Thursday, February 28, 2013

Class Divide: UK masses slide into poverty as austerity ramps up - Max Keiser

Class Divide: UK masses slide into poverty as austerity ramps up - Max Keiser

Thanks to the banksters, prices have risen faster than wages for a LONG TIME. This is a must see video, that shows what is happening in the UK because of austerity!

Generational Breakdown: Gen Y Millenials Risk Averse

Here is a breakdown of generations by years:


2000 -Present - New Silent Generation or Generation Z
1980-2000 - Millennials or Generation Y
1965-1979 - Generation X
1946-1964 - Baby Boom

Millenials, or Gen Y's are risk averse. They are so risk averse that they have two names! Talk about hiding in the woodwork. Seriously, though, there are reasons why they are risk averse. And risk averse actually hurts the bankers who got us into this credit crisis mess in the first place.

The question remains, will the Millenials bite at the obvious housing bubble Ben Bernanke wants? That is the question. Will the head of the Federal Reserve get his way, and make Jamie Dimon happy? Or will people refuse the easy loans that surely will come their way?

I hope the Gen Y Millenials stay risk averse. They will be saved from a life of debt. 

Wednesday, February 27, 2013

Guest Post: It's Always The Best Time To Buy | Zero Hedge

Guest Post: It's Always The Best Time To Buy | Zero Hedge

 This is a must read article. Here are some quotes that started it off. The more things change the more they stay the same. Watch out small investors and new buyers. Watch out.


“The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping.”David Lereah, NAR mouthpiece/economist – August 2005
“The steady improvement in home sales will support price appreciation despite all the wild projections by academics, Wall Street analysts, and others in the media.” David Lereah, NAR mouthpiece/economist – January 10, 2007
“Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country. We expect a seasonal rise of inventory this spring, but it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth.” – Lawrence Yun – NAR mouthpiece/economist – February 21, 2013




Bob Woodward: Obama's Sequester 'Madness' - Business Insider

Bob Woodward: Obama's Sequester 'Madness' - Business Insider

I am sorry, but Bob Woodward sold America out in supporting the Iraq War, an illegal war, as John McCain said, for oil. Woodward wants the US to invade Iran which would be a big mistake.

He has already proven he is not interested in the security of the United States, but is more concerned with the security of Israel. I believe Israel is capable of defending herself. The US should not invade Iran, which could involve the Russians and lead to WW3, THE LAST WAR.

After WW3 the world will be incapable of fighting any more wars.

Anyway, here is proof Woodward lied for Bush/Cheney in rallying US support for an illegal war:




Tuesday, February 26, 2013

Judge tosses mortgage 'robosigning' case in Vegas - Business Insider's Conflicted History

Judge tosses mortgage 'robosigning' case in Vegas - My News 4 - KRNV, Reno, NV

Robosigning, and deceptive mortgage handling practices are not rackets according to our pathetic justice system. There was an obscure article on Business Insider that should have been on the front page but wasn't, exposing the rackets of the banks. Now we see that the judges are still in on the racket, and robosigning is not a crime in Las Vegas.

I wonder if Henry Blodget, owner of Business Insider, forgot about this article by Larry Doyle, that got a whopping 220 pageviews! That means no one saw the article, because when an article like this makes the front page of Business Insider it should have thousands of views. This was a very important article.

Now, BI did run a few articles on Robosigning. But I didn't see any other articles exposing the fraud of not counting these crimes as RICO crimes. RICO could have put banksters in jail. They are teflon, the true mafia dons now.The banksters are the mafia dons, not the gangsters.

Racketeering was even in the initial criminal complaint cited by Mr Doyle. Which banks were accused of racketeering? This is what Larry said and the banks involved in this racketeering charge:

Banks “engaged in a pattern of unfair and deceptive practices” and made “false or fraudulent” claims to the federal government, according to an eight-count complaint filed in U.S. district court for the District of Columbia.
A “pattern of unfair and deceptive practices”? As in “on a regular basis” or as a “normal course of business”? In layman’s terms, can you spell, R-A-C-K-E-T??!!
In settling, the five banks—Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co . and Wells Fargo & Co .—neither admitted nor denied guilt.
Larry has said that the banks did much more than just robosign, which is a fraud upon the court. That judges could care less about fraud on the court is just disgusting. These judges are disgusting. But the banks did much more: the banks were alleged to have overcharged, and done other things against the populace. All of this is pattern. In RICO, intent does not have to be proven, only a pattern of corruption. But these banks are above corruption because our justice system has failed America. 


The Las Vegas decision (link above) is disappointing, but shows the absolute corruption of the justice system. Robosigning was a fraud on the courts and the courts don't care.

But for Henry Blodget to say in a post in an article on BI that he is tired of people calling these bankers criminals is as disgusting as the banks' behavior, which would have been subject to RICO in a just world. Las Vegas is just the culmination of a process started to absolve the banksters of crime. But saying it isn't crime, Henry Blodget, just doesn't make it so.





 

Bloomberg’s Awful Comment; What Can We Say For Certain Regarding the GSEs? | Rortybomb

Bloomberg’s Awful Comment; What Can We Say For Certain Regarding the GSEs? | Rortybomb

This article is a basic primer on how the GSE's interacted with the housing bubble. They had little to do with the housing bubble. I suggest everyone read this article.

This is the disturbing lie made by Mayor Bloomberg:


It was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp….But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody.

But Rortybomb proves that this deflector for the elite, king of shitheads, is full of same. 

Obama Signs Financial Reform -- Including Movie Futures Trading Ban | The Wrap Movies

Obama Signs Financial Reform -- Including Movie Futures Trading Ban | The Wrap Movies

Most people didn't see this. But movie futures cannot be traded. You can't bet on whether a movie will do good or bad at the box office. Can you imagine Cramer types floating rumors about films that were untrue? Hedge funds could have destroyed the industry.

Movies join onions as the only items not permitted to trade on futures markets. Now if we can add foodstuffs and oil America may one day recover.

This article is old, 2010, but got virtually no press at all. There was a little more press when the Senate passed the original bill, signed by Obama later. 

JPMorgan to trim 4,000 jobs, many in consumer bank - WSJ.com

JPMorgan to trim 4,000 jobs, many in consumer bank - WSJ.com

JP Morgan layoffs are just more proof that the consumer is dying and that the Federal Reserve is propping up assets in order to kill the consumer. The consumer cannot afford the inflated prices of assets that come from speculation and a weakening of the dollar. Speculation is the central way bankers skim profits from all of us. It must be modified and big investment banks should not be able to take large positions in the futures markets. 

Monday, February 25, 2013

Top 10 Ways the Elite Waged and Are Waging Class Warfare Against Us

I hope you take seriously this summary of the top ten ways the banker class took advantage of main street and weakened the middle class. Glenn Beck and the demagogues, some of whom say they are Tea Party people, will tell you that corporations are the victims and borrowers are the ones who took advantage in the credit bubble I am here to tell you that these people are liars and that they support thieves. I can prove that Wall Street has waged class warfare against Main Street, or Mainstreet. Here are the Top Ten Ways that Wall Street bankers, in collusion with the central banks like the Federal Reserve Bank, have waged relentless war against the average guy in America, and will likely continue to do so:

1. They offered ponzi lending loans to mainstreet, in a way that they never did before. This ponzi lending was a premeditated scam established at Basel 2 in Switzerland. Loans reserved for people of means were handed out to everyone, sans sound underwriting. People need to understand that this easy money scam played out in unique ways country by country, but that it was a worldwide scam, the biggest ponzi scam in the history of the world. Ireland, Spain, the USA and more countries are victims or soon could be victims of this scam.

2. They offered exorbitant and immoral usurious payday loans to the poor with obscene financial returns. These loans were set up to fail so that the banks could maximize the fees that they charged. The ponzi, doomed-to-fail mortgage loans that followed were patterned after these ponzi payday loans. Fees became the way banks made a lot of money off of an unsuspecting borrower.

3. They use QE (quantitative easing) to inflate the price of assets and commodities like gasoline. This is basically a direct theft from the pocketbooks of mainstreet and the poor.

4. They seek government guarantees of all loans through Fannie Mae and Freddie Mac, leaving the taxpayer on the hook and putting at jeopardy programs that help mainstreet. This creates moral hazard, because lenders will take liberty to loan recklessly as they did leading up to the credit crisis. It is the plan of Basel 3 and the central banks to continue to put governments and taxpayers at risk through these guarantees.

5. They rig the stock market so that Wall Street insiders win and mainstreet patsies lose, according to an esteemed professor, Peter Morici. I have also warned about this manipulation of the stock market. 

6. They made foreclosures on properties in default without proof they even owned the mortgages. They did this to avoid paying fees to state governments each time the note was transferred in the ponzi scheme to defraud investors the world over. They hid the notes from the investors in the first place, not transfering them to the trusts when the mortgages were originally packaged. This was a massive scam.

7. They have restarted securitized loans leading to no-money-down ABS (asset backed securities). This is certain to cause failures in car loans, in easy money credit cards and in home equity loans that are included in the ABS market.

8. They seek to restart dangerous securitized lending in the private MBS (mortgage backed securities) markets which could lead to the same banking crisis that we had before.

9. They seek cuts in government services for people who need them even though the ponzi housing loans, unregulated derivatives markets and bank bailouts led to the government financial crisis in the first place. In other words these thieves got their money and they don't give a damn about the collateral damage to mainstreet. 

10. They attack anyone who seeks to correctly place the blame for the credit crisis as being engaged in class warfare. Well, what did we expect! They continue to lie about who is to blame for the credit crisis!

Basel Commentary from Awhile Back

Basel is the seedbed of central bank financial schemes and scams. I wrote these awhile back on a blog that I will be discontinuing. The issues about central banking and attacks on main street continue unchanged:

Basel Part One:

Patrick Henry said, "Give me liberty or give me death". The liberty he was talking about was freedom from the Bank of England and control over the money supply. Well, Basel 3 is about to take away our freedoms again. I have argued that the central banks allowed the ponzi housing scam, the dot com scam and orchestrated bank bailouts. But Basel 3 wants to establish taxation without representation. In an article by John Carney at CNBC (one wonders why CNBC who shills for banks even allowed the article), the Basel 3 plan is exposed. This plan is to require banks to purchase Fannie and Freddie mortgage backed securities and get so deep into Fannie and Freddie, that no reform of the GSE's will be possible.

That means that if you took away the government guarantee, Fannie and Freddie would no longer be tier 2 required capital for these banks and another banking crisis would be baked in. As Carney says about this revision of the Bear Stearns Rule: 

This creates a huge subsidy for Fannie and Freddie. Banks will load up on GSE obligations, especially in an era where central bank reserves and Treasury bond yields are being depressed by policy-makers seeking to keep sputtering economies afloat. This artificial demand will scramble market signals about the risk taken on by Fannie and Freddie—all but ensuring that Fannie and Freddie will once again unwittingly take on more risk than they can handle. In short, the very same toxic situation created by the once implicit government subsidy of Fannie and Freddie is being baked right into Basel III.
Perhaps even more troubling, this will create a vicious cycle that will make reform of Fannie and Freddie next to impossible. Once banks have loaded up on Fannie and Freddie obligations, there will be no way for the U.S. government to remove government guarantees without triggering a liquidity crisis in banks around the world.
Link: Carney Article


Basel Part Two:

As I started discussing, the sovereignty of the United States is at stake in the Basel 3 revision of the Bear Stearns Rule. The Bear Stearns rule requires liquidity for the international big banks. The Bear Stearns Rule is to be revised to require the purchase of GSE mortgage backed securities. This is not a benevolent action by the World Economic Order. Indeed, this is an economic attack by the New World Order of finance upon the citizens of our nation.

No longer could the congress have the choice to take away the government umbrella of loan guarantees from the GSE's, Fannie and Freddie. The market place may dictate that these loans not be guaranteed, especially in times of reckless lending. But of course, this would not be possible if the banks were into these GSE's so deeply that there would be no way congress could act.

It is one thing if congress had the choice to give or take away guarantees for loans. It is quite another if there becomes no risk for the investors, and any losses on the loans becomes a risk for the taxpayer who would have to rescue Fannie and Freddie whether they wanted to or not. Can no one see the diabolical nature of this move? The citizens of the United States would no longer matter. If the loans all went bad, the US taxpayer is on the hook. If the loans were toxic and doomed to failure, the banks who bought the loans and facilitated the scam would have no fear from government intervention. After all, Basel 3 aims to make the banks and the investors whole at all costs! This no longer becomes investing, as with risk, but rather becomes a skimming of profits and a safe investment at taxpayer cost.

Then, what will happen is that the taxpayers will rebel against the poor in our society, rather than the scamsters. That is what is happening now. The Tea Party is even now taking it out on the poor, the borrower who was scammed, and the guy on unemployement, and is shielding the cause of the ponzi housing scam, the central banks and TBTF banks from fault and blame. Is the Tea Party now for perpetual taxpayer bailout of the banks? This is what happens when you trust banksters, Tea Party. What say you now?

Basel Part Three:

Lets see what abuses could come from the Basel 3 effort to add GSE bonds to tier 2 capital requirements of the TBTF banks. Well, certainly, mortgages could be like treasury bonds. In times of crisis, the banks could go to the discount window, borrow low, and make a great return on the difference between the mortgages and the discount rate. Oh wait, that already happens. But with Basel 3, the mortgage backed securities could come with no ability of congress to EVER pull back on the guarantees. This establishes moral hazard. Investing in MBS would be just like investing in treasuries with an ironclad guarantee that eliminates risk. It is coming folks. Fascism from Basel I call it.

Certainly you would think that the elimination of risk would keep interest rates down and keep the government solvent. However, if there is no failure on these loans, who cares about the underwriting quality. Just lend, lend, lend and let the chips fall where they may. Basel 3 is very interested in eliminating moral hazard they say. But they really want moral hazard. Moral hazard gives them the power to manipulate markets.

Is this the twilight of economic and political freedom? Banks could behave in any manner they want and buy any crap mortgages they want and there is no escape from moral hazard whatsoever, except to the taxpayer. This is not how investing is supposed to work, but then again, bondholders of TBTF banks already have no moral hazard, as these banks will not fail. So, the casino can lever up all these investments to the moon, and the rich will get richer, with no risk!

I see loans of all shapes and sizes coming on line with this scam. We could have 200 year loans, where people would pay more for the loans than rent, and still not own in their lifetimes. What a scam. If you think that is farfetched, read this.

Is this the death of democracy and of capitalism, to allow banks a permanent kitty of bailout money until mainstreet is completely destroyed?

Link: Suntrust Approves of Diabolical Plan to Create Moral Hazard

Italian Election Results - Business Insider

Italian Election Results - Business Insider

Joe Weisenthal, chief editor at Business Insider has article after article opposing austerity for governments, especially when GDP is dropping. Well, Italy's GDP is going to hell in a handbasket and Joe is over there reporting that low borrowing costs because of policies that kill the GDP are good.

Joe Weisenthal needs to make up his damn mind as to whether austerity in the face of GDP is bad or if growing the national economy is better. It is better, but Joe seems to have changed his mind against that.

Austerity is hurting the UK and Italy, and it could throw the world into a worldwide recession. Wake up people. Italians hate the unelected banker technocrat, Monti, who instituted the austerity which is NOT WORKNG.

There are three things the bankers want, since Andrew Mellon in the Great Depression. They want:


1. Percolation, or supply side economics.

[Of course their supply side never goes to small business who create jobs, only to real estate and banksters. Small business has no access to supply side capital markets! Only businesses that can hurt main street have access to supply side capital!]

Percolation doesn't work in a credit depression. Banks won't lend, and their easy money of the Roaring 20's turned to fear to lend in the 1930's. Why didn't they just lend with better underwriting in the Roaring 20's?

2. Speculation in stock and commodity futures markets to run wild.

[This drives up the cost of living for everyone else. But if the banks screw up, the people must suffer the pain, not the wealthy.]

Andrew Mellon was secretary of the treasury throughout the entire Roaring 20's until 1932. He was popular as long as the easy money flowed. Ultimately he was not a popular man, allowing all manner of speculation and bank lending easy money until it all crashed in 1929.

3. Austerity

[Andrew Mellon said:  "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.... That will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people."]

Since the banks outside the Federal reserve were allowed to fail like the shadow banks of our era that offered bogus second or piggyback mortgages, the stock market crashed in 1929. Mellon wanted the people to pay for the bankers' mistakes, just like today! They make money speculating, using supply side economics to make easy loans. The result is contagion and then the bankers want austerity from everyone else.


It was the failure of the Bank of the United States, which preyed on Jewish immigrants, that started the contagion. And it was started by second mortgages gone bad! The more things change the more things remain the same. 



Sunday, February 24, 2013

Business Insider Comment's Being Deleted. Post at Seeking Alpha and Patrick Instead

I actually love mixing it up at Business Insider. Henry Blodget's blog makes me think. And sometimes a lot of truth about the economy, and even bankers is shared there. There needs to be more talk about the evils of the big boys speculating but that is for a different article.

Someone has commandeered the Business Insider commenting system. There system is in the dark ages compared to Seeking Alpha, another Yahoo news source. Seeking Alpha has articles that are more in depth, in many cases. Lots of Business Insider traffic comes from fluff articles about fashion and someone selling a valuable house, etc. Seeking Alpha is nuts and bolts about investing and even about the dangers of investing.

Yet Seeking Alpha is gaining readers as Business Insider, still one of the most popular websites in the world, is losing readers.

I made an Alexa rank comparison today, with Seeking Alpha moving up to 450 most popular in the world, while Business Insider drops to 405. I am wondering if the drop at Business Insider has to do with a few insiders as they call them, getting comments seen more than the rest of us who comment. It is a system where comments are hidden for the rest unless you specifically click on those to be shown.

That discourages commenting. Yet commenting at Seeking Alpha is robust and you will be seen, not shoved into oblivion like what is happening at Business Insider.

Then you have comments being deleted as being offensive at Business Insider. It is annoying that whole lists of comments can be deleted. This is likely not being done by BI, but by folks taking over the site and clicking on the offensive tab en masse. I don't know for sure, and I will update this article as soon as I find out.

But as it stands, adding this annoyance to not being an insider, even though I published over 60 articles there, is a pain. I have recently published an article at Seeking Alpha that was accepted, while it was rejected at BI.

Here is the article: Is May 6 the Day of Reckoning for the New Housing Bubble?

I had to add an investment strategy in order for the article to qualify after it appeared on this blog here.

But anyway, my frustration with Business Insider has more to do with the acceptance and publishing of comments. I had a good run there. I had over 60 articles published as I said. I will submit from time to time and may get published again.

I like to get my viewpoint known, and understand that there is no pay in it, although I may try to submit an article to Seeking Alpha that is original, not from this blog, and get paid. We will see.

But the point of this article is that the commenting system at BI sucks. They need to fix it. They need to include everybody.

I highly recommend Seeking Alpha as a place to make your opinion heard, as well as Patrick.net where you have forums based upon subjects. Patrick has done a good job being a hang out for those with a point of view on real estate and real estate scamming by the uber connected. 

You can post articles that you find helpful at Patrick.net, and even use a browser button to do so. I will continue to post BI and SA articles at Patrick, and hope BI gets its act together regarding the posting debacle.


Saturday, February 23, 2013

Will the USA Declare Independence from the Private Federal Reserve Bank?

The German Finance Minister, Wolfgang Schauble, as many of you know, has said that the Federal Reserve does not know what it is doing. It has been translated that he said Bernanke is clueless, but really, he said that they know they don't know what to do. That means they have a clue that they don't know. What a relief!

But seriously, the implications of what the minister said is disturbing. He is saying that there already is enough liquidity in the system. Of course we know what he really is saying, that the issue is not about liquidity, but rather is about solvency.

The TBTF banks, with their interactive, and radioactive counterparty risk, are insolvent. It is most likely that off the bat, Bank of America and Citibank would be insolvent, with JP Morgan and Wells Fargo potentially insolvent if the other two fail. So then, all these trillions of dollars of debt and bailouts that include giving money to the banks in exchange for toxic assets, is a failure.

We are Japan. We are carrying banks that cannot lend, and liquidity is simply sopped up by the banks in order to hide losses. The disturbing thing about all this is that this minister would not likely say this if it weren't true. That is what is disturbing. Bernanke owes us an explanation because things are not getting better on main street.

 But we know that the central banks do not have allegiance to main street, only to their big banks. If you understand that you will go a long way in understanding why they let bubbles go unpopped!
 

Ben Bernanke is No Hero

What Americans need to realize was that Ben Bernanke prevented an economic meltdown caused by the Fed itself! The Fed private bank allowed off balance shadow banking approved by Basel 2 to come to the shores of the US and Greenspan and Bernanke looked the other way while the ponzi loan machine was undermining the sound value of US real estate! For a more complete understanding of the Fed's involvement in the housing bubble one only has to read my hub about Ponzi housing.
So when we have these Fed bankers coming on, saying how great Bernanke is, just remember that he helped to almost bring the system down. In the real world, if a Fireman burns down a forest so he can go in and put the fire out he is a criminal.

While there may be a case for bailouts by the Fed and by our government of big banks, there is no defense of the Fed letting CDO's be sold all over the world. That messy fraud was permitted by Greenspan and Geithner. I would like to see the Fed nationalized, with strict penalties for failure to regulate. I don't know that ending the Fed would be such a great idea because that would allow for rogue banks even more so than now. I would rather see the Fed taken over, with the international cabal on the outside looking in. Failure to prosecute bankers who needed bailouts was a big mistake. There has to be a price to bailouts because they weaken the sovereignty of the nations.

The Federal Reserve is not watching out enough for asset inflation in an age of globalization. Asset inflation is damaging to the soul of America, because Main Street cannot recover when prices are soaring for basic commodities food and oil. Speculation is allowing this onslaught by the Fed. Wages stagnate as America strives to compete in a globalized trading environment.

Even Nouriel Roubini and Bill Gross of Pimco, and others have argued that the Fed has not taken care to protect recoveries by stopping asset inflation. Congress could ban a lot of excess speculation in the futures markets simply by not permitting the investment bankers from taking large positions in the futures markets. 

Asset inflation is hitting real estate as well. It has been reported by Dr Housing Bubble that prices for homes in Culver City, California have doubled in price. Some would say that this is just getting back to trend. Yet, it is being done by investment bankers gone wild. So, more money and wealth continues to travel upwards to the uber rich, while the average folks cannot catch a break in SoCal with needed rent decreases. 


I understand the Fed is afraid to stop the pumping in deflationary times. But at some point the medicine of stimulus of the banks, and not main street, actually starts to really destroy the economic stability of MainStreet USA. We need more money to come to MainStreet, the true victim of this deflationary situation caused by the Fed and toxic loans in the first place!

So then, we have massive bubbles in all markets in various stages of maturity, with decreasing money finding its way to MainStreet. Asset inflation benefits only the very rich while destroying demand for MainStreet USA. 

I would much prefer a nationalized Federal Reserve that is beholden to the people  and not to the TBTF banks as is the case now.

Here is the court case proving the Fed is a private organization, with allegiance to the bankers first and to the nation second:

Lewis v. United States, 680 F.2d 1239 (1982)

 

 Hashtag #bullcrapben

 







 



Friday, February 22, 2013

Bloomberg Reports Biggest Story of All Backwards: Adler Uncovers Massive Deposit Bubble

Bloomberg Reports Biggest Story of All Backwards As Fed Blows Dangerous Deposit Bubble | The Wall Street Examiner

Mr Adler of the Examiner has discovered a massive deposit bubble. When there is a deposit bubble that comes from the Fed there can be only one outcome, bubbles in all manner of markets. This madness could do great damage to main street, especially if it finds its way into housing. All that is necessary is easier terms and a housing bubble could explode.

Then borrowers could be blamed for another housing bubble. Truth is, the Fed is trying to set one up! My other articles show that this is indeed the case here and here.  

#bullcrapben 

Evidence Oil Is In A Bubble - Seeking Alpha

Evidence Oil Is In A Bubble - Seeking Alpha

The author says we are experiencing parasitic economics. That means, oil should not be worth over 70 dollars per barrel. It may crash, for awhile. But we will see how strong the ability of the sucking parasites, the investment banks, can keep the price up and America broke. I hope the author is right and that at some point we will see relief at the pump.

You wonder if the Federal Reserve is serious about a recovery on main street or is just lying that they want that recovery. High gas prices won't get us anywhere near a recovery. 

Thursday, February 21, 2013

Sometimes You CAN 'Fight The Fed' - Business Insider

Sometimes You CAN 'Fight The Fed' - Business Insider


Easy money can ultimately destroy demand, as there is liquidity rampant at the top and a liquidity trap on main street. I would add to this article by saying QE is pushing money to the top, when it should be going to the rest of society. That money going to the top increases speculation. This article acknowledges that asset appreciation cannot help main street recover. Important reading that is worth your time spent.

Poll: Obama Approval Rating Hits High, Republicans Low - Business Insider

Poll: Obama Approval Rating Hits High, Republicans Low - Business Insider

This goes with my theme of the lesser of two evils. While both parties are beholden to bankers, they have different goals as far as foreign policy, and help for the average guy on main street.

Here is what we know:

1. Will Rogers said bankers cause depressions. Both parties were in on that.

2. The Democrats helped the people more in the Great Depression and they seek to help
the people more in this Great Recession that may turn into a Great Depression. We hope not!

3. The Republicans want to push for US military supremacy over the Russians and Chinese. This is
a bad idea that is opposed by many Democrats.

4. Both parties are drone crazy, with many innocent people dying. It is, frankly, disgusting.
Obama is trying to set some guidelines for drones, which would be better than what we have now. IMO drone activity is a war crime in many cases. 

So, while both parties suck, the Republicans suck more.

Wednesday, February 20, 2013

Herbalife to change customer classifications, says has spoken to Icahn | Reuters

Herbalife to change customer classifications, says has spoken to Icahn | Reuters

There is bad blood between hedge fund moguls Bill Ackman and Carl Icahn. Recently, Acman shorted Herbalife, claiming it was a ponzi scheme. Icahn says it isn't and it has always avoided that label with the law. So, I think Icahn wants to win this so badly that he is willing to take the company private.

It would not surprise me that he wants to at least rattle Achman's cage. Regular investors would do well to stay away, but Icahn has the money available to bid for Herbalife. Some brave souls may want to profit off of a short squeeze.

I am not a financial adviser so don't blame me if you lose your shirts. But it is tempting because just a rumor of a takeover could cause a short squeeze. Ackman would have to have cajones of steel to not buckle at a strong rumor. 

Wall Street Banks More Dangerous - Business Insider

Wall Street Banks More Dangerous - Business Insider

Wall Street banks are held to different accounting standards than the real world banks everywhere else. This is such a scam. Using real world, international standards, JP Morgan only has less than 4 percent capital reserve. That is TERRIBLE. 

The toxic loans are still on the bank balance sheets. The author wants austerity, as he writes in other articles. Therefore, I posted these responses to this really good article:

Then certainly he [author] needs to know that we can't cut government stimulus if we hold the banks to the correct standards. It would double tank the economy. He needs to make up his mind whose side he is on.
What I was saying is that we need to up the assets of the banks, but it would tank the economy if we did austerity measures against the masses at the same time.

Still, this is a very informative article, and our banks are not out of the woods if the strongest one, JPM, only has assets in the 3 percent range. 

Tuesday, February 19, 2013

My Discussion with Marcus at Patrick.net

I decided to respond to a discussion with Marcus, with an article showing that stocks and commodities can actually act like the underlying commodities they represent. They become scarce and price is affected regardless of the supply of underlying commodities. I posted this at Patrick.net in response to Marcus:

Again, maybe you should read this and find out you don't know as much as you think you know [Marcus and I were actually arguing past each other as you can see if you read on:
http://seekingalpha.com/article/1189671-cash-hoards-on-the-sidelines-and-the-great-rotation-old-myths-meet-a-new-reality

From the article, James explains that the amount of available cash and the amount of available stock are usually constant, but now are NOT constant. Therefore, a large increase in available cash, with the inelastic availability of the financial product, and that could be stocks, commodities or houses or anything that is sold, will push the price up.


I said:

So, what James is saying is that the underlying commodity, ie the value of a company, or the supply of oil, may be relatively constant, but in this age of imbalance, there are too few dollars chasing the contracts, stocks, financial products. 

The products themselves start to behave like commodities, with fundamentals not being important.

And Marcus, that is exactly what happened in the housing bubble. The house became a liquid asset, with too much money chasing too few houses. Prices were distorted. Same happens in all financial when there is easy money, and for investments the banksters have way too much easy money.

Another similar view is posted here.


And, finally, proof was given by David1 who commented at the above Patrick.net link:

[About] specs driving the prices up. Look at the collapse in 2008. $100 in 2-3 months price collapse. This was as panic was setting in - this wasn't oil producers suddenly opening up the floodgates on oil supply - it wasn't global demand fallng by 50% or more - it was panic selling by specs. The recession was caused by a credit crunch - the global economy might have retracted by 10% at the worst. Nowhere near the level needed for a price collapse of that magnitude.
So then, as David astutely says, we know by the collapse in 2008 that oil supplies were fairly steady. The only reason for the collapse was lack of credit for the speculators! That is why oil prices remain too high today.

As for today, David1 observes that the number of players has increased in the oil market all moving in a net long direction, and that this movement is in the contracts rather than a reflection of the fundamentals relating to the oil markets.

It is a scam folks, and we all are paying for the scam in the form of higher gasoline prices at the pump. 

Marcus finally understood that I was not saying a few wealthy players should try to corner a market. I am saying an industry is cornering the market, and that industry is pushing up the price of the underlying commodities. He didn't disagree.

And what industries are subject to bubbles? Every one of them because of so much easy money. I said to Marcus:

Well, as James said, it could apply to any industry and any bubble. It could apply to stocks, commodity contracts, houses, gold, bonds, etc.
The first time I saw stocks act like commodities [instead of like reflections of actual value of the companies] was in the dot com bubble. It was a phony bubble generated by lots of easy money and marginal buyers, and the stocks were in such demand that the price had nothing to do with fundamentals [of the companies themselves].



Say No to Recourse Loans

Recourse loans add risk to the borrower. If you get a recourse loan, or a heloc that has a recourse element to it, you could be responsible for the difference between what you sell the house for and how much you still own on your loan.

In recourse states, banks could come after you if you default on the loan. In non recourse states, the banks have a choice whether to come after you or get the house back, but not both. Therefore, recourse states give borrowers a much greater risk for assuming a loan. House prices should be less to reflect that risk, but rarely are.

States that do not have recourse loans have non recourse loans. While getting a mortgage there is risky in these times of volatility, they are less risky than getting a mortgage in Nevada or other recourse states. And of course, pulling equity out of your house in any state could result in a recourse situation.

Auto loans are all recourse loans. Your car gets repossessed and then they sell the car. If the lender gets less than what is owed on the loan, he can go after you for the difference. Having that sort of loan on a house is very risky. You can't screw up. You have a cloud hanging over you if you default even if the lender does not immediately go after you for the difference.

States have judicial and non judicial methods of foreclosure. Here is information about state foreclosure and recourse/non recourse laws from About.com and more information from the same site:


If Walmart Shoppers Are Broke, Then We're All In Trouble - Business Insider

If Walmart Shoppers Are Broke, Then We're All In Trouble - Business Insider

Here is another stupid Business Insider article that says the problems with Walmart revolve around the 6.2 percent payroll tax, up from 4.2 percent,  that works out to 60 bucks a month for a guy making 40k per year. I responded with my usual frustration to this thoughtless reporting:

 Here is the problem the execs at Walmart are more concerned with oil prices and food than they are about the 6.2 percent payroll tax rise. Why is BI a broken record on this.

This article says: When the payroll-tax break expired at the end of last year, Americans started paying 2 percentage points more in Social Security taxes on their first $113,700 in wages, Dudley reported. That's $60 a month for someone making $40,000 a year.

Ashley, that is PEANUTS compared to gasoline rising EVERY DAY. What is wrong with you people?
and:

This is what the Walmart execs said and it wasn't about a payroll tax:

The company’s Chief Executive Mike Duke said in a pre-recorded call the discount giant’s “core customers remain cautious about their finances.” “You can expect us to invest even more in lower prices,” he said.

Company executives said while Wal-Mart is cautiously optimistic about the improved employment reports, gas prices that have crept up again remain a concern. On the grocery front, while inflation is moderating, it continues to be an issue for many of the company’s customers.


While it is true that emails exist that show Walmart executive concerns based upon the payroll tax, when push comes to shove, they are more worried about the price of gasoline and foodstuff. Business Insider appears to be ignoring this fact.

Retirees Are the Casualties of the Currency War: Schiff | Breakout - Yahoo! Finance

Retirees Are the Casualties of the Currency War: Schiff | Breakout - Yahoo! Finance

First of all, Peter Schiff is a libertarian who believes that racism should be a civil right, similar to views held by Rand Paul. This is wacko. The only reason he gets heard is because Schiff is in the 1 percent, IMO.

As far as the currency is concerned, that is small compared to the massive speculation that is occurring with the Fed's easy money. It pushes up the price of things that directly impact folks on fixed income.

Yes, currency wars don't help, but they aren't as bad as the easy money that goes into banks who speculate in futures contracts, driving the price of those underlying commodities up. Scarcity is in the contracts, not in the underlying commodities. 

Monday, February 18, 2013

Obama, Housing and the Next Big Heist

Obama, Housing and the Next Big Heist: I previously supported the government's attempt to allow homeowners to get a chance to refi out of toxic loans. However, I strongly object to this part of the plan as uncovered by Mike Whitney:

 And Merkley’s proposal is just one two bills now awaiting congressional action. The other is the Boxer-Menendez bill which “promises lenders they won’t be forced to absorb the loss on refinanced loans that default.” (Bloomberg) Great. So, while the Boxer-Menendez bill will not refi loans that are not backed by Fannie Mae and Freddie Mac, (no “private label” loans) it will move (an estimated) one million high-risk mortgages off bank balance sheets and onto the public’s ledger. This is how the free market capitalism works in the US today; all the profits go to Wall Street and all the red ink goes to Main Street.

Certainly this would work as a stimulus to the economy and I understand that. And moving mortgages off the books of the banks will also ultimately cause banks to lend more money. Yet it really should be up to the banks to quit writing toxic mortgages in the first place. And it is clear that they want many, many more of those loans written as they seek to have all mortgages guaranteed by the government going forward.

Talk about moral hazard; that is moral hazard.And the rest of the article is devoted to the exposure of banks wanting loosened regulation so that those not qualified for mortgages will be able to get them, to the borrowers' peril.

Why Lincoln Warned Us Not To Surrender to Corporations. So did Hamilton

Why Lincoln Warned Us Not To Surrender Our Political Power - The Winning Words Project

Lincoln, and the so called libertarian, Alexander Hamilton, wanted regulation of corporations. We have fought for corporations' rights over our own, because the corporation controlled media managed to divide middle class and poor. And they won while the middle class and poor lost.

What the Heck is Going on at the Gas Pump? | Uncommon Wisdom Daily

What the Heck is Going on at the Gas Pump? | Uncommon Wisdom Daily

Here are some highlights, but this article is a must read:

1. World demand estimate has declined, but oil still goes up.

2. America provides 84 percent of usage through our own production yet we are held hostage to more expensive Brent crude prices. Speculation is rampant in London even more than here.

The article gives some great charts and facts. I believe the oil market is cornered. After all, one guy was able to corner the cocoa market. So clearly the investment banks have the power and the law behind them to corner the oil market.

This theft is destroying the working poor and causing Walmart to worry about their customer base. But the Fed doesn't care so long as the bankers make out like bandits. Oil and banking are closely intertwined.

Ok, I added my two bits, now read the article.

Since it is an investment article, the author gives ideas on how to invest in this environment. But if you don't care about that don't let it get in the way of the facts the article show regarding the evils of speculation and total oil supply and demand. 

Sunday, February 17, 2013

FHA; Is May 6, 2013 the Day of Reckoning for the New Housing Bubble?

Changes to private mortgage insurance (PMI), are coming on April 1, 2013, and May 6, 2013. In April a minor adjustment to cost will take place. But the dagger in the hearts of subprime borrowers everywhere takes place on May 6. On that day, all mortgages with less than 10 percent down (all FHA 3 percent mortgages are included), will require PMI for the life of the loan.

This lending website says this is a minor deal. Sorry, but it is a big deal. PMI has been required for 5 years. It will be required for the life of the loan for less than 10 percent down and 11 years for 10 percent to 19 percent.

The question is, will this destroy the infant housing bubble? I have explained that the housing market is too risky now, with few people putting a stable down payment. With the new FHA rules, the risk to borrowers increases greatly. Lots of folks need the car payment for the car not for insurance that retains lenders as the only beneficiary.

Private mortgage insurance, required on mortgages with less than 20 percent down, is expensive. And the cost can go up, leaving fewer buyers available to afford your house. Quite often, PMI costs as much as $1000 per year on each $100,000 dollars borrowed. So that works out at a 1 percent charge of over $160 per month on a $200,000 house.

Just remember, the extension of this insurance for the entire life of the loan could end up costing about 60 thousand dollars! Tacking that additional 50 grand (60-10) onto the price of a house payment is a big deal, not a minor adjustment.

While it is true that there are a couple of banks, like Key Bank, who take the risk on the loan and don't charge PMI, one wonders if they will be stifled at some point by the Fed, as well.

When homeowner equity exceeds 20 percent, the PMI can be cancelled by jumping through hoops. However, with house prices as volatile as they are, there is no guarantee your house cannot go down in value. You could be stuck with that PMI for a long, long time. Why should you be the guinea pig for the lenders' mistakes and greed when you can rent and invest the rest?

PMI was avoided by all the piggyback loans that were issued during the biggie housing bubble. But those loans went south and the default was huge. Now, with PMI that  could be tampered with and extended by the FHA, default could increase on those loans as well. Don't take on the risk that the banks should be taking. They are making the loan, not you.

So, will an easier money, no money down bubble be tacked onto this current FHA cash buyer bubble, to try to sucker more people into PMI? I am sure the insurance companies would love that. It remains to be seen if buyers will be suckered in again, but it is likely that the Fed and the bankers are counting on it. There are hedge funds who have borrowed a lot from the bankers, and they have been paying cash in bubble areas like Phoenix and Las Vegas, hoping to cash out at higher prices.

Increasing the PMI, in this economic environment will not cause prices to drift higher, in my opinion. It will almost be necessary for easy money loans with easy qualifying to become prevalent again.

This will not work out well for most borrowers. But it will make a lot of hedge funds, insurance companies, and even TBTF bankers happy. It all is guaranteed by the government now, so there is little risk to the bankers. Isn't that the way they want it, all the risk on the borrower and your government, and none on the bankers and their friends?




Mortgage bill faces tough road in Congress - Yahoo! News

Mortgage bill faces tough road in Congress - Yahoo! News


Truth is, the Republicans don't want homeowners to pay less interest. They would rather that the banksters take your home. These people who have never missed a payment are locked into a trap. And they are kept there by the Republicans because they are greedily in bed with the TBTF bankers.

There is no question that these homeowners are now under water. Allowing them to refi would cost the government money. But it is peanuts to what the bankers got in bailouts. And these folks paid their mortgages on time and are still getting screwed with the housing bubble, caused by the banks.

If the government cannot help here, boycott mortgages. Don't get one because house prices are volatile and could go up or down by thousands of dollars in a year. You are throwing the dice if you get a mortgage, especially a mortgage that stretches your budget. Beware people. 

The Republicans don't want to bail you out even if you are current. And the banks benefit in three ways, either getting government money for the refi or getting the mortgage payments as you are trapped by your high mortgage payment on a house worth little, or you walk away and they get their house back.

The  banks don't lose, but MainStreet is losing every day.

Update: Issues with the president's program

Saturday, February 16, 2013

The Problems At Wal-Mart Run Deeper Than Those Leaked Emails - Business Insider

The Problems At Wal-Mart Run Deeper Than Those Leaked Emails - Business Insider:

The problem with this article is what Walmart really said this about the money troubles of its customers:

The company’s Chief Executive Mike Duke said in a pre-recorded call the discount giant’s “core customers remain cautious about their finances.” “You can expect us to invest even more in lower prices,” he said.

Company executives said while Wal-Mart is cautiously optimistic about the improved employment reports, gas prices that have crept up again remain a concern. On the grocery front, while inflation is moderating, it continues to be an issue for many of the company’s customers.

So, I responded to a question about speculation in the comments section here.
OK, here is proof that the stock market can be subject to speculation, as the actual supply and demand of stocks, not the value of the company, determines price: http://say-no-to-recourse-loans.blogspot.com/2013/02/richard-wyckoff-method-proof-that.html

We know that the same principle is being used with regard to housing, as in the bubble crash places, cash hedge fund purchases have been running at 35 to 50 percent of all sales, with prices being driven up.

And here is a Federal Reserve article showing the speculation that results from purchasing a large number of contracts, so that the contracts, not the underlying supply, causes price rises: http://research.stlouisfed.org/wp/2011/2011-027.pdf


 Keep in mind, the Saudis warned the US government of this sort of speculation as we learned in Wikileaks.

Wal-Mart turns around U.S. unit, but at a cost - MarketWatch

Wal-Mart turns around U.S. unit, but at a cost - MarketWatch:

While Business Insider was foolishly worried about the tax increase on payrolls, we can see the real reasons for Walmart's concern about the customer base and their finances:

The company’s Chief Executive Mike Duke said in a pre-recorded call the discount giant’s “core customers remain cautious about their finances.” “You can expect us to invest even more in lower prices,” he said.

Company executives said while Wal-Mart is cautiously optimistic about the improved employment reports, gas prices that have crept up again remain a concern. On the grocery front, while inflation is moderating, it continues to be an issue for many of the company’s customers.
Of course, futures speculation by the uber wealthy and their investment bank helpers are the main culprits for this rise in grocery and gasoline prices. 

America at a Crossroads: Fight Class Warfare from the Top!

America Will You Let the Class Warfare From the Top Class Continue?

We have a choice in America. We can do one of two things:
1. We can massively cut spending, hurt mainstreet, slow economic growth, and let the banks create new ponzi schemes.
Or:
2. We can keep spending somewhat level, with a stopping of government growth, with targeted cuts, including military cuts, with controls on medicare costs, tax the top 1 percent, encourage savings in the private sector, and rein in the banksters, at least regarding housing and hedge fund activity.
The problem is, if too much government is cut, then there will have to be a lot of economic growth to make up for the lack of demand created in our society. The only way that this lack of demand can be supported is through another ponzi bubble, most likely in housing, although it could be in stock prices being artificially pushed up. UK consumer confidence is falling because of austerity.
To digress a bit, we need to realize that the Republicans and Democrats wanted the original housing bubble that went wild between late 2003 and 2007. But with the Volcker Rule getting some support, it was thought that the bankers would be reined in. This was a slow growth plan, and would entail government spending to help the classes hurt by banker ponzi activity. But with the 2010 election, the bankers gained the upper hand and the Volcker Rule is doomed as of the writing of this article.
The leader of this attack on the Volcker Rule was Republican Congressman Bachus of Alabama. This attack was all about giving banks the power to sponsor hedge funds. With this power, banks can invest in reckless lending, and create easy money scenarios once again. The shadow banking system can be reborn, and predatory loans can be made that are hard to pay back. Others, like Sensenbrenner, Republican of Wisconsin, and Michelle Bachman, of Minnesota, also oppose Dodd Frank, and ultimately the Volcker Rule, and HR 1081 is just one proof of that.
The Bankers-as-used-car-salesmen can once again replace the ethical bankers. So, America is at a crossroads. Do we want to feed the beast of Wall Street while cutting the crap out of mainstreet benefits again and again? Is this the nation we want? Don't be fooled, banks do not want to make money the old fashioned way, but rather they want benefits and taxes cut so that we can have money to bail them out again and again! If this is the America you want, you can have her.
Don't be fooled, the Republicans want guarantees of mortgage loans because, as I have argued, the big banks want these guarantees. And they want these guarantees whether there exists Fannie and Freddie, or whether they are privatized and go away. Bernanke has already advocated this, and we know that the New World Order of Finance is in charge. Don't be fooled by Michelle Malkin or these other Republican idiots. But whatever party succumbs to this flood of favors from the too big to fail banks, understand that once these banks tasted the riches that came from easy money, they are like crack addicts and want that high once again. And it will be at our expense!
I am no fan of the Democrats for what they did. But the Republicans want another bubble and they want to hurt the weakest in society, even by taking the meals of seniors away. It is disgusting to hear their spin on why they are not hurting these most defenseless Americans when they seek their demise. They accuse others of class warfare when they want no regulation of banks and want class warfare from the top down to continue. Remember, I pointed out in earlier writings that only about 1/3 or less of the subprime loans were made because of too much regulation through the CRA. No, most of the subprime loans were made by unregulated shadow banks supported by the major banks. Those loans were not guaranteed until the bailouts, but now these bankers want all 30 year mortgages guaranteed. I don't see Fox News speaking out against this. And the CRA made zero prime toxic, jumbo and option arm loans!
Michelle Malkin and Sean Hannity are void of conscience. They are part of the effort to let the banks do what they want. Either they are incredibly stupid, or they are part of the scam. I believe the latter, although I could be wrong. If you lose sight of this fact, that these Fox Minions work toward more banker advantage, whether they realize it or not, you fail to understand the new financial order facing us. Government used to be in charge of banksters, at least when they failed, as we saw in the Savings and Loan debacle. That power is gone. Wake up people!
So, Tea Party types, do you really care about the fact that massive government cuts could end up lowering tax revenue in the nation without Republican ponzi schemes? Have you considered that this is what is happening in Ireland? And Ireland is a little country that can attract business with low tax promises. The US does not have that capacity. Unless new industries are found or foreign nations grow, we will not be able to grow our way out of massive cuts.
We must not be afraid to peacefully protest, shun the financial products of the big banks, and save and even walk away from debt if we can. This is a protest against the New Financial Order, and is not financial or legal advice. I am not a lawyer nor am I an investment counselor, but I am mad as hell against this ruling class who is making war against us.

Friday, February 15, 2013

Business Insider is Being Idiotic Today about Walmart's Tank

I have read three articles at Business Insider today stating that the main reason business at Walmart is tanking is because of the 6.2 percent payroll tax hike. For a 40,000 year worker that is 15 bucks a week. If you make less, it is less. So BI is being really stupid here.

Gas prices are higher than ever for this time of year. That speculation, and also food speculation, is causing people to look for the best deals in the stores. Costco is so busy you can't walk around.

Speculation is killing people on the low end of our economy. That is what Business Insider refuses to acknowledge even though Bankrate.com did acknowledge the damage of speculation:

If demand for loans continues to be weak and banks do not want to lend at very low interest rates, then how might inflation result? One possible scenario has to do with the integration of markets and banks. To the extent the excess reserves find their way into proprietary commodity trading, that will help to push up the price of raw materials that are used to manufacture products around the world. The result will be the situation of cost-push inflation (stagflation), which will not stimulate output and job creation as the original intention to stimulate demand-pull inflation and the concomitant expansion of aggregate output.


That is not exactly a website that does flaming opposition to the banking community. It is time Business Insider becomes more bold about speculation and admit it is a big part of why the poor are becoming undone. When Bankrate is more forthcoming about speculation, then that Business Insider failure is a major black eye to journalism. And Business Insider has had articles by Henry Blodget and Joe Weisenthal actually playing down the affects of speculation.

So, then, the speculation we see hurting the average guy is deflationary, as spending declines. The policies of the Fed that Bankrate warned about are actually taking place now, not in the future. This is having the effect of creating an inflation in commodities and a deflation on main street. How long this will continue is anyone's guess. The private Fed and the government must attempt to get money into the hands of the people, not into the hands of those who bid up the commodities, the TBTF bankers and their buddies. 

Dear Chairman Bernanke... - Seeking Alpha

Dear Chairman Bernanke... - Seeking Alpha:

This article is a bombshell. Even those who seek to measure the state of the economy have fewer and fewer tools with which to do so, since the Fed and central banks have distorted the markets to such a large degree. I urge everyone to read the article. Lawrence Fuller writes:

"From my perspective, at a time when there is tremendous risk in the global economy and financial markets, we have an unprecedented suppression of the market's ability to measure or reflect that risk, because you have thwarted the pricing mechanism that rules free markets-supply and demand. You are attempting to engineer an economic outcome by manipulating the value of financial assets that should be reflections of that outcome, and not the catalysts to achieving it. The illusion of prosperity that you are helping to create is just that -- an illusion. Should real-world fundamentals continue to deteriorate, the illusion will lose its luster, volatility will soar, and financial markets will return to fair value. It is completely nonsensical to think that the solution to our economic plight is the same combination of low interest rates and abundant liquidity that led to the last crisis, especially when the primary benefactors are the same too-big-to-fail banks that built the last house of cards. It is naive to believe that they will be responsible the second time around. In fact, after the scandals at MF Global and JP Morgan, we know that they continue to be irresponsible."

Eventually, people will refuse to trust the illusion and fear will replace complacency. And it will come quick, like a financial sword, leaving the weak hands holding the bag as usual. One wonders just how long the charade will continue. The new housing bubble is being formed, and yet, it is pretty much a bubble created by and for the wealthy speculators, with most Americans opting out. The warning is, don't buy houses or stocks at the top, with the caveat that only the business insiders really know what that top is.

The warning Mr Fuller states is clear, in times of volatility, hold cash, the one thing Bernanke does not want you to be invested in. 

Thursday, February 14, 2013

Richard Wyckoff method: Proof that Stocks Are Commodities for Fraud

Richard Wyckoff method

The Wyckoff method proves to me that stocks are like commodities contracts. I have believed this to be so for many years. They are governed in price by supply and demand of the stocks themselves. This is similar to commodities futures contracts, where the contracts are what drives the price, not necessarily underlying supply of the commodity itself.

Great damage is done by hedge funds who manipulate these markets by driving up and down the price of the stocks, regardless of underlying fundamentals. Be they stocks, bonds, and now more than ever, the housing market, the Wyckoff method is used by hedge funds and private equity to shake out the weak hands who buy high. The goal is to buy low and sell high.

At some point then, to take from the principles of this article, the housing market at the top will be sold by the hedge funds and the housing prices will crash. This is a slower process, to be sure, than stock manipulation, which can be done in days or hours with high frequency trading mechanisms.

I cite this article for two reasons. It may be possible, for someone with deep pockets, to play with the big boys and some may be interested. But the second reason I post this is because it is highly risky, as the liquidity needed to play this game could be large. Watch out small investors!

Clearly, as I posted here, this method of stock manipulation is a fraud, a scam against the rest of us. And it has been played for centuries in some way or another. 

With regard to housing, I have said that the housing market is broken, as the 20 percent down thirty year mortgage has virtually disappeared. The hedge funds are buying with cash and we have easy money loans for the rest of us. This puts housing square in the way of massive manipulation by the predators. And this will do great damage to mainstreet.

For that reason I say, boycott mortgages unless you know you are at the bottom and don't use an easy money loan to buy at the top! 

The Richard Wyckoff Stock Trading Method - Business Insider

The Richard Wyckoff Stock Trading Method - Stock Manipulation from the 1930's 


PRESENTING: The Secret Trading Strategy From The 1930s That Hedge Funders Don't Want You To Know About


This is somewhat known to people, but I never knew there was a manual for hedge funds on how and when to drive stock prices up and down. The little guy could get killed in the cross hairs. Most interesting quote in the book:

"Those who understand it buy only when prices are low with the idea of selling when they are high; and they operate only in the stocks or commodities which they can move best so they may secure the highest possible rate of turnover of inventories."
Source: Wyckoff (1937)
This is one of the most important articles ever written on Business Insider. One interesting comment was made at the article, which basically noted that what used to take months, with manual trading in the 1930's now can be manipulated in the matter of days or even hours.

One interesting response to this article sums this up:

Break the law by coluding with others to drive a stock up or down and spreading fales rumors.

Wednesday, February 13, 2013

John Stossel Is Really a Crony Capitalist!

What people need to understand is that John Stossel is not what he represents himself to be. He is a crony capitalist, and wants to protect this predatory system. I know, he says he is not a crony capitalist. But when you blame the poor and the CRA instead of going after the shadow bankers who made the majority of the bad loans and who were coddled by Greenspan and the central banksters at Basel 2, then you are obscuring the issue. And when you don't speak out against Rick Santelli who said that people just made a bad bet and were "losers", when they decided to get a mortgage no money down, then you are crony capitalist. Santelli is the epitome of crony capitalism, because real responsible bankers, not scam artist bankers, actually care what kind of loans their customers get. They actually care to protect their customers from making bad bets and becoming losers.
The Tea Party leaders, Stossel, Santelli and his CNBC buddies could care less about putting a curb on the leverage practice of the big banks.. Their view is that you let the banks leverage up again and then just don't bail them out. While I don't support bailing them out either, think about what that easy money would do to the average guy on the street if he is caught up in another bad mortgage scam! It is the responsibility of bankers to make sure people don't get too much mortgage just like it is the responsibility of a used car salesman to sell you a car that is worth what the dealer says it is worth. The Tea Party, Santelli, and Stossel don't seem to understand that. So they can say they are against crony capitalism but it doesn't mean a thing.
Stossel then makes the case that taxation is stealing. I would say that taxation without representation is stealing, but that taxation in and of itself was never considered by the founding fathers as being theft. Stossel, by using these hot button issues, gives the appearance of being of the people, but don't be fooled. He is for the banksters.

John Stossel Patsy for the Bankers?

I am going to expose John Stossel for the man he really is. If you care to read on you will see, as I prove, that this man is clearly employed by and gets talking points from the predatory order. Or maybe he is just not very bright. However, I doubt the latter.
I am going to prove that Stossel is a crony capitalist because he blames the poor for credit costs in society and because he wants banks to be able to leverage up again, which will cause mainstreet to be scammed in the future. He says he wants the banks to fail and not be bailed out, but the leveraging up is predatory, as Stossel is predatory. Stossel is a bank patsy who wants credit scamming through high usury and easy money loans to continue.
John Stossel of Fox News is blaming the Democrats for higher fees on credit cards. Actually the Democrats did some things to lower the fees. They didn't do enough to help credit card holders, however. But, Stossel believes that the banks must gouge you one way or another. He won't admit it, but he is basically teaching this. If you have a so-called friend of conservative mainstreet telling you that you will get gouged, no matter what, so you may as well lie down and take it, would that be acceptable? Of course it wouldn't be acceptable. John Stossel is no friend of mainstreet.
John Stossel loves the bankers. But what he doesn't realize is that people are on to him. We know what he stands for. He stands for ramming some bank fees down your throats. And he blames poor people for the fees. What people don't realize about Stossel is that he is wrong to state it is the fault of poor people, because in fact, it is a function of the banks giving out credit where they should not have with loans that were doomed to failure. The entire payday loan business is based upon the loans failing with the collection of fees! Stossel won't tell you that, but that doesn't mean he doesn't know it. And if he does know how the scam works, then he is morally bankrupt for not reporting it.
With regard to these payday loans, the government must restructure them, or outlaw them. They must be loans that are not based upon usury, and they must be loans that are based upon the success of the borrower, not the failure of the borrower. John Stossel gives a choice, saying they can either stay how they are or be abolished. That is contemptible of him to not call for restructuring of the loans. Bankers in the past attempted to help borrowers and help their communities. Stossel is defending the indefensible.
With regard to housing, John Stossel actually admits that ACORN/CRA was just a small percentage of the subprime loans. But he dwells on the ACORN issue far longer than exposing the greed of the banks. He can't expose the greed of the banks because he has a 6 part video series where he defends greed as being good. But greed is not good. And Like Faux News itself, he dwells on the smaller CRA scandal of making some regulated banks loan to unworthy borrowers. But as I have proved, the shadow banks that had nothing to do with the CRA did much more to hurt mainstreet and fuel the housing bubble.
But why does Stossel blame government, while seeking to deflect blame off the banksters who caused the bubbles with the help of a government they paid for? Why does he do this? Because he wants the banks to have a business model unimpeded with regulation. Why else would he deflect the blame off the banks that, through Basel 2 in 1998, were clearly at fault for the easy money loans? Is it because he wants the banks to role the dice again on easy money loans? He says he doesn't want that, but by limiting government power to regulate he is like a guy who wants to pull the referees from a basketball game. Now some Republicans want to ban the words "shadow banks" from an official explanation of the credit crisis. These are a bunch of damn traitors and Stossel is playing the same sort of game.
While I would agree with him that the regulators did not do their jobs, we still need regulators. I would like to see stiff and automatic jail time for regulators that allow bubbles and allow banks to become insolvent without bailouts. That would fix this problem of lax regulation. But we know that won't happen. One of the reasons serious regulation will not be implemented is that the big banks are having so much trouble making money, and so they charge these stupid fees coming and going.
The big banks have trouble making money because they handed out way too many bad loans now festering on their books from when they pulled the underwriters. Stossel should know that this bankster-caused housing bubble was the height of irresponsible lending practice! Still, Stossel wants to blame the poor and not the banks. I guess it is all about who delivers your paycheck. This is like a circular nightmare, in that when times are good, the bankers hit mainstreet. When times are bad, they get their wings clipped and look for ways to blow bubbles, and that will hurt mainstreet.

Tuesday, February 12, 2013

Does Henry Blodget's Business Insider Report Fairly About Bank Crime and the Vatican?

There is an ongoing dispute with Henry Blodget, owner of Business Insider regarding the criminal activity of selling bogus mortgage backed securities by the big banks to investors. The selling of those resulted in lots of funding for easy money liar loans and the like. With new emails coming out about JPM traders possibly knowing about how bad the loans were in the MBS, Blodget has reluctantly criticized the bankers.

Well now, Business Insider has reported on the Vatican money laundering scandal and has shown JP Morgan in a favorable light in these reports:

JPMorgan Shuts Down The Account Of The Vatican Bank Due To Lack Of Transparency

and

The U.S. Government Just Put The Vatican On A List Of Places Where It's Easy To Launder Money

 These articles are very easy on JPM, as most Business Insider articles are. We know that the Vatican is a sovereign nation, prone to corruption. [That is why, for religious folk, and even for non religous folk, separation of church and state is so important. Even Christ said His kingdom was not of this world, no doubt because his knowledge of the corruption of sovereign governments and super sovereign cross border financial corruption that has existed for the centuries.] But we also know that the TBTF banks are prone to corruption as well.

Apparently JP Morgan is more involved in money laundering than meets the eye if we can believe this report:

It is clear that JPMorgan is complicit in money-laundering in Europe with the Vatican, having abetted Vatican bank money-laundering and fraud by allowing IRS-defined suspicious transactions pass through their institution....

 

My issue with Business Insider is that the blog tends to lean toward the bankers favorably, and should be doing more detailed research, IMO, to recover wrong doing on the part of the banksters.

 


 

 


My Tower of Basel "Oh Crap" Moment

The following article was written in 2009. I predicted the new housing bubble many years ago! 

I know you have heard of the Tower of Babel but perhaps none of you have heard about the Tower of Basel. The Tower is a building occupied by the Bank of Settlements in Basel, Switzerland. I am going to try to make this simple regarding the functioning of the Bank of Settlements. Essentially the Bank is the home bank of all central banks in the Western World. That of course includes the United States Federal Reserve Bank, one of a number of private banks who control the money supplies of various nations.
The Bank of Settlements hosts banking conferences. Out of the Basel 2, 1998 conference, came the ponzi housing scheme. Off balance sheet banking was permitted, and this allowed risky loan making with the blessing of the Bank of Settlements. Liar loans, option arms and the rest of the culprits of the Real Estate Bubble were essentially permitted at Basel 2. We know that the Federal Reserve Bank did nothing to protect the citizens or try to stop this housing bubble. The Bank of International Settlements warned against this lack of oversight and appears to take on the role of the good guy.
But is the Bank of Settlements the good guy? Well, we know that they allowed off balance sheet banking on their watch. How can they be trusted? And we know that out of Basel 2  came a revised plan to allow Mark to Market, or M2M accounting which was  set up in 2004. As it turned out, M2M accounting was not implemented until the bubble had run its course, in 2007, and the credit crisis meltdown occurred.
Had the central bank of the central banks warned with a loud shout about the real estate bubble and possible crash in 2004, investors would have seen house prices falling in 2005- 2006, stopping the bubble in its tracks. How much effect this would have had is difficult to measure.  I leave it to your own judgement whether the Bank of Settlements, central bank of the central banks, was, in fact, the good guy. After all, remember, they allowed off balance sheet banking. They gave a bunch of kindergartners a bazooka with which they used to blow up the entire system of responsible underwriting!!



The accounting regulator in the United States is FASB. FASB implemented Mark to Market, then took it away as it appeared we were headed toward a depression.FASB is talking about implementing M2M again. This would have the effect of putting many small banks under, and would have the effect of possibly putting a large bank under as well. Citibank comes to mind but there may be others at risk. And certainly, the shareholders of all these banks could be at risk even if the banks survive.

[Update: Basel 3 aims to increase capital requirements for banks but I would not hold my breath. With the laxity of Basel 3 one wonders if FASB, part of the financial cabal, will ever decide to mark to market!]

Of course, we now know that this M2M was never implemented, and banks are in zombie mode, unable or fearful to lend, while accumulating massive excess reserve capability. So, if the hedge funds restock their war chests, we could see more ponzi lending in the future, as the TBTF banks will be able to perpetually hide bad assets on and off balance, with no M2M. [Update: there is more Ponzi lending years after this article was written. See this article.]

So, my, Oh Crap! moment was the realization that the New Financial World Order can throw countries around, that America could be in for more pain just like a banana republic, and that there may be conspiracy to impose a one world currency that could come out of all this. While I don't know that a North American currency or a world currency will come out of this, the Tower of Basel may well come to be known everywhere and the reason could be their quest for an economic system that is out of the control of sovereign nations. We are really there now as to framework.

That concentration of power will not be good, and even if it doesn't happen, the pain facing the USA just to enrich central banks and the owners of those banks is going to be harsh and unwanted.



Basel 3 had started out with the hope of higher capital requirements than Basel 2. We know Basel 2 also started out with the hope of higher capital requirements, but of course we know that low capital requirements were founded upon loan guarantees and then private mbs lending rated AAA. This allowed the banks to maintain lower reserves. And while Basel 3 raises reserves some, when push comes to shove, the banks are seeking guarantees of all mortgages, not just subprime for the next bubble. So, they will likely get away with lower capital requirements in the future as well.

#bankabuse