Monday, September 5, 2011

The last resort: More and more Americans are calling long-stay motels home

A long way down the US housing ladder, beneath the grisly ‘projects’ of The Wire and the trailer parks hymned by Eminem, beneath the slums of New Orleans and the ghettos of Detroit, you’ll find the long-stay hotel.


Cheap, not very cheerful, and pretty much a last resort, these institutions provide four walls and a roof, for a few hundred bucks a month. It’s some of the cheapest accommodation you’ll find anywhere in the US, aside from a cardboard box.

Long-stay hotels can be found in almost every major American city. They offer none of the privacy of trailer parks, and even less of the permanency. Guests make do with postage stamp-sized rooms, paper-thin walls, and nylon sheets. You’ll rarely find them listed in tourist guides, even the section of a Lonely Planet devoted to ‘rock-bottom dives’. Staying in one isn’t exactly what you might call a holiday. It is, however, an experience. So says Kalpesh Lathigra, whose compelling photo-essay on the Wilmington Hotel in Long Beach, Southern California, is published on these pages.

A British documentary photographer, he stumbled upon the place while looking up relatives during a family holiday to Los Angeles (it is owned by his uncle, Bachu), and has since re-visited for extended periods, building close relationships with its most colourful and well-established residents.

“The hotel is one of those places with a feel that you know just has to be recorded,” he says. “There’s something in the ether. I remember walking in for the first time, and straight away realising that it had this weird character that cried out to be photographed.

Full story here.

Peter Schiff on jobs, gold, bonds & the Govt sues banks 09/02/2011

Robert Kiyosaki: Taxes & Debt Are Supposed To Make You RICH

Your Politics Are Boring As F*ck

You know it's true. Otherwise, why does everyone cringe when you say the word? Why has attendance at your anarcho-communist theory discussion group meetings fallen to an all-time low? Why has the oppressed proletariat not come to its senses and joined you in your fight for world liberation?
Perhaps, after years of struggling to educate them about their victimhood, you have come to blame them for their condition. They must want to be ground under the heel of capitalist imperialism; otherwise, why do they show no interest in your political causes? Why haven't they joined you yet in chaining yourself to mahogany furniture, chanting slogans at carefully planned and orchestrated protests, and frequenting anarchist bookshops? Why haven't they sat down and learned all the terminology necessary for a genuine understanding of the complexities of Marxist economic theory?
The truth is, your politics are boring to them because they really are irrelevant. They know that your antiquated styles of protest—your marches, hand held signs, and gatherings—are now powerless to effect real change because they have become such a predictable part of the status quo. They know that your post-Marxist jargon is off-putting because it really is a language of mere academic dispute, not a weapon capable of undermining systems of control. They know that your infighting, your splinter groups and endless quarrels over ephemeral theories can never effect any real change in the world they experience from day to day. They know that no matter who is in office, what laws are on the books, what "ism"s the intellectuals march under, the content of their lives will remain the same. They—we—know that our boredom is proof that these "politics" are not the key to any real transformation of life. For our lives are boring enough already!
And you know it too. For how many of you is politics a responsibility? Something you engage in because you feel you should, when in your heart of hearts there are a million things you would rather be doing? Your volunteer work—is it your most favorite pastime, or do you do it out of a sense of obligation? Why do you think it is so hard to motivate others to volunteer as you do? Could it be that it is, above all, a feeling of guilt that drives you to fulfill your "duty" to be politically active? Perhaps you spice up your "work" by trying (consciously or not) to get in trouble with the authorities, to get arrested: not because it will practically serve your cause, but to make things more exciting, to recapture a little of the romance of turbulent times now long past. Have you ever felt that you were participating in a ritual, a long-established tradition of fringe protest, that really serves only to strengthen the position of the mainstream? Have you ever secretly longed to escape from the stagnation and boredom of your political "responsibilities"?
It's no wonder that no one has joined you in your political endeavors. Perhaps you tell yourself that it's tough, thankless work, but somebody's got to do it. The answer is, well, NO.
You actually do us all a real disservice with your tiresome, tedious politics. For in fact, there is nothing more important than politics. NOT the politics of American "democracy" and law, of who is elected state legislator to sign the same bills and perpetuate the same system. Not the politics of the "I got involved with the radical left because I enjoy quibbling over trivial details and writing rhetorically about an unreachable utopia" anarchist. Not the politics of any leader or ideology that demands that you make sacrifices for "the cause." But the politics of our everyday lives. When you separate politics from the immediate, everyday experiences of individual men and women, it becomes completely irrelevant. Indeed, it becomes the private domain of wealthy, comfortable intellectuals, who can trouble themselves with such dreary, theoretical things. When you involve yourself in politics out of a sense of obligation, and make political action into a dull responsibility rather than an exciting game that is worthwhile for its own sake, you scare away people whose lives are already far too dull for any more tedium. When you make politics into a lifeless thing, a joyless thing, a dreadful responsibility, it becomes just another weight upon people, rather than a means to lift weight from people. And thus you ruin the idea of politics for the people to whom it should be most important. For everyone has a stake in considering their lives, in asking themselves what they want out of life and how they can get it. But you make politics look to them like a miserable, self-referential, pointless middle class/bohemian game, a game with no relevance to the real lives they are living out.
What should be political? Whether we enjoy what we do to get food and shelter. Whether we feel like our daily interactions with our friends, neighbors, and coworkers are fulfilling. Whether we have the opportunity to live each day the way we desire to. And "politics" should consist not of merely discussing these questions, but of acting directly to improve our lives in the immediate present. Acting in a way that is itself entertaining, exciting, joyous—because political action that is tedious, tiresome, and oppressive can only perpetuate tedium, fatigue, and oppression in our lives. No more time should be wasted debating over issues that will be irrelevant when we must go to work again the next day. No more predictable ritual protests that the authorities know all too well how to deal with; no more boring ritual protests which will not sound like a thrilling way to spend a Saturday afternoon to potential volunteers—clearly, those won't get us anywhere. Never again shall we "sacrifice ourselves for the cause." For we ourselves, happiness in our own lives and the lives of our fellows, must be our cause!
After we make politics relevant and exciting, the rest will follow. But from a dreary, merely theoretical and/or ritualized politics, nothing valuable can follow. This is not to say that we should show no interest in the welfare of humans, animals, or ecosystems that do not contact us directly in our day to day existence. But the foundation of our politics must be concrete: it must be immediate, it must be obvious to everyone why it is worth the effort, it must be fun in itself. How can we do positive things for others if we ourselves do not enjoy our own lives?
To make this concrete for a moment: an afternoon of collecting food from businesses that would have thrown it away and serving it to hungry people and people who are tired of working to pay for food—that is good political action, but only if you enjoy it. If you do it with your friends, if you meet new friends while you're doing it, if you fall in love or trade funny stories or just feel proud to have helped a woman by easing her financial needs, that's good political action. On the other hand, if you spend the afternoon typing an angry letter to an obscure leftist tabloid objecting to a columnist's use of the term "anarcho-syndicalist," that's not going to accomplish shit, and you know it.
Perhaps it is time for a new word for "politics," since you have made such a swear word out of the old one. For no one should be put off when we talk about acting together to improve our lives. And so we present to you our demands, which are non-negotiable, and must be met as soon as possible—because we're not going to live forever, are we?
1. Make politics relevant to our everyday experience of life again. The farther away the object of our political concern, the less it will mean to us, the less real and pressing it will seem to us, and the more wearisome politics will be.
2. All political activity must be joyous and exciting in itself. You cannot escape from dreariness with more dreariness.
3. To accomplish those first two steps, entirely new political approaches and methods must be created. The old ones are outdated, outmoded. Perhaps they were NEVER any good, and that's why our world is the way it is now.
4. Enjoy yourselves! There is never any excuse for being bored . . . or boring!
Join us in making the "revolution" a game; a game played for the highest stakes of all, but a joyous, carefree game nonetheless!
read more

Goldman Justifies The Need For More QE3, And Even More Record Wall Street Bonuses

We end this busy day of economic buffoonery with Goldman's scorecard for August ("the US economy has not fallen off a cliff", which we translate as a B+, and "far better than expected"), which in turn explains why Goldman, and everyone else, now assumes QE3 (yes, Op Twist is QE3; get over it) is not only a given, but why in Goldman's esteemed opinion, the Fed has at least 3 rationales for pushing for more QEasing. Incidentally, these are as follows: "First, unemployment is far above the Fed’s long-term forecast in the low 5% range; the longer high unemployment persists, the greater the risk that an erosion of skills and labor force attachment will result in permanent supply-side damage. Second, economic growth has been woeful this year and there is no convincing sign of the second-half pickup in growth that the majority of Fed officials seem to expect. The payroll report in particular will weigh heavily in the minds of many Federal Open Market Committee members. Third, there is limited prospect for near-term fiscal stimulus from a gridlocked Washington." The only thing Goldman is avoiding, of course, is the wipe out in stocks that will make QE3 a virtual certainty, as we have been predicting ever since March. Goldman is also avoiding to mention that the only outcome of more QE will be another record year of Wall Street bonuses, all at the expense of more joblessness, higher gas prices, a 120% debt/GDP ratio, and overall sovereign insolvency. Oh well - in the meantime we continue, as we have for the past 2.5 years, to buy gold... or spam for the Econ PhDs out there.
Incidentally, just as amusing is our prediction from November 2010:
Zero Hedge now believes a $5 trillion QE3 program will be announced by July 2011, when gold is trading at $10,000, the entire Treasury curve is at zero, and stock prices are meaningless courtesy of a DXY sub 50, and every commodity opening limit up daily.
Oddly enough, it was supposed to be a grotesque form of hyperbole. We are stunned to reread just how close we came to predicting everything to the dot.
From Goldman's Keynesian acolytes:
  • The US economy has not fallen off a cliff, despite the “confidence shock” precipitated by the debt ceiling impasse, the downgrade of the US sovereign rating, and the financial market turmoil of recent weeks.
  • The August employment report was weak but not recessionary. The payroll survey was very disappointing, with no job growth, a drop in weekly hours, and a decline in hourly earnings. But the household survey posted a decent gain and the unemployment rate held steady at 9.1%.
  • So far in the third quarter, “hard” indicators of economic activity look a tad better than our forecast of 1% real GDP growth (annualized), while “soft” measures such as business surveys look weaker. Recession remains a substantial risk but not our base case forecast.
  • The economy’s growth performance so far in 2011 would be disappointing in any year, and is woefully unacceptable given the high level of unemployment. So we expect the Fed to take further action at its September 20-21 meeting, most likely by announcing that it will extend the duration of its securities holdings by selling shorter-dated securities for longer-dated Treasuries.
  • We expect the impact of such a balance sheet “twist” to be similar to QE2. Given widespread speculation of further Fed action, and a very dovish set of minutes from the August meeting, we believe this impact is largely (though not completely) “priced in” to markets at this point.
In Search of Labor Day, Fed to Ease Further
The US economy has not fallen off a cliff, despite the “confidence shock” precipitated by the debt ceiling impasse, the downgrade of the US sovereign rating, and the financial market turmoil of recent weeks.
The August employment report was weak but not recessionary. The payroll survey was very disappointing, with no job growth, a drop in weekly hours, and a decline in hourly earnings. But the household survey posted a decent gain and the unemployment rate held steady at 9.1%.
So far in the third quarter, “hard” indicators of economic activity look a tad better than our forecast of 1% real GDP growth (annualized), while “soft” measures such as business surveys look weaker. Recession remains a substantial risk but not our base case forecast.
The economy’s growth performance so far in 2011 would be disappointing in any year, and is woefully unacceptable given the high level of unemployment. So we expect the Fed to take further action at its September 20-21 meeting, most likely by announcing that it will extend the duration of its securities holdings by selling shorter-dated securities for longer-dated Treasuries.

We expect the impact of such a balance sheet “twist” to be similar to QE2. Given widespread speculation of further Fed action, and a very dovish set of minutes from the August meeting, we believe this impact is largely (though not completely) “priced in” to markets at this point.
Despite a “confidence shock” precipitated by the debt ceiling impasse, the downgrade of the US sovereign rating, and the financial market turmoil of recent weeks, the economy seems to have staggered through August without a collapse. But with unemployment at unacceptable levels, growth below trend, and no clear evidence of a second-half pickup, we expect the Federal Reserve to take another substantial easing step at its September 20-21 meeting.
A Stagnant Labor Market
“Labor Day” is anything but in 2011, as the August employment report showed no growth whatsoever in nonfarm payrolls. The workweek shortened, average hourly earnings declined, and prior months’ payroll gains were revised down, making for a substantial disappointment that we would characterize as near-recessionary.
In contrast, the household employment survey was somewhat more encouraging, featuring a gain of 331,000 jobs in August (134,000 when adjusted to the payroll employment definition) and a slight uptick in the labor force participation rate. The unemployment rate was steady at 9.1% (see top exhibit on cover page).
Though the payroll and household surveys often diverge in a given month, both send an unambiguous message of weakness over the past few months, with household employment down slightly and payroll growth barely positive.
Little if Any Growth
A labor market in the doldrums is the natural result of listless GDP growth so far in 2011. We expect 1% growth for the third quarter, roughly the same pace as the first half of the year.
Recent economic news has offered a mixed picture of growth, roughly divided between “hard” indicators of economic activity and “soft” measures of sentiment. The “hard” measures—which include data such as retail activity, industrial production, and durable goods orders—currently imply a bit (though only a bit) of upside risk to our third-quarter growth estimate. Most surprisingly, reports from major retailers showed an uptick in August activity despite dismal confidence.
In contrast, “soft” indicators that focus more on sentiment or opinion have been weak for the most part. In particular, surveys of consumer confidence from the Conference Board and University of Michigan are at 30-year lows excluding the depths of the financial crisis. A number of business surveys have been extremely soft as well, in particular the Philadelphia Fed’s mid-month manufacturing survey, which fell to recessionary levels. But the bellwether business survey, the Institute for Supply Management’s manufacturing index, held roughly steady at 50.6 in August, a level more consistent with the soft-but-not-recessionary “hard” indicators.
Our Current Activity Indicator reads -0.5% with the August data in hand. Note, however, that the available indicators are skewed towards “soft” measures thus far.
Still Skirting Recession
On balance, the economy seems to have skirted recession so far. We recently evaluated a number of “rules of thumb” for recession as well as more formal regression models. The lower exhibit on the cover page shows a model incorporating indicators from the labor market (the change in the unrounded unemployment rate and the three-month change in payrolls), cyclical sectors (housing starts and the ISM manufacturing index), and financial markets (the S&P 500 equity index, the Treasury-Eurodollar spread, and the spread between the Moody’s BAA corporate yield index and long-term Treasury yields), as well as the trailing two-quarter real GDP growth rate. This model currently estimates a nearly 40% probability that the economy was in recession in August.
For estimating the likelihood of recession a few months from now, financial market variables take on greater importance. Exhibit 2 illustrates our financial conditions index, with and without an adjustment for oil prices. Despite the selloff in equities and widening in credit spreads, lower long-term interest rates and a weaker dollar have kept financial conditions slightly easier than early this year, with little net change in recent months. Thus, forward recession probabilities are lower if policymakers successfully evade additional near-term shocks from fiscal tightening (i.e. the yearend expiration of the payroll tax holiday) or financial stress (in particular, credit shocks related to the European debt crisis).
Fed to Try a Further Boost
We expect the Federal Reserve to launch another round of quantitative easing beginning at the September 20-21 meeting. Fed officials can offer several rationales for doing more. First, unemployment is far above the Fed’s long-term forecast in the low 5% range; the longer high unemployment persists, the greater the risk that an erosion of skills and labor force attachment will result in permanent supply-side damage. Second, economic growth has been woeful this year and there is no convincing sign of the second-half pickup in growth that the majority of Fed officials seem to expect. The payroll report in particular will weigh heavily in the minds of many Federal Open Market Committee members. Third, there is limited prospect for near-term fiscal stimulus from a gridlocked Washington.
Given the lack of unanimity on the FOMC and considerable opposition to asset purchases from some politicians, we think that “QE3” is likely to take the form of “going long” (extending the duration of the Fed’s balance sheet) rather than “going big” (expanding the balance sheet further), at least for now. We believe the impact of quantitative easing is proportional to the duration of Fed purchases. As we showed in a recent analysis, if the Fed sold all its securities maturing before mid-2013 and invested the proceeds in 10- and 30-year Treasuries based on the amounts available, it could achieve a market impact equal to 80%-90% that of QE2 without changing the size of the balance sheet. A further tilt towards 30-year securities could magnify the impact. Exhibit 3 (above) illustrates the current maturity structure of the Fed’s holdings and the market’s. Any manipulation of the portfolio is likely to take place over a period of a few months to minimize disruptions.
Further, QE is already priced into the market to a considerable extent. After all, the Fed went further than expected at its August 9 meeting, when it issued a conditional commitment to hold the funds rate at “exceptionally low” levels “at least through mid-2013”, and indicated the possibility of further action. The minutes from that meeting characterized this as a “measured” action and noted that “a few” members preferred a more aggressive move. A CNBC survey taken shortly after the meeting suggested that roughly half of market participants expected more QE; given the data flow since then and our subjective assessment from conversations with clients, a clear majority now expects it before the end of the year.

Solution to the Economic Crisis? North Dakota’s Economic “Miracle”—It’s Not Oil

North Dakota has had the nation's lowest unemployment ever since the economy tanked. What's its secret?
In an article in The New York Times on August 19th titled “The North Dakota Miracle,” Catherine Rampell writes:
Forget the Texas Miracle. Let’s instead take a look at North Dakota, which has the lowest unemployment rate and the fastest job growth rate in the country.
According to new data released by the Bureau of Labor Statistics today, North Dakota had an unemployment rate of just 3.3 percent in July—that’s just over a third of the national rate (9.1 percent), and about a quarter of the rate of the state with the highest joblessness (Nevada, at 12.9 percent).
North Dakota has had the lowest unemployment in the country (or was tied for the lowest unemployment rate in the country) every single month since July 2008.
Its healthy job market is also reflected in its payroll growth numbers. . . . [Y]ear over year, its payrolls grew by 5.2 percent. Texas came in second, with an increase of 2.6 percent.
Why is North Dakota doing so well? For one of the same reasons that Texas has been doing well: oil.
Oil is certainly a factor, but it is not what has put North Dakota over the top. Alaska has roughly the same population as North Dakota and produces nearly twice as much oil, yet unemployment in Alaska is running at 7.7 percent. Montana, South Dakota, and Wyoming have all benefited from a boom in energy prices, with Montana and Wyoming extracting much more gas than North Dakota has. The Bakken oil field stretches across Montana as well as North Dakota, with the greatest Bakken oil production coming from Elm Coulee Oil Field in Montana. Yet Montana’s unemployment rate, like Alaska’s, is 7.7% percent.
A number of other mineral-rich states were initially not affected by the economic downturn, but they lost revenues with the later decline in oil prices. North Dakota is the only state to be in continuous budget surplus since the banking crisis of 2008. Its balance sheet is so strong that it recently reduced individual income taxes and property taxes by a combined $400 million, and is debating further cuts. It also has the lowest foreclosure rate and lowest credit card default rate in the country, and it has had NO bank failures in at least the last decade.
If its secret isn’t oil, what is so unique about the state? North Dakota has one thing that no other state has: its own state-owned bank.
Access to credit is the enabling factor that has fostered both a boom in oil and record profits from agriculture in North Dakota. The Bank of North Dakota (BND) does not compete with local banks but partners with them, helping with capital and liquidity requirements. It participates in loans, provides guarantees, and acts as a sort of mini-Fed for the state. In 2010, according to the BND’s annual report:
The Bank provided Secured and Unsecured Federal Fund Lines to 95 financial institutions with combined lines of over $318 million for 2010. Federal Fund sales averaged over $13 million per day, peaking at $36 million in June.
The BND also has a loan program called Flex PACE, which allows a local community to provide assistance to borrowers in areas of jobs retention, technology creation, retail, small business, and essential community services. In 2010, according to the BND annual report:
The need for Flex PACE funding was substantial, growing by 62 percent to help finance essential community services as energy development spiked in western North Dakota. Commercial bank participation loans grew to 64 percent of the entire $1.022 billion portfolio.
The BND’s revenues have also been a major boost to the state budget. It has contributed over $300 million in revenues over the last decade to state coffers, a substantial sum for a state with a population less than one-tenth the size of Los Angeles County. According to a study by the Center for State Innovation, from 2007 to 2009 the BND added nearly as much money to the state’s general fund as oil and gas tax revenues did (oil and gas revenues added $71 million while the Bank of North Dakota returned $60 million). Over a 15-year period, according to other data, the BND has contributed more to the state budget than oil taxes have.
North Dakota’s money and banking reserves are being kept within the state and invested there. The BND’s loan portfolio shows a steady uninterrupted increase in North Dakota lending programs since 2006.
According to the annual BND report:
Financially, 2010 was our strongest year ever. Profits increased by nearly $4 million to $61.9 million during our seventh consecutive year of record profits. Earnings were fueled by a strong and growing deposit base, brought about by a surging energy and agricultural economy. We ended the year with the highest capital level in our history at just over $325 million. The Bank returned a healthy 19 percent ROE, which represents the state’s return on its investment.
A 19 percent return on equity! How many states are getting that sort of return on their Wall Street investments?
Timothy Canova is Professor of International Economic Law at Chapman University School of Law in Orange, California. In a June 2011 paper called “The Public Option: The Case for Parallel Public Banking Institutions,” he compares North Dakota’s financial situation to California’s. He writes of North Dakota and its state-owned bank:
The state deposits its tax revenues in the Bank, which in turn ensures that a high portion of state funds are invested in the state economy. In addition, the Bank is able to remit a portion of its earnings back to the state treasury .... Thanks in part to these institutional arrangements, North Dakota is the only state that has been in continuous budget surplus since before the financial crisis and it has the lowest unemployment rate in the country.
He then compares the dire situation in California:
In contrast, California is the largest state economy in the nation, yet without a state-owned bank, is unable to steer hundreds of billions of dollars in state revenues into productive investment within the state. Instead, California deposits its many billions in tax revenues in large private banks which often lend the funds out-of-state, invest them in speculative trading strategies (including derivative bets against the state’s own bonds), and do not remit any of their earnings back to the state treasury. Meanwhile, California suffers from constrained private credit conditions, high unemployment levels well above the national average, and the stagnation of state and local tax receipts. The state’s only response has been to stumble from one budget crisis to another for the past three years, with each round of spending cuts further weakening its economy, tax base, and credit rating.
Not all states have oil, of course (and it’s hardly a sustainable economic basis), but all could learn from the state-owned bank that allows North Dakota to capitalize on its resources to full advantage. States that deposit their revenues and invest their capital in large Wall Street banks are giving this economic opportunity away.
This article was written for YES! Magazine. Ellen Brown is an attorney, president of the Public Banking Institute, and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are and

Ellen Brown is a frequent contributor to Global Research.  Global Research Articles by Ellen Brown

Even Goldman Sachs Secretly Believes That An Economic Collapse Is Coming.

By Michael Snyder - BLN Contributing Writer

Goldman Sachs is doing it again.  Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse.  On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients.  The general public was not intended to see this report.  Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details. 

It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering.  In the report, Brazil says that the U.S. debt problem cannot be solved with more debt, that the European sovereign debt crisis is going to get even worse and that there are large numbers of financial institutions in Europe that are on the verge of collapse.  If this is what people at the highest levels of the financial world are talking about, perhaps we should all start paying attention.
There is a tremendous amount of fear in the global financial community right now.  As I wrote about the other day, the financial world is about to hit the panic button.  Things could start falling apart at any time.  Most of these big banks will not admit how bad things are publicly, but privately there is a whole lot of freaking out going on.
According to the Wall Street Journal, Brazil believes that “as much as $1 trillion in capital may be needed to shore up European banks; that small businesses in the U.S., a past driver of job production, are still languishing; and that China’s growth may not be sustainable.”
Perhaps most startling of all is what the report has to say about the debt problems of the United States and Europe.

For example, this following excerpt from the report sounds like it could have come straight from The Economic Collapse Blog….
“Solving a debt problem with more debt has not solved the underlying problem. In the US, Treasury debt growth financed the US consumer but has not had enough of an impact on job growth. Can the US continue to depreciate the world’s base currency?”
Remember, this statement was not written by some guy on the Internet.  A top Goldman Sachs analyst put it into a report for institutional investors.
The report also goes into great detail about the financial crisis in Europe.  Brazil writes about how the euro is headed for trouble and about how dozens of financial institutions in Europe could potentially be in danger of collapse.
But in any environment Goldman Sachs thinks that it can make money.  The following is how Business Insider summarized the advice that Brazil gave in the report regarding how to make money off of the impending collapse in Europe….
  • Buy a six-month put option on the Euro versus the Swiss Franc, thus betting the Euro will drop against the Franc (the Franc being the currency that an official Goldman report recently referred to as the most overvalued in the world)
  • Buy a five-year credit default swap on an index of European corporate debt—the iTraxx 9. This is a bet that some of these companies will default, and your insurance policy, the CDS, will pay off
This is so typical of Goldman Sachs.  They will say one thing publicly and then turn around and do the total opposite privately.
For example, prior to the financial crisis of 2008, Goldman Sachs was putting together mortgage-backed securities that they knew were garbage and marketing them to investors as AAA-rated investments.  On top of that, Goldman then often privately bet against those exact same securities.
The CEO of Goldman Sachs has even acknowledged that the investment bankengaged in “improper” behavior during 2006 and 2007.
For much more on the history of all this, please see this article: “How Goldman Sachs Made Tens Of Billions Of Dollars From The Economic Collapse Of America In Four Easy Steps“.
So will Goldman Sachs ever get into serious trouble for any of this?
No, of course not.
Yeah, they will get a slap on the wrist from time to time, but the reality is that the top levels of the federal government are absolutely littered with ex-employees of Goldman Sachs.  Goldman is one of the “too big to fail” banks and they are going to continue to do pretty much whatever they feel like doing.
Sadly, the power of the “too big to fail” banks just continues to grow.  At this point, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assetsequivalent to approximately 60 percent of America’s gross national product.
Goldman Sachs was the second biggest donor to Barack Obama’s campaign in 2008, so don’t expect Obama to do anything about any of this.
We have a financial system that is deeply, deeply corrupt and all of that corruption is a big reason why things are falling apart.
Sadly, the 54 page report mentioned above is right – we really are facing aglobal debt meltdown and we really are heading for an economic collapse.
You aren’t going to hear the truth from the mainstream media or from our politicians because “keeping people calm” is much more of a priority to them than telling the truth is.
The debt crisis in the United States is unsustainable and the debt crisis in Europe is unsustainable.  Right now we are in the calm before the storm, and nobody knows exactly when the storm is going to strike.
But let there be no doubt – it is coming.
The amazing prosperity that we have enjoyed for the last several decades has largely been a debt-fueled illusion.  It was a great party while it lasted, but now it is coming to an end and the aftermath of the coming crash is going to be absolutely horrific.
Keep watch and get prepared.  We don’t know exactly when the collapse is going to happen, but it is definitely on the way and now even Goldman Sachs is admitting that.

On September 17th Socialists Will Riot Like Egyptians In All Fifty States

Radical. Dangerous. Violent. Deadly.
No, I’m not referring to Islamic terrorists.
I’m talking about anti-capitalist terrorists in our own country.
Let me explain…
In the aftermath of the deadly British riots, American radicals are planning hundreds of simultaneous violent uprisings to topple our system of capitalism.
They plan on revolting in the financial districts of every capital in all 50 states! From Boise Idaho… to Topeka Kansas… to Sacramento California…the progressives will be rioting. I hope you plan on making a trip to the country on September 17th, because I certainly will.
World Net Daily reports, “Activists are advertising on social network sites such as Facebook and Twitter for a "Day of Rage" on Sept. 17 to begin with the "occupation" of Wall Street and continue with protests across the nation.”

Defund ACORN & The SEIU – NOW!
The people pulling the strings behind these protests are the thugs at ACORN (Association of Community Organizations For Reform Now) and the SEIU (Service Employees International Union.) Both who by the way, are closely linked with Barack Obama. It’s very interesting these folks chose to launch a massive demonstration against capitalism right before Obama’s re-election. Maybe they want to drum up some grassroots support to keep our socialist-in-chief in the White House.
Contrary to what the left-wing media reports, ACORN is NOT dead. It has merely splintered into dozens of smaller state chapters. Here are just a few of the ACORN chapters hiding out under different names…
  • Pennsylvania: Pennsylvania Communities Organizing for Change (PCOC)
  • Texas: Texas Organizing Project (TOP)
  • California: Alliance of Californians for Community Empowerment (ACCE)
  • Missouri: Missourians Organizing for Reform Empowerment (MORE)

…There are dozens more. To make matters worse, these agents of “change” are still receiving federal TAX DOLLARS in the form of grants! Tom Fitton, president of Judicial Watch (a conservative government watchdog organization) said the newly discovered grants are in violation of a 2009 law Obama signing blocking funding for Acorn and their offshoots.

ACORN and the SEIU have an interdependent relationship. ACORN is in charge of the two most well-known SEIU offices. Over the last four years they have received $5,609, 355 MILLION dollars from the SEIU. ACORN set up political rallies, events, and shared union dues with the teamster conglomerate.

Defund ACORN & The SEIU – NOW!

Washington has failed to balance the budget. We’re almost $15 TRILLION DOLLARS in debt. There is NO reason we should be going into more debt funding organizations that promote social upheaval!

These ACORN and SEIU revolutionaries claim their protests will be non-violent. If they don’t plan on inciting mayhem, why does the “Day of Rage” website have information on how to break the law and disrupt court hearings? And why are they encouraging protesters to get arrested so they can increase their “bargaining power?”
“Jail authorities are not going to patiently wait for us to reach consensus on solidarity agreements before they start employing "divide and conquer" tactics to weaken our bargaining power.” -
Defund ACORN & The SEIU – NOW!

They say they’re planning a “peaceful” gathering, yet they are preparing for large groups of people to be incarcerated? I’m not buying it. The truth is, these militant progressives plan on filling our streets with HUNDREDS OF THOUSANDS of people hell-bent on creating a Marxist-style revolution.
We are footing the bill for their guerilla demonstrations.
But the millions of dollars these groups funnel in from taxpayers aren’t enough.
Their ultimate goal is to kill capitalism and replace it with socialism.
And I guarantee that they’ll stop at nothing to reach that goal.
As you know, it doesn’t look like the economy is going to get better here or anywhere else. People are losing their jobs, their benefits, and the checks from the social programs they’ve become hooked on. When the gravy train quits making stops I’m sure many people will be incensed into ACTION.
Idle hands are the devil’s tools won’t even begin to describe the chaos these mobs will create.
Defund ACORN & The SEIU – NOW!
You may have thought I was being an alarmist when I warned you last week that England-style riots were headed to the U.S. I wish I was wrong. There is NO evidence anywhere that these people intend for this to be a tranquil gathering.
The Day of Rage website ( pays homage to the violent rioters in Europe, “[Here is how you can help] …provide aid by spreading awareness of the "European Revolution". We proudly support them as our partner and we all need all the help we can get; together, we can make the world a better place. Show them your support.”
Defund ACORN & The SEIU – NOW!
Don’t forget, these radicals will be demonstrating in ALL 50 states!
Now, more than ever, it is vital we cut off funding for these militant groups!
It gets worse. On Occupy Wall Street’s website (a sister group to the Day of Rage) there are hundreds of facebook posts from progressives across the country gearing up for an ALL-OUT WAR AGAINST THE UNITED STATES!
Remember, social media has been the tool that’s fueled every single riot this year from Egypt to England. If these comments don’t convince you that we’re in serious trouble, I don’t know what will…
  • “I’d honestly like to see organized people harassing certain targeted officials and CEO’s in varying degrees of threat.”
  •  “Summer’s here and the time is right for fighting in the streets, boys - The Rolling Stones.”
  • “We need to find medics to attend this event who are trained in first aid should anyone get hurt.”
  • “The National Guard needs a training exercise.”
  • “We need pressure and commotion to inspire people to move.”
  • “Strike like an Egyptian.”
This is not a fight we can afford to lose.
The consequences of inaction are too great.
The Day of Rage is only the first of MANY extremist protests that are being planned as you read this email. The current economic disaster is giving the socialists the perfect excuse to cause chaos and disruption. They never do let a crisis go to waste.
World Net Daily reported that countless radical groups (many who are linked to ACORN AND THE SEIU) are preparing protests during the NATO and G-8 summits in Chicago next May.
“Foreshadowing possible violent confrontations, some of the same radical trainers behind the infamous 1999 Seattle riots against the World Trade Organization have been mobilizing new protest efforts geared toward world summits as well as the current economic crisis.”
Defund ACORN & The SEIU – NOW!
Unless patriots like you stand up and demand an end to the destructive progressive agenda there might not be an America to stand up for tomorrow.
After you TELL CONGRESS TO DEFUND ACORN & THE SEIU, will you chip in $15…$20…or $25 dollars to help AmeriPAC safeguard the founding principles of our country? I know times are difficult. But this is not a fight we can afford to lose. Whatever you can afford will be much appreciated.
The fact is, as a non-profit organization, without the generous support from patriotic Americans like you, we will not be able to raise the funds we need to beat back the rabid socialists. So please tell TELL CONGRESS TO DEFUND ACORN & THE SEIU right away.

 Your future. My future. And our children’s futures are on the line.

Defend America,

Alan M. Gottlieb
Chairman, AmeriPAC

If you prefer to send a check, please mail to:
American Political Action Committee (AmeriPAC)
PO Box 1682
Dept Code 3879-e-cch
Bellevue, WA 98009-1682

Paid for by AmeriPAC, a federally-authorized and qualified multi candidate political action committee. Not authorized by any candidate or candidate's committee. Contributions to AmeriPAC will be used in connection with federal elections. Maximum contribution per individual per calendar year is $5,000. Contributions from foreign nationals and corporations are prohibited. Contributions are not deductible for federal income tax purposes.

FHFA Sues 17 Banks Over Massive Mortgage Losses At Fannie and Freddie

The ripple effects of the financial crisis continue to take their toll on banks, as reckless lending during the bonanza years catches up to them.  Friday after the closing bell, and ahead of a Labor Day weekend, the Federal Housing Finance Agency confirmed it was suing 17 different financial institutions for misrepresenting the quality of mortgage backed securities sold to Fannie Mae and Freddie Mac.
Affecting major banks like Bank of America, JPMorgan Chase, Goldman Sachs and Citigroup, the suit alleges negligent misrepresentation, securities laws violations, and common fraud as they issued, bundled, and sold MBS to government sponsored enterprises. (See list of institutions, amounts, and the suit against BoA below).
The FHFA is not looking for repurchases, but rather is looking to retrieve losses on Fannie and Freddie’s loan portfolios.  JPMorgan is being sued over $33 billion in securities, while Bank of America-Merrill Lynch is on the hook for almost $25 billion, and the Vampire Squid, Goldman Sachs, is in for $11.1 billion.
According to the suit, “defendants falsely represented that the underlying mortgage loans complied with certain underwriting guidelines and standards, including representations that significantly overstated the ability of the borrowers to repay their mortgage loans.”
As mentioned above, the FHFA, suing on behalf of Fannie and Freddie, is looking to retrieve losses, rather than for buybacks.  UBS suffered the FHFA’s lawyers back in July when it was sued for the violations, with the FHFA looking for $900 million on a $4.5 billion portfolio.  According to CNBC, the total amount involved in the current suit tops $120 billion.  According to the NY Times, Fannie and Freddie lost over $30 billion as a result of the financial crisis, most of which was borne by taxpayers.
The so-called MBS machine helped banks make big bucks during the bonanza years ahead of the crash.  Fueled by easy money, complacent regulators, and compliant credit-rating agencies, banks and mortgage originators pushed to bundle an ever-increasing number of loans and mortgages, despite their credit quality, in order to keep the MBS machine going.  Risk management was forgotten as profits took primacy; banking sector earnings hit record highs in 2007, as the whole thing began to crumble.
As subprime borrowers began to default on their loans at a national level, banks begun to see their scheme unravel, with AAA-rated securities, backed by such borrowers, tumbling in value.  Wall Street greed put the global financial system on its knees and sent the economy into its deepest contraction since the Great Depression.
Unemployment remains above 9% and GDP is growing at less than snail’s speed, as the number of economists and analysts predicting a recession increases daily.  To a pretty substantial point, this is a consequence of the MBS-machine and of banks’ relentless need for higher and higher profits. The ends, for them, justified the means. (Read Ghastly Jobs Report As Economy Stares Recession In The Face).
Banks have already been sued by the attorneys general of all 50 states over robo-signing, or mass foreclosures carried on without abiding by the legal process.  The NY Times reports they are looking for about $20 billion in damages.
Bank of America, one of the most targeted entities for litigation after its acquisition of Countrywide, was also sued last month by AIG which sought $10 billion in damages for misrepresenting the quality of securities it was selling.  Countrywide, headed by convicted fraudster Angelo Mozilo, was one of the biggest mortgage originators in the country. (Read Bank of America’s Latest Peril: Losing Merrill Lynch?).
Bank of America was the first of the defendants to give a public response to the suit, claiming Fannie and Freddie are trying to hold other market participants responsible for their losses.  The argument, repeated over the last couple of days by finance insiders, is that both Fannie and Freddie were sophisticated investors and understood securities are inherently risky.
The reality, of course, is a little more complicated.  The financial crisis is an example of an organizational failure across a web of actors that involved primarily banks, credit rating agencies, and regulators, as well as mortgage buyers that possibly underestimated or didn’t understand the risks of buying a home.  More than just a failure, there was complicity, to a certain extent, between many of the major actors, as banks looking for higher profits lobbied regulators, while credit-rating agencies took hefty commissions from rating as many securities as possible.  Their house of cards, though, fell with destructive force.
Below is a list of major institutions along with the value over which they are being sued for.

1. Ally Financial Inc. f/k/a GMAC, LLC ($6 billion)
2. Bank of America Corporation ($5 billion)
3. Barclays Bank PLC ($4.9 billion)
4. Citigroup, Inc ($3.5 billion)
5. Countrywide Financial Corporation ($26.6 billion, Countrywide was bought by Bank of America)
6. Credit Suisse Holdings (USA), Inc
7. Deutsche Bank AG ($14.2 billion)
8. First Horizon National Corporation ($883 million)
9. General Electric Company ($549 million)
10. Goldman Sachs & Co. ($11.1 billion)
11. HSBC North America Holdings, Inc. ($6.2 billion)
12. JPMorgan Chase & Co. ($33 billion)
13. Merrill Lynch & Co. / First Franklin Financial Corp. ($24.8 billion)
14. Morgan Stanley
15. Nomura Holding America Inc. ($2 billion)
16. The Royal Bank of Scotland Group PLC ($30.4 billion)
17. Société Générale ($1.3 billion)

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