Existing Home Sales Fall 16.7% in December; Largest Drop On Record

Sales of U.S. existing homes plunged 16.7% in December to a seasonally adjusted annual rate of 5.45 million from 6.54 million in November as the house purchase tax credit was set to expire. The 16.7% percentage decline from November to December was the largest on record, the National Association of Realtors reported.

Two things to keep in mind here. First, this indicates how manipulated of a "recovery" this. Once the government pulls the support from a sector, it crashes. Second, this is a winter month number. These numbers are notoriously volatile and heavily impacted by weather events.

Why Did the ‘Stimulus’ Fail to Help the Economy?

When Congress was debating President Obama’s proposed “stimulus” last year, two of the watchwords for the near-trillion-dollar boondoggle were “jobs” and “shovel-ready.” Now, given what comes out of Washington, one needs a shovel to clean up the muck, and I appreciate the politicians and the media telling us we needed to have our shovels ready.

Now that the numbers are in, however, it seems that money spent had no appreciable effect on lowering unemployment:

A federal spending surge of more than $20 billion for roads and bridges in President Barack Obama’s first stimulus has had no effect on local unemployment rates, raising questions about his argument for billions more to address an “urgent need to accelerate job growth.”

An Associated Press analysis of stimulus spending found that it didn’t matter if a lot of money was spent on highways or none at all: Local unemployment rates rose and fell regardless. And the stimulus spending only barely helped the beleaguered construction industry, the analysis showed.

Keynesians, not surprisingly, have an answer: The government did not spend enough. They reason that economic growth can occur only if “aggregate demand” is great enough to prevent an overall “glut” of unsold goods. (Like the mercantilists before them, Keynesians believe that recessions occur because businesses cannot sell all the goods they produce. Socialists similarly claim that workers are “unable to buy back the products” they make.)

Therefore if government is to prevent the recession-causing “glut,” it must spend whatever is necessary to cover any “shortfall” in private consumption and investment spending. Out of this “theory” we get the present “stimulus,” complete with the blessing of Ivy League economists (who seem to perform the role of the High Priests in today’s political economy).

Such a “theory,” however, is doomed to fail every time, and I wish to give some reasons why.

• Individuals are purposeful creatures, so their spending also will reflect their own purposeful behavior. (It is interesting that many people who endorse the “aggregate demand” terminology also decry what they see as “mindless consumption of the masses.”)
• The economy is not a blob into which one stirs in money the way one stirs in an ingredient into a cake. In other words, the economy does not have a “just add money” in a recipe. It is driven by people making purposeful decisions.
• An economy has a structure of production that when working well directs resources, labor, and capital toward those areas of production that reflect the desires and needs of consumers.
• When governments expand money through the central bank, the rush of new money distorts the production structure and changes the relative value of assets and factors of production. In the early stages of this government-inspired boom, the malinvested assets (the ones that become more valuable as a result of the artificial boom itself) expand relative to other assets.
• The credit-fed boom ultimately cannot be sustained, and it becomes painfully clear that malinvested assets (see the housing-real estate bubble) quickly lose their value relative to other assets. This is the beginning of the recession, which is a period in which the economy begins to reassert the “consumer-preferred” value of economic assets.

Attempts to “stimulate” the economy through massive government spending may put money into the pockets of politically connected people, but it does nothing to restore the economic factors to their proper balances. Instead, the “stimulus” only serves to further distort the economic fundamentals and prolong the downturn.

That’s right. The stimulus has not staved off a major depression; instead, it has ensured the greater likelihood of a major economic collapse by keeping the factors unbalanced and distorting the structure of production.

The fact that the “elite” economists ignore (or even mock) what is known as the Austrian Theory of the Business Cycle does not change the fact that it explains why the Keynesian “solutions” are making things worse. Government can no more end a recession by pouring new money into the economy than one can end a fire by pouring on gasoline. But it can burn down our economic house.

Top Senate Democrat lays out deficit curbs

WASHINGTON (AP) - The top Senate Democrat wants to make it more difficult to run up the deficit with new tax cuts or expansions of federal benefit programs.

Majority Leader Harry Reid's plan would make it difficult to again extend emergency unemployment benefits or health insurance subsides for laid off workers. It would also make it harder to render new assistance for state Medicaid payments.

The Nevada Democrat is pressing the plan to get legislation passed permitting the government to continue to borrow money to finance its operations. Under the pay-as-you-go concept, program cuts or revenue increases would be needed to cover the cost of any new policies or programs. If not, across-the-board spending cuts would kick in.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Happiness in Slavery

Don’t open your eyes
You won’t like what you see
The blind have been blessed with security
Don’t open your eyes
Take it from me
I have found you can find
Happiness in slavery
Nine Inch Nails-Happiness in Slavery

Think you’re free? Think again, slave!

This week the Federal government will attempt to auction off 118 billion dollars in U.S. debt to anyone who thinks the U.S. dollar is a great place to be. Of course if you ask liars like Fed Chief Ben Bernanke or his young sidekick “tiny” Tim Geithner, they will most certainly assure you that the dollar is strong and that the U.S economy is on a miraculous rebound. But this is fiction.

Lets do our own risk assessment, shall we? After all, barring any foreign investors stupid enough to take the bait, it’s going to be you and I… and several generations of our descendants left holding the check as the fat gluttons on Wall Street lick their plates before dashing out of the restaurant. But I warn you; what you are about to read is nothing short of horrifying and should convince you – once and for all – that we are in the final stages of a freefall spiral into outright despotism.

Stewart Dougherty is a specialist in inferential analysis, the practice of identifying historic and contemporary patterns and then extrapolating their likely effects upon the future. In his recent piece, “America’s Impending Master Class Dictatorship”, Mr. Dougherty crunches some numbers for us and finds:

“According to the Federal Reserve’s most recent report on wealth, America’s private net worth was $53.4 trillion as of September, 2009. But at the same time, America’s debt and unfunded liabilities totaled at least $120,000,000,000,000.00 ($120 trillion), or 225% of the citizens’ net worth. Even if the government expropriated every dollar of private wealth in the nation, it would still have a deficit of $66,600,000,000,000.00 ($66.6 trillion), equal to $214,286.00 for every man, woman and child in America and roughly 500% of GDP. If the government does not directly seize the nation’s private wealth, then it will require $389,610 from each and every citizen to balance the country’s books.”

Sorry, but I don’t have that kind of scratch! Few of us do! And though we should feel no obligation to pay this debt, we still must bear some of the responsibility for allowing it to happen. Somewhere along the way our ancestors dropped the ball. Our fathers failed to heed the warnings of great men. They allowed their words to echo down the memory hole into oblivion only to be replaced with the words of actors, sportscasters and anchormen. They allowed great texts and historical documents in our schools to be substituted with training manuals and rulebooks for the enslaved. Their apathy has delivered us into dependence, and from there we are entering back into the final stage of a never-ending fatal sequence: bondage.

Democracy may well be the worst of all forms of government. We are often told of the virtues of democracy and taught that it was under its principles that this nation was founded. But that is not true. We were born a Republic; a representative form of government designed to protect the rights of the individual. However, from the day of our nation’s founding, insidious forces within and from without have incrementally caused our government to deteriorate into a democracy. Where once the center of power was concentrated in our elected representatives in the House and senate, that power has now been usurped by the Executive Branch. The vast majorities of Americans have considered their vote for the presidency as the single most important elected office, and as a result, have rendered their sovereignty to that single entity.

The office of the President has become a seat of power. Through signing statements and a self appointed “executive privilege”, the President has become a ruler rather than a servant of the people who acts upon the direction of Congress.

Though the author of the following passage is unknown, it has been quoted as part of a speech given in 1943 by American Industrialist H.W. Prentis though much of what he said has been attributed to late 18th Century writer Andrew Fraser Tytler. Regardless of who or when it was said, it certainly seems prophetic now in relation to the situation we currently find ourselves in…

“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the world’s greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

· From bondage to spiritual faith;
· From spiritual faith to great courage;
· From courage to liberty;
· From liberty to abundance;
· From abundance to complacency;
· From complacency to apathy;
· From apathy to dependence;
· From dependence back into bondage.”

That last part, that has come to be known as the “Tytler Cycle”, could be used to chronicle our nation’s rise and fall from the day our ancestors fled the tyranny of King George (from bondage to spiritual faith), the American Revolution (from spiritual faith to great courage), the Declaration of Independence (from courage to liberty), the Industrial Revolution (from liberty to abundance), the signing of the Federal Reserve Act (from abundance to complacency), the Great Depression (from complacency to apathy), the entry into the United Nations (from apathy to dependence) and everything that has happened since: the endless wars, socialism/facism, the CIA, etc., etc., etc. … (from dependence back into BONDAGE!)

Should we accept our fate? Surely we can adapt. A frightening number of men and women whom have received long-term confinement in our nation’s prison system succumb to a thing known as “institutionalized syndrome” characterized by a loss of independence and self-confidence, erosion of desire and skills for social interaction and fear of authority. Upon the prospect of release many prefer to stay in that nightmarish environment rather than face the world alone due to excessive reliance on these institutions to provide food, clothing and shelter. Could this be where we are headed?

And what of our destiny? Will we go the way of North Korea, a communist regime that controls it’s population through hunger and fear? One only needs to read accounts of daily life in it’s largest city, Pyongyang to conclude that this is precisely what our masters have in store for us. Imagine living in tiny living quarters within towering, drab apartment complexes that siphon intermittent supplies of water and electricity while reliably feeding government propaganda through living room speakers that can never be fully turned down. A place where no citizen is allowed to drive or even own a bicycle. A place where rations of food are so miniscual that hunger and starvation are commonplace.

And though I suspect that none of us will live long enough to be forced to live under such harsh conditions, is it acceptable to use that as an excuse to leave that fate to our children? Perhaps for some of you it is. Perhaps the work that lies ahead of us is an insurmountable task. Perhaps the victories of our enemy have caused you to become complacent, even apathetic in your own personal “Tytler Cycle”? If so, then I wish you well. Hopefully you will find comfort in the distractions provided to you by our social engineers. And although you may find your liberty in short supply, be comforted in the fact that there will always be an abundance of drugs, sports, music and all manner of entertainment to keep your buzz going through these tumultuous times.

If you accept this conclusion then I offer, in parting, these words from Samuel Adams:

“If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen.”

In other words, may you find “Happiness in Slavery”.

Democrats consider dropping insurance ban on pre-existing conditions

Among the casualties of President Barack Obama's healthcare agenda may be those who suffer from pre-existing medical conditions and can't get insurance.

Thought the ban on denying health insurance coverage for pre-existing conditions was going the way of the dodo? Not so fast.

An astute blogger noted that the new proposals floated by Democrats in the wake of the massive health care bill's collapse is a provision that would bar denying coverage for those with pre-existing conditions -- but only if they were under 19. "Did someone just chuck pre-existing conditions overboard?" he wrote.

Among the measures Democrats are considering, the New York Times noted Friday, "Insurers could not deny coverage to children under the age of 19 on account of pre-existing medical conditions."

"The only reason to specify that children under the age of 19 won't be denied coverage is because you plan on letting everyone 19 and over BE denied coverage for pre-existing conditions," blogger John Aravosis replied.

The liberal blogger also discovered a carefully worded description of what may be Obama's health care fallback plan in an editorial penned for the Washington Post on Sunday by former Obama campaign manager Dan Plouffe.

"If we do pass it, dozens of protections and benefits take effect this year," Plouffe wrote. "Parents won't have to worry their children will be denied coverage just because they have a preexisting condition. Workers won't have to worry that their coverage will be dropped because they get sick. Seniors will feel relief from prescription costs. Only if the plan becomes law will the American people see that all the scary things Sarah Palin and others have predicted -- such as the so-called death panels -- were baseless."

Aravosis notes that Plouffe has again highlighted plans to jettison pre-existing conditions -- but only for children.

"Their children?" he wrote. "The original promise - even the bad Senate bill - protects everyone, of any age, from being denied coverage because of pre-existing conditions. Now it's just children?"

Democrats haven't firmly coalesced around any plan, so details remain up in the air. House Speaker Nancy Pelosi's (D-CA) office did not immediately return a request for comment from Raw Story.

If the Democrats were to back away from a fullscale ban on pre-existing conditions, liberals are sure to question President Barack Obama, who included a ban at the top of his change.gov website's health care agenda prior to taking office.

"Require insurance companies to cover pre-existing conditions so all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums," the then-president-elect's website said.

The challenge for Democrats: a ban on denying coverage for those with pre-existing conditions went hand-in-hand with a requirement that all Americans carry insurance. Insurance companies conceded that they would accept all patients, regardless of health history, but only if everyone was required to have insurance, which would spread the cost of insuring the sick across a wider pool. Without an insurance mandate, a pre-existing ban would mean that premiums would almost certainly rise.

Liberal critics of the Senate Democratic healthcare bill -- which now appears dead -- argued that even with a pre-existing ban, a provision that allowed insurance companies to charge older patients three times as much as younger consumers effectively undermined attempts to level the insurance playing field.

ThinkProgress, the blog of the progressive Center for American Progress, notes that insurers spent at least $38 million in lobbying on the health care bill in 2009.

Outsourcing roars back to India, China: Study

WASHINGTON: Outsourcing has roared back to life in the last six months with some of it moving to countries like India, and from India to other

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places like China, the Philippines, Costa Rica and even Romania, according to a new study.

"After fizzling out over the past couple years as companies simply slashed jobs rather than move them, outsourcing is back in vogue," Forbes.com reported Monday citing a new PricewaterhouseCoopers study.

"Cost is still the major factor," Charles Aird, managing director for shared services practices at PWC, was quoted as saying. "But people are also looking for greater efficiency, better quality and access to talent."

The list of what's being outsourced is growing, too, with much of the recent growth being driven by competitors playing catch-up to market leaders that slashed their costs prior to the downturn.

Not everything can be outsourced effectively, though, Forbes said suggesting, "Computer customer service that was outsourced to India, for example, was notorious for alienating customers."

"Dell eventually brought much of its call-centre support back into the US from India, while Apple has made a point of keeping support within the country in which the calls originate," it said.

In contrast, application development - a much more complicated skill set - that was outsourced to India has proved to be extremely successful, it said.

There also is a risk that outsourcing some core services can cause damage to a company Forbes said citing Aird: "The key is that you've got to tie your sourcing strategy to your business strategy."

Not everything can be outsourced to the same place. India, which was the first big outsourcing centre, is largely bound by the English-speaking world, Forbes said.

Other countries such as China, with an equivalent-size labour pool; Poland, with about 40 million workers, and others, with much smaller pools of trained workers, are stepping up their outsourcing skills training for non-English-speaking countries, it noted.

Most of these operations are fairly fluid for entry-level positions. Clerical-level staff is in an almost constant state of churn, and goes to the lowest-cost region of trained workers.

Programmers are more valuable, and to prevent poaching, the salaries have risen from about $100 a month in 1994 to about $3,000 a month now in India, Forbes noted.

Great Recession Continues

Click this link ....... http://www.youtube.com/watch?v=1NuLKMkniG0&feature=player_embedded