Saturday, January 8, 2011

Hawaii jobless claims spike

HONOLULU (HawaiiNewsNow) - New jobless claims across Hawaii spiked to the highest level since April on the final week of 2010, though unemployment remains much lower than on the mainland.

The Hawaii Department of Labor & Industrial Relations counted 253 new claims on Kauai, 349 in Maui County including 25 on Molokai, a flat 229 claims in the Hilo office, a small decline to 187 in the Kona office, and a leap to more than 1,600 claims on Oahu, for a statewide total of 2,752 first-time applications for unemployment benefits.

Total claims rose almost to 17,000, which was a routine level during the first three quarters of 2010 but higher than the norm for the past two months.

The weekly claims report is not a survey but an actual tally, and it's not seasonally adjusted. There is usually a spike in the second or third report of January after retailers lay off their Christmas help. This report is early for that annual phenomenon and might reflect other layoffs timed for Christmas so that the affected workers drew a paycheck through the holiday.

Copyright 2011 by HawaiiNewsNow. All rights reserved.

Bernanke: U.S. Debt Is Out of Control and Nobody Gives a Damn

In testimony before the Senate Committee on the Budget, Federal Reserve Chairman Ben Bernanke made it clear that the U.S. government debt situation can not continue the way it is, but that no one is doing anything about it:
It is widely understood that the federal government is on an unsustainable fiscal path. Yet, as a nation, we have done little to address this critical threat to our economy. Doing nothing will not be an option indefinitely; the longer we wait to act, the greater the risks and the more wrenching the inevitable changes to the budget will be.
Bottom line: Bernanke knows the debt problem is not going to resolved by others and that the Federal Reserve will simply have to print money to "fix" the problem. A "fix" that will create huge price inflation as the Fed prints more and more momey.

Internet Tax Bill Passed in Illinois

Internet Affiliate Jobs Will Be Lost; No Revenue Gained for State

CHICAGO, Jan. 7, 2011 /PRNewswire/ -- The Internet Tax Bill (HB 3659) was passed in the Illinois Senate on January 5, by the House of Representatives on January 6 and brought to the Governor, who may sign it into a law as early as Friday, January 7.

The tax legislation relates to out-of-state merchants like and that do not have a physical presence in Illinois but have relationships with Illinois advertisers and publishers like By this law, these merchants are deemed to have a presence (nexus) in Illinois and are therefore required to collect Illinois sales tax.

The goal of this is to increase tax revenue for the state, but what has happened in the four states that have passed similar laws (New York, Colorado, North Carolina and Rhode Island) is that instead of collecting sales tax, these merchants have severed their relationships with publishers in that state. Twelve other states have rejected similar legislation.

Statement from Scott Kluth, Founder and President of

"Needless to say, we are disappointed by the passing of the legislation today. It was disheartening that both Houses passed this bill in 30 hours without a full and fair opportunity for the voice of Illinois small businesses to be heard. CouponCabin has been rapidly growing for the past several years; in fact, in November, we were only 12% behind Groupon's monthly traffic. For the third straight year, our staff has doubled in size and has already grown by 12% in the first week of 2011. Unfortunately, this bill will do significant harm to our growth by cutting our business by nearly one-third. Chicago has been an amazing home for CouponCabin for more than seven years. We are grounded in the community with our business and our charitable work and have no plans to leave. We hope the State will see that this bill will fail to achieve its revenue-raising goal, and instead cause drastic hardship for small businesses like ours. We know from other states' experience that the tax revenue does not materialize. Should this bill become a law, Internet affiliate jobs will be lost with no increase in state revenue. The other states that have passed this are moving to repeal it for this exact reason. We hope consideration will be given to the impact on small businesses before this bill becomes a law."

About offers online coupon codes, printable coupons, grocery coupons and local coupons without requiring its users to share any personal information. The site has grown from 150 stores and 1,000 offers in 2003 to 2,800+ online stores with more than 125,000 offers. offers live chat help and a weekly newsletter highlighting the latest top deals. The average shopper spends 80 seconds on the site and saves $19 per order.™ shoppers have clicked 201,560,759 coupons and deals since launching in August 2003. For more information, please visit



US economy boosted as jobless rate drops to 18-month low

The US economy created far fewer jobs than expected in December, but revisions meant the unemployment rate dropped to its lowest in more than 18 months.

Non-farm payrolls increased 103,000, the Labor Department said on Friday, below economists' expectations for 175,000. Private hiring rose 113,000, while government employment fell 10,000.

However, overall employment for October and November was revised to show 70,000 more job gains than previously reported, meaning the December unemployment rate fell to 9.4pc, the lowest since May 2009, from 9.8pc in November.

Economists raised their employment forecasts after payrolls processing company ADP Employer Services said on Wednesday private employers added 297,000 in December – the largest gain on ADP records dating to 2000.

"The labour market improvement is still way slower than what everybody would hope for," Harm Bandholz, chief US economist at UniCredit Research in New York told Reuters.

Federal Reserve officials will weigh the jobs report when they meet on January 25-26.

Signs of strength in the economic recovery had led to calls for the US central bank to scale back its widely criticised $600bn government bond-purchasing program aimed at keeping interest rates low to boost demand.

Some policymakers indicated in December they had a "fairly high" threshold for curtailing the stimulus program.

Fed Chairman Ben Bernanke speaks on the economic outlook before the Senate Budget Committee at 2.30pm.

Analysts say the Fed's focus is on unemployment and expect it to complete the bond-buying plan.

"Gains in payrolls won't be enough to spark a change in Fed policy until the gains either accumulate for many, many months or are accompanied by gains in inflation expectations," Tony Crescenzi, a strategist at bond fund PIMCO, told Reuters.

The economy usually needs to create at least 125,000 jobs a month to keep the unemployment rate from rising, but a faster pace might be needed now since so many discouraged workers are sitting on the sidelines. As job growth picks up, these workers could re-enter the labour force, keeping upward pressure on the jobless rate.

Employment gains in December were led by the private services sector, which saw payrolls rising 115,000 after gaining 84,000 in November. Retail jobs increased 12,000 after a surprise 19,400 slump in November when retailers reported their best sales in years.

Temporary hiring, seen as a harbinger of permanent employment, increased 15,900 after 31,100 in November.

The goods-producing sector shed 2,000 jobs in December after losing 5,000 in November, but manufacturing payrolls rose 10,000. Construction employment fell 16,000 after slipping 2,000 in November.

The average work week was steady at 34.3 hours. Average hourly earnings increased three cents in December.

Over Two Million Children Are Now Homeschooled

Ian Slatter

Purcellville, VA—In a new study released today the National Home Education Research Institute (NHERI) estimates there were over 2 million children being homeschooled in the United States in 2010. “The growth of the modern homeschool movement has been remarkable,” said Michael Smith, president of HSLDA. “Just 30 years ago there were only an estimated 20,000 homeschooled children,” he added.

According to the U.S. Census Bureau (2008) there were an estimated 54 million K–12 children in the U.S. in spring 2010, which means homeschoolers account for nearly 4% of the school-aged population, or 1 in 25 children.

Today, homeschoolers can be found in all walks of life and with a wide variety of curriculum options, and a proven record of academic as well as social success, homeschooling is rapidly becoming a mainstream education alternative.

The NHERI study used data from both government and private sources in order to arrive at the 2 million figure.

Home School Legal Defense Association (HSLDA) is a 28-year-old, 85,000 member non-profit organization and the preeminent national association advocating the legal right of parents to homeschool their children.

2011 – The year when money starts to die

Finance and Economics

Between 1716 and 1720, John Law tried to rescue the French government from bankruptcy with a scheme that came to be called “The Mississippi Bubble”. His strategy was to set up two entities: a bank whose purpose was to issue paper money, and a company whose primary but undeclared function was to refinance government debt. Law realised that he had to confiscate all gold and silver other than smaller quantities, and force French citizens to pay their taxes and buy shares in the Mississippi Company, only with the bank’s newly issued notes. These were the three essential elements of his scheme.[i]

This is precisely what central banks in the US, Europe, Japan and the UK are doing today. They are rigging the markets by buying government debt at artificially high prices with freshly created paper money, having previously excluded gold and silver from any role as legal tender. The following quote from John Law, could equally be attributed to a central banker of today: “An abundance of money which would lower the interest rate to two per cent would, in reducing the financing costs of the debts and public offices etc. relieve the King.” This is quantitative easing, pure and simple, and John Law had fully anticipated modern central banking. Law’s scheme ended in disaster and as a precedent for today’s central banking this should worry us greatly.

Many of us recognise the government debt bubble, which ensures that today’s rulers are relieved by the artificially low cost of their debt. But most of us are unaware of the other bubble, that of the value of money, which is also held up at artificially high levels. The money bubble is inflating primarily in quantity rather than price, making it easier to deceive the public. There is also a fundamental difference from the usual bubbles, which end with a collapse while money’s value is unaffected: in this dual bubble both debt and money will eventually collapse together; the former as nominal yields rise and the latter being reflected in rising precious metal prices.

In Law’s time, it was made illegal to hold more than a minimal quantity of gold and silver coinage. Today the central banks have had a different approach, removing gold and silver from circulation altogether. Naturally, central banks have also convinced themselves that precious metals are now redundant, fully replaced by paper money, so they have carelessly reduced their own holdings to suppress prices. At the same time commercial banks offering gold and silver accounts have developed large uncovered liabilities with their customers through their fractional banking practices. Through these uncovered, undeclared positions, the strategy of depressing bullion prices has become dangerously dependant on confidence remaining in both the central banks and the banking system.

We can expect the collapse in money values to be reflected in gold and silver prices rather than other paper currencies, and the warning signs are now upon us. Bullion has been climbing in value for a decade, and in 2010 buyers found it regularly difficult to get physical metal delivered to them by the banks. It is becoming clear that the ability of the central banks to keep a lid on bullion prices is at last coming to an end.

Read Full Article

JP Morgan Chase Rigging the Silver and Gold Markets - Bob Chapman on Discount Gold and Silver Trading Jan 05 2010

Click this link ......

JB Campbell: Mortgage Fraud

Foreclosure fraud is in the news. Or it was. It probably will be again even though the media masters don’t want to talk about it. There’s a big decision coming up in Massachusetts as to whether securitized mortgages are just so much toilet paper. The banks got so greedy that merely collecting usury on “loans” that cost them nothing wasn’t good enough. They “securitized” them, bundling thousands, millions of mortgages and turning them into “securities,” selling them to even greedier speculators without the little detail of recording the transfers of ownership. Massachusetts’ highest court is going to decide if your mortgage ought to be zeroed out and the house put in your name, no more questions asked. And if you lost your home in the current Great Depression, as so many of us did, you’ll probably be able to get it back.

Foreclosure fraud is based on mortgage fraud, of course. Anything the banks do is based on fraud and lies – no exception to that rule. Mortgage fraud, interest fraud, foreclosure fraud – they’re all connected. Banks don’t lend a dime in real money – they credit your account with electronic entries out of the ether. They take zero risk but collect real cash from you and if you fall behind they take your house and sell it to the next poor sucker.

You may recall a couple of months ago that several big banks had suspended all foreclosures in all fifty states because a couple of homeowners had discovered the nature of the mortgage and foreclosure scam. The former congressman Alan Grayson’s YouTube video explaining the scam went viral. Then it became a non-subject. The lie factories went silent on the subject, not even trying to lie for their banking masters since the credibility gap in Manhattan could swallow Rockefeller Center, where so many lies originate.

So what happened to me and my friends twenty-eight years ago probably won’t happen to you, now that the fraud is becoming widely understood. The SWAT team probably won’t show up at your place for a foreclosure eviction. The SWATs may come for other reasons but the way things are going today, it won’t be for an eviction because fraud nullifies all contracts.

My friend Pete was a decorated Vietnam veteran. He got the Silver Star and Purple Heart for an action in which his unit was overrun by Vietcong and most of them killed. Pete and several others were wounded and Pete picked up an M-60 that wasn’t being used and managed to kill over a dozen VC in an extended fight and saved the lives of the wounded guys, allowing all to be rescued some time later. His award was re-evaluated and a survivor recommended the CMH but the officer-witness died during the process. The point is that Pete knew his way around guns. He had no criminal record and made his living as a real estate broker in central California. He and his wife Gwendolyn had done quite well in the real estate boom in the ‘70s, buying and selling fixer-uppers. Then the interest-rate crisis of 1980 hit and real estate didn’t sell so well with the prime rate at 23%, thanks to Paul Volcker.

By 1983 he fell behind in his mortgage payments and the bank in Santa Cruz foreclosed. Pete and Gwen had $240,000 in equity in their lovely property in the giant redwoods up on Summit Road. The bank, I came to realize, had no equity, no risk and no standing. But they had a crooked judge named Christopher Cottle, who was a reformed gang member according to an article in the Santa Cruz paper. But I didn’ t know that until later.

I read an article in the old Spotlight newspaper about the Minnesota legal case of First National Bank of Montgomery v. Jerome Daly of 1968. Do a search on that and discover some interesting things, such as the banker admitting that “banks create money out of thin air – it’s standard practice.” The jurors were so taken aback by this casual admission that they quickly found for Jerome Daly, and the judge, Martin V. Mahoney, remarked, “It sounds like fraud to me.” Daly’s contract with the bank was made null and void and the farm was his in fee simple. I missed the part where Judge Mahoney was murdered by poison six months later. The Daly case potentially was the death warrant for the standard bank practice of lending credit, should it ever become widely known.

I took this article to Pete and Gwen and suggested that they sue their bank for fraud and usury, based on Jerome Daly’s experience. Neither of them was very good on the typewriter so I wound up doing the paperwork of their lawsuit for them, which you can imagine was rather detailed.

The case went to court and was dutifully thrown out by Judge Cottle, despite our showing that the bank had put up nothing of value and had created credit out of thin air. It was appealed and indignantly denied by another judge. Pete assured me that he was licked but that we had fought the good fight. I went to Santa Fe to visit some friends. While there I had a bizarre nightmare that persuaded me I must return to Carmel as quickly as possible. If you ever have a weird dream and get an irresistible urge to act on it – don’t. This was possibly the worst mistake of my life, and I’ve made a few of them.

When I got home there was a message on my machine to call Pete, that he was going to be evicted and he needed another gun. Naturally, I took him a Heckler & Koch HK-91 in 7.62mm NATO that morning. And a half-dozen 20 round mags. I’d already given him a .357 Magnum revolver but he obviously could use more firepower.

What was I thinking? Pete had given me an M1A1 Thompson submachine gun a couple of years earlier that he’d brought back from Nam. I’d needed a clean gun to use against David Rockefeller and Henry Kissinger in 1980 in an operation that unfortunately went south, with me going to jail – no conviction. But Pete had come through, no questions asked, and I could hardly do less – right? Don’t answer that. We were also involved in an operation against Paul Volcker in ‘82 but one of our confederates was arrested and burned us to make a deal. Pete managed to persuade the FBI that the guy was lying. And I had just finished the manuscript of my book that would start the militia movement and was in a very revolutionary mood. Taking on some stinking banker’s SWAT team didn’t bother me, frankly. The team wasn’t ready for our combined anti-terrorist experience in Africa and Vietnam, if we’d been serious.

I showed up with the equipment and had lunch with them, their daughter and baby granddaughter and another vet named Jimmy. I checked him out on the rifle and said, well, if the cops weren’t going to show then I was going to go back to Carmel and get some sleep, as I’d had none since leaving Santa Fe thirty hours earlier. I went out to the upper gate and swung it open and looked down the road and saw the SWAT team approaching, single-file. Camouflage, AR-15 rifles and one bolt-action sniper rifle. Eight guys.

Back down to the house. Hey, Pete – they’re here.

The SWATs took positions behind bushes and trees. Pete had, at Gwen’s insistence pinned on his Silver Star and Purple Heart. Jimmy had a camera and wandered down to the lower gate to take pictures, the doofus. The sergeant in charge of the SWATs asked Jimmy to come a little closer so they could talk. Jimmy fell for it and the cop grabbed him. Jimmy yelled and pulled away but Pete went hustling down there to see. The sniper and his helper rushed Pete from behind and drew a bead on him. I stepped off the porch and waved frantically but silently for them to Get Back, Get Back! For some crazy reason, they got back. Maybe they were confused by my clothes. I had on slacks, white shirt, dark tie and sport coat. I probably looked like a cop. Gwen saw what happened and naively said, “Bruce, go up there and talk to them! Tell them to stop it!” I had nothing better to do, so I did what she said.

I could see where they were hiding so I walked carefully up the gravel drive toward them and took off my jacket and put it on a bush. They were both aiming at me. I raised my hands and said I just wanted to talk. One of them shouted, “You’re under arrest! Get on your knees!” I kept my hands up and said, “No, I’m not getting on my knees. I’m just asking you not to shoot my friend. He needs his day in court.”

“I said you’re under arrest! Get on your knees!” I shook my head and picked up the jacket and walked back down to the house, ignoring their shouted orders to stop. Pete came up from the lower gate and said, “What’s that all about?” When I pointed to the sniper and assistant, I got in a lot of trouble. I said, “Pete, those guys about killed you from behind when you ran down there. Gwen wanted me to talk to ‘em, and I said not to shoot you.”

Pete calmed down a little after that and the SWAT team withdrew after an hour or so. They cut water, gas, phones and power to the property. At one point, one of the SWATs fired his weapon. I looked out of the upstairs window where I’d been trying to take a nap and saw Pete lying on the porch below me. I thought he’d been nailed, but he yelled out, “Don’t get nervous in the service!” One of the dopes had had an accidental discharge. After a couple more hours, for some reason, they allowed the press to pour onto the property. Television, newspaper, radio guys were everywhere, interviewing Pete and Gwen. I told Pete that we needed some more guys up here and I’d take a chance and drive down to the local store and make some calls, but to hold on to my dog in case they busted me. Cops generally kill dogs. He said okay. I drove carefully through the throngs of reporters, out onto Summit Road and was immediately busted and pulled out of my car and put face down on the asphalt. Then into a car and taken downtown. After several hours I was taken to an interrogation room and a detective started with the questions. What the hell was this all about? I said that Pete needed his day in court, that he’d sued a bank for fraud and usury and Cottle threw it out. Well, this isn’t how you get justice, taking on a SWAT team. Really? How do you get justice?

He didn’t much care for me and I got the orange suit and was put in a cell block from the 1930s with a lot of guys. I was in there for five days. On about the second day, the jailer yelled out, “Where’s Campbell?” He said I had an attorney visit, which was pretty good since I didn’t have an attorney. It turned out to be two detectives. The one guy said he was with the Sheriff’s office and the other one was with the Coroner’s office. Coroner? “Yeah, we need next-of-kin information on Pete and Gwen.” You killed ‘em? “We can’t say anything until we notify next-of-kin.”

Wow. So now, I’m looking at Murder One. Any cops killed? “We’re not sure at this time.” Uh, huh. Wow. My friends are dead and I’m up for murder. “So, how about the next-of-kin information?”

I didn’t know where their next-of-kin lived or even what their names were. I wasn’t any help, but I would have been if I’d known. That’s how good they were.

I staggered back to the cell block. After an hour or so, the jailer called out my name again. “Hey, those two detectives said to tell you that the property’s secure and nobody was killed. They said you looked in pretty bad shape.” Whaddya mean, no one was killed? Besides my two friends, you mean? “Buddy, I’m in jail just like you are. I only know what they told me.” Someone shouted at me, “Hey, come look at this!” They could see a television screen beyond the cell bars and the news was on. Turned out that Pete had taken the whole gang, Gwen, daughter and her baby and Jimmy, right down the mountain, through the SWAT lines and the huge redwoods. He did it because the FBI had gotten in the act and gassed them. Pete watched my Scottie keel over at his feet just as he himself was getting extremely sleepy, along with everyone else. So he told them that they had to get out. I don’t know how the hell he did it but he pulled off a good one. That’s why the cops pretended they were dead so they could trick me into telling them where they probably went. They did trick me but I didn’t know anything.

Here’s how I avoided prison: The initial detective asked me the next day to go up to the house to talk Pete into giving up. I wanted to talk with him and get our stories straight so I immediately agreed. Shortly before the other two pulled the KGB trick on me, the first one changed his tune and bitterly denounced me as the brains of the whole operation. He said he’d found the lawsuit papers in my car. He said, “I know that you took the guns to him. We had a witness who saw the whole thing.” The thing was, no one had ever read me my Miranda warning, either out on the asphalt or in the squad room or anywhere. So I immediately said, “Yes, I took him the guns. The guns were mine.”

I eventually did get an attorney. I told him that I admitted bringing the guns to Pete.

“You what? Why did you say that?”

“Because I was never read my rights.”

He hesitated. “Are you sure about that?”

“I’m sure.” He checked with the detective, who reluctantly confirmed it. And for that reason I did not go to prison for twenty years. I was charged with multiple felony conspiracies (with no co-conspirator), much more serious charges than Pete, but they were all reduced to one misdemeanor accessory-after, because of the bad confession, and I had to do about seven weekends in jail.

Pete wasn’t so lucky. He was at large for a couple of months but was finally arrested in the courthouse where he was trying to get his legal papers. I went to his trial and the sniper pointed at me and broke into tears, saying that I had pointed him out to Pete and he could have been killed and that he had a family! His boss, the sergeant, took the stand and admitted that the Sheriff had authorized the SWAT team to kill all of us. Pete said, “Even the women and the child?” Yes, everyone. Pete got six years, did about two and a half at San Quentin.

So, we were a little ahead of the power curve on mortgage and foreclosure fraud. But now, twenty-eight years later, the true nature of the fraud is exposed for everyone to see. It is exactly as Jerome Daly and Pete told their respective juries, that the banks create money out of thin air but we have to give them hard cash or the property – plus interest. The banks couldn’t lose.

Until now. Now, they can’t win. They’ve been caught and their monumental crimes against the people are being revealed.

Representative Marcy Kaptur tells her Ohio constituents, do not leave your home under any circumstances. Demand to see the original note. In the great majority of cases, there is no original note because the mortgages have been “sliced and diced” and bundled and securitized and not legally recorded before they were turned magically into “mortgage-backed securities” and peddled to stupid and greedy speculators overseas. The federal government is in on the fraud also. Phony and Fraudie (Fannie May and Freddy Mac) have a bogus front company called MERS (Mortgage Electronic Registration Service) that has assumed power over millions of these fraudulent mortgages, but to avoid scrutiny, have moved MERS to New Delhi, or Calcutta or Bangalore or some damn place. That’s India! Does that sound kosher to you?

Hell, yes – Circle K kosher.

Albertsons grocery store in Ellensburg to close

ELLENSBURG -- An Albertsons store in Ellensburg is one of several Washington and California stores the grocery chain will close at the end of February.

The store at 705 N. Ruby St. was a "non-performing store," company spokeswoman Lilia Rodriguez said. A store in Puyallup, Wash., and four stores in Southern California will also close, she said. The closings are timed to the beginning of a new fiscal year for the grocery chain, which is owned by Eden Prairie, Minn.-based Supervalu.

Albertsons stores at 1610 W. Lincoln Ave. and 401 S. 40th Ave. in Yakima will stay open.

« Bernanke's Disclosure Bombshell - The FED Took Equities As Collateral During Crisis »

Submitted by Chris Whalen.


Is Ben Bernanke driving the QEII or the Titanic?

By Christopher Whalen

Our colleagues in the media have been diligently pouring over the latest disclosure by the Federal Reserve on rescue loans made to banks and corporations around the world in the hope of uncovering a pearl. For one thing, the details of the extensive rescue operation by the Fed following the collapse of Lehman Brothers in 2008 confirms the role of the U.S. central bank as the global lender of last resort, a job description as yet unauthorized by Congress. But there are some rather subtle revelations which do deserve investigation.

A number of writers have noticed that the fact that the Fed did not reveal these operations until now doubtless effected how the Congress finally legislated in the case of the Dodd-Frank law. “The Fed’s current set of powers and the shape of the Dodd-Frank bill over all might have looked quite different if this information had been made public during the debate on the bill,”American Institute for Economic Research fellow Walker Todd told Gretchen Morgenson in the Sunday New York Times. “Had these tables been out there, I think Congress would have either said no to emergency lending authority or if you get it, it’s going to be a much lower number — half a trillion dollars in the aggregate.”

Perhaps more important is the fact that there is now confirmation that the Fed took in equities as collateral during the market liquidity operations in 2008 and 2009. As one of our favorite equity market observers wrote last week, the fact of the Fed financing equity positions was known in September of 2008, but as my colleague noted at the time, “you had to read between the lines.”

As it turns out, the Fed’s primary dealer credit facility or “PDCF” was essentially able to take any paper, debt or equity, proving once and for all that the Fed had abandoned any pretense at market discipline. For 25 pips over Fed funds, you could finance any equity security: “Eligible collateral will include all collateral eligible in tri-party repurchase arrangements with the major clearing banks as of September12, 2008,” said the Fed in a press release.

Previously I had heard from a number of large bulge bracket firms that there was no problem financing anything with the Fed during the crisis: office furniture, equities, whatever. So now this latest data dump from Chairman Bernanke seems to confirm that eye-opening fact and more, namely that during the crisis dealers were using the Fed to finance equity positions as well as Treasury bonds and mortgage-backed securities.

Thus the question becomes: Will the U.S. central bank continue to backstop equities when (not if) falling economic growth, rising employment and rising interest rates push equity valuations lower? There are a number of reasons to be concerned that a sustained increase in interest rates will not only make bonds and other interest rate instruments more competitive with stocks, but that an overly optimistic consensus behind the prospects for growth is about to be brought down to earth.

For one thing, the Fed’s zero interest rate policy has made the equity markets seem relatively attractive. Putting cash into blue-chip equities makes more sense, at least for some investors, than buying bonds at what may be the lowest yields that will be seen for a generation. Given the Fed’s purchases of Treasury debt via QE II, volatility is understated and thus the duration risk on bonds is likewise being understated in the markets. As one trader asked me recently: “Is Fed Chairman Ben Bernanke steering the QE II or the Titanic?”

The other issue that has made equities relatively attractive is liquidity. When investors are buying large-cap stocks, even financial names such as Citigroup, JPMorgan and Wells Fargo, they are buying size, not quality. Whereas most of the largest US banks have single digit or event negative risk-adjusted returns, smaller regional exemplars such as Cullen Frost, BB&T or US Bancorp have consistently out-performed the larger players when it comes to growing fundamental value at reasonable levels of risk.

When the Fed uses QEII to subsidize the largest players on Wall Street, it is disadvantaging the smaller, better run banks, and it is also playing with politics. Priyank Gandhi and Hanno Lustig, in a National Bureau of Economic Research working paper issued in November (No. 16553), suggest that the implicit collective guarantee extended to large U.S. financial institutions reflects an annual subsidy to the largest commercial banks of $4.71 billion per bank, measured in 2005 dollars. But, even more important, the paper notes that subsidies for the “too big to fail” banks shows the Fed’s willingness to support the equity markets, an extraordinary and ultimately political act that requires further hearings by the Congress.

Like it or not, indices such as the dollar, the Dow Jones Industrials and S&P 500 are a litmus test not only for the markets, but for the credibility of American political leaders. When the Fed deliberately bails out some banks but not others, and also relieves Congress and the White House from doing their collective jobs in terms of fiscal policy, Chairman Bernanke provides short-run stability via endless liquidity, but ultimately hurts the American people by short circuiting the political process.

It is time for Fed Chairman Bernanke and the other members of the FOMC to step back from crisis mode and demand that Congress and President Obama pick up the ball. Specifically, Washington needs to take an example from our friends in the United Kingdom and begin the process of economic and fiscal restructuring now, before the next phase of the economic crisis crests next year. That may require letting equity markets sag when the full truth of the remaining economic adjustment is accepted by the public.

As I wrote in Zero Hedge last week, “Loss Given Default: From Madrid to Los Angeles Foreclosures Set to Crest in 2011-2012”), next year, IMHO, we are going to see a further sharp decline in residential home prices as the tide of foreclosures begun in the past year starts to clear the courts and move to market via involuntary sales. The same thing is happening in Spain, by coincidence, “Foreclosed Homes May Flood Spanish Market as Banks Offload Unwanted Assets”. When this next deflationary leg in the “revenue side” of the economic equation ripples through the economy, both restructuring and aggressive action by the Fed to provide liquidity will be required.




Related stories...


Whalen says Bank of America is doomed...


Whalen - "Goldman would have failed without the bailout. No question."


Blizzards ahead for much of Sweden

Heavy snowfall is expected throughout Sweden today and on Friday, and a Class 1 weather warning, the lowest on a three-grade scale, has now been issued for large parts of the country by SMHI, the Swedish Meteorological Institute.

A Class 1 warning indicates weather that may present certain risks to the public, with some disruption.

Southern Sweden is expected to receive around a decimeter of snow, and in central parts of the country, as much as 15 centimeters of snow may fall today.

SMHI also warns that all areas north of Jämtland, a region in the north of Sweden will be hit by strong winds, with rain and drifting snow.

The meteorological institute has issued a Class 2 weather warning, indicating possible danger to the public, for the region of Västernorrland, in the north of Sweden, where heavy snowfall is expected to cause snow drifts.

External link: SMHI's website »

TT/The Local ( 656 6518)

What do you think? Leave your comment below.

Pt. 5/10 - What You've Been Missing - Ep. 1 - Exposing The Noble Lie - WYBM

Pt. 5/10 - What You've Been Missing - Ep. 1 - Exposing The Noble Lie - WYBM

« FED's Richard Fisher, PIMCO's Neel Kashkari On Squawk Box: "I Guarantee We Won't End Up Like Japan" (VIDEO) »

For those who missed this clip the first time around.

Video: Neel Kashkari & Richard Fisher - Aired Oct. 17, 2010

Kashkari pimps Treasury-Goldman connections at PIMCO and Richard Fisher is president of the Dallas Federal Reserve Bank.


Video: Part 2 of the same interview -- Aired yesterday

Further reading:

Mercury Exposure Makes People Go Nuts

Dr. Mark Sircus

It is very interesting to note that that everyone is concerned in this video about green house gasses from coal fired plants but nothing is mentioned of the 50 tons of mercury that these plants put into the atmosphere each and every year in the United States alone. Coal plants put out lots of nasty stuff that have covered the globe but none as nasty as mercury. Now that the greenhouse gas theory has been run down by increasing global cooling we do not have to worry about CO2 emissions, unless one wants to worry because one has nothing better to do, but we do have to worry about many of the other foul emissions, especially that of mercury. After all without sufficient CO2 we would all be dead.

In a recent Associated Press release we find out that along a stretch of Highway 21, in a pastoral, hilly region of Texas, is a vegetative wasteland. Trees are barren, or covered in gray, dying foliage and peeling bark. Fallen dead limbs litter the ground where pecan growers and ranchers have watched trees die slow, agonizing deaths. Visible above the horizon is what many plant specialists, environmentalists, and scientists believe to be the culprit: the Fayette Power Project—a coal-fired power plant that for nearly 30 years has operated mostly without equipment designed to decrease emissions of sulfur dioxide, a component of acid rain.

Jim Berry, a horticulturalist who owns a wholesale nursery in Grand Saline, Texas describes a 30-mile stretch of Highway 21 as a place where “The plant community was just devastated. There was an environmental catastrophe. It wasn’t just the pecan groves. It was the entire ecosystem that was under duress,” Berry said recently. Pecan grower Harvey Hayek said, “Everywhere you look, it’s just dead, dead, dead.” Coal is really dirty stuff and we get exactly what we expect in terms of environmental degradation. Sulfur dioxide is just one of many pollutants that degrade life forms but in terms of toxicity nothing is as potent per gram as mercury.

Mercury-contaminated brains are
not going to function normally.

One does not have to be overdeveloped in the intelligence department to understand that a highly potent neurological poison can cause neurological problems in animals and humans exposed to it. Hotwiring of neurological tissues with mercury leads to serious problems such as diminished sexual development and fertility—which covers only a sliver of the full range of pathology that can manifest from mercury contamination. Mercury can be contained in the smoke stacks but the government does not even bother to regulate the industry’s output of mercury. They would rather spend billions of dollars radiating or feeling people up at the airport than contain the real threat of mercury pollution.


Female birds exposed to mercury yielded

National Geographic published on December 3, 2010, Male birds that eat mercury-contaminated food show “surprising” homosexual behavior. In a recent experiment with captive white ibises, many of the males exposed to the metal chose other males as mates. These “male-male pairs did everything that a heterosexual pair would do,” said study leader Peter Frederick, a wildlife ecologist at the University of Florida in Gainesville. “They built their nest, copulated together, stayed together on a nest for a month, even though there were no eggs—they did the whole nine yards.”

The point of this research extends far beyond the issue of sexual behavior. I take great exception to Frederick’s assertion that this study has no ramification for humans. Lou Guillette, a zoologist at the Medical University of South Carolina who was quoted in the National Geographic article said, “A study like this that looks at environmentally appropriate levels of mercury is probably the most powerful kind of study to tell us what’s going on in the real world.” And truly, we need to stop, look at, and reflect upon this study.

States that are reporting the highest levels of mercury emissions
also have the highest rates of developmental disorders including autism.
Dr. John Palmers

The news offered by Dr. Palmer from the University of Texas and a Harvard Research team is that the mercury in the air is having its direct effect on our children, playing its part in the devastating epidemic of neurological disorders including autism. It is not just the fish, the vaccines or the dental amalgam that are saturating our bodies with mercury. Americans and people around the world are going to have to wake up to the fact that mercury is in the air they breathe, in the soil they plant in, and in the water they drink. Hundreds of millions of people in the world are exposed to mercury contamination but our government health officials are not really concerned even when scientists speak up about how it is even devastating our children’s mental and emotional health.

The FDA’s own panel of scientists advises that mercury-containing dental amalgam should “definitely not” be implanted in children, pregnant women, and hypersensitive people. Pediatric neurologist Dr. Suresh Kotagal of the Mayo Clinic summed it up for the entire panel: “There is really no place for mercury in children.” Other panelists went on to explain that dental mercury is like lead. The panel urged the FDA to quickly contraindicate amalgam for these vulnerable populations and insisted that it provide consumers with labeling containing clear warnings. Has the FDA responded as it should? No! One more time they demonstrate is the last thing in the world they are interested in is protecting people from serious harm.

Then we have billions of people around the world exposed yearly to mercury-containing vaccines. In the first world it’s mostly the ineffective flu vaccine but for the rest of the world they have purposely left the mercury in many of the vaccines given. Pediatricians deserve credit for incredible cruelty and ignorance for injecting mercury into babies on their first day of life with their totally unnecessary hepatitis B vaccine.

Then add the intense downwind mercury pollution of all incinerators, crematoriums and coal-fired electrical plants. Mercury is thus in the water, in our food—it’s everywhere as a background toxic neurological agent affecting even those who would deny ever being affected. Almost ten years ago the FDA itself said that mercury is everywhere and the problem only gets worse each and every year.

Mercury is dangerous and can cause more than just sexual problems and general mental confusion. In fact, the heavy metal can cause death through a number of mechanisms. Exposure to mercury can be acute—usually occupation-related—or chronic—caused by continuous low-dose exposure over a long period of time. It is generally invisible in the environment as are the mercury fumes released 24 hours a day from dental fillings, which offer the worst type of chronic exposure.

In human brain samples, exposure to mercury dramatically reduced the viability of a major brain protein called tubulin but had little if any effect on another major protein, actin. Both tubulin and actin are critically important for the growth of dendrites or maintenance of axon structures of neurons. Exposing neurons to mercury rapidly results in the stripping of tubulin from the axon structure, leaving bare neurofibrils that form the tangles that are the diagnostic hallmark of Alzheimer’s disease.

Mercury is of concern because it is a persistent, bioaccumulative, and toxic (PBT) pollutant. As a natural element, it cannot be degraded or broken down; once released into the environment it remains in the biosphere for long periods of time. Some forms of mercury can also bioaccumulate in living organisms, such as fish, to levels that are hundreds of thousands of times greater than the surrounding water. Depending on its precise chemical form, route of exposure, and dose, mercury can damage the brain, kidneys, immune system, nervous system, and cardiovascular system. It can also affect the reproductive system and act as a mutagen.

Levels of mercury currently regarded as safe for adults is already impairing brain function, yet doctors and health officials fail to diagnose mercury poisoning—acute or chronic. Mercury is reducing the mental performance of millions if not billions of people worldwide and medical experts are just not seeing it. At the beginning of the 21st century, the EPA’s top mercury scientist found that 630,000 American children—one in every six—are born each year with potentially unsafe levels of mercury in their blood.

EPA experts acknowledge that there are tools available today that can measure the toxic dangers in any locality, which can dramatically improve decisions on where people can safely live, work, go to school, or play. What no one has clearly communicated is that those safe places have become extinct, especially in the northern hemisphere, leaving us and our children with no safe haven from a chemical onslaught that will only continue to get worse.

It is now accurate—scientifically and medically—to state that we are poisoning every man, woman, and child on earth. We have reached a milestone in human history. Awaiting each and every child born on the planet is a life doomed to being poisoned. There is “overwhelming evidence that every child, no matter where in the world he or she is born, will be exposed, not only from birth, but from conception, to manmade chemicals that can undermine the child’s ability to reach his or her fullest potential—chemicals that interfere with the natural chemicals that tell tissues how to develop and construct healthy, whole individuals according to the genes they inherited from their mothers and fathers,” wrote Dr. Theo Colborn, Senior Program Scientist, at the World Wildlife Fund.

Doctors need to be advised that all efforts to derail the chemical buildup taking place in us have failed, and the direct effects of this chemical poisoning are resulting in more and more symptoms. But doctors will not be told about any of this by medical officials from either the government or private medical associations. The fact that toxic damages from the Gulf of Mexico oil disaster are being hidden, denied, and covered up, and the fact that the government is against natural chelation of mercury, adds up to a one-two punch against trusting much of anything from the official medical world when it comes to heavy metal contamination—or anything else for that matter.

It really does matter where one lives and what pediatrician and dentist parents choose. Parents need to be highly informed to protect their children today from abusive governments, doctors, and dentists who seem to purposely work against the health and wellbeing of their children. Parents must also be aware of powerful poisons that can rain down on their children if they live too near a coal-fired plant or any other point source of mercury pollution.

Special Note, A Case in Point: Texas might be one of the nastiest places to live in terms of mercury contamination but Pennsylvania, one of the states at the center of the gas rush, is only partially treating substances that gush from gas wells, then actually dumping environmentally harmful liquids into rivers and streams from which communities get their drinking water. Ever increasing levels of toxicity are the main threat to humanity at this point (besides a possible coming Ice Age and financial/economic collapse with an accompanying collapse in agricultural production) and unfortunately there are fewer and fewer places to run to for safety.

Today the Huffington Post ran an article about dead birds dropping from the skies and more massive fish kills all – at the present moment unexplained but happening at numerous locations around the globe. There is a lot going on in our world today and the signs and symptoms are beginning to become biblical in proportion. Chemical, heavy metal and radiation exposures have been increasing dramatically through the years as chronic diseases have surged, even among the young who are the most vulnerable, and we have done absolutely nothing about it except to worry about CO2, a gas very necessary for life.

We have mostly shrugged it all off and left our governments to resolve our problems. What a huge mistake! Even faced with massive insanity and theft on the financial front most go back to their TVs and sleep without much alarm. I think the day is coming soon that this denial is going to be crushed by events and life will no longer continue to be the massive amusement park that we have made it.

IRS tax liens jump by 60%, but how effective are they?

Kevin McCoy
USA Today

IRS liens filed against taxpayers jumped 60% since the start of the national recession, according to a new federal report that urges the tax agency to moderate the collection policy and study its effectiveness.

The IRS filed more than 1 million liens in federal fiscal year 2010, the highest in nearly two decades and a spike from the nearly 684,000 filed in the year ahead of the recession's December 2007 start, according to the annual report to Congress issued Wednesday by the National Taxpayer Advocate.

Although the IRS has taken some steps to aid financially struggling taxpayers, it "has continued the trend toward more lien filings despite the worst economy in at least a generation" — with serious financial impact on some of those unable to pay, the taxpayer advocate report concluded.

"Lien filings can badly damage or destroy a taxpayer's creditworthiness because they are picked up by the credit-rating agencies and retained on the taxpayer's credit reports for seven years from the date the tax liability is resolved, or longer if it is not resolved," wrote Nina Olson, who heads the Taxpayer Advocate's office.

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