Sunday, June 30, 2013

Fraud, Money Laundering and Narcotics. Impunity of the Banking Giants. No Prosecution of HSBC

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In another shameful decision by the US Department of Justice, earlier this month federal prosecutors reached a deferred prosecution agreement (DPA) with UK banking giant HSBC, Europe’s largest bank.
Shameful perhaps, but entirely predictable. After all, in an era characterized by economic collapse owing to gross criminality by leading financial actors, policy decisions and the legal environment framing those decisions have been shaped by oligarchs who quite literally have “captured” the state.
Founded in 1865 by flush-with-cash opium merchants after the British Crown seized Hong Kong from China in the aftermath of the First Opium War, HSBC has been a permanent fixture on the radar of US law enforcement and regulatory agencies for more than a decade.

Not that anything so trifling as terrorist financing or global narcotrafficking mattered much to the Obama administration.
As I previously reported, (here, here, here and here), when the Senate Permanent Subcommittee on Investigations issued their mammoth 335-page report, “U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History,” we learned that amongst the “services” offered by HSBC subsidiaries and correspondent banks were sweet deals, to the tune of hundreds of billions of dollars, with financial entities with ties to international terrorism and the grisly drug trade.
Charged with multiple violations of the Bank Secrecy Act for their role in laundering blood money for Mexican and Colombian drug cartels, as a sideline HSBC’s Canary Wharf masters conducted a highly profitable business with the alleged financiers of the 9/11 attacks who washed funds through Saudi Arabia’s Al Rajhi Bank.
While the media breathlessly reported that the DPA will levy fines totaling some $1.92 billion (£1.2bn) which includes $655 million (£408m) in civil penalties, the largest penalty of its kind ever levied against a bank, under terms of the agreement not a single senior officer will be criminally charged. In fact, those fines will be paid by shareholders which include municipal investors, pension funds and the public at large.
With some 7,200 offices in more than 80 countries and 2011 profits topping $22 billion (£13.6bn), Senate investigators found that HSBC’s web of 1,200 correspondent banks provided drug traffickers, other organized crime groups and terrorists with “U.S. dollar services, including services to move funds, exchange currencies, cash monetary instruments, and carry out other financial transactions. Correspondent banking can become a major conduit for illicit money flows unless U.S. laws to prevent money laundering are followed.” They weren’t and as a result the bank’s balance sheets were inflated with illicit proceeds from terrorists and drug gangsters.
Revelations of widespread institutional criminality are hardly a recent phenomenon. More than a decade ago journalist Stephen Bender published a Z Magazine piece which found that “99.9 percent of the laundered criminal money that is presented for deposit in the United States gets comfortably into secure accounts.”
According to Bender: “The key institution in the enabling of money laundering is the ‘private bank,’ a subdivision of every major US financial institution. Private banks exclusively seek out a wealthy clientele, the threshold often being an annual income in excess of $1 million. With the prerogatives of wealth comes a certain regulatory deference.”
Such “regulatory deference” in the era of “too big to fail” and its corollary, “too big to prosecute,” is a signal characteristic as noted above, of state capture by criminal financial elites.
Indeed, HSBC’s private banking arm, HSBC Private Bank is the principal private banking business of the HSBC Group. A holding company wholly owned by HSBC Bank Plc, its subsidiaries include HSBC Private Bank (Suisse) SA, HSBC Private Bank (UK) Limited, HSBC Private Bank (CI) Limited, HSBC Private Bank (Luxembourg) SA, HSBC Private Bank (Monaco) SA and HSBC Financial Services (Cayman) Limited. All of these entities featured prominently in money laundering and tax evasion schemes uncovered by the Senate Permanent Subcommittee in their report. Combined client assets have been estimated by regulators to top $352 billion (£217.68).
According to Senate investigators, HSBC Financial Services (Cayman) was the principle conduit through which drug money laundered through HSBC Mexico (HBMX) flowed. “This branch,” Senate staff averred, “is a shell operation with no physical presence in the Caymans, and is managed by HBMX personnel in Mexico City who allow Cayman accounts to be opened by any HBMX branch across Mexico.”
“Total assets in the Cayman accounts peaked at $2.1 billion in 2008. Internal documents show that the Cayman accounts had operated for years with deficient AML [anti-money laundering] and KYC [know your client] controls and information. An estimated 15% of the accounts had no KYC information at all, which meant that HBMX had no idea who was behind them, while other accounts were, in the words of one HBMX compliance officer, misused by ‘organized crime’.”
In fact, the “normal” business model employed by HSBC and other entities bailed out by Western governments fully conform to the “control fraud” model first described by financial crime expert William K. Black.
According to Black, a control fraud occurs when a CEO and other senior managers remove checks and balances that prevent criminal behaviors, thus subverting regulatory requirements that prevent things like money laundering, shortfalls due to bad investments or the sale of toxic financial instruments.
In The Best Way to Rob a Bank Is to Own One, Black informed us: “A control fraud is a company run by a criminal who uses it as a weapon and shield to defraud others and makes it difficult to detect and punish the fraud.”
“Control frauds,” Black reported, “are financial superpredators that cause vastly larger losses than blue-collar thieves. They cause catastrophic business failures. Control frauds can occur in waves that imperil the general economy. The savings and loan (S&L) debacle was one such wave.”
Indeed, “control frauds” like HSBC “create a ‘fraud friendly’ corporate culture by hiring yes-men. They combine excessive pay, ego strokes (e.g., calling the employees ‘geniuses’) and terror to get employees who will not cross the CEO.” In such a “criminogenic” environment, the CEO (paging Lord Green!) “optimizes the firm as a fraud vehicle and can optimize the regulatory environment.”
In their press release, the Department of Justice announced that HSBC Group “have agreed to forfeit $1.256 billion and enter into a deferred prosecution agreement with the Justice Department for HSBC’s violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA).”
“According to court documents,” the DOJ’s Office of Public Affairs informed us, “HSBC Bank USA violated the BSA by failing to maintain an effective anti-money laundering program and to conduct appropriate due diligence on its foreign correspondent account holders.”
The DOJ goes on to state, “A four-count felony criminal information was filed today in federal court in the Eastern District of New York charging HSBC with willfully failing to maintain an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent affiliates, violating IEEPA and violating TWEA.”
However, “HSBC has waived federal indictment, agreed to the filing of the information, and has accepted responsibility for its criminal conduct and that of its employees.”
In other words, because they accepted “responsibility” for acts that would land the average citizen in the slammer for decades, those guilty of “palling around with terrorists” or smoothing the way as billionaire drug traffickers hid their loot in the so-called “legitimate economy,” got a free pass. In fact, under terms of the agreement DOJ’s “deferred prosecution” will be “deferred” alright, like forever!
Why might that be the case?
The New York Times informed us that state and federal officials, eager beavers when it comes to protecting the integrity of a system lacking all integrity, “decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.”
Keep in mind this is a “system” which former United Nations Office of Drugs and Crime director Antonio Maria Costa told The Observer thrives on illicit money flows. In 2009, Costa told the London broadsheet that “in many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor.” Costa said that “a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.”
Glossing over these facts, Times’ stenographers Ben Protess and Jessica Silver-Greenberg, cautioned that “four years after the failure of Lehman Brothers nearly toppled the financial system,” federal regulators “are still wary that a single institution could undermine the recovery of the industry and the economy.”
“Given the extent of the evidence against HSBC, some prosecutors saw the charge as a healthy compromise between a settlement and a harsher money-laundering indictment. While the charge would most likely tarnish the bank’s reputation, some officials argued that it would not set off a series of devastating consequences.”
Devastating to whom one might ask? The 100,000 Mexicans brutally murdered by drug gangsters, corrupt police and Mexican Army soldiers whose scorched-earth campaign kills off the competition on behalf of Mexico’s largest narcotics organization, the Sinaloa Cartel run by fugitive billionaire drug lord Chapo Guzmán?
“A money-laundering indictment, or a guilty plea over such charges,” the Times averred, “would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.”
Many of the same lame excuses for prosecutorial inaction were also prominent features in the British press.
The Daily Telegraph reported that the “largest banks have become too big to prosecute because of the impact criminal charges would have on confidence in them, Britain’s most senior bank regulator has admitted.”
“In a variant of the ‘too big to fail’ problem, Andrew Bailey, chief executive designate of the Prudential Regulation Authority, said bringing a legal action against a major financial institution raised ‘very difficult questions’.”
“‘Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen and I’m not saying we are going to see… this is not an ordinary criminal indictment’,” Bailey told the Telegraph.
Echoing Bailey, Assistant Attorney General Lanny Breuer said the decision not to prosecute HSBC was made because “in this day and age we have to evaluate that innocent people will face very big consequences if you make a decision.”
This from an administration that continues to prosecute–and jail–low-level drug offenders at record rates!
“Breuer’s argument is facially absurd,” according to William K. Black. In a piece published by New Economic Perspectives, Black argues:
Prosecuting HSBC’s fraudulent controlling managers would not harm anyone innocent other than their families–and virtually all prosecutions hurt some family members. Breuer claims that virtually all of HSBC’s senior officers have been removed, so his argument is doubly absurd. Mostly, however, Breuer ignores all of the innocents harmed by the control frauds. SDIs [systemically dangerous institutions] that are control frauds are weapons of mass economic destruction that drive global crises and are the greatest enemy of ‘free’ markets. They are also the greatest threat to democracy, for they create crony capitalism. We are all innocent victims of these control frauds–and the Obama and Cameron governments are allowing them to commit their frauds with impunity from criminal prosecutions. The controlling officers get wealthy without fear of prosecution. The SDIs controlled by fraudulent officers have to purchase an indulgence, but the price of the indulgence is capped by the ‘too big to prosecute’ doctrine at a level that will not cause it any real distress. Breuer’s and Bailey’s embrace of too big to prosecute should have led to their immediate dismissals. Obama and Cameron should either fire them or announce that they stand with the criminal enterprises and their fraudulent controlling officers against their citizens.
As Rowan Bosworth-Davies, a former financial crimes specialist with London’s Metropolitan Police observed on his web site, “When you get a bank which admits, like HSBC has just done, that it is nothing more than a low-life money launderer for Mexican drug kingpins, and when it serves powerful vested interests to get round internationally-ratified sanctions against rogue nations, what possible benefit is achieved by trying to pretend that they cannot be prosecuted and charged with criminal offences?”
“Oh, excuse me,” Bosworth-Davies wrote, “it might impact the confidence they enjoy? Whose confidence, their Mexican drug traffickers, their international sanctions breakers, their global tax evaders, or the ordinary, law-abiding clients who are entitled to assume that their bank will obey the laws imposed on them and will provide a safe place of deposit?”
“Confidence,” the former Met detective averred, “what bloody confidence can anyone have when they know their bank is an admitted criminal? When their money is deposited with a bank that breaks the criminal law at every possible opportunity, which cheats them at every turn, sells them fraudulent products, launders drug money, evades international sanctions, moves foreign oligarchs’ tax evasion, safeguards the deposit accounts of Third World dictators and their families, then what is that confidence worth?”
Instead, as with the 2010 deal with Wachovia Bank, federal prosecutors cobbled together a DPA that levied a “fine” of $160 million (£99.2m) on laundered drug profits that topped $378 billion (£234.5bn).
Although top Justice Department officials charged that HSBC laundered upwards of $881 million (£546.5m) on behalf of the Sinaloa and Colombia’s Norte del Valle drug cartels, federal prosecutors investigating the bank told Reuters in September that this was merely the “tip of the iceberg.”
In fact, as Senate investigators discovered during their probe, the bank failed to monitor more than $670 billion (£415.6bn) in wire transfers from HSBC Mexico (HBMX) between 2006 and 2009, and failed to adequately monitor over $9.4 billion (£5.83bn) in purchases of physical U.S. dollars from HBMX during the same period.
Assistant Attorney General Lanny A. Breuer, said in prepared remarks announcing the DPA that “traffickers didn’t have to try very hard” when it came to laundering drug cash. “They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account,” Breuer said, “using boxes designed to fit the precise dimensions of the teller windows in HSBC Mexico’s branches.”
While Breuer’s dramatic account of the money laundering process may have offered a gullible financial press corps a breathless moment or two, a closer look at Breuer’s CV offer hints as to why he chose not to criminally charge the bank.
A corporatist insider, after representing President Bill Clinton during ginned-up impeachment hearings, Breuer became a partner in the white shoe Washington, DC law firm Covington & Burling. From his perch, he represented Moody’s Investor Service in the wake of Enron’s ignominious collapse and Dick Cheney’s old firm Halliburton/KBR during Bush regime scandals. Talk about “safe hands”!
Appointed as the head of the Justice Department’s Criminal Division by Obama in 2009, Breuer presided over the prosecution/persecution of NSA whistleblower Thomas A. Drake on charges that he violated the Espionage Act of 1917 for disclosing massive contractor fraud at NSA to The Baltimore Sun.
More recently, along with 14 other officials Breuer was recommended for potential “disciplinary action” by the Justice Department’s Office of the Inspector General over the Fast and Furious gun-walking scandal which put some 2,000 firearms into the hands of cartel killers in Mexico.
“A Justice official said Breuer has been ‘admonished’” by U.S. Attorney General Eric Holder, “but will not be disciplined,” The Washington Post reported.
Breuer had the temerity to claim that deferred prosecution agreements “have the same punitive, deterrent, and rehabilitative effect as a guilty plea.”
“When a company enters into a deferred prosecution agreement with the government, or an non prosecution agreement for that matter,” Breuer asserted, “it almost always must acknowledge wrongdoing, agree to cooperate with the government’s investigation, pay a fine, agree to improve its compliance program, and agree to face prosecution if it fails to satisfy the terms of the agreement.”
As is evident from this brief synopsis, when it came to holding HSBC to account, the fix was already in even before a single signature was affixed to the DPA.
Without batting an eyelash, Breuer informed us that HSBC has “committed” to undertake “enhanced AML and other compliance obligations and structural changes within its entire global operations to prevent a repeat of the conduct that led to this prosecution.”
“HSBC has replaced almost all of its senior management, ‘clawed back’ deferred compensation bonuses given to its most senior AML and compliance officers, and has agreed to partially defer bonus compensation for its most senior executives–its group general managers and group managing directors–during the period of the five-year DPA.”
Yes, you read that correctly. Despite charges that would land the average citizen in a federal gulag for decades, senior managers have “agreed” to “partially defer bonus compensation” for the length of the DPA!
As Rolling Stone financial journalist Matt Taibbi commented:
“Wow. So the executives who spent a decade laundering billions of dollars will have to partially defer their bonuses during the five-year deferred prosecution agreement? Are you fucking kidding me? That’s the punishment? The government’s negotiators couldn’t hold firm on forcing HSBC officials to completely wait to receive their ill-gotten bonuses? They had to settle on making them ‘partially’ wait? Every honest prosecutor in America has to be puking his guts out at such bargaining tactics. What was the Justice Department’s opening offer–asking executives to restrict their Caribbean vacation time to nine weeks a year?”
“So you might ask,” Taibbi writes,
“what’s the appropriate penalty for a bank in HSBC’s position? Exactly how much money should one extract from a firm that has been shamelessly profiting from business with criminals for years and years? Remember, we’re talking about a company that has admitted to a smorgasbord of serious banking crimes. If you’re the prosecutor, you’ve got this bank by the balls. So how much money should you take?”
“How about all of it? How about every last dollar the bank has made since it started its illegal activity? How about you dive into every bank account of every single executive involved in this mess and take every last bonus dollar they’ve ever earned? Then take their houses, their cars, the paintings they bought at Sotheby’s auctions, the clothes in their closets, the loose change in the jars on their kitchen counters, every last freaking thing. Take it all and don’t think twice. And then throw them in jail.”
But there’s the rub and the proverbial fly in the ointment. The government can’t and won’t take such measures. Far from being impartial arbiters sworn to defend us from financial predators, speculators, drug lords, terrorists, warmongers and out-of-control corporate vultures hiding trillions of taxable dollars offshore, officials of this criminalized state are hand picked servants of a thoroughly debauched ruling class.
Writing for the World Socialist Web Site, Barry Grey observed: HSBC “was allowed to pay a token fine–less than 10 percent of its profits for 2011 and a fraction of the money it made laundering the drug bosses’ blood money. Meanwhile, small-time drug dealers and users, often among the most impoverished and oppressed sections of the population, are routinely arrested and locked up for years in the American prison gulag.”
“The financial parasites who keep the global drug trade churning and make the lion’s share of money from the social devastation it wreaks are above the law,” Grey noted.
“Here, in a nutshell,” Grey wrote, “is the modern-day aristocratic principle that prevails behind the threadbare trappings of ‘democracy.’ The financial robber barons of today are a law unto themselves. They can steal, plunder, even murder at will, without fear of being called to account. They devote a portion of their fabulous wealth to bribing politicians, regulators, judges and police–from the heights of power in Washington down to the local police precinct–to make sure their wealth is protected and they remain immune from criminal prosecution.”
Regarding America’s fraudulent “War on Drugs,” researcher Oliver Villar, who with Drew Cottle coauthored the essential book, Cocaine, Death Squads, and the War on Terror: US Imperialism and Class Struggle in Colombia, told Asia Times Online, it is a “war” that the state and leading banks and financial institutions in the capitalist West have no interest whatsoever in “winning.”
When queried why he argued that the “war on drugs is no failure at all, but a success,” Villar noted: “I come to that conclusion because what do we know so far about the war on drugs? Well, the US has spent about US$1 trillion throughout the globe. Can we simply say it has failed? Has it failed the drug money-laundering banks? No. Has it failed the key Western financial centers? No. Has it failed the narco-bourgeoisie in Colombia–or in Afghanistan, where we can see similar patterns emerging? No. Is it a success in maintaining that political economy? Absolutely.”
Equally important, what does the impunity shamelessly enjoyed by such loathsome parasites say about us?
Have we become so indifferent to officially sanctioned crime and corruption, the myriad petty tyrannies and tyrants, from the boardroom to the security checkpoint to the job, not to mention murderous state policies that have transformed so-called “advanced” democracies into hated and loathed pariah states, who we really are?
As the late author J. G. Ballard pointed out in his masterful novel Kingdom Come, “Consumer fascism provides its own ideology, no one needs to sit down and dictate Mein Kampf. Evil and psychopathy have been reconfigured into lifestyle statements.”
Paranoid fantasy? Wake up and smell the corporatized police state.
Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, he is a Contributing Editor with Cyrano’s Journal Today. His articles can be read on Dissident Voice, Pacific Free Press, Uncommon Thought Journal, and the whistleblowing website WikiLeaks. He is the editor of Police State America: U.S. Military “Civil Disturbance” Planning, distributed by AK Press and has contributed to the new book from Global Research, The Global Economic Crisis: The Great Depression of the XXI Century.

About unlawful orders: US Supreme Court decided such ‘law’ is void

As I wrote last year, a useful place for Americans to stand is with the US Supreme Court in one of its most cited decisions:
Anything passed as law in obvious violation of the US Constitution is not law, but void.
Void as a legal term means the alleged “law” has zero legal force; that “void things are as no things.” A court decision has root in the word decide, meaning to cut off or kill all other options.
Supreme Court Chief Justice Marshall’s crystal-clear wording is below.
This definitive legal ruling empowers Americans acting upon or enforcing such non-laws to reject them in full confidence of their Oaths to support and defend the US Constitution against all enemies, foreign and domestic.
The 3-minute video asks police, military, and other law enforcement:
When you signed-up to serve the US Constitution, was your Oath sincere?
US military are authorized by their Oath of Enlistment and training to refuse unlawful orders, with officers authorized to arrest those who issue them. Given that US wars are unlawful because the US is treaty-bound to only use our military if under attack by another nation’s government, all current war orders are unlawful and should be refused. Military of civilian “leadership” who issue such orders should be arrested to immediately stop War Crimes.
Our peaceful and lawful 2nd American Revolution points to other “emperor has no clothes” obvious void laws and criminal acts:
Here is the US Supreme Court’s ruling (my parenthetical notes and emphases):
The powers of the Legislature are defined and limited; and that those limits may not be mistaken or forgotten, the Constitution is written. To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may at any time be passed by those intended to be restrained? The distinction between a government with limited and unlimited powers is abolished if those limits do not confine the persons on whom they are imposed ...
Between these alternatives (limited and unlimited government) there is no middle ground. The Constitution is either a superior, paramount law, unchangeable by ordinary means, or it is on a level with ordinary legislative acts, and, like other acts, is alterable when the legislature shall please to alter it.
If the former part of the alternative be true, then a legislative act contrary to the Constitution is not law; if the latter part be true, then written Constitutions are absurd attempts on the part of the people to limit a power in its own nature illimitable.
Certainly all those who have framed written Constitutions contemplate them as forming the fundamental and paramount law of the nation, and consequently the theory of every such government must be that an act of the Legislature repugnant to the Constitution is void.
... So, if a law be in opposition to the Constitution, if both the law and the Constitution apply to a particular case, ... those, then, who controvert the principle that the Constitution is to be considered in court as a paramount law are reduced to the necessity of maintaining that courts must close their eyes on the Constitution, and see only the law.
This doctrine would subvert the very foundation of all written Constitutions. It would declare that an act which, according to the principles and theory of our government, is entirely void, is yet, in practice, completely obligatory. It would declare that, if the Legislature shall do what is expressly forbidden, such act, notwithstanding the express prohibition, is in reality effectual. It would be giving to the Legislature a practical and real omnipotence with the same breath which professes to restrict their powers within narrow limits. It is prescribing limits, and declaring that those limits may be passed at pleasure.
That it thus reduces to nothing what we have deemed the greatest improvement on political institutions -- a written Constitution, would of itself be sufficient, in America where written Constitutions have been viewed with so much reverence, for rejecting the construction. But the peculiar expressions of the Constitution of the United States furnish additional arguments in favour of its rejection.
... Why otherwise does it direct ... an oath to support it? This oath certainly applies in an especial manner to their conduct in their official character. How immoral to impose it on them if they were to be used as the instruments, and the knowing instruments, for violating what they swear to support!
The oath of office, too, imposed by the Legislature, is completely demonstrative of the legislative opinion on this subject. It is in these words:
I do solemnly swear that I will administer justice without respect to persons, and do equal right to the poor and to the rich; and that I will faithfully and impartially discharge all the duties incumbent on me as according to the best of my abilities and understanding, agreeably to the Constitution and laws of the United States.
Why does a judge swear to discharge his duties agreeably to the Constitution of the United States if that Constitution forms no rule for his government?
... If such be the real state of things, this is worse than solemn mockery. To prescribe or to take this oath becomes equally a crime.
It is also not entirely unworthy of observation that, in declaring what shall be the supreme law of the land, the Constitution itself is first mentioned, and not the laws of the United States generally, but those only which shall be made in pursuance of the Constitution, have that rank.
Thus, the particular phraseology of the Constitution of the United States confirms and strengthens the principle, supposed to be essential to all written Constitutions, that a law repugnant to the Constitution is void, and that courts, as well as other departments, are bound by that instrument (the US Constitution).
And as Abraham Lincoln stated:
“The people — the people — are the rightful masters of both Congresses, and courts — not to overthrow the Constitution, but to overthrow the men who pervert it.” - "Abraham Lincoln, [September 16-17, 1859] (Notes for Speech in Kansas and Ohio)," Page 2.

Ron Paul: It's Going to Get Much, Much Worse


The most delinquent loan of them all: Student debt delinquencies at record levels on the eve of rates doubling. Half of college graduates working in jobs where their degree is not required.

If the news for college graduates couldn’t get any better.  Our woefully motivated millionaire Congress is unable to figure out what is necessary to stop the doubling of interest rates on student debt.  While the Fed can turn on a dime to rectify zero percent interest rates for member banks, trying to help the youth of the nation well, that is just too hard to do.  Milling around through the data I found that for the first time in history, student debt had the highest delinquency rate of all household debts.  This is a big deal given that Americans now carry over $1 trillion in student debt and most of it is in the hands of the young.  At the nucleus of this argument is that people are going into too much debt to finance their educational pursuits.  Collecting tips at the Olive Garden is not exactly going to payoff that $50,000 in student debt.  How is it that the Fed can subsidize big banks with zero percent rates so they can speculate in real estate and other ventures while college graduates are now faced with the doubling of interest rates?

Half of college graduates not utilizing degree
Part of the problem is the voting power (or lack of it) from younger Americans.  Many simply do not vote.  And the baby boomer cohort is guiding many policies through elected officials although they only serve a tiny pizza slice of the baby boomers at that.  So with that said, the voice of the young is largely drowned out by big business and higher education has turned into a very lucrative private-public venture.  With that as our backdrop, half of college graduates are not utilizing their increasingly more expensive degrees:
college graduates underemployed
Half of recent college graduates are either unemployed or underemployed.  And recently many have given up on pursuing careers where their degrees would be utilized and have taken up other jobs.  Other jobs that would have gone to lower skilled workers.  And of course, these workers get pushed down into a lower level of the economic ladder.  And what a shocker that as we go into the various levels of Dante’s Economic Inferno we find that 47.7 million Americans are on food stamps.
The above chart is rather sobering because many recent graduates are leaving school with high levels of debt.  Incomes for many of these graduates are not justifying the sky high rates of tuition at many schools.  Education is still a worthy venture and that is why people continue to go into high levels of debt for this.  Yet our banking system has been rather obsessed with one sector of our economy since the tech bubble burst in the early 2000s.  Real estate has seemed to dominate every big decision in the last decade to the detriment of creating an economy where millions of jobs are added to meet this more educated workforce.  That has clearly not happened.  Colleges are not going to turn their back on willing students with fresh loans in hand.  And I suppose that is the point.  Easy access to debt is like an aphrodisiac for the industry.  Go to any college campus and you will see palatial stadiums and massive buildings.  Do Olympic sized pools make people discover cures for modern diseases quicker?
What is even more troubling is that the underemployment rate for recent college graduates has trended up in the last few years while the overall unemployment rate has fallen:
recent college grad data
No, we are not looking at a chart of Spain or Greece but a chart of US recent graduates.  A large part of the decline in the unemployment rate has come because the civilian employment population ratio continues to lower:
civilian pop ratio
While many older Americans have dropped off the radar, many recent graduates simply do not have this option.  Many over the last few years have clearly opted to take on jobs that are underutilizing their degrees.  Does that mean they overpaid for their education?  $1 trillion in student debt seems to give us an answer that not only did many overpay, they didn’t even have the funds to afford it in the first place.  Higher tuition would make more sense if wages were also rising but that doesn’t seem to be the case with the new batch of graduates.  And many are falling into student debt quicksand and are unable to pay the loans they now have.
The most delinquent of them all
Student debt before the 2000s hit was typically a safe financial bet.  Delinquencies on student debt reflected this.  Today, we now find ourselves at the precipice of another bubble with student debt having the highest delinquency of any form of household debt:
student loan bad debt
You can see this rate doubling only in the last few years.  Keep in mind this is occurring without the potential doubling of student loan interest rates.  Rates are set to go from 3.4 percent to 6.8 percent if Congress does not act.  Amazingly, they are able to act quickly when it comes to the interest of large banking but to help the young in our nation?  No, let us go on holiday break and see what happens.
The rising delinquency rates are simply the last straw in the student debt bubble.  This is a bubble.  When you have prices soaring without any underlying economic change, you have a big problem on hand.  Keep in mind that what you can afford and the price of something are fully disengaged since the government will lend pretty much whatever is necessary to go to school.  If the cap was $100,000 a year, you can rest assured you will have some for-profits cropping up with $100,000 a year degrees.  Record delinquencies and half of recent graduates working in jobs where a massively expensive degree is not being used does not bode well for higher ed at the moment.  No one has a crystal ball on how this will play out but you can rest assured that something is going to give.  You don’t need a college degree to figure that one out.

BlackBerry may have fumbled chance at recovery

Commentary: Some investors are starting to plan a funeral


By MarketWatch
SAN FRANCISCO (MarketWatch) — BlackBerry Inc.’s disappointing first fiscal quarter, along with its bigger-than-expected drop in subscribers, further dimmed investors’ hopes that the smartphone maker will ever recover its lost luster. 
 

On Friday, the smartphone pioneer surprised investors with a far bigger drop in subscribers than anticipated, an indication that, after a decent fourth quarter, the company’s new BlackBerry 10 software and new smartphones are not making a big enough impact to attract new customers or maintain the current customer base.
That alone cost BlackBerry BBRY -27.76%   CA:BB -26.38%  more than one-quarter of its market value by Friday afternoon — though the stock remains well above its low in the range of $6 per share before enthusiasm over the launch of BB10 devices ignited gains. 
One analyst, Kevin Smithen of Macquarie Capital, made the amost inevitable comparison to Palm, another pioneering mobile-device maker that flamed out before being acquired by Hewlett-Packard Co. HPQ +0.12% . Mark Sue, an analyst with RBC Capital Markets, wrote that a full quarter with the new BlackBerry 10 products on the market “should’ve resulted in better results.”
“BlackBerry could be discounting new and older products, which explains the decline in margins,” Sue posited.
In the wake of these results, many investors appear to be giving up hope that the company can return to its former glory, or recover any vestige of it, competing as it must with Apple Inc.’s AAPL +0.70%  iPhone and devices based on Google’s GOOG +0.38%  Android.
What happens next is anyone’s guess. But investment bankers are no doubt sizing up the company’s declining valuation Friday and pondering prospects for a takeover.

30 Shocking Photos Of Child Labor Between 1908 And 1916

The impact of these images, by photographer Lewis Hine, were instrumental in changing the child labor laws in the U.S.

1.
Date: June 1910
Location: Seaford, Delaware.
The photo shows Daisy Langford, an 8-year-old who works at Ross’ canneries. She helps at the capping machine, but is not able to “keep up.” So she places caps on the cans at the rate of about 40 per minute working full time. That was her first season at the cannery.
Image by Library of Congress / National Child Labor Committee Collection
2.
Date: August 1908
Location: Indianapolis, Indiana
Young workers at the Indianapolis Furniture Factory.
Image by Library of Congress / National Child Labor Committee Collection
3.
Date: September 1908
Location: Cincinnati, Ohio
Lawrence J. Hill, 17 years old, had four fingers mashed off by stamping machine in a lamp factory.
Image by Library of Congress / National Child Labor Committee Collection
4.
Date: October 1908
Location: West Virginia
Two boys working at Lehr glass works.
Image by Library of Congress / National Child Labor Committee Collection
5.
Date: August 1908
Location: Indianapolis, Indiana
Noon time at a cotton mill.
Image by Library of Congress / National Child Labor Committee Collection
6.
Date: November 1910
Location: Fayetteville, Tennessee.
Group of spinners at Elk Cotton Mills. According to Lewis, the youngest girl hardly knew her name.
Image by Library of Congress / National Child Labor Committee Collection
7.
Date: November 1908
Location: Location: Lincolnton, North Carolina.
A young girl, worked as a spinner in Daniels Mfg. Co.
Image by Library of Congress / National Child Labor Committee Collection
8.
Date: May 1911
Location: Tupelo, Mississippi
Inez Johnson (9 years old) and Lily, her cousin (7 years old), both regularly worked as spoolers.
Image by Library of Congress / National Child Labor Committee Collection
9.
Date: November 1908
Location: Gastonia, North Carolina.
Workers on their way home from Loray Mill. The smallest boy on the right end, John Moore, 13 years old, had already been working at the mill for 6 years as sweeper, doffer and spinner.
Image by Library of Congress / National Child Labor Committee Collection
10.
October 1913
Location: San Antonio, Texas.
Three brothers: Boyce (10 years old), Lawrence (7 years old), and the unidentified youngest brother (5 years old), worked as newsboys to support themselves, because their father was sick.
All three would start work at 6:00 A.M. and would sell papers until about 9:00 or 10:00 P.M
Image by Library of Congress / National Child Labor Committee Collection
11.
Date: May 1910
Location: St. Louis, Missouri
Newsboys taking a smoke break.
Image by Library of Congress / National Child Labor Committee Collection
12.
Date: August 1908
Location: Indianapolis, Indiana
13 Indianapolis Newsboys waiting for the Base Ball edition, in a Newspaper office.
Image by Library of Congress / National Child Labor Committee Collection
13.
Date: July 1908
Location: St. Louis, Missouri
Francis Lance, 5 years old, selling papers on Grand Avenue.
Image by Library of Congress / National Child Labor Committee Collection
14.
Date: August 1916
Location: Warren County—Albaton, Kentucky
Amos (6 years old) and Horace (4 years old), worked every day from “sun-up to sun-down,” worming and suckering tobacco plants on their father’s farm.
Image by Library of Congress / National Child Labor Committee Collection
15.
Location: Comanche County, Oklahoma
Date: October 1916
Jewel (6 years old) and Harold Walker (5 years old), both picked between 20 to 25 pounds of cotton a day.
Image by Library of Congress / National Child Labor Committee Collection
16.
Date: October 1913
Location: Houston [vicinity], Texas
Millie, a 4-year-old cotton picker, on farm near Houston. She picked about eight pounds of cotton a day.
Image by Library of Congress / National Child Labor Committee Collection
17.
Date: February 1913
Location: Bluffton, South Carolina
Rosie (7 years old) was a regular oyster shucker. It was her second year working a the Varn & Platt Canning Co.
Image by Library of Congress / National Child Labor Committee Collection
18.
Date: January 1911
Location: Pittston, Pennsylvania
Breaker boys (their job was to separate impurities from coal by hand) at the Hughestown Borough Pennsylvania Coal Company.
Image by Library of Congress / National Child Labor Committee Collection
19.
Date: January 1911
Location: Pittston, Pennsylvania
Breakers boys at work at the Pennsylvania Coal Co. A kind of slave-driver sometimes stood over the boys, prodding or kicking them into obedience.
Image by Library of Congress / National Child Labor Committee Collection
20.
Date: June 1911
Location: Richmond, Virginia
Two Newsboys’ Richard Green (with hat), 5 years old, and Richmond, who was “8”.
Image by Library of Congress / National Child Labor Committee Collection
21.
Date: March 1911
Location: Dunbar, Louisiana
Rosy, an 8-year-old oyster shucker, worked all day from about 3:00 A.M. to about 5 P.M. at the Dunbar Cannery.
According to Lewis, the baby in photo would learn to shuck as soon as she could handle the knife.
Image by Library of Congress / National Child Labor Committee Collection
22.
Date: March 1911
Location: Bay St. Louis, Mississippi
Maud Daly (5 years old) and her sister, Grade Daly (3 years old), each picked about one pot of shrimp a day for the Peerless Oyster Co.
Image by Library of Congress / National Child Labor Committee Collection
23.
Date: November 1910
Location: Pell City, Alabama
Doffers at the Pell City Cotton Mill.
Image by Library of Congress / National Child Labor Committee Collection
24.
Date: November 1910
Location: Birmingham, Alabama.
Donnie Cole worked as a doffer (someone who clears full bobbins, pirns or spindles from a spinning frame). When asked Lewis asked his age, he hesitated, then said, “I’m 12.”
Image by Library of Congress / National Child Labor Committee Collection
25.
Date: April 1913
Location: Columbus, Georgia
Phoenix Mill was a “dinner-toters,” delivering up to 10 meals a day to workers.
Image by Library of Congress / National Child Labor Committee Collection
26.
Date: January 1909
Location: Augusta, Georgia
A little spinner at the Globe Cotton Mill. Augusta, Ga. The overseer admitted that she was regularly employed.
Image by Library of Congress / National Child Labor Committee Collection
27.
Date: December 1908
Location: Loudon, Tennessee
Like many young workers, this little girl was so small she has to stand on a box to reach the machine.
Image by Library of Congress / National Child Labor Committee Collection
28.
Date: February 1911
Location: Port Royal, South Carolina
Josie (6 years old), Bertha (6 years old), Sophie (10 years old), were all shuckers at the Maggioni Canning Co.
Image by Library of Congress / National Child Labor Committee Collection
29.
Date: January 1909
Location: Tampa, Florida
Young boys working as cigar makers at the Englahardt & Co.,
Image by Library of Congress / National Child Labor Committee Collection
30.
Date: July 1909
Location: Baltimore, Maryland.
Young workers stringing beans in the J. S. Farrand Packing Co. Those too small to work are held on laps of workers.
Image by Library of Congress / National Child Labor Committee Collection

The Rent-a-government

End of the Thatcher property revolution

A generation of young families in rented properties could turn away from the Conservative Party, experts warned tonight, after new home ownership figures signalled the end of Margaret Thatcher’s housing legacy.

The number of 25 to 34-year-olds who own their home has fallen from two million to 1.3 million in a decade.
The number of 25 to 34-year-olds who own their home has fallen from two million to 1.3 million in a decade.  Photo: REX FEATURES
 
 
The Office for National Statistics said the number of 25 to 34-year-olds who own their home has fallen from two million to 1.3 million in a decade.
Only 40 per cent of young adults own their own home compared with 58 per cent in 2001.
The figures illustrate for the first time the sharp decline in home ownership among young people since Mrs Thatcher’s home ownership drive of the Seventies and Eighties.
The number of young people renting has risen sharply from 1.5 million to two million over the same period as high property prices and low wages lock young people out of the housing market.
The figures, based on England and Wales census data, also show that the number of people renting homes in 2011 was more than 8.3 million — the highest since 1961.
 
Experts said the data showed that Mrs Thatcher’s dream of a property-owning democracy was now a “relic”, and that it could take years for young professionals to be able to afford to leave the family home.
Nationwide, Britain’s biggest building society, said house prices were rising at the fastest pace for nearly three years, tightening the squeeze on would-be house buyers.
Nick Faith, of the think tank, Policy Exchange, said: “The stark drop in younger people owning a home presents a long-term challenge for all political parties but especially the Conservatives.
“Research shows that private renters and people living in social housing are less likely to vote Tory. That is why the Government needs to have an honest conversation about the need to build more quality housing, especially in urban and suburban areas. That’s where younger people tend to want to live.”
Emma Stone, of the Joseph Rowntree Foundation, warned a million people in “Generation Rent” could be locked out of home ownership until 2020.
She said: “Renting is likely to be the only game in town for young people trying to get a foothold in a fierce and competitive market.
“It means young people’s dreams of owning a home may never come true, while many more will have a much longer wait before they own their own properties. More people will be pushed into private renting or staying at home with mum and dad well into their thirties.”
She added: “Margaret Thatcher’s vision for a property-owning democracy increasingly looks like a relic from the 1980s — unless we address the chronic shortage of homes to improve affordability and supply.”
Despite the credit crisis, record low interest rates have helped underpin the housing market. Government schemes such as Help to Buy have begun to kick-start a recovery in price.
Capital Economics claims house values are on average six times higher than incomes, meaning property prices are “over-valued” by as much as 15 to 20 per cent.
A report this week revealed Virginia Water in Surrey is the first place outside of London where house prices average more than £1 million.
Matt Pointon, of Capital Economics said: “We’re not surprised to see the proportion of young home owners fall, and we believe it will continue to go down.” The ONS figures confirmed figures released in April which showed the proportion of owner occupiers in England and Wales has fallen for the first time in nearly 100 years, from 69 per cent in 2001 to 64 per cent.
Today’s data provided the first breakdown of home ownership by age. More than 75 per cent of 65 to 74-year-olds own their own homes, the highest across any age group. Some 87 per cent of 16 to 24-year-olds rent. The ONS data also showed that one in five families, or 1.2 million, are renting from a private landlord — double the level in 2001.
Shelter, the charity for the homeless, said couples who start a family in their twenties could face a 12-year wait to save enough money for a deposit, nearly double the time faced by a childless couple.
Campbell Robb, its chief executive, said: “For a generation, home ownership is drifting further and further away and we feel the Government missed an opportunity in the spending review to invest more in affordable housing.
“For successive governments, polticians have claimed that home ownership is a central theme, important for people and communities. The trouble is that the rhetoric and reality are further apart than they have ever been.”
Housing Minister Mark Prisk said: "These figures cover the end of the unsustainable housing boom which led to a near trebling of house prices in the decade from 1997 and a decline in the number of homeowners since 2003.
"In stark contrast, the number of first-time buyers is now at its highest level since 2007, housing is the most affordable its been for a decade for first-time buyers and home buying costs have fallen by a third in the last four years.
"But we're determined to help aspiring homeowners which is why our Help to Buy scheme is supporting people buy newly-built homes with a fraction of the deposit they would normally require."
 

Detroit’s Default May Spark U.S. Death Spiral of Debt

Source: CP
Debt is deadly, and it’s made even worse with rising interest rates that can prevent you from eliminating the load. What happens with rising interest rates is that more of the payments go toward the interest and less to the principal. In fact, it’s what I call a death spiral of debt that worsens as rates move higher.
When individuals face excessive debt, often the solution is to reduce spending and adhere to a strict repayment program.
When corporations face excessive debt, they tend to streamline; but they must be careful when they do so, because any cost-cutting could impact the company’s growth. What generally happens is more debt or credit is issued.
But when governments build up massive debt loads, there is no definitive solution, and it becomes problematic. The national debt is estimated to reach $17.55 trillion by the end of this year, while the country’s total debt, including federal, state, and municipal debt, is earmarked at $20.54 trillion. (Source: USGovernmentDebt.us, June 18, 2013.)
Congress and Obama must resolve the national debt limit.
Take a look at the chart below of the national debt from 1970 to today (blue bars), and the projected national debt to 2018 (red bars). What’s made clear from this chart is not only the steady buildup of national debt but the rate of the buildup since early 2000, especially following the Great Recession in 2008. It’s obvious that the national debt is spiraling out of control.
Gross Public Debt Chart
Chart courtesy of www.USGovernmentSpending.com
Despite the popular adage “a picture is worth a thousand words,” this chart of the national debt can be defined by one word: debt.
That’s why the Federal Reserve and the U.S. government must deal with the country’s massive national debt load—and how it’s getting out of hand.
But not only is the national debt an issue, the debt buildup at the state and municipal level is also a major concern. By the end of this year, the debt amassed by the state governments is estimated to reach $1.19 trillion. (Source: Ibid.)
What’s alarming is that the municipal, state, and federal governments will inevitably be subject to a cash crunch when yields and interest rates ratchet higher.
As I recently mentioned in these pages, we’re seeing debt issues in many states that are vulnerable to rising interest rates, and not only with the federal debt.
Recall that California and its municipalities have accumulated a debt load of about $848 billion, which could eventually be eclipsed by $1.1 trillion, according to The California Public Policy Center. (Source: “Report: California’s Actual Debt At Least $848B; Could Pass $1.1T,” CBS web site, May 1, 2013.)
And then this past Monday, we found out that the city of Detroit, which has been ravaged by decades of slow growth and major population decline, has run out of money after defaulting on roughly $2.5 billion in unsecured debt. The city is trying to convince its creditors to accept $0.10 on the dollar to eliminate this debt. (Source: Williams, C., “Emergency manager: Detroit won’t pay $2.5B it owes,” Associated Press, June 14, 2013.)
But the problem won’t stop there, because Detroit will need new funds to survive, and based on the city’s default and low credit rating, the cost of the loan would likely be significant.
So, while the stock market rises to new records and new millionaires surface each day, the real problem will be when rates move higher and debt payments become unmanageable.
I would start to take some profits off the table, or move funds into more defensive sectors.

It's bigger than the Wall Street mortgage scandal

Unfortunately, this thing starts out with a painfully long and pointless series of introductions and professional back slapping.

Stick with it. When the speaker starts, she gets into high gear fast?

Pension plans are underfunded?

They weren't - until they were looted.

CEOs have been raiding them with fancy accounting to boost their company's stock prices in order to boost their "performance based" bonuses.

Trillions of dollars have been stolen then way in broad daylight - but it's all "legal."

From YouTube:

The decline in employer-sponsored pension and retiree health plans is a troubling trend that has eroded the retirement security of millions of Americans. Stock market losses and low interest rates have weakened pension funding, and employers say that this -- combined with retiree longevity, rising costs and the need to compete globally -- is forcing them to freeze pensions and cut retiree benefits.

However, Ellen Schultz, a former investigative reporter for The Wall Street Journal, says that employers' practices also played a role. In her new book, Retirement Heist, Schultz contends that large companies, aided by benefits consultants and lawyers, have played a largely overlooked role in the decline of American pensions and benefits. At this November 2011 event, Schultz and other experts explored the numerous examples of companies using their pension funds and retiree benefit cuts to bolster profits and boost compensation for senior executives at the expense of rank-and-file workers.

This event was hosted jointly by the New America Foundation, the Pension Rights Center and AARP.

A Short, Sharp, Close Look at Ordinary Commercial Banking Profits


Before It’s News
Even with the most cursory examination, lending can be seen as mostly a no-risk, ‘asset-secured’ business, in its simplest form seeing borrowers liable only for the original loan, which is secured against the borrower’s assets, plus interest.
When the loan is payed back, the bank profits in the accepted perception of what a bank does for a living – it gives low interest to depositors and takes a slightly higher interest from borrowers, their profit being the difference in interest rates.  
When borrowers default, they yield to the lender whatever securities they’ve put up, which normally have asset values far exceeding that of the original loan.
The lender still profits.
In the case of mortgage loans, (Mort = death, as in ‘mortuary’ and Gage = bond) the home itself secures the loan, which over the 20-30 year payback period often returns more than 100% interest as the borrower pays back at least twice the amount of the original home loan he commits his working life to – and can lose at any time, no matter how much he’s paid.
So on the simple loan side, the lender gets his money back, plus interest.
In a default situation, he gets the securities against the loan which he sells off to pay back the loan.
In the Trillion-dollar mortgage market, he doubles his money.
This appears to be an almost totally win-win situation for the banks.
Astonishingly, that’s not enough! Instead of getting a small interest on their money, depositors actuallypay banks to lend them their money today – it’s called a ‘deposit charge’ – which, along with all the other bank charges, means depositors see only between 80 and 90% of their income, when they used to see a small income from interest.
Things change… today’s problem with banks is their tendency to gamble:
By taking on the ‘moral hazard’ involved in the sale of debt derivatives, sacrificing long-term debt profit for today’s cash, they put the purchaser in harm’s way.
Their sale of ‘toxic’ derivatives, one of which is ‘securitized’ mortgage debts pooled with less secure, even unrecoverable debts and fraudulently labeled ‘Triple-A mortgage-backed securities’, led to the U.S. Sub-prime crash in 2008.
Step Right Up, Folks and pay, pay, pay…. we have hedge funds, Credit Default Swaps and many other chips in the game…

2013 – Start of Seismic Shifts in Money, Metals, Markets


Gold Silver Worlds – by  Taki Tsaklanos and GE Christenson
Unsustainable trends can survive much longer than most people anticipate, but they do end when their “time is up” – at the culmination of their time cycles. Examples of these trends include deficit spending, exponential debt increases, overpriced bond markets, and unbacked paper currencies, to name a few. In an effort to bring clarity in how and when these trends could change direction we analyzed more than 20 different cycles. They almost unanimously point to tectonic shifts in the months and years ahead … starting now. We have been warned.  
At this point, we have enough confirmation to accept that the gold and silver crash – starting in April of 2013 – was the first shot across the board of what is to come.
Financial crashes and economic collapses are not inevitable, but they seem more likely in the next few years, starting later this summer.  Preparation might appear to be a waste of time and resources, but lack of preparation could result in the loss of wealth, incomes, jobs, and lives.  Perhaps our leaders will guide the world economies through some upcoming hard times, but they might also aggravate those hard times by following policies that benefit the political and financial elite at the expense of the middle class and the poorer classes.  Look at current trends in government and banking, and decide for yourself!
The next few years are likely to be quite problematic for most of the world’s population, particularly the poor.  People who have the majority of their assets in stocks, bonds and paper debt may also be hurt as the currencies are inflated and purchasing power declines sharply.
We have presented a summary of cycles for stocks and bonds, war, gold and silver.  We show the source of the cyclic information, the relevant timing, and some commentary.

Stocks & Bonds 

Charles Nenner Research (source)
Stocks should peak in mid-2013 and fall until about 2020.  Similarly, bonds should peak in the summer of 2013 and fall thereafter for 20 years.  He bases his conclusions entirely on cycle research.  He expects the Dow to fall to around 5,000 by 2018 – 2020.
Kress Cycles by Clif Droke (source)
The major 120 year cycle plus all minor cycles trend down into late 2014.  The stock market should decline hard into late 2014.
Elliott Wave Cycles by Robert Prechter (source)
He believes that the stock market has peaked and has entered a generational bear-market.  He anticipates a crash low in the market around 2016 – 2017.
Market Energy Wave (source)
He sees a 36 year cycle in stock markets that is peaking in mid-2013 and down 2013 – 2016.  “… the controlling energy wave is scheduled to flip back to negative on July 19 of this year.”  Equity markets should drop 25 – 50%.
Armstrong Economics (source)
His economic confidence model projects a peak in confidence in August 2013, a bottom in September 2014, and another peak in October 2015.  The decline into January 2020 should be severe.  He expects a world-wide crash and contraction in economies from 2015 – 2020.
Cycles per Charles Hugh Smith (source)
He discusses four long-term cycles that bottom roughly in the 2010 – 2020 period.  They are:  Credit expansion/contraction cycle;  Price inflation/wage cycle; Generational cycle;  and Peak oil extraction cycle.
Harry Dent – Demographics (source)
Stock prices should drop, on average for the balance of this decade.  Demographic cycles in the United States (and elsewhere) indicate a contraction in real terms for most of this decade.
Sun Spot Cycles
They are due to peak in the summer of 2013 and decline into 2019.  Market tops often occur at or near peaks in sun spots.  This is an approximate 10 – 13 year cycle.  Economic and political upheavals tend to occur at or near the peak of sun spot cycles.
Lucky 13
1987, 2000, and 2013 marked stock market highs, all 13 years apart.

War Cycles

Larry Edelson (source)
His research shows that the world-wide tendency to fight major wars rises and falls over time.  He currently projects a peak about 2020 with rising war fever from 2013 until 2020.  There is no shortage of possible war zones.  As conditions worsen during the balance of this decade, nations will be inclined to distract and control their populace via wars and increased government control and management of the economy.
Long term war cycles
1780, 1860, 1940, 2020?  About every 80 years there has been a major war involving the United States.

Gold & Silver

Amanita inflation markets model
He expects a major gold low in 2014/15, and a super bull market running into 2020.  He is one of the top timers in the world according to “Timer Digest”.
Alf Field (source)
He uses Elliott Wave theory to analyze gold.  His first major target for gold is $4500, for Intermediate wave III of MAJOR THREE.  Wave IV will be a correction and wave V will take gold much higher thereafter.
Charles Nenner Research
He expects gold to bottom about now and rally substantially from here.  He called the top in gold two years ago.  He called for a bottom about now in the $1300s.  He expects a large rally that extends several years.
Larry Edelson
He projects a low for gold in June 2013 followed by a substantial rally until about 2020, possibly to $10,000.
Armstrong Economics
Gold is likely to be weak until after October 2015, and then move strongly higher into January 2020.  Gold will rise primarily due to the collapse of paper currencies in the period from 2015 – 2020.

Other Cycles

Comet ISON
This comet will be visible in October and November 2013 – it is expected to be the brightest comet in years, perhaps many decades.  Highly visible comets often indicate sudden changes in leadership, political systems, and financial systems.  Possible changes are the failure or redesign of the Euro, a dollar crash, assassination of a major leader, impeachment, derivative implosion, martial law, international war, and a major economic default.
JR Nyquist on global cooling and food production (source)
He discusses long-term solar output cycles.  He anticipates that an approximately 200 year cycle in solar output will reduce average temperatures, available water, and crop yields.  He expects higher food prices and famine during the next decade.  The last cold cycle low was around the time Napoleon marched into Russia.
100 year anniversaries
1913 was an important year.  It marked the beginning of the Federal Reserve and the income tax in the US.  2013 has already shown that essentially all digital communications and internet activity are tracked and recorded by the government.  It has also marked the authorization for military control and martial law in the United States.  Further, bank account and brokerage confiscations (bail-ins) have already occurred and more “bail-ins” are likely.  2013 could mark the beginning of what might evolve into WWIII – starting in the Middle East.

Financial Astrology Cycles

Amanita (Astrological cycles) (source)
He expects a peak for stocks, bonds, gold, and silver in July or August 2013.  Thereafter, those markets should decline, and equities and bonds could crash.  Gold and silver should rally into 2020.  He anticipates a very difficult time world-wide until 2023.  This could include market crashes, financial meltdowns, economic collapse, world war, and increasing government control over the populace.
Furthermore, the timeline between 2016 and 2020 is the most likely period for a derivative implosion.
Bradley Model
Stock markets peak in early June 2013, bottom in late 2014, late 2017, and 2020.  This model anticipates a stock market decline into 2020 from a peak in June 2013.
Crawford:  Mars-Uranus Crash Cycle
He sees a crash window from late 2013 – through early 2015.  This model anticipates a stock market decline into 2020 from a peak in June 2013.
Tarasov model
The model sees a peak in 2011, bottom in late 2014 and lower low in 2020.  It indicates weakening economies and declining global liquidity into late 2014, a short bounce and then further decline into 2020.
Amanita long term equities model
He expects a high in spring of 2013 and a low in early 2015.  This indicates nearly two years of weakening stock markets, world-wide.
Saturn-Neptune hard aspects
Period:  Late 2015 – late 2016.  These hard aspects correlate with the bursting of major bubbles.  Our best guess for late 2015 would be the bursting of the fiat currency, bond, or derivative bubbles.
Global food supplies, as discussed by Amanita
Period:  2014 – 2034.  Global temperatures are likely to decline, substantially lowering crop yields and causing massive starvation.  Rebellions, riots, and chaos often begin with food shortages.

Summary

There are many cycles that suggest a stock market correction or crash is near.  That correction/crash will probably be accompanied by a correction in the bond market that reverses much of the bullish action of the past 30 years.  (Signs of a bond bear market are already visible.)  Gold and silver should rally substantially as their cycles are turning up while money flees the stock and bond markets and attempts to find safety in an increasingly dangerous world.  Financially and socially, many cycles have turned downward, and many will not bottom until later in this decade.  Much can go badly wrong during the next seven years.  Now is NOT the time for complacency or procrastination.
Along with the decline in equities, bonds, and the value of paper money will come – probably – more social unrest, considerably higher consumer prices for food and energy, bankrupt local, state and national governments, more debt defaults, higher unemployment, possible monetary and/or economic collapse, and a likely escalation in regional and global wars.
A gradual cooling (NOT warming) will reduce crop yields and drive already high food prices much higher.  The world’s poor will suffer.  Hungry people are inclined to rebel and threaten world governments.  Hence governments will become more repressive and will increase their information gathering on all those viewed as potentially threatening to the status quo.
Paul B. Farrell of Market Watch sees “Doomsday poll:  87% risk of stock crash by year-end.  The link is here.
Alf Field wrote this in 2011 regarding what is needed to fix our monetary system: The Brutal Truths:
  1. The slate needs to be wiped clean and a new sound monetary system introduced.
  2. That will require the elimination of all debt, deficits, unfunded social entitlements, the US Dollar as Reserve currency, and the big one, the $600 trillion of derivatives.
  3. To eliminate these problems by default and deflation will cause a banking collapse and untold economic pain, leading to riots and political change.
  4. Politicians are appointed for relatively short terms and opt for the easy solutions.
  5. While politicians continue to have the ability to create new money at will, they will do so in order to prevent a melt down on their watch.
  6. Consequently the odds point to governments wiping the slate clean by generating enough new money to eventually destroy their currencies.
  7. The new international monetary system is likely to involve precious metals. It will have to be money that people trust and that governments cannot create at will.
Preparation is important.  You still have a little time remaining before the “window” closes!