Monday, October 25, 2010

« Andy Xie: "If You Print A Trillion, I'll Print A Trillion" »

Andy Xie is the former Chief Economist for Morgan Stanley.

Enough is never enough for Paul Krugman – and other instances of behavior leading the world toward high inflation and political instability.

  • "The stimulus has failed. How should one interpret the result? If you were Paul Krugman, you would say it wasn't enough.
  • "Of course, if 20 percent of GDP in budget deficit and another round of QE still don't work, he would say not enough again. You can never prove Krugman wrong. Such a smart fellow."


QE: The Numberless Oblivion by Andy Xie

The world seems full of smoke ahead of a world currency war. The weapon of choice is quantitative easing, a.k.a. QE. If you print a trillion, I'll print a trillion. Of course, he and she will too. No change in exchange rates after a trillion? Let's do it again, QE2. If you listen to people like Geithner, the end of the world is quite near. Rich people everywhere are buying gold for a little peace of mind, not just the Chinese. They are literally trucking it by the ton or two home. When currency values vanish in a QE melee, at least the rich have the gold to stay rich.

If you listen to American pundits, politicians or government officials, it's all China's fault. China is far from perfect. Its currency policy certainly isn't. But it is not the cause for the world's ills. The U.S. is by far the biggest source of uncertainty and the initiator of the QE war. Its elite created the biggest financial bubble since 1929, even removing regulations designed to prevent it, and left the U.S. economy in shambles after its burst. The same people want to find a quick cure to hold onto their power. Unfortunately, there is no quick cure.

The U.S. has cut interest rates to zero and run up the budget deficit to 10 percent of GDP. It's a shock-and-awe Keneysian policy. But, after a few quarters of strong growth, the economy is turning down again, and the unemployment remains close to 10 percent. And this figure would be much higher, close to 20 percent like Spain's, if it included the underemployed and those who have stopped looking for work.

  • The stimulus has failed. How should one interpret the result? If you were Paul Krugman, you would say it wasn't enough. Of course, if 20 percent of GDP in budget deficit and another round of QE still don't work, he would say not enough again. You can never prove Krugman wrong. Such a smart fellow.

The second interpretation is that it takes time for the economy to heal. No economy recovers so quickly after a bubble that big. During this prolonged and massive bubble, resources have become so misallocated that it takes time for regeneration. In particular, when the labor market is misallocated, it just can't correct itself quickly. Hence, when an economy is in a misallocated state, a stimulus kicks up growth through its own power but can't get the multiplier effect for the economy to sustain growth beyond.

The third interpretation is that it's China's fault. Yes, China's exports to the U.S. rose sharply during its stimulus-inspired pickup, i.e., the stimulus partly went to China. But, whose fault is it? Apple makes all the iPhones in China, because it costs under US$ 20 each, even after the massive wage increase for Chinese workers. Apple's gross margins are 30 times the processing cost that goes to China. Maybe Apple is an extreme example. But, the fact is that China's exports to the US are American goods that retail for 3-4 times of the factory-gate prices. American companies want to make the goods in China to satisfy the stimulus-inspired demand.

People like Geithner would argue that China should raise the currency to force American companies to move production back to the U.S. I suppose that that is how the whole yuan appreciation idea may work. But, at what exchange rate would the American companies want to do it? American wages are ten times China's. Should China increase its currency value ten times?

Of course, the American pundits wouldn't put it that way. They would talk about China's trade or current account surplus and the rising forex reserves, the prima facie evidence of currency manipulation. I don't want to deny that the rising forex reserves are a problem that China must tackle with. But, it is a separate issue from the US economy. The solution isn't yuan appreciation either.

Everybody knows China has a massive savings rate of around half of its GDP. It's a simple equation that the current account surplus is equal to savings minus investment. If the current account surplus is a problem, it is either insufficient investment or excessive frugality. China's investment is over 40 percent of GDP. Even casual observers would find China's investment too much. Are Chinese people too frugal? The household income is probably under 40 percent of GDP. How could they be the source of the gigantic savings?

The problem is China's political economy. The government sector raises money through taxes, fees, monopoly franchises and high property prices. The property sales were 14 percent of GDP. If the price is normalized, i.e., halved, the household sector would have 7 percent of GDP more. The household savings rate is roughly one third. That would boost domestic demand by nearly 5 percent, wiping away the whole current account surplus.

China's education and healthcare systems are quite scary to the people. They are very creative at squeezing the household sector. The teachers need gifts on holidays. There are lots of holidays. Hospitals eye patients on how much money they can be squeezed out of and provide services accordingly. China's household sector is squeezed, punched upon and kicked at everyday. For the masses it is a joke that they have too much money to fund the current account surplus.

China's current account surplus is mainly due to its political economy. The gray income is vast, possibly 10 percent of GDP. Such money normally goes offshore. But, because the dollar is weak and China's property market is sizzling, the money stays in China and goes disproportionately into the property market. Unless the gray income is reduced through anti-corruption campaigns, the current account surplus won't go away.

The current account surplus is half of the forex reserve story. The other half is hot money. Overseas Chinese are the main source. Chinese property and the dollar are their most important foreign assets. As the dollar weakens, they have poured money into China, especially into the property market. Hedge funds and other speculators have also poured money in through buying offshore Chinese assets. Hot money into emerging economies is always a bubble. I can't recall an exception. This one will prove the same.

I think China's currency is overvalued. China's money supply has exploded in the past decade, rising from 12 to 70 trillion yuan. No currency has not experienced depreciation after a such a prolonged bout of money growth. China's industry has risen tremendously to justify part of the growth. But, a massive amount is in the overvalued property market. When it normalizes, the money flows out and the currency depreciation pressure happens. We should see this within two years.

What is right isn't important for now. What is politically expedient is. Americans want a quick cure for its economic difficulties. It wants to devalue the dollar to achieve it. If it could force China to increase its currency value, then the yen, euro, and all the others would go up in tandem. The U.S., one fourth of the global economy, could export out of its problem.

The problem is that all the others won't follow this program. China could not move up its currency value too much. Otherwise, it would trigger hot money outflows, a total collapse of its property market and the banking system with it. China is between a rock and a hard place. It is trying to achieve a soft landing of its property market by incremental tightening steps while the currency appreciation expectation keeps the hot money from leaving. The combination may support a multi-year gradual adjustment, giving the banking system time to raise capital.

Japan isn't in a position to appreciate the yen much. Its industries have lost competitiveness to Germany's or even the U.S.'s. Its industries haven't had a global hit product for years. Germany and the U.S.'s auto industries are gaining over Japan's. It's hard to see how the yen could go up a lot. The BoJ is vulnerable to political pressure. It doesn't have a good track record. If it lets the yen to destroy Toyota, Honda, etc., it's hard to see how it could remain independent. Hence, it will resort to QE to hold down the yen.

The euro is surging by default. The ECB seems to still be talking like the Bundesbank. But, its position can't last through the next sovereign debt crisis. When the euro is high, some economy, not Germany or France, will get into a crisis mode. It may join the QE crowd too.

The UK doesn't need persuasion to embrace QE. It is like a big Hong Kong, all about stir-frying stocks and properties. When the bubble bursts, it doesn't have much else to do. Devaluing the currency seems to be the only way out.

Korea is small but always tries to join the big leagues. It is big in automobile, electronics and petrochemicals. Its government doesn't need convincing to watch over the exchange rate. Recently, it has been "investigating" financial institutions for undesirable practices in the currency market.

The mild Brazil is fired up too. Over the past decade, it allowed the market to double its currency value. Brazilian people are grateful for the low inflation as a result. But its growth rate is quite low, not good enough for a developing economy, leaving alone the vaunted status of one of the BRICs.

It seems that nobody wants to appreciate. Most major economies will do something to keep their currencies down. That is checkmate for the U.S. Without devaluation benefits on rising exports, QE just leads to inflation, first through rising oil prices. The American people are suffering from declining housing prices and high unemployment. If the gasoline price doubles from here, the country may not be stable. How would the elite react? Probably more of the same.

The world is heading towards high inflation and political instability. Another global crisis is a matter of time. The first sign would be a collapsing treasury market. The Fed is controlling the yield curve through its QE program. It would be irrational for other investors to play the game. The only reason to stay in is that the Fed won't let the market fall. But, the underlying value is evaporating with rising money supply and the inflationary consequences. When all the investors realize this, they will all run for the exits. The Fed won't be able to stop the stampede. If it prints enough money to take over the whole market, people with freshly minted dollars would surely want to convert the money into other assets. The dollar would collapse too.

The world seems on course to another crisis in 2012.

The same people who caused the last crisis are still in charge. They'll get us into another. Iceland is taking its ex-prime minister to court for causing the banking crisis. Worse fates await the people who are causing the next crisis. China used to chop off the heads of its failing ministers at the capital's vegetable market. Maybe we should bring back the practice and globalize it.

« Velvet Underground Drummer Moe Tucker Talks About Her Opposition To The Obama Spending Machine »

Video: Democrat Moe Tucker at a protest in Clifton, Georgia

First Cenk Uygur, now the Velvet Undergound. Turns out that lifelong Democrat Maureen Tucker, aka Moe Tucker, the Underground's former drummer, is something of a tea partier. Check out these comments from an interview with the Riverfront Times (St. Louis).

  • "I'm furious about the way we're being led toward socialism. I'm furious about the incredible waste of money, when things that we really need and are important get dropped, because there's no money left."
  • "No country can provide all things for all citizens. There comes a point where it just isn't possible, and it's proven to be a failure everywhere it's been tried."
  • "My family was damn poor when I was growing up on Long Island. There were no food stamps, no Medicaid, no welfare. If you were poor, you were poor. You didn't have a TV, you didn't have five pairs of shoes, you didn't have Levi's, you didn't have a phone; you ate Spam, hot dogs and spaghetti."
  • "I am against the government now thinking about bailing out unions. The unions made the contracts which include insane pensions; the U.S. government didn't."
  • "Today it was announced that there would be no cost of living increase for Social Security recipients because "there's no inflation." ... But why is it that suddenly food prices don't go up two or three or five cents, but instead they're going up 40, 50, 60 cents at a clip? No inflation my ass!"
  • "My anger stems from the unbelievable (criminal!) waste of money....Billions spent every friggin' year on totally unnecessary crap so that these Congressbums can tell their constituents that they 'brought home the bacon' and get re-elected."
  • "I disagree with spending / borrowing / printing -- damn the torpedoes, full speed ahead! I disagree with the 'we won' attitude, which is the cowardly way of saying fuck you! I disagree with an administration that for twenty months blames Bush."
  • "Anyone who thinks I'm crazy about Sarah Palin, Bush, etc. has made quite the presumption. I have voted Democrat all my life, until I started listening to what Obama was promising and started wondering how the hell will this utopian dream land be paid for? For those who actually believe that their taxes won't go up in order to pay for all this insanity: good luck!"
  • "To be honest, I never paid attention to what the hell was going on. My always voting Democrat was the result of that. My philosophy was and is all politicians are liars, bums and cheats."
  • [asked if she's still involved in music] "No time for it anymore. I take care of my eight-year-old grandson and it's a full-time job. He wears me out, keeps me laughing, and I love him to pieces!"

Sounds pretty good, Moe.

If you're the voice of the Tea Party, I'm Sticking With You.


County GOP Chair: The ES&S machines 'ain't worth a damn, we ought to go back to paper ballots'

One voter says: 'I pressed confirm and screen went totally black'...

[Now UPDATED with additional reports of additional vote-flipping and touch-screen failure from other NC counties at bottom of article.]

Aaand the touch-screen voting machines continue to flip votes during the early voting period. Right on schedule. Just as always. But, for the second time this week we have the unusual occurrence of votes reportedly flipping away from the GOP.

Yesterday our report was of a touch-screen in Dallas, TX, caught on video flipping an attempted vote for Republican Gov. Rick Perry to straight-ticket Green Party selections in Dallas, TX.

Today's report, where the local election official is also misleading voters by downplaying the incident, comes from the same type of 100% unverifiable ES&S iVotronic touch-screen voting machine, but it took place in Craven County, NC, according to P. Christine Smith of the Sun Journal...

A Craven County voter says he had a near miss at the polls on Thursday when an electronic voting machine completed his straight-party ticket for the opposite of what he intended.

Sam Laughinghouse of New Bern said he pushed the button to vote Republican in all races, but the voting machine screen displayed a ballot with all Democrats checked. He cleared the screen and tried again with the same result, he said. Then he asked for and received help from election staff.

"They pushed it twice and the same thing happened," Laughinghouse said. "That was four times in a row. The fifth time they pushed it and the Republicans came up and I voted."
"Something is not right here," [Craven County GOP Chair Chuck] Tyson told the Sun Journal. He said he "got two or three calls" from people describing the same problem while they were voting.

Tyson also went on to report there were long lines reported as voters waited to use the two touch-screen voting machines available at one location (paper ballots don't cause that problem) and, even more disturbingly, "machines reporting 250 ballots cast where 400 voters had signed in to vote."

Well that's a problem, isn't it?...

In our report on the video of the vote-flipping out of Dallas yesterday, we offered a great deal of background on the historic --- and monumental --- failures of the ES&S iVotronic machines which notoriously fail to register not only straight-ticket votes accurately on the screen, but pretty much any vote, in many cases. Most notoriously, perhaps, the ES&S iVotronic lost some 18,000 votes in a 2006 special election for the U.S. House in Florida (in which the Republican candidate was declared the "winner" by just 369 votes), leading to the state getting rid of virtually all of their touch-screen systems. The same ES&S iVotronics were used when Alvin Greene, the unemployed South Carolina veteran who failed to campaign or even have a campaign web site, inexplicably defeated four-term state Senator and former Circuit Court Judge Vic Rawl for the Democratic U.S. Senate nomination. (See the previous article for more such examples of ES&S iVotronic failures.)

Yet, in North Carolina and Texas and 16 other states (also listed in the previous article), election officials still force voters to use these 100% unverifiable, oft-failed, easily manipulated voting systems. It's a disgrace. But how many different ways, and over how many different years can we make that point over and again?

We also explained yesterday how the usual "solution" to the problem of touch-screen vote-flipping is for election officials or voting machine company employees to "re-calibrate" the systems in the middle of the election --- at the time they are absolutely most vulnerable to tampering and other malfeasance --- rather than simply take them out of service and securely quarantine them for inspection later.

To that end, the Sun Journal's coverage offers some startling news that ought to send the county Republican and Democratic Parties alike straight to a court house to demand the practice be stopped! According to the paper, when Laughinghouse tried to report the incident an unidentified "man said the machine likely needed to be calibrated...and set about the method to do so."

But the next graf is even more startling [emphasis ours]...

"Each morning every voting unit is calibrated as per manufacturer instructions by trained election rovers," [Craven County Board of elections chairman M. Ray] Wood’s statement said. "These individuals are also working throughout the county each day to assist one-stop officials with any issues that arise during the course of voting."

So there you have it, people of Craven County. Want to game your election? Become a "trained election rover" and you can have complete and unfettered access to every machine in the county each and every morning. If you'd like instructions on how to game that machine, they are available all over the Internet.

In the meantime, poor Mr. Laughinghouse has been so bamboozled by GOP propaganda about the virtually non-existent problem of "voter fraud" (rather than election fraud which can be carried out by a single election insider, say, a "rover" for example, allowing just one of them to flip the results of an entire election without detection), that he's now completely confused.

"He has become suspicious of voter fraud because of news reports he has heard," says the paper.

"I’m all for our country and we know there has been voter fraud before and it continues even today," Laughinghouse is quoted as saying. "So you get suspicious when something like this happens."

He's suspicious of "voter fraud" as he's been misinformed by Fox "News" and friends, the same folks who, for years, have been repeating the Republican mantra that concerns about voting machines are little more than "Democrat conspiracy theories."

Mr. Laughinghouse must be suspicious of himself, since he was the voter here. The truth, of course, is that the voters are doing fine and need to be left alone, rather than hassled and intimidated and suppressed at the polling place.

Laughinghouse's real concerns were under his very nose when he went to vote yesterday, and he still seems not to have noticed, as the paper reports...

Laughinghouse advises voters to carefully check their ballots before confirming to ensure that the machine is logging each vote as intended.

As this may be the first time Mr. Laughinghouse has heard this, hopefully he'll read this carefully and it will stick with him (and every other voter perhaps hearing this for the first time): It doesn't matter what your "ballot" says on the screen. It is 100% scientifically impossible to "ensure that the machine is logging each vote as intended." In fact, it's 100% impossible ensure that even one vote has been recorded as intended on such a voting system. And impossible to prove that any vote ever cast on such a machine in any election for any candidate or initiative on the ballot has ever been recorded as the voter intended.

But you folks can go ahead and keep looking for phantom "voter fraud" if you prefer, rather than where the real threat to (small "d") democratic elections exists.

The upside here: Craven County GOP chair Tyson actually seems to get it. He told the paper about his county's touch-screen voting machines: "They never work, they’re late reporting, they screw up, they ain’t worth a damn and we ought to go back to paper ballots."

Bravo, sir.

[Hat-tip to Joyce McCloy, publisher of the indispensable Voting News and founder of North Carolina's]

* * *

« Being Bank Of America Means NEVER Having To Say You’re Sorry For Countrywide Fraud »


Must read op-ed from Joe Nocera at the New York Times.

The Flavor of Fraud Inside Countrywide

The prospect of a second legal assault is more recent. Shortly before the earnings call, Bank of America (nyse: BAC) received a letter from a lawyer representing eight powerful institutional investors, including BlackRock, Pimco and — most amazing of all — the New York Federal Reserve. The letter was a not-so-veiled threat to sue the bank unless it agrees to buy back billions of dollars worth of loans that are in securitized mortgage bonds the investors own.

Mainly, they are saying that Bank of America was servicing loans in these bonds that the bank knew violated the underwriting standards that the investors had been led to believe the bank was conforming to. What’s more, they said, the bank had never come clean about all the bad loans, as it was required to do. Therefore, say the investors, the bank has a contractual obligation to buy back the bad loans.

During the conference call, Mr. Moynihan and Mr. Noski made it clear that Bank of America was going to use hand-to-hand combat to fight back these claims. “We’re protecting the shareholders’ money,” Mr. Moynihan said. Mr. Noski questioned whether the investors even had the right to bring the case. “We continue to review and assess the letter and have a number of questions about its content including whether these investors actually have standing to bring these claims,” he said.

So there you have it. Having convinced millions of Americans to buy homes they couldn’t afford, Bank of America is now revving up its foreclosure efforts on these same homeowners. At the same time, having sold tens of thousands of these same terrible loans to investors, it is going to spend tens of millions of dollars on lawyers to keep from having to buy back their junky loans.

Apparently, being the biggest bank in the country means never having to say you’re sorry.

In truth, it’s not really Bank of America itself that persuaded so many people to borrow beyond their means and then sold those terrible loans to investors. It was Countrywide, which Bank of America purchased in July 2008, by which time the company was on the verge of collapse because of all the corrosive subprime loans it had made.

A loan for $360,000 went to a Chicago woman who supposedly earned $6,833 a month at an auto body shop. In truth she was a part-time housekeeper who was posing as the buyer to help her sister. The Countrywide loan officer not only knew these facts, she came up with the idea of having the borrower pretend to work at the auto body shop.

The lawsuit uncovered a raft of similar examples — case after case where the loan officers not only knew that fraud was being committed, but were actively engaged in committing it. “By about 2006,” says the lawsuit, “Countrywide’s internal risk assessors knew that in a substantial number of its stated-income loans — fully a third — borrowers overstated income by more than 50 percent.” And that is just one small subset of what went on at Countrywide. The truth is, any rock you turn over in the Countrywide subprime portfolio, something slimy is going to emerge.

That’s why most people, myself included, have no sympathy for Bank of America’s legal predicament — and no patience for its “we’re not the bad guys here” arguments. It is absolutely true that the homeowners that Bank of America wants to foreclose on are in default on loans they should never have gotten in the first place. (Gee, whose fault was that?) But it simply does not follow that the bank therefore has an absolute right to take back the home. Under the law, it has to prove it has that right — by filing documents that show that the owner of the mortgage has conveyed that right to it. That’s why this affidavit scandal isn’t some legal nicety. It’s about the single most important value of American jurisprudence: due process.

“Just because the homeowner hasn’t paid his mortgage doesn’t mean anybody in the world can kick him out,” said Katherine Porter, a visiting law professor at Harvard. “The bank has to have the standing to do that.”

She added that the bank’s argument was a little like saying that someone who committed a crime shouldn’t receive a trial because he’s so obviously guilty.

America just isn’t supposed to work that way.

That’s also why the bank’s contention that the foreclosure scandal will soon be behind it is unlikely to hold true. Peter Ticktin, a Florida lawyer who represents some 3,000 homeowners, told me that he did not believe it was possible for Bank of America to have properly vetted those 102,000 affidavits in a matter of weeks.

“My hat is off to them for doing the impossible,” he said, his voice dripping with sarcasm. “They figured out how to take a massive amount of perjured affidavits and turn them into real ones without robo-signers.” Mr. Ticktin said he had every intention of continuing to challenge Bank of America foreclosures. Most other lawyers specializing in these cases plan to do likewise. The affidavit scandal isn’t over yet, no matter how much Mr. Moynihan might wish it to be so.

As for the potential lawsuit with BlackRock and the New York Fed, the week before the investors sent the letter to Bank of America, three Countrywide executives, including former C.E.O. Angelo Mozilo, settled charges brought by the S.E.C. that they had engaged in fraudulent conduct. Internal Countrywide e-mail clearly show that they knew how dangerous their lending had become. Once the loans were sold to Wall Street — which, I should note, aggressively pushed the subprime companies to lower their standards — they went through a due diligence process that investors never knew about. Banks took advantage of investors every bit as much as they took advantage of home buyers.

And it would be nice, if just once, they would admit it. Instead, we get Mr. Noski, the chief financial officer, promising that the bank will fight these cases to the death because they’re looking out for shareholders. It’s appalling, really.

Read the whole thing at the NYT (there's more)


Top Ten countries External % GDP to debt ratio. Same list has names of countries with blood in the streets. Who's next? by Tom Dennen The collapse of

The collapse of entitlement: Numbers on the dominoes.

Ireland 993.27 %

Great Britain UK 426.65 %

Portugal 256.67 %

France 197.04 %

Greece 182.67 %

Spain 165.51 %

Germany 146.88 %

Australia 114.50 %

Italy 107.59 %

USA 94.96 %

(Source: World Debt Clocks

See also: U.S. National Debt Clock : Real Time)

Will you make the leap of faith? Or will you sink, with the ship?

As we draw closer to the inevitable, engineered crash of the United States, and ultimately the world, I begin to wonder – will those who understand reality, actually be able to make the leap of faith?

The Ultra-Rich of the United States have already begun their mass exodus from the United States, fully understanding the situation that is about to present itself. Dr. Rima Laibow, the lady who first introduced the implications, of Codex Alimentarius, to the world at large, took off more than a year ago to begin a new life in South America. What do these people understand, that we do not?

Russian Roulette of the American Public

At this moment, we are involved in a massive game of Russian Roulette. Unfortunately, and unlike traditional Russian Roulette, we have multiple guns, all cocked, locked, and ready to turn our brains to mush.

- 600-1,500 trillion dollar derivatives bubble is waiting at this moment to end life as we know it. Due to the fact that the Derivatives bubble has been artificially manufactured thanks to the repeal of Glass Steagell – we all know that there is no stopping it. It's coming round the tracks, whether we will it, or not.
The growing housing collapse, for those who are unaware, and even prior to the recent mortgage-gate, repossessions were NOT being added to the market. This was because of the sheer magnitude of foreclosures, if they were all added to the market, the abundance of supply would crash the market instantly. So, in the best interest of the market, houses were held off the market to ensure the collapse didn't happen. Eventually, the housing market will collapse entirely.

- Inflation-nation. With quantitative easing, and the FED monetizing the debt, we are left in a situation where inflation is about to begin running rampant. The Derivatives bailouts (housing/banking) crisis of '08, now totals nearly 28 trillion. Bad news for you, is that you're entitled to exactly zero of that 28 trillion, since its entirely for the banks. While they reap the benefits of the cash, you'll be squashed by the inflation it creates. Of course then we have the foreign debt holders (who all refuse to buy our debt now), all holding a trillion each. Since they are unwilling to take a huge hit on their investment, they will wait till the final moment possible, and when one unloads, so will the rest, reigning in the almost instant destruction of the dollar.

- Job market collapse. This has been in the making for many decades, as the banking cartel and globalists have forced us into “globalization” and signed numerous free-trade agreements, but most notably, NAFTA, we have witnessed the destruction of American manufacturing and production. 1.2 billion American cell-phones were produced in the last year, not one was manufactured in the US, what does that tell you? This is by design. This is also why illegal immigrants are allowed to flood across the border, so that they can come and steal your jobs, and accept poor wages.

To illustrate just how 'manufactured' the influx of immigrants is, consider this. Prior to NAFTA, the American government understood that with just a 15% differential in pay rates between Canada and the United States, Canadian manufacturers decided to manufacture goods in the US to save that 15% on wages. Prior to NAFTA, there was a 7 times differential between average American workers, and average American workers, meaning that Americans made seven times more than Mexicans. So they knew full well, that if they opened the flood gates, a vacuum would occur drawing millions of Mexicans across the border to earn higher wages.

By February 2010, it was reported that more than 7.1 million jobs had been lost forever, since 2007. From CNN,

The government's current readings show that 4.8 million jobs were lost in those twelve months [April 2008-April 2009], more than twice the jobs lost during any comparable April-March period going back to 1939, when the numbers first started to be compiled.

Currently, as many as 10 million jobs may have been lost since the “economic downturn” began in 2007. As noted though, not only are there millions fewer jobs, but you're now competing with millions of illegal immigrants, who are willing to work for nothing and not complain. This is Amerika.

- Commercial Real-Estate Collapse. As we continue to shed millions of jobs, we have millions of foreclosures, and millions more relying on food stamps, and welfare. None of these people are supporting the consumerism based economy, and as the strain of this situation continues to pummel the consumerism based economy, we will begin to see an avalanche of commercial real-estate collapses. Once enough steam is gathered, an implosion of the market will soon follow – just like the consumer real-estate market.

- Coming oil inflation. With inflation, as well as real – or implied, scarcity, you had better get used to $150+ barrels of oil, and the resulting $5.00 a gallon fuel. This will bleed the final dollars out of the American public, destroy the transportation sector, and fuel the housing and commercial real-estate collapse. If war with Iran starts, you had better go load up on fuel because you'll likely never find it so cheap again, at least until the war is well and over, but at that point, who knows what will be left of the US.

Fraudulent, monolithic US debt. If you've missed the memo, the current US debt is exponentially larger than it was during the great depression. It cannot, and will not ever be paid off. This will end in the forfeiture of the United States to debt holders. If you “believe” you own your property, you're in for a rude awakening someday soon.

So really, after just scratching the surface, I have identified numerous guns waiting to blow our head into mulch. Derivatives, inflation, housing crash, Job losses, immigration influx, and of course, this is all assuming that World War 3 is not started in Iran, and that the Government doesn't decide to attack its own citizens again, with an event that makes 9/11 look like a warm-up.

The Illusion that makes us stay

What is it about the United States, that makes you want to stay, and live there? Is it the freedom? Can't be, because that's gone. Is it the personal rights? Can't be, because those are gone. Is it the abundant wealth, and well-paying, cushy jobs? Can't be, because those are gone. Is it the culture? Can't be, because culture has been entirely extinguished and replaced with teenie-bopper bullshit like American Idol, and 24 hour garbage reality-entertainment. Is it your pension and retirement? Can't be, because the government invested your entire retirement into toxic derivatives that the banks knew would fail, so they could bankrupt everyone.

If you haven't noticed

The United States that you grew up in, and love, is long gone. Soon enough, it will be so far gone, that you will be unable to recognize it, as it will appear foreign due to the massive changes that have taken place. Absolutely nothing you loved, is left. It's all been systematically destroyed or perverted, so that today, we are left with only ashes and rubble.

The American lifestyle

If you haven't noticed, the “American” life-style is nearly extinct, at least for the common man anyways. Today we have toxic water, toxic food, toxic air, no education system, exponentially expanding police-state, no economic opportunity, garbage health-care, criminal police, fraudulent banking system, the list almost never ends.

On top of all this, we have the locked and loaded guns waiting to drastically, and radically, change, life as we know it, in the United States, at literally any moment. Once those happen, who knows how far down the toilet the United States will go, I cannot speculate, I can only assume, it will be much worse than the shitty state of affairs that it is now.

The leap of faith, that may save your life

When does the time come, that one realizes, that hope is lost, and that the only option is to head for the exits? At what point, during the sinking of the Titanic, did people understand that there was no way to survive on the ship, and instead, went for the life-rafts? Once that realization comes to fruition, is there still time to run for the life rafts?

My point, is that if you wait until the plot accelerates, you may have no choice but to go down with the ship. Now, if you're ready to swim the frigid waters of the North Atlantic, then you may willingly choose to tough it out, and hope that the Titanic returns from the depths, re-emerges on the surface, and you can then continue your fantasy dream life. Unfortunately, the United States you know, is never coming back. Just like the Titanic, once it hits bottom, it's there to stay.

Considering exodus

First, lets identify the two primary driving factors which will dictate your ability to prosper during the times ahead,

1) Self-Sustainability. The more sustainable your life style is, the less dependent you are on others. If you rely on cheap fuel, and a stocked wal-mart shelf, then you are going to be screwed, the time for sugar-coating is over, you're screwed. If you cannot provide your own food, electricity, shelter, and protection. You may as well get down on your knees, and throw your head into the sand, cause you're fucked.

2) Proximity to ignorant, and lack of self-sustainable populations. This is going to be the real wild-card, destructive factor, that people fail to consider. It matters not, if you are 1000% self-dependent, if you're located just down the road from the millions of, unprepared, ignorant, masses. Looting will be common place. So you better have an arsenal if you're planning to tough it out in the burbs, or a city. Society is about to be hit by a freight train, and just because you avoid the smash of the train, does not mean everyone else will. In fact, it's guaranteed that the masses will march triumphantly off the cliff into the collapse. So the closer your proximity is to these masses, the harder life will be for you. Period.

There's nothing left to stay for, as highlighted above. Staying, could result in swimming with the fishys at the bottom of the ocean. So what are the barriers to exodus? First, coming to grips with the fact that nothing is left of the once proud nation, and what is left, will soon be gone, as the engineered destruction of the United States continues at a fevered pace.

One of the most common issues cited for staying, is the fact that money is scarce. This is because we are trained to understand money in terms of the US or Canada, where you cannot go and buy property for very cheap. And the cost of living is large. What most people fail to understand, is that even $500,000 is a massive amount of money pretty much anywhere else on the planet. If you can liquidate for anywhere near $250-$500k+, you could start a new life in a new country, and live like a king.

We all have grown attached to this life we have, but for what? When we really look around and consider our situations, what are we waiting for? Do we enjoy the rat race? Do we enjoy what our nations have become? Do we truly believe, things are going to miraculously get better? I don't think it was curiosity that killed the cat, I think it was merely naivety.

Imagine for a moment, if you and your family members all liquidated, took your few hundred thousand, or perhaps even much more, and moved to another country. You could purchase a chunk of land, and create a sustainable lifestyle, away from that of the toxic American lifestyle.

Could you imagine, not stressing about the rat-race?

Could you imagine, forgetting about the social chaos about to ensue?

Could you imagine, not having to ingest toxic food, and fluoridated, toxic water?

Could you imagine, not having a pile of monthly bills which strip every shred of your income before you can save a dollar?

Could you imagine, not having the Government and banks prying into every single aspect of your life, just waiting for a reason to destroy everything you love, and have worked so hard to attain?

Could you imagine, not living your life based on a clock, and the stress filled life that entails?

Besides, regardless of where you move to, you would still be able to retain all of the creature comforts you enjoy now. Internet and television via satellite, is available anywhere you go. Sure, you will lose the ability to stop off at wal-mart and buy a bunch of Chinese junk, and manufactured horse shit .. err I mean.. food. But, keep in mind, Americans are about to lose that luxury very soon as well, as the credit evaporates and China quits wasting their time shipping containers across an ocean, when their own middle-class is a growing consumer base.

Foreclosure Mess Scares Away Investors as 'Fear Has Taken Hold'

Investors who have been snapping up foreclosed homes are backing off in the wake of the U.S. foreclosure fiasco, driven off by sagging inventory and fears over legal title. Some economists say the trend could hurt the overall housing market.

With foreclosed properties accounting for a large portion of housing sales, and investors accounting for a large portion of buyers — particularly in some key markets with very high foreclosure rates — the implications for the broader economy could be serious.

Investors who would buy, rehabilitate and then sell or rent foreclosures were playing a "huge role," in helping to clear the market, said housing economist Tom Lawler.

But many of those investors are now staying on the sidelines.

"We're like a plane flying around in a holding pattern, waiting to land," said Tony Alvarez, an investor in southern California who is currently renting out 40 former foreclosed homes. "Nothing is going on, and why? Fear has taken hold in the marketplace."

Allegations that banks failed to review foreclosure documents properly or submitted false statements when they foreclosed on properties spurred a joint investigation by the attorneys general of all 50 states and triggered foreclosure moratoriums by some of the biggest U.S. lenders.

Bank of America and GMAC Mortgage have retreated from their foreclosure suspensions.

The investors are so essential to the housing recovery, Amherst Securities managing director Laurie Goodman wrote in a paper in Financial Analysts Journal, that an extension of federal loans for them is "the single most important demand-side action that could be taken."

The pall cast over foreclosure sales by the growing questions over the use of shoddy documents in processing foreclosures has adverse implications for the housing market and the broader economy, said IHS Global Insights economist Patrick Newport.

Fewer sales to investors mean fewer sales altogether, which will further elevate supply. That, in turn, will keep a lid on home prices, making consumers feel poorer.

"Falling home prices make consumers less likely to spend," Newport said. "In general, uncertainty is not a good thing for the economy."

Consumer spending accounts for two-thirds of the U.S. economy.


The role of investors in helping to clear the huge supply of inventory has been substantial. In August, investors generated 21 percent of existing home sales, according to the National Association of Realtors.

In markets like Orlando, Florida, and Phoenix, where rampant risky lending and speculation during the housing boom left the most foreclosures behind, those numbers can hit 40 percent and higher, Lawler said.

Nearly one-third of all homes sold in September were in the foreclosure process, according to real estate data company RealtyTrac.

The number of homes taken over by banks topped 100,000 in a month for the first time in September, though foreclosures are likely to slow as lenders review their paperwork, RealtyTrac said.

Distressed real estate investor Bruce Norris said the volume of his business in southern California has dropped 75 percent in the past two weeks as the sudden decline in inventory has led to a spike in prices.

"We're being much more cautious," Norris said. "Everything is getting bid up to a ridiculous number. There isn't any profit."

Current higher prices are not the only disincentive. Investors see lenders cutting foreclosure prices sharply at some point next year when they try to reduce the logjam that is now building up by pushing more inventory out onto the market.

"Investors are pulling back," said John Burns, whose national real estate consulting firm is based in Irvine, California. "They think it'll be cheaper next year."

Alvarez also said the uncertainties hanging over the industry will keep smaller foreclosure investors like him on the sidelines at least through the end of the year.

"We're still going through the motions of doing our typical business," he said. "But it's like a doctor; you want to monitor a patient's stats. Well, try operating without any of that information, you'd be losing patients left and right."

Timing is the investor's most pressing concern, said John Anderson, a real estate agent who specializes in foreclosures in the Minneapolis and St. Paul, Minnesota, area.

"They want to buy these properties and have them back on the market in a short time," Anderson said. "If there are major delays, they could be stuck."


The picture is not as bleak for larger players, said Jamie Rand, whose Prime Asset Fund LLC, based in the suburbs of Tampa, Florida, bought and sold over a thousand foreclosures in the past year.

When the uproar subsides, lenders and government investigators will find only a very small percentage of truly wrongful foreclosures, Rand said.

And should one of those crop up in his business, he can absorb the cost, he said.

"For me, it's an opportunity," he said. "Because of the limited amount of inventory, it'll help me as I take my assets on the market."

Still, smaller investors say they have more reasons to sit back than to act.

They worry that their title insurance will not cover them if past owners sue to reclaim their property, said Anderson, the Minneapolis-area real estate agent.

In southern California, Norris said he sees the foreclosure mess gaining momentum.

"The cat's out of the bag," he said. "And the lawyers are going to have a new cottage industry stopping foreclosures and going after people who have already purchased them."

Norris has received calls from foreclosure buyers who had upgraded the homes and were ready to sell them when a former owner sued for their return.

"There still might be concern about past foreclosures," Lawler, the economist, said. "We don't know if refiled papers will be accepted or approved by the courts. And it could be different depending on the state."

© 2010 Thomson/Reuters. All rights reserved.

Jim Rogers on CNBC Kudlow Report 10/22/10

Click this link ......

Georgia Class Action Suit For ALL Homeowners Who Have Been Foreclosed ON by MERS!

Another Class Action Suit has NOW been filed for All Homeowners who have been foreclosed on in the State of Georgia against MERS!

How Awesome is this!! A class action for ALL homeowners who had been foreclosed on in the past by MERS banks!

The paperwork filed is at the link! This should get the banks buzzing!

Now there is two Class Actions happening in the states for previous foreclosures - New York and Georgia!

Lets hope we see more states with this type Headline!

The Plaintiff shows herein that MERS’ foreclosure on Plaintiff’s property was not valid and was wrongful, as are those foreclosures by MERS on the property in the State of Georgia of all similarly situated persons to the Plaintiff wherein MERS sent the notice of foreclosure to the debtor and wherein MERS purports to have exercised the power of sale and auctioned the property. MERS does not have the authorized power to send a valid notice of foreclosure within the State of Georgia for those deeds where it is “solely a nominee” and does not have the authority or power under Georgia law to foreclose on a property or engage in an auction of sale on such property where is is “solely a nominee” on such deeds.

Lawsuit Alleges that MERS Owes California a Potential $60-120 Billion in Unpaid Land-Recording Fees

Former hedge fund manager Shah Gilani notes:

In creating MERS, these institutions actually changed the land-title system that this country - for much of its history - has relied upon to determine legal ownership status of land titleholders.

Not only did the lenders sidestep (read that to mean avoid) paying billions of dollars in fees to local governments, they paid themselves from the fees that MERS collected.

MERS is facing class-action lawsuits and civil racketeering suits around the country and their members are being individually named in all these suits. One suit alleges that MERS owes California a potential $60 billion to $120 billion in unpaid land-recording fees.

If suits against MERS and all its members are successful, unpaid recording fees and fines (that can be as much as $10,000 per incident) would make every one of them insolvent.
MERS is a shell company, with no employees. However, its parent does have employees.

As Bloomberg notes:
MERS Inc., which holds the liens, has no employees, and MERSCORP, the parent, has only about 50, [the MERS spokeswoman said].
Plaintiffs' lawyers will undoubtedly argue that the "corporate veil should be pierced". In other words, they'll argue that MERS hasn't followed normal corporate formalities (or is inadequately capitalized), and so the big banks which own it should have to pay any judgments against it. I am not sure who will win that argument.

But Plaintiffs' lawyers will probably also name the banks themselves directly as co-defendants.

The Government Pulls a Bernie Madoff on Social Security and Lays Out the Sad Truth

When Bernie Madoff realized he could no longer meet all the demands of his investors that wanted their money, he walked into the offices of the SEC and admitted as much.

The government has just pulled a Madoff. They have admitted that they don't have the money to pay everyone out they have promised to pay out via Social Security. Specifically, those under 30 are going to get really screwed.

Business Insider's Bruce Kasting explains how bad the situation is, but keep in mind that this is based on CBO projections, and there is no chance the CBO has run the truly negative scenarios, where the government can't pay its Treasury debt--which is mostly what the Social Security Trust fund holds. Factor that in and the odds drop for everyone that they are going to get paid in full :

CBO looked at all of the scenarios regarding Social Security. They ran a total of 500 simulations that reflect the different variables of the puzzle. The analysis assumed that there would be no changes in current law on SS. The objective of the exercise was to quantify the probabilities of which generation would most likely not get the benefits they were (A) paying for, (B) entitled to and (C) expecting.

The results of the CBO analysis is that there is societal/economic trouble in front of us on this issue. It should come as no surprise to readers that if you are young, you have a problem. The CBO report defines which generation(s) will be hurt and by how much. I found their conclusions to be very troubling.

If you were born in the 1940’s the probability that you will receive 100% of your scheduled benefits is nearly 100%. The people in this age group will die before SS is forced to make cuts in scheduled benefits.

If you were born in the Sixties things still do not look so bad. Depending on how long you will live the odds (76+%) are pretty good that you will get all of your scheduled benefits. However, if you were born in the Eighties you have a problem. The numbers fall off a cliff if you are between 30 and 40 years old today. In only 13% of the possible scenarios you will get what you are currently expecting from SS. If you were born after 1990 you simply have no statistical chance of getting what you are paying for. The full CBO report can be found here. This (hard to read) chart is from that report.

Ministers plan huge sell-off of Britain's forests

Ministers are planning a massive sell-off of Britain's Government-owned forests as they seek to save billions of pounds to help cut the deficit, The Sunday Telegraph has learnt

Caroline Spelman, the Environment Secretary, is expected to announce plans within days to dispose of about half of the 748,000 hectares of woodland overseen by the Forestry Commission by 2020.

The controversial decision will pave the way for a huge expansion in the number of Center Parcs-style holiday villages, golf courses, adventure sites and commercial logging operations throughout Britain as land is sold to private companies.

Legislation which currently governs the treatment of "ancient forests" such as the Forest of Dean and Sherwood Forest is likely to be changed giving private firms the right to cut down trees.

Laws governing Britain's forests were included in the Magna Carta of 1215, and some date back even earlier.

Conservation groups last night called on ministers to ensure that the public could still enjoy the landscape after the disposal, which will see some woodland areas given to community groups or charitable organisations.

However, large amounts of forests will be sold as the Department for the Environment Food and Rural Affairs (Defra) seeks to make massive budget savings as demanded in last week's Spending Review.

Whitehall sources said about a third of the land to be disposed of would be transferred to other ownership before the end of the period covered by the Spending Review, between 2011 and 2015, with the rest expected to go by 2020.

A source close to the department said: "We are looking to energise our forests by bringing in fresh ideas and investment, and by putting conservation in the hands of local communities."

Unions vowed to fight the planned sell-off. Defra was one of the worst-hit Whitehall departments under the Spending Review, with Ms Spelman losing around 30 per cent of her current £2.9 billion annual budget by 2015.

The Forestry Commission, whose estate was valued in the 1990s at £2.5 billion, was a quango which was initially thought to be facing the axe as ministers drew up a list of arms-length bodies to be culled.

However, when the final list was published earlier this month it was officially earmarked: "Retain and substantially reform – details of reform will be set out by Defra later in the autumn as part of the Government's strategic approach to forestry in England."

A spokesman for the National Trust said: "Potentially this is an opportunity. It would depend on which 50 per cent of land they sold off, if it is valuable in terms of nature, conservation and landscape, or of high commercial value in terms of logging.

"We will take a fairly pragmatic approach and look at each sale on a case by case basis, making sure the land goes to the appropriate organisations for the right sites, making sure the public can continue to enjoy the land."

Mark Avery, conservation director for the Royal Society for the Protection of Birds (RSPB) said: "You can understand why this Government would think 'why does the state need to be in charge of growing trees', because there are lots of people who make a living from growing trees.

"But the Forestry Commission does more than just grow trees. A lot of the work is about looking after nature and landscapes."

"We would be quite relaxed about the idea of some sales, but would be unrelaxed if the wrong bits were up for sale like the New Forest, Forest of Dean or Sherwood Forest, which are incredibly valuable for wildlife and shouldn't be sold off.

"We would look very carefully at what was planned. It would be possible to sell 50 per cent if it was done in the right way."

A Defra spokesman said: "Details of the Government's strategic approach to forestry will be set out later in the autumn.

"We will ensure our forests continue to play a full role in our efforts to combat climate change, protect the environment and enhance biodiversity, provide green space for access and recreation, alongside seeking opportunities to support modernisation and growth in the forestry sector."

Allan MacKenzie, secretary of the Forestry Commission Trade Unions, said: "We will oppose any land sale. Once we've sold it, it never comes back.

"Once it is sold restrictions are placed on the land which means the public don't get the same access to the land and facilities that are provided by the public forest estate.

"The current system means a vast amount of people can enjoy forests and feel ownership of them. It is an integral part of society."

In 1992 John Major's Conservative government – also looking to save money in a recession – drew up plans to privatise the Forestry Commission's giant estate, which ranges from huge conifer plantations to small neighbourhood woodlands.

John Gummer, then the Agriculture Minister, wrote to cabinet colleagues saying that he 'wanted to raise money and get the forest estate out of the private sector'. Mr Major backed the sell- off which, it was hoped, would raise £1 billion.

However it was later abandoned following a study by a group of senior civil servants, amid widespread public opposition.

U.S. seeks to dismiss UBS criminal tax evasion case

(Reuters) - The U.S. Department of Justice is seeking to dismiss a criminal prosecution against UBS AG that led to the Swiss bank paying a $780 million penalty and admitting it helped wealthy U.S. clients evade taxes.

In a filing on Friday in the U.S. district court in Fort Lauderdale, Florida, prosecutors said UBS has complied with an 18-month agreement to defer prosecution, after helping roughly 17,000 clients with $20 billion of assets hide their accounts from the Internal Revenue Service.

As part of the February 2009 settlement, Zurich-based UBS handed over names on more than 250 client accounts and ended its U.S. cross-border banking business.

It later revealed data on some 4,450 additional accounts and the government said UBS is continuing to cooperate.

"UBS AG has fully complied with all of its obligations," senior litigation counsel Kevin Downing wrote in the filing. "The United States believes that dismissal is appropriate."

The settlement is considered a landmark in cracking Switzerland's famed bank secrecy. Dismissal of the case requires court approval.

UBS spokeswoman Karina Byrne declined to comment.

"The UBS prosecution was historic and unique, and is a high point in government tax enforcement," said Peter Hardy, a partner at Post & Schell PC in Philadelphia and former prosecutor. "It has resulted in a systemic change in how Switzerland views foreigners holding assets in their banks."

On Friday, Swiss financial market regulator FINMA told bankers and insurers in that country that they must understand non-Swiss rules and take steps to mitigate or eliminate risks stemming from cross-border activity.

Since the U.S. accord was announced, the federal government has prosecuted several individual former UBS clients. At least 10 have been sentenced to terms ranging from probation to one year in prison.

Meanwhile, about 15,000 Americans with offshore accounts reported them voluntarily to the IRS under a 2009 amnesty program.

"The question now is whether the government can capitalize on its gains, or be mired in the many cases on its plate" following the voluntary disclosures, Hardy said.

The case is U.S. vs UBS AG, U.S. District Court, Southern District of Florida, No. 09-60033.

(Reporting by Jonathan Stempel in New York; additional reporting by Robin Bleeker in Geneva, Tom Brown in Miami and Helen Kearney in New York)

G-20 meeting ends with U.S. failing to secure key support for trade plan

A proposal to set a cap for each country's deficit or surplus is opposed by some American allies and trading partners.

Finance officials at G-20

From left, European Central Bank President Jean-Claude Trichet, EU economic chief Olli Rehn and Belgian Finance Minister Didier Reynders. (Kim Hee-chul / European Pressphoto Agency / October 23, 2010)

Officials of the world's major economic powers agreed Saturday to take steps to head off what one nation has warned could become a currency war, but the Obama administration fell short of securing an agreement to correct large trade imbalances threatening the global economy.

Concluding two days of talks in South Korea, Treasury Secretary Timothy F. Geithner and other finance ministers of the Group of 20 leading economies also moved to give emerging nations such as China and India a bigger voice in the International Monetary Fund.

Geithner's top priority at the talks, before a summit of G-20 leaders next month in Seoul, was to persuade his counterparts to accept a new set of policies and mechanisms aimed at reducing the large U.S. trade and investment deficits while curbing surpluses of China and other countries that have long relied on Americans as the consumers of last resort.

In the wake of the global financial crisis and devastating recession, U.S. officials have pressed harder for export-dependent countries to import more and expand their economies by boosting domestic demand. At the same time, the United States and other nations that have been running deficits would need to consume less while boosting savings and investments.

The shift, officials contend, is necessary for sustained growth of the global economy and to prevent a recurrence of the worldwide crisis.

While agreeing to the general principles of this framework, some key American allies and trading partners opposed the U.S.-backed proposal to set global curbs on the current account surpluses and deficits of major nations, underscoring the difficulties ahead in restoring stability to the global economy.

At the meeting in South Korea's southern city of Gyeongju, U.S. officials sought to set a cap for each country's deficit or surplus at 4% of its economic output by 2015.

The idea drew support from Britain, Australia, Canada and France, all of which are running trade deficits, as well as South Korea, which is hosting the G-20 meetings and hoping for a compromise among the parties.

But the proposal got a cool reception from export powerhouses such as China, which has a current account surplus of 4.7% of its gross domestic product; Germany, with a surplus of 6.1%; and Russia, with a surplus of 4.7%, according to IMF statistics.

Geithner accentuated the progress made.

"The framework of cooperation we agreed to today recognizes that none of us can accomplish this alone," he said in a statement. "First, we have agreed that it is important to limit the overall level of external imbalances across the global economy.... The value of this framework to limit trade imbalances is that rights and responsibilities are aligned and balanced."

But with countries still feeling the pain of the recession and reluctant to accept policies that might weaken their growth prospects, analysts weren't surprised that the U.S. failed to come away from the talks with commitments to adopt specific targets.

"Will the U.S. Congress pass tax increases and spending cuts for immediate implementation because the international community is concerned that the U.S. is running too large a current account deficit position?" asked Paul Donovan, a global economist at UBS Investment Bank in London.

U.S. officials met with greater success in their efforts to address the upheaval over currency values.

American lawmakers and some businesses have accused the Chinese of devaluing the yuan to gain an advantage in trade, and Brazilian officials, who did not attend the G-20 meeting, have expressed concern about a currency war.

The G-20 finance ministers pledged in their declaration to "move toward more market-determined exchange rate systems … and refrain from competitive devaluation of currencies."

Yoon Jeung-hyun, South Korea's finance minister, lauded the agreement on currency policies, saying that it would "put an end to the controversy over foreign exchange rates."

G-20 officials also highlighted their accomplishments in following through on a pledge a year ago to restructure the IMF's voting quota system and governance to give emerging nations greater say. The G-20 parties agreed Saturday to shift more than 6% of quota shares to emerging economies and underrepresented countries by the end of 2012. The hope is that this realignment will help make the IMF more credible and effective.

Chinese officials welcomed the change.

"China, the biggest developing and low-quota country, should be promoted in terms of its quota and voting right in the IMF," said Zhou Xiaochuan, China's central bank governor.

But there was little comment from the Chinese side on the G-20's other statements related to trade imbalances and currency policies. On Friday, the Chinese Embassy in Washington issued a statement saying, "China never pursues trade surplus, nor has it manipulated its currency to gain trade benefits."

Haiti cholera cases detected in Port-au-Prince

Click to play

Aisha Bain, International Rescue Committee, says the infection risk is "great"

Five cases of cholera have been detected in Haiti's capital, Port-au-Prince, the UN says, amid an outbreak that has killed more than 200 people.

UN officials said the patients had been quickly diagnosed and isolated.

They became infected in the main outbreak zone - the Artibonite region - and then travelled to the capital where they developed symptoms, the UN said.

This meant Port-au-Prince was "not a new location of infection", the UN's humanitarian affairs agency said.

"The identification of the five cases in the capital, while worrying, also demonstrates that the reporting systems for epidemic management are functioning," said the UN Office for the Coordination of Humanitarian Affairs, or Ocha.

More than a million survivors of Haiti's devastating January earthquake are crowded into tent cities around Port-au-Prince with poor sanitary conditions and little access to clean drinking water.

Aid officials have described the prospect of cholera in the city as "awful".

Those in the camps are highly vulnerable to the intestinal infection, which is caused by bacteria transmitted through contaminated water or food.

Cholera causes diarrhoea and vomiting leading to severe dehydration, and can kill quickly if left untreated through rehydration and antibiotics.

'Slower pace of increase'

With 2,674 cases of the disease reported, health officials have been trying to contain the outbreak in Artibonite and Central Plateau.

They said they had stepped up disease prevention measures and surveillance at the tent camps, and sent medical teams north to treat those infected so they did not travel to the capital to seek help.

People carry a coffin containing the remains of a relative who died of cholera in Robine, Haiti (23 October 2010) This is the first time in a century that cholera has struck the Caribbean nation

Ocha also said five cholera treatment centres were being built in the Port-au-Prince, most attached to hospitals or clinics.

"The hospitals in Port-au-Prince seem more prepared now for cholera to hit the area but the situation is far from under control," said Carel Padre.

"Everybody is worried about the disease reaching this dense city where there is a lack of sanitation and nowhere clean to cook or sleep," he told the BBC.

On Saturday, Ocha reported that the severity of the outbreak seems to be lessening in the southern Artibonite but its continued spread in the north of the region remained a concern.

"Although there is an increase in the number of confirmed cases, it is increasing at a slower pace than in previous days, which is a possible indication that some of the prevention and treatment measures are taking effect," Ocha said.


Meanwhile, officials confirmed that 194 people had died of cholera in Artibonite, and another 14 in Central Plateau.

The worst-hit areas were Saint-Marc, Grande Saline, L'Estere, Marchand Dessalines, Desdunes, Petite Riviere, Lachapelle, and St Michel de l'Attalaye, said the UN.

Map showing cholera in Haiti

A number of cases have also been reported in the city of Gonaives, and towns closer to the capital, including Archaei, Limbe and Mirebalais.

Local hospitals have been overwhelmed. Aid workers said many patients at the St Nicholas hospital in Saint-Marc were being forced to lie outside in the car park in unhygienic conditions, hooked up to intravenous drips.

The aid agency Medicins Sans Frontieres has set up a cordon around the hospital to control exit and entry to try to contain the spread of the outbreak.

Dr Jhonny Fequiere told the BBC that his hospital in Marchand Dessalines was also struggling to cope, and that he had seen dozens die.

"We are trying to take care of people, but we are running out of medicine and need additional medical care. We are giving everything we have but we need more to keep taking care of people," he said.

Some patients said they became ill after drinking water from a canal, but others said they were drinking only purified water. The Artibonite river, which irrigates central Haiti, is thought to be contaminated.

Haitian Health Minister Alex Larsen has urged people to wash their hands with soap, not eat raw vegetables, boil all food and drinking water, and avoid bathing in and drinking from rivers.

There are enough antibiotics in Haiti to treat 100,000 cases of cholera and intravenous fluids to treat 30,000, according to the UN.

This is the first time in a century that cholera has struck Haiti.

G20 finance ministers agree to global economic regulations

G20 finance ministers Saturday agreed tougher rules for big financial firms blamed for the global economic crisis as they tackled the problem of companies deemed "too big to fail".

After a two-day meeting in South Korea, G20 ministers and central bankers said in a statement that the 2008-09 crisis laid bare the need for global cooperation on banking regulation.

"We are committed to take action at the national and international level to raise standards, so that our national authorities implement global standards consistently, in a way that ensures a level playing field and avoids fragmentation of markets, protectionism and regulatory arbitrage," they said.

The rules, known as Basel III, will raise the minimum capital reserves that banks must hold as insurance against any new financial tumult.

The rules, announced in September by the Basel Committee on Banking Supervision, will be phased in over several years starting in 2013. They will be formally adopted by G20 leaders at a Seoul summit next month.

A senior South Korean delegate told AFP: "There was very little disagreement on the issue. This was a simple process of approval."

European governments see US failure to implement the previous bank capital standards known as Basel II as one cause of the crisis.

Many in continental Europe, along with Canada, Australia and others, said their own banks had weathered the crisis well thanks to strict supervision, unlike those in the United States and Britain.

The G20 ministers backed a broad plan by the Financial Stability Board (FSB) watchdog to tighten supervision of big banks and financial firms.

The board, created last year by the G20, had met on Wednesday in Seoul and the G20 statement endorsed its recommendations "to increase supervisory intensity and effectiveness".

Also approved were recommendations on implementing the central clearing and trade reporting of over-the-counter derivatives -- a move intended to reduce risk in the huge derivatives market.

The G20 additionally backed FSB principles for reducing reliance on credit rating agencies, which came in for widespread criticism for being too close to the firms they assessed and for failing to warn of problems.

The G20 backed too the FSB's drive "to mitigate the risks posed by 'systemically important financial institutions' and address the 'too-big-to-fail' problems".

Enormous bailouts of banks deemed "too big to fail" angered taxpayers in the United States and Britain, and bankers remain vilified, with seven-figure bonuses once more becoming the norm as profits return.

But Nout Wellink, who heads the Basel Committee on Banking Supervision, admitted Tuesday that rules on systemic risks and the biggest banks would not be ready before the middle of next year.

However he said the new capital requirement, combined with a global liquidity framework, "will substantially reduce the possibility of a banking crisis in the future".

In Brussels Wednesday, the European Commission called for the creation of a system to allow troubled banks to fail without jeopardising the financial sector and forcing taxpayers to save them.

European Internal Markets Commissioner Michel Barnier said setting up a crisis management framework to wind down failing banks in an orderly fashion was vital "to prevent taxpayers from again having to pay for the banks".

Under the Basel III reforms, banks of all sizes will be required to hold more reserves by January 1, 2015, with the "minimum requirement for common equity", the highest form of loss-absorbing capital, raised to 4.5 percent of overall assets from 2.0 percent at the moment.

In addition, banks would be required by January 1, 2019 to set aside an additional buffer of 2.5 percent to "withstand future periods of stress", bringing the total of such core reserves required to 7.0 percent.

"Central Banks a Threat To Civilization" - Peter Schiff on Freedom Watch 10/23/10

Click this link 。。。

Jim Rogers on Bloomberg 10/21/10: Printing Money Won't Work

Click this link 。。。

The Rising Tide of Ethno-Nationalism: Multiculturalism Fails in Europe

Is Europe's adventure in international living about to end? At Potsdam, Germany, this weekend, Chancellor Angela Merkel told the young conservatives of her Christian Democratic Union that Germany's attempt to create a multicultural society where people "live side by side and enjoy each other" has "failed, utterly failed."

Backing up her rueful admission are surveys showing 30 percent of Germans believe the country is overrun by foreigners. An equal number believe the foreigners come to feed off German welfare.

Merkel had in mind the Turks who came as gastarbeiters, guest workers, in the 1960s. Some 2.5 million now live in Germany. Arabs and East Europeans have come more recently. One survey puts the Muslim population at 5 million.

"Multikulti is dead," says Horst Seehofer of Merkel's sister party, the Christian Social Union of Bavaria. He wants no more immigration from "alien cultures". Turks and other Muslims are not learning the language, he contends, not assimilating, not becoming Germans.

Awareness of deep differences with Turkish neighbors became acute for Germans when, grieving in solidarity with America after 9/11, they learned that Turkish sectors of Berlin were celebrating Islam's victory with barrages of bottle rockets.

Like all of Europe, Germany grows nervous.

This summer, Thilo Sarrazin, who sat on the Bundesbank board, published "Germany Abolishes Itself", which sold 300,000 copies in seven weeks. Sarrazin argued that Germany's Muslim population is unable or unwilling to learn the language or culture, and that mass immigration is destroying the nation.

Across Europe, there is a resurgence of ethnonationalism that is feeding the ranks of populist and anti-immigrant parties that are gaining respectability and reaching for power.

Austrian nationalists triumphed in 2008 when the Freedom Party of Joerg Haider and the Alliance for the Future of Austria together took 29 percent of the vote. The Swiss People's Party of Christoph Blocher, largest in Bern, was behind the successful referendum to change the constitution to outlaw minarets and prohibit the wearing of burqas. Hungary's Jobbik Party, which to the Financial Times "sits squarely in Europe's most repulsive arch-nationalist tradition and which blames Jews and Roma for the hardships of other Hungarians," pulled 17 percent of the vote this year and entered parliament with 47 seats, up from zero seats in 2006.

The Sweden Democrats just captured 6 percent of the vote and entered parliament for the first time with 20 seats, joining right-wing folk parties in Norway and Denmark.

Geert Wilders, a rising figure in Dutch politics, was charged with hate speech for equating Islam and Nazism. In June, his Freedom Party swept past the ruling Christian Democrats, who lost half of their strength in parliament. "More security, less crime, less immigration, less Islam -- that is what the Netherlands has chosen," said Wilders. In France, President Nicolas Sarkozy -- one eye on Jean-Marie Le Pen's National Front, the other on the 2012 elections -- rejecting cries of "Nazism" and "Vichyism", is dismantling Gypsy camps and deporting Gypsies to Romania. Milan is now following the French lead. What is happening in Europe partakes of a global trend. Multiracial, multi-ethnic, multicultural nations are disintegrating.

Russians battle ethnic Muslim separatists in the North Caucasus. Seventy percent of Americans support an Arizona law to identify and expel illegal aliens. Beijing swamps the homelands of Tibetans and Uighurs with Han Chinese. India fights secession in Kashmir, Nagaland and the Naxalite provinces.

"Wars between nations have given way to wars within nations, " said Barack Obama in his Nobel Prize address.

Ethnonationalism tore Mikhail Gorbachev's Soviet Union and Josip Tito's Yugoslavia into 22 separate nations and is now tugging at the seams of all multi-ethnic states. Globalism is in retreat before tribalism.

But the awakening of Europe's establishment to the shallow roots of multiculturalism will likely prove frustrating and futile. With her fertility rate below replacement levels for 40 years, projected to remain so for the next 40 years, Germany will lose 12 million of her 82 million people by 2050. Her median age will rise eight years to 53, and 40 percent of all Germans will be over 60. Germany's problem is insoluble. She is running out of Germans. Baby boomer Europe decided in the 1960s and 1970s it wanted La Dolce Vita, not the hassle of children. It had that sweet life. Now the bill comes due. And the bill is the end of their tribes and countries as we have known them.

Old Europe is dying, and the populist and nationalist parties, in the poet's phrase, are simply raging "against the dying of the light."

« Foreclosure Fight Heads To The Courts Where Judges Are Finally Respecting The Law »

In this clip, Chris Whalen says JPMorgan (nyse: JPM) has some of the best paperwork out there, while Bank of America (nyse:BAC) is a nightmare.


Foreclosure Battle Lines - NYT

Katherine M. Porter, a visiting law professor at Harvard University and an expert on consumer credit law, said that lenders were wrong to minimize problems with the legal documentation.

“The misbehavior is clear: they lied to the courts,” she said. “The fact that they are saying no one was harmed, they are missing the point. They did actual harm to the court system, to the rule of law. We don’t say, ‘You can perjure yourself on the stand because the jury will come to the right verdict anyway.’ That’s what they are saying.”

Banks “have essentially sidestepped 400 years of property law in the United States,” said Rebel A. Cole, a professor of finance and real estate at DePaul University. “There are so many questionable aspects to this thing it’s scary.”

“This is ultimately going to have to be resolved by the 50 state supreme courts who have jurisdiction for property law,” Professor Cole predicted.

He also said that lenders “seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance.” Now that their practices were “put to the test, their weak legal arguments compel the court to stop them at the gate,” the judge ruled.

“We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs — such as a family home — during this period of economic crisis,” Judge Lippman said in a statement.

For example, Frederick B. Tygart, a circuit court judge overseeing a foreclosure case in Duval County, Fla., recently ruled that agents representing Deutsche Bank relied on documents that “must have been counterfeited.” He stopped the foreclosure. Deutsche Bank had no comment on Wednesday.

“Everybody knows the banks screwed up and loaned out money to people who couldn’t pay it back,” she said. “Why are people surprised that they don’t know what they are doing here either?”

Per ususal, check in comments below for related links.