FedUpUSA

Archive for April, 2011

College sticker shock is probably stunning many parents as college aged students now sign their intent to register at thousands of schools across the country.  You can almost feel the panic when Johnny or Suzie tells mommy and daddy she is going to University of Break the Bank while they watch their home equity plummet.  What should be a proud time is now becoming a scary prospect for many parents looking at backbreaking student loan debt.  If not the parent, many teenagers are looking at going into debt similar to taking on a mortgage without even owning a brick and mortar house.  Many private schools now charge $50,000 or more per year in tuition and fees.  Given that the average annual income for an American worker is $25,000 this one year cost is daunting.  In the past if you picked the wrong major or school you ended up with a nice looking piece of paper and a likely opportunity to work in the blue collar world as a backup earning a relatively decent income.  Today, pick the wrong career and school and not only do you have that same piece of paper but you also have limited prospects in finding even a basic job to service your college debt, forget about paying the rent or filling up your car with $4 a gallon gas.  To expect teenagers to pick the right college and have their lives figured out early on is a bit much to ask.  Students in the past did not have this same albatross hanging over their head.  The big problem now is the massive cost of college.

Student loan debt outpacing all other forms of debt

Probably the most disturbing development in the last few years is with households deleveraging on mortgage and credit card debt there is a doubling down in student loan debt:

The above chart looks at the Sallie Mae portion of student loans on the government balance sheet.  While total revolving credit has gone negative year-over-year since 2008 student loan debt has increased by 20, 40, and even 80 percent year over year.  Some will argue that this is usually the case in recessions.  Well look at the recession of 2001.  Student loan debt quickly decelerated at this time.  Why?  Many simply jumped into the real estate industry as mortgage brokers, agents, construction, or other industries that were fine with simply a high school diploma.  These positions paid very well.  But it was all a bubble.   Today the few sectors with employment growth and solid pay do require a college degree and even that isn’t sufficient to secure a job.  If we look at the raw amount of student loan debt we can see this problem more clearly:

Student loan debt has far surpassed the total amount of credit card debt outstanding in the United States.  Currently there is over $900 billion in student loan debt and is quickly approaching the $1 trillion mark.  Yet simply looking at the above charts you would concluded that colleges are doing a great job luring people into their expensive libraries and selling people on their deep pocket sports teams.  Yet how is this translating in the work world?

Source:  Calculated Risk

Those with a college degree are now seeing higher rates of unemployment as well.  The cost keeps going up because these loans are secured tightly to students where debt can be collected similar to tax liens.  There is no walking away from student loan debt (at least not as easy as it is with say credit card debt or a mortgage).

The profit machine of colleges

The cost of going to college has surpassed every category in the magnitude of price hikes:

College tuition and fees have gone up faster than housing, income, and medical care costs which are already stripping bare the balance sheet of American households.  This is a similar question I had during the housing boom.  How is it possible for home prices to go up while incomes are stagnant?  In the case of housing it was massive and easy to get credit.  Why are college costs soaring when middle class income is shrinking?  Again it is access to this debt as seen above.

While other sectors decline colleges can rest assured their money is secured by the Federal government.  The largest source of funding for education is the government:

Nearly half of college funding comes from the government.  There have been studies showing that for each jump in loan access tuition subsequently rises.  No shocker here.  Colleges are trying to get as much profit as possible even if results are not showing up in the overall economy.  Of course it depends on what university you go to as well.

Attend a top private school and you are likely to make solid connections that will yield a solid return on your investment.  Yet I would argue that this goes for the top 50 colleges in the country.  We have over 4,800 institutions of higher education.  If not a top 50 private then a public college.  Public colleges however are now getting more expensive as well because of poor state budget issues.  The fact of the matter is most people attend okay to mediocre to bad schools.  When the economy tightens up like it has career choice and quality start to matter much more.  Many of the for-profit institutions are one step above paper mills.

McDonald’s hiring lures thousands of people

Many lob jokes at “McJobs” and burger flipping yet McDonald’s recent hiring campaign of 50,000 workers is yielding thousands of applicants:

“(Yahoo) Managers at a McDonald’s in Cincinnati said a dozen or so applicants had lined up by 7 a.m., an hour before the restaurant planned to start interviews. By 10 a.m., the store had interviewed 100 people and had 25 more waiting.

Tiwian Irby, 28, was hoping for a full-time job and wasn’t particular about what it would entail. He said he’d had trouble finding regular work since getting laid off from his construction job two years ago.

“A job is a job to me,” said Irby, a father of three. “I’ll take whatever is available.”

McDonald’s and other fast-food chains, once an entry point into the work force for teenagers, appear to be turning into an employer of more adults, a legacy of the recession, industry watchers said. The average age of a fast-food worker is 29.5, up from 22 in 2000, according to the U.S. Census Bureau.”

This little summary virtually sums up the current situation.  You have someone that lost a good paying job in construction and is now looking for work at McDonald’s.  What is also the key here is that the average age of a fast-food worker went from 22 in 2000 to 29.5 currently.  Welcome to the new world of low wage capitalism.  The choice then becomes accept this low paying work or go into massive debt to enter college?

It is no surprise then in these desperate times that people will fork over tens of thousands of dollar for a college education.  But for every one solid college institution you have fifty seeking to take student financial aid and provide an experience similar to a rollercoaster ride; fun for a brief moment but what are the longer term results?  So far with student loan defaults rising and the results in industry, the numbers are not positive.

My Budget360

I oft times say “The oddities are odder with every other day.”  This is a case of one of the odder oddities.  One, that like the universe unfolding, is expanding in oddness. One that deserves an expansion of outrage.

The most recent development caught my eye in a short piece from Matt Weidner: Are the Banksters Powerful Enough To Make Legislation Disappear?.  It caught his eye on popular blog site 4ClosureFraud.  It caught their eye in an article posted to blog site “The Impode-O-Meter” by author Mandelman Matters.

At the core of the shocking new development is a bill, “State Senate Bill 1259? proposed by Arizona State Senator Michele Reagan:

“If you foreclose on somebody you should have to tell them who owns the property.  People have the right in this country to face their accusers.”

In response to her bill the Arizona Banker’s Association threatened:

“If Arizona passes this, it will be the only state in the union that will require a production of chain of title. States that pass these types of laws will be riskier environments to lend in and more difficult environments to get a loan in.”

Apparently proving chain of title and that they actually own the homes they foreclose upon must be too onerous a requirement for major banks and servicers foreclosing on Arizona homes!

.

Before delving further, let me recap from my own writings.  In March of 2010 Arizona State Senator Michele Reagan was sued by her lender, Colonial Savings Bank, simply for asking, who owned her note!  I included the video in notes to Episode IV in my “Tale of Greed”.

Fast forwarding a year we find that Colonial Savings Bank was shuttered by the FDIC, having been wrapped up in fraudulent actions by executives at Taylor, Bean and Whitaker.  The notes included under Episode IV: D-I-S-C-O-V-E-R-Y in a Nevada Desert goes into some detail of revelations in the trial of Taylor, Bean CEO Lee Farkas.  In only the past week he was found guilty – on all 14 counts – of a $1.9 Billion fraud scheme!  All of the other executives plead guilty without going to trial.

http://twainsthoughts.com/episode-iv-d-i-s-c-o-v-e-r-y-in-a-nevada-desert/iv-notes/

********************************

Here a few highlights:

According to a statement of facts submitted with his plea agreement, Allen joined TBW in 2003 as its CEO and reported directly to its chairman. He admitted in court that from 2005 through August 2009, he and other co-conspirators engaged in a scheme to defraud financial institutions that had invested in a wholly owned lending facility called Ocala Funding. Ocala Funding raised money by selling asset-backed commercial paper to financial institutions, including Deutsche Bank and BNP Paribas, and used the money to purchase TBW mortgages. The facility was managed by TBW and had no employees of its own.

According to court records, shortly after Ocala Funding was established, Allen learned there were inadequate assets backing its commercial paper, a deficiency referred to internally at TBW as a “hole” in Ocala Funding. Allen admitted that in an effort to cover up the hole and to mislead investors, he told a co-conspirator to produce reports that concealed the hole. He also admitted that he knew that these misleading reports were sent to Ocala Funding investors and other third parties.

Allen also admitted in court that he kept the chairman of TBW informed of the collateral shortfall, and that in the fall of 2008, Allen was told that the hole had been moved from Ocala Funding to Colonial Bank. At the time that TBW ceased operations, the hole was approximately $1.5 billion. According to court documents, as a result of the Ocala Funding fraud scheme, Freddie Mac, Colonial Bank, and Ocala Funding investors believed they had an undivided ownership interest in thousands of the same mortgage loans.

***

Taylor, Bean & Whitaker Mortgage Corp.’s former chairman, Lee Farkas, ordered data sent to Colonial Bank for nonexistent loans in an effort to cover up the company’s growing deficits, a company ex-president said.

Raymond Bowman, 45, testifying yesterday for the government in federal court in Alexandria, Virginia, said Farkas in 2003 explained that the sale of “dummy” loans, known as Plan B, were necessary to prevent Taylor Bean from going out of business.

I told him I didn’t think it was a good idea, said Bowman, who pleaded guilty last month to conspiracy and to making false statements. Bowman said he thought the plan was unethical and possibly illegal.

***

By December 2003, Taylor Bean was overdrawing its account by about $150 million a day, the SEC said.

Bowman said “Plan B” was put into place by Farkas and Catherine Kissick, head of Colonial Bank’s Mortgage Warehouse Lending Division.

“Lee said we had two options,” Bowman testified. “Not do it and shut the company down. Cathy would lose her job and probably go to jail. Or, borrow money through Plan B, pay her back, and move forward.”

***

Desiree Brown, former treasurer of Taylor, Bean & Whitaker, the mortgage lender allegedly behind the August 2009 collapse of Colonial Bank, pleaded guilty in March to conspiring to commit bank, wire and securities fraud. Federal investigators linked TBW to a $1.9 billion scheme that defrauded the Federal Housing Administration, private investors and the Troubled Asset Relief Program. Montgomery, Ala.-based Colonial Bank ($25 billion in assets) was TBW’s biggest lender.

Brown, 45, of Hernando, Fla., could face up to 30 years in prison when she is sentenced June 10 by a U.S. District Court in Virginia. And more charges are expected from a separate enforcement action filed by the U.S. Securities and Exchange Commission against Brown.

The fate of Lee Farkas, once at the helm of TBW, remains to be determined. Farkas’ criminal trial began April 4 in Virginia. Farkas has pleaded not guilty to the 14 counts of conspiracy, bank fraud, wire fraud and securities fraud brought against him last year for his connection to TBW scheme.

***

As the former senior executive officer with Freddie Mac, Paul R. Allen joined the Ocala-based company initially as a consultant, eventually migrating over as the full-time CEO in charge of all company operations in August 2003.

As prosecutors began laying out his direct examination testimony for the jury Monday afternoon, Allen, 55, touched on the often grand promises extended by Lee Farkas, the company’s chairman, during his six-year run with the residential mortgage lender until it ceased all lending operations in August 2009 and eventually filed for bankruptcy.

For instance, when Farkas was leading a $300 million capital raise for Colonial BancGroup Inc. in 2009 so the bank could meet conditional approval for $550 million in TARP bailout funds, Allen said Farkas offered him a $5 million equity bonus that he could use to buy Colonial stock.

That figure stood out because in an average year, a typical bonus for him was about $100,000, said the former CEO. The TARP deal never went through and Allen never received that promised $5 million bonus.

***

On his part, Allen said he concealed the existence of this collateral shortfall on the monthly reports sent to credit rating agencies like Moody’s Investors. Established in April 2005, Ocala Funding sold commercial paper to investors to generate additional funding for Taylor Bean to originate and service residential mortgage loans.

By 2007, Ocala Funding restructured and brought in two new investors, Deutsche Bank and BNP Paribas. This helped funnel in $1.75 billion to the entity and pay off the old investors.

“Is that how you were supposed to use the money?” Assistant U.S. Attorney Charles Connolly asked Allen.

“No, sir,” the witness replied.

A former senior executive at Freddie Mac, Allen described Farkas as “a micromanager” who reached “far down the organizational level to have one-on-one conversations with people.”

Following one such unapproved discussion with a Colonial official, Allen said Farkas fired off a single-line missive to his email inbox, which read, “I am going to KILL you,” an exhibit that was published for the jury.

***

“There was that hole and if we were caught between a rock and a hard place, we would go to them and say, we need Plan B [loans],” Brown testified.

“We were stealing money,” she added.

Speaking in a deep, almost flat tone, the 45-year-old Hernando resident told the jury that Farkas’ residence, complete with a cabana and swimming pool, was “beautiful” — “kind of like walking through Silver Springs attraction,” she said, which she described for the courtroom, as “like a garden.”

“I used to say, if he wanted to drive a different car to work each day, he could — for a month at least,” the witness said, adding that her boss did use company funds to pay housekeeping staff.

 **********

With respect to the “disappearing” SB 1259:

The Bill: Reference Title:Foreclosures: Proof of Ownership

Introduced by Senators Reagan, McComish: Biggs

AN ACT Amending Title 33 Chapter 6.1 Article 1.  Arizona Revised Statutes By Adding Section 33-807.02: Relating To Deeds of Trust.

SB 1259    -

01 Be it enacted by the Legislature of the State of Arizona:

02    Section 1.  Title 33, chapter 6.1, article 1, Arizona Revised Statutes,

03                is amended by adding section 33-807.02, to read:

04                333-807.02. Nonoriginator foreclosures; evidence of title;

05                remedy; attorney fees

06 A.  FOR ANY BENEFICIARY WHO IS NOT THE ORIGINATING BENEFICIARY ON THE

07     DEED OF TRUST, THE BENEFICIARY SHALL RECORD A SUMMARY DOCUMENT REGARDING THE

08     BENEFICIARY’S LEGAL INTEREST IN THE DEED OF TRUST THAT CONTAINS THE FOLLOWING

09     INFORMATION IN CHRONOLOGICAL ORDER:

10         1.  THE FULL NAME AND ADDRESS OF RECORD OF EVERY PRIOR BENEFICIARY ON

11             THE DEED OF TRUST.

12         2.  THE DATE, RECORDATION NUMBER OR OTHER UNIQUE DESIGNATION OF THE

13             INSTRUMENT, AND A DESCRIPTION OF THE INSTRUMENT THAT CONVEYED THE INTEREST OF

14             EACH BENEFICIARY.

15 B.  THE SUMMARY DOCUMENT PRESCRIBED BY THIS SECTION SHALL BE RECORDED

16     AT THE SAME TIME AND PLACE THAT THE NOTICE OF TRUSTEE’S SALE IS RECORDED

17     PURSUANT TO SECTION 33-808 AND A COPY OF THE SUMMARY DOCUMENT SHALL BE

18     ATTACHED TO ANY NOTICE OF TRUSTEE’S SALE THAT IS REQUIRED TO BE PROVIDED AS

19     PRESCRIBED IN SECTION 33-809.19C.

20     FAILURE TO PROPERLY RECORD THE SUMMARY DOCUMENT THAT DEMONSTRATES

21     EVIDENCE OF TITLE FOR THE FORECLOSING BENEFICIARY AS OF THE DATE OF THE

22     TRUSTEE’S SALE AS PRESCRIBED BY THIS SECTION RESULTS IN A VOIDABLE SALE.

23 D.  ANY PERSON WITH AN INTEREST IN THE TRUST PROPERTY MAY FILE AN

24     ACTION TO VOID THE TRUSTEE’S SALE FOR FAILURE TO COMPLY WITH THIS SECTION AND

25     IS ENTITLED TO AN AWARD OF ATTORNEY FEES AS WELL AS DAMAGES AS OTHERWISE

26     PROVIDED BY LAW IF THE PERSON SUBSTANTIALLY PREVAILS, INCLUDING AN AWARD OF

27     ATTORNEY FEES FOR ANY INJUNCTION OR OTHER PROVISIONAL REMEDIES RELATED TO THE

28     CLAIM.

http://www.scribd.com/doc/48530405/SB-1259-Introduced-Version-Arizona-State-Legislature-via-MyGov365-com

***

“ForeclosureIndustry.com”  (Feb 6, 2011):

http://www.foreclosureindustry.com/2011/02/arizona-action-alert-support-sb-1259/

Arizona Action Alert! Support SB 1259!

“All Arizona homeowners should be interested in these changes to the Arizona foreclosure statute. It would require the recording of a certification regarding the complete chain of title prior to any non-judicial foreclosure not conducted by an originating lender, or the sale would be voidable. Attorney’s fees would be awarded if a homeowner had to sue to enforce this.”

***

Not surprisingly MERSCorp hired professional lobbyists to fight the bill.

(Findsen Law) http://findsenlaw.wordpress.com/2011/02/18/lobbyists-and-mers-hire-lawyers-to-kill-arizona-sb-1259/

“The bill passed through the Senate Republican caucus yesterday.  MERS has reportedly retained Tri-Advocates, via Squire Sanders law firm (thought they used Quarles Brady law firm in Arizona?)  to kill our bill, SB 1259, on Monday.  Why are they so afraid of truth telling?  A foreclosing party should be legally authorized.  It should be easy to come up with a summary of transfers that must have already occurred at foreclosure, for the conveyances of real property interests in the deeds of trust to be legal.  I’m glad that we’ve had an opportunity to create new jobs for lobbyists in Arizona but SB 1259 should pass.  It’s a no brainer for Arizona citizens who oppose the theft of houses, and support transparency.

The bill should get a vote on Tuesday or Wednesday by the full Senate.”

***

Suggested reading – under Case Filings listed in links on the rightmost column of this blog.  In particular The Ibanez Decision, Professor Randall Wray on the Grossman Ruling, and Randall Wray’s Nightmare on Wallstreet. 

***

“Foreclosure Industry.com” (Feb 16, 2011): Bill Passes Senate

***

Mandellman Matters (Feb 24, 2011):  Bankers Apoplectic Over Arizona’s Republican Dominated Senate Passing Chain of Title Bill, 28-2

http://mandelman.ml-implode.com/2011/02/bankers-apoplectic-over-arizona’s-republican-dominated-senate-passing-chain-of-title-bill-28-2/

Frankly, I don’t know where to begin. There’s just so much to say. It’s like a cornucopia of… well, lots of stuff to say. Bankers everywhere must be walking in circles, muttering to themselves, perhaps breaking out in hives. And I have to imagine that banking industry lobbyists are in some kind of trouble with their masters today, with phones being slammed down after CEOs have screamed:

***

You see, the Arizona State Senate has passed Senate Bill 1259, sponsored by Michele Reagan, which would require the lenders that didn’t originate a loan to produce the full chain of title, or risk the foreclosure sale being voided. The bill now goes to the House for a vote, but with the Senate having passed it by an overwhelming margin of 28-2, it would seem that its passage is a fait accompli.

According to the Arizona Senate’s FACT SHEET FOR S.B.1259, foreclosures; proof of ownership, the Bill’s purpose is as follows:

“Provides a chain of ownership during foreclosure proceedings and allows reimbursement of lawyer fees for injunctions or court cases that fail to prove ownership.”

I urge you to read his full article.

Since the bill has been passed, it appears to have “disappeared”, at least on the list of sponsored bills presented on Arizona State Senator Michele Reagan’s website:

http://www.azleg.gov/MembersPage.asp?Member_ID=47&Legislature=49&Session_ID=87

********************

Matt Weidner:  Are the Banksters Powerful Enough To Make Legislation Disappear?

“I love that reruns of the Sopranos are back on.  Remember Tony Soprano and the guys and the dark humor of the mafia?  If they didn’t like someone, they were whacked….disappeared.  But as I woke up this morning, I read on 4Closurefraud something that really blew my mind.  It was an absolutely disturbing post from Mandelman Matters where he suggested that the banksters were able to make an entire piece of filed legislation….DISAPPEAR. “

****************

Mandelman Matters:

A Funny Thing Happened on the Way to the AZ House of Representatives… After passing the Senate 28-2… S.B. 1259 Completely Disappeared

http://mandelman.ml-implode.com/2011/04/a-funny-thing-happened-on-the-way-to-the-az-house-of-representatives…-after-passing-the-senate-28-2…-s-b-1259-completely-disappeared/

Arizona State Senator Michele Reagan, was first elected to serve in the Arizona House of Representatives in 2002.  In 2010, she was elected to the Arizona State Senate.  She is Vice-Chairman of the Banking and Insurance Committee, and Chairman of the Committee on Economic Development and Jobs Creation.

Well, as you might remember from the article I posted on February 23rd of this year, she and her husband were sued by their servicer, Texas-based Colonial Savings FA, when they sent the bank a letter last July stating that they were planning to rescind their loan due to violations of the Truth in Lending Act or TILA.

Apparently, Senator Reagan found herself having a dickens of a time finding out who exactly owned her note, and she wasn’t at all happy about it.  So, in response, and working with Arizona attorney, Beth Findsen, she sponsored Senate Bill 1259.

***

But that’s nothing more than just the industry’s standard scary bedtime story, nothing to get too excited about… at least that’s what I thought at the time.

So, I posted my article on Senator Reagan’s S.B. 1259 this past February and waiting anxiously to hear about its passage by the House.  The governor, smart money was already saying, would sign the bill upon its passage.  This was going to be good… don’t you just love Arizona, was all I could think to myself.

It was perhaps a little over a month later when I found myself packing my suitcase, about to leave for the greater Phoenix area on my second annual pilgrimage to watch Major League Baseball’s Cactus League during Spring Training.

I called an Arizona foreclosure defense attorney, Don Loeb, who lives in Phoenix, and who had suggested that we meet for dinner during my stay in the Valley of the Sun, and while I had him on the phone, I asked him about the status of Senator Reagan’s bill, as I had been unable to find anything about its status online.  In fact, when I had searched for information on-line, S.B. 1259 seemed to be about something about firefighters… I was sure I was doing something wrong.

What I heard Don say, however, made no sense to me whatsoever and it simply wasn’t sinking in for the first minute or two… Don said S.B. 1259 was gone, replaced by something having to do with firefighting… he said I needed to speak with Beth Findsen to get the details.

Click here to follow Mandelman Matter’s conclusions.

TwainsThoughts

hat tip:  Implode-O-Meter, 4ClosureFraud, and Matt Weidner

I’m getting very tired of this – isn’t there some sort of law about intentionally misleading people to their detriment?  Isn’t doing that called fraud?

WASHINGTON (AP) — The United States has never defaulted on its debt and Democrats and Republicans say they don’t want it to happen now. But with partisan acrimony running at fever pitch, and Democrats and Republicans so far apart on how to tame the deficit, the unthinkable is suddenly being pondered.

No it’s not.

The government now borrows about 42 cents of every dollar it spends. Imagine that one day soon, the borrowing slams up against the current debt limit ceiling of $14.3 trillion and Congress fails to raise it. The damage would ripple across the entire economy, eventually affecting nearly every American, and rocking global markets in the process

That’s not a default.  Watch the (intentional) misdirection here:

A default would come if the government actually failed to fulfill a financial obligation, including repaying a loan or interest on that loan.

Uh, no.

“Including”?  No, not at all.

In fact a default is only the failure to pay interest or principal on a loan.  Nothing else is a default.

If the U.S. starts missing interest or principal payments, borrowers would demand higher and higher rates on new bonds, as they did with Greece, Portugal and other heavily indebted nations

The United States takes in about $2 trillion in taxes a year.  The total interest paid last year was about $180 billion, a ridiculously low blended rate, but that’s what ZIRP (zero interest rates by The Fed) get you.

Let’s assume for a moment that the blended rate was to more than double, to 4%.  That would be about $560 billion in interest a year, including interest on the Social Security and Medicare “trust funds” (which aren’t trust funds, but I’ve been over that before.)

$560 billion is about one quarter of the tax revenues that the government takes in.  So even were interest rates to more than double The United States would not default.

Investment bank J.P. Morgan Chase recently concluded that any delay in making an interest or principal payments by the Treasury “even for a very short period of time” would have large “long-term adverse consequences for Treasury finances and the U.S. economy.” The analysis is being circulated on Capitol Hill by supporters of raising the debt limit.

There is no risk of default.  What JP Morgan is putting forward would be a default, but a failure to raise the debt ceiling would not cause one, because the Government takes in far more money in taxes than it must spend on interest.  JP Morgan knows this.

Therefore, running this line of crap is an intentionally false claim and those who are doing so must be identified by specific name, title and position and then be PERMANENTLY EJECTED by the people from the public conversation and debate on this issue.

Even though GOP leaders say they want to avoid more economic chaos, there is a large crop of tea-party aligned Republicans threatening to refuse to raise the cap under almost any circumstance. Polls suggest a large percentage of Americans oppose raising the debt limit.

The people are smarter this time around.  They were lied to last time; we were told that “Armageddon” would occur if TARP wasn’t passed.  The people said “bullcrap!” to the tune of three hundred to one among callers to Congress, but Congress passed TARP anyway.

Now the banks are running the same lie that Henry Paulson and Ben Bernanke ran in 2008: Either do this or the United States will “default.”

No it won’t.  A default only occurs if you can’t make the interest and principal payments. 

The United States Federal Government takes in more than ten times the amount of interest paid in fiscal 2010 in the form of taxes.  It is therefore more than able, without any increase in the debt ceiling, to meet its lawful obligations to creditors.

What it cannot do without an increase in the debt ceiling is continue to increase the amount of borrowed money that it does not have. 

In other words, a refusal to raise the debt ceiling is a Congressionally-imposed balanced budget amendment.

Since people like Jim DeMint have said they will not vote for the increase without a Constitutional Amendment requiring a balanced budget, the simplest way to get what they claim they want is to refuse to raise the debt ceiling.

Such a refusal is a balanced budget mandate that can be imposed by Congress right now and which cannot be avoided or otherwise tampered with.

STOP LYING TO THE AMERICAN PEOPLE YOU BAND OF BANKSTER JACKALS!

If there IS such a thing as a fiscal responsibility party (whether it is called “Tea” or not) they must rise right now and refuse to pass ANY increase in the debt ceiling – period.

They must make clear that ANY lawmaker who votes for such a thing will be targeted for defeat in 2012 and will lose their job – no exceptions, no ifs, no ands, no buts and no maybes.

Refusing to raise the debt ceiling will not cause a default – it will, instead, force the government to live within its means.

The Market-Ticker

The United States is in the middle of a devastating long-term economic decline and it is getting really hard to deny it.  Over the past year I have included literally thousands of depressing statistics in my articles about the U.S. economy.  I have done this in order to make an overwhelming case that the U.S. economy is in deep decline and is dying a little bit more every single day.  Until we understand exactly how bad our problems are we will never be willing to accept the solutions.  The truth is that our leaders have absolutely wrecked the greatest economic machine that the world has ever seen.  Most Americans just assume that we will always experience overwhelming prosperity, but that is not anywhere close to the truth.  We are not guaranteed anything.  Our manufacturing base has been gutted, the number of jobs is declining, more Americans are dependent on government handouts than ever before, our dollar is dying and as a nation we are absolutely drowning in debt.  The economists that are trumpeting an “economic recovery” and that are declaring that the U.S. economy will soon be “better than ever” are delusional.  We really are steamrolling toward a complete and total economic collapse and our leaders are doing nothing to stop it.

The following are 24 more signs of economic decline in America.  Hopefully you will not get too depressed as you read them….

#1 On Monday, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned the U.S. that it could soon lose its AAA rating.  This is yet another sign that the rest of the world is losing faith in the U.S. dollar and in U.S. Treasuries.

#2 China has announced that they are going to be reducing their holdings of U.S. dollars.  In fact, there are persistent rumors that this has already been happening.

#3 Hedge fund manager Dennis Gartman says that “panic dollar selling is setting in” and that the U.S. dollar could be in for a huge decline.

#4 The biggest bond fund in the world, PIMCO, is now shorting U.S. government bonds.

#5 This cruel economy is causing “ghost towns” to appear all across the United States.  There are quite a few counties across the nation that now have home vacancy rates of over 50%.

#6 There are now about 7.25 million less jobs in America than when the recession began back in 2007.

#7 The average American family is having a really tough time right now.  Only 45.4% of Americans had a job during 2010.  The last time the employment level was that low was back in 1983.

#8 Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in all of U.S. history.

#9 According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

#10 Gas prices reached five dollars per gallon at a gas station in Washington, DC on April 19th, 2011.  Could we see $6 gas soon?

#11 Over the past 12 months the average price of gasoline in the United States has gone up by about 30%.

#12 Due to rising fuel prices, American Airlines lost a staggering $436 million during the first quarter of 2011.

#13 U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

#14 Approximately one out of every four dollars that the U.S. government borrows goes to pay the interest on the national debt.

#15 Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

#16 Total credit card debt in the United States is now more than 8 times larger than it was just 30 years ago.

#17 Average household debt in the United States has now reached a level of 136% of average household income.  In China, average household debt is only 17% of average household income.

#18 The average American now spends approximately 23 percent of his or her income on food and gas.

#19 In a recent survey conducted by Deloitte Consulting, 74 percent of Americans said that they planned to slow down their spending in coming months due to rising prices.

#20 59 percent of all Americans now receive money from the federal government in one form or another.

#21 According to the U.S. Bureau of Labor Statistics, the average length of unemployment in the U.S. is now an all-time record 39 weeks.

#22 As the economy continues to collapse, frustration among young people will continue to grow and we will see more seemingly “random acts of violence”.  One shocking example of this happened in the Atlanta area recently.  The following is how a local Atlanta newspaper described the attack….

Roughly two dozen teens, chanting the name of a well-known Atlanta gang, brought mob rule to MARTA early Sunday morning, overwhelming nervous passengers and assaulting two Delta flight attendants.

#23 Some Americans have become so desperate for cash that they are literally popping the gold teeth right out of their mouths and selling them to pawn shops.

#24 As the economy has declined, the American people have been gobbling up larger and larger amounts of antidepressants and other prescription drugs.  In fact, the American people spent 60 billion dollars more on prescription drugs in 2010 than they did in 2005.

The Economic Collapse

On the banks that are filing foreclosures improperly….

http://inthearena.blogs.cnn.com/2011/04/21/sheriff-takes-on-banks-over-robo-signing/

Oh, and if you think this is only foreclosures?  Uh….. no.

It’s not the foreclosure affidavits only. Hello? It’s the whole kit-n-caboodle. it’s the fabricated assignments of mortgage, fake allonges, robo-stamped endorsements in blank, and satisfactions of mortgage, ignoring SEC and IRS regulations, disregard for the steps required by the REMIC rules. It’s all the top national banks and their servicing arms. The whole of it is a sham. Don’t believe the propaganda that insists otherwise.

If you “paid” your mortgage in full, did you actually pay the right person, and is that “satisfaction” that was filed authentic, or is that a fraud too?  Oh, read that second link carefully folks…. then ponder whether you have a trash title to your house, even if you’ve been paying on time, as-agreed.

The Market-Ticker