FedUpUSA

Archive for November 19th, 2011

Brought to us courtesy of senators Kay Hagan of North Carolina and one of the banking lobby’s most obedient lap dogs, Bob Corker of Tennessee.

The United States Covered Bond Act of 2011 is designed to allow bundling of any kind of debt including derivatives, into marketable securities guaranteed at full face value by the FDIC.

Asset classes eligible to be rolled into Covered Bonds are shown below including “H” which leaves the door open for anything left over, What would qualify would be the decision of one unelected official, the treasury secretary/Goldman Sachs representative.

(A) a residential mortgage asset class;
(B) a commercial mortgage asset class;
(C) a public sector asset class;
(D) an auto asset class;
(E) a student loan asset class;
(F) a credit or charge card asset class;
(G) a small business asset class; and
(H) any other eligible asset class designated by the Secretary, by rule
and in consultation with the covered bond regulators

The full text of the bill is here.
http://www.hagan.senate.gov/files/111109_CoveredBond_BillText.pdf

Thanks Bob Corker for working to build this new FDIC insured landfill where our TBTF banks can dump all of their unwanted financial refuse and collect 100 cents on the dollar on their way out.

Please write your congressman to stop this before it is too late.

h/t Patrick.net

But you, the common man, does not have to.

Many have asked why I became so critical of the “Tea Party” around the election in 2010, and why I’ve continued that criticism since.  You can look up the articles; they’re many and varied.

My view has just been validated by a major lobbying organization in DC with the following memo:

According to the memo, if Democrats embrace OWS, “This would mean more than just short-term political discomfort for Wall Street. … It has the potential to have very long-lasting political, policy and financial impacts on the companies in the center of the bullseye.”

The memo also suggests that Democratic victories in 2012 should not be the ABA’s biggest concern. “… (T)he bigger concern,” the memo says, “should be that Republicans The Tea Party will no longer defend Wall Street companies.”

Two of the memo’s authors, partners Sam Geduldig and Jay Cranford, previously worked for House Speaker John Boehner, R-Ohio. Geduldig joined CLGC before Boehner became speaker; Cranford joined CLGC this year after serving as the speaker’s assistant for policy.A third partner, Steve Clark, is reportedly is reportedly “tight” with Boehner, according to a story by Roll Call that CLGC features on its website.

Got it folks?  “Your” (The Tea Party’s) political party has been defending the acts that led into the mess we are in today and continue to do so.  The fear is that they might stop doing so.

Remember this Ticker from the other day?

The political folks who utterly refuse to address this issue – including the so-called “Tea Party” (Joe Walsh anyone?  Or how about Steve Southerland?) are simply pointing out that you are considered peasants and under the boot of an imperious King who grants those in his favor the right to screw you with impunity.

If you continue to support and vote for these jackals on either side of the aisle — if you continue to provide consent of the governed to the government under those terms — then you’re consenting to being screwed.

It’s that simple folks

You want to know why “OWS” is right?  It’s found right here in this sort of so-called “justice” that the SEC is trying to mete out.  And don’t start this crap about it only being “Democrats” that do this sort of thing: The Republican Party controls The House which means it also controls appropriation of funds and could literally close any department or agency that refused to bring actual prosecutions and demand actual jail sentences.

Along with this chart:

Note that under “three strikes” laws any person who had three dots on that line above would be locked up for life.  Therefore, any firm with three dots or more under the very same rule of law must not be allowed to continue to exist.

How can this continual, repeated and intentional violation of the law happen?  There’s only one way: The institutions involved have to be protected by the government.  But the government’s job in this instance is to prosecute such actions, not protect those who engage in them.

It is the very protection of these sorts of acts that in fact led to the American Revolution!

Go read that linked Ticker again and understand this folks: The Wall Streeters and lobbyists know that if the common man Tea Partier and Occupy Wall Streeter come together and execute non-violent decisive action — such as a national general strike until the rule of law is enforced — their game is over.

And what is their “game”?  That’s simple: They’re robbing you.  Serially, intentionally, even violently using the force of government to obtain your property under fraudulent pretense.

“They” know the risk if you put away the divisive rhetoric and foolish name-calling and instead come together and, as the actual 99%, withdraw your consent to being screwed.

There is only question remaining: Are you up to the challenge?

What happens to a debt-dependent economy when it hits the wall of debt saturation? The job market and the very nature of work will change.

What is the future of work in a debt-dependent economy that no longer responds to more debt?  In a word: bleak.

Given the “recovery’s” stagnant job market and the economy’s slide toward renewed contraction, it’s a timely question. To answer it, we must first ask, What is the future of the U.S. economy?

In broad brush, the Powers That Be have gone “all in” on a bet that this  recession is no different than past post-war recessions. All we need to do to get through this “rough patch” is borrow and spend money at the Federal level, and the household and business sectors will soon recover their desire and ability to borrow more and spend it all on one thing or another. We don’t really care what or how, because all spending adds up into gross domestic product (GDP).

In other words, we’re going to “grow our way” out of stagnation and over-indebtedness, just as we’ve done for the past fifty years.

Unfortunately, this diagnosis is flat-out wrong. This is not just another post-war recession, and so the treatment—lowering interest rates to zero and flooding the economy with borrowed money and liquidity—isn’t working. In fact, it’s making the patient sicker by the day.

The best way to eliminate the signal noise of official propaganda (“The stock market is rising, so everything’s great for everyone!” etc.) and the high keening wails of Keynesian cargo cultists is to construct a model of the underlying fundamental forces that will shape the future.

The best way to do that is to glance at a few key charts.

Let’s start with debt.  Clearly, the “growth” of the U.S. economy since 1980 is debt-based. Debt has exceeded growth by 136%. If debt had risen in tandem with GDP, then total debt would be a mere $22 trillion instead of $52 trillion.

The next chart reflects how every incremental increase in debt has had a diminishing effect on growth. Where $1 of debt once added 70 cents to GDP, now it adds basically nothing, or even reduces GDP.

We hear a lot of euphoric babble about households “deleveraging;” that is, paying down debt and thus setting the stage for the next ramp-up of household debt. But the reality is not quite so euphoric. Compared to the explosion in household debt since 1980, which we might term the debt elephant, the recent “deleveraging” reduction in debt is more like a mosquito.

Next, let’s look at jobs and employment. To make sure we’re getting the full picture, let’s look at several measures of employment as a reflection of the underlying economy.

This first chart looks like a steady onward-and-upward trend of job growth. The “jobless recovery” appears to be a modest bump in the road of ever-rising employment.

By other measures, however, employment hasn’t hit a bump in the road; it’s off the road and sinking into a bottomless bog. Here is the civilian participation rate, which measures how many folks in the civilian population are participating in the labor market in one way or another.

By this measure, the labor market has retraced to the level of the 1981-82 recession thirty years ago.

Next, let’s look at another, perhaps even more telling metric: private payrolls per capita, which is basically a measure of how many jobs there are per capita in the economy.

What this means is that beneath the glitter of a “rising GDP” and “rising stock market,” the economy is producing far fewer jobs per capita.

If we look at the total number of civilians and the total number of jobs, the chart looks even uglier. We are back to the levels of 1970s stagflation, just as women began entering the workforce en masse to compensate for declining household purchasing power.

This next chart is civilian employment per capita, which is similar to the previous chart of private payrolls per capita, but includes all jobs, including public-sector/government employment. Once again it shows that the economy is back to the levels of the mid-1980s, even including the rapid expansion of local and state government payrolls.

Another way to measure the real performance of an economy is capacity utilization — how much of the potential capacity of the economy is being used. In good times, capacity is added because the existing capacity is running full-tilt. In recessions, there is not enough demand to use the economy’s full capacity, and therefore no reason to add to capacity with business investment.

I’ve drawn some lines to clarify what happened during each primary phase of the post-war era. During the stagflationary 1970s, capacity utilization see-sawed between growth and recession, tracing out a series of lower lows and lower highs. This downtrend reflected the reality that the economy wasn’t growing; it was stagnating, hitting new lows with every downturn, and never reaching its previous high-point during recovery.

After finally hitting bottom in the 1981-92 recession when Federal Reserve Chairman Paul Volcker vanquished inflation by jacking up interest rates to 18%, the economy entered a 30-year cycle of financialization (deregulation of the banking sector and the rise of debt as the engine of growth), globalization, and technological innovation that fueled a multi-decade trend of rising productivity.

The wheels fell off the financialization and dot-com boom in 2000, and the Federal Reserve and federal government created an even more extreme version of financialization that inflated a gigantic debt/real estate bubble. Like all financial bubbles, this one burst, and once again the Fed and federal government scrambled to inflate another debt bubble.

Since the household sector was tapped out and its primary asset, the family home, had lost a third of its bubble value, the Federal government borrowed $6 trillion to bail out the banking sector and spread trillions of dollars around as stimulus and giveaways like “Cash for Clunkers.”

Unsurprisingly, this injection of trillions of dollars did boost capacity utilization. Roughly 11% of the entire GDP is borrowed and spent every year now by the federal government. But just as in the stagflationary 1970s, the decline reached a new low and the subsequent rise never got close to the previous bubble high of 2006.

Now that the economy is rolling over again, capacity utilization is also declining.

None of this reflects a healthy economy. What it does reflect is an economy that has depended on ever-greater amounts of debt to power a diminishing trend of growth, and an economy which creates fewer and fewer jobs with ever-greater mountains of debt.

This is not a bump in the road; it is the exhaustion of the entire model of  growth that we have depended on for the past 30 years. Once the debt saturation point has been reached, adding more debt subtracts from the economy rather than adds to it. This is reflected in the decline of employment by every metric: total number of jobs, civilian participation, payrolls per capita, and employment as a percentage of the total population.

We are past the point of debt saturation, and so we need a new model of employment, and indeed of “growth” itself. Sadly, as discussed in a recent report, the Status Quo financial witch-doctors have only prescribed more debt and more unproductive friction.

Unfortunately, as the above charts abundantly illustrate, the patient (the U.S. economy) hasn’t been cured; rather, its condition has gotten worse. The stock market is like a sort of makeup that has been slathered on by the Fed to give the appearance of health, but the internal measures of jobs and income (both declining) show that both the “health” and the “recovery” are illusory.

So, the key question to ask ourselves is, Where will the demand for work be in a post-debt, post-”cheap oil” economy”?

In Part II: The Future of Work, we tackle this critical question and provide a framework for potential job seekers/switchers to use in positioning themselves for meaningful and dependable employment in this coming era.

Click here to read Part II of this report (free executive summary; paid enrollment required to access).

This article was first published on Chris Martenson.com as “The Future of Work.”

Charles Hugh Smith – Of Two Minds

The tide is turning……

MEMPHIS, Tenn. — Occupy Memphis member Mallory Pope had just finished telling a group of about 75 tea party followers Thursday night that politicians should not allow themselves to be influenced by lobbyists and unions when she received an unexpected invitation.

“It sounds to me that y’all ought to be joining us,” said Jerry Rains, a 64-year-old computer programmer and tea party member. “You have a lot of the same goals we have, which is to take our country back.”

Pope and fellow Occupy Memphis protester Tristan Tran had a lively, sometimes strained and confrontational, but mostly civil discussion with members of the Mid-South Tea Party at a municipal meeting hall outside Memphis.

The factions saw eye-to-eye on some issues and clashed on others. And, while the young speakers didn’t change many minds, they did earn praise from the tea party members for their passion, honesty and courage.

THIS.

You want change?  You want to see actual change?

Then you have to stop doing things that don’t work — by your own experience — and embrace those that do work, whether you agree with every single point on the table or not.

I will never find “consensus” with my views if I insist that every point of what I would use as a platform were I to run for office be adhered to in order to participate.  Were that to be my standard there is only one way I’d find common ground, and that is if I was to be crowned a dictator!

That’s not America folks, and God willing, it never will be.

Face it folks: The Tea Party was maligned as a bunch of redneck racist cross-burning KKK members by the hard-left political establishment.  I called that sort of crap what it is at the time: Bigotry and over the line.

So what is when the hard-right maligns Occupy as a bunch of dope-smoking communists and marxists?  The exact same thing: Bigotry and far over the line.

Are there “dope-smoking hippies” in Occupy?  I’m sure there are.  I’m also sure there are redneck racists within the Tea Party.  But the presence of those who would try to exploit something for their own puerile purpose does not make the movement, nor does it constitute endorsement by that movement.

Here’s reality folks: The Tea Party, if we are talking about what founded the Tea Party — the Santelli Scream if you will, of if you prefer my original Tea Bag Ticker, which is this singular message, is where we need to find that common ground and focus:

So long as we have an inauguration drawing this sort of crowd and not a protest about our government blowing $700 billion of our dollars so that The Pigmen of Wall Street can continue to rob our nation blind, then saddle us with the bill when their bets go bad, we will see no solution.

I cannot take credit for the idea floated on the forum, but I do like it.

It is time for We The People to send a strong message to Washington DC – no more.  No more loading our children and grandchildren with debt.  No more bailing out speculators and bankers who made bets they knew were unsafe at the time.  No more bailing out people who came to Congress to demand the removal of leverage limits, got what they asked for, then blew themselves up with the very leverage they demanded to be able to use.

No more.

Therefore, on February 1st, which is more than enough time for Barack Obama to be seated in his chair in the West Wing, I am recommending an act of peaceful, lawful and yet unmistakable protest.

That is, to mail President Obama one teabag.  Nothing dangerous, nothing illegal – just one teabag.

Send one to your Congressman and one to each Senator.

Later, when the weather is a bit warmer and fountains are running water (rather than frozen!) this sort of protest can be repeated with LOOSE tea in select cities.

For the Tea Party, take the “guns, gays and God” thing and shelve it folks.

From the left, take the “I want my mathematically-impossible freebie” and shelve it folks.

Here’s the punch line, in case you missed it in the Huffington Post article:

“The Occupy movement has remained adamant about not drafting a list of demands because terrorists make demands, and we’re not terrorists,” said Pope, a graphic design student. “We shouldn’t have to demand a democratic process.”

Remember the shopworn criticism from The Right, and from the mainstream media?  “There’s no list of demands.“  Well it’s true that there’s no list of demands, because there shouldn’t have to be demands.  Demands are made by terrorists; the rule of law is followed in a representative republic, and does not need to be stated as a demand as it is implied in any lawful, rational, rights-based society and government.

Wake up and smell the coffee damnit.  The Attorney General of Nevada just issued a 600+ count indictment against criminal behavior in bank-sponsored foreclosure actions.  Hundreds of counts of felony misconduct are alleged.  That leaves just 99,400 more that have yet to be charged nationally, does it not?

The tide is turning.

We need a banking system but we do not need banks that run roughshod over the people with criminal behavior that no legitimate society and government should ever tolerate.

The tide is turning.

Not a damn thing has changed in this regard since 2007; the total notional value of derivatives has increased since that time and what’s worse is that they’re using your bank deposits as collateral to back them!  They have refused to put them on an exchange and back every dollar of underwater position with one dollar of capital from an actual shareholder or bondholder because if they were forced to do this they would not have the money to post the margin and they know it, which means that the “contracts” are no contract at all since it is impossible for them to perform.

This is the outright scheme and scam that is being run against you.  Bernanke is coddling these jackasses because he, along with Congress, are locked in a deadly embrace; they both know the above is true and they also both know that the economy does not have actual demand sufficient to absorb the supply — that is, a good part of the current so-called “GDP” is false just as it has been since 1980.

This must stop!

It is not a matter of politics.  It is a matter of arithmetic.

The tide is turning and we are about to be buried under a 500′ wall of water.

Europe is on the verge of economic collapse as a direct consequence of their refusal to face reality for the same 30 years.  We are next in line if we do not both ringfence our financial system and cut the crap in this country.

There is no way around the economic contraction that we must accept in order to restore balance to our economy.  There no way around the deflation of asset prices and the general economy.  There is no way to pay that which has been promised to many — the promises were intentionally fraudulent and the government agencies, representatives, senators, governors and presidents who made them knew it at the time.

This does not mean we cannot help people.  It does not mean we cannot fix our economic system.  It does not mean we cannot provide the assistance we are able and reform our economic, tax, medical, immigration and government structures to return competitiveness to American manufacturing and ultimately drive economic prosperity.  We can do all of those things, but not in the form and fashion we’ve claimed to do them up until this point.

But we cannot continue with Ponzi Finance and we must unite as a people around the singular goal of putting an immediate stop to it and jailing every one of the bastards that has promoted and continued these policies to the fullest reach and extent of the law.

The tide is turning and the available time to both lay in the sandbags and get to higher ground is running out.