"Our Children and Grandchildren are not merely statistics towards which we can be indifferent" JFK

Monday, May 30, 2011

Wall Street Banks Pay $50 million To Deal with Guilt Pre-Memorial Day 2011

It's All Better Now that The Big Wall Street Banks
have Apologized...NOT!!!
4,454 soldier deaths in Iraq,
1,598 in Afghanistan and
Jamie (I missed the Vietnam draft
by 3 years) Dimon deeply apologizes...




By Justin Blum
May 26 (Bloomberg) -- Bank of America Corp. and Morgan Stanley units will pay $22.4 million to resolve U.S. allegations that they improperly foreclosed on active-duty soldiers, including some who suffered severe injuries, without first obtaining court orders.

The Bank of America unit will pay $20 million to settle a lawsuit alleging improper foreclosure on about 160 members of the military between 2006 and 2009, the Justice Department said in a statement today. Morgan Stanley’s Saxon Mortgage Services Inc. unit will pay $2.35 million to resolve a lawsuit alleging it improperly foreclosed on 17 service members from 2006 to 2009.

“The men and women who serve our nation in the armed forces deserve, at the very least, to know that they will not have their homes taken from them wrongfully while they are bravely putting their lives on the line on behalf of their country,” Thomas Perez, the assistant attorney general overseeing the Justice Department’s civil rights division, said in today’s statement.

The foreclosures violated the Servicemembers Civil Relief Act, which was enacted to shield deployed military personnel from financial stress, according to the Justice Department.

‘Not Acceptable’
“These errors are not acceptable, and we certainly regret them,” Terry Laughlin, head of Bank of America’s unit managing foreclosures and defaulted loans, said in an e-mail. “While most cases involve loans originated by Countrywide and the improper foreclosures were taken or started by Countrywide prior to our acquisition, it is our responsibility to make things right.”

Morgan Stanley apologizes to the military families affected by the mistakes, Mark Lake, a spokesman for the New York-based bank, said in an e-mailed statement.

“Our servicemen and women deserve the highest level of customer service,” Lake said. “Saxon has taken meaningful steps to ensure it has appropriate policies and procedures in place to comply fully with the Servicemembers Civil Relief Act.”

Last month, JPMorgan Chase and Co. agreed to pay $27 million in cash to about 6,000 active-duty military personnel who were overcharged on their mortgages, cut interest rates on soldiers’ home loans and return homes that were wrongfully foreclosed upon, according to settlement terms filed in federal court in Beaufort, South Carolina.

JPMorgan Chief Executive Officer Jamie Dimon apologized this month for improperly foreclosing on U.S. military personnel.

‘Deeply Apologize’
“We deeply apologize to the military, the veterans, anyone who’s ever served this country,” Dimon said during the New York-based bank’s annual shareholder meeting.

In many instances, the lenders knew or should have known about the military status of the service members, according to the Justice Department. Victims included people who served in Iraq and Afghanistan.

Some of those in the military foreclosed on by Saxon were severely injured in the line of duty or suffer from post- traumatic stress disorder, according to the Justice Department.





Fannie and Freddie Owe Our Grandchildren $134 Billion While Executives Make Millions

The FHFA has defended executive pay at Fannie and Freddie
in the past by saying the salaries were necessary to recruit and
retain talented executives who can run big, complex companies.


The Center for Public Integrity
By: John Solomon and
Julie Vorman
May 26, 2011

Over the last two years, the Obama administration has approved a whopping $34.4 million in compensation to the top six executives of the financially troubled Fannie Mae and Freddie Mac mortgage giants while lacking basic protections to ensure such compensation is warranted, a federal watchdog found.

The largesse flowed to the six executives even though the two companies they run struggle to staunch billions of dollars in losses, remain in government conservatorship, and are required to repay taxpayers for assuming the companies’ liabilities during the mortgage crisis. Fannie and Freddie are tapping Treasury Department funds each quarter to help pay 10 percent dividends owed to the U.S. government.

“The need for effectiveness, integrity, and transparency in FHFA’s programs and operations cannot be overstated,” said Inspector General Steve Linick, a former Justice Department prosecutor confirmed by Senate last year to watch over federal housing programs. “Fannie Mae and Freddie Mac have received almost $154 billion in taxpayer funding to support the still-fragile housing market. In addition, they own or guarantee about $5.4 trillion in residential mortgage obligations.”

Compensation Fast Facts
  • Fannie Mae Chief Executive Michael J. Williams received a compensation package totaling $9.3 million in 2009 and 2010, according to a March report by the FHFA inspector general. That figure includes an annual salary around $900,000, a similar amount in long-term incentive awards each year, plus $2.9 million in annual deferred pay. All three types of compensation are paid in cash.
  • Fannie Mae’s chief financial officer, David M. Johnson, was paid $4.6 million in 2009 and 2010. The company’s general counsel, Timothy Mayopoulos, had a compensation package of $4.5 million for the two years, the inspector general said.
  • At Freddie Mac, Chief Executive Charles Haldeman had a two-year compensation package totaling $7.8 million in salary, incentive awards and deferred pay. Freddie’s chief financial officer, Ross Kari, was paid $4 million and its general counsel, Robert Bostrom, took home $5.2 million, according to the inspector general. Continue Reading






Friday, May 27, 2011

Blatant Mortgage Document Fraud: Linda Green, Come Out..Come Out Wherever You Are.

Thanks to and a hat tip for Jim Sinclair for the Channel 7 WHDH investigative reporting on blatant morgtgage document fraud. You can see they're all the same name - but they're not written by the same person. "So what does that mean?" John O'Brien, Register, Southern Essex District Registry of Deeds "It means as far as I'm concerned, they're fraudulent documents."

Marie McDonnell, President of McDonnell Analytics: As I said to Hank in the interview, the extent and scope of the fraud is unimaginable and shocking…even for me, which is saying a lot!

Saturday, May 21, 2011

Early Childhood Prgrams At Risk...But not Oil Company $2 billion per Year Tax Breaks

Wonder the Result if Pre-School Children
had a Say in Who Goes to Washing D.C.
as an "Elected Representative?"


News Observer
By: David T Taylor Jr.
5/20/2100

GOLDSBORO -- Ben Bernanke, chairman of the Federal Reserve, recently pointed to the benefits of early childhood education for individuals and to the economy as a whole. "The payoffs of early childhood programs can be especially high," he said. "For instance, preschool programs for disadvantaged children have been shown to increase high school graduation rates. Because high school graduates have higher earnings, pay more taxes and are less likely to use public health programs, investing in such programs can pay off even from the narrow perspective of state budgets; of course, the returns to the overall economy and to the individuals themselves are much greater."

So what are our North Carolina legislators thinking when they cut the funding of vital preschool programs, Smart Start and More at Four, and reorganize them to disrupt continuity with our K-12 system?

The key to our future work force is our investment in at-risk children birth to 5 years of age. There is data to show that North Carolina is failing to address the needs of preschool children and is therefore allowing one-third of our children to drop out of school and struggle to become productive responsible citizens. We cannot afford to allow one-third of our future work force to fail to become contributors to our economy.

We are competing with the Chinese, who are pouring money into preschool programs. China is investing in early brain and child development. If China develops one-tenth of its potential work force, it will surpass the United States in economic capacity. We cannot afford to cut our investment in our youngest children at this critical time. We need a "growth" strategy for our future, not a shortsighted "deficit" strategy.

The statistics paint a depressing picture of our future work force. One in three 5-year-old children do not have age-appropriate language skills. One in three third-graders cannot read at grade level, putting them at high risk to drop out of school.

The best way to address these embarrassing statistics, and assure a healthier work force for our state, is to invest in at-risk preschool children.

In spite of our excellent Smart Start program, which has become a national model, we have never served more than 47 percent of preschool children identified to be at-risk for school failure. More at Four was designed to bridge the gap between birth-to-3 and kindergarten. It was appropriately assigned to the state Department of Public Instruction, to assure continuity from preschool to kindergarten.

Our Early Intervention program has always moved at-risk children from the Department of Health and Human Services to Education after the third birthday. Moving More at Four away from Education makes little sense to professionals who work with at-risk children at the community level.

As a pediatrician who cares for many at-risk children, I would hope our legislators could follow the advice of Bernanke and adopt a "growth" strategy that increases our investment in our youngest children. Our current preschool programs are super; they just are not funded well enough to provide the outcomes we need in the current global economy.

We must do the right thing now for our youngest at-risk children and invest more, not less, in their future and our future.

David T. Tayloe Jr., M.D., has been a pediatrician in Goldsboro since 1977. He is a past president of the American Academy of Pediatrics, a current member of the Governor's Early Childhood Advisory Council and medical director for Reach Out and Read of N.C.

The Senate has blocked a bill to repeal about $2 billion a year in tax breaks for the five biggest oil companies....












Friday, May 20, 2011

IRS Extends Home Energy Credit to a 3 Year old


Center for Public Integrity
By: Laurel Adams
May 19, 2011

Stimulus-funded tax credits for home owners making energy efficient upgrades caught on quickly—more than 6.8 million individuals claimed over than $5.8 billion in residential energy credits on 2009 tax returns. But the Internal Revenue Service is unable to verify if individuals claiming credits are actually entitled to them.

A review by Treasury’s tax administration inspector general found that the IRS cannot accurately track and account for the home energy credits.The IRS does not require third-party documentation proving taxpayers actually purchased qualifying home improvements or that improvements were made at a principal residence. IRS relies on individuals claiming energy credits to provide correct information on their tax returns.

The 2009 Recovery Act included provisions for homeowners investing in energy efficiency measures or renewable energy sources. In return, tax payers received a reduction in the amount of taxes owed. Homeowners could credit 30 percent of the cost of alternative energy equipment and energy efficiency measures, like new doors or windows. Investments were only eligible if they were made to an individual’s principal or secondary residence, rental properties and new construction were not eligible.

A computer analysis of 6.4 million 2009 tax returns with energy credits processed last year identified 5 percent that did not show any indication of home ownership. The credits claimed on these tax returns amounted to more than $234 million.

The inspector general also found 362 ineligible individuals who claimed $404,578 in energy credits. The IRS lacks a process to identify prisoners or individuals under 18, which is the minimum age for entering a contract required for purchasing a home. But IRS does have information which could have been used to identify fraudulent credits.

“Despite having the data available, the IRS did not develop a process to identify these individuals who filed tax returns erroneously claiming these credits,” the inspector general stated.

Individuals were also allowed credits over the maximum amount of $1,500. The inspector general audit found 171 individuals whose credit exceeded $1,500, amounting to a total of $453,220. The audit determined IRS had failed to implement an electronic filing reject code that would have automatically rejected claim amounts over $1,500.

Recommendations by the inspector general include requesting information supporting eligibility requirements on tax returns, creating a process to screen prisoners and underage filers, and implementing the reject code to disqualify credits that exceed the limit.

FAST FACT : The inspector general identified 100 individuals under the age of 18 who were allowed $61,091 in home energy credits. The youngest individual receiving the credit was 3 years old.





Saturday, May 14, 2011

Dylan Ratigan: Deployed Military Members Being Denied Housing Aid

Dylan Ratigan Show
May 13, 2011

Members of deployed military missing a deadline to apply for assistance because they are dodging bullets and improvised explosive devices. Don't you know every hypocritical Washington D.C. politician will make the most of their photo opportunities Memorial Weekend.

A message for our elected "representatives"
The only vice that cannot be forgiven is hypocrisy.
The repentance of a hypocrite is itself hypocrisy.
William Hazlitt


Social Security Projected to Run Dry In 2036 and Other U.S. Misplaced Priorities

Social Security trust funds are
projected to be drained in 2036


United States Misplaced Priorities

$1 Trillion and Counting
 

$138 Billion and Counting
 

$2 Billion in Tax Breaks Annually


Billions in Corporate Tax Breaks.
Bank of America makes $4.4 billion profit yet
recieves a $1.9 billion tax refund and
received almost $1 Trillion bailout from TARP.



Capital Hill Blue
By: Stephen Ohlemacher and
Ricardo Alonzo-Zaldivar
May 14, 2011

The bad economy is worsening the already-shaky finances of Medicare and Social Security, draining the trust funds supporting them faster than expected and intensifying the need for Congress to shore up the massive benefit programs, the government said Friday.

Both Medicare and Social Security are being hit by a double whammy: the long-anticipated wave of retiring baby boomers and weaker-than-expected tax receipts, according to the annual report by the trustees who oversee the programs.

The Medicare hospital insurance fund for seniors is now projected to run out of money in 2024, five years earlier than last year’s estimate. The Social Security trust funds are projected to be drained in 2036, one year earlier than the last estimate. Once the trust funds are exhausted, both programs can only collect enough money in payroll taxes to pay partial benefits, the report said.

More immediate bad news for seniors: After they’ve gone two years with no cost-of-living increase in Social Security payments, the trustees project a 0.7 percent increase for next year, a raise so small that it will probably be wiped out by higher Medicare Part B premiums for most beneficiaries.

“There can no longer be any doubt or denial: Our nation’s Medicare and Social Security programs are unsustainable and will run out of money sooner than expected,” said Senate Republican Leader Mitch McConnell of Kentucky.

Congress and the Obama administration are negotiating possible changes to Medicare and other benefit programs as part of a deal to increase the government’s ability to borrow. The $14.3 trillion debt ceiling will be hit Monday, though Treasury officials are taking measures to put off an unprecedented default on government bonds until August, Treasury Secretary Timothy Geithner said.

Congress is putting off changes to Social Security, but Medicare, the government health insurance program for older Americans, is still on the table.

The longer Congress waits to fix the programs, the more likely it is that lawmakers will be forced to impose tax increases, deep benefit cuts, or both, to save them, the report said. By acting sooner, the trustees said Congress can impose gradual changes that reduce the impact on current beneficiaries and give future retirees time to prepare.

Fixing Social Security would require an increase in the payroll tax of 2.15 percentage points, or an immediate and permanent 14 percent cut in benefits, the report said. Fixing the Medicare hospital fund would require an increase in the payroll tax of nearly 1 percentage point, or a 17 percent cut in benefits.

Nearly 55 million retirees, disabled people and children who have lost parents receive Social Security benefits, which average $1,077 monthly. More than 46 million people are covered by Medicare. Complete Article











Ominous-Looking Market Top (Comstock Partners)

All in all, both fundamental and technical
factors point to a coming major decline
in stock prices at a time when the
majority is still bullish and
contrary to conventional wisdom
market valuations are historically high.


Comstock Partners
May 12, 2011

The market is giving distinct signs that the previously strong rally is fading and that investors and speculators alike are paying greater attention to the headwinds that we have been discussing in these comments for the last few months. Last week we pointed out how suddenly everything that was going up turned sharply down and that everything that was going down moved up.

On a more gradual basis we note that stocks have made no progress now for almost three months. The S&P 500 reached 1344 on February 18th and today closed virtually at the same level---1348. Since investors invariably try to buy on dips what they most recently missed, some bouncing around is likely as the market forms a top. Nevertheless we believe the groundwork for a big decline is now being set at a time when the vast majority is still bullish. The following sums up our concerns.

1) Underlying all of the specific problems is the massive debt, both government and household, built up over the last few decades, but particularly the most recent one. Household debt has averaged about 55% of GDP over the last 60 years, but recently peaked at 98%, and is now still at 91%. As a percent of disposable personal income, household debt has averaged 75% with a recent top of 130% and is currently at 117%. Similarly, government debt has averaged 66% of GDP and is now at a peak of 108%, as government debt has recently risen more than private debt has dropped. The need to cut back on debt will inhibit economic growth for many years to come.

2) QE2 is ending on June 30th. The program will, by that time, have pumped $600 billion into the economy, meeting Chairmen Bernanke's stated goal of jump-starting the stock market. The end of the program is a defacto tightening of monetary policy. While the Fed's balance sheet won't be reduced anytime soon, the key point is that it won't be increasing by an average of $3.8 billion a day as it has since mid-November.

3) Fiscal policy is about to tighten as well. This is obviously what the ongoing discussions in Washington are all about. The fact is, that one way or another, both sides are more or less in agreement that the Federal deficit has to be reduced. So, whatever the merits, both monetary and fiscal policy will be less easy in the period ahead. That is a headwind against economic growth and the stock market.

4) The European Union's (EU) sovereign debt problem is not just a headline risk; it's a real one. As those who know far more than we do about the situation have pointed out, the EU's weak sisters are not facing a mere liquidity crisis, but a solvency crisis. It seems that a restructuring is virtually inevitable, causing severe damage to a number of major European banks. Furthermore, the EU will be lucky if the restructurings are limited to Greece, Ireland and Portugal without spreading further.

5) China is battling against soaring inflation even on the officially suspect government numbers. It has steadily raised interest rates and reserve requirements over the last six months in an attempt to slow down the economy. Although the pundits, as usual, are looking for a so-called soft landing, the vast majority of government attempts to slow down an economy result in recessions. This would have a major impact on the global economy including the commodities markets, emerging market suppliers and multinational corporations.

6) The Japanese earthquake is yet another headwind to the economy. In addition to being a severe blow to the Japanese economy, it is having an important impact on the global supply train. Since the quake occurred late in the first quarter, it is likely to have a far greater impact in the current quarter. Indeed, part of the renewed jump in initial unemployment claims may be due to the quake. We'll find out more when companies start to give warnings about second quarter results.

7) The Mid-East turmoil is continuing and is showing no sign of slowing down. Although the eventual outcome is unpredictable and can go in any direction, it is not likely to be conducive to further risk-taking in the markets.

8) The economic recovery appears unsustainable without additional government stimulus, which is politically off the table. Household savings rates have to move higher in order to deleverage debt at a time when only reduced savings rates can induce stronger consumer spending. Home foreclosures in the pipeline are enormous. This will add to already bloated inventories and sink home prices by another 15% to 20%. Almost a quarter of all homes with mortgages are underwater, and this number will rise more as prices drop.

All in all, both fundamental and technical factors point to a coming major decline in stock prices at a time when the majority is still bullish and---contrary to conventional wisdom--- market valuations are historically high.

Comstock Partners Bios


Debt Ceiling...? We Are Already Defaulting (Jacob Hornberger)

By: Jacob Hornberger
The Future of Freedom Foundation
May 11, 2011

The doomsday crowd claims that the sky will fall in if Congress fails to raise the debt ceiling. If the ceiling isn't raised, they say, the federal government will be forced to default on its debt payments, which apparently will then cause the sky to fall in.

That's, of course, ridiculous. For one thing, just because the federal government isn't permitted to add to its ever-soaring mountain of debt doesn't mean that it will be forced to default on debt payments. With the $2.2 trillion it collects in tax revenues, it can give first priority to debt payments.

But let's assume there is a default. Will the sky fall in, as the doomsayers claim?

Not likely. After all, thanks to the Federal Reserve, the federal government is already defaulting on its debts – and has been for decades.

While the ostensible purpose of the Federal Reserve is to “stabilize” the money supply, its real purpose is to enable public officials to spend as much money as they want by borrowing it and then letting the Federal Reserve pay off its creditors with newly printed, debased, cheapened, devalued dollars.

That's precisely what the Fed is doing now, has been doing recently, and has been doing ever since it was established in 1913. It “monetizes” the government's debt by printing the money to pay it off. The inflated supply of money cheapens the value of the money in circulation, which means that bondholders are being repaid in currency that is worth less than it was when they loaned it.

That's a default.

Let's assume I loan the government $1,000 at 10 percent interest, with the note payable one year from now. The year passes. The government owes me $1,100. The government doesn't have the money to pay me because all of its tax revenues are devoted to welfare and warfare, which the big spenders in Congress are dead-set on continuing.

The members of Congress are reluctant to raise taxes to pay me back for two reasons: one, they know that overtaxed people get upset over more taxes, and, two, they're concerned that more taxes will kill the private sector that funds the welfare-warfare state

No problem. The big spenders simply turn to the Fed to do the dirty work for them. The Fed cranks up the printing presses and starts printing large quantities of new money to pay me and the other creditors whose debts are now due.

The government sends me its newly printed $1,100 to pay off my debt. But there is one big problem: That $1,100 now only buys 90 percent of what it used to. Due to the Fed's expansion of the money supply, the dollar has been debased or devalued by, say, 10 percent.

The government has not complied with its promise to pay me $1,100. It has instead paid me in money now worth $990.

That's a default because the government isn't paying me what I am owed.

That's what the Fed has been doing for decades. That's why the dollar is worth about 5 percent of what it was worth in 1913, when the Fed was established. Decade after decade, the Fed has expanded the money supply to accommodate the big spenders in Congress (and the big-spending President), thereby debasing and devaluing the currency. Throughout most of that time, the government's creditors have been paid off in cheapened, debased, devalued dollars.

While decades of continuous default have brought monetary chaos, the sky has never fallen in.

Needless to say, the big spenders in Congress love the Fed. They know that they can keep spending and borrowing to their hearts' content and not have to incur voter wrath by raising taxes. They know that the Fed will always come to their rescue by printing the money to pay for their big spending and big borrowing.

The citizens, of course, have no idea what is occurring. All they see is soaring prices (initially gold, silver, oil, gasoline, and other commodities, and, later, retail prices in general). Unaware that the government itself – through the Fed – is the culprit, the citizens blame the rising prices on greed, speculation, the banksters, the profiteers, the capitalists, the middle men, the entrepreneurs, and perhaps even the illegal aliens.

Our American ancestors had it right. That's why they lived for more than 100 years with no Federal Reserve and no welfare-warfare state and a way of life based on economic liberty, sound money, private property, the free market, and a limited-government, constitutional republic.

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He is a regular writer for the Foundation's publication, Freedom Daily, and is a co-editor or contributor to the eight books that have been published by the Foundation.

Originally published on April 29, 2011 at CampaignForLiberty.com. Jacob G. Hornberger, the Future of Freedom Foundation, and Campaign for Liberty are not affiliated with Euro Pacific Capital, Inc. Euro Pacific Capital does not guarantee the accuracy and completeness of third-party authored content.

The commentary above is for the benefit of our readers from opinion makers and writers not associated with Euro Pacific. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific, or its president, Peter Schiff.


Tim Geithner Antsy to Crank Up Money Printing Machines

"A default would inflict catastrophic,
far-reaching damage on our Nation's
economy, significantly reducing growth,
and increasing unemployment."


The Wall Street Journal
By: Damian Paletta
5/14/2011

WASHINGTON—Treasury Secretary Timothy Geithner warned in a letter to Congress that failure to raise the $14.294 trillion debt ceiling would drive up interest rates, push down household wealth, put more pressure on federal entitlement programs and cause a double-dip recession.

Mr. Geithner's letter to Sen. Michael Bennet (D., Colo.), sent Friday, marked one of the Obama administration's most explicit warnings about the consequences of failing to raise the debt ceiling. The U.S. government is projected to hit the ceiling Monday. Treasury officials say they have until Aug. 2 before the country could begin defaulting on its debt.

Some Republicans have questioned whether the Treasury would allow a default to occur, but Mr. Geithner said in the letter that "failure to raise the debt limit would force the United States to default on these obligations, such as payments to our service members, citizens, investors, and businesses."

"This would be an unprecedented event in American history," he wrote. "A default would inflict catastrophic, far-reaching damage on our Nation's economy, significantly reducing growth, and increasing unemployment."

Republicans leaders have said they want to raise the debt ceiling but only if the White House agrees to accompany its major spending cuts. House Speaker John Boehner (R., Ohio) has said it would be "irresponsible" to let the U.S. default, but "it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process."

The White House and Republicans have begun deficit-reduction talks. Early signs of progress were reported last week, but they haven't reached an agreement and talks aren't expected to pick up again until June. Policy makers have discussed ways to reduce the deficit from what it would otherwise be by close to $4 trillion over 10 years.

Mr. Geithner, Federal Reserve Chairman Ben Bernanke and other government officials have warned for months about the consequences of defaulting on the country's debt. Because the U.S. government is projected to run a $1.5 trillion deficit in fiscal year 2011, it must borrow to cover its obligations unless it makes huge spending cuts or enacts giant tax increases. To borrow, the government issues debt to investors, but it is much harder to issue debt once the country hits the debt ceiling.

A default would make it more expensive for the U.S. to borrow money by selling Treasury securities, Mr. Geithner said, and this would have wide repercussions.

"Treasury securities set the benchmark interest rate for a wide range of credit products, including mortgages, car loans, student loans, credit cards, business loans, and municipal bonds," Mr. Geithner wrote. "Accordingly, an increase in Treasury rates would make it more costly for a family to buy a home, purchase a car, or send a child to college. It would make it more expensive for an entrepreneur to borrow money to start a new business or invest in new products and equipment."

Mr. Geithner said a default would have the "perverse effect" of making the country's debt problems worse. He said it would lead to a recession, which would drive down tax revenue, while putting more pressure on "social safety net programs."

This would "channel a larger share of our national wealth toward paying our creditors rather than reducing our debt or making productive investments in education."

Many Democrats have joined Republicans in calling for a deficit-reduction plan to clear the way for a debt-ceiling increase. But in the last few weeks, business groups have begun urging lawmakers with more urgency to raise the ceiling soon to avoid a premature reaction from bond investors.

"It is absolutely urgent and essential that we craft a comprehensive plan that materially reduces the deficit," Mr. Bennet said. "But as this letter states, playing politics with the debt limit would rattle the capital markets, blow an even bigger hole in our deficit and would likely throw our economy into another deep recession. That is unacceptable, especially since Congress has the power to prevent it. We need a responsible and comprehensive approach to deficit reduction, not political games that put our country and our economy at risk."



Saturday, May 7, 2011

The Fine Folks at Fannie Mae Lose another $6.5 Billion and Reach Into the Taxpayers' Pockets for Another $6.2 Billion

The federal government has committed
unlimited sums to prop the companies
up and keep mortgage markets from
collapsing. So far, taxpayers are on the
hook for around $138 billion, with
$86 billion for Fannie
and $52 billion for Freddie.
(Meanwhile, Fannie Mae CEO Michael Williams
pulls in a cool $9.3 million during 2009/2010)


The Wall Street Journal
By: Nick Timiraos
5/17/2011

Fannie Mae reported a net loss of $6.5 billion for the first quarter as a weakening housing market dashed hopes that the company had stabilized.

Fannie said Friday it would ask the government for a fresh taxpayer infusion of $6.2 billion after paying dividends to the Treasury. The loss follows net income of $73 million during the previous quarter.

Fannie's loss came as it increased its loan-loss reserves after it revised down its home-price forecast for 2011, and took bigger-than-expected losses on the sale of foreclosed properties. The mortgage-finance giant booked $11 billion in credit-related expenses, up from $4.3 billion last quarter.

"Right now, we're not seeing a lot of good things in the residential real-estate markets," said David Hisey, acting chief financial officer for Fannie Mae.

Home-price declines pose a big risk to Fannie and its smaller sibling Freddie Mac because the firms could take steeper losses on a rising number of foreclosed homes that must be resold. Fannie and Freddie owned 218,000 homes at the end of March, a 33% increase from a year ago.

The rising losses came despite a decline in the share of single-family loans that were 90 days or more delinquent. Those fell to 4.27% at the end of March, down from 4.48% at the end of last year. Fannie has around $206 billion in delinquent loans on its books, "so with that much exposure, if you just have a little bit of negative things happening, it can have a big impact," said Mr. Hisey.

Fannie's report comes days after Freddie Mac reported net income of $676 million for the first quarter.

"It is clearly too soon to say that they've turned a corner," said Jim Vogel, an analyst at FTN Financial.

The federal government has committed unlimited sums to prop the companies up and keep mortgage markets from collapsing. So far, taxpayers are on the hook for around $138 billion, with $86 billion for Fannie and $52 billion for Freddie.

The government receives preferred shares that pay a 10% dividend in exchange. At the current rate, Fannie must pay the government $2.3 billion each quarter. Fannie has posted losses for 14 of the past 15 quarters.





Friday, May 6, 2011

The itsy bitsy $SPDR went up the water spout. It's okay now, the spout is clear...

The itsy bitsy $SPDR went up the water spout.
Down came the flash crash pain, and washed the spider out.
Up came the Bernank, and dried up all the pain,
and the itsy bitsy SPDR went up the spout again.


Happy Anniversary Flash Crash

5/6/11
Themis Trading, LLC
By: Joe Saluzzi

There has been much hype this week about today’s Flash Crash Anniversary.  We have certainly contributed with some comments about what we think has not changed and how we think another flash crash could happen again.  But up until now, the pro-HFT, status quo crowd has been pretty quiet.  Guess they think if they don’t call attention to it, then maybe the critics will just go away.  Well, apparently, they couldn’t hold out any longer and we have been treated with some quotes from the “don’t change anything or I’ll take my liquidity and go home crowd”.  We will first post the pro-HFT comment and then offer the Themis translation.  First we have the COO from the CME Group making some comments read article here.

Comment: “The SEC came in quickly with the circuit breakers proposal and was implemented in record time”

Translation: The public thinks they are protected know from flash crashes but the current circuit breakers only cover the Russell 1000 stocks and some ETF’s



Wednesday, May 4, 2011

Mc Rescue as Ronald McDonald Throws the Middle Class a Lifeline (Michael Pento)

The middle class has been thrown a lifeline
from Ronald McDonald



Wednesday, May 4, 2011
Euro Pacific Capital
By: Michael Pento


The non-manufacturing portion of the U.S. economy dropped precipitously in the month of April. According to the ISM Index, the service sector of the economy—which unfortunately accounts for 90% of GDP—plunged to 52.8 last month from 57.3 in March. The measurement of new orders dropped by the most since records began in 1997. New orders at service providers decreased to 52.7, which was the lowest reading since December 2009, from 64.1 in the prior month. Meanwhile, the employment index dropped to 51.9, from 53.7 a month earlier.

More data confirming the slowing economy came from the release this morning of the ADP employment report. The private payroll survey indicated that 179,000 jobs were created in April, down from the revised 207,000 reported in March. The BLS reported that 216,000 net jobs were added in March.

The rapidly rising cost of food and energy is starting to vastly curtail consumer spending on non-discretionary purchases. Therefore, inflation is well on the way to eroding employment and GDP growth just as it always has throughout economic history.

But not to worry all of you who are out of work or significantly under-employed. The middle class has been thrown a lifeline from Ronald McDonald. The restaurant chain announced on April 19th that it is looking to add 50,000 U.S. workers. Thus is the sad future for U.S. employment.

Michael Pento, Senior Economist at Euro Pacific Capital is a well-established specialist in the “Austrian School” of economics. He is a regular guest on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications, including the Wall Street Journal. Prior to joining Euro Pacific, Michael worked for a boutique investment advisory firm to create ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.


Read about McDonald's Hiring

4 Kent State University Students Killed 41 Years Ago Today...DO NOT FORGET THEM AMERICA

Not one of America's finer moments.
67 Shoots fired in 13 Seconds

4 Kent State Students Killed by Troops

Kent, Ohio, May 4, 1970 -- Four students at Kent State University, two of them women, were shot to death this afternoon by a volley of National Guard gunfire. At least 8 other students were wounded. (9 students wounded with one permanently paralyzed).

The burst of gunfire came about 20 minutes after the guardsmen broke up a noon rally on the Commons, a grassy campus gathering spot, by lobbing tear gas at a crowd of about 1,000 young people.

In Washington, President Nixon deplored the deaths of the four students in the following statement:

"This should remind us all once again that when dissent turns to violence it invites tragedy. It is my hope that this tragic and unfortunate incident will strengthen the determination of all the nation's campuses, administrators, faculty and students alike to stand firmly for the right which exists in this country of peaceful dissent and just as strong against the resort to violence as a means of such expression." Complete New York Time Article

Almost 5 years later to the day was the Fall of Saigon. 58,220 American service people killed during the Vietnam War Conflict and 4 DEAD IN OHIO.




Robinson Memorial Hospital identified the dead students as Allison Krause, 19 years old, of Pittsburgh; Sandra Lee Scheuer, 20, of Youngstown, Ohio, both coeds; Jeffrey Glenn Miller, 20, of 22 Diamond Drive, Plainsview, L.I., and William K. Schroeder, 19, of Lorain, Ohio.

Paul Tople May 4, 1970 Photograph Collections

Vigilant Grandpa
Missing the Viet Nam draft by one year left an indelible mark on
my being and my view of the world. A fine line separates a realist
from a cynic however keeping one leg on each side
affords me some degree of stability.

To the parents, family and friends of Allison, Sandra,
Jeffrey and William...
They Are Not Forgotten

Will Obama tell us to keep shopping? (Dylan Ratigan)



Huffington Post
May 4, 2011
By Dylan Ratigan

It's hard, even today, to really remember the carnage of 9/11, the sense of piercing fear in what had been a placid lake of prosperity. At that moment, anything great and anything terrible was possible. People remember him with a bullhorn on top of rubble, but President George W. Bush also prevented innumerable hate crimes by simply saying that Islam is a religion of peace. That sentiment represented the best of America. But then, he gave yet another clarion call, which was more important than his call for tolerance -- go shopping.

That was his moment, and that was his prescription for America. Go shopping. Now Obama has his moment, a moment richly earned by his security strategy. What will he use it for? It isn't clear. The forces of the status quo are powerful. This past weekend, Seth Meyers presided over a popularity contest between a birther-hugging cynic, Donald Trump, and the President, Barack Obama. It was DC's version of a Royal Wedding.

But then, on Sunday night, President Obama announced that Navy SEALS had delivered two bullets to Osama Bin Laden. Flag-waving throngs gathered outside the White House and in New York City to celebrate, clambering up trees and expressing joyful patriotism and exuberance. Others were more somber, remembering that death, even for one's enemies, is not to be welcomed lightly.

But I listened to our president, the one who only the day before had been throwing around amiable jokes about the political establishment. He said something that stuck with me, and should stick with all of us.

And tonight, let us think back to the sense of unity that prevailed on 9/11. I know that it has, at times, frayed. Yet today's achievement is a testament to the greatness of our country and the determination of the American people.

The cause of securing our country is not complete. But tonight, we are once again reminded that America can do whatever we set our mind to.

If this is true, and I believe it is, then we have much to do. If we can do whatever we set our minds to, then we should not be held back in our attempt to ending the banking oligarchy strangling our economy. If it is true that our struggle is one for "equality for all our citizens," as the president said, then we should end our poisonous petro-political path. As Glenn Hurowitz said, "now that we've killed Osama, let's kill oil." If it is the case that we up for our values abroad, then let's leave Afghanistan and end our highly destructive war on drugs.

This is now a moment. George W. Bush used his moment on behalf of the forces of the status quo. He told us, to go shopping.

Is the era of shopping over?







Tuesday, May 3, 2011

Homeland Security's 2012 Budget Greater than GDP of 132 Countries

Over the decade, the department alone
has spent more than $424 billion.
Today it employs 216,000 people.

"Lawmakers largely served as a rubber
stamp for any budget that
had to do with security"

Grandpa:
One can only wonder if 1/2 of the Homeland Security
staff was proportionately spread throughout the
top 100 U.S. cities as police officers....
Let's talk about feeling safe...



By Charles Riley, staff reporter
May 2, 2011

NEW YORK (CNNMoney) -- In the decade between Sept. 11, 2001, and the death of Osama bin Laden on Sunday, the U.S. government has spent hundreds of billions of dollars with the aim of making Americans safer.

Agencies were created, expanded or given new missions. The government hired thousands of new employees to analyze intelligence, track terror financing and support the nation's rapidly expanding national security apparatus.

The spending started quickly. Within a week of the Sept. 11 attacks, lawmakers approved an emergency $40 billion to bolster national defenses and pursue international terrorists. (Who gets the bin Laden bounty?)

At the forefront of this broad expansion was the Department of Homeland Security. Twenty-two federal agencies were consolidated under the control of one director, with the singular mission of stopping terrorist attacks.

Over the decade, the department alone has spent more than $424 billion. Today it employs 216,000 people.

In its first full budget after the attacks, the Bush administration proposed a funding level of $37.7 billion for the new agency. By 2008, its funding would rise to $50.6 billion.

And the eye-popping totals don't even count money from other parts of the budget used for domestic security.

A total of $71.6 billion will be spent on homeland security in 2012, according to Obama administration projections.

For comparison, that is more spending than the 2009 gross domestic product of 132 countries, including Iraq, Croatia and Cuba.

Tax dollars buying less and less
Of course, while homeland security spending was blasting through the roof, the Pentagon -- busy prosecuting two wars -- was getting a huge boost of its own.

Since 2001, defense spending has just about doubled, rising to almost $700 billion in 2010. That is more than half of the discretionary budget and about 20% of the entire federal budget.

At home, Washington's policymakers built a giant new bureaucracy to focus on border security, dirty bombs, homegrown extremists and the threat of another al Qaeda strike.

And Congress wasn't shy about giving the Department of Homeland Security and other agencies exactly what they wanted.

"Nobody wanted to be perceived as sitting on their hands after September 11th," said Chris Hellman, senior policy analyst at the National Priorities Project, a group that studies the federal budget.

According to Travis Sharp, a research associate at the Center for a New American Security, it was "very rare" to see members of Congress question funding requests.

"Lawmakers largely served as a rubber stamp for any budget that had to do with security," Sharp said.

While lawmakers pumped trillions of dollars into war funding and domestic security, they made no effort to offset costs by raising taxes or cutting spending in other areas.

How Washington F@#$%! the budget
But lawmakers didn't just increase security spending. After a brief few years of budget surpluses at the end of the Clinton administration, lawmakers opened the new century by blowing a hole in the budget with major tax cuts and spending programs.

Congress approved and then expanded the Bush tax cuts, then moved on to establish new prescription drug benefits for seniors on Medicare. The decade closed with a flurry of bailouts and financial stimulus packages that cost trillions.

Today, the debt stands at more than $14 trillion, a number that is setting off alarm bells in Washington.

As a result, both security and military budgets might soon face cuts as lawmakers, and even President Obama, seem to have caught budget-cut fever.

Already, the DHS budget has leveled off, stabilizing around $45 billion annually.

"We've gotten to a point where we think throwing more money is not going to solve the problem," said Hellman. Still, binLaden's death a decade after Sept. 11 underscores the difficulty of counter-terrorism operations.

Plus, the United States has surely foiled plots along the way, even if they have gone unreported. That's an oft-cited argument for justifying homeland security spending.

"It's the loophole through which you drive trucks," Hellman said.





Sunday, May 1, 2011

Millions Set to Lose Unemployment Benefits, Don't Worry, McDonald's Hired 62,000 in One Day, Well Yippee!!

Labor Secretary Hilda Solis "We still have a ways to go..."

As of March, about 14 million people
were unemployed and looking for work,
according to the household survey.

The Wall Street Journal
By Mark Whitehouse
April 30, 2011

5.5 million: Americans unemployed
and not receiving benefits

The job market may be on the mend, but that’s not much consolation to millions of Americans facing a frightening deadline: the end of their unemployment benefits.

The country’s unemployment rolls are shrinking fast, after expanding sharply last year as the government extended benefits to ease the pain of a deep economic slump. As of mid-March, about 8.5 million people were receiving some kind of unemployment payments, down from 11.5 million a year earlier, according to the Labor Department.

To some extent, the shrinkage reflects a desirable reality: Some people are leaving the unemployment rolls because they’re finding jobs. The number of employed in March was up nearly 1 million from a year earlier, according to the Labor Department’s household survey. That’s the biggest year-over-year rise since late 2007.

Many Americans, though, are simply running out of time. As of March, about 14 million people were unemployed and looking for work, according to the household survey. At the time the survey was done, about 8.5 million were receiving some kind of unemployment payments, according to the Labor Department’s Employment and Training Administration. That leaves about 5.5 million people unemployed without benefits, up 1.4 million from a year earlier.

There’s always a certain number of unemployed who don’t receive benefits. They may have just entered the labor force, quit their jobs or not been eligible for some other reason. But workers didn’t quit their jobs at a higher rate over the past year, and more exited the labor force than entered. That suggests the 1.4-million-person change largely reflects people losing their benefits.

For the more than 4 million Americans still receiving extended benefits, the picture isn’t encouraging. The longer they’ve been out of work, the harder it is to find a job. They’ve typically been unemployed for at least 26 weeks, and may have been out of work for as long as 99 weeks, which for many people is the limit.

In the coming months, hundreds of thousands more will drop off the unemployment rolls. The number of people using up their regular 26 weeks of unemployment payments peaked in August 2009 at nearly 800,000 a month. That means a lot of people should be hitting their 99-week limit right about now. And unless Congress does something unexpected, more people with shorter bouts of unemployment will start joining them as the government phases out extended benefits next year.

And what jobs are currently available
for the long-term unemployed?

The Wall Street Journal
By Sara Murray
April 1, 2011

More Jobs Doesn't Necessarily Mean More Good Jobs
Of the 230,000 private-sector jobs created in March, 199,000 of those were in the service sector. A large chunk of those jobs are in fields that are likely to provide a stable livelihood for those lucky enough to snag them – like some of the 78,000 added in professional and business services. But that’s less certain for, say, the 37,000 new workers in the leisure and hospitality industry.

More than half of those full-time workers who lost jobs between 2007 and 2009 and then found full-time work by early last year said their new jobs came with lower wages. Some 36% saw a pay cut of 20% or more. Complete Article

McDonald's Hires 62,000 in One Day
McDonald’s and its franchisees hired 62,000 people in the U.S. after receiving more than one million applications, the Oak Brook, Illinois-based company said today in an e-mailed statement. Previously, it said it planned to hire 50,000. 4/28/11: Complete Bloomberg Article

Average pay for the jobs is $8.30 an hour. That's compared to the federal minimum wage of $7.25 an hour, though in some states the minimum wage is higher. She said that restaurant managers can make $50,000 a year.












Donald Trump receives a mini roast courtesy of President Obama

President Obama turns the tables on Donald Trump during the White House Correspondents' dinner. Yes, President Obama has a sense of humor. If we could only "roast" our way out of Iraq and Afghanistan.