation of Independent Businesses, the largest organization and voice for small businesses. It has also been endorsed by the American Dental Association and the American Association of Orthodontists. Finally, the U.S. Chamber of Commerce has indicated that although it continues to have concerns with the consumer financial protection bureau, it views this amendment as an important step forward.”
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Senator Corker: (11:57 AM)
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“I had a number of Democratic colleagues come up after the vote and they said, or actually during the vote, and they said, I support what you want to do, but the provision striking the 5% retention, which we did have in this same amendment, dealing with the securitization was what kept me from voting for this underwriting amendment. I put that in there because I think most people looked at this, looked at the Dodd proposal on 5% retention on securitization and realized that that created a problem, not a solution. And so I actually did that to draw people to our amendment. Since I had a number of Democrats, my friends, on the other side of the aisle come up and say that they would have supported it without striking the risk retention, I have now refiled that amendment, okay? And I have filed that amendment. I’m now asking, let’s have some standard underwriting procedures in this country so now that I’ve refiled that amendment, if it was the issue of risk retention on the securitization piece that kept you from coming onto this amendment, I’ve refiled it, and now I’m seeking on the other side of the aisle — I’m seeking some cosponsors of this amendment.”
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Senator Gregg: (5:01 PM)
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“Our goal should be, one, to put in place a structure which as much as possible foresees and limits systemic risk caused by the derivatives market — that could be caused by the derivatives market. And two, maintain an extremely vibrant derivatives market where America remains the best place in the world to get credit. Unfortunately, the pending bill undermines the second part of that effort. It could be argued the first part of the effort in trying to anticipate systemic risk is addressed in this bill, but it addresses it in such an unwieldy and unmanageable and in some ways counterproductive way that it actually undermines the basic goal which is to keep the system sound and also keep the credit markets vibrant. And why is that? Well, there are a number of reasons for it. But the two most difficult parts of this proposal relative to getting it right are the fact that it forces the swap desk to be spun off of financial houses and it essentially forces instant movement from and basically almost total coverage from clearing houses into exchanges. In both those instances, you’re basically going to create fairly close the opposite result that you seek if you pursue this course.”
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ΩΩIt helps to read what is actually said in Congress. First off, the biggest banks want to keep the present system going because it is giving them a greater and greater share of our GDP. Especially the game of making cheap loans and then palming them off onto Uncle Sam! And worse, the Derivatives Beast is very alluring! They love it! They want it! They want it to grow and grow and grow and to hell with the rest of humanity!
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ΩΩNote how delusional this whole exercise is: the US is CREATING more debts? We are handing out loans to the world???? How insane is this! We are the Debt Hole From Hell! We are Red Ink Central. We are the pipe at the bottom of the ocean spewing red ink into the waters, killing everything.
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Morgan Stanley’s Gorman Denies Bank Misled CDO Buyers (Update1) – Bloomberg.com
Morgan Stanley Chief Executive Officer James Gorman denied allegations the U.S. bank misled investors about mortgage derivatives it sold them. The firm is being probed by U.S. prosecutors over whether the bank misled clients when it sold them collateralized debt obligations as its own traders bet that the value of the securities would drop, the Wall Street Journal reported today. The New York-based firm hasn’t been contacted by the Justice Department, Gorman told reporters in Tokyo today.
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ΩΩArrest them all. They are beyond saving at this point. Return all the ‘boring’ regulations, restrictions and laws that once kept our stock markets and banks safe rather than turning them into toxic wastelands. And for god’s sake, let us return manufacturing to its proper position as the #1 biggest share of US GDP production! This is life and death! The banks are killing us! We are drowning in debts! We need to go in the opposite direction!
Culture of Life News 
@ Elaine
Re: G7 Addiction To Easy Credit Continues Despite All Odds..
….Congress is spinning its wheels, trying to change course without changing any fundamentals…
Unfortunately, it is hard to find a silver lining as many of your readers previously commented as well.
Kevin Rudd has just presented the Australian Budget that includes flaky assumptions as well.
It is better than the US budget but both remain a Pollyanna denial of reality.
All our leaders are tin men and malaise dominates most of our institutions and business houses …where are the hope?
The centre is rotten …this is how it must have been like China went under during the 18th century Ching Dynasty as well as the fall of Rome etc.
Vienna proudly opened their expensive World Trade Exhibition of 1873 with great fan fair before the global depression hit home 6 months later.
Now Shanghai has its World Trade Exhibition with prospects of their own real estate and infrastructure bubble due to soon collapse whilst GFC is amuck.
Will Obama or Hu Jintao turn the lights out?
Well, if nothing else, we now know officially just how great those tax receipts were. Good thing too – we can end that whole superficial tax receipt debate and focus on important things. April’s tax deficit of $83 billion was the highest April deficit on record. America is now more bankrupt than ever. Income was $245.3 billion, 8% below the total recorded last April. Spending was $328.0 billion, up 14% year-over-year. A year ago in April the deficit was $20.9 billion. And here is the data: tax receipts down 7.9% YoY, Individual Income Tax down 21.5% YoY, and more importantly, spending: Total spending up 14.2%, National defense up 17%, Medicare up 39.4%, Social Security up 4.2% and General Government up 5.6%. At least interest payments were down 9.5%.
Iceland goes after
the Banksters
http://www.ipsnews.net/news.asp?idnews=51401
The BP goons are going to lower a decommissioned dive bell on the cracked pipe to stop the pollution and throw old tires at the blown wellhead. These brilliant measures would not have worked three weeks ago? Did it take that thinktank of brilliance three weeks to come up with this? Every dredge and bottom dragger in the gulf should have been there moving the floor over this nightmare. George Bush could have done a heck of a job like this one. We have become a joke. Everyone in power has attained the highest level of incompetence achievable.
Guess as long as JPM can continue shorting the market with non existent silver and Tricky Jean can create a trillion by typing thirteen characters, all is well. Print Hu baby, print. I double dog dare you to make the yuan convertible to gold.
Soviet nuclear solution could be part of tactics to halt oil spill off US coast
http://tinyurl.com/2adlxek
I remember when the Japanese extended mortgage loans to 99 years to keep the housing bubble debt game going. It promoted multi-generational debt-peonage, but collapsed anyway. (Along with it those lifetime employment guarantees.)
By seeing down-payments reduced significantly, isn’t this using the same principal? That is, more debt and therefore more interest over the life of the loans? More debt-peonage for working Americans. Sure, we haven’t reached the 99 year mortgages scenerio, but the compressed life of the loans are achieving similar results. Just before our collapse I remember seeing 40 year loans offered.
For years I’ve thought that, with the passing of the Baby Boomer generation, real lifetime accrual of wealth – fully owned homes and real estate – would pass directly to heirs causing a problem for our debt-based system. That is to say – the greatest transfer of wealth in our country’s history without financiers and debt instruments involved.
With a shrinking middle-class and fewer children, our debt-based system needs to rely on more illegals just to continue functioning. Of course revamping our entire monetary and banking system, and enforcing labor laws would address some of this, but that’s obviously not going to happen any time soon.
Yes, bring back boring banking. Boring adds stability.
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ELAINE: Absolutely correct. When my granddaddy bought his home in Pasadena in 1898, he paid cash and it was less than $3,000. When my parents bought their first house, it cost them $18,000 and had a 15 year mortgage. My first major house, a brownstone in NY that had a fire in it, cost me $35,000 and I paid a 9% interest on it and got rid of it in 5 years. Since then, I have owned a succession of houses and have zero debt. But I watched housing prices soar to insane levels while down payments dropped like a rock and the payment schedule went from 15 years in 1955 to the present 40 years and counting! Insane.
Republic and Empire are mutually exclusive … can’t be both …
After the empire, regression into tribalism?
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http://www.khou.com/home/Quanell-X-If-you-shoot-another-black-man-in-Bellaire-your-city-will-go-up-in-flames-93629879.html
“This cop is a criminal, this cop should be in jail,” Quanell X said. “If you shoot one more black man in Bellaire in cold blood, then your damn city will go up in flames.”
After having a few cups of coffee and driving to work, I’m fully awake now and need to amend what I wrote earlier.
“real lifetime accrual of wealth – fully owned homes and real estate – would pass directly to heirs causing a problem for our debt-based system.”
This will not happen for many of us because our elders must become homeless and penniless before that gosh-darn state socialism kicks in and helps provide care for seniors no longer able to live alone and care adequately for themselves.
My siblings and I are in the process of cleaning up our elderly mother’s home (small, old, rural and very basic) to put up for sale. She must go into assisted living, requiring full-time professional care. So all assets must be sold off, and proceeds used to pay for that care. After a couple of years her (and our deceased step-father’s) lifetime of working hard, investing in a home, and doing without to create a small savings, will be used up. Nothing left. At that point the state (we tax-payers) will step in and provide adequate, no-frills “socialist” care.
Or we could just let the free-market work and let her die mercilessly and miserably.
Nah….
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ELAINE: That is all so very sad! My condolences to this impending loss…your mother is going to miss everything, of course. I cannot blame her, either. Hope you all do well despite all of this.
isha,
I doubt we will descend into tribalism. It’s a struggle between sovereignty and self-determination through representative governance as opposed to global bankster imposed neofuedalism. Greece joined to EU and gave up sovereign control of their economy. Iceland didn’t and is fighting back. Let’s keep our eyes on the outcome of that. Hopefully everyone understands by now that “globalism” is fraud and failure.
China will never give up sovereignty. Nor should we. But our forms of governance may change. It’s our obligation to stay informed and participate even when it doesn’t feel like our efforts are rewarded. Defeatism is for wimps.
I dunno man,
A white cop shot a black man dead here in my ‘sleepy little town’ recently.
The man had broken laws and led police on a chase, but that will not ipso facto justify a shooting.
I won’t recite the whole story but the officers’ account (the only account) of what happened definitely warrants scrutiny. A local newspaper, however, characterized the shooting as ‘accidental’, but the officers’ account of the events clearly indicated the shooting was indeed intentional. So that reporter, who is responsible for being a community voice, has in effect published the conclusion that the killing officer is not a wrongdoer. This conclusion was published absent any official legal inquiry, such as cross-examination of either the shooting or non-shooting officer under oath. In reality, the issue is not whether the shooting was accidental, but whether it was justified.
At a county meeting, where several mostly less serious incidents were brought up as well, the mayor cut off a black citizen after he intimated that local blacks were not going to put up with having their equal protection guarantees flaunted and that justice might be administered one way or another.
I think their policy advisor is JKG:
http://voices.washingtonpost.com/ezra-klein/2010/05/galbraith_the_danger_posed_by.html
Here is another danger for banks right now. It’s not just the NINJA loans that are suspect. People who are able to pay are skipping out. I read an investment newsletter a few weeks ago about guy living in a $3 million home laughing about he’s no longer making payments because it’s now worth $2 million and the bank won’t chance putting it on the market.
From the Huffington Post yesterday…
“JPMorgan Chase told investors and regulators that homeowners who owe more on their mortgages than their homes are worth may not continue to make their payments — even when they’re able to.
Strategic defaults are those in which the homeowner could have continued to make payments but chose not to. The rate of strategic defaults has tripled since mid-2007, notes Tirupattur.”
http://www.huffingtonpost.com/2010/05/11/jpmorgan-chase-warns-inve_n_571103.html
People who live in expensive houses for free are fools…they might not be evicted today but they will be, tomorrow, and the moral as well as financial implications will be ugly, I assure everyone.
We have to look in the long term, not today. The grasshopper philosophy is, winter will never come while ants anticipate this. So when the dooms day does come, it is too late if someone acts like a grasshopper.
Thank you Elaine for your kind words.