tagged w/ The New Depression
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WASHINGTON - The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year as sharp cutbacks by businesses and the biggest drop in U.S. exports in 40 years overwhelmed a rebound in consumer spending.
The Commerce Department's report, released Wednesday, dashed hopes that the recession's grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a 5 percent annualized decline.
Instead, the economy ended up performing nearly as bad as it had in the final three months of last year when it logged the worst slide in a quarter-century, contracting at a 6.3 percent pace. Nervous consumers played a prominent role in that dismal showing as they ratcheted back spending in the face of rising unemployment, falling home values and shrinking nest eggs.
In the January-March quarter consumers came back to life, boosting their spending after two straight quarters of reductions. The 2.2 percent growth rate was the strongest in two years.
Still, the consumer rebound was swamped by heavy spending cuts in virtually every other area.
Businesses cut spending on home building, commercial construction, equipment and software, and inventories of goods. Sales of U.S. goods to foreign buyers plunged as they retrenched in the face of economic troubles in their own countries. Even the government trimmed spending. It was the first time that happened since the end of 2005.
The sharp cuts underscore the toll the housing, credit and financial crises — the worst since the 1930s — are having on the country. The recession, which began in December 2007, has taken a big bite out of national economic activity and snatched 5.1 million jobs.WASHINGTON - The economy shrank at a worse-than-expected 6.1 percent pace at the start... more
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Celente takes an in-depth look at what AIG and Goldman Sachs really are and the people behind them; explains the policies of the Obama’s administration, and the moral basis for a forthcoming new American Revolution.
EXCERPT (Transcript is not completely accurate):
RT: I’d like to begin by talking about the Treasury department. They’ve decided to extend bailout funds to a number of struggling life insurance policies. This is in addition to the auto industry and the banks. Do you think Americans are aware of what’s going on?
G.C.: They know about it, it’s a new trend. America is going from what used to be the major capitalistic country in the world of free market – a crusader – into what Mussolini would have called fascism: the merger of state and corporate powers. So it is not socialism as people believe, it is socialism’s egalitarianism. It’s not communism where the state controls monopolies – it’s fascism, plain and simple. The merger of corporate and government powers. State-controlled capitalism is called fascism, and fascism has come to America in broad daylight. But they’re feeding them it in little bits and pieces. First AIG was too big to fail. Mortgage companies Fannie Mae and Freddie Mac were too big to fail. Banks too big to fail and auto companies. And now we give money to the people that make the auto parts. And now there’s talk about the technology companies, wanting their piece of the action. The merger of state and government is called fascism. Take it from Mussolini; he knew a thing or two about it.
RT: What can Americans do if they are opposed to the road that government officials are bringing them down?
G.C.: The people don’t really have a choice, there is no ballot box. I’m of Italian descent and I’ve heard enough of mafia stories for the rest of my life. If you want to look at a mafia, you can call it a republican and democratic party. And if you want to look at the two families, the heads of the mafia, all you have to do is to look at the Bushes and the Clintons. They’ve been running the show now for some 24 years. We heard about Obama who is going to bring in ‘change’. A change you could believe in if he is dumb, stupid and blind. Look who he’s brought in as his chief policy makers. Retreads from the old Clinton administration. It’s a two-headed one-party system. So it’s very difficult for the people to vote in a new administration that isn’t part of the old one.
RT: Can you tell me one thing that you like about President Obama?
G.C.: In the Trends Journal, the top trends of 2009, one of our trends was that people are going to be putting out ‘recession gardens’. And now as we see the Obamas, they are planting their own garden, and that trend is taking hold. So he is doing that in positive ways, he’s bringing an element of dignity back to society. Those are positives. But now let me look at whether it’s true or the hypocrisy. So, they are talking about planting their own gardens. And they are talking about buying local. Oh, all that is wonderful, but on the other side of the coin they are pushing genetically modified foods while they’re eating organic. So it’s like ‘let them eat Frankenfoods’ – this is the message. So I see hypocrisy at every level. When they show me truth and justice, and the real American way – then I’ll believe.
END OF EXCERPTCelente takes an in-depth look at what AIG and Goldman Sachs really are and the people... more
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The FDIC took control of four more FAILED banks this weekend bringing the total this year to 29.
The failure rate has surpassed last years total of 25 all within 4 months.
The Treasury Department is due to release the results of their "Bank Stress Test" within a week.
Where will the total number of Failed banks be after that?
Will there be a run on the banks?
Please read article and decide for yourself.
If this concerns you, please check out the BANKS topic thread here on CURRENT.
Please read and discuss-The FDIC took control of four more FAILED banks this weekend bringing the total this... more
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Bringing the total SO FAR to 28 this year.
Just wait until the Treasury releases the "stress test" results....
All this while banks pop up around every corner like Starbucks.
Too much of anything can be a bad thing.
Prepare for the upcoming Dollar Crisis. Read the writing on the wall.
Please read article at link and discuss-Bringing the total SO FAR to 28 this year.
Just wait until the Treasury releases... more
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From the article...>Despite signs of improvement in global markets, further coordinated actions are needed by governments and banks to ensure that a world economic recovery can take hold, a senior International Monetary Fund official said Tuesday.
"The unprecedented policy response, both in the financial and macroeconomic domains, is gradually beginning to restore market confidence," said Jose Vinals, director of the fund's monetary and capital markets department.
"But continued decisive and effective action is needed to preserve and strengthen these first signs of improvement and to help provide a more stable and resilient platform for sustained global growth," Vinals said in a briefing to discuss the IMF's latest Global Financial Stability Report.
The report indicated a significant deepening and spreading of the crisis beyond the mortgage-related assets in the U.S. responsible for sparking the turmoil. The IMF now projects that worldwide financial losses could top $4 trillion through next year, with the estimated damage from U.S. assets alone increased to $2.7 trillion from a previous forecast of $2.2 trillion in January.
Reflecting the widening scope of the crisis, loan losses and write-downs in assets originated outside the U.S. were also factored in for the first time. Losses from European assets are expected to reach $1.2 trillion through 2010, with estimates of $149 billion for Japanese assets and $340 billion for emerging markets.
Still, IMF officials sounded the most optimistic note yet about the crisis, saying recent improvements in some markets point to the possibility that write-downs could come in below those levels.
"Circumstances in some of the markets were worse than they are now" when the $4.1 trillion loss estimate was calculated at the end of March, Jan Brockmeijer, deputy director of the monetary and capital markets department, told Dow Jones Newswires after the briefing.
That figure is "slightly higher" than current mark-to-market write-downs would suggest, he said, adding that it would be too difficult to give a precise revision due to market fluctuations.
The market improvements have been "across the board" but not significant enough to alter the overall outlook, said Brockmeijer. Some of the biggest improvement has come from emerging-market spreads, which he said is in part due to the recent announcement of plans to triple the IMF's resources, and to countries like Mexico, Poland and Colombia lining up for the new flexible credit line to backstop sound economies.
"Certain emerging-market spreads have come in quite considerably since these liquidity facilities have been announced," said Brockmeijer.
Despite some positive signs, the IMF stressed the need for banks to raise a significant amount of additional capital, estimating that U.S. and European firms would need $875 billion more equity just to return to pre-crisis levels. U.S. banks are nearly halfway there, but European institutions have raised just a third of the capital that may be needed to restore market confidence, the report said.
"The key takeaway is that higher write-downs, together with market demands for both lower leverage and more stringent capital ratios will require financial institutions to hold more capital - whether raised in markets or provided by governments," said Vinals.
When asked about reports that the U.S. may convert some of the preferred shares it owns in banks into common equity - which would cover most of the need for capital among local banks - Vinals said it is a possibility, but that it is up to the government to decide.
Temporary nationalization may also be necessary for a "limited subset of cases" around the world, just long enough to stabilize the situation, said Vinals. But he also welcomed the Obama administration's public-private investment program to provide incentives for the private sector to buy up toxic assets.
"This is something which is useful in order to make private capital come back into tFrom the article...>Despite signs of improvement in global markets, further... more
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The global economy is set to decline by 1.3% in 2009, in the first global recession since World War II, the International Monetary Fund (IMF) says.
In January, the IMF had predicted world output would increase by 0.5% in 2009.
It now projects that the UK will see its economy shrink by 4.1% in 2009, and by a further 0.4% in 2010(!)
But other major economies are predicted to shrink even more, with Germany declining by 5.6%, Japan by 6.2%, and Italy by 4.4% in 2009.
The prospects for the advanced economies are not much brighter in 2010, with an overall forecast of zero growth.
IMF chief economist Olivier Blanchard on the bleak economic outlook
The IMF says this represents "by far the deepest post-World War II recession" with an actual decline in output in countries making up 75% of the world economy.
Currently, output is falling by an "unprecedented" 7.5% annual rate in the rich countries in the last quarter of 2008, and the IMF expects the same rate of decline in the first quarter of this year.
Only a recovery in developing and emerging market countries will propel the world economy back into positive growth in 2010, albeit at a relatively weak level of 1.9%.
The prospects for world trade are even gloomier, with the IMF now forecasting world trade volumes to decline by 11% in 2009, and barely grow at all in 2010.The global economy is set to decline by 1.3% in 2009, in the first global recession... more
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Top recipients of federal bailout money spent more than $10 million on political lobbying in the first three months of this year, including aggressive efforts aimed at blocking executive pay limits and tougher financial regulations, according to newly filed disclosure records.
The biggest spenders among major firms in the group included General Motors, which spent nearly $1 million a month on lobbying, and Citigroup and J.P. Morgan Chase, which together spent more than $2.5 million in their efforts to sway lawmakers and Obama administration officials on a wide range of financial issues. In all, major bailout recipients have spent more than $22 million on lobbying in the six months since the government began doling out rescue funds, Senate disclosure records show.
The new lobbying totals come at a time of mounting anger in Congress and among the public over the actions of many bailed-out firms, which have bristled at attempts to cap excessive bonuses and have loudly complained about the restrictions placed on hundreds of billions of dollars in government loans. Administration officials said this week that top officials at Chrysler Financial turned away a $750 million government loan in favor of pricier private financing because executives didn't want to abide by new federal limits on pay.Top recipients of federal bailout money spent more than $10 million on political... more
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Thank you to sempiternal for the link.
During the campaign, Ron Paul often said, "thank you for inviting me to your revolution!" The revolution continues, and I urge you to honor and support true grassroots organizations like the Oath Keepers and the Committees of Safety. Walter Reddy of the Committees of Safety deserves special recognition for what he is doing. He is putting everything on the line -- his name, his fame and his entire fortune for the cause of Liberty. Oath Keepers: The Orders We Will Not Obey
1. We will NOT obey orders to disarm the American people.
2. We will NOT obey orders to conduct warrantless searches of the American people
3. We will NOT obey orders to detain American citizens as “unlawful enemy combatants” or to subject them to military tribunal.
4. We will NOT obey orders to impose martial law or a “state of emergency” on a state.
5. We will NOT obey orders to invade and subjugate any state that asserts its sovereignty.
6. We will NOT obey any order to blockade American cities, thus turning them into giant concentration camps.
7. We will NOT obey any order to force American citizens into any form of detention camps under any pretext.
8. We will NOT obey orders to assist or support the use of any foreign troops on U.S. soil against the American people to “keep the peace” or to “maintain control.”
9. We will NOT obey any orders to confiscate the property of the American people, including food and other essential supplies.
10.We will NOT obey any orders which infringe on the right of the people to free speech, to peaceably assemble, and to petition their government for a redress of grievances.
http://www.dailypaul.com/node/90542Thank you to sempiternal for the link.
During the campaign, Ron Paul often said,... more
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Rep. Ron Paul released a video on Sunday offering support for the principles of secession, calling them "very much American." And he described Perry's recent talk about pulling Texas out of the union a discussion worth having.Rep. Ron Paul released a video on Sunday offering support for the principles of... more
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Bob Lawless, a professor at the University of Illinois College of Law, said bankruptcies could reach 1.5 million this year and level off at 1.6 million next year _ around the same time economists expect an economic recovery to begin.
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So what does congress think of debt?
http://www.americanissuesproject.org/enough
We don't care? We are going down, and we don't care? ~ WTF, who are you representing, Senator Schumer?Bob Lawless, a professor at the University of Illinois College of Law, said... more
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In order to survive in the face of our new economic reality, some families have turned to being 21st-century homesteaders.In order to survive in the face of our new economic reality, some families have turned... more
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On March 25, 2009 Peter Schiff went on NBC and talked about how the government/Federal Reserve spending is making the economy even worse.On March 25, 2009 Peter Schiff went on NBC and talked about how the government/Federal... more
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Source: http://linkbee.com/Obama5StepEcoFix
President Barack Obama said the key to a bright, sustainable future for the U.S. economy requires a "foundation built upon five pillars," each of which represents a policy shift that is sure to set off a major political battle.
They are: 1- (Story continues here: http://linkbee.com/Obama5StepEcoFix)Source: http://linkbee.com/Obama5StepEcoFix
President Barack Obama said the key to... more
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NEW YORK (Reuters) - General Growth Properties Inc, the second-largest U.S. mall owner, declared bankruptcy on Thursday in the biggest real estate failure in U.S. history.
Ending months of speculation, General Growth, along with 158 of its 200-plus U.S. malls, filed Chapter 11 while it tries to refinance its debts.NEW YORK (Reuters) - General Growth Properties Inc, the second-largest U.S. mall... more
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It's Not Just Another Story from Harley Carnes on Friday, April 17, 2009.
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This is the most cogent, balanced, unbiased summary of the root causes and history of the "meltdown" I've seen yet.
If you're not done blaming one side or the other or one key player or another, this probably won't change your mind, but if you read the entire article, you'll get a very good view of who the players really were, what they really did, and why both they AND the MSM are still not 'fessing up about it. Why should they, if they can get you to believe that the guilty parties aren't "really" guilty....
Anatomy of a Breakdown
Concerted government policy helped trigger the financial meltdown—and will almost certainly extend it.
Michael Flynn | January 2009 Print Edition
Intro...
"It was not an absence of federal intervention that produced the Great Financial Panic of 2008. Contrary to the assertions of those clamoring for new regulations (see "Is Deregulation to Blame?," page 36), the liquidity shortage and credit freeze that triggered Washington's biggest intrusion into the economy since Richard Nixon's wage and price controls were caused by bad government policy and worse crisis management. "
excerpt:
"The Roots of the Crisis
Throughout the 1990s and the early years of this century, both major political parties became intoxicated with the idea of promoting "affordable" housing. By the time the crisis blew up, Congress was mandating that roughly 50 percent of the mortgages issued by Fannie and Freddie go to households making below their area's median income.
Many conservative commentators have blamed the housing mess on the 1977 Community Reinvestment Act (CRA), which essentially required banks to increase lending in low-income areas. While the CRA was a bad law, its role in recent events has been overblown. After all, it was on the books for decades before the bubble began. The law's worst legacy is the permanent network of "affordable housing" advocates that sprang up after it passed. These groups, which were intended to facilitate lending in poor areas, continually called for increased activity by banks and additional government support for affordable housing initiatives. The CRA also helped create a climate in which lending to low-income households was a key metric and condition regulators used in approving bank mergers. "
read the rest at the link and have an open mind. you'll find your eyes widening, too!
+afThis is the most cogent, balanced, unbiased summary of the root causes and history of... more
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Seven Signs of Terrorism.
A new video released by the city of Kansas City Missouri and the Dept. of Homeland Security.
Besides the fact that the quality is subpar along the lines of a bad corporate training video, This just reeks of McCarthyism.
This seems to be right in line with the new initiative in the U.K. that has citizens spying on other citizens by digging through each others garbage bins.
Please watch video and discuss-Seven Signs of Terrorism.
A new video released by the city of Kansas City Missouri... more
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USA — Justin Fox, Time Magazine journalist reported a possible shift from the world’s current dominant currency, the Dollar to the special drawing right (SDR) that had been created since 1969 till 1981.USA — Justin Fox, Time Magazine journalist reported a possible shift from the... more
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A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.
The Congressional Oversight Panel, in a report released yesterday, also said the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.” Three of the group’s members disagreed with at least some of the findings.
“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.
Treasury Secretary Timothy Geithner has revamped the Troubled Asset Relief Program to focus on injecting capital into banks and removing up to $1 trillion in illiquid securities from their balance sheets via public-private investment partnerships. The government is also working to unfreeze credit markets through a Federal Reserve program that provides loans to investors in some asset-backed securities.
Warren, in an interview on Bloomberg Television, said yesterday that while “things may be getting a little better” under Geithner, the Treasury still needs to be more transparent about how it is spending the taxpayers’ money.
“We still have a long way to go, a very long way,” she said.
Depth of Downturn
In the report, Warren’s panel said “it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth.”
The group said it was offering an examination of “potential policy alternatives” for the Treasury and not endorsing any shift at this time.
Still, it said a bank liquidation would be “least likely to sap the patience of taxpayers” and “provides clarity relatively quickly” to the markets.
“Allowing institutions to fail in a structured manner supervised by appropriate regulators offers a clearer exit strategy than allowing those institutions to drift into government control piecemeal,” the report said.
The report also said that past successful financial rescues were accompanied by governments’ “willingness to hold management accountable by replacing -- and, in cases of criminal conduct, prosecuting -- failed managers.”
Separate Findings
Two of the panel members, New York State Superintendent of Banks Richard Neiman and former New Hampshire Senator John Sununu, issued separate findings.
“We are concerned that the prominence of alternate approaches presented in the report, particularly reorganization through nationalization, could incorrectly imply both that the banking system is insolvent and that the new administration does not have a workable plan,” the two wrote.
Sununu and the five-member panel’s other Republican appointee, Representative Jeb Hensarling of Texas, dissented from the entire report.
The oversight panel was set up under the rescue law passed in October. It has three members appointed by Democrats and two by Republicans. The group’s reports are required by the legislation.A congressional panel overseeing the U.S. financial rescue suggested that getting rid... more
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