Daily Digest

Daily Digest - August 17

Monday, August 17, 2009, 9:37 AM
  • Welfare State (H/T DrKirbyLuv)
  • 1 of about 500 reasons why we work until August 12 for the government (Seen on MarketTicker)
  • Why "Normal" WILL NOT Return (Video)
  • Consequences be damned . . .
  • ICN, Video (H/T iDoctor)
  • Elizabeth Warren (Video, H/T Fujisan)
  • www.COP.Senate.gov (Warren's full report)
  • Belated Sunday Funnies
  • Real Estate with Jim the Realtor (Video)
  • United States Postal Servcie Health Pension DEFAULT!
  • U.S. Banking crisis just BEGINNING
  • End of the Recession - Closed Monday's

Economy

Welfare State (H/T DrKirbyLuv)

Americans had to work from January 1 until August 12 this year just to cover the cost of government.  That is 26 days more than they had to work last year to cover the cost of government.

1 of about 500 reasons why we work until August 12 for the government (Video, Seen on MarketTicker)

Consequences be damned . . .

Why "Normal" WILL NOT Return (Video)

GDP Prospects Flash Green (MARCH 5, 2007) The author forecast: “The economy should grow nicely this year and next.” Only not so much.

Why Recession Is Remote (OCTOBER 8, 2007) This was precisely at the peak of the last expansion — we now know Real Wholesale-Retail trade sales peaked in September 2007, and Real Income hit its cyclical high in October ‘07. (Employment was December 07, and Industrial Production was January 08). The recession was two months from beginning.

Housing Isn’t Clobbering GDP (OCTOBER 22, 2007) Good thing Housing didn’t impact the economy much . . .

Look for Joblessness to Hit 5.2% in Late ‘08 (DECEMBER 10, 2007) Wildly too optimistic — the Unemployment Rate rate was 6.1% in September 2008, and as I noted at the same time “its likely to rise.” Its now over 9%.

Outside of Housing, Things Are Humming (NOVEMBER 5, 2007) The credit crisis was already 4 months old when this insightful column came out. Aside from GDP being negative, relying on a dirt cheap dollar raises the question of what happens when that dollar rises — like it has this past quarter.

Slowdown, Not Recession (FEBRUARY 4, 2008) The irony is that NBER marked the

recession starting in December 2007 — 3 months prior.

Even Money on Recession (MARCH 10, 2008) That’s a small change from the column the month before. 5 months into to a horrific recession, the call was a coin toss. Awful.

The Great American Savings Myth (MAY 28, 2007) Facts have proven this to be clueless nonsense. “Household net worth — assets minus debt — has never been higher.” As we warned at the time, asset prices can go down, while debt doesn’t — exactly what happened. One of the truly horrific, embarrassing, columns of all time.This is why ideology loses investor’s money. foolishness

Why GDP Will Keep Growing (SEPTEMBER 29, 2008) Thanks to high Imported Oil prices, GDP looks better than it is (high imported Oil makes the deflator artificially raise GDP. But beyond that technical explanation, this is simply embarrassing nonsense. If you worked at any P&L driven buy side firm, writing stuff like this is how you get fired.

ICN, Video (H/T iDoctor)

Elizabeth Warren (Video, H/T Fujisan)

www.COP.Senate.gov (Warren's full report)

Belated Sunday Funnies

Real Estate with Jim the Realtor (Video)

United States Postal Servcie Health Pension DEFAULT!

Anyone remember my commentary about a year ago regarding pension plans - including public pensions - being in serious trouble and ultimately being at risk of insolvency?

U.S. Banking crisis just BEGINNING

Thanks to the U.S. accounting 'watch-dog' – the FASB – legalizing fraudulent accounting (see “FASB strong-armed into mark-to-fantasy accounting”), the “solution” which the bankster oligarchs have come up with to the mass-insolvency of U.S. banks is to simply hide a lot more bad loans. Indeed, fraudulent accounting has become a way of life for the U.S.

It began when the U.S. federal government simply stopped reporting the exponential increase in liabilities from its benefit programs in its own budget – contrary to its own law requiring all of its corporations to report such liabilities. Instead, it simply calls this humungous mountain of future debt “unfunded liabilities”, and spends most of its time pretending it doesn't exist.

The bonus for not including the $70 TRILLION or so in “unfunded liabilities”

End of the Recession - Closed Mondays

18 Comments

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
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Posts: 1995
Re: Daily Digest - August 17

The Elizabeth Warren video verifies that the bail-out was a scam. 

In an article entitled "An econimic time-bomb being mishandled by the Obama administration?", David Corn says:

"is there a ticking time-bomb for the US economy?  And is the Obama administration, Congress, and the media not paying it sufficient attention? That seems to be the message of a government report released this week that drew not as much notice as it deserves."

On Tuesday, the Congressional Oversight Panel, which was set up to monitor the $700 billion Troubled Assets Relief Program (aka the Big Bank Bailout), put out another of its monthly reports, and this one notes that the Treasury Department has not used its TARP billions to purchase this junk--which includes both lousy commercial and residential mortgages and securities based on lousy mortgages--and that billions of dollars of toxic assets remain on the books, threatening the security of numerous financial institutions.

In other words, whoops.

What's happened is that accounting changes have made it easier for banks to contend with these assets. But this bad stuff hasn't gone anywhere. It's literally been papered over. And it still has the potential to wreak havoc. As the report puts it:

If the economy worsens, especially if unemployment remains elevated or if the commercial real estate market collapses, then defaults will rise and the troubled assets will continue to deteriorate in value. Banks will incur further losses on their troubled assets. The financial system will remain vulnerable to the crisis conditions that TARP was meant to fix.

So all those hundreds of billions spent by TARP were for naught?

In a conference call with a few reporters (myself included), Elizabeth Warren, the Harvard professor heading the Congressional Oversight Panel, noted that the biggest toxic assets threat to the economy could come not from the behemoth banks but from the "just below big" banks. These institutions have not been the focus of Treasury efforts because their troubled assets are generally "whole loans" (that is, regular loans), not mortgage securities, and these less-than-big banks have been stuck with a lot of the commercial real estate loans likely to default in the next year or two.

Given that the smaller institutions are disproportionately responsible for providing credit to small businesses, Warren said, "if they are at risk, that has implications for the stability of the entire banking system and for economic recovery." Recalling that toxic assets were once the raison d'etre of TARP, she added, "Toxic assets posed a very real threat to our economy and have not yet been resolved."

It's also frightening that this fundamental issue barely registers a blip on our collective Attention-O-Meter.

Anyone who has read about the last "great depression" knows that many small banks were eliminated, which meant a larger market share for the surviving big banks.  Consolidation through contraction.

This "great depression," like the last one, has been by design.  It is working out nicely again as our nations wealth is being transferred from the working middle class to the international banking cartel. 

The last great depression brought us the imperial presidency and this one is designed for the next step -global governance by the international banking cartel.

Larry



 

Ruhh's picture
Ruhh
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Re: Daily Digest - August 17
DrKrbyLuv wrote:

This "great depression," like the last one, has been by design.  It is working out nicely again as our nations wealth is being transferred from the working middle class to the international banking cartel. 

The last great depression brought us the imperial presidency and this one is designed for the next step -global governance by the international banking cartel.

Certainly so and if any doubt remains one should have a read of the following series of articles.

Part 1: Global Power and Global Government: Evolution and Revolution of the Central Banking System
Part 2: Origins of the American Empire: Revolution, World Wars and World Order
Part 3: Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve
Part 4: Forging a “New World Order” Under a One World Government

Thomas Hedin's picture
Thomas Hedin
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Re: Daily Digest - August 17

What amazes me is the fact that we have legislation up here in minnesota, right now, that would put a god damnded stop to all this, but the people here don't have the guts to want to get behind it.

Support The Minnesota Transportation Act.

One1776's picture
One1776
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Re: Daily Digest - August 17

" End of the Recession - Closed Mondays" ...and begining of a depression!

Farmer Brown's picture
Farmer Brown
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American Dystopia and the Bull Moose

Davos's picture
Davos
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Re: Daily Digest - August 17
turbo wrote:

" End of the Recession - Closed Mondays" ...and begining of a depression!

Sealed +1

pinecarr's picture
pinecarr
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Re: American Dystopia and the Bull Moose

WOW!!!  Farmer Brown, great post!!  Warren Pollock, right?  He's quickly getting my attention as another clarion voice for what is going on.

The end segment with the clip of Teddy Roosevelt's speech, crackly like from an old-time radio, on the "invisible government" of "corrupt business" behind the American government gave me goosebumps, as it is like deja-vu. 

Davos, I hope you will consider re-posting this in your Daily Digest tomorrow so more people here get a chance to hear it!

Farmer Brown's picture
Farmer Brown
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Re: American Dystopia and the Bull Moose

Yep, I like his dispassionate. objective tone and manner.  I don't feel like I'm being sold something.

Rustyrayl's picture
Rustyrayl
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Fraudulent Deposit Insurance Con !

GREAT FREE ARTICLE BY CHRIS  ON THE FDIC. I found another great article about the

 fraudulent deposit insurance con  at    http://www.drschoon.com/articles/GoldAndWhyGoldNow.pdf

the real question here is "how long is the shelf life of the  shell game"?Yell

Headless's picture
Headless
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Posts: 363
Re: Justice approacheth...

Guns for Obama

"A dozen people with guns--including two with semi-automatic rifles--gather outside Obama event."

The First Die-off

"Then, of course, there is the political problem that nobody is thinking about, namely, what happens when a substantial portion of the public is permanently foreclosed from motoring because they've lost jobs and incomes and positions and vocations that they will never get back -- ?  Do you think they'll just hike down the breakdown lanes with colorful bundles on their heads like the impoverished folk in other lands?  Or will they put all those home arsenals to work?  I can't wait to find out."

 

We are heading towards [civil] war! (Part 1 of 4; all worth a listen)

"Are you, the people, getting ready to [surgically] remove them [the politicians and Wall Street criminals]?"

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

We are heading towards [civil] war! (Part 2 of 4; all worth a listen)

"If the names on Wall Street....were Celente, Puccini...they would call it the mafia. But because...the names are Thain, Blankfien, and Paulson...they call it a different game. It's criminal activity. They're robbing us blind..."

We are heading towards [civil[ war! (Part 4 of 4; all worth a listen)

"They [congress] are not my leaders. They couldn't lead me across the street.... They are dangerous. They will take us to war."

"How many hundreds of billions of investor dollars need to be lost before the people rise up...?"

idoctor's picture
idoctor
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Re: Daily Digest - August 17

Stocks still face deflationary collapse - Robert Prechter, August 17, 2009

idoctor's picture
idoctor
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Re: Daily Digest - August 17

citizenman's picture
citizenman
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Posts: 8
HoweStreet mentions Chris Martenson

I was not sure if you like to see any articles mentioning the website but here is one:

http://www.howestreet.com/articles/index.php?article_id=10436

citizenman

fujisan's picture
fujisan
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Posts: 296
Re: Daily Digest - August 17

Systemic musings

In November 2008 the Queen asked why so few Economists had foreseen the credit crunch.

'Ten leading British Economists write to Her Majesty, claiming that the training of economists is too narrow: “Mathematical technique should not dominate real-world substance.”

During a visit to the London School of Economics in November 2008, the Queen asked why few economists had foreseen the credit crunch. Dated 22 July 2009, she received an answer from Professors Tim Besley and Peter Hennessy. This was widely quoted in the British press.

Ten leading British economists – including academics from top universities, three Academicians of the Academy of Social Sciences, academic journal editors, a former member of the Monopolies and Mergers Commission and the Chief Economic Advisor the Greater London Authority – have responded by writing their own response to the Queen. They note that the letter by Professors Besley and Hennessy fails to consider any deficiency in the training of economists themselves.

Following similar complaints by Nobel Laureates Ronald Coase, Wassily Leontief and Milton Friedman, the ten economists argue that economists has become largely transformed into a branch of applied mathematics, with little contact with the real world. The letter by Professors Besley and Hennessy does not consider how the preference for mathematical technique over real-world substance diverted many economists from looking at the whole picture.

The ten economists uphold that the narrow training of economists – which concentrates on mathematical techniques and the building of empirically uncontrolled formal models – has been a major reason for the failure of the economics profession to give adequate warnings of the economic crises in 2007 and 2008.

The ten signatories also point out that while Professors Besley and Hennessy complain that economists have become overly ‘charmed by the market’, they mention neither the highly questionable belief in universal ‘rationality’ nor the ‘efficient markets hypothesis’, which are both widely taught and promoted by mainstream economists.

The ten economists call for a broader training of economists, involving allied disciplines such as psychology and economic history, as well as mathematics.'

 

Should also add geology, sociology, philosophy...

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
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Posts: 1503
Re: Daily Digest - August 17
fujisan wrote:

Should also add geology, sociology, philosophy...

and add the Crash Course to that list!  Maybe someone should point out to the Queen that many people did predict this (Schiff, Rogers, Martenson, Faber, Roubini, Prechter, Hendry, Robertson, Celente, Wiggin, Griffin, among others) but they all have one thing in common: they're not government-paid economists and didn't go to the central-banking school of monetary theory!

ReginaF's picture
ReginaF
Status: Bronze Member (Offline)
Joined: Jan 16 2009
Posts: 93
state banking supervision ask in March 2008 about Lehman

 

The state banking supervision (Bafin) and the Deutsche Bundesbank ask in a confidential report early march 2008 the german banks, how much Risk positions they had at/from Lehmans & USB....For me, it was a new information, that they might be know something what the public dosen't know...

The source (in german) http://www.manager-magazin.de/unternehmen/artikel/0,2828,643444,00.html

Best Greetings,

Regina

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
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Posts: 2237
Re: HoweStreet mentions Chris Martenson

Thanks for the tip, citizenman!  It's good to see Chris starting to get recognized more and more for his work and expertise!

 

Jeff Borsuk's picture
Jeff Borsuk
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Posts: 150
Re: Daily Digest - August 17

Cool

+2

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