Thursday, September 2, 2010

The U.S. Path to Collapse

The Financial Crisis Inquiry Commission today held hearings with former Lehman Brothers Chairman Dick Fuld. They are trying to figure out why Lehman Brothers was allowed to collapse, with the belief that the failure of Lehman Brothers caused the financial crisis of 2008. The truth is, the failure of Lehman Brothers was a result of the crisis and allowing them to fail was the only correct decision the government made during the crisis.

The pain that was felt after the collapse of Lehman Brothers is nothing compared to the pain that will come when we begin to feel the effects of bailing out the rest of Wall Street. U.S. second quarter GDP growth was revised down on Friday from 2.4% to 1.6%. In order to get this 1.6% GDP growth, the U.S. government had to spend $3.7 trillion on bailouts, stimulus bills, the buying of mortgage backed securities, and other commitments.

General Motors reported today that their August deliveries fell 25% from one year ago to 185,176 vehicles. The U.S. government used "cash for clunkers" to buy GDP growth in 2009, but that growth stole from future automobile sales. NIA believes that GM's sales decline is a sign that the U.S. will likely see a sharp contraction in GDP beginning in the third-quarter, which will lead to the Federal Reserve implementing the mother of all quantitative easing and cause a massive sell off in the U.S. dollar.

Christina Romer, outgoing Chairwoman of Obama's Council of Economic Advisers, today called for more government spending and less taxes as a way to bring down unemployment. The combination of more government spending and less taxes equals massive inflation, but this represents the state of mind in Washington today. Inflation is still the last thing on their minds because they don't see it yet.

Even though we might not see massive across the board price inflation at this time, gold and silver prices have been surging ever since NIA released its article "Gold and Silver Capitulation is Near" on July 28th. Gold is very close to breaking its all time nominal high of $1,264.90 per ounce set during June and silver is getting ready to test the critical $20-$21 per ounce resistance level.

Rising gold and silver prices indicate that the U.S. is headed for an explosion in budget deficits that will rise far beyond what it can pay for through borrowing. Leading Chinese economists are now calling Japanese debt less risky than U.S. debt and with the Japanese savings rate in decline, the U.S. will soon have nobody left to borrow from. The only option will be monetization and already the Federal Reserve is getting ready to buy $10 billion to $30 billion per month in U.S. treasuries to keep its balance sheet at inflated levels.

There are now 50 million Americans on Medicaid, with annual Medicaid costs rising 36% over the past two years to $273 billion. The recently enacted health care bill will add 16 million more Americans to Medicaid beginning in 2014, but the U.S. government will likely go bust by then. It is impossible to have an economic recovery when jobless benefits are encouraging Americans to stay unemployed. U.S. unemployment insurance spending has nearly quadrupled since 2007 to $160 billion annually. Even food stamp costs have surged 80% over the past two years to $70 billion annually.

Once Americans get used to receiving and relying on government entitlement programs, it is hard to wean them off of them. NIA has been hearing reports from members with friends who say they will only "come out of retirement" if they can find a job that pays $25 per hour or more, because with anything less it wouldn't be worth losing their jobless and food stamp benefits. Americans expect to receive their jobless benefits forever and we are sure Obama will continue to extend them leading up to the 2012 election.

There are now countless warning signs all around us on a daily basis that the U.S. is headed for a complete societal collapse. NIA received an overwhelming response from its members when we asked you to submit any signs you see that a societal collapse is near. The response we received was so strong that we are now beginning to produce a documentary about America's upcoming collapse of society. The documentary will be over an hour long and we are hoping to release it by the end of October. It will go beyond the economic facts and statistics that were discussed in 'Meltup' and help expose the upcoming collapse from a real life perspective. NIA believes this documentary will appeal to a very mainstream audience and help open up the world's eyes to the truth about the path this country is on.

Please continue to spread the word about NIA by telling your friends and family to subscribe for free.

JPMorgan Is Shutting Down All Prop Trading Desks

JPMorgan has plans to shut down all of its prop trading desks, says Bloomberg.

CNBC just reported that under 20 commodities traders in London were told to apply for jobs elsewhere inside the bank.

They say the move will take around one to two months.

From Bloomberg:

JPM told traders who bet on commodities for the firm’s account that their unit will be closed as the company begins to shut down all its proprietary trading, according to a person briefed on the matter.

The New York-based bank will shut proprietary trading in fixed-income and equities later, the person said.

Banks right now are changing the roles of their prop traders because of new regulations imposed on them by the FinReg bill.

There were rumors a few weeks ago that Goldman would shut down its prop trading units. Since then, those rumors have reversed.

But other banks - like Citi and Bank of America - have already made moves to change the roles of their prop traders.

The announcement about JPMorgan is different because they apparently plan to shut down ALL prop trading desks. News has only emerged about one or a number of prop trading desks closing at other banks.

But shutting down prop trading desks actually might resemble just changing the name of prop trading, not the practice. Prop traders are no longer "prop traders," and many have been moved to client-based desks.

(For a prime example of how the role of prop traders is changing, look how Citi changed one of their star prop traders's, Sutesh Sharma's, role at the firm.)

Proprietary trading can easily become related to client operations and very closely resemble the prop trading done on strictly defined "prop trading" desks.

Thanks to a line in the Volcker Rule which specifies trading "operations unrelated to customer operations," as long as the "prop trading" is done for client-related purposes, it's OK.

Silver Manipulation Song!

Oil’s Out - Find Out What’s In

The International Energy Association (IEA) has spoken. What the world needs now is a clean energy technology revolution.

June saw the 2010 launch of IEA’s biannual report, Energy Technology Perspectives. Speaking at the launch was Nobuo Tanaka, executive director for IEA. The Gulf oil spill, he said, could prove to be a tipping point in the world’s energy consumption habits. He added that the disaster serves as a tragic reminder that our current path is not sustainable.

As far as the IEA is concerned, this is probably a very important moment to start looking at alternative energy sources. If we, as a collective group of consumers, continue on the business-as-usual path, the scenario for 2050 is looking grim.

This baseline scenario sees carbon emissions rising by 130%, with power generation accounting for 44% of total global emissions in 2050. Oil demand will be up by 70% – that’s five times the oil production in Saudi Arabia today. I’ll leave you to imagine what this means from an energy security perspective.

The other scenario offered by the publication, known as BLUE Map, is the “target” scenario. It assumes that all carbon emissions will be reduced by 50% by 2050 and suggests the least costly way to get there. This 50% reduction, the IEA insists, is the absolute minimum, should we want to keep climate change within the more acceptable 2-3 degree change.

The main focus of this scenario is, of course, weaning the world off fossil fuels. Carbon intensity of energy use would have fallen by 64% by 2050. Demand for coal would drop by 36%, gas by 12%, and oil demand by 4%. Renewable energy would be providing a hefty 40% of primary energy supply and 48% of the electricity generated. As for cars, 80% will be electric, hybrid, or hydrogen-fueled.

And while the world is expected to reduce emissions by 50% by 2050 in the BLUE scenario, it is the OECD that will bear the real burden. Non-OECD countries can get away with just a 50% reduction; OECD countries are looking at cutting 70-80% of their 2007 emissions. This would mean that the electricity sector for these 32 countries would have be “almost completely decarbonized” by 2050.

So what needs to be done to make this work? Well, gird your loins – the “top priority” will be to increase energy efficiency, reduce energy consumption, and lower energy intensity.

But there’s also some exciting news. The revolution is already under way.

On a global scale, total investment into technology and its deployment between now and 2050 would be about US$45 trillion – 1.1% of average annual global GDP over the period. The good news is, that investment has already begun all around the world.

Even as China grudgingly accepts the mantle of the biggest energy consumer, investment dollars are being poured into renewable energy research. China has already surpassed the United States as the largest producer of clean energy, whether it be hydro, wind, solar, or nuclear.

Germany, Europe’s powerhouse, is lining up renewable energy to compete with nuclear. Currently getting 10% of its energy from renewable energy, Germany’s renewable numbers for 2020 are projected at 38.6% electricity, 15.5% heating and cooling, and 13.2% of the transport sector.

And in the United States, the Obama Administration has been pushing for, and encouraging, clean energy research and development since it came into power. On display are a variety of subsidies and loans guaranteed to tempt even the most conservative producer.

Whether it’s the 30% cash up-front that the government is willing to give renewable energy projects or the vast amounts of cash injections into various energy technologies programs, renewable energy is set to take off in America.

For those investment portfolios that have taken a hit from the BP and Enbridge oil disasters, the IEA report is only going to spur up greater interest in the renewables game. Knowing which companies are enjoying political favor from Washington to Berlin and are at the receiving end of substantial grants is a sure-fire way to repair the damage.


Three great waves ... IRS

Date: 2010-08-31 03:35 +800
To: paycheck-piracy
Subject: Three great waves ... IRS
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From: Peter Dorsett <>
Date: August 30, 2010 09:35:50 AM PDT
To: "'Peter Dorsett" <>
Subject: Three great waves ... IRS

*Subject:*Three great waves ... IRS

This will really make your blood boil - *at least it ought to*!!!

*In just **four months**, on January 1, 2011, the largest tax hikes
in the history of America will take effect. *

They will hit families and small businesses in three great waves. *

On January 1, 2011, here's what happens... (read it to the end,
so you **see the effect of all three waves)... *

* **

First Wave: **

Expiration of 2001 and 2003 Tax Relief **
In 2001 and 2003, the GOP Congress enacted several tax cuts for
investors, small business owners, and families. *

These will all expire on January 1, 2011. *

Personal income tax rates will rise. *

The top income tax rate will rise from 35 to 39.6 percent (this
is also the rate at which two-thirds of small business profits are
taxed). **
The lowest rate will rise from 10 to 15 percent. **
All the rates in between will also rise. **

**Itemized deductions and personal exemptions will again phase
out**, which has the same mathematical effect as higher marginal
tax rates. **

The full list of marginal rate hikes is below: *

* *The 10% bracket rises to an expanded 15%*
* *The 25% bracket rises to 28%*
* *The 28% bracket rises to 31%*
* *The 33% bracket rises to 36%*
* *The 35% bracket rises to 39.6%*

Higher taxes on marriage and family. ** *

The "marriage penalty" (narrower tax brackets for married couples)
will return from the first dollar of income. *

The child tax credit will be cut in half from $1000 to $500 per
child. *

The standard deduction will no longer be doubled for married couples
relative to the single level. *

The dependent care and adoption tax credits will be cut. *

**The Return of the Death Tax.**
This year only, there is no death tax. (It's a quirk!) For those
dying on or after January 1 **, **2011, there is a 55 percent top
death tax rate on estates over $1 million. A person leaving behind
two homes, a business, a retirement account **, **could easily pass
along a death tax bill to their loved ones. Think of the farmers who
don't make much money, but their land, which they purchased years ago
with after-tax dollars, is now worth a lot of money. Their children
will have to sell the farm, which may be their livelihood, just to
pay the estate tax if they don't have the cash sitting around to pay
the tax. Think about your own family's assets. Maybe your family
owns real estate, or a business that doesn't make much money, but
the building and equipment are worth $1 million. Upon their death,
you can inherit the $1 million business tax free, but if they own
a home, stock, cash worth $500K on top of the $1 million business,
then you will owe the government $275,000 cash! That's 55% of the
value of the assets over $1 million! Do you have that kind of cash
sitting around waiting to pay the estate tax? *

Higher tax rates on savers and investors. *

The capital gains tax will rise from 15 percent this year to 20
percent in 2011. *

The dividends tax will rise from 15 percent this year to 39.6
percent in 2011. *

These rates will rise another 3.8 percent in 2013. *

Second Wave: *

Obamacare *

There are over twenty new or higher taxes in Obamacare. Several
will first go into effect on January 1, 2011. They include: *

The "Medicine Cabinet Tax" *

Thanks to Obamacare, Americans will no longer be able to use health
savings account (HSA), flexible spending account (FSA), or health
reimbursement (HRA) pre-tax dollars to purchase non-prescription,
over-the-counter medicines (except insulin). *

The "Special Needs Kids Tax" *

This provision of Obamacare imposes a cap on flexible spending
accounts (FSAs) of $2500 (Currently, there is no federal government
limit). There is one group of FSA owners for whom this new cap will
be particularly cruel and onerous: parents of special needs children.

There are thousands of families with special needs children in the
United States , and many of them use FSAs to pay for special needs
education. *

Tuition rates at one leading school that teaches special needs
children in Washington , D.C. ( National Child Research Center )
can easily exceed $14,000 per year. *

Under tax rules, FSA dollars can not be used to pay for this type
of special *n *eeds education. *

The HSA (Health Savings Account) Withdrawal Tax Hike. *

This provision of Obamacare increases the additional tax on
non-medical early withdrawals from an HSA from 10 to 20 percent,
disadvantaging them relative to IRAs and other tax-advantaged
accounts, which remain at 10 percent. *

Third Wave: *

The Alternative Minimum Tax (AMT) and Employer Tax Hikes *

When Americans prepare to file their tax returns in January of 2011,
they'll be in for a nasty surprise-the AMT won't be held harmless,
and many tax relief provisions will have expired. *

The major items include: *

The AMT will ensnare over 28 million families, up from 4 million
last year. *

According to the left-leaning Tax Policy Center , Congress'
failure to index the AMT will lead to an explosion of AMT taxpaying
families-rising from 4 million last year to 28.5 million. These
families will have to calculate their tax burdens twice, and pay
taxes at the higher level. The AMT was created in 1969 to ensnare
a handful of taxpayers. *

Small business expensing will be slashed and 50% expensing will
disappear. *

Small businesses can normally expense (rather than slowly-deduct,
or "depreciate") equipment purchases up to $250,000.

This will be cut all the way down to $25,000. Larger businesses
can currently expense half of their purchases of equipment.

In January of 2011, all of it will have to be "depreciated." *

Taxes will be raised on all types of businesses. *

There are literally scores of tax hikes on business that will take
place. The biggest is the loss of the "research and experimentation
tax credit," but there are many, many others. Combining high marginal
tax rates with the loss of this tax relief will cost jobs. *

Tax Benefits for Education and Teaching Reduced. *

The deduction for tuition and fees will not be available.

Tax credits for education will be limited.

Teachers will no longer be able to deduct classroom expenses.

Coverdell Education Savings Accounts will be cut.

Employer-provided educational assistance is curtailed.

The student loan interest deduction will be disallowed for hundreds
of thousands of families. *

Charitable Contributions from IRAs no longer allowed. *

Under current law, a retired person with an IRA can contribute up
to $100,000 per year directly to a charity from their IRA.

This contribution also counts toward an annual "required minimum
distribution." This ability will no longer be there. *

PDF Version Read more: < <>1>

And worse yet? *

Now, your insurance will be INCOME on your W2's! *

One of the surprises we'll find come next year, is what follows -
-a little "surprise" that 99% of us had no idea was included in the
"new and improved" healthcare legislation . . . thedupes, er, dopes,
who backed this administration will be astonished! *

Starting in 2011, (next year folks), your W-2 tax form sent by your
employer will be increased to show the value of whatever health
insurance you are given by the company. It does notmatter if that's
a private concern or governmental body of some sort.

If you're retired? So what... your gross will go up by the amount
of insurance you get. *

You will be required to pay taxes on a large sum of money that you
have never seen. Take your tax form you just finished and see what
$15,000 or $20,000 additional gross does to yourtax debt. That's
what you'll pay next year.

For many, it also puts you into a new higher bracket so it's even
worse. *

This is how the government is going to buy insurance for the15%
that don't have insurance and it's only part of the tax increases. *

Not believing this??? Here is a research of the summaries..... *

OFFSET PROVISIONS-(sec. 9001, as modified by sec. 10901) Sec.9002
"requires employers to include in the W-2 form of each employee
the aggregate cost of applicable employer sponsored group health
coverage that isexcludable from the employees gross income." *

- */Joan Pryde is the senior tax editor for the Kiplinger letters. /*/
- *Go to Kiplingers and read about 13 tax changes that could affect
you. Number 3 is what is above. */

/*/Why am I sending you this? The same reason I hope you forward
this to every single person in your address book. /*/

*/*/People have the right to know the truth because an election is
coming in November!/*

*Three great waves .... A must read, this is not bashing, it's
the truth.*


Marc Faber on the state of silver, gold, and commodities

Oregon's Tax On The Rich Came In Short, While Unions Just Got A Pay Raise

From the dysfunctional state of Oregon comes news that Measure 66 fell about 50% short of its revenue predictions. Balance that with 4.75% pay hikes and it adds up with a continuing refusal by Oregon to address its problems.

Oregon Grants Unions 4.75% Pay Hike

5 percent pay increase for Oregon state union employees begins Wednesday

A step pay increase of nearly 5 percent for Oregon state workers represented by unions goes into effect Wednesday. The 4.75 percent increase will cost the state as much as $16 million through the end of the two-year budget period.

Measure 66 Falls Short

Oregon tax revenues from Measure 66 coming up short of predictions

Early indicators suggest the state won't receive nearly as much as officials expected from a tax increase on wealthy Oregonians -- raising questions of whether January's bitterly fought election was worth it.

The latest numbers show Measure 66, which set higher tax rates on households making more than $250,000 a year, and on individual filers making half that, has brought in about $70 million in additional collections to date.

"We're thinking we're right around half of what we expected about this time," said Paul Warner, head of the Legislative Revenue Office.

Here's the deal. Oregon raised taxes for the benefit of unions and now they have to raise taxes again because the state only got half as much revenue from the tax hike as expected. When does the madness stop?

I have written about Oregon a lot recently.

Dysfunctional Oregon

August 22, 2010: Dysfunctional Oregon

Sight unseen, I am willing to state that Oregon should get rid of all 64 state boards, no matter what they are supposed to do. Sight seen, it's time Oregonian voters relegate Gov. Ted Kulongoski to the ash heap of history.

Overoptimism Oregon Style

August 18, 2010: Oregon Wins Blue Ribbon for Unfounded Optimism; Everything "Weaker than Expected"

In July of 2009 state revenue projections were $222.8 million to the plus side. Now just one year later, smack in the midst of a "recovery", a $577.2 million June 2010 deficit is too optimistic by as much as another $500 million.

Congratulations of sorts go to Oregon for winning the blue ribbon for unfounded optimism.

Oregon has already cut state spending by 9%. Another 9% may be on the way.

We can now add Measure 66 to the list of overoptimistic misses in Oregon.

Edge of the Financial Chasm

July 25, 2010: Edge of Financial Chasm

Four Problems Oregon Faces.

  • Problem 1: Our income is shrinking
  • Problem 2: We have more people in need
  • Problem 3: We've locked up a lot of money
  • Problem 4: We can't grow our way out

End of the Line for Meaningful Can-Kicking Delays

When it comes to state budgets, the low lying fruit has been picked. Indeed all the fruit has been picked and next year's harvest has been spoken for as well. Thus it's the end of the line for state's ability to kick the can down the road in a meaningful way, if employment does not dramatically pick up soon.

Here's a hint: it won't.

Oregon Taxpayers at Huge Risk over PERS

July 24, 2010: Oregon's Public Employee Retirement System (PERS) in Deep Trouble, Taxpayers on the Hook

If we finish the year here the system will only be 70% funded. Pray tell what happens if the stock market finished the year down a modest 15% and is flat next year?

Notice the article says "Actual pension rates vary by individual employer". Although the rates will vary, it is not "employers" who pick up the tab. Rather it is taxpayers who have to pay taxes to pick up the tab.

If articles like the one quoted explained things properly, there would be much more needed outrage.

The system is broke and the only way to fix it is to get rid of it. Defined benefit plans at taxpayer expense have to go.

Oregon Faces Decade of Budget Deficits

May 23, 2010: Governor's Study Shows Oregon Faces Decade of Budget Deficits; Support for Unions Wanes in Illinois

A study conducted by Oregon Governor Ted Kulongoski shows that Oregon will not be bailed out by a rebounding economy, assuming of course the economy rebounds at all.

Oregon Overestimates the Recovery, Underestimates What Needs to be Done

My sense is that states are all overestimating what the recovery will do. That aside, Oregon is a step ahead of others in realizing the recovery alone will not fix the problem.

The report made no recommendations even though it is crystal clear what needs to happen. For starters, the state needs to kill defined benefit plans for new hires. Next, the state needs to outsource everything possible with the goal of getting rid of all public unions.

Anything else is just pecking at the fringes of the problem.

Business Owners Move Out

January 27, 2010: Oregon's Death Spiral; Business Owners Say "I'm moving out"

On Tuesday, unions in Oregon won a charred earth victory that will drive already troubled Oregon, straight off the cliff.

Oregon voters passed Measure 66 which raises tax rates on individuals who earn more than $125,000 and couples with incomes greater than $250,000. Voters also passed Measure 67 which increases business taxes.

Complete fools in Oregon just voted to save bloated union salaries and pensions, while driving away the real source of tax revenue, private business.

Unions that take hold of states inevitably wreck them. Oregon should take a good hard look in the mirror. It will see a reflection of Michigan. Good luck with that.

Look's like that was a decent call on Measure 66.

Increased taxes will drive away business. For whose benefit are these tax hikes? Unions that need to be eliminated. Oregon's problems cannot and will not go away as long as political pandering to unions continues.

Public union salaries and benefits are Oregon's biggest problem.

A tip of the hat to Oregon Live for excellent articles on the economic plight of Oregon.

Mike "Mish" Shedlock

Economy changing the face of homelessness in US

Click to play

AJ Goode and his wife Mary lived in their car for five months before getting a room at the shelter in Los Angeles, California

Mary Goode and her husband, AJ greet each other with a kiss and dissolve into laughter. They are irrepressibly upbeat.

But their attitude belies their story - and their status as faces of the new, working homeless.

The two are not destitute, but they live in one room at the five-storey Union Rescue Mission in downtown Los Angeles.

The homeless shelter is a step up from their previous address - a white Chevy pick-up truck.

"We were working in Tennessee at this motel, and it got really slow there. And we lost our jobs," Mr Goode says.

Start Quote

We've had a tsunami of families come in - families who are experiencing homelessness for the first time. And it just seems like the wave never ends”

End Quote Reverend Andy Bales, Director Union Rescue Mission

They lived where they worked, so they lost their home, too.

Mrs Goode laughs: "It's a good truck. But we lived in it for four months because of the recession."

"Life can be very hard on you. If you don't have a steady base of income coming in, if you don't have any savings, you can go down real fast and stay there," she says.

Skid Row

Along with several more shelters, the mission sits just a few grubby blocks from gleaming skyscrapers and the city's elegant City Hall.

In the shadow of power and wealth, this is Skid Row, LA's square mile of despair.

The traditional image of homelessness is shocking and all too obvious - people wrapped in filthy layers, some pushing their lives around on supermarket trolleys, others simply crouching in corners, seeking shade from the unrelenting summer sun.

According to the city's Homeless Services Authority, the number of people homeless each night in the city of LA dropped from around 40,000 to 25,000 between the recession years of 2007 and 2009.

But a US government report found the number of homeless families rose 30% between those same years.

A homeless family standing outside of a shelter in Los Angeles,  California Some homeless families in Los Angeles, California have found shelter at local missions in the city

Countrywide, the National Alliance to End Homelessness estimates around 670,000 are homeless each night.

It says there is not yet enough data to quantify the effects of the recession.

But it points out that homelessness tends to be a delayed response to an economic downturn.

Reverend Andy Bales, who runs the Union Rescue Mission, doesn't need data to identify a changing problem.

"We've had a tsunami of families come in - families who are experiencing homelessness for the first time. And it just seems like the wave never ends," he says.

We walk through a large room containing several rows of bunk beds.

Stand-alone fans keep the room cool. Air conditioning is too expensive to install.

The shelter sleeps around 1000 people each night, mostly single adults in these dorms.

The 'economic reality'

Now for the first time, the shelter is asking some to pay $7 (£4.50) a night.

In return, residents can stay in their beds during the day, a change from the current policy of vacating the beds until the evening.

The shelter also gives them a locker and saves $2 on their behalf, a scheme designed for empowerment as much as economics.

"People feel better about themselves when they pay their own way, and it affirms their dignity," Reverend Bales says.

Tents on a sidewalk in the Skid Row district in Los Angeles Some of Los Angeles' homeless have erected tents on sidewalks around the city

He adds: "And really the economic reality has forced us into considering that. These are the toughest times in the history of Union Rescue Mission - 119 years. We are serving ten times the people that we were during the Great Depression, and LA is only three times bigger than it was during the Great Depression."

Donations on which the shelter depends are down, and some staff have been laid off.

Meanwhile, California's publicly-funded safety net is shrinking, a result of deep cuts in a state facing a $19bn (£15bn) budget shortfall.

Families in poverty

California's jobless are adding to the state's homelessness, with unemployment remaining stubbornly above 12% along with one of the highest rates of foreclosure in the US.

Among them is Jonathan Long.

Start Quote

I think it might be weeding out the people who are serious about getting their life straight. It gives you back your pride as a man”

End Quote Jonathan Long Father of homeless family in LA

By the door of his room at the Union Rescue Mission a hand-drawn sign reads "The Long Family".

Above it, a photograph of his wedding day - he and his bride wore red, as it was Valentine's Day.

Inside I met his four children and his wife, Veronica, pregnant with their fifth.

The room looked to measure around 15ft (4.5m) by 10ft (3m).

"It's better then being out there," Mr Long says.

There was a bunk bed against one wall and a single bed in the corner.

Through a window was a view of downtown skyscrapers.

Each night they pull out two extra mattresses so they all can sleep.

In a bookcase, food and toys are stored and a small electronic keyboard, the last reminder of the recording studio Jonathan used to own.

He lost his business when his clients stopped being able to pay.

Selling off equipment kept them going for a while, then his grandmother helped out while she could.

The family moved in with friends, until the friends were evicted.

"Three summers ago, we were actually so well off we were looking into buying a house. And then when the economy crashed, it completely screwed me up," Mr Long says.

In fact, this was a dual income family. Mrs Long used to earn money as a massage therapist, until that too dried up through lack of clients.

Now she says the change has been hardest for the children.

"They don't have the space and the toys and the TV and the video games and the DVD player and the movies. We don't have these things anymore. That may be the reason he's been acting out some,' Mrs Long tells me, nodding towards their eldest son, Nathan.

They hadn't heard about the shelter starting to charge a fee.

"Some people here with their attitudes might think it was taking advantage," Jonathan says. "I think it might be weeding out the people who are serious about getting their life straight. It gives you back your pride as a man."

Places like the mission face unprecedented challenges.

They must now reach out to those they help.

And increasingly, even amongst the homeless, there are haves and have-nots.

America's Healthcare Insanity

By now it is common knowledge the healthcare system in the USA is a disaster. It was a disaster before the recent “overhaul," and I’m betting is will be an even bigger disaster after the new laws actually go into effect.

For the record, I’m a proponent of public healthcare, and I was actually looking forward to the Obama administration fixing this issue. The result they gave us is not a fix, though; it’s not even a Band-Aid. What it is, is a flat out screw job to every U.S. citizen, along with a massive payday for the private insurance agencies. Why else would insurance company stocks go up after this new bill was passed? Apparently someone expects them to make a lot more money going forward, and honestly I can’t see how they’d be wrong.

As far as I’m concerned, the great “debate” on healthcare was a huge partisan charade. If this overhaul had been properly executed, by people who cared about doing the greatest good for the greatest number of U.S. citizens, there would have been no need for a debate in the first place. I can illustrate in the next 5 minutes why the healthcare system needs to be overhauled, and I’m almost positive that 100% of people will agree with me. The fact that this issue was even debated in the first place makes me wonder just how dumb some people really are, and it also makes me wonder who does the marketing for the Republican Party. Whoever it is, those guys are good, really really good.

The underlying problem is a massive conflict of interests -- human life vs. the corporate bottom line. Private insurance companies are for-profit businesses. They collect your annual premiums (their revenue), and payout your claims each year (their expenses). So, what happens when someone gets seriously injured, terminally ill, or has any variety of health issues that may exist? Then the for-profit company loses money on you. When you start taking away from the corporation’s bottom line, you are no longer a good investment for them. If you force them to pay out more than the annual premium you’ve paid in, you can expect them to say good bye to you.

Simply put, your life is worth less to them than their bottom-line profits. These companies have shareholders, board members, VPs, CEOs -- all who are looking for a positive return on the year. In fact, their compensation is often tied to stock price. The more the stock goes up, the more they get as an annual bonus. Of course, if an insurance company stock is going up that typically means they paid out less in claims. Meaning they let their non-profitable “investments” go.

Insurance companies literally invest in human lives. If you become too expensive to keep alive, they’ll simply stop paying, or cut you loose.

They’re not accountable to you as a customer; they’re accountable to board members, executives, and owners.

The fact that these agencies have no real interest in keeping you alive and healthy in the first place is the reason the system needs to be overhauled. These insurance companies have an actual interest in not paying for your expenses, as that profit is what keeps them in business. They’ll even bribe doctors to deny you medical procedures that would cost them money. This conflict of weighing human life against profits is inhumane, immoral, and flat out disgraceful to all those that actually rely on these companies to keep their families alive and healthy.

This conflict is a fact -- actually it’s the business model of the insurance agencies. I have yet to meet someone who isn’t completely disgusted by this. We have companies investing in our lives to pay dividends, bonuses, golden parachutes, and highly bloated CEO compensation packages.

The need for overhaul should be beyond clear, especially for anyone who relies on insurance agencies to cover their health costs.

So, what was the overhaul supposed to accomplish? In reality it probably accomplished what it was supposed to all along, as it forced every U.S. citizen to buy a for-profit product from a private seller. But what did I naively hope it would do? I hoped it would create a government-run and paid-for-healthcare system, that every citizen in the USA has the option of using.

It doesn’t have to replace the existing private healthcare system, nor does it have to force anyone to use it who doesn’t want to. It simply provides an alternate system of healthcare that is government run and paid for, like every other civilized country on earth already has.

Now, I know a ton of you will moan and groan about government-run anything, but I’m about to show you exactly why the government is the only organization that could run this.

First, the government is already massive; so massive they could care less about any single person or “bad investment." They also don’t show much concern for profitability -- just look at the national debt and budget deficits they run. They aren’t accountable to shareholders; they have no bottom line to report; and they can sign blank checks for unlimited amounts of money. If I want anyone footing the bill for my CT scan, it’s an entity like this.

Now, I know there will always be those that gripe about there even being a public option. Honestly though, why do you care so much about the option if you don’t have to use it? It’s simply an option. My guess is you don’t want to pay for other people's healthcare with your tax dollars, right? Yeah, well you already pay for multiple wars each year that kill thousands of innocent civilians. You pay to keep officials in office that are inept, incompetent, and corrupt. You pay to bail out banks that have robbed an entire generation of people. The way I see it, I actually would like to pay to help out those who can’t afford healthcare, as I don’t think anyone should die because they can’t afford to see a doctor.

If there’s anyone out there who would rather see their tax dollars go toward killing people in another country instead of helping people in their own country, I have to say shame on you. Honestly, if you can support the multiple wars our country is waging, but are anti-public healthcare, you’ve got an evil soul that belongs in the deepest darkest pits of hell -- sort of like the private insurance companies that take out life insurance policies on our soldiers and make millions off their deaths while screwing the families.

Back to healthcare -- I’m not saying the public plan should be mandatory, or that anyone that doesn’t want to use it should be forced to. All I’m saying is that this is what every other developed country on the planet has . . . and I thought it was finally our turn.

However, due to magical powers of private interest groups, and our trusty political figures deep in the pockets of these corporations, any hope for a public, government-run health plan was destroyed. Marketing messages somehow convinced people that it was going to steal them away from their beloved insurance agency and force them through a bureaucratic nightmare every time they needed to see the doctor. Somehow they convinced people that the existing system in the USA was actually good.

The "pro-public option" Democrats (provided they actually wanted to pass this thing) need to take some lessons in debate. The only thing that should have focused on here was the fact that the government plan was an option. It’s there if you want it, but no one has to use it if they don’t want to. I can’t see how anyone with half a brain would be opposed to that. It’s certainly a lot better than the mandate we have now. The bill that passed requires every U.S. citizen to purchase heath insurance from a private, for-profit, company. Furthermore, it expands the powers of the IRS to take action against those who don’t comply.

Bravo Democrats . . . you took your one chance to finally fix the nation's healthcare system, and forced every citizen to become a paying customer of the insurance agencies you've been vilifying throughout this charade.

This "overhaul" ended up being one more way to track and control the public, which makes me think this was probably the goal all along.

Problem bank list climbs to 829

NEW YORK ( -- The government's list of troubled banks hit its highest level since 1993 during the second quarter, although the pace of growth continued to slow, according to a government report released Tuesday.

The number of banks at risk of failing rose by 53 to 829, the Federal Deposit Insurance Corp. said in its quarterly survey of the nation's banking system. That increase marks the smallest rise since the first quarter of 2009.

However, it's still nearly double the 416 banks that were on the FDIC's watch list a year ago and is up from 775 in the first quarter of this year.

Banks that end up on the problem list are considered the most likely to fail. But few of the lenders on the list actually reach the point of failure. On average, just 13% of banks on the FDIC's problem list have been seized and shuttered by regulators.

So far this year, 118 banks have failed, with 45 closings during the last quarter.

While FDIC chief Sheila Bair said she expects 2010 bank failures to exceed last year's tally of 140, the total amount of assets from this year's failures will likely be lower since banks have been cleaning up their balance sheets.

More money in the kitty. The FDIC reported a second consecutive increase in its deposit insurance fund, which covers customer deposits when a bank fails. The fund, which had been dwindling for two years, grew by $5.5 billion, but it still operates in the red, with a deficit of $15.2 billion.

"As we expected, demand on cash have increased this year," said Bair. "But our projections indicate that our current resources are more than enough to resolve anticipated failures."

Meanwhile, banks and other institutions insured by the FDIC collectively earned approximately $21.6 billion during the quarter. That's the highest in nearly three years and reversing last year's $4.4 billion loss.

Two out of three banks reported higher profits compared to a year ago, as they set aside fewer funds to cover bad loans for the first time since 2006. Banks reduced their quarterly loan-loss provisions to $40.3 billion, according to the FDIC. That's down more than 40% from a year ago.

Although bank earnings are still low by historical standards and the number of problem banks and bank failures remain high, Bair remained optimistic.

"As long as economic conditions remain supportive, most institutions should maintain profitability and increase their capacity to lend." she said.

The latest reading on the health of the industry provided a modest boost to bank stocks Tuesday. The KBW Bank Index (BKX) edged up 1.3% in late morning trading.

Half of Your Taxes Will Go for Interest Under Obama

By: Ronald Kessler

Congressional Budget Office forecasts of government deficits and debt are supposed to be authoritative. But Congress forces the CBO to make unrealistic assumptions when issuing those estimates.

The latest assumptions include that the alternative minimum tax will not be adjusted annually for inflation and that discretionary spending unrelated to war will increase no faster than inflation.

Brian M. Riedl of the Heritage Foundation has stripped out these and other assumptions to come up with a more realistic look at the government’s spending and debt. Based on realistic assumptions:

  • By 2020, half of all income tax revenues will go toward paying interest on a $23 trillion national debt.
  • The national debt held by the public will surpass 100 percent of gross domestic product (GDP) by 2020.
  • Federal spending per household, which has risen from $25,000 to nearly $30,000 during the past three years, will top $38,000 by 2020. The national debt per household, which was $52,000 before the recession, will approach $150,000 by 2020.
  • Over eight years under President Obama, budget deficits will total $10 trillion. That is triple the $3.3 trillion in deficits accumulated by President Bush. The public debt — $7.5 trillion at the end of 2009 — will triple to $23.5 trillion by 2020.
  • The expected additional costs of the Social Security, Medicare, and Medicaid programs will push the federal public debt to more than 300 percent of GDP by 2050 and above 800 percent of GDP by 2080.

Obama blames Bush for handing him a growing deficit. Never mind that the deficit is now nearly three times what it was under Bush. Meanwhile, Obama is lecturing European countries, which are cutting government spending, that they should reverse course and increase spending.

American consumers know better. Even as Obama and the Democratic-controlled Congress spend like drunken sailors, Americans have cut back on their personal debt.

“I think the biggest threat we have to our national security is our debt,” Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, has said.

Because of Obama and the Democrats, America faces a financial crisis as devastating as a terrorist attack.

Ronald Kessler is chief Washington correspondent of

New Video of World Trade Center 7 Released Showing Michael Hess Calling Down For Help While He is Stuck in the Building

New World Order Report Exclusive

After the first World Trade Center tower is hit, Barry Jennings, a City Housing Authority worker, and Michael Hess, New York’s corporation counsel, head up to the emergency command center of the Mayor’s Office of Emergency Management (OEM), which is on the 23rd floor of WTC 7. Testimony from Barry Jennings and Michael Hess has rarely been confirmed, until now. This video was just released via a FOIA (freedom of information act request) and New World Order Report has obtained and released it on the internet.

Take a look for yourself. Michael Hess, clearly visible, is stuck in the building. This corroborates the story they told that on the way down trying to evacuate the building, an explosion occurred inside of the building which trapped them. The stairway, where the explosion occurred, blew out the last floors in the stairwell. Barry Jennings gave an exclusive interview with Loose Change creator Dylan Avery where Barry stated that when he was finally found by firefighters, they stepped over dead bodies in the lobby on their way out. After the video publicly aired, Barry Jennings mysteriously died just before the BBC aired a piece about World Trade Center Building 7...

New footage just released:

Michael Hess on the News on 9/11 discussing his story:

Michael Hess Testimony:

Barry Jennings Testiomny:

Info on WTC 7 and Michael Hess from

After the first World Trade Center tower is hit, Barry Jennings, a City Housing Authority worker, and Michael Hess, New York’s corporation counsel, head up to the emergency command center of the Mayor’s Office of Emergency Management (OEM), which is on the 23rd floor of WTC 7. [Associated Press, 9/11/2001] The center, opened in 1999, is intended to coordinate responses to various emergencies, including terrorist attacks (see June 8, 1999). [CNN, 6/7/1999] However, Hess and Jennings find no one there. [National Institute of Standards and Technology, 9/2005, pp. 109-110 pdf file; BBC, 7/6/2008]

Center Is Empty; Jennings Warned to Leave - Jennings will describe that, when he arrives at the emergency command center, “To my amazement, nobody’s there.” He says: “I saw coffee that was still hot, that was still smoldering. They had screens all over the place, but the screens were blank. So I didn’t know what was going on.” He then phones several individuals, including one of his superiors. When Jennings says where he is, the superior responds: “Get out of there. Get out of there now.” Hess then runs back into the center, after having found the stairwell, and says: “We’re the only ones up here. We gotta get out of here.” [Dylan Avery, 2007; BBC, 7/6/2008]

9/11 Commission Claims Command Center Not Evacuated until Later - Yet, according to the 9/11 Commission, “After the South Tower was hit [at 9:03], OEM senior leadership decided to remain in its ‘bunker’ and continue conducting operations, even though all civilians had been evacuated from 7 WTC.” The Commission will claim the emergency command center is not evacuated until 9:30 a.m. (see (9:30 a.m.) September 11, 2001). [9/11 Commission, 7/24/2004, pp. 305] But according to the London Independent, Hess and Jennings arrive there by the time the South Tower is hit, which suggests the center is evacuated earlier than officially claimed. [Independent, 9/13/2001] Jennings himself will recall, “I had to be inside on the 23rd floor when the second plane hit.” [Dylan Avery, 2007] The possibility that the emergency command center is evacuated earlier than the 9/11 Commission claims is partly confirmed by OEM Commissioner John Odermatt, who later says that after the first plane hit the WTC, he left only two staffers there (see (Soon After 8:46 a.m.-9:35 a.m.) September 11, 2001). [Barrett and Collins, 2006, pp. 34] Jennings and Hess subsequently head down the stairs, but will become trapped in WTC 7, and have to be rescued by firefighters (see 12:10 p.m.-12:15 p.m. September 11, 2001). [National Institute of Standards and Technology, 9/2005, pp. 109-110 pdf file]

Barry Jennings, a City Housing Authority worker, and Michael Hess, New York’s corporation counsel, hear unexplained explosions inside World Trade Center Building 7, where they become trapped. [UPN 9, 9/11/2001; BBC, 7/6/2008] The two men went up to the emergency command center on the 23rd floor of WTC 7 after the first attack occurred (see (Shortly Before 9:03 a.m.) September 11, 2001). [Associated Press, 9/11/2001; Independent, 9/13/2001] At some point, the power goes out in the building. They then start walking down the stairs to get out. According to Hess, when the two men get down to the eighth floor, “there was an explosion and we’ve been trapped on the eighth floor with smoke, thick smoke, all around us, for about an hour and a half.” [UPN 9, 9/11/2001] Jennings will also recall hearing explosions. He will say: “I made it to the sixth floor and there was an explosion. The explosion was beneath me.” [Dylan Avery, 2007] He will add, “[T]he staircase that I was standing on just gave way,” and, “Then we made it back to the eighth floor, I heard some more explosions.” [BBC, 7/6/2008] Jennings says to Hess: “This is it; we’re dead. We’re not gonna make it out of here.” [Penn State Public Broadcasting, 3/1/2002] The National Institute of Standards and Technology (NIST) will claim the two men head down the stairs after 9:59, when the first collapse occurs, and then become trapped around the time the second tower collapses, at 10:28. [National Institute of Standards and Technology, 9/2005, pp. 109-110 pdf file] But according to the London Independent, they start heading down the stairs after the second attack at 9:03, which suggests the explosions begin earlier on. [Independent, 9/13/2001] Jennings will confirm this, saying that when he hears the first explosion, “Both [of the Twin Towers] were still standing,” meaning it occurs before 9:59. He says: “I was trapped in there when both [Twin Towers] came down.… All this time I’m hearing explosions.” [Dylan Avery, 2007] The cause of the explosions is unclear. Later on, firefighters will rescue Hess and Jennings from the building (see 12:10 p.m.-12:15 p.m. September 11, 2001). [National Institute of Standards and Technology, 9/2005, pp. 109-110 pdf file]

Barry Jennings, a City Housing Authority worker who had become trapped in World Trade Center Building 7, finds the building’s lobby in ruins as he is being rescued from it, and steps over what feels to him like dead bodies. [Dylan Avery, 2007] After the first plane hit the WTC, Jennings had gone up to the emergency command center on the 23rd floor of WTC 7 along with Michael Hess, New York’s corporation counsel (see (Shortly Before 9:03 a.m.) September 11, 2001). [Associated Press, 9/11/2001; Dylan Avery, 2007] After heading down the stairs, the two men became trapped on the building’s eighth floor (see (Between 9:15 a.m. and 12:00 p.m.) September 11, 2001). Some time later, firefighters come into WTC 7 to help the two men out of the building. [UPN 9, 9/11/2001; National Institute of Standards and Technology, 9/2005, pp. 109-110 pdf file]
Lobby Is 'Total Ruins' - According to Jennings, when he gets down to the lobby, he is astonished to find it totally ruined. In a 2007 interview he will recall: “[W]hen I came in there, the lobby had nice escalators. It was a huge lobby.” But reaching it again, he asks the firefighter who is escorting him, “Where are we?” and the firefighter answers, “This was the lobby.” Jennings finds this “unbelievable,” and says, “You gotta be kidding me.” He will describe the lobby as being “total ruins.”
'Stepping over People' - Furthermore, Jennings steps over what may be dead bodies in the lobby. He will say: “[T]he firefighter that took us down kept saying, ‘Do not look down,’ and I kept saying, ‘Why is that?’ [He said,] ‘Do not look down.’ And, stepping over people. And you know you could feel when you’re stepping over people.” [Dylan Avery, 2007] Yet most people were evacuated from WTC 7 around 9:03 a.m., if not earlier (see (9:03 a.m.) September 11, 2001). [National Institute of Standards and Technology, 9/2005, pp. 109 pdf file] The very latest that people left the building, according to official accounts, was 9:30 a.m. (see (9:30 a.m.) September 11, 2001). [9/11 Commission, 7/24/2004, pp. 305] In a later interview, Jennings will clarify: “I never saw dead bodies.… [I]t felt like I was stepping over them but I never saw them.” The BBC will say, “There is no evidence that anyone died in Tower 7 on 9/11.” [BBC, 7/4/2008; BBC, 7/6/2008] According to the National Institute of Standards and Technology (NIST), firefighters lead Jennings and Hess out of WTC 7 at around 12:10 p.m. to 12:15 p.m. (see 12:10 p.m.-12:15 p.m. September 11, 2001). [National Institute of Standards and Technology, 6/2004, pp. L-18 pdf file]

While most of Building 7 of the World Trade Center was evacuated around the time the South Tower was hit, if not earlier (see (9:03 a.m.) September 11, 2001), firefighters now find three individuals who have become trapped inside it, and lead them out of the building. [National Institute of Standards and Technology, 6/2004, pp. L-18 pdf file; National Institute of Standards and Technology, 9/2005, pp. 109-110 pdf file] Among these individuals are Barry Jennings, a City Housing Authority worker, and Michael Hess, New York’s chief lawyer who is also a longtime friend of Mayor Rudolph Giuliani. The two had gone up to the 23rd floor emergency command center of the Mayor’s Office of Emergency Management after the first attack occurred, but found it empty (see (Shortly Before 9:03 a.m.) September 11, 2001). [New York Times, 11/21/1997; Associated Press, 9/11/2001; Giuliani, 2002, pp. 20-21 and 244; Dylan Avery, 2007] They then headed downstairs but became trapped around the eighth floor by smoke and debris that filled the staircase. After breaking a window and calling for help, they were spotted by firefighters outside. When the firefighters go in, they also find a security officer for one of the businesses based in the building, who is trapped on the seventh floor by the smoke in the stairway. This officer headed up the building after the South Tower collapsed at 9:59, to check that all his personnel had left there (see (Shortly After 9:59 a.m.-12:10 p.m.) September 11, 2001). All three men are escorted out of the building. [Penn State Public Broadcasting, 3/1/2002; National Institute of Standards and Technology, 6/2004, pp. L-18 pdf file; National Institute of Standards and Technology, 9/2005, pp. 110 pdf file; National Institute of Standards and Technology, 11/2008, pp. 298-299 pdf file]

Soon after leaving his office of mayor of New York City, Rudolph Giuliani opens a consulting company, Giuliani Partners, specializing in security issues. According to a 2007 report, it will earn more than $100 million over the next five years, making Giuliani a wealthy man. Giuliani selects several long-time associates as business partners, including Michael D. Hess, a former corporation counsel for the city of New York and now the senior managing partner of the firm. (Hess was rescued from WTC7 before its collapse.) Giuliani also hires his former police commissioner, Bernard Kerik, despite warnings that Kerik has ties to organized crime figures. Kerik will later be convicted of tax fraud. Some of the firm’s clients will prove controversial. Seisint Inc., a data-mining software company, was advised by Giuliani Partners on how to do business with the federal and state governments. In 2003, press reports will reveal that Seisint’s founder, Hank Asher, is a confessed cocaine smuggler and that Giuliani had touted the company in public speeches without disclosing his financial relationship with Asher. Giuliani also joins a Texas law firm named Blackwell & Patterson, which is then renamed Blackwell & Giuliani. Blackwell is involved in the litigation surrounding both the 2000 and 2004 elections, which were marred by allegations of voting irregularities and fraud. Giuliani’s business deals will prove to be a source of controversy and criticism during his 2007-08 presidential bid. [Washington Post, 5/13/2007; Vanity Fair, 1/1/2008]

Final Vote Set on Silverstein’s Towers at Ground Zero

The Port Authority of New York and New Jersey is expected to convene Thursday to formally ratify a plan that would allow the developer Larry A. Silverstein to build two office towers at ground zero with up to $1.6 billion in public financing and subsidies, according to Port Authority and real estate executives.

Mr. Silverstein, who leased the trade center six weeks before it was destroyed in the 2001 terrorist attack, has already started construction of one tower on Church Street, at the southeast corner of the 16-acre trade center site. Under the terms of the development plan, the authority would provide about $1 billion in financing for that project.

If Mr. Silverstein is able to raise at least $300 million in cash for the second tower on an adjacent site and secure leases for tenants, the authority, state and city would provide $600 million in subsidies.

Stephen Sigmund, a spokesman for the Port Authority, said the board would take up “World Trade Center matters” on Thursday, but he declined to give any details.

After years of delays and missteps, the trade center site is crowded today with thousands of workers. The authority is building a skyscraper — the $3.2 billion 1 World Trade Center — as well as the national memorial and a $3.2 billion transit hub.

Mr. Silverstein, who has put little of his own cash into rebuilding other than insurance money, had sought to have the authority finance all three of his towers after he was unable to obtain private financing and secure tenants. The authority balked, in part, because of the weak economy and the real estate markets.

A preliminary outline of the Silverstein agreement was first announced in March, but the authority’s board wanted to see the final terms before ratifying the deal. The board’s vote will presumably bring to an end the often fractious relationship between the two sides.

Still, some board members said they were only reluctantly approving the plan, which they say still allows Mr. Silverstein to profit while a huge public investment is at risk, if the towers do not find tenants at adequate rents.

There also is a recognition at the authority, whose board is appointed by the governors of New York and New Jersey, that its investment in Lower Manhattan is so great now that other New York projects, including Moynihan Station, may have to be delayed. New Jersey is eager for the authority to take up other projects, such as rebuilding the Bayonne Bridge.