Tuesday, December 14, 2010

Water, Meet Blood - JP Morgan Admits To, Reduces Massive Silver Short Position, Proves Millions Of Conspiracy Theorists Correct

In the latest example that virtually every conspiracy theory is almost always inevitably proven to be fact, the Financial Times reports that JP Morgan, the firm targeted by thousands of "tin foil hat" wearing, conspiratorially-oriented "gold bugs", has cut back on its US silver futures. "JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal." And in what can only be considered an unprecedented victory for all those who have over the past year agitated to putting JP Morgan out of business, most recently spearheded by the likes of Mike Krieger and Max Keiser, by forcing a massive short squeeze on its commodities trading desk, we learn that "the decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver, a person familiar with the matter said. The person added that the bank’s position in silver would from now on be “materially smaller” than in the past." Of course, the latter is pure and total bullshit: as Bart Chilton indicated over the weekend, it is JP Morgan who at one point or another (and possibly very recently) controlled as much as 40% of the silver market, via a massive short. Attempting to make others believe that this short could be covered without pushing the price of the silver metal to over $100/ounce is an indication of either how stupid JPM believes the general population to be, or just how desperate the firm is to end the ongoing short squeeze onslaught. Either way, we are confident that this first unprecedented confirmation that a) JPM is indeed massively short silver and b) that it is hurting bad, will merely redouble efforts to put the world's biggest financial company out of business. Lastly, this means that silver is about to really blast off as the push to really hurt JPM takes off in earnest.

From FT:

The US regulator, the Commodity Futures Trading Commission, announced in September 2008 that it was investigating complaints of misconduct in the silver market, although it did not name specific entities.

However, JPMorgan said in a statement: “It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.” The bank declined to comment on whether it had reduced its position in the silver market.

The price of silver has risen more than 70 per cent since mid-August to hit a 30-year high of $30.68 a troy ounce last week on the back of a surge in investor buying and a rebound in industrial silver consumption.

In two previous reviews of the silver market, the CFTC has dismissed claims of manipulation. Most analysts say there is little reason to believe the price of silver is being systematically manipulated.

But Bart Chilton, a CFTC commissioner, said in October that he believed there had been “fraudulent efforts” to “deviously control” the silver price. He did not name any party.

Publicly available data on individual traders’ positions are sketchy. In a speech last Wednesday, Mr Chilton said that “earlier this year, one trader held more than 40 per cent of the silver market”. He declined to identify the trader.

The CFTC’s Bank Participation Report shows that one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.

The CFTC only reports data for the US silver futures market, a small corner of the global derivatives market for the precious metal, which is centred in London and largely traded via private over-the-counter deals. The data also do not cover transactions in the physical market.

Analysts and traders said that JPMorgan’s large short positions on New York’s Comex exchange, a division of Nymex, were hedges for the bank’s long positions in physical silver and London’s over-the-counter market.

JPMorgan has invested nearly $3bn over the past two years in its commodities business led by Blythe Masters.

And while we revel in the knowledge that the short squeeze is causing massive pain for JPM, we are far more overjoyed that the days of Blythe Masters as head of JPM's commodities desk is coming to an end: any comparable massive admission of weakness by a trader is always and inevitably followed by some very high profile terminations.

9 TRILLION Dollars Missing from Federal Reserve,Fed Inspector General Ca...

Moody's May Cut US Rating on Tax Package


Moody's warned Monday that it could move a step closer to cutting the U.S. Aaa rating if President Obama's tax and unemployment benefit package becomes law.

The plan agreed to by President Obama and Republican leaders last week could push up debt levels, increasing the likelihood of a negative outlook on the United States rating in the coming two years, the ratings agency said.

A negative outlook, if adopted, would make a rating cut more likely over the following 12-to-18 months.

For the United States, a loss of the top Aaa rating, reduce the appeal of U.S. Treasuries, which currently rank as among the world's safest investments.

"From a credit perspective, the negative effects on government finance are likely to outweigh the positive effects of higher economic growth," Moody's analyst Steven Hess said in a report sent late on Sunday.

After Obama announced his plan, Treasury prices fell sharply in volatile trade last week and yields have hit a six-month high, in part due to concerns over the effect the package will have on government debt levels.

If the bill becomes law, it will "adversely affect the federal government budget deficit and debt level," Moody's said.

On Monday, the Democratic-led U.S. Congress moved toward grudging approval of President Obama's deal with Republicans to extend expiring tax cuts, even for the wealthiest Americans, Last week, Moody's and Fitch Ratings both expressed concerns about the U.S.'s rating longer term, with Moody's fearing the impact if the tax cuts become permanent.

Read Full Article

"Washington’s Role Is To Serve The Banks" Says Spencer Bachus Incoming House Banking Committee Chairman »

Scroll down for VIDEO...


A reporter is doing an interview and is obviously recording. Do these guys even think before they begin speaking.

Bachus supported TARP, though begrudgingly, and only after he was removed by Republicans from his role as lead TARP negotiator with Democrats. He also showed some intelligence last week when, against certain Wall Street Congressional interests, he appointed Ron Paul as Chairman of the House Monetary Policy sub-committee with oversight over the Fed.

But he's still a hypocritical TARP scallywag


Bachus Gets His Chairmanship

Source - Birmingham Times

Rep. Spencer Bachus (R-AL) will become chairman of the House Financial Services Committee in the 112th Congress. Bachus, in an interview Wednesday night, said he brings a "main street" perspective to the committee, as opposed to Wall Street.

  • "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks."
  • He later clarified his comment to say that regulators should set the parameters in which banks operate but not micromanage them.

In the 2009-10 election cycle, the finance/ insurance/real estate sector gave Bachus' campaign account $752,200, most of it from political action committees, according to an analysis by the Center for Responsive Politics. Democrats Wednesday were critical of that connection.

"Republicans putting Spencer Bachus in charge of financial regulation is voting for the fox to guard the henhouse," said Ryan Rudominer of the Democratic Congressional Campaign Committee.

  • But Bachus is not alone in accepting huge donations from the industries that the committee oversees. Outgoing chairman Frank accepted $986,000 from the sector over the last two years, according to the center.

In his quiet campaign for the chairmanship, Bachus promoted an agenda to end taxpayer subsidies for mortgage giants Fannie Mae and Freddie Mac, repeal those parts of the Wall Street reforms that he thinks still leave the door open for taxpayer bailouts of financial institutions or their creditors, and increase oversight of President Barack Obama's administration.

"Now is the time to get government out of the way so businesses can create jobs and grow the economy," Bachus said.

Bachus has spent the last four years as the ranking Republican on the banking committee, the counterpart to chairman Rep. Barney Frank, D-Mass., and it wasn't without controversy. He irritated some of his GOP colleagues during the crisis negotiations over the $700 billion economic rescue package back in 2008, and they replaced him as their lead bargainer in the talks. He eventually supported the Troubled Assets Relief Program, but quickly became a critic of how President George W. Bush's administration was implementing it. Soon after, he survived a challenge to his ranking position, a sign that he has loyal friends inside the Republican caucus, many of whom he has showered with campaign contributions over the years.

Continue reading...


Now watch Bachus and try not to hurl...

Video - Bachus is upset about TARP but he voted for it


BofA looks to sell toxic mortgages worth $1 billion: report

The sign on a Bank of America ATM machine is pictured in downtown Los Angeles October 8, 2010. REUTERS/Fred Prouser

Mon Dec 13, 2010 10:00am EST

n">(Reuters) - Bank of America Corp has put up for sale at least $1 billion worth of toxic mortgage assets, the New York Post said on Monday, citing sources.

Bids are due by the end of December for the assets, which includes already written-off loans and mortgage-servicing rights, the paper said.

The asset sale is part of a larger effort by the bank to unwind a trove of assets in the wake of the purchases of Countrywide Financial and Merrill Lynch, the Post said.

Bank of America declined to comment to the New York Post. The company could not be immediately reached for comment by Reuters outside regular U.S. business hours.

(Reporting by Abhinav Sharma in Bangalore; Editing by David Holmes)

« Lord Bernanke spake and the sheeple listened: "All will be well my debt slaves, all will be well" »

Video - Bernanke speech on the Fed's exit strategy

Who Needs QE2 - Watch An Overconfident Bernanke Talk About SHRINKING The Fed's Balance Sheet Back In Early 2009


Your Debt Lord speaks...

But to whom will he sell the exalted MBS...

Ben seeks to reassure those concerned that the Federal Reserve does indeed have an exit strategy for its massive asset purchases and ponzi-inflated balance sheet. The only 2 things the failed Chairman got wrong in this presentation were the the timing and the direction.

What he meant to say was that the recession would last a decade, unemployment would skyrocket and then would plateau instead of subsiding, that housing prices would fall an additional 30%, and that he the great Bernanke would in fact increase asset purchases not decrease them, let alone, god forbid, actually sell a pile of crap or two, and that he might even consider creating a brand new national debt monetization program with proceeds from the previous $1. 5 trillion mortgage backed securities debt monetization program, and that still nothing would work, but not to worry because the helicopter was not working right and as soon as he got it fixed, that all would be well.

These are must-sees...

Lord Bernanke spake, thus the sheeple listened and went shopping - part 1...

Lord Bernanke spake, thus the sheeple listened and went shopping - part 2...

Links embedded above...

Alan Grayson - Congratulations America! You Own Bankrupt Red Roof Inns

Fed's Maiden Lane Spins Crap Assets Into Tungsten

CHART SHOCK: The REAL Unemployment Rate Is 22%

CHART SHOCK: Fed's balance sheet grows to RECORD size

Not So Well Known - Tracking The Fed's OTHER Criminal Debt Program


« Not So Well Known - Tracking The Fed's OTHER Criminal Debt Monetization Program »

The program in question isn't talked about frequently. It is a completely separate criminal approach to monetizing the national debt through Treasury purchases.

Background reading:


NEW YORK (Source - Reuters) - The recent spike in U.S. Treasury yields could whittle down prepayments on the Federal Reserve's $1 trillion mortgage investments and reduce the cash it reinvests into federal government debt.

The Fed's reinvestment of proceeds from maturing mortgage securities, which began in August, was aimed at maintaining its ultra-loose monetary policy. It is a separate move from its controversial $600 billion Treasuries purchase program, dubbed QE2, which started three months later.

The Federal Reserve Bank of New York said in November that reinvestments were expected to total $250 billion to $300 billion by the end of the second quarter of 2011. However, a slowdown in mortgage prepayments due to the surge in home loan rates could pare the Fed's reinvestment into Treasuries from mortgage assets by as much as $100 billion, said Eric Green, chief of U.S. rates research and strategy at TD Securities in New York.

Barclays Capital analysts see a similar slowdown in the wake of the current bond sell-off, downgrading annual paydowns on the Fed's mortgage holdings to about $175 billion from their earlier forecast of $278 billion. This means $8 billion to $9 billion less monthly reinvestment by the Fed.

Last week, the contract rate on U.S. 30-year mortgages, excluding points and fees, averaged at 4.66 percent, the highest since late July, the Mortgage Bankers Association said on Wednesday. The average 30-year loan rate has risen 0.38 percentage points from a month earlier. The MBA's mortgage activity index, meanwhile, fell 28 percent in the week ended Dec 3 from a month earlier.

The 10-year Treasury yield, which is the benchmark for the 30-year mortgage rate, has risen about three-quarters of a percentage point over the last month and hit a six-month peak of 3.29 percent on Wednesday.

Compounding the market sell-off this week was a proposed deal between Democratic U.S. President Barack Obama and Republican lawmakers to extend Bush-era tax cuts and to reduce payroll taxes.

The Fed's initial bout of bond buying that began in mid-November comprised $75 billion for QE2 and $30 billion for its mortgage reinvestment program.

Continue reading at Reuters...


More on this from Bloomberg...

The Fed has bought $106.3 billion in Treasuries on its way to purchasing $600 billion of government debt through June 2011. Separately, it has purchased $75.8 billion of Treasuries as part of its plan, announced in August, to reinvest maturing mortgage holdings. The second round of unconventional monetary easing is aimed at spurring economic growth and preventing inflation from falling too low.


Alternate Treasury Purchases Increase by Fed

Two of the 16 securities the Fed purchased today carried a interest-rate coupon of over 10 percent, including a 10.625 percent note maturing Aug. 15, 2015, and one with a 11.25 percent coupon that comes due on Fed. 15, 2015.

  • “Some of the securities the Fed purchased have been floating around for a long time,” added McCarthy. “Whoever owned them made a massive profit.”

« Jim Rogers: "We've Had 3 Central Banks In The History Of America, 2 Of Them Failed And This Will One Will Too!" »

Runs 2 minutes.

Video: Jimmy Rogers on Bernanke and the Federal Reserve

  • "The Fed should be abolished. In my view their day is done."

Related reading...


Recently from Jimmy...


On the Chopping Block: Social Security, Medicare and Medicaid

Planned is death by a thousand cuts - aka "creeping normalcy," defined as a way to make major changes seem normal if happen slowly, incrementally like boiling a frog unaware it's dinner until cooked.

Social Security and Medicare are dinner. Yet both are insurance, not welfare, programs funded by (worker-employer) payroll tax deductions. They're contractual federal obligations to eligible recipients who qualify. You'd never know it the way both programs are publicly discussed, explaining everything but the truth. More on that below.

On August 14, 1935, the Social Security Act became law, known as the federal Old-Age, Survivors, and Disability Insurance program (OASDI). It provides retirement, disability, survivorship, and death benefits. It's still America's most effective poverty reduction program that's worked remarkably well since inception. It exists to provide secure inflation-adjusted retirement or disability income, unlike risking personal savings to create private wealth that may end up losing it.

Despite bogus claims, it's not going bankrupt. When properly administered, it's sound and secure, needing only modest adjustments at times to assure it.

On July 30, 1965, Lyndon Johnson signed the Social Security (Medicare) Act into law, enrolling Harry and Bess Truman as its first recipients.

Medicare.gov calls it "the nation's largest health insurance program," covering 40 million Americans. It's a "Health Insurance program for people age 65 or older, some disabled people under age 65, and people of all ages with End-Stage Renal Disease (permanent kidney failure treated with dialysis or a transplant)."

America's aristocracy wants Medicare and Social Security ended, citing the nation's burgeoning debt and enormous unfunded liabilities for both programs. The web site usdebtclock.org lists them as follows:

(1) the US National Debt: nearly $14 trillion;

(2) Social Security Liability: nearly $15 trillion;

(3) Prescription Drug Liability: nearly $20 trillion; and

(4) Medicare Liability: nearly $78 trillion.

Total: nearly $113 trillion plus the National Debt.

Most important is that future liabilities mask today's soundness that can stay that way if current programs are properly administered. That's omitted from hyped scare tactics to convince future recipients to make unjustifiable sacrifices. Like them or not, they're coming, major media reports promoting the idea as well as politicians from both parties.

On August 9, 2010, for example, a New York Times editorial headlined, "The Latest on Medicare and Social Security," saying:

"Of course, neither program is sound for the long run. (Yet there's) time for lawmakers to reform and strengthen both (for) the long haul. (Required is) a combination of benefits cuts and tax increases, which could be distributed fairly and phased in over decades."

A May 13, 2009 Wall Street Journal report headlined "Social Security, Medicare Face Insolvency Sooner," saying:

Medicare "will be depleted by 2017," Social Security by "2037." In fact, neither program is endangered as explained above. Yet the report continues:

"Any attempt to address long-term fiscal problems will require big changes to the way entitlements are funded or paid out."

False, but don't expect major media reports to explain or side with recipients about programs too important to be weakened or lost.

Yet in his January State of the Union address, Obama announced plans to "freeze government spending for three years," starting in 2011, saying he'd form a bipartisan fiscal commission to cut the deficit and tackle entitlements by imposed austerity at a time massive stimulus is needed.

Called the National Commission on Fiscal Responsibility and Reform (NCFRF), it's co-chaired by two deficit hawks, former Senator Alan Simpson (R. WY) and Erskine Bowles, former Clinton White House Chief of Staff. They headed an 18-member team, stacked with like-minded members, elitists knowing their futures are secure.

Their mandate: slash Medicare, Medicaid, Social Security and other social spending, continuing a decades long process of transferring wealth to America's super-rich. On November 10, they issued their proposal. An earlier article addressed it, accessed through the following link:


Among other recommendations were:

-- ending or capping middle class tax breaks, including deductions for home mortgage insurance and tax-free employer provided medical insurance;

-- lowering income taxes dramatically to 9, 15 and 24%, down from six brackets ranging from 10 - 35%;

-- slashing corporate tax rates from the top 35% to 26%;

-- making deep Medicare cuts as well as increasing Medicaid co-pays; and

-- raising the Social Security retirement age to 69 by 2075 as well as reducing annual cost-of-living increases.

A second Bipartisan Policy Center (BPC) commission co-chaired by former Senator Pete Domenici (R. NM) and Alice Rivlin, former director of the Office of Management and Budget and the Congressional Budget Office, issued its own proposal called "Restoring America's Future."

Its recommendations include:

-- indexing Social Security benefits to life expectancy to reduce them as longevity increases;

-- eliminating annual cost-of-living adjustments, bogusly claiming inflation is overstated, especially for retirees facing costly medical expenses;

-- instituting a one-year payroll tax holiday for workers and employers to save $650 billion, supposedly to be replenished from future general revenues; in fact, it's a way to help kill Social Security as discussed below;

-- sharply cutting Medicare and Medicaid benefits;

-- simplifying the tax code to two brackets (15 and 27%), favoring the rich;

-- eliminating home mortgage and most other deductions and credits;

-- taxing employer provided health insurance; and

-- instituting a 6.5% national sales tax, hitting ordinary people hardest.

An earlier article providing more details, including on Obama's planned austerity, can be accessed through the following link:

Nancy Altman is co-director of Social Security Works (strengthensocialsecurity.org), an "American coalition (representing over 50 million Americans) united around the simple proposition, Strengthen Social Security...Don't Cut It."

Its seven principles include:

(1) Social Security didn't cause the federal deficit; it shouldn't be cut to reduce it;

(2) it shouldn't be privatized;

(3) it shouldn't be means-tested;

(4) future revenues should come by raising the payroll tax ceiling, requiring those earning more to pay their fair share;

(5) the retirement age shouldn't increase further;

(6) benefits shouldn't be cut, including by reducing annual inflation-adjusted increases; and

(7) benefits "should be increased for those who are most disadvantaged."

In short, Social Security (Medicare and Medicaid) should be strengthened to provide greater, not lower, future benefits.

Obama's Destructive Payroll Tax Holiday

The proposed 2% worker earnings cut for one year is a stealth indefinite extension scheme to drain hundreds of billions from the Social Security Trust Fund. Doing so will irreparably weaken its ability to pay future benefits, the idea being to destroy the program altogether, perhaps first by privatizing it.

Social Security Works explained how the tax holiday "could unravel" the whole system as follows:

(1) "It's easy to enact tax cuts - it's very hard to end them."

(2) Doing so results in a substantial tax increase - $2,000 on $100,000 a year earners, $400 for those making $20,000.

(3) "Restoring the 2% lost....would be a nearly 50% tax increase (for) 94% of all Americans...."

(4) House and Senate Republicans oppose any increases. So do many Democrats, especially in election years or when economic conditions are weak.

(5) Obama's proposal undermines Social Security's long-term solvency. Repaying what's lost from general revenues is greatly impeded by the size of the deficit and planned austerity coming to reduce it.

(6) Maintaining the 2% cut indefinitely will cause massive benefit cuts and eliminate any chance for improving them, notably for society's poor and disadvantaged.

(7) Middle class households will also be harmed, violating Franklin Roosevelt's pledge that:

"We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren't a matter of economics, they're straight politics."

FDR never met Obama or congressional Republicans and Democrats. What he gave, they'll end, violating a government-mandated right.

(8) A payroll tax holiday is another step toward privatization, a sure way to kill it, the way 401(k)s destroyed private pensions, leaving workers at the mercy of marketplace uncertainties that can wipe out life savings during hard times.

Social Security Works concluded, saying:

"There are better ways to provide stimulus to the economy - and that do less harm to Social Security - than a tax holiday."

According to the Center for Budget and Policy Priorities (CBPP), one way is by extending the 2009 Making Work Pay Tax Credit, adding much more stimulus than a payroll tax holiday. It gives workers a refundable tax credit, increasing the size of the paychecks. At 6.2% of earned income, it provides maximum $400 for working individuals, $800 for married taxpayers filing joint returns.

A payroll tax holiday is a bad idea any time, besides doing little to stimulate economic growth. "The most efficient way to boost consumer spending is to put money into the hands of people who will spend it quickly rather than save it." It's most effective when given to low and middle-income workers, not high-end ones who'll save, not spend, their windfall.

"A payroll tax holiday does not score well on this front - too little of the benefit goes to lower-income households struggling to make ends meet and too much goes to higher-income taxpayers, who are likely to save a significant (portion) of any new resources they receive."

Besides killing Social Security, that's the whole idea, of course, transferring more wealth to the rich, what Republicans and Democrats endorse, including Obama.

In contrast, the Making Work Pay Tax Credit poses no threat to Social Security. The payroll tax holiday may destroy it. Republicans signing on as a concession masks their real intent, the same one they've had since Social Security's enactment, a program they strongly opposed as well as Medicare in 1965. Now both parties oppose them.

A Final Comment

Obama's payroll tax holiday will drive a stake into Social Security's heart, or as Hall of Fame former baseball announcer Bob Prince used to call Pittsburgh Pirate home runs: "Kiss it goodbye." Fans cheered. Deathly silence will greet Obama's proposal once recipients know they've been scammed. Republicans and Democrats plan it unless an aroused public stops them.

Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

Detroit Mayor Plans to Halt Garbage Pickup, Police Patrols in 20% of City; Expect Bankruptcy, Massive Municipal Bond Turmoil in 2011

Detroit has been bankrupt for years. It simply refuses to admit it. Detroit's schools are bankrupt as well. A mere 25% of students graduate from high school.

Yet, in spite of hints and threats from mayors and budget commissions, and in spite of common sense talk of bankruptcy, Detroit has not pulled the bankruptcy trigger.

In a futile attempt to stave off the inevitable one last time, Mayor Bing's latest plan is to cutoff city services including road repairs, police patrols, street lights, and garbage collection in 20% of Detroit.

Bing to Cede 20% of Detroit to Gangs and Homeless

City officials suggest this will not shrink the size of the city. Perhaps it won't shrink Detroit on Google Maps. However, Bing's plan would effectively surrender 20% of the city to gangs and the homeless.

Would you want to live in one of the gang war-zones that his plan would create? Would you want to live in a bordering neighborhood or in a bordering city?

Regardless of your answer, Bing's plan cannot and will not work and I believe Detroit will, sometime in 2011, file for bankruptcy. If so, expect massive turmoil in municipal bonds.

Less Than a Full-Service City

The Wall Street Journal discusses Bing's plan in Less Than a Full-Service City

More than 20% of Detroit's 139 square miles could go without key municipal services under a new plan being developed for the city, with as few as seven neighborhoods seen as meriting the city's full resources.

Those details, outlined by Detroit planning officials this week, offer the clearest picture yet of how Mayor Dave Bing intends to execute what has become his signature program: reconfiguring Detroit to reflect its declining population and fiscal health. Yet the blueprint still leaves large legal and financial questions unresolved.

Mr. Bing's staff wants to concentrate Detroit's remaining population—expected to be less than 900,000 after this year's Census count—and limited local, state and federal dollars in the most viable swaths of the city, while other sectors could go without such services as garbage pickup, police patrols, road repair and street lights.

Karla Henderson, a city planning official leading the mayor's campaign, said in an interview Thursday that her staff had deemed just seven to nine sections of Detroit worthy of receiving the city's full resources. She declined to identify the areas, but said the final plan could include a greater number.

"What we have found is that even some of our stronger neighborhoods are at a tipping point with vacancy," Ms. Henderson said. "Vacancy adds to blight and blight is a disease that takes over the whole neighborhood. So the sooner we can get those homes occupied, the better for the city."

Officials bristle when their efforts are described as downsizing, saying their aim is to repurpose portions of the city, not redraw its borders. "We will not be shrinking the city," Ms. Henderson said. "We are 139 [square] miles and we'll stay that way."
Repurpose or Abandon?

Of course the Mayor's office did not say they would abandon sections of the city to gangs. But how the hell can repurposing as described above possibly mean anything else?

What's next? Barbed wire? Oh wait a minute, Detroit already has tried that. Razor-wire too. Here's a picture of Detroit's clearly abandoned repurposed Michigan Central Train Depot.

Image courtesy of the Journal and the AP.

Detroit's Tax Collection Process

The Detroit Free Press points out Detroit botched Packard plant tax collection
The City of Detroit has failed for nearly four years to send property tax bills to the owner of the Packard plant, costing the city badly needed cash.

At 3.5 million square feet, the plant is by far the largest derelict property in Detroit.

It wasn't until the Free Press began making inquiries last week that the city's assessor's office returned the property to the tax rolls -- with an assessed value of nearly $1.6 million. The change came nearly four years after a Michigan Supreme Court decision prompted the city to surrender the century-old plant to Bioresource, a company whose last listed corporate representative is a convicted drug dealer.

Last week, less than 18 hours after a reporter questioned why the property was listed as city-owned, the assessor's office changed its status to "taxable." The property's assessed value ballooned from almost nothing to nearly $1.6 million.

Robin Boyle, professor of urban planning at Wayne State University, said the error underscores "just how challenged the city is in dealing with the fundamental task of title, control, oversight and follow-through" with property throughout the city.

"To me, that is a fundamental problem that leaves Detroit in a consistently weakened position. It can't even do the basics," Boyle said. "This is a huge piece of real estate, and yet, there's still confusion."

Although only one tenant remains on the property, the plant is not entirely neglected. Scrappers prowl it for metal. Graffiti artists decorate its walls. Someone perched TV sets atop pillars standing at least 15 feet tall.

And it can all be yours for $13 million.

David Wax, senior associate with Burger Easton & Co. in Farmington Hills, has listed the property for sale for a couple of years. He said there was a good deal of interest before the world economic crisis and before steel prices collapsed, making the Packard plant less attractive to buy and then demolish for its metal.

"For 13 years it's been vandalized, raped, burned, stripped of anything of value," Wax said. And on any given day, he said, you can hear "people with hammers and cutting torches cutting steel out of the building."
Packard Closeup Images

The Business Insider has fantastic set of images of the beautiful $13 million Packard property. Here are a couple of those images.

Now that the building has been put back on the active tax rolls to a convicted drug dealer, this is the sequence of events I imagine would transpire were Detroit to stay on its existing path using Bing's plan as the roadmap.

1. Detroit will send a tax bill to Bioresource
2. Bioresourse will not pay the bill
3. Detroit will reacquire the building in a tax sale with no bidders
4. In a couple of years Detroit will realize it once again owns the building
5. Detroit will repurpose the Packard plant with the same success as depicted in the Michigan Central Train Depot image.

Detroit Schools Bankrupt

Flashback July 24,2009: The Wall Street Journal reports Detroit’s Schools Are Going Bankrupt, Too
Now’s the time to cast off collective bargaining agreements and introduce school choice.

‘Am I optimistic that they can avoid it . . . ? I am not.” That’s what retired judge Ray Graves said this week when asked whether the Detroit public schools, which he is advising, would be forced into bankruptcy. Facing violence, a shrinking student body, and graduating just one out of every four students who enter the ninth grade on time, the city’s schools have been stumbling for years. Now they face a seemingly insurmountable deficit and are expected to file for bankruptcy protection at about the time that students should be settling down in a new school year.

As embarrassing as such a filing would be, it also may be the only thing that can force the kinds of changes Detroit schools need—as the financial turmoil is just the latest manifestation of a system in terminal decline.

Detroit is like many urban school districts—large, unwieldy and bureaucratic, with a powerful union that makes the system unable to adapt to changing circumstances and that until very recently had an indulgent political class that insulated it from reform. That insulation came in two forms. The first was neglect. Mayor Kwame Kilpatrick spent several years distracted by a scandal stemming from his affair with a staffer. He resigned last year, pleaded guilty to obstruction of justice, and was sentenced to four months in jail. Had he been an effective mayor, he might have also been a powerful advocate for students.

The other insulating force was a conscious decision to wall off Detroit from charter schools. In 1993, Michigan’s legislature made it difficult to create new charters in Detroit by declaring that only community colleges could authorize charters for primary and secondary schools in “First-Class Districts”—defined as those with more than 100,000 students. Detroit was the only First-Class District. In 2003 the state, under pressure from the Detroit Federation of Teachers, turned down a gift of $200 million from philanthropist Robert Thompson that would have established 15 charter schools in the city. Those charters are needed today.

The net result has been a school system that’s been coming apart as the teachers union has dug in its heels. In 2006, the union illegally went on strike, killing a plan to force teachers to take a pay cut to balance the system’s books.
Collective Bargaining has Morally and Fiscally Bankrupted Detroit Schools

Read that again. Under pressure from the Teachers' Union, Detroit turned down $200 Million. That was in 2003 dollars. Wow. No doubt the union "did it for the kids".

For more on the appalling behavior of Detroit's teachers' unions please see Detroit Public Schools (25% graduation rate) teachers unions opposing highly qualified volunteer teachers.

It is time to kill collective bargaining for public unions, every one of them, and nation-wide, not just Detroit.

Detroit Bankruptcy Looms

Flashback April 6, 2010: Detroit Bankruptcy Looms with Deficit of $446 Million in Budget of $1.6 Billion
Detroit has hit the end of the line. It's budget deficit is between $446 million and $466 million (28% to 29%) of $1.6 billion with few ways other than drastic cuts in wages and benefits to address the problem.

If unions will not give in (and they won't), Detroit Faces Bankruptcy.
With that introduction, inquiring minds are diving into the Citizens Research Council report on The Fiscal Condition of the City of Detroit
The Economic Base

The deterioration of the economic base of the city has accelerated. There were an estimated 81,754 vacant housing units (22.2 percent of the total) in Detroit before the recession; that number increased to an estimated 101,737 (27.8 percent of the total) in 2008.

The average price of a residential unit sold in the January through November, 2009 period was $12,439, down from $97,847 in 2003. Remaining businesses and individuals are challenging property tax assessments on parcels that have lost value and, in some cases, cannot be sold at any price.

More than half of employed city residents work outside the city limits; the metro area has the highest unemployment rate of the 100 major metro areas in the U.S.
Detroit Should Embrace Bankruptcy

The only legitimate solution for Detroit is to shed pension obligations, privatize everything it can including the fire department, and dump unions contracts en masse. Since those items can only happen in restructuring, Detroit should openly embrace bankruptcy.
Detroit Warns of Bankruptcy as It Prepares Bond Sale

Flashback March 5, 2010: Detroit Warns of Bankruptcy as It Prepares Bond Sale
Detroit, the largest U.S. city whose debt is rated below investment grade, warned investors of the risk of bankruptcy as it prepares to sell $250 million of bonds to help close its budget deficit.

The city told bondholders in a March 2 preliminary offering statement that while it hasn’t taken steps to reorganize under Chapter 9, it may have few other options if its financial condition worsens. Detroit officials also detailed the steps they would have to take should bankruptcy become necessary.

“If the city’s financial status were to deteriorate further the city’s options to improve its fiscal health may be limited,” Detroit said in the statement. Bondholders “should not expect that their rights to payment and remedies will not be adversely affected by filing under the bankruptcy code.”

“We are still in a financial crisis but insolvency isn’t on the horizon or on the agenda at this time,” Mayor Dave Bing said in an e-mail from his spokesman, Dan Lijana. The total deficit this year is estimated at $280 million.
Bing Still Pretends - How Long Can It Last?

For reasons unknown, Bing just cannot do what is right. He will not come flat out and say what everyone in their right mind knows - that Detroit is fiscally and morally bankrupt and so are its schools.

Instead, on December 10, 2010 Detroit Borrows $100 Million for Police and Fire Headquarters.
Detroit, whose population has dropped by half since 1950, borrowed $100 million to turn the MGM Grand Casino’s former site into a headquarters for the police, fire and emergency-services departments.

The city sold so-called Recovery Zone Bonds authorized under the U.S. economic-stimulus plan, borrowing at 4.55 percent, the city said in a press release today. The bonds, with the longest term maturing in 2035, were sold through the Michigan Finance Authority by investment banks led by Siebert Brandford Shank & Co., according to data compiled by Bloomberg.

“The financial markets believe in what we’re doing to bring fiscal responsibility back to Detroit,” said Mayor Dave Bing, in a prepared statement today.

So-called recovery zone bonds were included in the economic-stimulus package signed by President Barack Obama last year to help expand the economy of areas with poverty and unemployment. They’re a type of Build America Bond that comes with a 45 percent interest subsidy rather than 35 percent rate under the Build America program, which expires Dec. 31.

The bonds were rated A1, or fifth highest, by Moody’s Investor’s Service and AA-, or fourth highest, by Standard & Poor’s.
BABs Set to End December 31, 2010

Note the ridiculous rating of those bonds by Moody's and by Standard & Poor’s. If the Federal government is backing those bonds, then they are AAA. If not, they are junk. There is no in-between.

Thankfully, the extremely ridiculous Build-America-Bond program will expire on December 31. When it does, no one in their right mind will lend Detroit money, and that at long-last will mean "lights out" for Detroit.

A new Republican governor takes over in Michigan next year, complete with a new Republican legislature. I believe Governor-Elect Rick Snyder will be amenable to fixing what ails Detroit and numerous other cities in Michigan.

Should Mayor Bing not seek bankruptcy assistance, I propose for Governor Snyder to force Detroit into bankruptcy. It is the only hope Detroit has. Mayor Bing is clearly in over his head.

Governor Snyder would be a hero if he can turn Detroit around, and outside of bankruptcy that appears impossible.

Thus, forced or not, I believe Detroit will file bankruptcy in 2011, the state will accept it, and public unions will be forced to accept massive concessions in bankruptcy court.

Look for massive turmoil in the municipal bond market as a result.


Mismanagement of Emergency Services

Please consider Detroit paramedics fear they're losing the battle to save lives
Over the past month, the troubled Detroit Fire Department has found itself trying to convince an angry public that it has not abandoned them. The latest debacle was a windblown inferno that torched at least 70 homes across the city. It was so bad that an 11-year-old dressed in a T-shirt and sneakers was pulling hose for the overwhelmed Fire Department. Firefighters from Warren, Dearborn and Grosse Pointe were called in. Mayor Bing passed it off as a natural disaster.

But even before the fires, the competence of the department was called into question after a string of blunders in the past month related to its ambulance service. In August, firefighters from Engine 50 pulled two victims from a burning building. They requested two ambulances. No units available, they were told. A man cut off his toes with a lawn mower. Again, no unit available. Most shocking, perhaps, occurred when a building collapsed on six firefighters, half of whom were taken to the hospital in squad cars and fire trucks because there were no ambulances on the scene. If that is how people in uniform are treated, imagine what it is like for the average citizen in the dark of night.

Fire Commissioner James Mack Jr., who also oversees the EMS system, said the morning after the fires the department's problems aren't a matter of mismanagement but poverty.

"Everybody knows we are under budget constraints, so with those budget constraints we are maximizing the equipment that we have and the manpower that we have," Mack said.

Some city leaders aren't buying it. Consider that today the Fire Department budget is $175 million, more than it was five years ago, even after adjusting for inflation.

"What's wrong with the city?" asked City Councilman Gary Brown, who believes there is room to cut in the Fire Department's $175 million budget. "A vacuum in leadership. It's not a matter of funding. I suspect it's mismanagement."

Brown asked Mack -- who served for six years as the second deputy commissioner under disgraced former Mayor Kwame Kilpatrick -- to deliver within 90 days a comprehensive plan to bring the ambulance response time down to a targeted eight minutes, which is the national standard. That was 170 days ago and Brown is still waiting for the report.
The article tells many sad stories of people who died waiting for emergency services. Please read it. I repeat my claim: Detroit cannot be saved from within, bankruptcy is the best hope.

'EU price tag $76 million a day - should we stay or should we go?'

Inside London Riots: Cop's eye view of 9-12-2010 student protests

Banking system may not make it to Christmas

Citizens Electoral Council of Australia

Media Release 10th of December 2010

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 03 9354 0544 Fax: 03 9354 0166
Email: cec@...
Website: http://www.cecaust.com.au

Banking system may not make it to Christmas

The troubles that have hit Australia's banking system in recent weeks reflect the deepening crisis in the global banking system, especially the eurozone, which prompted Lyndon LaRouche to warn on 8th December that the banks may not make it to Christmas.

The National Australia Bank's so-called "technical glitches", which threw Australia's financial payments system into disarray, coincided with revelations that NAB, along with Westpac, joined the rush of panicked banks in 2008 that borrowed desperately-needed emergency funds from the U.S. Federal Reserve.

It also coincided with the shockwaves in European bond markets set off by the Irish crisis—Australia's banks were estimated back in May to have a $56 billion exposure to the eurozone, and NAB was until recently directly involved in two Irish banks and also had a sizeable exposure to the steadily collapsing Italian government bonds. (To top it off, NAB's exposure to the toxic derivatives bubble skyrocketed in the last year to $3.476 trillion, up $457 billion in just the last year!—by far the most exposure of any Australian bank.)
London's 8th December Financial Times foreshadowed that the eurozone bond markets face a pre-Christmas explosion: "Eurozone bond markets face a testing run-up to Christmas amid fears the regional crisis could blow up again because of thin trading volumes that may send borrowing costs of the most vulnerable countries to new highs. Bankers say December is traditionally a time when most dealing rooms close their trading books and sit on the sidelines as they wait for the new year before strategically investing money in the financial markets. But the extreme nervousness surrounding the eurozone has prompted warnings that markets could see a vicious downward spiral as small sell transactions trigger dramatic falls in thin trading."

None of this is unexpected for anyone who has paid attention to Lyndon LaRouche's analysis of the global financial system, and understands the fact that the entire system has been on terminal-patient life support since mid-2008, from taxpayer-funded government bailouts.

The true extent of that bailout has just been revealed by the office of U.S. Senator Bernie Sanders. The total bailout was much greater than the $700 billion "TARP" program, and in fact was in the many trillions—perhaps as high as $16 trillion. Much of it went to foreign financial firms, including NAB and Westpac, and/or was loaned by the Fed against crap collateral, in violation of the Federal Reserve law. Two aspects of these reports are most shocking:

  • First, foreign banks and financial corporations tapped 4,200 different loans/securities purchases under 13 different bailout programs of the Fed for $3.8 trillion total. In one Fed program, the Commercial Paper Funding Facility (CPFF), foreign financial firms got 68 per cent of the $396 billion in bailout loans.
  • Second, under one of those programs, the Term Asset-Backed Securities Loan Facility (TALF), the Fed loaned at least $60.8 billion to more than 100 hedge funds, private equity funds, and other funds located in the Caymans or other British offshore havens. These funds are, right now, conducting intense speculations on the bonds of various European nations, in particular those of Spain, Portugal, Ireland, Belgium, and now Germany; and they are publicly attacking the European Central Bank for failing to throw in enough of its own buying, to make sure they make super-profits.

Senator Sanders' office estimates that 36 per cent of the collateral pledged to the Fed's primary dealer [overnight] credit facility was merely stock—this is not allowed under the Federal Reserve Act—or bonds ranked below investment grade. Another 17 per cent of the collateral was unrated—downright pornographic—credit or loans. The biggest mass of low-grade/illegal collateral was pledged immediately after the September 2008 Lehman collapse, by Morgan Stanley and Merrill Lynch, which were clearly going to collapse themselves, without the Fed bailouts.
Citizens Electoral Council leader Craig Isherwood said today, "It is good news that this terminal system may be finished by Christmas, because that will force nations that wish to survive to organise for LaRouche's proposal of a global Glass-Steagall, which would be a great Christmas present for the whole world!"

[Colour fonts and bolding added.].

All writings by members of AbundantHope are copyrighted by
©2005-2010 AbundantHope - All rights reserved

London tuition fee protest

Yesterday, in central London, thousands of students and others gathered to protest as Britain's Parliament met to vote on a proposal to raise university tuition fees significantly - nearly tripling them - as part of a continuing set of austerity programs. During the protest, several clashes took place between police and protesters, resulting in numerous injuries and 43 arrests. Late in the demonstration, a group of protesters attacked the car of Prince Charles and Camilla, Duchess of Cornwall as the couple were inside, being driven to the London Palladium. The car was slightly damaged, the royal couple unharmed, though a bit shaken by the incident. Parliament did end up narrowly approving the measure, and the fee increases are set to take effect in 2012. Collected here are images from London last night. (39 photos total)

A student protester stands on a barrier in Parliament Square on December 9, 2010 in London, England. Parliament was voting on whether to implement the coalition Government's proposals to increase university tuition fees in England from 3,290 GBP to 9,000 GBP. (Oli Scarff/Getty Images)

Placards are pictured outside the University of London, on 9 December 2010, as thousands of students prepare to take part in protests against government proposals to let universities triple tuition fees. (LEON NEAL/AFP/Getty Images) #

A police officer puts on his body armor before a large student protest outside Parliament on December 9, 2010 in London, England. (Oli Scarff/Getty Images) #

British students protest in central London against government plans to triple tuition fees, Thursday, Dec. 9, 2010. (AP Photo/Lefteris Pitarakis) #

A protester stands beside a statue of former British Prime Minister Winston Churchill in Parliament Square in London, on December 9, 2010. (LEON NEAL/AFP/Getty Images) #

A student protester looks over Parliament Square on December 9, 2010 in London, England. (Oli Scarff/Getty Images) #

Mounted police drive their horses into protesters during student demonstrations in London, on December 9, 2010. (LEON NEAL/AFP/Getty Images) #

Police restrain a protester in London, Thursday, Dec. 9, 2010. (AP Photo/Alastair Grant) #

A mounted police officer pushes protesters back during a protest against an increase in tuition fees on the edge of Parliament Square in London, Thursday, Dec. 9, 2010. (AP Photo/Matt Dunham) #

A protester tries to take a police officer's truncheon during a protest outside the Houses of Parliament in Westminster, central London on December 9, 2010. (REUTERS/Andrew Winning) #

A police officer detains a youth during a protest against an increase in tuition fees on the edge of Parliament Square in London on Thursday, Dec. 9, 2010. (AP Photo/Karel Prinsloo) #

Police officers and student protesters clash during protests on December 9, 2010 in London, England. (Dan Kitwood/Getty Images) #

A police officer is helped by a medic during a protest in Westminster in central London December 9, 2010. (REUTERS/Stefan Wermuth) #

Police officers clash with student protesters in Parliament Square on December 9, 2010 in London, England. (Peter Macdiarmid/Getty Images) #

An injured protester is led away by a police officer during a protest outside the Houses of Parliament in London on December 9, 2010. (REUTERS/Andrew Winning) #

A police officer is covered in paint on December 9, 2010 in London, England. (Dan Kitwood/Getty Images) #

Police stand in a line near Parliament Square during clashes with student protesters on December 9, 2010 in London, England. (Oli Scarff/Getty Images) #

A demonstrator is carried away by medics during a protest in Westminster in central London December 9, 2010. (REUTERS/Stefan Wermuth) #

Mounted police ride during a protest in Westminster in central London December 9, 2010. (REUTERS/Stefan Wermuth) #

A police rider falls to the ground from his horse in London, Thursday, Dec. 9, 2010. (AP Photo/Alastair Grant) #

Demonstrators jump off burning park benches during a protest outside the Houses of Parliament in Westminster, central London December 9, 2010. (REUTERS/Andrew Winning) #

A protester wears a gas mask as a vandalized portakabin is set on fire during student demonstrations in Parliament Square, in London, on December 9, 2010. (LEON NEAL/AFP/Getty Images) #

A fire burns in Parliament Square, Westminster, London, as students demonstrate against planned tuition fee increases on Thursday Dec. 9, 2010. (AP Photo/Gareth Fuller/PA) #

Police officers in riot wear contain student protesters on Westminster Bridge on December 9, 2010 in London, England. (Oli Scarff/Getty Images) #

Police videotape proceedings and stand ready to meet a students demonstration in Parliament Square near the Palace of Westminster about the increase in University fees in London, Thursday, Dec., 9, 2010. (AP Photo / Lefteris Pitarakis) #

Mounted riot police clash with protesters during student demonstrations in Parliament Square, in London, on December 9, 2010. (Carl Court/AFP/Getty Images) #

A student protester stands in front of a fire in Parliament Square on December 9, 2010 in London, England. (Oli Scarff/Getty Images) #

Student protesters try to smash the windows to the Treasury building in Parliament Square on December 9, 2010 in London, England. (Matthew Lloyd/Getty Images) #

Police officers clash with students during protests against an increase in fees in central London, on December 9, 2010. (Carl Court/AFP/Getty Images) #

Police horses charge into a crowd of students demonstrating in Parliament Square near the Palace of Westminster about the increase in University fees in London, Thursday, Dec., 9, 2010. (AP Photo/ Lefteris Pitarakis) #

Protesters attempt to set fire to the Norwegian Christmas tree in Trafalgar Square, London, during a protest against the increase in university tuition fees, Thursday, Dec. 9, 2010. (AP Photo/Matt Dunham) #

British police arrest a youth during scuffles during a protest by students against government plans to triple tuition fees, in central London, Thursday, Dec. 9, 2010. (AP Photo/Lefteris Pitarakis) #

Britain's Prince Charles and Camilla, Duchess of Cornwall react as their car is attacked, in London, Thursday, Dec. 9, 2010. Angry protesters in London attacked the car containing Prince Charles, the heir to the British throne, and his wife Camilla, Duchess of Cornwall. An Associated Press photographer saw demonstrators kick the car in Regent Street, in the heart of London's shopping district. The car then sped off. Charles' office, Clarence House, confirmed that "their royal highnesses' car was attacked by protesters on the way to their engagement at the London Palladium this evening, but their royal highnesses are unharmed." (AP Photo/Matt Dunham) #

A broken window and splattered paint are pictured on a car used to transport Britain's Prince Charles and Camilla the Duchess of Cornwall to the London Palladium in London, on December 9, 2010, after it was attacked by protesters during a student demonstration. (TERRY STEPHENS/AFP/Getty Images) #

Riot police hold their shields up to protect windows inside the Treasury in Parliament Square during clashes with student protesters on December 9, 2010 in London, England. (Peter Macdiarmid/Getty Images) #

British riot police come under attack from flares as they clash with protesters during student demonstrations in Parliament Square, in London, on December 9, 2010. (CARL DE SOUZA/AFP/Getty Images) #

The Big Ben clock tower is seen through the broken window of a damaged telephone box the morning after a protest in Westminster, in central London December 10, 2010. (REUTERS/Stefan Wermuth) #

Forensic police carry out investigations in Parliament Square in London, Friday, Dec. 10, 2010. A student protest Thursday over a tuition fee increase caused damage around Parliament. (AP Photo/Kirsty Wigglesworth) #

Barriers are stacked in a pile in front of the Winston Churchill statue in Parliament Square after a protest, in Westminster in central London December 10, 2010. (REUTERS/Stefan Wermuth) #

We Have a New College Debt Queen

After detailing college graduates with $97,000 and $120,000 in debt, I thought I had reached the peak of "bad ways to finance college." I was so, so wrong.

Here's the story of a young lady who has $200k in college debt (from an undergraduate degree alone.) Yikes! Her words:

The severity of my situation goes a bit deeper than "I owe this money, help me" - I am actually forced to live with my parents (forced = I am lucky! But...) as the monthly payments for just my private loans are currently $891 until Nov 2011 when they increase to $1600 per month for the following 20 years... attached is my payment plan. I also mentioned I have a job - which is great! And I probably have my college education to thank for that! Except there is still no way to make these monthly payments, and live on my own as a contributing member of society. Neither of my parents, nor I, really knew how this would pan out — unfortunately — and now that I'm here, I see no real light at the end of the tunnel.

Ugh! Here's another person who simply didn't think through the college/education/debt/earning issues in advance -- and now she's paying for it.

But she's got another great idea! She's set up a website so people can donate and help her pay off her debt. Yeah, that's gonna be money well spent.

Let me say this again in the hopes that a future college student (or his parents) will read this: to get the most financial benefit out of college, you must compare expected costs with expected post-graduation incomes. And you HAVE to do this before you decide which college to attend and how much you'll borrow (if any) to go there.

And be sure to read Thoughts on the "New" Way to Go to College before you take any actions. It will save you thousands of dollars.

As for the student above, I can't muster much sympathy. I suggest she puts her nose to the grindstone, makes as much as she can, saves as much as she can, and pays off as much of the loan as soon as possible. Yes, it will take her several years to do so, but if she works at it, she may just end up making lemonade out of lemons. I imagine hearing of her in ten years -- she'll have a best-selling book, a well-read blog, and be all over speaking to people on how she paid off $200k in college loans in five years. Here's hoping! ;-)