Thursday, April 11, 2013

Big Banks Attempt Secret Coup Against Cheap Loans

Too Big Banks Try End Run to Kill Growing Public Banking Movement

The Trans-Pacific Partnership (TPP) is an international treaty negotiated in secret – hidden even from congressmen who oversee such treaties – which threatens to destroy national sovereignty.
Public banks – such as the Bank of North Dakota – can provide low-cost loans to Main Street, when Wall Street insists on high interest rates … or won’t even extend credit.
More and more states are considering launching their own public banks.
A 2011 study from Demos – a non-partisan public policy organization – in conjunction with the Center for State Innovation, analyzed the potential for “partnership banks” across the country, including numerous states already considering such legislation.   The study found:
Across the country, states are considering proposals to move general revenue deposits out of the Wall Street banks that dominate the banking business today, and use them to capitalize a new local public structure with a mission to grow the local economy. A “Main Street Partnership Bank” would be modeled on the nearly 100-year-old public Bank of North Dakota (BND). This public policy innovation—also known as a Public Bank or State Bank—could contribute to the health of local community banks, state budgets and small business job growth in an era of rapid banking concentration, budget deficits and disinvestment on Main Street.
Partnership Banks can raise revenue for states without raising taxes, and increase loans to small businesses precisely when Wall Street banks have cut back on lending and raised public borrowing costs. A Partnership Bank would act as a “banker’s bank” to in-state community banks and provide the state government with both banking services at fair terms and an annual multi-million dollar dividend.
If modeled on the successful Bank of North Dakota, Partnership Banks in other states would:
  • Create new jobs and spur economic growth. Partnership Banks are participation lenders, meaning they partner—never compete—with local banks to drive lending through local banks to small businesses. If Washington State had a fully-operational Partnership Bank capitalized at $100 million during the Great Recession, it would have supported $2.6 billion in new lending and helped to create 8,212 new small business jobs. A proposed Oregon bank could help community banks expand lending by $1.3 billion and help small business create 5,391 new Oregon jobs in its first three to five years. All of this would be accom- plished at a profit, which Partnership Banks should share with the state.
  • Generate new revenues for states directly, through annual bank dividend payments, and indirectly by creating jobs and spurring local economic growth…
  • Lower debt costs for local governments. Like the Bank of North Dakota, Partnership Banks can get access to low-cost funds from the regional Federal Home Loan Banks. The banks can pass savings on to local governments when they buy debt for infrastructure investments. The banks can also provide Letters of Credit for tax-exempt bonds at lower interest rates.
  • Strengthen local banks even out credit cycles, and preserve real competition in local credit markets. There have been no bank failures in North Dakota during the financial crisis. BND’s charter is clear that its goal is to “be helpful to and to assist in the development of [North Dakota banks]… and not, in any manner, to destroy or to be harmful to existing financial institutions.” By purchasing local bank stock, partnering with them on large loans and providing other sup- port, Partnership Banks would strengthen small banks in an era when federal policy encourages bank consolidation.
  • Build up small businesses. Surveys by the Main Street Alliance in Oregon and Washington show at least 75 percent support among small business owners. In markets increasingly dominated by large corporations and the banks that fund them, Partnership Banks would increase lending capabilities at the smaller banks that provide the majority of small business loans in America.
These various proposals would “move general revenue deposits out of the Wall Street banks that dominate the banking business today, and use them to capitalize a new local public structure with a mission to grow the local economy.”
This would obviously cut into the big banks’ profits.  Indeed, the big banks have engaged in mafia-style big-rigging fraud against local governments (see this, this and this), scalped local governments by manipulating interest rates, and engaged in all sorts of other shenanigans to fleece governments, businesses and citizens.
And the big banks are using dirty tricks to try to kill the growing public banking movement, so as to protect their racket.
Les Leopold writes:
Clearly, from Wall Street’s perspective, the North Dakota bank must go, and all other state efforts to replicate it must be thwarted. Wall Street’s stealth weapon may be lodged within the latest corporate trade agreement called the Trans-Pacific Partnership (TPP), which currently is being negotiated in secret. We already know that Wall Street is seeking to remove all tariff restrictions that prevent the U.S. financial services industry from doing business in countries like Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The biggest banks also want the treaty to eliminate “non-tariff” barriers including regulations that create “unfair” competition with state-owned financial enterprises.
Depending on the final language, it is possible that the activities of the Bank of North Dakota could be ruled illegal because “foreign bankers could claim the BND stops them from lending to commercial banks throughout the state” ….  How perfect for Wall Street: a foreign bank can be used as a shill to knock out the BND.
Truthout explains:
Legislators around the world are being kept in the dark about what they’re voting on until the deal [on TPP] is hammered out; it’s expected to be completed this year. When it’s finished, if the experience of Congress here is any indication, legislators will be feeling extraordinary pressure from corporate lobbyists and their heads of state to accept the deal without a fuss. [Indeed, lawmakers often vote on legislation without ever reading it.]
***
Publicly owned enterprises, for example, are being targeted by negotiators. One such entity in the United States that has been the subject of considerable interest in recent years is the Bank of North Dakota (BND) – the only fully publicly owned financial institution in the country. The BND, which is only allowed to lend wholesale, was a stabilizing force that helped keep the already energy-rich state insulated from the shock of the financial crisis (Alaska, for example, didn’t fare as well). It has also brought a small fortune to the state’s treasury – $340 million in net tax gain between 1997 and 2009. Legislators in at least 13 different states have proposed studying or emulating the North Dakota model – state-owned development of central-bank style institutions guaranteed by tax revenue. But if the TPP is passed, that option might not be available. [Barbara Weisel, the top American government  negotiator for TPP] said that State Owned Enterprises (SOE) are routinely “competing directly with private enterprises, and often in a way that is considered unfair.”
Some of the advantages that can be conferred on State Owned Enterprises are things like preferential financing,” Weisel said. “Those are things that wouldn’t be provided to private companies – preferential provision of goods and services provided by a government.”
She said that “State Owned Enterprises – which in some cases can comprise a significant percentage of an economy – can be used to undermine what we’re otherwise trying to gain from this free trade agreement.”
A spokesperson for the BND declined to comment on whether or not this outlook was perceived by the bank to be an institutional threat. But, depending on the report’s language, foreign bankers could claim that the BND stops them from lending to commercial banks throughout the state.
Citigroup’s Johnston [Rick Johnston is a a senior vice president and director for international government affairs at Citigroup], in response to another question from the audience, said that corporations weren’t exactly enamored of competition with publicly owned enterprises – and that they are prodding TPP delegates into doing something about it.
“The companies that are running up against the problem and the challenges of the state-owned enterprises, they obviously feel strongly enough about it that the problem is being addressed within the negotiations,” he said.
***
There can be no guarantee, until the draft is finally released, that the TPP will protect entities like the BND, especially when considering, as critics have contended, that the deal’s boosters are pushing an agreement that more firmly entrenches capital flow as a form of trade.
“When you hear the word ‘trade‘ in today’s business world, it doesn’t just mean goods moving across borders,” Johnston said. “It doesn’t even mean just services moving across borders. It also means investment. And that’s something where the TPP is really gonna make a big difference.”
Trade, according to Black’s Law dictionary, is defined as “Traffic; commerce, exchange of goods for other goods, or for money.” Yet this trade pact could usher in a rash of reforms, with minimal oversight and virtually no public hearings, treating investment rules as a trade issue, even though they haven’t traditionally been dealt with as such.
A lobbyist’s world-view on this issue is instructive.  As Michael Wendell told the Congressional Subcommittee on Trade:
SOEs [state-owned enterprises], by definition, are interested in promoting the interests of their home country, and are all too often guided by state interests, rather than commercial interests.
Why does this matter? Let’s consider a Chinese SOE. Chinese SOEs benefit enormously from below-market-rate financing by state-owned banks at rates well below what American companies pay. Many of these loans may not have to be repaid at all. How does a commercial entity here in the U.S. compete with the U.S.-based operations of an SOE that sets up shop here?
***
There are many ways that disciplines on SOEs can be developed as part of the TPP talks. The best approach would be to ensure that all transactions are based on commercial considerations.
Basing all transactions on “commercial considerations” may sound okay initially.  But that would – in essence – mean that the interests of the banks in making high-interest rate loans are more important than the interests of the people in obtaining cheap loans.
Moreover, America as a nation is arguably paying trillions of dollars to the big banks in unnecessary interest costs which public banks would render moot. See this and this.
And  remember, the Founding Fathers’ vision of prosperity was largely based around public banking.
However we decide to treat foreign state-owned enterprises, banks owned by the American people will help to create prosperity for we the people and our small businesses.
Indeed, both conservative and liberal economists point out that the big banks are already state-sponsored institutions … so the government should create a little competition through public banking.
State-owned public banks – like North Dakota has – would take the power away from the big banks, and give it back to the people … as the Founding Fathers intended.
Don’t trust the federal government? That’s fine … we’re not talking about state – not federal – banks. Don’t trust your state?  Then support a county-level bank.
Postscript:  Obama is a shill for TPP.  So is Treasury Secretary Jack Lew, who told the Senate:
As Deputy Secretary of the State Department, I actively promoted the United States’ entry into the Trans-Pacific Partnership negotiations.

BitCoin Down 50% In Massive Sell Off: Over $1 Billion Vaporized In a Few Hours


SHTF Plan – by Mac Slavo
Just a few months ago the total net worth of all Bitcoins, a popular encrypted digital currency, was worth about $140 million. The non-tangible exchange mechanism is used by people all over the world to purchase everything from traditional goods and services, to illicit trade that may include drugs and stolen credit card numbers. The coins became a go-to digital store of wealth around the world after the meltdown of the Cypriot financial system, and was pushed as a ‘safe’ way to preserve wealth out of view prying government eyes. All of the excitement surrounding Bitcoin has driven the price of a single unit to in excess of $250, giving the total Bitcoins in global circulation a market capitalization of over $2.5 Billion in just a few months time.  
Earlier this morning, Mike Adams of Natural News penned a warning to investors and those seeking privacy and wealth protection by utilizing the digitally encrypted BitCoin currency unit:
Bitcoin has become a casino. It is almost a perfect reflection of the tulip bulb mania of 1637 in these two ways: 1) Most people buying bitcoins have no use for bitcoins (just like tulip bulbs), and 2) The rapid increase in bitcoin valuations cannot be substantiated in any way that reflects reality.
In other words, there is no fundamental reason why bitcoins should be 2000% more valuable today than four months ago. Nothing has changed other than the craze / mania of people buying in.

When bitcoins were in the sub-$20 range, I was not concerned about any of this. I actually encouraged people to buy bitcoins and support the bitcoin movement. But alarm bells went off in my mind when it skyrocketed past $150 and headed to $200+ virtually overnight. These are not the signs of rational markets. These are warning signs of bad things yet to occur. (ViaInfowars)
A few hours after Adams’ dire warning was posted, the crash he warned about has become a reality.
This morning, without warning, and moments after Bitcoin achieved its all time highs, the currency collapsed over 50%, essentially vaporizing upwards of one billion dollars in value.
This is what panic selling looks like – in real time:
Bitcoin-Collapse(Chart Courtesy Bitcoinbullbear.com)
And given that there are no protective mechanisms for the alternative free market Bitcoin trade, the crash may not yet be over.
Will it stage an amazing recovery? Alas, for this particular bubble, there are no NYSE circuit breakers nor is there a Federal Reserve-mandated “plunge protection team.” And why should there be? The central banks hate all currency alternatives. Firehats: on, especially since the volume is still relatively lite. (Zero Hedge)
The momentum for Bitcoin has now turned to the downside, much like it did in previous crashes where the currency achieved new highs, and was promptly sold off by those who bought into the bubble early at rock-bottom prices.
While BitCoin may be a preferred method of keeping payments for services and products private through its crypto-mechanisms, it is still a non-tangible asset and it require brokers and the internet to function properly.
Touted as a safe haven store of wealth and a “gold standard of the internet age” by Forbes, tens of thousands of investors bought into the hype.
Today they are paying the price.
During times of financial and economic stability BitCoin may function just fine as a suitable mechanism of exchange. But these are not ordinary times. Interesting, yes. Stable, no. And thus, exchanging one’s assets and turning them into digital Bitcoins may not be the best choice of asset protection during periods of financial, economic and political turmoil and uncertainty.
Only physical assets – the kind we can hold in our hand – can truly be called safe havens.
Food in your pantry that you can consume at anytime.
Skills and labor you can barter for other goods.
Precious metals, which have stood the test of time over thousands of years.
Land on which you can produce food and alternative power.
These are the assets that provide a realistic level of safety and security.
These are money when the system crashes and confidence in the paper ponzi schemes around the world is lost.
Bitcoin is fine for certain types of transactions. But having funds in Bitcoin is, obviously, no different than a deposit account at a bank which can go under or a stock market prone to manipulation.
Get physical. It’s the only way to ensure your assets will really be there when you need them.
http://www.shtfplan.com/headline-news/bitcrash-down-50-in-massive-sell-off-over-1-billion-vaporized-in-a-few-hours_04102013

Barofsky On Bailouts, Bernanke And Too Big To Jail


Barofsky says bank culture hasn't changed since crisis.
And why would anything change with Zimbabwe Ben at the helm of both the helicopter and the printing presses.  Borrowing at 0% and speculating with a taxpayer guarantee is a hell of a business model.

Large Widespread Cutoff of Supply Chains Coming-Jim Willie


Bitcoin crashes, losing nearly half of its value in six hours

Plunge happens on the same day one anonymous redditor made it rain in Bitcoin.

 

On Wednesday afternoon, the Bitcoin bubble appears to have burst. As of this writing, its current value is around $160—down from a high of $260. (It fell as low as $130 today.) There is no obvious explanation for why the digital currency has fallen so far and so fast, although the market correcting after such a huge rise might be a good explanation. (Update 4:05pm CT: Bitcoin seems to have somewhat recovered and appears to be hovering around $200. Update 6:00pm CT: The exchange rate has fallen back to around $160.)
Some redditors have taken solace in a comment thread entitled "Hold Spartans."
"This is just the market venting some pressure after these huge gains," wrote anotherblog. "To be honest I'm glad it's happening now. If it recovers, it will demonstrate resilience in the market and give confidence to future buyers and current holders that they don't need to panic sell, reduce the chances of a crash in the future."
Coincidentally, the plunge came several hours after a reddit user by the name of “Bitcoinbillionaire” suddenly, spontaneously decided to give away around $12,000 (more than 63 BTC) worth of the digital currency. Bitcoinbillionaire rewarded 13 seemingly random redditors, then stopped the whirlwind spree after about eight hours. At the moment, no evidence links the currency's plunge with this random reddit charity.
Bitcoinbillionaire took advantage of reddit’s Bitcointip mechanism, which allows users to send each other small amounts of cash (usually less than $5). The mysterious benefactor appears to have given away 20 BTC (now worth slightly less than $4,000) as his or her first gift to one Karelb. This gift happened under a comment titled: “I wish for the price to crash.” That comment now seems prophetic.
A look at the account transferring all this money shows that two hours before the giveaways began, Bitcoinbillionaire received 50 BTC (about $9,500) from another account without an IP address.
Business Insider reported that Bitcoinbillionaire has left hints that he or she was an "early adopter," and had forgotten he or she even had any bitcoins. Not much is known beyond that, as Bitcoinbillionaire vanished as suddenly as he or she appeared.
"You've made me change my mind about this whole thing," Bitcoinbillionaire wrote. "I'm done."
Don’t feel bad if you missed the action. Business Insider also notes that this pot of cash is now being “paid forward.”

David Stockman: US Addicted To Keynesian Medicine, Social Security Trust Fund Filled With Confetti

Gerald Celente - "The Big Crash Happens When The USD Lose It's World Reserve Currency Status" | XRepublic

Gerald Celente - "The Big Crash Happens When The USD Lose It's World Reserve Currency Status" | XRepublic

Gold will be many multiples higher once the printing presses stop

Gold will be many multiples higher once the printing presses stop

Wal-Mart executive who called sales “total disaster” has left


A person walks outside a Wal-Mart store in Mexico City January 11, 2013. REUTERS/Edgard GarridoReuters – by Jessica Wohl
(Reuters) – Jerry Murray, the mid-level Wal-Mart Stores Inc (WMT.N) executive who called the chain’s early February sales “a total disaster” in an email made public by Bloomberg, left the world’s largest retailer last week, Wal-Mart confirmed on Wednesday.
On Wednesday, Bloomberg reported that Murray had left the company on April 5. Wal-Mart told Reuters that it was Murray’s decision to leave and that his last day at Wal-Mart was Friday. A replacement has not yet been named.  
“In case you haven’t seen a sales report these days, February (month-to-date) sales are a total disaster,” Murray, a Wal-Mart vice president who worked on finance in the U.S. logistics division, said in a February 12 email to other executives, Bloomberg reported on February 15. “The worst start to a month I have seen in my (about) 7 years with the company.
On February 21, Wal-Mart reported that its Walmart U.S. unit had a slow start to February, which it attributed largely to a delay in customers getting their tax refunds.
Murray could not immediately be reached for comment on Wednesday.
Murray had been a vice president and chief financial officer of logistics at Wal-Mart since 2011, according to a profile posted on LinkedIn. According to that profile, he joined Wal-Mart in 2006 after working at Honeywell (HON.N), General Motors (GM.N) and Coopers & Lybrand.
(Reporting by Jessica Wohl in Chicago; Editing by Chris Reese)
http://www.reuters.com/article/2013/04/10/us-walmart-employee-departure-idUSBRE9390YI20130410

Trillion dollar debt day of reckoning is quickly approaching! Jim Willie: “When the losses from the debt write-downs come, I see tremendous national wealth lost because private accounts are really just bank assets"

The day of reckoning for global total debt – total credit market debt up from $28 trillion in 2001 to $53 trillion in 2012. US consumer debt went up in last few months but largely because of giant amounts of student loan debt taken on.

You have to really question what passes for financial analysis these days. One financial show was discussing the recent increase in consumer debt as something positive. In the same breath this person also said that households increased savings. Now think about this statement. If you financed a $2,000 vacation on your credit card but increased savings by $500 did your balance sheet improve? Of course not. Let us not even dive into the fact that most of the recent consumer debt increase has come at the hands of student debt which is already in a massive bubble. We are simply repeating the same mistakes with a different soundtrack. We are trying to get out of a debt led crisis with more debt. The facts even show this and we have compiled some of the more troubling data by putting the entire debt market into perspective here. Is it really possible to solve a problem based on too much debt with more debt?
The total market of debt shows our addiction to borrowed money
We flat out have an addiction to borrowing.  Total market debt is now up to an astonishing$53 trillion and continues to grow.  Take a look at this frightening data:
total credit market debt


US is facing debt restructuring similar to Greece, Italy, Spain and Cyprus


Out of Control Debt
Third World countries have spiraling out-of-control debt. Standard & Poor’s made it official when it changed its label for America’s national debt from “stable” to “negative.” Subsequently, America is now officially a “Third World country”. Meanwhile, JP Morgan Chase, Citigroup and Bank of America each report billions in quarterly profit, while the US is facing debt restructuring similar to Greece, Italy, Spain and Cyprus.

The debt crisis has also spread to nearly every state, as 46 states out of 50 states are on the verge of bankruptcy and many of our cities are going broke. Detroit is the epitome of a Third World city. America’s infrastructure is collapsing as evidenced by the pitiful condition of our roads which are quickly obtaining Third World status.
The out-of-control debt found in the Third World is constantly being used against these countries by organizations such as the World Bank and the IMF. Globalist banking organizations use the debt to begin to acquire a nation’s infrastructure. It happened in Bolivia through an unholy alliance between Bechtel and the World Bank when water rates quadrupled and it became illegal to even reuse irrigation water runoff and to trap rainwater. Colorado just enacted the same two laws within the past year. Very soon America, the banksters will own every aspect of sustenance. Does anyone still believe the movie, The Hunger Games, wasn’t delivering a clear message as to what lies ahead for all of us unless we can wake up enough people in time and change our course?


Jim Willie: “When the losses from the debt write-downs come, I see tremendous national wealth lost because private accounts are really just bank assets.”


Barack Obama ready to cut US pensions to strike deficit deal with Republicans, but wants higher taxes on the rich

The president will outline his  next Wednesday, April 10.
Barack Obama’s proposal is to cut the deficit by $1.8 trillion over 10 years, say administration officials.
But Democrats would oppose cuts to pensions, while Republicans have refused to accept tax rises.
President Barack Obama is ready to offer cuts to Americans’ pensions to strike a deficit deal with Republicans
Under the deal trailed by the White House, Barack Obama would support lowering the inflation measure used to calculate cost-of-living increases in .
The plan will also include reductions in Medicare spending for the elderly, much of it by targeting payments to healthcare providers and drug firms.


My Gold Guru Still Thinks the Gold Bull Market is Far From Over

My gold guru, Frank Giustra of Vancouver, Canada pushed me hard on gold from the summer of 2008 when it was selling at $900 an ounce– all the way up to $1900 an ounce in the summer of 2011– a hell of a run of accumulated gain of more than a double– while stocks floundered pretty badly.
The gold story went like this; Ben Bernanke’s policy of one QE after another– dramatically increasing the supply of greenbacks– was bound, sooner or later, to cause the dollar to face its own severe crisis of devaluation. Faith in the dollar was going to swoon badly– and then the late to the game investors would recognize that the only true protection against the denouement of paper currency was that precious metal gold. Giustra even believed that the panicky selling of dollars to escape its tarring and feathering would trigger a parabolic rise in the value of gold to some astronomically fantastic level– and then you were supposed to make your exit, selling to the crowd.
Such noted hedge fund barons as George Soros and John Paulson signed onto this playbook to one degree or another. Family offices, public pension funds, fixed income advisors looking for an extra kick to their bond portfolios– and the many camp followers no matter how amateur trailed along, thinking to make a killing when gold shot through $200 an ounce to $5000 an ounce and then God knows where. Chinese banks, encouraged by the Communist government, allowed their banks to establish monthly gold accumulation plans as the way to stay ahead of whatever inflation hit the fastest growing economy in the world. Indian gold jewelry was hoarded while retail lenders offered credit to accumulators of silver, which was expected to move jointly with gold. Central banks in Asia and in Russia regularly purchased gold whenever the IMF scheduled auctions of its inventory. The tv networks were filled wit come-one advertisements to join the smart money.
Then came the denouement in Europe, and pressure on the euro, while the Japanese economy languished and China appeared to be tightening up credit to avoid some kind of bubble. Gold retreated, advanced again, then retreated again– and seems stuck in a trading range between $1525 and $1650 an ounce. The dollar has not collapsed; rather it has gotten stronger as US treasuries became more and more the safe haven holding for investors frightened of another 2008 meltdown.
When I heard from Giustra today, he insisted that the dollar’s current strength is only because there is so much cash in the world looking for a safe haven. “Anyone who thinks that practically the entire globe can go on a money printing spree and a currency devaluation race to the bottom without eventual inflation is going to be in for a big surprise.
” Anyone who thinks the Fed will take its foot off the gas anytime soon is also sadly mistaken,” Giustra added. “ The dollar has not strengthened; it is merely a parking spot in the only currency with enough liquidity and size to accomodate all the cash that’s piling up while investors try to make sense of where it should be invested.”
In other words, Guru Giustra, who called the ascent of gold since 2002, before I knew of him, and recommended to Forbes readers they accumulate gold from the 2008 level of around $900 an ounce and called every step of the ladder in gold prices up to its peak.
While he’s not predicting when the price will go to $2000 an ounce and beyond, he’s standing firm on his basic analysis t hat gthe dollar must decline and gold must advance.

Jim Rogers 'I Suspect They'll Take The Pension Plans Next'

Jim Rogers 'I Suspect They'll Take The Pension Plans Next'

America is AT WAR with China, and losing. By Gregory Mannarino


Kyle Bass: "I'd Much Rather Own Gold Than Paper"


We've moved to an ideology of unlimited printing.
"I'm perplexed as to why gold is as low as it is.  The largest central banks in the world have all moved to an unlimited printed ideology.  If monetary policy is the only game in town, then we're all in for a world of trouble."
--
Good read from Bloomberg:
Trust in Gold Not Bernanke as U.S. States Promote Bullion
Distrust of the Federal Reserve and concern that U.S. dollars may become worthless are fueling a push in more than a dozen states to recognize gold and silver coins as legal tender.  Arizona is poised to follow Utah, which authorized bullion for currency in 2011.  Similar bills are advancing in Kansas, South Carolina and other states.
Read more here...


Kyle Bass: The Best Way To Get Paid Back By Fannie

States Fight Back Against MERS Mortgage Fraud


MERS: The Center of the Mortgage Scam

A prominent economist said about the 2008 financial crisis:
“At the root of the crisis we find the largest financial swindle in world history”, where “counterfeit” mortgages were “laundered” by the banks.
The Mortgage Electronic Registration Systems – MERS – was one of the main ways the swindle was done, and the main way in which counterfeit mortgages were laundered by the banks.
MERS is a shell company with no employees, owned by the giant banks.
MERS threw out centuries of well-established law about how real estate is transferred – and cheated governments out of many tens or hundreds of billions of dollars in recording fees.
Matt Taibbi pointed out:
MERS … is essentially an effort at systematically evading taxes … and hiding information from homeowners in ways that enabled the Countrywides of the world to defraud investors and avoid legal consequences for same.
***
MERS was at least in part dreamed up by Angelo Mozilo of Countrywide.
***
For those of you wondering why so many localities are broke, here’s one small factor in the revenue drain. Counties typically charge a small fee for mortgage registration, roughly $30. But with MERS, … you don’t need to pay the fee every time there’s an ownership transfer. Multiply that by 67 million mortgages and you’re talking about billions in lost fees for local governments (some estimates place the total at about $200 billion).
Outrageously, MERS actually marketed itself to its customers as a way to save money by avoiding the payment of legally-mandated registration fees. Check out this MERS brochure from 2007. It brags on the face page about its fee-avoiding qualities (“MINIMIZE RISK. SAVE MONEY. REDUCE PAPERWORK”) and inside the brochure, in addition to boasting about helping clients “Foreclose More Quickly,” it talks about how clients save money because MERS “eliminates the need to record assignments in the name of the Trustee.”
All of this adds up to a system that enabled the mortgage industry to avoid keeping any kind of proper paperwork on its frantic, coke-fueled selling and re-selling of mortgage-backed securities during the bubble, and to help the both the Countrywide-style subprime merchants and the big banks like Goldman and Chase pull off the mass sales of crappy loans as AAA-rated securities.
Harper’s reported:
“What’s happened,” said Christopher Peterson, a law professor at the University of Utah who has written extensively about MERS, “is that, almost overnight, we’ve switched from democracy in real-property recording to oligarchy in real-property recording.” The county clerks who established the ownership of land, who oversaw and kept the records, were democratically elected stewards of those records, said Peterson. Now a corporation headquartered outside Washington, D.C., oversaw the records. “There was no court case behind this, no statute from Congress or the state legislatures,” Peterson told me. “It was accomplished in a private corporate decision. The banks just did it.” Peterson said it was “not a coincidence” that more Americans than at any time since the Great Depression were being forced out of their homes just as records of home ownership and mortgages were transferred wholesale to a privatized database.

The Securitized Sausage Maker

http://www.biltongmakers.com/Cnops%20107_0724.JPG
MERS was also the engine which allowed securitization of mortgages. Bloomberg reported:
MERS played a key role in the bundling of mortgages into securities that reached a frenzy before the economic decline of 2008, critics including Grayson of Florida said. It allowed banks to sell and resell home loans faster, easier and cheaper, he said.
“MERS was a facilitator of securitization,” said Grayson, a Democratic member of the House Financial Services Committee.
How?
Steve Liesman explained in 2007:
How do you create a subprime derivative? …You take a bunch of mortgages… and put them into one big thing. We call it a Mortgage Backed Security. Say it’s $50 million worth… Now you take a bunch of these Mortgage Backed Securities and you put them into one very big thing… The one thing about all these guys here [in the one very big thing] is that they’re all subprime borrowers, their credit is bad or there’s something about them that doesn’t make it prime…
Watch, we’re going to make some triple A paper out of this… Now we have a $1 billion vehicle here. We’re going to slice it up into five different pieces. Call them tranches… The key is, they’re not divided by “Jane’s is here” and “Joe’s is here.” Jane is actually in all five pieces here. Because what we’re doing is, the BBB tranche, they’re going to take the first losses for whoever is in the pool, all the way up to about 8% of the losses. What we’re saying is, you’ve got losses in the thing, I’m going to take them and in return you’re going to pay me a relatively high interest rate… All the way up to triple A, where 24% of the losses are below that. Twenty-four percent have to go bad before they see any losses. Here’s the magic as far as Wall Street’s concerned. We have taken subprime paper and created GE quality paper out of it. We have a triple A tranche here.
Ellen Brown explained the significance of MERS in this process:
The top tranche is triple A because it includes the mortgages that did NOT default; but no one could know which those were until the defaults occurred, when the defaulting mortgages got assigned to the lower tranches and foreclosure went forward. That could explain why the mortgages could not be assigned to the proper group of investors immediately: the homes only fell into their designated tranches when they went into default. The clever designers of these vehicles tried to have it both ways by conveying the properties to an electronic dummy conduit called MERS (an acronym for Mortgage Electronic Registration Systems), which would hold them in the meantime. MERS would then assign them to the proper tranche as the defaults occurred. But the rating agencies required that the conduit be “bankruptcy remote,” which meant it could hold title to nothing; and courts have started to take notice of this defect.
(Gonzalo Lira made the same point.)
Indeed, the secretary and treasurer of MERS admitted this in a deposition, stating (page 32, lines 9-20):
As a requirement for mortgages that were securing loans or promissory notes that were sold to securitize trust, the rating agencies would only allow mortgages MERS — well let me step back. They required that a bankruptcy remote single purpose entity be created in order for transactions holding loans secured by MERS, by mortgages MERS served as mortgagee to be in those pools and receive a rating, an investment grade rating without any changes to the credit enhancement. They required that to be a bankruptcy remote single purpose subsidiary of MERS, of Merscorp.
Many commercial mortgages may be held by MERS as well, and for the same reason.
Harper’s points out:
[MERS] facilitated the buying and selling of mortgage debt at great speed and greatly reduced cost. It was a key innovation in expediting the packaging of mortgage-backed securities. Soon after the registry launched, in 1999, the Wall Street ratings agencies pronounced the system sound. “The legal mechanism set up to put creditors on notice of a mortgage is valid,” as was “the ability to foreclose,” assured Moody’s. That same year, Lehman Brothers issued the first AAA-rated mortgage-backed security built out of MERS mortgages. By the end of 2002, MERS was registering itself as the owner of 21,000 loans every day. Five years later, at the peak of the housing bubble, MERS registered some two thirds of all home loans in the United States.
Without the efficiencies of MERS there probably would never have been a mortgage-finance bubble.
(In addition, the same mortgage was sometimes pledged to numerous buyers at the same time. This wouldn’t have been possible without the vaporware title given by MERS. And some – like foreclosure attorney Neil Garfield – think that the ability to pledge the same mortgage multiple times is a feature, rather than a bug, of MERS. And see this.)

Relief Must Come at the State Level

Property recording laws are state laws, and the states have always been the bedrock for property rights.
Given that the head of the U.S. Department of Justice used to represent MERS – and that the D.C. politicians are (with a few exceptions) lackeys for the big banks which own MERS – the only hope is at the state level.
Some state courts have, in fact, declared MERS illegal … or at least without power to foreclose on property.
Harper’s notes:
After the housing market collapsed, however, MERS found itself under attack in courts across the country. MERS had singlehandedly unraveled centuries of precedent in property titling and mortgage recordation, and judges in state appellate and federal bankruptcy courts in more than a dozen jurisdictions—the primary venues where real estate cases are decided— determined that the company did not have the right to foreclose on the mortgages it held.
In 2009, Kansas became one of the first states to have its supreme court rule against MERS. In Landmark National Bank v. Boyd A. Kesler, the court concluded that MERS failed to follow Kansas statute: the company had not publicly recorded the chain of title with the relevant registers of deeds in counties across the state. A mortgage contract, the justices wrote, consists of two documents: the deed of trust, which secures the house as collateral on a loan, and the promissory note, which indebts the borrower to the lender. The two documents were sometimes literally inseparable: under the rules of the paper recording system at county court-houses, they were tied together with a ribbon or seal to be undone only once the note had been paid off. “In the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity,” said the Kansas court, “the mortgage may become unenforceable.”
MERS purported to be the independent entity holding the deed of trust. The note of indebtedness, however, was sold within the MERS system, or “assigned” among various lenders. This was in keeping with MERS’s policy: it was not a bank, made no loans, had no money to lend, and did not collect loan payments. It had no interest in the loan, only in the deed of trust. The company—along with the lenders that had used it to assign ownership of notes—had thus entered into a vexing legal bind. “There is no evidence of record that establishes that MERS either held the promissory note or was given the authority [to] assign the note,” the Kansas court found, quoting a decision from a district court in California. Not only did MERS fail to legally assign the notes, the company presented “no evidence as to who owns the note.”
Similar cases were brought before courts in Idaho, Massachusetts, Missouri, Nevada, New York, Oregon, Utah, and other states. “It appears that every MERS mortgage,” a New York State Supreme Court judge recently told me, “is defective, a piece of crap.” The language in the judgments against MERS became increasingly denunciatory. MERS’s arguments for standing in foreclosure were described as “absurd,” forcing courts to move through “a syntactical fog into an impassable swamp.”
The next key battle is taking place right now in Rhode Island. Specifically, the Rhode Island Attorney General and state legislators are trying to slay the MERS dragon within their state:
Citing the irregularities with the recording of mortgages and assignments that negatively impact municipalities and consumers, Attorney General Peter F. Kilmartin filed legislation to require that all transfers of a mortgage interest on residential property be recorded to provide a clean chain of title. The legislation, S0547 sponsored by Senator William Conley (District 18, East Providence, Pawtucket) and H5512 sponsored by Representative Brian Kennedy (District 38, Hopkinton, Westerly), is scheduled to be heard before both the Senate Committee on Judiciary and House Corporations Committee on Tuesday, March 26, 2013.
The legislation makes it easier for borrowers and regulators to determine who owns loans secured by mortgages on Rhode Island property. Borrowers facing foreclosure will be able to more easily discover who owns their loans before it is too late, and municipalities will be able to identify lenders who are responsible for abandoned homes. The legislation will [stop] the practice of having the vast majority of mortgages held in the name of a private registry with no interest in the loans known as … “MERS.”
Since 1997, the banking industry has been using MERS, which lenders claim has minimized their administrative and financial burdens of the recording process. However, this practice has basically privatized the local land recording process, thereby undermining the accuracy of public records and leading to negative consequences for consumers and municipalities.
“The changing of servicing and subservicing rights within the lending history often leaves the borrower confused regarding which entity they are supposed to be dealing with on a monthly basis and why,” said Attorney General Kilmartin. “The legislation is designed to give borrowers a public record of who ultimately owns their loans, increasing the ability of homeowners to negotiate with their lenders and their ability to have full knowledge of their rights, counterclaims and defenses if they are faced with litigation.”
“Rhode Island has experienced a record number of foreclosure and short sales since the mortgage crisis,” said Representative Kennedy, “This legislation will assist homeowners in knowing who maintains the note on their property while also ensuring that local cities and towns will know the potential owner of a property after a forced sale has occurred, to ensure that municipalities have the proper information available on the documentation for taxation and municipal recording fees.”
“With this legislation, we are taking another step toward easing the pain of the housing and mortgage foreclosure crisis, which has affected both the state’s municipalities and individual consumers,” Sen. William J. Conley Jr. said. “It is common sense to record these transfers and take out the unnecessary middle man. Rhode Islanders need to know exactly who they are dealing with and how they can protect themselves. The foreclosure process is tough enough already without adding the frustration of MERS.”
By having a nominee entity listed as the mortgagee, the banking industry has privatized Rhode Island’s mortgage recording system, and left the accuracy of public land records at the mercy of a private company’s database. Federal banking authorities have already concluded that the private mortgage system contains numerous inaccuracies and has not been accessible to homeowners. Moreover, the nominee frequently has no contractual relationship with the actual noteowner, despite the contention in the mortgage documents of a nominee relationship.
Not only has this private system deprived cities and towns the recording fees that they are owed for over 15 years, it has also hampered the ability of municipalities to adequately address abandoned property and nuisance issues because the mortgagee liable for these issues is not clear from the chain of title.
Consumers are adversely impacted due to the fact that their mortgage loans change hands multiple times through the life of the loan without proper recording. The lack of a contemporaneous public record hampers their ability to deal directly with their lenders and enforce their legal rights.
The banking industry’s practice of using a nominee entity process for recording deeds has become a highly litigated issue by consumers, municipalities and counties throughout the country. This very issue is currently being litigated in Rhode Island with private citizens and municipalities calling into question the legality of using the nominee process to record mortgage interests. The multitude of legal issues surrounding the nominee process has caused confusion and delay in foreclosure proceedings in our State, and has raised the critical issue of whether a nominee entity can enforce the power of sale. High Courts in other States, including Massachusetts and Washington, have already ruled that a nominee cannot utilize the power of sale [i.e. MERS cannot foreclose on property]. This legislation resolves this issue in Rhode Island by simply eliminating the nominee recording process and restoring accuracy and transparency to the public land records [i.e. killing MERS].

The Secret FDIC Proposal That Puts Your Savings At Risk

What happened in Cyprus isn’t a “one off” event.

The financial media and elite have been trying to convince the world that Cyprus was a unique situation… a “one time” deal… and that our money is safe in the banks.

This is untrue.

Spain, Canada, and New Zealand have already proposed similar measures through which individuals’ SAVINGS accounts would be used to prop up the banks during times of Crisis.

It’s called a “bail-in,” but really it’s “THEFT” plain and simple. The banks made the terrible mistakes that rendered them insolvent. They (the banks) should simply fail. But instead of failing, the regulators want to keep the banks in business… using YOUR money.

Why is this?

Two reasons:

  1. The regulators don’t have the money to actually insure deposits that they claim.
  2. Politicians realize that people are fed up with the public funding bank bailouts… so they’re targeting individual savers in the banks that are in trouble.

It’s a simple question of math regarding #1. Banking deposits are in the trillions of Dollars and most deposit insurance entities only have a few billion Dollars in funds. Obviously, if a large bank were to fail under these circumstances there wouldn’t be the funds to cover deposits…

Regarding #2, politicians have begun to realize that the public simply won’t stomach another Federal bailout of the banks. So instead of getting everyone and their children to chip in by using the public’s funds… they’re going after the deposits of a select few people who have their funds IN the troubled bank.

Their thinking is that if you can’t steal a little from everyone, you might as well try to steal a lot from a few people.

Could this happen in the US?

You better believe it. In fact, the FDIC has already put forth a proposal to do EXACTLY this in the event of a Crisis.

Just four months ago, the FDIC drafted a formal strategy in which it suggested that during the next Crisis, it can…

  1. Decide WHAT banks are systemically important.
  2. Take control of any “systemically important” bank that it deems at risk of default.
  3. Once in control of the bank, YOUR savings deposits can be “written down” in value (meaning you LOSE money you thought was yours) as part of the bank bailout.

Less than 99% of Americans realize this is the case, but the legislation allowing this is already IN PLACE and the FDIC has already written out the rules for what will happen.

We’ve put together a special investment report outlining this which EVERY person with a savings deposit needs to read now BEFORE the next Crisis hits the US. Doing this can mean the difference between keeping your nest egg secure… and losing EVERYTHING.
To read our investigative report…

Click Here Now!

Best Regards,

Graham Summers
Chief Market Strategist
Phoenix Capital Research

Arizona passes law making gold and silver legal tender


Daily Mail
States are now rushing to push bills through allowing for gold and silver to be recognized as legal tender as politicians fear that the U.S. economy is going to collapse.
The push from states like Arizona, which passed through their House of Representatives on Monday allowing gold and silver to be considered legal tender, comes as conservatives fear that the Federal Reserve is running the country’s economy into a deep hole.  
Lawmakers say the global economy is on the precipice of financial ruin and the U.S. dollar could soon be worth less than the paper used to make it.
These doomsayers are pushing forward legislation that would declare privately minted gold and silver coins legal tender, no different under state law than the U.S. dollar printed by the federal Department of Treasury.
Arizona is one of more than a dozen states to incorporate similar laws into their roster, as many conservatives are harboring a growing distrust in government-backed money.
‘This is the type of currency we have had over the history of mankind,’ Republican state Representative Steve Smith said of the Arizona law.
In 2011, Utah became the first state in the country to legalize gold and silver coins as currency.
Lawmakers in Minnesota, North Carolina, Idaho, South Carolina, Colorado and other states have debated similar laws in recent years.
Many investors have invested their money in precious metals in recent years as a hedge against the declining value of the dollar.
Loss of faith: Conservative politicians are concerned about the economic policies put into place by Ben Bernanke during his time as the chairman of the federal reserveLoss of faith: Conservative politicians are concerned about the economic policies put into place by Ben Bernanke during his time as the chairman of the federal reserve
When the value of the dollar declines, gold prices rise.
Gold rose $12, nearly 1 per cent, to $1,604.60 per ounce on Monday with news of Europe’s bailout plan for cash-strapped Cyprus. Silver inched slightly higher, up 2.3 cents to $28.874 per ounce.
The dollar was up against the euro, the currency used by 17 European countries, as well as the Japanese yen and the Canadian dollar in February.
The Arizona bill, which advanced in a 4-2 vote by a House committee Monday, states that gold and silver should be legal currency not subject to tax or regulation as property.
The Republican-led Senate gave the bill its blessing in February in a 17-11 partisan vote.
Angry Arizonans: The Arizona House of Representatives passed the law through and now it continues through the process before it goes ahead an is enacted in the stateAngry Arizonans: The Arizona House of Representatives passed the law through and now it continues through the process before it goes ahead an is enacted in the state
Proponents of the switch to gold and silver argue paper money is too vulnerable to government manipulations.
When central banks boost the amount of currency in circulation to drive down interest rates, the value of that currency relative to others can decline.
Gold-backed money fell out of favor during World War I because the U.S. and many other countries needed to print more cash to pay for the war.
In 1971, President Richard Nixon formally abandoned the gold standard. Now Republicans are pushing for it to come back as they do not trust President Obama and the economic policies put into place by Ben Bernanke during his time as the chairman of the federal reserve.
Read more: http://www.dailymail.co.uk/news/article-2306590/Arizona-make-gold-silver-legal-tender-join-growing-number-states-distrust-government-money.html#ixzz2Q4TpXEBm
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CORZINE CRONYISM BOMBSHELL - High Ranking DOJ Lawyers And AG Eric Holder Were Partners In Firm That Represented MF Global


What do Corzine, Eric Holder and MF Global all have in common?
Besides fraud.
Law firm Covington & Burling.

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MF Global Was A Client Of Eric Holder's And Lanny Breuer's Firm
Those wondering why the Department of Justice has refused to go after Jon Corzine for the vaporization of $1.6 billion in MF Global client funds need look no further than the documents uncovered by the GAI that reveal that the now-defunct MF Global was a client of Attorney General Eric Holder and Lanny Breuer’s former law firm, Covington & Burling.
Records also reveal that MF Global’s trustee for the Chapter 11 bankruptcy retained as its general bankruptcy counsel Morrison & Foerester--the very law firm from which Associate Attorney General Tony West came to DOJ.
There's more.
As Government Accountability Institute President Peter Schweizer explains in the Washington Times Thursday, the trustee overseeing MF Global’s bankruptcy is former FBI Director Louis Freeh.  At Holder’s Senate confirmation hearing Freeh served as a character witness for Holder and revealed that Holder had previously worked for Freeh. “As general counsel,” Freeh said, “I could have engaged any lawyer in America to represent our bank. I chose Eric.”
Until now, the conventional wisdom for why Holder wouldn’t throw the book at Corzine was that Corzine is an Obama campaign bundler.  Indeed, as Breitbart News reported, four of the top officials at the Department of Justice--Eric Holder, Thomas Perrelli, Karol Mason, and Tony West--were also big money bundlers for Obama.
But the newly understood crony connections reveal conflicts of interest that extend well beyond mere political support for a common candidate--they go to a tangle of prior business dealings that further underscore the need for a special prosecutor in the Corzine case.
At least 65 members of Congress have already signed letter to Eric Holder requesting that he appoint a special prosecutor to investigate MF Global’s collapse and the loss of $1.6 billion in customer money. What’s more, even progressives have begun to wonder whether Holder’s Covington & Burling connection explains why the Department of Justice has not charged, prosecuted, or jailed a single Wall Street executive after the biggest financial collapse in American history.
As Richard Eskow of the Huffington Post recently wrote:
More and more Washington insiders are asking a question that was considered off-limits in the nation's capital just a few months ago: Who, exactly, is Attorney General Eric Holder representing?  As scandal after scandal erupts on Wall Street, involving everything from global lending manipulation to cocaine and prostitution, more and more people are worrying about Holder's seeming inaction -- or worse -- in the face of mounting evidence.
Continue reading...

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Cronyism Is Preventing Prosecution In The Corzine Case
Washington Times
Sixty-five members of Congress have signed a letter to Attorney General Eric H. Holder Jr. requesting that he appoint a special prosecutor to investigate MF Global’s collapse and the loss of $1.6 billion in customer money. As the New York Times has noted, “Mr. Holder has the ultimate authority to decide whether a special counsel is necessary.”
Some contend that the fact that Mr. Holder, Mr. Corzine and Associate Attorney General Tony West all previously served as fundraising “bundlers” for President Obama’s presidential campaign is enough to warrant Mr. Holder’s recusal and the appointment of a special prosecutor.  Indeed, a letter signed by 65 members of Congress cites Mr. Corzine’s $500,000 in fundraising for Mr. Obama as one of the reasons a special counsel is needed.  A subsequent report by Bloomberg revealed that MF Global had written clauses into bond offerings indicating that Mr. Corzine, a former Democratic U.S. senator and governor of New Jersey, might join a future Obama administration as a Cabinet officer, a revelation that surprised even experienced Wall Street executives.
However, political connections aside, there are at least three compelling economic and financial reasons why a special prosecutor is essential to avoid the appearance of any potential conflicts of interest.
First, the Government Accountability Institute has discovered that prior to going bankrupt, MF Global was a client of Mr. Holder’s former law firm, Covington & Burling. It is unclear how long Covington & Burling represented MF Global. However, records reveal that MF Global owed Covington & Burling $114,275.55 “for services rendered prior to Oct. 31, 2011,” the date MF Global filed for bankruptcy protection. Furthermore, this connection is complicated by the fact that the head of Justice’s criminal division, Assistant Attorney General Lanny Breuer, also hailed from Covington & Burling.
What’s more, Associate Attorney General Tony West, who helped raise an estimated $65 million in his role as the co-chairman of Mr. Obama’s campaign, came to the Department of Justice from Morrison & Foerster.  The problem: MF Global’s trustee for the Chapter 11 bankruptcy has retained Morrison & Foerster as its general bankruptcy counsel.


Janet Tavakoli - Analyzing the Fraud at MF Global
Reuters - Eric Holder, Top DOJ Lawyers Were Partners With Big Banks

Bi-Partisanship We Don’t Need: The President Offers to Cut Social Security and Republicans Agree

John Boehner, Speaker of the House, revealed why it’s politically naive for the President to offer up cuts in Social Security in the hope of getting Republicans to close some tax loopholes for the rich. “If the President believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” Boehner said in a statement released Friday.
House Majority Leader Eric Cantor agreed. He said on CNBC he didn’t understand “why we just don’t see the White House come forward and do the things that we agree on” such as cutting Social Security, without additional tax increases.
Get it? The Republican leadership is already salivating over the President’s proposed Social Security cut. They’ve been wanting to cut Social Security for years. 

But they won’t agree to close tax loopholes for the rich. They’re already characterizing the President’s plan as a way to “save” Social Security — even though the cuts would undermine it — and they’re embracing it as an act of “bi-partisanship.”
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“I’m encouraged by any steps that President Obama is taking to save and preserve Social Security,” cooed Texas Republican firebrand Ted Cruz. “I think it should be a bipartisan priority to strengthen Social Security and Medicare to preserve the benefits for existing seniors.”  Oh, please. Social Security hasn’t contributed to the budget deficit. And it’s solvent for the next two decades. (If we want to insure its solvency beyond that, the best fix is to lift the cap on income subject to Social Security taxes – now $113,700.)
And the day Ted Cruz agrees to raise taxes on the wealthy or even close a tax loophole will be when Texas freezes over.
The President is scheduled to dine with a dozen Senate Republicans Wednesday night. Among those attending will be John Boozman of Arkansas, who has already praised Obama for  “starting to throw things on the table,” like the Social Security cuts.
That’s exactly the problem. The President throws things on the table before the Republicans have even sat down for dinner.
The President’s predilection for negotiating with himself is not new. But his willingness to do it with Social Security, the government’s most popular program  — which Democrats have protected from Republican assaults for almost eighty years — doesn’t bode well.
The President desperately wants a “grand bargain” on the deficit. Republicans know he does. Watch your wallets.
This article was originally posted on Robert Reich's blog.

Another blow to gold – Goldman Sachs slashes 2013, 2014 forecast



Not even Cyprus turmoil could do it. Or exceptionally weak U.S. data. Or general fears of a backlash in the global recovery. Gold prices currently struggle to shine as a safe haven and regain its past fame, prompting analysts at Goldman Sachs to slash their gold price forecasts. For the second time in less than two months, that is.
The gold team at Goldman now sees an average price of $1,545 an ounce in 2013, down from an earlier forecast of $1,610, with average prices falling even further to $1,350 in 2014 from $1,490 expected previously.
“Despite resurgence in euro-area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning,” the analysts said in a note. Read: An S&P chart that could be pointing to a correction
“With our economists expecting few ramifications from Cyprus and that the recent U.S. slowdown will not derail the faster recovery they forecast in 2H13, we believe a sharp rebound in gold prices is unlikely,” they added.
Gold futures for June delivery GCM3 +0.12% fell Wednesday, stepping back from their strongest level since the start of the month. Speculative traders have also been down on gold.
But even as gold puts in an upbeat forecast from time to time, Goldman says it looks set for a decline on both the short, medium and long term. The investment bank trimmed its three-month forecast to $1,530 an ounce from $1,615, its six-month outlook to $1,490 from $1,600 and its 12-month forecast to $1,390 from $1,550.
“While there are risks for modest near-term upside to gold prices should U.S. growth continue to slow down, we see risks to current prices as increasingly skewed to the downside as we move through 2013. In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast,” the analysts said. Read: Bill Gross turns bullish on 10-year Treasurys on Japan’s bond binge
The move from the U.S. investment bank comes a day after Deutsche Bank poured cold water on its own outlook for gold prices. The bank Tuesday slashed its 2013 average forecast by 11.8% to $1,637 an ounce ounce for 2013.
Barron’s noted a day ago that not everyone in the market is seeing a sell sign over gold.
NYU economist Nouriel Roubini is, though.

More Than 101 Million Working Age Americans Do Not Have A Job


101 Million Out of workThe jobs recovery is a complete and total myth.  The percentage of the working age population in the United States that had a job in March 2013 was exactly the same as it was all the way back in March 2010.  In addition, as you will see below, there are now more than 101 million working age Americans that do not have a job.  But even though the employment level in the United States has consistently remained very low over the past three years, the Obama administration keeps telling us that unemployment is actually going down.  In fact, they tell us that the unemployment rate has declined from a peak of 10.0% all the way down to 7.6%.  And they tell us that in March the unemployment rate fell by 0.1% even though only 88,000 jobs were added to the U.S. economy.  But it takes at least 125,000 new jobs a month just to keep up with population growth.  So how in the world are they coming up with these numbers?  Well, the reality is that the entire decline in the unemployment rate over the past three years can be accounted for by the reduction in size of the labor force.  In other words, the Obama administration is getting unemployment to go down by pretending that millions upon millions of unemployed Americans simply do not want jobs anymore.  We saw this once again in March.  According to the U.S. Bureau of Labor Statistics,more than 600,000 Americans dropped out of the labor market during that month alone.  That pushed the labor force participation rate down  to 63.3%, which is the lowest it has been in more than 30 years.  So please don’t believe the hype.  The sad truth is that there has been no jobs recovery whatsoever.
If things were getting better, there would not be more than 101 million working age Americans without a job.
So exactly where does that statistic come from?  Well, the following explains where I got that number…
According to the U.S. Bureau of Labor Statistics, there are 11,742,000working age Americans that are officially unemployed.
In addition, the U.S. Bureau of Labor Statistics says that there are89,967,000 working age Americans that are “not in the labor force”.  That is a new all-time record, and that number increased by a whopping663,000 during the month of March alone.
When you add 11,742,000 working age Americans that are officially unemployed to the 89,967,000 working age Americans that are “not in the labor force”, you come up with a grand total of 101,709,000 working age Americans that do not have a job.
When you stop and think about it, that is an absolutely staggering statistic.
And anyone that tells you that “a higher percentage of Americans are working today” is telling you a complete and total lie.  During the last recession the percentage of working age Americans with a job fell dramatically, and since then we have not seen that number bounce back at all.  In fact, this is the very first time in the post-World War II era that we have not seen the employment-population ratio bounce back after a recession.  At this point, the employment-population ratio has been under 60 percent for 49 months in a row…
Civilian Employment Population Ratio
Since the end of 2009, the employment-population ratio has been remarkably steady.  Just check out these numbers…
March 2008: 62.7 percent
March 2009: 59.9 percent
March 2010: 58.5 percent
March 2011: 58.4 percent
March 2012: 58.5 percent
March 2013: 58.5 percent
We should be thankful that the percentage of working age Americans with a job did not continue to decline, but we should also be quite alarmed that it has not bounced back at all.
If there was going to be a recovery, there would have been one by now.  The next major economic downturn is rapidly approaching, and that is going to push the employment-population ratio down even farther.
So why is the U.S. economy not producing as many jobs as it used to?  Well, certainly the overall decline of the economy has a lot to do with it.  We are a nation that is drowning in debt and that is getting poorer by the day.
But since the end of the last recession, corporate profits have bounced back in a big way and are now at an all-time high.  So you would figure that the big corporations should be able to hire a lot more workers by now.
Unfortunately, that is not the way things work anymore.  Big corporations are trying to minimize the number of expensive American workers that they have on their payrolls as much as possible these days.
One way that they are doing this is through the use of technology.  Thanks to robots, computers and other forms of technology, big corporations simply do not need as many human workers as they used to.  In future years, this trend is only going to accelerate.  I wrote about how this is changing the world of employment in one of my previous articles entitled “Rise Of The Droids: Will Robots Eventually Steal All Of Our Jobs?
Another way that big corporations are replacing expensive American workers is by shipping their jobs off to the other side of the globe.  Big corporations know that they can make bigger profits by making stuff in foreign countries where they can pay workers less than a dollar an hour with no benefits.  How in the world are American workers supposed to compete with that?
For much more on how U.S. jobs are being killed by offshoring, please see this article: “55 Reasons Why You Should Buy Products That Are Made In America“.
And of course immigration is having a dramatic impact on the labor market in some areas of the country as well.  Cheap labor has dramatically driven down wages in a lot of professions.  For example, once upon a time you could live a very nice middle class lifestyle as a roofer.  But now many roofers really struggle to make a living.
When you add everything up, it paints a very bleak picture for the future of the American worker.
The cost of living keeps rising much faster than wages do, and the competition for good jobs has become incredibly fierce.
Meanwhile, the government continues to make things even easier for those that are not working.  This has caused some Americans to give up completely and to be content with letting the government take care of them.  The following is from a recent article by Monty Pelerin
As we make it easier to get unemployment benefits for longer time periods, more people take advantage of the system. So too with food stamps and disability. All programs are at or near record levels in what is supposed to be four years into an economic recovery. For many, the benefits of becoming a government dependent exceed what they can earn. One study reported that a family of four, collecting all the benefits for which they were entitled, would have to earn $65,000 per annum to have the same after-tax purchasing power.
If you are a product of the government schools and are legal to work (i.e., have skills enough that you are affordable at the minimum wage or higher), at what point do you realize that there is no need to go through the hassle of actual work. You can live pretty well by staying home and taking advantage of the entitlements available to you. That is exactly what a larger and larger percentage of the population are realizing. In many cases, it is economically irrational to work.
This behavior creates a social pathology that only worsens over time. Kids learn from their parents that work is not necessary and the many ways to game the system. In this regard, look for this problem to become worse over time unless these programs are cut back.
In some areas of the country, it actually pays not to work very hard.  According to Gary Alexander, the Secretary of Public Welfare for the state of Pennsylvania, a “single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045.”
But the truth is that most Americans still want to work hard and would gladly take a good job if they could just find one.  The following is one example that was featured in a recent Fox News article
After a full year of fruitless job hunting, Natasha Baebler just gave up.
She’d already abandoned hope of getting work in her field, working with the disabled. But she couldn’t land anything else, either — not even a job interview at a telephone call center.
Until she feels confident enough to send out resumes again, she’ll get by on food stamps and disability checks from Social Security and live with her parents in St. Louis.
“I’m not proud of it,” says Baebler, who is in her mid-30s and is blind. “The only way I’m able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on.”
And that is how most Americans feel.
Most Americans do not want to be dependent on the government.
Most Americans want to work hard and take care of themselves.
Unfortunately, our economy is not producing nearly enough jobs for everyone and it never will again.
So there will continue to be millions upon millions of Americans that find that they cannot take care of themselves and their families without government assistance no matter how hard they try.
And this is just the beginning – things are going to get much worseduring the next major wave of the economic collapse.
Yes, at the moment there are more than 101 million working age Americans that do not have a job, but that number is actually going to go much higher in the years ahead.  The anger and frustration caused by a lack of employment opportunities is going to shake this nation.
That is why it is important to try to become less dependent on your own job.  In this economic environment, a job can disappear at literally any moment.  Anything that you can do to become less dependent on the system would be a good thing.
Homeless