"When Volcker began tightening to save the dollar in 1979 the unemployment rate was 6.0%, and it topped out at 10.8%. If Fed officials tighten now to save the dollar, they'll be starting at 10.0%. This means, in my opinion, if they tighten they will be flirting with massive social upheaval, and they know it, so they are sacrificing the dollar to buy as much time as they can, hoping they will be out of office before the catastrophe arrives." -- Richard Maybury, U.S. and World Early Warning Report, Jan. 2010
Dear All,
November consumer borrowing plummeted by $17.5 billion. This is the largest drop in history. The American consumer is the economy. If you solely understand the significance of this statistic you can set aside all others and everything you hear about green shoots and recovery. Without consumer credit, U.S. economic recovery is simply not possible -- Period....THE END. November Consumer Credit plunges 17.5%
The FDIC announced its first bank closure of the year (Horizon Bank, Bellingham, WA). What makes this closure particularly noteworthy is the balance sheet of the closed institution features the worst qualitative overstatement of assets of all FDIC seizures thus far in the crisis.
It is worth examining the details of this closure in order to gain an understanding of the magnitude of the financial deterioration in the banking system and the culture of accounting deception being blessed by the Financial Accounting Standards Board. "Deception" is actually too kind. The FASB is effectively endorsing accounting fraud.
On the very day of it's seizure Horizon Bank reported $1.1 billion in deposits, and stated balance sheet assets -- largely real estate loans, of $1.3 billion. The FDIC is estimating it's cost to close the bank at $539.1 million. Translation:
(In $millions)
$1,100,000. Deposits
- 539,100. FDIC Estimated cost to cover deposits (asset shortfall to deposits)
560,900. Implied FDIC estimate of true asset value available to cover deposits:
FDIC estimated asset value / Horizon deposits 560,900 / 1,100,000 = 51.0%
FDIC estimated asset value/ Horizon stated asset value: 560,900 / 1,300,000 = 43.2%
The FDIC is saying that the bank's assets are in actuality worth only 43.2% of what Horizon Bank stated and that Horizon in reality had only 51 cents in assets for every dollar on deposit, contrasted with the $1.18 per dollar claimed by Horizon on the date of its closure. Horizon's massive asset deterioration was hidden from it's shareholders and depositors through the very day of its seizure - and yet Horizon's reporting was in conformance with FASB guidelines. Horizon's acquiring institution (Washington Federal) also required the FDIC to enter into a loss-share transaction with respect to $1.0 billion of the assets which means that the FDIC may still be overstating the asset values and understating the FDIC's eventual costs. As commercial real estate deteriorates further, so will bank balance sheets but even if things stabilize, the write-downs that have yet to be taken in the banking sector are breathtaking. FDIC shuts down Horizon Bank
Here is a picture of what has become of this country. More Americans are now employed by government than in goods-producing jobs.
Spot on. London School of Economics Professor predicts massive dollar collapse
More on the adventures of the Really Smart Guys: Harvard's Shadow Elite; Are the Secret 7 bankrupting the U.S.?
How ironic and sad that Pravda has become a more credible source of truth than much of U.S. media. Pravda: Recession over/depression beginning
It galls me when I hear politicians, Fed members and assorted business leaders state that nobody could have predicted such a severe financial and economic crackup. Not only could they -- they did. However, they were ignored, ridiculed, and trivialized by mainstream economists, Wall Street and the establishment media. Peter Schiff was one of the few invited to appear with any regularity on financial television. Many of his appearances and warnings going back several years are available on YouTube. He was right then. He's right now. Peter Schiff: "It's not our Fault"
Three military jets, two 737's and a Gulfstream Five. That's some of the steroidal carbon-footprint blasting equipment used by our country's climate elite -- a congressional delegation hand-picked and led by Nancy Pelosi to transport them, their spouses (and in some cases their kids) on each leg of their trip to the Climate Summit in Copenhagen a few weeks ago, where getting the rest of us to decrease our carbon footprints was the agenda. As CBS reports, the taxpayers picked up the full tab for this boondoggle. It produced no climate agreement, but a good time was had by all. CBSNews: Partying in Copenhagen
The two passengers accused of attempting to bring down separate airliners using explosives attached to a shoe in one instance and testicles in the other, were attempting to use PETN (a military explosive) on their respective flights. As I have come to understand, PETN -- whether attached to a shoe or strapped to any part of the body, cannot be detected by current airport scanners with the exception of "Puffers" -- Explosive Trace Portals (ETP's). Otherwise a chemical test is needed. According to a TSA blog post only 33 ETP's are currently in use in the entire country. Presumably, a terrorist of moderate intelligence would opt to avoid entering one of the few security lines leading to a Puffer. This therefore begs the question of precisely why we have all been needlessly taking our shoes off in airports and agreeing to be subjected to long delays under the scrutiny of TSA personnel who would otherwise be employed collecting trays at Wendy's. The effect, if not the purpose of airport "security" as it currently exists is to delay travel and to collect as much shampoo, toothpaste and grooming devices from the traveling populace as possible. Were these toiletries redistributed to struggling families such as those who have lost their homes to foreclosure there might be some rationale for this. Certainly these confiscated products are not being excessively used by TSA employees themselves, judging from my observation of the condition of their hair and fingernails.
The truth is that this airport charade is entirely unrelated to security or preventing terrorism. It is nothing more than an expansion of centralized bureaucracy and a means to create government jobs. Whatever acts of terror have been averted since 9/11/01 have had nothing whatsoever to do with the presence of this faux security. Do you think the TSA and Department of Homeland Security would forgo the opportunity to make a huge self-congratulatory public relations splash every time they nabbed a would-be plane bomber(s) attempting to sneak their weaponry through a TSA checkpoint? After all, the TSA wasted no time this past week in heralding the capture and arrest (albeit several days after the incident) of "The Kissing Bandit," the fellow caught on video camera simply walking around an entire checkpoint at Newark Airport after kissing his girlfriend goodbye as a TSA employee turned his back. The reason you don't hear about TSA accomplishments in stopping attacks at security checkpoints is because they don't occur. The x-ray and frisking drama played out in airports is pure theater. As far as I am aware, the only foiled attacks have occurred in-flight by private citizens at the time of attempted detonation. All the airport security put in place since 9/11 has been a colossal waste of money and pointless inconvenience. Whatever sense of safety you may feel because of the existence of this "screening" is attributable to the placebo effect. Until we adapt the Israeli model of security, we should drop all pretense of having any airport security in place and eliminate the screening. It would make traveling far more pleasant, no less safe and save us $billions. The "Israelification' of airports: High security, little bother
Until then we can expect the quality of airport security to continue along the following lines: YouTube: Security checkpoint
On to gold...
Comments