Monday, April 5, 2010

The Genesis Of The Gold-Tungsten: The Rest Of The Story

Click this link ...... http://www.zerohedge.com/sites/default/files/tungsten%20genesis.pdf

More Toxic Paper: New Subprime Bonanza in the Housing Market

Another Stealth Bailout for Pudgy Banks

Whew. That was fast. It didn't take long for Wall Street to figure out how to game Obama's new mortgage modification program, did it? The plan was hyped as help for "struggling homeowners", but it turns out, it's just another stealth bailout for pudgy bank-execs. It's funny, the program hasn't even kicked in yet and, already, bigtime speculators are riffling through their filing cabinets looking any garbage paper they can find to dump on Uncle Sam. Take a look at this on today's Bloomberg report:

"Subprime-mortgage securities are rising at an accelerating pace as the U.S. begins to encourage reductions to homeowners’ balances, which may lead to fewer foreclosures and a quicker end to the housing slump....Senior-ranked bonds tied to borrowers with poor credit will mostly benefit after the Treasury Department said for the first time it would seek to cut the size of mortgages, reducing the likelihood that loan modifications will fail, according to JPMorgan Chase & Co., Morgan Stanley and Barclays Plc. (Bloomberg)

What does it mean? It means that Obama's mortgage modification extravaganza has touched-off a gold rush in toxic paper. Subprime securitizations, which had been worth next to nothing, are now the hottest trade on Wall Street. It's a subprime bonanza! The investment sharpies are scarfing up all the crummy MBS they can get their hands on, because they know they can trade it in for Triple A FHA-backed loans when the program get's going. It's another swindle cooked up by Treasury Secretary Timothy Geithner to keep the brokerage clan in the clover. Here's how a Wall Street veteran explained it to me:

"It looks like the investors in securitizations will be swapping underwater real estate for govt-insured paper... I think the scam here is just to provide some cover so the hedge funds and other high net worth individuals can trade their low grade paper for Triple AAA mortgages insured by the FHA at the taxpayer expense."

That's it, in a nutshell. The faux-foreclosure prevention program has nothing to do with helping homeowners. That's just diversionary gibberish to confuse the public. The real objective is to create a government landfill (aka--FHA) where the banks and other financial institutions can dump their toxic MBS-sludge and walk away with gov-backed loans. Get a load of this:

(Bloomberg) -- The Federal Reserve’s completion this week of its program to buy $1.25 trillion in mortgage bonds probably won’t mean significantly higher U.S. home loan rates as investors return to the market, replacing the Fed...

What we are seeing is an effective handoff occurring between the Fed and industry buyers such as banks and pension funds,” said Christopher Sebald, chief investment officer for Advantus Capital Management in
St. Paul, Minnesota...

Advantus is purchasing mortgage bonds after the Fed’s program drained supply in the $5.4 trillion market." (Bloomberg)

Of course, they're "purchasing mortgage bonds", because the government is going to insure them. It's a "no brainer". And don't you love that expression, "a handoff", because that's exactly what it is. The government hasn't stopped pumping liquidity into the system; they've just found another entry-point where they can push it in. Here's how it works: The new program offers incentives to banks and other deep-pocketed investors (in mortgage-backed securities) to slash the principal on underwater mortgages which keeps people from strategic default or foreclosure. Sounds good, right? But here's the catch: When the mortgage is refinanced, it's converted into a FHA-backed loan which provides an explicit gov-guarantee. So, for a slight loss on the face-value of the MBS, the investors (ie--investment banks, hedgies, etc) are able to resuscitate their moribund securitizations (MBS) and reap hefty gains. It's like taking Fido's steaming pile on the front lawn and turning it into the Hope Diamond. Abracadabra!

Geithner has figured out how to put together a bailout that will cost taxpayers hundreds of billions of dollars without any money actually exchanging hands. The value of the putrid mortgage-paper will soar because of the gov-underwriting, and the ginormous losses won't be realized until the mortgages start blowing up sometime in the future. That's when FHA will be put-to-pasture along with fellow-homicide victims, Fannie and Freddie. Pretty clever, eh?

So, the cutthroat speculators and bunko artists who fleeced us all with their dogshit subprimes, have returned for another dip at the public trough. That means taxpayers will get scalped on the same investments a second time. Hey, it's a double-whammy!

This really takes the cake. You gotta hand it to that sniveling scamster Geithner. He had his back to the wall and, presto, he extracts another rabbit from his hat. What a guy. He knew he couldn't go begging to congress for more money, or they'd kick him to the curb. So he worked out a scam that picks up where the Fed's $1.25 trillion quantitative easing bailout leaves off. It's a seamless transition from one massive corporate giveaway to the next. Now the Fed has nearly $2 trillion worth of structured garbage on its balance sheet, (which it will undoubtedly dump on Fannie or Freddie) the banks are loaded with fresh reserves, and another trillion or so is earmarked for the shadow bankers who provide funding to the regulated banking system. AND IT'S ALL 100% FREE. Such a deal.

This bank/credit cabal is robbing us blind in broad daylight and no one seems to give a hoot. Maybe Barack Obama will save us from all ruin?

Fat chance!

Sarkozy sparks party revolt as voters lose confidence in him

A deepening sense of gloom has fuelled speculation that France's president will not seek re-election in 2012

French President Nicolas Sarkozy and wife Carla Bruni
French President Nicolas Sarkozy and wife Carla Bruni in Washington DC last week. Photograph: Benjamin J. Myers/Reuters


France's president, Nicolas Sarkozy, is facing an unprecedented crisis as a poll showed that fewer than 28% of voters had confidence in his leadership, and deputies in his own UMP party launched a revolt against his tax policies, a pillar of his administration.

Only two serving French presidents have polled lower, François Mitterrand and Jacques Chirac, but both maintained the support of their party. The deepening sense of gloom enveloping Sarkozy has come amid speculation that – under pressure from his wife, Carla Bruni-Sarkozy – the president might not stand for re-election in 2012.

The latest poll, in Le Figaro, follows the recent humiliating defeat for the UMP in the second round of regional elections, the final test of Sarkozy's popularity before the 2012 elections, which saw his party trounced by the Socialists and holding only one of France's 26 regions.

Sarkozy's troubles have forced him to reshuffle his cabinet and to beg UMP deputies not to campaign against a tax commitment he introduced in his first few weeks in office guaranteeing that no one should pay more than 50% in direct taxes. Last week 13 MPs from the UMP sent a letter to Le Monde saying that they planned to draft a new law to abolish the tax rule.

The problems Sarkozy faces in his party were dramatically underlined by a furious intervention from a former finance minister, Alain Lambert, who launched a vitriolic public attack on the president on Friday, denouncing his policies of the past three years and warning that he was leading the French right "straight into the abyss".

Describing Sarkozy as being "in no position to deliver a majority" in 2012, he called on senior members of the party to "consider all eventualities".

Sarkozy's 50% tax regime has become the symbol of his difficulties. With France burdened with a budget deficit of 8%, even his supporters believe the country can no longer support his plans.

Junk bond sales hit a record as investors rush for yield

Investors’ appetite for U.S. Treasury securities may have waned, but their hunger for high-yield corporate junk bonds remains robust.

Yield is king: If you have it, investors want it -- and nobody’s terribly worried about risk at the moment.

That means that the first quarter, which ends Wednesday, will be another strong one for many junk bond mutual funds popular with individuals.

Even as Treasury bond yields jumped last week amid disappointing investor demand at the government’s auctions of $118 billion in new debt, buyers continued to snap up junk issues.

Issuance of new junk bonds worldwide is on track to top $38 billion this month, surpassing the previous monthly record of $36 billion in November 2006, according to Bloomberg News. . . .

The junk market had sold off from mid-January to early February as fears over European government debt troubles (Greece, etc.) caused many investors to pull away from higher-risk bonds in general.

The average yield on an index of 100 junk issues tracked by KDP Investment Advisors jumped to a five-month high of 8.79% by Feb. 11 from 7.77% on Jan. 12. Bond prices drop as market yields rise.

But buyers have flocked back to the junk market this month as the U.S. economy has stayed on the recovery track, boosting optimism about corporate financial health. The KDP index yield was at 7.82% on Friday after declining for four straight weeks.

Falling yields and rising bond prices have pushed share values of many junk bond mutual funds to new 52-week highs in recent days.

Shares of the Pimco High Yield fund closed at $9.06 on Friday, the highest since mid-2008. The fund’s total return (share price change plus interest earnings) is 5% year to date. The Vanguard High-Yield Corporate fund, which also is at its highest since mid-2008, is up 2.9% this year.

The average junk fund is up 4% year to date, the best performance of any category of bond funds, according to Morningstar Inc.

Still, the stock market is on track to beat junk funds’ returns this quarter: The Standard & Poor’s 500 index’s total return is 5.1% so far.

-- Tom Petruno

RED ALERT: British Assassination Plot on Obama? Tea Party & Militias being

Click this link ...... http://eclipptv.com/viewVideo.php?video_id=11127

Michelle says Barack's Home country is Kenya - full statement

Click this link ..... http://eclipptv.com/viewVideo.php?video_id=11132

Fossil could rewrite human evolution

The discovery of a nearly-complete early human skeleton is set to revolutionise scientists' understanding of human evolution.

Homo habilis lived 2.0-1.6 million years ago and had a wide distribution in Africa

While there have been thousands of fossilised fragments from human ancestors unearthed around the world, the story of mankind's progression from simple primates to modern, intelligent humans is far from complete.

The fossil record, which spans millions of years, contains large gaps while in some cases entire species have been described from just a few small pieces of bone.


Some religiously-inspired opponents of evolution theory use the patchy fossil record to argue that humans did not evolve from primates.

But rare fossil finds like the new skeleton from the Malapa caves in Sterkfontein, South Africa, give anthropologists the opportunity to gain huge insights into how our prehistoric ancestors lived and looked.

Africa is now widely accepted as the birthplace of mankind as simple primates evolved into the common ancestor we share with the great apes such as Chimpanzees and Gorillas.

Around 3.9 million years ago a species known as Australopithecus afarenus emerged, which was apelike but also shared certain characteristics with modern humans like the ability to walk upright on two legs.

This bipedalism, however, has remained one of the most contentious issues in human evolution and the evidence for exactly when human ancestors moved onto two feet to walk around remains a hotly debated subject.

The first truly human-like species is thought to have first appeared around 2.5 million years ago in southern and eastern Africa.

Homo habilis, as it has been named, had a 50% larger brain capacity than its predecessors and was the earliest species to be placed by scientists in the genus Homo due to its human-like characteristics.

This larger brain is believed to have given the species an edge that its more apelike ancestors had not benefited from, allowing it to begin to form more complex social groups and to master the use of stone tools.

Despite this growing intelligence, however, Homo habilis is not thought to have shared the sophisticated hunting abilities of its descendants, Homo erectus and later Homo sapiens, that would come to dominate the planet.

There is some evidence they were in fact a staple in the diet of large predators such as Dinofelis, a large scimitar-toothed predatory cat.

But the description of Homo habilis is based on just a few key fossils. The first, which was used to define the species, consisted of a lower jaw found in Tanzania along two fragments of skull and 21 finger, hand and wrist bones.

Another fossil, found in 1973 in Koobi Forea, Kenya, is the most complete Homo habilis cranium found so far. No examples of a pelvis or complete limbs have been discovered.

With so few fossils, scientists have struggled to draw a definitive timeline of how human species evolved and arguments about how individual fossils should be ranked are common.

Experts will be keen to pour over the new fossilised hominid after it is unveiled this week in a bid to unravel more about what its place should be. The team who discovered it will certainly face counter claims about where exactly in the evolutionary tree it should sit.

With an almost-complete skeleton, however, it will be possible to determine whether this early ancestor of humans climbed trees or lived on open grassland and if it stood upright or used its arms to assist when walking.

Armed with this kind of detail, scientists should be able to make far more conclusive statements about how our own species evolved.

What The Top U.S. Companies Pay In Taxes

How can it be that you pay more to the IRS than General Electric?


HOUSTON -- As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all.

The most egregious example is General Electric ( GE - news - people ). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.

Avoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%.

In Pictures: What The 25 Top U.S. Companies Pay In Taxes

How did this happen? It's complicated. GE's tax return is the largest the IRS deals with each year--some 24,000 pages if printed out. Its annual report filed with the Securities and Exchange Commission weighs in at more than 700 pages.

Inside you'll find that GE in effect consists of two divisions: General Electric Capital and everything else. The everything else--maker of engines, power plants, TV shows and the like--would have paid a 22% tax rate if it was a standalone company.

It's GE Capital that keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain). Not only do the U.S. losses balance out the overseas gains, but GE can defer taxes on that overseas income indefinitely. The timing of big deductions for depreciation in GE Capital's equipment leasing business also provides a tax benefit, as will loan losses left over from the credit crunch.

But it's the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us. It only makes sense that multinationals "put costs in high-tax countries and profits in low-tax countries," says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. "When you add in state taxes, the U.S. has the highest tax burden among industrialized countries," says Hodge. In contrast, China's rate is just 25%; Ireland's is 12.5%.

Corporations are getting smarter, not just about doing more business in low-tax countries, but in moving their more valuable assets there as well. That means setting up overseas subsidiaries, then transferring to them ownership of long-lived, often intangible but highly profitable assets, like patents and software.

As a result, figures tax economist Martin Sullivan, companies are keeping some $28 billion a year out of the clutches of the U.S. Treasury by engaging in so-called transfer pricing arrangements, where, say, Microsoft's ( MSFT - news - people ) overseas subsidiaries license software to its U.S. parent company in return for handsome royalties (that get taxed at those lower overseas rates).

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BE CAREFUL:Cops giving out more speeding tickets due to recession.

The recession may be claiming a new victim: the 5-10-mph "cushion" police and state troopers across the USA have routinely given motorists exceeding the speed limit.

As cities and states scramble to fill budget gaps with revenue from traffic citations, "not only are the (speeding) tolerances much lower, but the frequency of a warning instead of a ticket is way down," says James Baxter, president of the National Motorists Association, a Wisconsin-based drivers' rights group that helps its members fight speeding tickets.

"Most people, if they're stopped now, are getting a ticket even if it's only a minor violation of a few miles per hour," Baxter says. He cites anecdotal evidence of drivers being pulled over at slower speeds.

RECESSION AND POLICE: Police escort fewer funeral processions
NEW POLICE CAR DESIGN: Automakers' competition fierce for law-enforcement fleets

Tim Davenport, 42, of Kansas City, Mo., was recently stopped on 15th Street in Blue Springs, Mo., and ticketed for going 40 mph in a 35-mph zone — although the police officer initially ticketed him for 40 in a 25, he says. "I drove down that road again, and the posted limit was 35," he says. "I figured the judge wouldn't accept that, since I was over the speed limit, and would still charge me with it. So I went ahead and paid" the $60 ticket.

Ivan Sever, 60, of Boston was stopped on the Massachusetts Turnpike for doing 55 in a 45-mph speed zone. "I had just passed into the section where the speed limit is 45," says Sever, who teaches recording techniques at Berklee College of Music in Boston. "I saw the (trooper) and slowed down. I passed him carefully. He pulled me over, said I was doing 55."

The Governors Highway Safety Association, which represents state highway safety offices, issued a report in 2005 stating that police in 42 states routinely let drivers exceed speed limits. GHSA said the practice hampered efforts to reduce speeding.

"It's still done in some places but not in others," says Jonathan Adkins of GHSA. In places where police no longer allow the cushion, it might be because speed limits are creeping up around the country, he says.

He notes that Virginia's maximum speed limit will rise from 65 to 70 mph in July. Last year, Ohio raised the maximum speed limit for trucks on rural and suburban interstates from 55 to 65 mph. Texas, Iowa and Indiana have all raised their maximum speed limits since the GHSA study.

A study published last year in the Journal of Law and Economics found that police issue more traffic citations during recessions. From 1990 to 2003, counties in North Carolina issued significantly more tickets in the year following a decline in general tax revenue.

Researchers from the Federal Reserve Bank of St. Louis and the University of Arkansas-Little Rock found that a 10% decrease in revenue growth caused a 6.4% increase the following year in the growth rate of traffic tickets.

Troy Green, national spokesman for auto club AAA, says he's unaware of increasing complaints from members about being stopped at slower speeds.

Sgt. Michael Edes, chairman of the National Troopers Coalition, which represents 45,000 troopers, says there is no lower tolerance for speeding among state troopers. "I think you'll find (enforcement is) actually the opposite," he says. "A lot of states have cut (trooper) positions or frozen positions. Several states have grounded their aviation unit, so they're not doing as many speed details."

But it's clear that many communities are turning to traffic citations for added revenue in tough financial times:

• Police in Canton, Ohio, for example, issued 2,011 traffic tickets in January — more than four times the 452 tickets issued in January 2009, according to Police Chief Dean McKimm. He says a decrease in crime in the city of 78,000 that's home to the Pro Football Hall of Fame has freed officers to do more traffic enforcement. McKimm says the additional revenue from traffic citations allows his understaffed department to hire more officers. "We're not writing tickets at lower (speed) thresholds," he says.

• Tennessee is considering a measure similar to one adopted by Georgia last year that would add a $200 fine for "super speeders," those driving more than 25 mph over the posted speed limit, according to the office of Sen. Jack Johnson, a Franklin Republican who introduced the bill.

• Speeding fines are being doubled in "travel-safe" zones on several stretches of highway in Missouri, including five in the St. Louis area. The state passed a law in 2008 that allows authorities to establish such "travel-safe" zones on high-crash stretches of highways. Fines also are routinely doubled in construction zones.

White House cautious over taming US joblessness

WASHINGTON (AFP) - The United States has "a long way to go" in taming its stubbornly high unemployment rate, despite positive jobs creation news last week, top White House economic adviser Lawrence Summers said Sunday.

"We've got a long way to go. We've inherited a terrible situation, the most pressing economic problems since the Great Depression in our country," Summers told CNN television's "State of the Union" program.

Summers called efforts to bring down the high unemployment, which has been stuck for months at 9.7 percent, the "preoccupation" of President Barack Obama's administration.

"There's a great deal we've got to do, and we've got to do it with all of the energy that we can," Summers said.

"It is the president's preoccupation to put people back to work," he said. "That's what the legislation he signed into law -- to give incentives to businesses to hire people who've been out of work -- was all about.

Summers also cited a raft of legislation in the pipeline, to "channel credit to small business, to protect the jobs of those on the front lines, teachers and policemen, to make investments" -- all with an eye towards job creation.

He told ABC television's "This Week" program, meanwhile, that after months of grinding recession and a stalled unemployment rate, he "expects the trend to be upwards" in the US economy.

But Summers suggested the path toward economy recovery may not be smooth, warning that "the numbers could fluctuate."

Christina Rohmer, chairwoman of the White House Council of Economic Advisers, took a more sanguine view of the economy, hailing what she called "good, solid employment growth."

"I anticipate we'll continue to see positive job growth as we go forward. What I'll be focusing on is, how big does it get," she told NBC television's "Meet the Press" program.

"The fact that the unemployment rate stayed constant this month at some level is pretty amazing," she said.

"There's been a tremendous increase in the labor force," Rohmer added.

"Over the last three months we've added more than a million people to the labor force. That's a great sign. That's a sign that people that might have been discouraged dropped out because of the terrible recession, have started to have hope again, and are looking for work again."

Their remarks came after the US government released figures last week showed that the recession-wracked American economy may be turning a corner, creating 162,000 jobs in March, the biggest increase in three years.

Last week's upbeat economic news was tempered however by sobering data showing that the number of people who have not worked in more than six months rose by 414,000 in March, to 6.5 million people.

The US Labor Department also said Friday that the job growth was not enough to budge the unemployment rate from 9.7 percent -- a mission Obama will be determined to accomplish before crucial mid-term elections in November.

Since the recession began in December 2007, around eight million Americans have lost their jobs. Some 15 million Americans remain unemployed.

But like Summers, Rohmer warned that it may not be completely smooth sailing ahead on the jobs creation front.

She noted that an anticipated real GDP growth of just three percent for 2010 may not be enough to create more than a trickle of new jobs.

"You need faster than that to really make a dent," she said. "We still face a lot of headwinds."

Ground zero to be sifted again

Click this link ...... http://eclipptv.com/viewVideo.php?video_id=11140

Michael Savage Talks To Caller Who Knows Michigan Militia Member

Click this link ..... http://eclipptv.com/viewVideo.php?video_id=11147

4/2/2010 Peter Schiff: Who Should Be Hiring Right Now?

Click this link ...... http://eclipptv.com/viewVideo.php?video_id=11141

Arctic ice recovers from the great melt

Melting ice in the sea
Chilly winds across the Bering Sea have caused thousands of square miles of ocean to freeze


IF you thought it was cold in Britain for the time of year, you should see what is happening around the North Pole. Scientists have discovered that the size of the Arctic ice cap has increased sharply to levels not seen since 2001.

A shift in the chilly winds across the Bering Sea over the past few months has caused thousands of square miles of ocean to freeze.

The same phenomenon, known as the Arctic Oscillation, is also partly responsible for the cold winter experienced in northern Europe and eastern America.

It allowed icy blasts of air to escape from the Arctic and make their way southwards. Provisional Met Office figures for December to February suggest the UK had its coldest winter since 1979, with an average temperature of 1.6C — a full 2.1C below normal. Last week a teenager was killed in Scotland when a school bus crashed in the snow — just days into British Summer Time.

The Arctic Oscillation usually acts like a ring of strong winds circulating anti-clockwise around the North Pole to dam up cold Arctic air. This year it has turned “negative”, meaning the ring has broken down, allowing blasts of cold air to escape to lower latitudes.

Mark Serreze, director of the National Snow and Ice Data Center (NSIDC) in Colorado, is surprised by the Arctic’s recovery from the great melt of 2007 when summer ice shrank to its smallest recorded extent.

“It has been a crazy winter with Arctic ice cover growing and very cold weather in northern Europe and eastern America all linked to this strongly negative Arctic Oscillation,” Serreze said.

Vicky Pope, a Met Office scientist, said the Arctic Oscillation had affected weather across the hemisphere. “It also played a part in the very warm weather experienced in the Mediterranean, and western Canada, where the winter Olympics were at risk of too little snow,” she said.

Scientists emphasise that the regrowth of ice in the Arctic and the fierce US blizzards are natural variations in weather which have little relevance for long-term climate change.

“Records kept by Nasa show that in January and February global average temperatures were actually well above the long-term average by around 0.7C,” Serreze said.

Such caution contrasts with the warnings issued by scientists in 2007 when the north polar ice cap suffered a spectacular summer melt.

It hit an all-time low size of 1.65m square miles, about 39% below average, prompting many scientists, including some at the NSIDC, to suggest that global warming had pushed the Arctic to a tipping point from which it might not recover.

By last summer, however, the ice cap had expanded to 2m square miles and this year’s figures show it approaching normal levels for the time of year.

“In retrospect, the reactions to the 2007 melt were overstated. The lesson is that we must be more careful in not reading too much into one event,” Serreze said.

The Met Office had taken a more cautious approach in 2007, warning that the melting was a natural variation so the ice was likely to recover.

Scientists have made mistakes over other short-term trends such as increases in tropical storms. In 2004-5 an increase in the number and severity of storms, including Hurricane Katrina, prompted some researchers to suggest a link with global warming — but this was then followed by a decline in storms.

Similar fears were raised in 2005 when scientists at Southampton University published research showing that some deep Atlantic Ocean currents, linked to the Gulf Stream, had slowed by a third.

They issued a press release entitled “Could the Atlantic current switch off?” which suggested that circulation in the ocean, which gives Europe its temperate climate, might shut down. But more recent studies have shown that such currents slow down and speed up naturally, so short-term changes cannot be seen as evidence of global warming.

“The reality is that greenhouse gases are making the world warmer, but it is a mistake to see short-term changes in weather, currents or Arctic ice cover as evidence of this,” Pope said.

“Instead you have to look at long-term trends. These show that Arctic summer sea ice is decreasing by 232,000 square miles a decade, nearly 2.5 times the area of Great Britain.

“On current trends it will still become ice-free in summer by around 2060.”

Sharp Increase in March in Personal Bankruptcies

More Americans filed for bankruptcy protection in March than during any month since the federal personal bankruptcy law was tightened in October 2005, a new report says, a result of high unemployment and the housing crash.

Federal courts reported over 158,000 bankruptcy filings in March, or 6,900 a day, a rise of 35 percent from February, according to a report to be released on Friday by Automated Access to Court Electronic Records, a data collection company known as Aacer. Filings were up 19 percent over March 2009. The previous record over the last five years was 133,000 in October.

“Even with the restrictive new law, we’re back up over where we were before the law changed,” Mike Bickford, president of Aacer, said in a phone interview Thursday from his headquarters in Oklahoma City. He faulted the stagnant economy, saying a surge in bankruptcies generally follows economic contraction by 6 to 18 months, and he pointed to March as a historically busy month for bankruptcy filings.

Other experts point out that filings invoking Chapter 7 of the bankruptcy code, a simple and inexpensive option, are rising faster than more complex Chapter 13 reorganization filings, under which consumers repay a portion of their debts so they can keep their homes, suggesting that more homeowners are simply walking away from underwater mortgages.

“Fewer people are trying to save their homes,” Katherine M. Porter, a University of Iowa law professor and bankruptcy expert, said in an interview by phone on Thursday. “They realize their payments are not affordable, and bankruptcy judges do not have the power to adjust the mortgages to make them more affordable.”

Statistics from the United States Trustee Program, the Justice Department office that oversees bankruptcy cases, show that Chapter 7 filings as a percentage of all bankruptcies have increased to about 73 percent in 2009 from about 62 percent in 2006-07. Of the 158,141 bankruptcy filings in March, 118,505, or 75 percent, were Chapter 7s and 38,241 were Chapter 13s, the Aacer report says.

“We think that means fewer and fewer families think they’re really going to save their homes,” Professor Porter said. “They don’t have any equity, so why try to keep up with their home payments?”

The nation’s high unemployment rate is one more reason for people to choose Chapter 7, Professor Porter said. “To file Chapter 13, you need ongoing income, and to the extent we have more people who are unemployed, they can’t use Chapter 13 because they don’t have that income to pay into the plan,” she said.

Finally, Professor Porter said, March is the high season for bankruptcy filings because many people in financial distress get a tax refund check that they can use to pay the $1,500 to $3,500 that a bankruptcy lawyer charges.

“People use their tax refunds to pay their attorney fees,” she said.

Eat Plastic, Die ~ A Photo Essay








American Monetary Institute (AMI): History of money, monetary reform, public action. 3 of 6


We hold these Truths as self-evident...

The American Monetary Institute is the world’s leading organization for understanding monetary history and how to reform monetary policy. These six articles reprint AMI’s principle information, available at AMI’s website, with their express permission to share widely:

  1. Explaining the need for monetary reform: the heart of our economic crisis
  2. Monetary history: synopsis of Stephen Zarlenga’s The Lost Science of Money
  3. How to reform our monetary system: understanding the mechanics of creating money
  4. The American Monetary Act: monetary reform legislation for Congress
  5. FAQ of monetary reform
  6. What can Americans do for monetary reform?

This article is part 3. The other titles above will have live links as I add one each day. The following eight paragraphs are a common introduction that begins each article.

The Lost Science of Money (LSM) is a superlative accomplishment of historical analysis. It explains with academic professionalism how money has historically evolved and its capture by oligarchic corporate, political, and media “leaders” for their own use rather than public benefit. Stephen Zarlenga is an unsung hero for his years of work in reviewing nearly a thousand books on money, its creation, and its manipulation. LSM is the most historically authoritative, most comprehensively researched, and most important book on monetary reform available. It is clearly written for all readers to understand this topic of trillions of dollars of yearly benefits for the American public.

As the founder and Director of AMI, Mr. Zarlenga draws on 35 years of experience in the world of finance, securities, insurance, mutual funds, real estate, and futures trading. He has published 20 books on money, banking, politics and philosophy (including The Anglo American Establishment, by Prof. Carrol Quigley). While in his mid 20s he incorporated the Athenian branch of an English life insurance company, earlier opening several European markets for the parent firm, IOS. He built the U.S. distribution network of the then leading American mutual fund concentrating in gold shares. As a member of the New York Futures Exchange (a subsidiary of the New York Stock Exchange) he specialized in trading the complex CRB futures index for several years.
Our “modern” banking system is a Robber Baron-era cartel, expert only in creating price bubbles, bursting them, consolidating power, using political control for taxpayer subsidization of trillions of our dollars (so-called “bailout”), and then repeating the process. It is an Orwellian comic-tragedy of economic management; fraud to consolidate money and power to an elite group of families and organizations.
My summary of leading economic professionals alert to these facts and communicating them to the American public, along with the obvious solutions, is here. The background paper I have for students to understand monetary reform is here. A summary of many of America's brightest historical minds who have argued for monetary reform, here. The evidence that corporate media doesn't report these obvious solutions because they are in collusion with the current power structure of government and money, here. Evidence that professional economic journals are controlled by the Federal Reserve to censor any information that would provide an alternative monetary system, here. A simple example is censoring the obvious alternative of paying the national debt rather than increasing it; that is, shifting from a government-created "debt supply" to an actual "money supply." Corporate media near-absolute silence on these issues is revealing and stunning in its implications.
I also work with Ellen Brown, author of the outstanding Web of Debt, and other colleagues for states’ legislatures’ understanding of monetary reform, and in particular their legislative option to create state-owned banks. Under existing bank laws, states could issue their own credit to purchase their outstanding debt. If California were to do this, they would save $5 billion every year on their state debt interest cost. To put that number in perspective, California could rehire their 20,000 laid-off teachers (I am one) and still have $3.4 billion left.
The power of a two-pronged strategy to work for national monetary reform while educating state legislators of the advantage to their state of creating their own credit rather than going to banks is the education of over a thousand powerful law-making partners all across the US. As a professional educator, I can tell you that research agrees with our observation that education is greatly helped by linking what students (state legislators) already understand (their state economic crisis) to their interests (solving their state crises), and then to the broadest curricular objectives (national monetary reform).
A weakness in any monetary reform strategy is its “Catch-22” nature. The nation’s money supply (not the current debt supply) needs to be managed at a centralized national level. However, the current central national management are the criminal frauds keeping Americans as debt peons. The structural answer is simple, but requires honest management: transparency and public accountability. A probable scenario for Americans to achieve an honest and accountable monetary system is a Truth and Reconciliation process to uncover all the facts keeping our systemic fraud in place.
Mr. Zarlenga and I have discussed this political strategy; he currently disagrees. His view is that investing time for state use of the current non-public-serving system is a distraction from the real reforms required at the national level. His views are expressed in the following and on AMI’s website. I observe the lack of movement in Congress, the sterling example of North Dakota being one of only two currently solvent states in the US with their state-owned bank, and prefer the benefits of unleashing thousands of state lawmakers for national monetary reform step-by-step from seeing their state benefits first.

Reforming Our Monetary System *
Monetary reform is as old as money itself. And while Money plays such a crucial role in our lives and civilization that we couldn’t function without it, how few of us have given it the attention it deserves! Not just to make more – but to understand how the money system works; the institutions and regulations that determine what is money; how it’s introduced or removed from circulation; who controls these decisions for what purposes. Who benefits, who loses?
We want to live in a world of growing freedom and opportunity, but have we done enough to assure that society’s money system is operated to advance our civilization? Evidence grows that the money power instead has become oppressive. Lets see which changes are called for.
Why does reform become necessary? A century ago the great monetary historian Alexander Del Mar wrote: “The money system is society’s greatest dispenser of justice or injustice.” A good system functions fairly, helping to create values for life. A bad one, such as the present system, obstructs the creation of values; gives special privileges to some and disadvantage to others; causes unfair concentrations of wealth and power; leads to social strife and eventually warfare and a thousand unforeseen bad consequences.
Because great power is exercised through money, power-hungry elements from ancient times to the present pursued the political ambition to dominate through the Money Power. This requires societies to periodically reform corrupted systems. The main weapon in this battle has been the manipulation of language and thought, where definitions serve as heavy artillery. Those benefiting from the corruption fund university economics departments and finance “professionals” (we call them economists) to promote their viewpoint through economic theories. That’s why this corrupt system has continued for so long despite its abysmal performance.
Why is reform urgent now? Financial abuses of the world’s money systems are pervasive and self-evident. Dominant companies focus on usury instead of production. Globalization harms helpless third world nations – and even the Planet! Action on monetary reform has become urgent as we enter the 3rd millennium.
How does reform proceed? It must start with an understanding of the nature of money; that money is not a commodity; that money and credit are two very different things.
If society defines money as a commodity (as wealth) then the wealthy will control the system. In our system money and credit have been confused. If society defines money as credit, as the present system does, then the bankers will control the system. Define money in the proper Aristotelian sense as an abstract legal power, and control over money and society can then be under our constitutional system of checks and balances.
The Lost Science of Money book presents the historical chain of the concept of money from Aristotle forward to arrive at our concept of money:
“Money’s essence (apart from whatever is used to signify it) is an abstract social power embodied in law, as an unconditional means of payment.” (LSM, p. 657)
Confusion, Complexity and Dishonesty Serve to “Protect” America’s Nightmare Monetary System: Unfortunately explaining exactly how the credit circulating in our society is created is like walking into quicksand, because the process itself is so unjust and so counter intuitive and so harmful to good public policy, and full of poor banker terminology. We’ll present it here and see whether readers like this full explanation or instead would prefer a shorter summary, for the next printing.
Modern Money Mechanics – The Chicago Fed’s guidebook.
Modern Money Mechanics (published and republished 6 times from 1961 to 1994 by the Chicago Federal Reserve Bank) is the most reliable and readable description of the Fed’s money creation operation. This process is a “moving target,” with elements potentially superseded recently by the Bank for International Settlements so called Basel agreements, but it continues to be a system of fractional reserves as discussed below; and remember that this process and practices keep shifting with increasingly horrendous results.
*Special thanks for this section to Dick Distelhorst; Robert Poteat; Steven Walsh & Jamie Walton.
Money is a crucial part of modern society – But Where Does Our Money Come From?
Most people think our money is issued by our government and indeed money should be created and issued by government and used for the benefit of all by spending new money directly to promote the general welfare. That is what passage of the American Monetary Act will do. However, this does not happen. In our present system, the Federal Reserve Bank of New York, one of the 12 private Federal Reserve branch banks, begins the process by creating money out of thin air. Then using this money as a reserve base, the rest of the banks create about ten or more times that amount of money out of thin air by what’s called “fractional reserve banking.” The required “reserve” varies, ranging from 0% on the first few million loaned; then 3% and then to 10% for larger sums.
How Does the Federal Reserve System Create Money out of thin air?
This chart and its explanation are often used to explain fractional reserve banking because it was published on a number of occasions by the Federal Reserve Bank of Chicago. The following is an admittedly simplified description used for brevity. Besides giving an excellent graphic reference showing how the money supply expands, it also helps explain how money is created.
Source: Federal Reserve Bank of Chicago, “Modern Money Mechanics” (1962; rev. 1968; 1971; 1975; 1982; 1992; 1994)
There are really two stages in money creation; the first is by the Federal Reserve, the second by the various banks. Notice in the bottom left corner the “initial” deposit of $10,000. This deposit was made by the Federal Reserve itself. The Federal Reserve created this money as a liability onto itself. Or, in other words, it paid for it with its own bookkeeping entries. Its “checks” can’t bounce.
This first process involves the government borrowing money. Congress and the Executive need to spend more money on social security, health care, education, infrastructure and sadly, war, than they raise in taxes or other revenue streams. To acquire this money the Treasury sells ‘securities’. These Treasury IOUs come to maturity in three time periods; up to one year the security is called a “Bill,” from one year to 10 years it is called a “Note” and over ten years it is called a “Bond.”
Treasury securities are sold mostly to domestic and foreign banks, and thus Treasury gets its operating money for government expenditures. The money creation process starts with the Federal Reserve buying these securities, not usually from the government, but from Treasury securities dealers representing banks, and from banks themselves. The Fed pays for these securities by notifying the dealer’s bank to credit the dealer’s account for payment for the securities sold to the Fed. At the same time the Fed credits the same amount to the bank’s account at the Fed. That is simply recorded on an account ledger as a liability - an amount the Fed ‘owes’ that bank.
The following example shows this new Fed liability from an accounting perspective when the Fed purchases $10,000 in securities from Bank A.
Federal Reserve Bank Bank A
Assets Liabilities Assets Liabilities
Treasury Securities Reserve Account Reserve Account Dealer’s Account
+$10,000 +$10,000 +$10,000 +$10,000
This double-entry accounting system is described in Modern Money Mechanics. (That forty page, 8.5 x 11 booklet is available from the AMI at $25 per copy)
Under the Federal Reserve Bank, the Assets column has increased by $10,000 because the Federal Reserve now owns the actual Treasury securities with the face value of $10,000 (plus the interest it earns).
Under the Federal Reserve Bank, the Liabilities column has increased by $10,000, which was the cost of purchasing the security. The Federal Reserve is able to make these purchases with mere bookkeeping entries, only because of accounting rule privileges sanctioned by our government.
Under Bank A (the bank that has the Treasury securities dealer’s account), its Assets column is increased by $10,000. This is the first moment that this ‘reserve’ money has come into existence – while at the same time the Fed now holds the Treasury Security.
Under Bank A, the Liabilities column represents the payment by the Fed to the Treasury securities dealer of $10,000 (banks call their customer’s deposits liabilities).
Summarizing the above: The Federal Reserve at the time of purchase took those Treasury securities, IOUs, and gave securities dealer money and Bank A reserves. This money the Fed gave the securities dealer was simply done by creating a liability on paper, and by doing this the Fed created money. Now that we have an understanding of the initial creation of money by the Fed, we are ready to learn about the second stage – fractional reserve banking.
The Second Stage – How Fractional Reserve Banking Then Creates Money out of thin air:
Let’s assume for illustration purposes that the $10,000 deposited into Bank A, received for the account of the dealer, for the sale to the Federal Reserve, stays in Bank A’s accounts. Using the account ledger from earlier, under Bank A’s liabilities is the $10,000 in the dealers’ account, balanced by assets of $10,000 in Bank A’s reserve account at the Fed.
As an asset, Bank A can use those reserves of $10,000 to create new money in the form of loans or investments up to at least 90% of that amount (with the accounting rules now in effect). Therefore, about $9,000 of new money can be created and lent out by Bank A. If Bank A loans Arthur $9,000 to buy a used tractor from Bill and Bill deposits the $9,000 in Bank A (or any other bank), the fractional reserve lending can continue. After Arthur’s loan, Bank A can see that its asset column has just increased by $9,000. After Bill’s deposit, the bank receiving the deposit (if not Bank A) can see that its liability column and asset column has just increased by $9,000. The second bank can now create 90% of that amount, or $8,100 of additional money, and loan it out to Carl to build a porch onto his house. The contractor who gets this job deposits the $8,100 into some other bank and that bank can now loan out 90% of that amount, or $7,290. Banks call the money they receive from other banks when a customer from one bank makes a payment to a customer of another bank “reserves” and the amount of this which they can loan or invest “excess reserves.” What’s important is that the original deposit by the Fed of $10,000 can expand: $10,000 + $9,000 + $8,100 + $7,290 + $6,561 … with each addition being a new loan of 90% of the previous loan (after it gets deposited somewhere). The original reserve of $10,000 (the new money the Fed initially created) can continue to expand deposits with each new bank loan, to eventually become $100,000, or ten times the original deposit. This is graphically presented in the diagram from the Chicago Fed.
The above are some wholesome loan examples. But most of the loaning went into overpriced real estate transactions, and stock market gambling and takeovers!
The interest earned on $90,000 of this new money goes to the banks. Morally, the first use of this money should belong to everyone through our government for there to be justice. If the bank does not receive the interest plus any principal payments, from its borrowers, the bank can foreclose and take any collateral that the borrower has pledged.
Here are Three Problems with Fractional Reserve Banking:
First, it’s immoral. It takes from the whole society and gives to a privileged few, apart from their not doing anything to deserve it. They get it for cleverly manipulating accounts, without creating any values useful for life. This has concentrated wealth to obscene levels in our society.
Second, the interest on money created along with debt creates an unnecessary initial cost on all money in circulation. This is like a ball-and-chain on the leg of every person working to create values for living.
Third, whoever controls the money system controls the direction of society; if it’s government, then in a democracy citizens can decide what to do with it, and it will function under our constitutional system of checks and balances. If it’s banks, then only bankers will decide what to do with it, most likely in their own interest.
In practice this has funded ridiculous bubbles on Wall Street, or incredible real estate bubbles. They did not fund the levee repairs around New Orleans or bridge repairs in Minneapolis, or the $2.2 trillion the engineers tell us is needed to make our infrastructure safe!
The American Monetary Act corrects and reforms the system with three elements:
First, the Federal Reserve system becomes incorporated into the U.S. Treasury. This nationalizes the money system, not the banking system. Banking is not a proper function of government, but control and oversight of the money system must be done by government.
Second, the accounting privilege banks now have of creating money through fractional reserve lending of their credit is stopped entirely, once and for all. Banks remain private companies and are encouraged to act as intermediaries between their clients who want a return on their savings and those clients willing to pay for borrowing those savings, but they may no longer create any part of the nation’s money supply.
Third, new money is introduced into circulation by government spending it into circulation starting with the $2.2 trillion the engineers tell us is needed for infrastructure repair and renewal. In addition, health care and education are included as human infrastructure. Everyone supports the infrastructure, but they worry how to pay for it. That becomes possible with passage of the American Monetary Act.
History shows that all three elements must be done, and done together, for the reforms to work. This is clear in the pages of The Lost Science of Money book, by Stephen Zarlenga.
The system has again shifted in the present crisis. The Federal Reserve itself purchased about $1.5 trillion bonds direct from the U.S. Treasury and has credited the government’s account, creating the money as a bookkeeping entry. This is actually better than the more complicated process described above that’s been operating for decades, because the Federal Reserve has to turn over its net earnings to the Treasury.
But this doesn’t represent reform. The simpler process, used in financing WW2, evolved into the more complex one because the financiers could then grab more money and power. For while the Fed turns over its earnings on money creation to the Treasury, the various banks keep the net interest they earn in the fractional reserve money creation process. That fractional reserve accounting feature is still in effect and at an opportune moment the system will obviously shift back to the more complex, more profitable one for banks.
The above descriptions may seem difficult – the system’s main “protection” is the confusion it generates. Just keep in mind that the power to create our nation’s money has been usurped and privatized. Those in control promote their interests rather than the general welfare; destructively manipulating accounting rules; unfairly concentrating wealth and misdirecting society’s resources into various gambling activities instead of creating values for living. That must change once and for all. We must demand and act for that change.

Earthquake hits Mexico and shakes Los Angeles

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A strong 7.2 magnitude earthquake has struck Baja California in Mexico, rocking buildings and panicking residents as far away as Palm Springs and downtown Los Angeles.

The skyline of downtown Los Angeles, which has been rocked by the Mexican earthquake.

Mexican officials had no immediate reports of damage or injuries.

But witnesses north of the Mexican border said they had been left shocked by the effects of the earthquake.


"I'm shaking like a leaf ... the pool water was just going everywhere," said Jean Nelson in Indio, California, outside of Palm Springs.

A witness in Tijuana told reuters cars in a car park could be seen jolting with the quake.

The quake was felt for about 40 seconds in Tijuana, Mexico, causing buildings to sway and knocking out power in parts of the city. Families celebrating Easter ran out of their homes, with children screaming and crying.

Baja California state Civil Protection Director Alfredo Escobedo said there were no immediate reports of injuries or major damage. But he said the assessment was ongoing.

The quake was felt in downtown Los Angeles, witnesses said. It rattled buildings on the west side and in the San Fernando Valley.

Los Angeles fire department officials have gone on earthquake status and were last night inspecting buildings and overpasses for damage. According to some radio dispatches and local television elevators were stuck in some buildings, including the Disneyland Hotel in Anaheim.

"LAFD has all resources on radio watch and checking their district to ensure safety for all citizens," the department said.

"Firefighters from your 106 neighborhood fire stations are providing a complete survey of 470 square miles in the greater Los Angeles area and are examining transportation infrastructures, large places of assemblage (Dodger Stadium, universities) apartment buildings, power lines, etc, from the ground and the air to ensure safety."

The quake struck at 15:40 Pacific time, 16 miles south-west of Guadalupe Victoria at a depth of 20 miles. The quake was 108 miles south-east of Tijuana.

Multiple aftershocks were reported.

Mike Wong, who works at a journalism school in downtown Phoenix, Arizona, said he was in his second-floor office getting some work done when he heard sounds and felt the building start to sway.

"I heard some cracking sounds, like Rice Crispies," he said. "I didn't think much of it, but I kept hearing it, and then I started feeling a shake. I thought, 'You know what? I think that might be an earthquake."

Andrew Maguire finally exposes systemic fraud by CFTC & JPMorgan

Click this link ...... http://www.youtube.com/watch?v=yLxoeLqQMlw&feature=email