11 ‘Stunning Revelations’ From a Confidential Economics Memo to President Obama | TheBlaze.com

Columnist Ryan Lizza’s in-depth New Yorker article (“The Obama Memos”) examines some of the strategies and reasoning behind the Obama administration’s handling of the U.S. economy. But unlike most op-eds, his column involves more than just speculation and conjecture. As one of the article’s chief resources, Lizza uses a 57-page, “Sensitive & Confidential” memo written by the economist Larry Summers in 2008.

For those unfamiliar with that name, Larry Summers is the former Director of the United States National Economic Council for President Obama. And although he resigned from this position in November 2010, as the White House’s chief economist he “played a leading role in crafting the administration’s interventions in the economy,” according to the Wall Street Journal.

Summers’ influence being understood, this “sensitive and confidential” memo helps explain why certain economic strategies and initiatives have been adopted, and in many cases maintained, by the Obama administration. But it does a little more than that: the memo also sheds some light on why the administration has failed to revive the economy.

Summers’ 57-page memo is “striking for two reasons,” writes Dean Baker of The Guardian. “First, it…showed the economic projections that the administration was looking at when it drafted its stimulus package. These projections proved to be hugely overly optimistic.”

Read more: 11 ‘Stunning Revelations’ From a Confidential Economics Memo to President Obama | TheBlaze.com

The Worst Economic Recovery Since The Great Depression - Forbes

The record of President Obama’s first three years in office is in, and nothing that happens now can go back and change that.  What that record shows is that President Obama, with his throwback, old-fashioned, 1970s Keynesian economics, has put America through the worst recovery from a recession since the Great Depression.

The recession started in December, 2007.  Go to the website of the National Bureau of Economic Research (www.nber.org) to see the complete history of America’s recessions.  What that history reveals is that before this last recession, since the Great Depression recessions in America have lasted an average of 10 months, with the longest previously lasting 16 months.

When President Obama entered office in January, 2009, the recession was already in its 13^th month.  His responsibility was to manage a timely, robust recovery to get America back on track again.  Based on the historical record, that recovery was imminent, within a couple of months or so.  Despite widespread fear, nothing fundamental had changed to deprive America of the long term, world-leading prosperity it had enjoyed going back 300 years.

 
Read more: The Worst Economic Recovery Since The Great Depression - Forbes

The Austerity Myth: Federal Spending Up 5% This Year - Investors.com

When Republicans took control of the House in January, they pledged to make deep cuts in federal spending, and in April they succeeded in passing a bill advertised as cutting $38 billion from fiscal 2011's budget. Then in August, they pushed for a deal to cut an additional $2.4 trillion over the next decade.

Some analysts have blamed these spending cuts for this year's economic slowdown.

But data released by the Treasury Department on Friday show that, so far, there haven't been any spending cuts at all.

Higher Spending, Deficits

In fact, in the first nine months of this year, federal spending was $120 billion higher than in the same period in 2010, the data show. That's an increase of almost 5%. And deficits during this time were $23.5 billion higher.

These spending hikes haven't stopped many analysts from claiming that the country is in an age of budget austerity, one that's hurting economic growth.

A July article in USA Today, for example, claimed that "Already in 2011, softer government spending has sapped growth."

Jared Bernstein, former chief economic adviser to Vice President Biden, wrote over the summer that "government spending cutbacks have been a large drag on growth in recent quarters and have led to sharp losses in state and local employment."

Economist and New York Times columnist Paul Krugman argued in September that "the turn toward austerity (is) a major factor in our growth slowdown."

If government spending is related to growth, as these and others claim, then the economy presumably should be growing faster, not slower, given the current higher rates of federal outlays.

State Spending Higher Too

Nor does the claim that state governments sharply cut spending stand up well to closer scrutiny.

Overall state spending continued to climb right through the recession, when all money from state general funds and other funds, federal grants and state bonds is combined.

Total state outlays in 2010 were almost 10% higher than in 2008, according to the National Association of State Budget Officers' annual State Expenditure Report.

And general fund spending — which makes up about 40% of total state spending — is expected to climb 5.2% in 2011 and 2.6% next year, according to the association's latest survey.

NASBO says that states were able to sustain spending growth through 2010 only because the federal government was pumping more money in via the $830 billion stimulus, and that these funds are now all but exhausted.

The Austerity Myth: Federal Spending Up 5% This Year - Investors.com

Oops, Obama touts his jobs plan today at an Ohio bridge that won't qualify - latimes.com

By Andrew Malcom 

You know all those rusting bridges that President Obama wants to spend billions more dollars repairing to allegedly stimulate the economy?

He's headed out to one today which he's described as a "bridge that needs repair between Ohio and Kentucky that's on one of the busiest trucking routes in North America." It is on a busy trucking route, spanning the Ohio River between Covington, Ky., and Cincinnati.

It's the Brent Spence Bridge. It doesn't really need repairs. It's got decades of good life left in its steel spans. It's just overloaded. The bridge was built to handle 85,000 cars and trucks a day, which seemed like a lot back during construction in the Nixon era.

Today, the bridge sort of handles more than 150,000 vehicles a day with frequent jam-ups.

So, plans are not to repair or replace the Brent Spence Bridge. But to build another bridge nearby to ease the loads.

But here's the problem, as John Merline graphically notes here, that could screw up all those envisioned photo op shots of the Democrat and the traffic:

The president's jobs bill is designed for "immediate" highway spending.

And the new $2.3 billion Cincy bridge is not scheduled to even start construction for probably four years, long after Republicans have scheduled the Obama presidency for completion.

And without delays, it wouldn't be finished until 2022, when no one will be counting Obama's rounds of golf.

Politicians hate these kinds of messy distractions when they pick a place to make a symbolic statement. But Brent Spence was so tempting linking, as it does, the home states of GOP House Speaker John Boehner and Senate Minority Leader Mitch McConnell.

But there is some possible good news for President Obama: The $447-billion jobs bill that he wanted passed "right now" back in early September is stuck in a legislative traffic jam in the Senate.

Fellow Democrat Harry Reid, the majority leader who can run that place like a school principal whenever he wants, is aware of opposition to the measure among some of his own caucus members.

And, well, darn it, wouldn't you know, Reid just can't seem to find a place for Obama's jobs bill in the chamber's overloaded schedule. As a result, as of right now Obama's "right now" jobs bill won't come up until later in the fall, possibly much later.

In a way the scheduling doesn't matter. Since the Democrat in the White House would rather have Republican opposition to it than any of its job-creating provisions, so he can have obstructionist charges for next year's campaign.

But if Congress works the way it usually does, maybe the bridge-repair money will be delayed a few years until the president's photo op Brent Spence Bridge enhancement bridge project is actually shovel-ready.

Oops, Obama touts his jobs plan today at an Ohio bridge that won't qualify - latimes.com

Economy Faces a Jolt as Benefit Checks Run Out - Yahoo! Finance

An extraordinary amount of personal income is coming directly from the government.

Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government.

By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year.

In terms of economic impact, that is slightly less than the spending cuts Congress enacted to keep the government financed through September, averting a shutdown.

Unless hiring picks up sharply to compensate, economists fear that the lost income will further crimp consumer spending and act as a drag on a recovery that is still quite fragile. Among the other supports that are slipping away are federal aid to the states, the Federal Reserve’s program to pump money into the economy and the payroll tax cut, scheduled to expire at the end of the year.

“If we don’t get more job growth and gains in wages and salaries, then consumers just aren’t going to have the firepower to spend, and the economy is going to weaken,” said Mark Zandi, chief economist of Moody’s Analytics, a macroeconomic consulting firm.

Job growth has remained elusive. There are 4.6 unemployed workers for every opening, according to the Labor Department, and Friday’s unemployment report showed that employers added an anemic 18,000 jobs in June.

In Arizona, where there are 10 job seekers for every opening, 45,000 people could lose benefits by the end of the year, according to estimates from the state Department of Economic Security. Yet employers in the state have added just 4,000 jobs over the last 12 months.

Some other states will also feel a disproportionate loss of income unless hiring revives. In Florida, where nearly 476,000 people are collecting unemployment benefits, employers have added only 11,200 jobs in the last year. In Michigan, employers have added about 40,000 jobs since May 2010, but about 267,000 people are claiming jobless benefits.

Throughout the recession and its aftermath, government benefits have helped keep money in people’s wallets and, in turn, circulating among businesses. Total government payments rose to $2.3 trillion in 2010, from $1.7 trillion in 2007, an increase of about 35 percent.

While some of that growth was in Social Security and disability benefits as the population aged, the majority resulted from payments to people continuing to suffer from the recession, said Mr. Zandi. Unemployment benefits, including emergency and extended benefits, are more than three times their prerecession level, he said. The nearly 20 percent of personal income now provided by the government is close to a record high.

 Read more here: Economy Faces a Jolt as Benefit Checks Run Out - Yahoo! Finance

WSJ: 107 Months to Clear Banks’ Housing Backlog

According to Helicopter Ben the recession was officially over in May 2009 but if that is true then how come  we have almost 9 years of housing inventory that needs to be sold by the bailed out banks.

Number of the Week: 107 Months to Clear Banks’ Housing Backlog

By Mark Whitehouse

107: How many months it would take to sell banks’ current and shadow inventory of foreclosed homes.

Banks’ vast pile of foreclosed homes doesn’t appear to be diminishing. That’s a troubling sign for the future of the housing market.

Back in April, this column tallied up all the foreclosed homes sitting in banks’ inventory, as well as the “shadow” inventory of homes in the foreclosure process or on which owners had missed at least two mortgage payments. At the time, we reported that at the current rate of sales, it would take 103 months to unload it all.

Over the past six months, that number has actually risen. Banks managed to pare down the shadow inventory, but largely by taking possession of foreclosed homes. As of September, they owned nearly 994,000 foreclosed homes, up 21% from a year earlier. The shadow inventory stood at 5.2 million homes, down 7% from a year earlier. Grand total: 107 months of inventory.

The numbers aren’t exactly comparable to the April analysis, as the providers of data have changed. The inventory data now come from RealtyTrac, the shadow inventory data from LPS Applied Analytics, and the sales data from Core Logic. But no matter how you slice it, the housing market faces almost nine years of foreclosure hangover.

Over the summer, banks appeared to be making some headway. The government’s mortgage-modification program helped some people get current on their payments, taking their homes out of the foreclosure pipeline. At the same time, homebuyer tax credits helped boost sales. Combined real and shadow inventory fell to 91 months of sales in May.

Lately, though, a new wave of defaults appears to be coming in, in part related to the high rate of failures on government modifications. As of September, some 1.9 million homeowners had missed one payment on their mortgages, up 14% from March. Meanwhile, home sales have slowed sharply with the end of government stimulus.

Homeowners might reasonably hope that banks’ latest troubles with foreclosure paperwork might prop up prices by at least temporarily easing the flow of homes onto the market. So far, though, that doesn’t seem to be happening: According to housing-market consultancy Zelman & Associates, banks listed 15% more repossessed home in October than in September.

The mountain of foreclosed homes casts a long shadow.

Remember When Obama Said the Stimulus Plan Would Help Caterpillar Rehire (I guess he meant hire Chinese)

In February of 2009, President Obama stated that Jim Owens, the CEO of Caterpillar, Inc., "said that if Congress passes our plan, this company will be able to rehire some of the folks who were just laid off." Caterpillar had announced 22,000 layoffs in January of that year. After the President left the event, Owens said the exact opposite.

Fastforward to today.

Caterpillar opening facility in China

NEW YORK - Caterpillar Inc., the world's largest marker of construction and mining equipment, said Wednesday it plans to open a new facility in Wujiang, China, to build mini hydraulic excavators.

The company currently supplies Chinese customers with mini excavators produced at a facility in Xuzhou, China, and with machines produced in Sagami, Japan.

Work on the new facility in Wujiang is expected to begin in late 2010, pending approvals from governmental officials in Jiangsu province. The company expects to begin making mini excavators in Wujiang in 2012.

The facility will be part of Caterpillar's Building Construction Products Division, which has manufacturing operations in the U.S., Japan, Brazil and the United Kingdom.

"In recent years, Caterpillar and its independent dealers have made significant investments to expand the range of products and components produced in China, increase and improve customer support services, and expand and enhance dealer coverage in every province," the company said in a statement.

Caterpillar is based in Peoria, Ill.

Mark my word it is only a matter of time before this new Chinese plant will be churning out all of Caterpillar's currently American-made machines not just the ones mentioned in the press release. In other news at least you can thank Caterpillar for helping to artificially raise DOW Jones Average since the recession began.

John Paulson's scary speech: Double digit inflation by 2012, gold at US $4,000

If you have the means it is time to get out of the bond market and buy some gold or silver. When Billionaires are investing 80% of their personal wealth in precious metals you would be foolishess not to heed the warning.

John Paulson: Sell Bonds; Buy Stocks; Double Digit Inflation Coming


By ROBERT LENZNER

It could be time to sell your low-yielding bonds and replace them with higher-yielding common stocks.

Multibillionaire hedge fund operator John Paulson, the investment genius who made a killing going short subprime mortgages a few years ago, told a standing room only crowd at New York’s University Club that double-digit inflation is about to rear its ugly head by 2012, killing the bond market, and restoring strength to equities and gold.

Paulson’s warning to sell U.S. government bonds is one of the latest signs that the most successful investors of this generation believe the run up in bonds is over. Paulson especially underscored the attraction of equities with earnings yields of 7%-8% compared to the 2.6% pittance available on 10-year Treasuries.

Paulson listed his favorite blue-chip stocks; JNJ (Johnson& Johnson) at a 3.8% yield; KO(Coca Cola);PFE, 4% yield., as well as C (Citigroup), BAC (BankofAmerica) and STI (Suntrust Banks) and RF (Regions Financial).

Paulson is a pro at buying the distressed bonds of bankrupt companies, and then converting the debt to equity in reorganization and benefiting from the potential run up. He mentioned one of his greatest plays — K-Mart, which emerged from bankruptcy at $10 a share and then skyrocketed to $190 a share.

His crystal ball is for 2% GDP growth for 2011 and 2012 and he warns that the Fed’s promise of quantitative easing should contribute to double-digit inflation over the next few years.

As this is the best time in 50 years to buy homes, Paulson advised his listeners, crowded into 3 separate dining rooms, to issue 30 year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”

“If you don’t own a home buy one,” Paulson recommended; ” if you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

15 Shocking Poverty Statistics That Are Skyrocketing As The American Middle Class Continues To Be Slowly Wiped Out- The Economic Collapse Blog

You might find these statistics to be shocking but this is what happens when you live in a highly leveraged society that has for decades survived, not prospered, on credit from China and Japan.

15 Shocking Poverty Statistics That Are Skyrocketing As The American Middle Class Continues To Be Slowly Wiped Out

The "America" that so many of us have taken for granted for so many decades is literally disintegrating right in front of our eyes. Most Americans are still operating under the delusion that the United States will always be "the wealthiest nation" in the world and that our economy will always produce large numbers of high paying jobs and that the U.S. will always have a very large middle class. But that is not what is happening. The very foundations of the U.S. economy have rotted away and we now find ourselves on the verge of an economic collapse. Already, millions upon millions of Americans are slipping out of the middle class and into the devastating grip of poverty. Statistic after statistic proves that the middle class in the United States is shrinking month after month after month. Meanwhile, millions of Americans are starting to wake up and are beginning to realize that we have very serious problems on our hands, but they have no idea what is causing our economic distress and they are unaware that most of our politicians have absolutely no idea how to fix the economic disaster that we have created.

On the mainstream news, the American people are treated to endless footage of leaders from both political parties proclaiming that the primary reason that we are in the midst of such an economic mess is because of what the other political party has done.

Republicans proclaim that we are experiencing all of this economic chaos because of the Democrats.

Democrats proclaim that we are experiencing all of this economic chaos because of the Republicans.

Even many readers of this column (who are generally more educated and more informed than most average Americans) leave comment after comment blaming either the Democrats of the Republicans for our current economic mess.

But do you really want to know who is to blame for our economic problems?

Both of them.

This economic nightmare has taken literally decades to develop, and both Democrats and Republicans have contributed greatly to this disaster.

Both parties have absolutely refused to stand up to the Federal Reserve and the horrific economic policies that they have been shoving down our throats for decades.

Both parties have stood idly by as the U.S. trade deficit has absolutely exploded in size and the United States has become significantly poorer month after month after month.

Both parties have refused to do anything as month after month after month large numbers of factories and good paying jobs leave the United States.

Both parties have shoved the spending accelerator to the floor when they have been in power and now we have the largest national debt in the history of the world.

Both parties have done essentially nothing as the health care industry, which was once the envy of the world, has degenerated into a cesspool of corruption and greed and now seems designed to do little more than to provide pharmaceutical companies and health insurance crooks with obscene profits.

If factories keep leaving the United States and jobs keep leaving the United States and the federal government keeps going into more debt and state governments keep going into more debt and local governments keep going into more debt, then things are going to keep getting worse.

It does not take a genius to figure that out.

The United States is continually getting poorer and is continually going into more debt.

Can anyone out there explain how that is a formula for economic prosperity?

Seriously.

Can anyone explain how that would work?

Please leave a comment and explain that to all of us if you can.

The truth is that as wealth continues to leave the United States and as the U.S. gets even deeper into debt, more Americans are going to become poor.

It really is that simple.

The following are 15 shocking poverty statistics that are skyrocketing as the American middle class continues to be slowly wiped out....

#1 Approximately 45 million Americans were living in poverty in 2009.

#2 According to the Associated Press, experts believe that 2009 saw the largest single year increase in the U.S. poverty rate since the U.S. government began calculating poverty figures back in 1959.

#3 The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

#4 According to the U.S. Department of Agriculture, on a year-over-year basis, household participation in the food stamp program has increased 20.28%.

#5 The number of Americans on food stamps surpassed 41 million for the first time ever in June.

#6 As of June, the number of Americans on food stamps had set a new all-time record for 19 consecutive months.

#7 One out of every six Americans is now being served by at least one government anti-poverty program.

#8 More than 50 million Americans are now on Medicaid, the U.S. government health care program designed principally to help the poor.

#9 One out of every seven mortgages in the United States was either delinquent or in foreclosure during the first quarter of 2010.

#10 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it in 2007.

#11 The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.

#12 According to one recent survey, 28% of all U.S. households have at least one member that is looking for a full-time job.

#13 Nationwide, bankruptcy filings rose 20 percent in the 12 month period ending June 30th.

#14 More than 25 percent of all Americans now have a credit score below 599.

#15 One out of every five children in the United States is now living in poverty.

Banks Hold Off On Foreclosure Notices - CNBC

Banks Hold Off On Foreclosure Notices - CNBC

I'm sure you've all seen the headlines from RealtyTrac today that show a new record for bank repossessions.

In some of the news reports today, I've also heard TV anchors make mention of some bright news in the report, that Notices of Defaults (NOD's) are down 30 percent from a year ago.

NOD's are the first stage in the foreclosure process. So that should mean that while there are still a lot of borrowers working through the system, at least the number of newly troubled borrowers entering the system is improving, right? Wrong.

According to Rick Sharga at RealtyTrac, the NOD number is down only because banks are not sending out NOD's to borrowers who are seriously delinquent.

15,000 in Valley vie for jobs at McDonald's

But don't worry your 401k is safe and "Dear Leader" says its your duty as good little Americans to borrow money to buy useless crap from Chinamart.

The middle class is dead in America and you can thank your elected politicians for selling you out to China and India for campaign donations.

15,000 in Valley vie for jobs at McDonald's

More than 15,000 people hoping to land one of 800 to 1,000 part-time jobs available at Arizona McDonald's poured into Valley restaurants Wednesday to fill out forms and interview with store managers.

The seven-hour on-site hiring campaign was spurred by the popularity of the fast-food chain's expanded McCafe product line. The success of recently released beverages such as the frappe and smoothie has fueled employee growth for McDonald's restaurants in Arizona, area supervisor Jerry Gehrke said.

About 100 people applied in person for entry-level positions at each of the 166 restaurants in metropolitan Phoenix. Most locations had anywhere from three to eight openings, ranging from cooking to operating the cash register to performing janitorial duties. Wages begin at $7.25 per hour and increase depending on an applicant's experience, Gehrke said.

"We are seeing college students, professionals out of the workforce, moms and high-school graduates applying for these jobs," Gehrke said. "It's a little bit unusual to see so much diverse work experience."

In other news on the employment front Harley Davidson employees voted for a new contract, which freezes their pay for seven-years, slashes hundreds of jobs and assigns large volumes of the work to part-time workers, who get no healthcare benefits. If the employees had rejected the deal, Harley has said it would have moved its Wisconsin operations to another state, leaving about 1,350 employees out of work. My question is when did China become the 51st state?

Yes, things are "dire" in the labor market but you don't have to take my word for it. Dire is how the IMF describes the situation. However, the solution is not more borrowing as suggested by the IMF as that is the root of the problem.

Americans forgot that they can't live by borrowing money. But we get it now and if we could only get our leaders to understand this very simple concept then things might get back on track.

U.S. Trade Deficit Narrows, Unemployment Claims Drop- or did it?

When you read the headlines only you miss the really important details.

U.S. Trade Deficit Narrows, Unemployment Claims Drop

The U.S. trade deficit narrowed more than forecast in July and filings for jobless benefits plunged last week, tempering concern the world’s largest economy is slipping back into a recession.

The trade gap shrank 14 percent, the most since February 2009, to $42.8 billion, the Commerce Department said today in Washington. The deficit was less than the lowest forecast in a Bloomberg News survey of economists. New applications for unemployment insurance fell by 27,000 to 451,000, the lowest since July 9, according to the Labor Department.

Sounds like some positive news. Right? Here is the real important details I was talking about:

Nine states didn’t file claims data with the Labor Department in Washington because of the Labor Day holiday, a department official told reporters as the figures were released. California and Virginia estimated their claims, and the U.S. government estimated the other seven.

http://www.bloomberg.com/news/2010-09-09/u-s-trade-deficit-narrows-more-than-forecast-as-exports-hit-two-year-high.html

Do you really think that the Government would estimate that more people lost their jobs than what was predicted by the Wall Street Economists?

Meltup

Thousands of distressed homeowners lined up at the Palm Beach County Convention Center Friday morning in hopes of saving their homes

The economy grew at a dismal 1.6% last quarter down from the original projection of 2.4%. 1 out of 10 homeowners have now missed at least one mortgage payment. But Obama and friends same nothing to see here keep moving along ignore the bad news. Obama and friends have called this "Recovery Summer" its more like the "Summer of Declining Data".

In Palm Beach today, thousands of homeowners from as far away as Detroit camped out overnight in hopes of saving their homes.

"The Secret of Oz"

Interesting video regarding the debt cycle and the eventual implosion of fiat currency.

The economy of the U.S. is in a deflationary spiral. Nothing can stop it -- except monetary reform.

1. No more national debt. Nations should not be allowed to borrow. If they want to spend, they have to take the political heat right away by taxing.

2. No more fractional reserve lending. Banks can only lend money they actually have.

3. Gold money is NOT the answer. Historically gold ALWAYS works against a thriving middle class and ALWAYS works to create a plutocracy.

4. The total quantity of money + credit in a national system must be fixed, varying only with the population.

A Fight Over City Hall—Literally - WSJ

I don't know who the bigger idiots are the City for risking money on a golf course or the bankers for loaning $9.2M backed by two buildings only worth " a few hundred thousands." Either way they both deserve what they get from this realtionship.

By IANTHE JEANNE DUGAN

A financial firm is fighting City Hall—and angling to take over the building itself.

Buena Vista, Va., borrowed $9.2 million through a bond offering in 2005 to refinance a municipal golf course. It pledged as collateral, of all things, its City Hall and police station. Now, amid financial difficulties, the city says it can't pay its debt, triggering a showdown over these public buildings.

On the other side of the battle is a big New York insurance company, ACA Financial Guaranty Corp., which is obligated to pay bondholders if the city defaults.

"They put up City Hall to finance the golf course," says Bonnie France, a lawyer for ACA. "It's collateral, so they could lose it. I've worked in public finance for 30 years and never seen this happen."

Municipalities across the U.S. are struggling with huge debts and shrinking revenue, making them vulnerable to similar situations. Harrisburg, the capital of Pennsylvania, is publicly flirting with bankruptcy. And when Central Falls, R.I., couldn't pay its debt recently, it handed its finances to a receiver.

http://online.wsj.com/article/SB10001424052748703908704575433720458693754.html

Chaos As Crowd Waits for Section 8 Housing Assistance

Yes, things are getting better in America, at least that is what Congress and the White House would have us believe. But if that's true then why in the hell did 30,000 people show up in Atlanta to get applications for Section 8 housing, which nearly resulted in riot. Yes, folks this is the new America where everyone is on government assistance and those who aren't get to pay higher taxes to finance this whole disaster. 

Charles Biderman states that unless things change a collapse will happen in a year

Charles Biderman, Founder and CEO of TrimTabs Invesment Research, appears on Fox Business to give his view on the mounting economic problems that could trigger a collapse of the markets with Fox's Liz Claman.

Putin announces ban on grain exports

The decision by the Russian government appears to be warranted in light of the massive crop failures in that country. Food prices will surely go up in the short term but how high can they go before people take their anger out on their governments. There are currently record numbers of Americans relying on food stamps to put food on the table. The U.S. Department of Agriculture - which oversees the program and distributes the money to states - projects that 43 million Americans will be using food stamps by next year. The last thing we need right now are higher fuel and food prices with unemployment numbers as high as they are right now. Eventually other countries might decide to stop exporting their own surpluses in efforts to insulate their own populations from these higher prices which could prove disastrous for poorer nations that rely on food aid. But even the larger countries like the U.S., India and China could have problems as these countries rely upon grain imports to meet the needs of their populations.

Putin announces ban on grain exports
By Catherine Belton in Moscow and Jack Farchy and Javier Blas in London

Published: August 5 2010 10:50
Last updated: August 5 2010 10:50

Vladimir Putin, the Russian prime minister, on Thursday announced a temporary export ban on grains after a severe drought decimated the country’s crops.

“I think it would be expedient to introduce a temporary ban on export grains and other agricultural goods,” Mr Putin told a Cabinet meeting. “We cannot allow an increase in domestic prices and we need to maintain the number of cattle.”

The ban will take effect from August 15, a spokesman for Mr Putin said

Wheat prices rallied sharply on the news. In Chicago, wheat jumped by its daily limit of 60 cents to a new peak two-year peak above $7.85 a bushel, up nearly 80 per cent in little a over a month. In Paris, European wheat hit €222.75 a tonne, up 6.6 per cent on the day.

Interfax, the Russian news agency, earlier quoted a source in one of the economic ministries as saying that the export ban could affect wheat, barley, rye, corn and flour. It also quoted Arkady Zlochevsky, president of the Grain Union lobby group, as saying: “The signals that export will close from as soon as August 10 exist.”

Financial Crisis - World at Risk of Folding in on Itself: Deputy Doom - CNBC

Roubini was right the last time. Could his Deputy be right this time?





Financial Crisis - World at Risk of Folding in on Itself: Deputy Doom - CNBC