FedUpUSA

Archive for November, 2010

Interpol Issues International Arrest Warrant For Julian Assange For “Sex Crimes”

Per BreakingNews.com, Interpol has just issued an international arrest warrant for Julian Assange. The offense listed: SEX CRIMES. And somehow Interpol does not have access to the Internet and is unable to pull an image of the wanted criminal. Unclear if Ben Bernanke will follow suit in the same Sex Crime category for repeated involuntary fornication with the world’s middle class. In other news, we are now taking odds on a dramatic, globally televized slow speed chase on a California highway in Julian Assange’s future?

ZeroHedge

As we said earlier today, the previous Wikileak dumps didn’t elicit any action by world leaders other than some words of condemnation.  Even this latest one merely garnered some harsh rhetoric and hand-wringing.  It wasn’t until Julian Assange said he had information that would damage a ‘big bank’ (later turning out to be Bank of America), that suddenly governments (including ours) got serious.  Wikileaks came under the biggest denial of service attack in history and now Interpol has issued an arrest warrant.

Guess this should serve as fair warning:  don’t piss off the banks.  Do you need any more proof that banks own the government and the government serves the banks, not We The People?

Nothing further needs to be said.  Truth. 

Sunshine is the best disinfectant and Washington DC is so infected, it’s gangrenous.

STOP THE LOOTING AND START PROSECUTING…..

and it’s not Wikileaks that needs prosecuting.

Maybe.  And look what else popped up today:

WikiLeaks founder Julian Assange isn’t some well-meaning, anti-war protestor leaking documents in hopes of ending an unpopular war. He’s waging cyberwar on the United States and the global world order. 

Mr. Assange and his fellow hackers are terrorists and should be prosecuted as such.

Why now?  Well gee, it wasn’t Iraq, and it certainly wasn’t the claim that soldiers fired on poor harmless unarmed civilians!  Why that latter video turned out to display a very nice RPG across the shoulder of one of those so-called “peace-loving” civilians when examined under a somewhat-critical eye.

No, what got FauxNews all wired up was this:

If we don’t deal quickly and decisively with what is a cyberattack on America, we can expect WikiLeaks 2.0 and Pvt. Manning copycats to do this kind of thing over and over again and again. In fact, Mr. Assange has already announced plans to ‘bring down major bank’ by leaking information about its accounts and practices.

Oh I see. 

And what bank might that be?  Uh….

Is the target of the Wikileaks “Big Bank” exposé going to be Bank of America?

As the Huffington Post points out, Julian Assange talked about BofA last year in an interview with Computer World, claiming “he had acquired a large cache of information from Bank of America.”

He specified that he has 5GB of material on the company.

Now let’s think about this.  What has Bank of America done that could implicate it in this regard?  Oh hell, who knows. 

But it is rather interesting that all these screams about prosecuting the Wikileaks folks suddenly started to gain currency and stridency when the leaks turned from the fact that Iran isn’t liked by anyone (big shock) to the possible exposition of improper conduct – knowing improper conduct – by one or more of the big US Banks.

Exposing diplomatic cables is probably bad and might be criminal.  Lying about why our soldiers engaged some bad guys by implications was bad too.  I was pissed, and even more-so when the truth was right there in the video they published, but they either didn’t bother mentioning it or worse, had a slant on the “reporting” they were doing.

But while that raised a furor over here, now, suddenly, we have people threatening prosecution or worse, and WikiLeaks site is under high-volume cyber-attack.

What changed?

They’re targeting a bank’s conduct.

Should I be surprised?

The typical American family is facing the biggest economic uncertainty since the Great Depression and must feel like their lives are in a washer spin cycle.  Many unemployed Americans are now entering a stage where unemployment insurance is being cut off which will send tens of thousands of people into the street.  The mainstream media won’t cover this because they rather gossip about the next tan face to drink themselves into a gutter at a nightclub.  43 million Americans are receiving some kind of food assistance yet this is some kind of recovery?  Many are wondering how banks can produce such large profits without actually producing anything real or of substance in the economy.  Yet banks are largely casinos that now operate to siphon off real wealth from the economy through bailouts, frauds, and other activities that harm the overall economy.  In a decade where banks were unleashed to do what they may with limited regulation and a cozy Fed, we are now left with an economy in tatters but a banking sector that is still healthy based on oversized bonuses.  I wanted to gather data over the last 60 years and measure how most Americans are now fairing.  The data shows a largely underwater nation.

Let us look at the data carefully:

Back in 1950 the median home price cost a little above 2 times the annual median household income:

1950:     $7354 / $3,319 =2.2

In 1960 the ratio remained roughly the same:

1960:     $11,900 / $5,620 = 2.1

In fact, over this ten year period the typical household gained buying power when it came to housing.  Even in 1970 the ratio became more favorable to US households:

1970:  $17,000 / $9,867 =1.7

This was the lowest point at the start of any decade in modern history.  After this point, with all the push for deregulation and allowing Wall Street to run rampant prices remained fairly stable only because of the two income household (that is until we hit 2000):

1980:     $47,200 / $21,023 = 2.2

1990:     $79,100 / $35,353 = 2.2

2000:     $119,600 / $50,732 = 2.3

This was sustained via the two income household:

After this point, things went haywire.  Incomes went stagnant or dropped yet home prices sky rocketed.  Even today after the severe correction the ratio is still out of sync with 50 years of data:

2010:     $170,500 / $50,221 = 3.3

In fact, given the current income levels the median nationwide home price should be down to $119,000 (a 30% drop from current levels).  Some will argue that we should factor in for inflation.  This would only be the case if we also saw wage growth.  For the first time in modern history did we see wages stagnant for an entire decade.  So the average American family is still looking at inflated assets and that is why we have millions of people sitting in underwater homes:

Just think of what negative equity represents.  It represents a household that has over paid for a home.  I don’t think the desire to own a home has dramatically gone up or down in the last fifty years.  Homeownership has always been a big part of the American Dream.  But what happened over the last ten years is that banks were able to get their grubby hands on mortgages and convert them into another commodity where they could place large bets and ultimately push losses to taxpayers.  People that over paid are paying via foreclosure.  What is the penalty that banks are paying?  That is why now that banks have raided and had their way with housing, they are looking for other markets to gamble in (with taxpayer money).  The above chart shows the millions of homeowners who hold mortgages that are worth more than the homes they are in.  Any thinking person realizes that the only way home prices are justified at current levels would be if incomes shot up to make the ratio closer to 2.2.  Over half a century of data and never did we have a housing bubble on a nationwide level.  All of a sudden Glass-Steagall is repealed in 1999 and a housing bubble takes off with banks leading the way because the line between investment and commercial banking was blurred.  Only those who want to deceive themselves would place blame elsewhere.

The average American is going to struggle throughout the next decade.  It is hard to see how wages will go up so it is likely that home prices will adjust lower given the magnitude of foreclosures in the pipeline.  People might be jumping up and down about the recent job growth but they are occurring in lower paying sectors.  So this does nothing to justify current prices.  Low mortgage rates are merely a gimmick so banks can use cheap money to speculate on a global scale.  Even with mortgage rates at levels we’ve never seen the housing market remains stalled like an old car.  Why?  Because the actual sticker price is still inflated based on income levels.

We need to reform the banking system, break up investment and commercial banks, and finally restore sanity in the market.  There is a reason the metrics are all off but nothing has been done to change this so we are only a short ways away from another crisis.  Ireland for example can be likened to a homeowner that took on too much debt with too little income.  So the international banking sector idea of a solution is to extend them a credit line?  What they should do is tell the IMF and Euro to shove it, default, and start from scratch and learn from their mistake.  Otherwise, they’ll be in the same position as Americans who bailed out their corrupt banking sector.

My Budget360

Well, no, it’s hosing. 

You. 

And the economy.

The Standard & Poor’s/Case-Shiller composite index of 20 metropolitan areas declined 0.8 percent in September from August on a seasonally adjusted basis.

Economists polled by Reuters had expected a decline of 0.3 percent.

Yeah.  Remember, it was all going to be ok.

Well, no it’s not.

And what’s worse is that the cause of this is entirely the government which has tried to prevent asset price deflation – yet that’s exactly what’s necessary to clear the market!

As Gary Shilling said:

Shilling expects another 20 percent drop in home prices.

“As prices go down, more people get underwater, leading people to walk away,” leading to more write-downs by the banks, Shilling said “That will be Act II in the whole drama of the housing collapse,” Shilling said.

The big banks must be taken into receivership NOW.

Force the bad debts into the open, write them off, and for each institution that this bankrupts, recognize it and reorganize them.

That’s what bankruptcy law is for, it’s why it’s in the Constitution, and it’s the proper move to make.

We should have done it in 2007, we should have done it in 2008, and we should do it now.

Nobody wants to, but this isn’t about “wants.”  It’s about what we can realistically support in the economy and whether the debt levels are sustainable.

They’re not.

Remember my discussion on Pensions?

And how you were going to get screwed?

Feel free to use the search bar and type in “Pension”, then have a read.

You’re hosed America.  Severely.  Far worse than you think.  And there’s nothing you can do about it.

I wish it wasn’t true, but it will be, because you refuse to stand up and put a stop to this crap.

France is the latest to seize pension assets.  They follow Hungary and Ireland.  There will be more.  And eventually, it will come here – and when it does, you will get hosed.

There is only one way to stop it. 

You, the American people, must demand that all of the bad loans that were made by banks be forced back onto them and defaulted.  At the same time the government must stand back and let the adjustment take place.

Yes, this will detonate the banks.  Yes, this will result in huge losses.  Yes, this will result in a short-term dislocation in the economy – a really, really bad one.  Yes, it will result in the collapse of home prices, bankruptcy of tens of millions of people and even more unemployment in the short term.

Again, government must do nothing more than providing emergency shelter and food to those who need it in this regard.

Government must also, at the same time, put an immediate stop to the offshoring monster through wage and environmental-parity tariffs.

If, as is often claimed, the reason for firms to offshore production is because people are willing to work harder or smarter than they are in the US, all fine and well.  But if they’re doing it because they have effective slave labor or can pollute with impunity, thereby having dramatically lower costs through poisoning the earth, that has to stop because those firms are then creating an economic imbalance that not only cannot be maintained but if not stopped will destroy our nation’s economy and funding mechanisms.

We all want certain services from our government.  We claim we want social services of various sorts, including social security, medicare, welfare and more.  But we have to be able to pay for those services, and we can’t when the tax base is destroyed by sending our labor overseas in search of slave-like conditions and the ability to poison the planet instead of keeping it, and the tax base it generates, here in this nation.

We have avoided the truth of this matter through borrowing for two decades.  We’re now coming up against our national credit card’s limit.  To avoid that The Fed, with the explicit consent of both Congress and President Obama, is intentionally trying to devalue the currency – that is, create “inflation.”

But the money is going overseas, and the inflation he’s creating is in China.  This is due to the fact that money is global and goes where it can earn the best return.  It doesn’t care what Bernanke wants or what our government wants – money is agnostic.

We can choose only between an orderly process and a disorderly one.  We can choose to force the banks to eat their own cooking along with citizens and take them into receivership or we will suffer a disorderly collapse.  That which is happening through Europe will come here.  We cannot avoid it.  We are only holding our place in line and acceleration is now taking place in these matters.

Remember that we started here with Bear Stearns and were told it was all ok after that.  Then we had Fannie and Freddie get into trouble, and we were told they were “stabilized” with Paulson’s Bazooka.  He lied – both they and Lehman collapsed at once.

The point is that he lied – he knew damn well what was going on and so did The Fed.  They all knew that Citi, for example, was writing crap paper for more than two years prior to it all blowing up and that 80% of their loans were bad by 2007. 

They tried to hide it and failed.

The same thing is happening in Europe right now.  The rolling “fails” will continue and intensify until the truth is recognized and the debt that cannot be paid is defaulted.  This path cannot be avoided irrespective of what people want or desire.

Our time to act in a responsible fashion as citizens of this nation is running out.  Three years ago I sent a fax to all 535 members of Congress urging them to put aside the cash necessary to feed, house and clothe at a basic level up to 1/4 of Americans – in closed military facilities and similar if necessary – for a year or more.  I’m talking about three hots and a cot, not “welfare payments” to sustain people in their iPhones and cable TV. 

Of course I was ignored and probably considered a nut, but in point of fact nothing has gotten better, and in fact has gotten worse, since I recognized this threat and warned of it and what must be the response.

If you’re currently dependent on pension funds of any sort, make other plans because given our government’s idiocy and refusal to stop sucking on the wang of people like Blankfein, Lewis and Strumpf you will not have a backstop from the government either. 

God helps those who help themselves, and on the path we’re on that’s all you’re going to have left.