Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Thursday 08.26.2010

Relax America, The Global Elites Love You
By Giordano Bruno - Neithercorp Press
In the grand scheme of history, in the great wash of the collective American cosmos, in the midst of the day to day howls and earth rattles of towering financial and political giants, many of us tend to see ourselves as "the little people". We consider ourselves inconsequential in the wake of epic events that appear to rise and fall like irregular tides and determined by some frenetic force of chance; a great cultural roulette wheel. In fact, we are often encouraged to emulate this belief. Better to roll with the river of difficult times than to fight against the current in a fruitless attempt at changing its direction. Better to let more important and more powerful men blaze the trails that we will later follow, right...?
Human beings have a strange attachment to the concept of the "decision makers vs. the decision followers", even in the U.S. The Declaration of Independence was meant to herald the birth of a society which dissolved the separation between the rulers and those who are ruled. Our country was built upon the premise that every citizen has a right to participate in the making of his own providence, to play a part in the decisions that directly or indirectly affect his future. Of course, those were the days when average Americans saw themselves as giants, as innovators of history, not as little people.

USA a failed state? It may be closer than you think
By Paul Wallis - DigitalJournal.com
There's only one common factor in the failure of great nations: Mismanagement. The USA is heading down a well traveled road to its own Armageddon. Rome, China, Russia, the British Empire and others have all been there before.
The Caligula- like state of the US as a corporate entity is hardly a secret. Caligula made his horse a god, the US media has made dis-informative demagogues gods. Any factually inaccurate piece of information has a fairly good chance of becoming accepted as gospel truth in this environment.

Putting the Brakes on ObamaCare
How a Republican Congress could begin the process of repealing this unpopular law. By GRACE-MARIE TURNER - WSJ.com
If Republicans take control of one or both houses of Congress this fall, many will have been elected with a promise to "repeal and replace" ObamaCare. But what are their options, really? There likely will be an initial showdown, but President Obama will surely veto any challenge to the law, and it would be hard to imagine mustering the votes to overturn it.
Information is the key weapon. Republicans can use congressional hearings to explain what ObamaCare is doing to the economy and the health sector. Their strongest cases would be built around jobs, the cost of health care, and the rising deficit.

Headlines Sound the Alarm about Deeper Economic Problems
By: Paul Mladjenovic - Safehaven.com
The following three headlines are alarming symptoms of the economic insanity unfolding before our eyes:

1. "Philly requiring bloggers to pay $300 for a business license"
2. "LA unveils $578-Million school, costliest in the nation"
3. "Record Number Of Americans Using Retirement Funds As Source Of Immediate Cash"

Yes, those are actual headlines. They may seem like random and disjointed stories but really they are connected to the same economic and financial crisis that is here now and threatens to get much worse.
Philadelphia is forcing bloggers that make little or no money cough up $300 for what is annoyingly labeled a "Business Priviledge Tax". The struggling city is searching for new revenue to pay for their over-spending. This silly tax may yield some modest revenue for the city but the unintended consequence will be to chase away budding entrepreneurs. In other words, they will get much less revenue than they think. This is at a time when they desperately need to attract and encourage entrepreneurs.

The Nonsense Recovery
By Bill Bonner - The DailyReckoning.com
08/25/10 Ouzilly, France - Eventually, investors are going to realize that the discussion of a "recovery" is nonsense. The economy can never recover the pace and frenzy of the bubble years - and so much the better. It has to move on to something new. The big question is: What will this new economy look like?
One important detail: in this new economy US stocks are not likely to be as highly prized as they are now. That is not to say that companies won't make money. They will - especially those that are taking advantage of strong rates of growth overseas. But investors are likely to appreciate them less regardless. That's what happens in a bear market: the price-to-earnings ratio falls. Earnings do not necessarily go down; but the multiple investors are willing to pay for each dollar of earnings does.

The trillion dollar bailout you didn't hear about
Commercial real estate values plummet again yet banks hide losses. A $3.5 trillion financial disaster in the making.
We are now proud owners of an AMC theater and Chick-fil-A.
MyBudget360.com
The latest data on existing home sales should tell you exactly where we are in this so called recovery. Average Americans are unable to purchase big ticket items without massive government subsidies. It is also the case that all the too big to fail banks are standing only because of the generous support of taxpayer money. Without large tax credits and the Federal Reserve buying down mortgage rates the housing market is extremely weak. Yet very few of the housing "analysts" actually bother to ask why they are weak in the first place. The employment market is in disarray and wages have fallen for everyone outside of the top 1 percent of income earners. The bailout fatigue is running out of steam but banks are using clandestine methods to offload trillions of dollars of commercial real estate to taxpayers. The next giant bailout is already happening but you probably haven't heard about it.

10 Practical Steps That You Can Take To Insulate Yourself
(At Least Somewhat) From The Coming Economic Collapse
TheComingEconomicCollapseBlog.com
Most Americans are still operating under the delusion that this "recession" will end and that the "good times" will return soon, but a growing minority of Americans are starting to realize that things are fundamentally changing and that they better start preparing for what is ahead. These "preppers" come from all over the political spectrum and from every age group. More than at any other time in modern history, the American people lack faith in the U.S. economic system. In dozens of previous columns, I have detailed the horrific economic problems that we are now facing in excruciating detail. Many readers have started to complain that all I do is "scare" people and that I don't provide any practical solutions. Well, not everyone can move to Montana and start a llama farm, but hopefully this article will give people some practical steps that they can take to insulate themselves (at least to an extent) from the coming economic collapse.

1. Get Out Of Debt:
2. Find New Sources Of Income:
3. Reduce Your Expenses:
4. Learn To Grow Your Own Food:
5. Make Sure You Have A Reliable Water Supply:
6. Buy Land:
7. Get Off The Grid:
8. Store Non-Perishable Supplies:
9. Develop Stronger Relationships:
10. Get Educated And Stay Flexible:

Morgan Stanley: Government Defaults Inevitable
JESSE'S CAFÉ AMÉRICAIN
In addition to "It's different this time" one of the deadliest assumptions is "It can never happen here."
Morgan Stanley says what we have all known for some time. There will be government defaults of various types on debts which have become unmanageable.
As we see in a UK Telegraph story today, a report claims the Tories are placing the greatest pain in managing their budget gaps on the backs of the less well to do, presumably protecting their more well to do constituency. No surprise to anyone if it is true. And yet this may not be enough unless the economy recovers and the great mass of the public can regain some reasonable level of organic economic activity.

Roubini Says Third Quarter Growth in U.S. to Be "Well Below" 1%
By Bob Willis
Roubini Sees U.S. Growth Below 1%,
Chance of Double-Dip Recession at 40%
Aug. 25 (Bloomberg) -- Nouriel Roubini, the New York University economist who predicted the global financial crisis, said U.S. growth will be "well below" 1 percent in the third quarter and put the odds of a renewed recession at 40 percent.
Roubini, chairman of Roubini Global Economics LLC, said his forecast assumes the government will lower its estimate for growth in the second quarter to an annual rate of 1.2 percent "at best."
"All the growth tailwinds of the first half of the year become headwinds in the second half," he said in an e-mail message, including the government's $814-billion stimulus plan, hiring for the census, and incentives such the cash-for-clunkers program and tax credits for first-time home buyers.

The Fed's Biggest Bubble
By: Michael Pento - Safehaven.com
I've made a living out of exposing economic fallacies, but there's one whale that I can't seem to harpoon. Even top-flight Wall Street analysts seem to believe that the Fed's doubling of the monetary base after the credit crunch has not had an inflationary impact on our economy. Their logic can be summed up like so: "The money the Fed created and dropped from helicopters has all been caught in the trees." In other words, the Fed is creating money, but it is just being held as excess reserves by the banking system instead of being loaned to the public. Therefore, the money supply hasn't truly increased, there is no money multiplier effect, and aggregate price levels are behaving themselves.

As economy slows and Fed voices conflict, markets look to Bernanke for guidance By Neil Irwin - Washington Post Staff Writer
With the housing market retreating, unemployment lingering and top officials at the Federal Reserve in open disagreement over what to do, Fed Chairman Ben S. Bernanke is under rising pressure to offer solutions in an address Friday that is likely to be his most important since the end of the financial crisis.
The central bank's policy intentions have been unusually muddled in the past two months, according to a widespread view among economists and people in the financial world. They say it is unclear how likely it is that the Fed will undertake major new efforts to try to support the economy, what economic conditions would trigger such actions and what form those actions would take.

The Idiots Guide to Repairing an Economy
By Bill Bonner - The DailyReckoning.com
08/25/10 Ouzilly, France - Too bad Thomas Friedman has stopped writing about the economy. We could use a good laugh this morning. Chilly winds are blowing across this part of France. The children have all gone. The sun is low and cool. It's quiet here, and a bit sad.
But Friedman has moved on to giving bad advice on other subjects.
So, this morning we turn to Bob Burnett, "retired Silicon Valley executive." Mr. Burnett is writing on a site that we believe is part of The Huffington Post. His photo shows a man who seems affable. At least, he's smiling. The edges of his mouth curl up, revealing the incipient insanity of the self-assured. He knows what he knows; too bad that what he knows isn't so.

Earth to Bill Gross:
We Chickens Know You Are The Fox Minding the Henhouse
NakedCapitalism.com
Boy, when you think you've seen the worst in utterly shameless, self serving tripe, someone manages to outdo it. Admittedly, it's awfully hard to beat Steve Schwarzmann's recent one-two punch of utter canard wrapped in tasteless hyperbole, that of Obama proposals that private equity kingpins pay taxes on what is really the fruits of their labor like other working stiffs was a "warÉ like when Hitler invaded Poland in 1939."
But no, Pimco's Bill Gross bests Schwarzmann in making it clear to the great unwashed his unabashed belief that what is good for him is good, period. Schwarzmann is a tad less horrid by at least limiting his grandiose claims to his own industry. Gross is marginally less offensive to good taste (although a discussion of his body odor in an investment piece is certainly a novel wrinkle), but makes it up by insulting his audience's intelligence, namely, by presenting himself as a staunch ally of the little guy.

Recession Double Dippers In The Ascendancy
By: PaddyPowerTrader - MarketOracle.co.uk
US stocks declined Tuesday, sending the S&P 500 Index to a seven-week low, as a record plunge in home sales cast further doubt on the viability of the economic recovery as the battle between "moderators" and "double dippers" is currently being won hands down by the latter. Existing US home sales where a real horror show - resales dropped a record 27.2 percent-nearly twice as much as analysts had expected - to an annual rate of $3.83 m in July, the National Association of Realtors said Tuesday. Meanwhile, inventories rose to 12.5 months from 8.9 months in June, pressuring already depressed home prices. Inventories are at their highest level in more than a decade.

Silver and Gold Breaking Out As Safe Haven Buying Continues
By: Jeb Handwerger - Safehaven.com
Silver had very powerful break out today as investors are seeking assets that are safe and will retain value during a debt crisis. Silver is seeing demand at these price levels as it is historically cheap relative to gold. If the ratio came down to the levels it was in 2006 it would be close to $27 an ounce. Silver is soaring because investors are realizing this is a hard asset, it is money and it is historically cheap compared to gold.
Gold has reached overbought conditions from my July 28th buy signal. Right now gold is a bit overbought while silver is at an interesting buy point, having found support for the fourth time at its long term 200 day moving average. Today's breakout of the symmetrical triangle, a very bullish chart pattern, is a sign that silver has built up a lot of internal strength and could break out into new three year highs. Remember, silver is significantly below all time highs while gold has already broken into new highs.

Gold May Gain to $1,252 an Ounce
By Wendy Pugh
Aug. 26 (Bloomberg) -- Gold may climb to as high as $1,252.35 an ounce, as long as prices do not drop below the 55- day moving average for two consecutive days, according to a report from Commerzbank AG technical analyst Axel Rudolph.
The precious metal has rallied from a three-month low on July 28 as concern that the global economic recovery is slowing boosted investment demand. Spot gold closed at $1,240.05 yesterday, the highest price in eight weeks and 2 percent from the record $1,265.30 reached on June 21.

How Financial Instruments Suppress Silver's Value
By: Dr Jeff Lewis - MarketOracle.co.uk
One fact is very, very clear: the silver markets are horribly suppressed. As we reported months ago, it was discovered in May that the silver futures market is purely paper, and there is an actual whistleblower to tell the tale. However, that testimony was subsequently squandered when the closed circuit TV had "technical errors," and days later Andrew Maguire, the famed whistleblower, was in a hit and run accident.
However, not all of the suppression talk need be reserved for so called "conspiracies," as silver is suppressed right before your eyes.

Gold and Silver Protection From Economic Cancer and Desperation of QE2 By: Jim Willie CB - MarketOracle.co.uk
History is being made. The American public has never been no nervous, perhaps fearful of something dreadful and imminent. The global monetary system is crumbling. The typical stimulus has failed to jumpstart the USEconomy. The 20 months of near 0% short-term official interest rate has failed to revive the moribund US housing market. The phony FASB accounting rules has failed to accomplish anything except a stay of execution for the big US banks, which do not lend much. In fact, the US banks are largely dead entities showing enough life for to receive USGovt largesse aid. Witness the failure of the US financial sector. Witness the climax chapter of failure for the Fascist Business Model.

Safe-haven buying lifts gold to 8-wk highs
Reuters - businessday.co.za
Gold rose for a second day on Wednesday to eight-week highs near $1240 an ounce as the dollar fell against the euro and concern over economic growth hit equities, sparking interest in the metal as a safe haven
Gold rose for a second day on Wednesday to eight-week highs near $1240 an ounce as the dollar fell against the euro and concern over economic growth hit equities, sparking interest in the metal as a safe haven.

You'll Buy Gold Now and Like It!
By: Jeff Clark - Safehaven.com
I get this question a lot: "Should I buy gold now, or wait for a pullback?"
It's a valid question. For nearly two years, gold hasn't had a serious decline. There have been pullbacks, of course, but nothing assumption-challenging. In fact, since October 2008, gold's largest price drop is 10.6% (based on London PM fix prices), and yet the average of all declines since 2001 is 13% (of those greater than 5%). The biggest pullback we've seen this summer is 8.2%. Technically the summer's not over, but I'll admit I'm surprised we haven't had a better buying opportunity.

GOLD RUSHING ON
Submitted by Frank Holmes - FinancialSense.com
The World Gold Council's latest quarterly recap of the gold market confirms much of the big-picture story we already knew: demand is strong (up 36 percent from a year earlier), supply is not keeping pace (up 17 percent), and global economic worries are driving investors toward gold as a safe haven.
Drilling down a little further turns up a number of interesting points:

China's Gold Demand: Saving, Not Spending
By: Adrian Ash - Safehaven.com
What jewelry-selling Western consumers have discovered about China's gold buying...
WHATEVER the reasons for China's massive household savings rate (Western economists blame the lack of social security, so you can guess their cure), the World Gold Council's Gold Demand Trends today showed private consumers putting ever-more money into physical gold.
Compared to household savings, in fact, revised forecasts here at BullionVault this morning put likely gold purchases in 2010 at the equivalent of almost 1.7% - over twice the level of five years ago.

Ron Paul Calls for Audit of US Gold Reserves
TEXAS (Kitco News): U.S. Rep. Ron Paul, R-Tex, plans to introduce a new bill next year that will allow for an audit of US gold reserves, he told Kitco News in an exclusive interview.
Paul dropped the news in the interview, indicating that the bill still does not have an official name yet but will be unveiled at the start of the new U.S. Congress.
"If there was no question about the gold being there, you think they would be anxious to prove gold is there," he said of the Federal Reserve.
This is not the first time the congressman has made his pitch. "In the early 1980s when I was on the gold commission, I asked them to recommend to the Congress that they audit the gold reserves - we had 17 members of the commission and 15 voted not to the audit," said Paul. "I think there was only one decent audit done 50 years ago," he said.

Inflation versus Deflation Debate Part 2
By: Fred Sheehan - MarketOracle.co.uk
Inflation versus deflation discussions are the rule for columnists, economists and BubbleTV. This false distinction is potentially harmful for investors and shoppers who think they must decide between the two, then act. Inflation and deflation act contemporaneously. The relative movement of what is inflating and what is deflating (e.g., common stocks vs. gas, bonds vs. bread) influences, and possibly changes, the way we live.

Inflation Follows the Stimulus Boom
By: The Mogambo Guru - Savehaven.com
Peter Schiff of Euro Pacific Capital notes that the Federal Reserve, and the idiots like Paul Krugman who genuflect at the altar of Keynes, is not done with destroying the economy, but that "Bernanke and his supporters have said that their stimulus will be withdrawn as soon as the recovery takes hold in earnest." Hahaha!
I laugh because this makes me think of my dad saying, in answer to my constant whining, "Shut up! I'll buy you a motorcycle when your Uncle Raymond pays me back the money I loaned him,' which finally got to be a family joke because Uncle Ray never came across with a dime because he was a penniless mooch all his life! Hahaha!

Fed to Outline Future Actions Friday
By SEWELL CHAN - NYTimes.com
WASHINGTON - With fresh signs that the housing market is weakening, the Federal Reserve chairman, Ben S. Bernanke, on Friday will offer his outlook on the economy, explain the Fed's recent modest move to halt the slide and possibly outline other actions.
Mr. Bernanke's speech, at an annual Fed symposium in Jackson Hole, Wyo., will be his first public comments since the Fed announced it would invest proceeds from its holdings of mortgage bonds to buy more long-term Treasury securities to prop up the recovery.

Goldman's Hatzius Says Fed Will Move Toward Additional Stimulus
By Bob Willis and Tom Keene
Aug. 24 (Bloomberg) -- The Federal Reserve will probably ease monetary policy further as the U.S. economy weakens, said Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York.
"The Fed will eventually move to additional monetary stimulus via asset purchases or other unconventional measures," Hatzius said in a radio interview today with Tom Keene on "Bloomberg Surveillance." Should the Fed opt for more securities purchases, he said, there is "no point in doing anything less than" $1 trillion.

Top book in China hammers Goldman Sachs
Calls company source of crisis
By Elaine Kurtenbach - Associated Press - WashingtonTimes.com
SHANGHAI | Goldman Sachs & Co., reviled in the U.S. for its role in the financial crisis, is now getting hammered in the world's No. 2 economy with a sensationalist new book accusing the investment bank of trying to destroy China.
The "Goldman Sachs Conspiracy," which has sold over 100,000 copies since it was released in June, reaching popular website Sina.com's top 10 list, follows another by author Li Delin, "Eliminate All Competitors - How Goldman Sachs Wins Over the World," published last year.

Debt crisis just beginning, Morgan Stanley says
by Colin Barr - Fortune CNN
This spring's bond market tussle in Europe was just a warm-up, Morgan Stanley says.
The investment bank warns in a report Wednesday that the sovereign debt crisis is far from over -- and won't end till deeply indebted rich country governments give holders of their bonds a good soaking.
The remarks amount to the latest warning issued to investors who have herded into government bonds this month, following a downturn in U.S. economic indicators and a series of anxious-sounding comments from Federal Reserve officials. The yield on the 10-year Treasury bond has plunged to a recent 2.45% from the already low level of 3% at the end of last month.

Obama should get rid of Geithner, Summers
It's time for a new economic theory
By Darrell Delamaide
WASHINGTON (MarketWatch) -- At last, an economic strategy that can muster truly bipartisan support: House Minority Leader John Boehner's call this week to fire Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers.
Boehner, who was not previously known for his insights into economics, found a surprising resonance in the press with his call to get rid of President Barack Obama's top two economic aides.

Despite Reform, Banks Have Room for Risky Deals
By NELSON D. SCHWARTZ and ERIC DASH - NYTimes.com
When Congress passed a new financial regulation bill last month, it sought to prevent federally insured banks from making speculative bets using their own money. But that will not stop banks from making bets that some critics deem risky, even as the rules go into effect over the next few years.
That is because many such bets - on the direction of the stock market or the price of coal, for example - are done on behalf of clients. So, the banks say, they will continue to be allowable despite the new restrictions.

SEC backs labor on corporate board votes
By Patrice Hill - The Washington Times
Business groups denounce move as burdensome, favoring special interests
The Securities and Exchange Commission on Wednesday handed labor and social-activist groups a big victory by approving rules making it easier for them to put allies on corporate boards throughout the country.
The measure was approved on a 3-2 vote by a divided commission, with Republican members warning that the change may not pass muster in the courts. It is the first major regulation from last months landmark financial-reform law to win approval.

Chronicle - The Foundation
The Patriot Post
"We must not let our rulers load us with perpetual debt." --Thomas Jefferson
Editorial Exegesis
Obama's fiscal plan
"Speaking last Wednesday in Columbus, Ohio, President Obama asked, 'How do we, over the long term, get control of our deficit?' Good question. Here's the answer suggested by last Thursday's semi-annual budget summary from the Congressional Budget Office: Stop spending so much. CBO's mid-year review largely reinforces the bad news we already knew -- to wit, that spending has exploded since Democrats took over Congress in 2007, first with the acquiescence of George W. Bush and then into hyperdrive after Mr. Obama entered the White House. To appreciate the magnitude of this spending blowout, compare CBO's budget 'baseline' estimate in January 2008 with the baseline it released Thursday. The baseline predicts future spending based on the law at the time. ... In a mere 31 months Congress has added more than $4.4 trillion to the 10-year spending baseline. ... As recently as 2005, total federal spending was only $2.47 trillion.

Housing still at heart of our problems
Prices could fall a lot more before it's over
By MarketWatch
WASHINGTON (MarketWatch) -- How in the world can Americans feel secure or confident in the economy when the value of their single-biggest asset is dropping?
Americans have already lost more than $6 trillion, on paper, on the value of their homes. Millions have lost something more tangible: the roof over their heads.
Now, four years after the housing bubble began to explode, it looks like home owners may have to accept further losses before it's all over.

Plunge in Home Sales Stokes Economy Fears
By SUDEEP REDDY And NICK TIMIRAOS - WSJ.com
U.S. home sales plummeted in July to a level not seen in more than a decade, spurring fears of renewed weakness in housing prices and the broader economy.
Sales of previously owned homes fell 27.2% from June to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday, the lowest level since the industry group started its tally in 1999.
The expiration of a home-buyer tax credit in the spring was expected to damp buying, though less severely. Economists said the sales drop - together with a corresponding rise in the inventory of unsold homes - meant another decline in housing prices was on the horizon. House prices had stabilized last year after declining since 2006.

Recovery in Danger as Firms, Homebuyers Cut Back
By: AP - CNBC.com
The economic recovery appears to be stalling as companies cut back last month on their investments in equipment and machines and Americans bought new homes at the weakest pace in decades.
Overall orders for big-ticket manufactured goods increased 0.3 percent in July, the Commerce Department said Wednesday. But that was only because of a 76 percent jump in demand for commercial aircraft.

US mortgage lenders report profit despite home woes
By Dave Clarke
WASHINGTON, Aug 25 (Reuters) - The U.S. thrift industry reported $1.49 billion in profits for the second quarter, a slip from the previous quarter, but up from a $94 million loss a year ago.
It was the fourth consecutive profitable quarter for the industry, which reported a profit of $1.72 billion in the previous quarter.
The industry still faces challenges from delinquent loans, the Office of Thrift Supervision said on Wednesday.

Housing: The Lost Half Decade
BespokeInvest.com
While it has been a 'lost decade' for equities, housing isn't too far behind. The sector is now in the midst of a lost half decade and counting. Following up on yesterday's downright awful release of existing home sales, today's new home sales report for July came in at a seasonally adjusted annualized rate of just 276K, which is a record low dating back to 1963. Since peaking in July 2005, new home sales have now declined by more than 80% in five years. As seen in the chart, while the slope of the rally in housing was steep, the decline has been even steeper.

The Housing Mirage
By John Frisby - LuxLibertas.com
Homeowner subsidies have only delayed the day of reckoning.
Yesterday's news that sales of existing homes fell a record 27% in July did not trigger the end of civilization. Instead, while stocks generally declined on the news, shares of home building companies rallied on the chance that this market has finally found a bottom.
We make no predictions on whether the expected rebound in August or autumn sales will come to pass, after more than four years of a declining market and numerous federal programs delaying the inevitable correction. The trigger for yesterday's decline was the expiration of the $8,000 first-time home buyer tax credit, a political gimmick that altered the timing of some sales, provided a larger tax benefit to many people who were going to buy anyway, and did nothing to change the fundamental supply and demand for housing.

Existing Home Sales Plunge!
By Chuck Butler - The DailyReckoning.com
08/25/10 St. Louis, Missouri - An awful Existing Home Sales report yesterday is causing more people to jump on my bandwagon... You know, the one about the double dip recession, which will be fueled by another housing slump... Of course I call it a double dip, but in reality, I truly believe it to be a "single scoop," for I don't believe like our government officials, and Fed Heads that we "came out of the recession."... But that's just me, thinking logically, as always!
Did you strap yourself in for the Existing Home Sales for July report yesterday like I warned you to do? Good thing, because, July Existing Home Sales fell -27%!!!!! (Consensus was for a -12% decline!)

The Subprime Mortgage Crisis on Trial
Peter J. Henning - White Collar Watch - NYTimes.com
The financial crisis has led to only a few civil and criminal cases against executives, and even those focused on peripheral issues: Goldman Sachs's peddling of a credit derivative obligation and the communications of two former Bear Stearns hedge fund managers.
But the Securities and Exchange Commission's securities fraud action against Angelo R. Mozilo, former chief executive of Countrywide Financial, promises to feature the aggressive mortgage practices of what was then the nation's largest mortgage lender.

U.S. Economy: Durables, Housing Signal Recession Risk
By Timothy R. Homan and Courtney Schlisserman
Aug. 25 (Bloomberg) -- Orders for durable goods in the U.S. increased less than forecast in July and sales of new homes unexpectedly dropped, increasing the risk of a renewed recession in the world's largest economy.
Bookings for goods made to last at least three years rose 0.3 percent, figures from the Commerce Department showed today in Washington. Excluding transportation equipment, demand fell by the most in more than a year. Purchases of new dwellings fell 12 percent to an annual pace of 276,000, the weakest since data began in 1963, figures from the same agency showed.

Inventory Explodes Past the Worst of the Housing Crash
by Michael David White - HousingStory.net
Soft demand for existing homes pushed up inventory to a record 12.5 months of sales and easily broke the previous high of 11.3 months scored in April 2008. By this basic measure, the price of homes may reasonably be expected to fall at the most torrential pace seen during our four-year-old crash.
Yet you will see only the most tepid warnings of this risk as described by the mainstream media with results released today being worse than the most pessimistic forecast of economists surveyed by Bloomberg News. Please review the chart (above) and note that it is in record territory for the history of months-of-inventory for sale.

The Five Stages of America's Housing Bubble
by Michael David White - HousingStory.net
See charts

Budget hits families and pensioners twice as hard
Telegraph.co.uk
Pensioners and families with children will be the biggest victims of George Osborne's emergency Budget, according to an analysis published today.
The Institute for Fiscal Studies says the two groups will lose much more of their income than childless couples over the next four years because of the Coalition's tax and benefit changes.
According to the institute, the country's leading economic think tank, this is because the increase in VAT and other taxes combined with changes to the benefit system will disproportionately affect pensioners and families.

Disabled Face Sharply Higher Jobless Rate
By SARA MURRAY - WSJ.com
The government's first detailed look at disabled workers' employment shows they are far more likely than the overall work force to be older, working part-time or jobless.
The average unemployment rate for disabled workers was 14.5% last year, the Labor Department said Wednesday, well above the 9% rate for those without disabilities. By the Labor Department's count, there were roughly 27 million Americans 16 years or older with a disability last year.
The employment situation doesn't appear to have improved this year: The unemployment rate for those with disabilities had risen to 16.4% as of July.

We Killed The Goose That Laid The Golden Egg
And Now The Number Of Americans Receiving Long-Term Unemployment Benefits Has Risen A Whopping 60 Percent In Just One Year TheEconomicCollapseBlog.com
For middle class Americans, the new global economy has provided mountains of cheap products made in China, India and dozens of other nations, but it has also killed the goose that laid the golden egg. Millions of American workers have been discovering that the price for all of those inexpensive foreign-made goodies is their jobs. Now we have so many long-term unemployed workers in the United States that we are inventing new terms (such as "the 99ers") to describe them. Unemployment is on the rise again (we'll get to the figures in a minute) and everyone seems perplexed at the continuing inability of the "greatest economy in the world" to provide jobs for everyone. But the truth is that this has been coming for a long time. The debt-fueled prosperity of the past couple of decades allowed us to live far beyond our means and provide very high levels of employment for a while, but now economic reality is setting in. The millions of middle class jobs that have been shipped overseas are never coming back. Unfortunately, the existence of a large class of chronically unemployed Americans that are struggling just to survive is going to quickly become "the new normal".

Retiree Ponzi Scheme Is $16 Trillion Short
Commentary by Laurence Kotlikoff
Aug. 25 (Bloomberg) -- Social Security just celebrated its 75th birthday. Love it or hate it, it has done its job and should retire. We need a new system, the Personal Security System, which retains Social Security's best features, scraps the rest, and covers its costs.
Social Security's objective -- forcing people to save for retirement -- is legit. Otherwise millions of us would seek handouts in our old age.
But Social Security has also played a central role in the massive, six-decade Ponzi scheme known as U.S. fiscal policy, which transfers ever-larger sums from the young to the old.

Seniors may be forced to swap health care plan
By Ricardo Alonso-Zaldivar - AP - WashingtonTimes.com
More than 3 million seniors may have to switch their Medicare prescription plan next year, even if they are happy with it, as a result of an attempt by the government to simplify their lives.
The policy change could turn into a hassle for seniors who hadn't intended to switch plans during Medicare's open-enrollment season this fall.
And it risks undercutting President Obama's promise that people who like their health care plans can keep them.

California to Delay Payments Sooner than Expected
AP - CNBC.com
Gov. Arnold Schwarzenegger, California's state controller and treasurer, decided Monday to delay $2.9 billion a month in payments to school districts and counties sooner than expected so the state can meet debt and pension obligations.
The leaders issued a joint letter notifying state lawmakers of their decision to begin withholding the payments in September instead of October.
The move reflected the limited resources the state has to work with as the impasse over California's $19 billion budget shortfall has dragged on for nearly two months.

Google Is Offering Phone Calls via Gmail
By CLAIRE CAIN MILLER - NYTimes.com
SAN FRANCISCO - Google entered a new businesses beyond Internet search on Wednesday with a service within Gmail to make phone calls over the Web to landlines or cellphones.
The service will thrust Google into direct competition with Skype, the Internet telephone company, and with telecommunications providers. It could also make Google a more ubiquitous part of people's social interactions by uniting the service for phone calls with e-mail, text messages and video chats.

The dirty little secret about Google Android
Author: Jason Hiner - TechRepublic.com
Google Android began with the greatest of intentions - freedom, openness, and quality software for all. However, freedom always comes with price, and often results in unintended consequences. With Android, one of the most important of those unintended consequences is now becoming clear as Google gets increasingly pragmatic about the smartphone market and less and less tied to its original ideals.
Here's the dirty little secret about Android: After all the work Apple did to get AT&T to relinquish device control for the iPhone and all the great efforts Google made to get the FCC and the U.S. telecoms to agree to open access rules as part of the 700 MHz auction, Android is taking all of those gains and handing the power back to the telecoms.

Cell Towers For the Home Work Best in Worst Sites
by Walter S. Mossberg - AllThingsD
If you have lousy cellphone reception in your house, you may have wished you had a cellular tower nearby. Well, now you can buy your own and plant it right inside your home.
Verizon (VZ), Sprint (S) and AT&T (T) all have started selling gadgets that act as mini-cell towers, broadcasting wireless phone service just like a real cell tower does, though over a much smaller area: a single house.

Chinese Authorities Move to Ease Jam
By SHAI OSTER - WSJ.com (free)
BEIJING - Emergency measures appeared Wednesday to have eased congestion on a main route into the capital that was the scene of a massive traffic jam that lasted more than 10 days and drew widespread media attention.
Still, trucks remained backed up at the border between Inner Mongolia and Hebei province, about 150 miles from Beijing, as authorities there held back traffic to help clear a badly blocked stretch of road closer to the city, state media said.

Mexican Military Finds 72 Bodies Near Border
By DAVID LUHNOW and JOSE DE CORDOBA - WSJ.com (free)
MEXICO CITY - Gunmen from a drug cartel appear to have massacred 72 migrants from Central and South America who were on their way to the U.S., a grisly event that marks the single biggest killing in Mexico's war on organized crime.
Mexican marines discovered the 72 bodies - 58 men and 14 women - on Tuesday after the lone survivor of the massacre, a wounded migrant from Ecuador, stumbled into a Navy checkpoint the previous day and told of being shot on Monday at a nearby ranch, Mexican officials said on Wednesday.

Two minutes to midnight?
By Tony Karon - AsiaTimes
America's march to a disastrous war in Iraq began in the media, where an unprovoked United States invasion of an Arab country was introduced as a legitimate policy option, then debated as a prudent and necessary one. Now, a similarly flawed media conversation on Iran is gaining momentum.
Last month, TIME's Joe Klein warned that Barack Obama administration sources had told him bombing Iran's nuclear facilities was "back on the table". In an interview with CNN, former Central Intelligence Agency (CIA) director Admiral Mike Hayden next spoke of an "inexorable" dynamic toward confrontation, claiming that bombing was a more viable option for the Obama administration than it had been for his predecessor, George W Bush.

BP frozen out of Arctic oil drilling race
Terry Macalister in Nuuk -guardian.co.uk,
British energy giant BP forced to abandon hopes of Greenland exploration owing to tarnished reputation from Gulf oil spill
BP has been forced to abandon hopes of drilling in the Arctic, currently the centre of a new oil rush, owing to its tarnished reputation after the Gulf of Mexico spill.
The company confirmed tonight that it was no longer trying to win an exploration licence in Greenland, despite earlier reports of its interest. "We are not participating in the bid round," said a spokesman at BP's London headquarters, who declined to discuss its reasons for the reverse.

BP executive says blowout preventer was not connected properly
By David S. Hilzenrath - WashingtonPost.com
As BP and Transocean officials struggled to contain the oil gusher in the Gulf of Mexico, they discovered that the plumbing on the blowout preventer was connected improperly, a BP executive testified Wednesday.
"It would mean that the pipe rams could not be closed," said Harry Thierens, BP executive vice president for drilling and completions. "I was frankly astonished that this could have happened."
Thierens was testifying in Houston before a federal panel investigating the April 22 disaster.

John McCain wins Arizona Republican primary
Ewen MacAskill in Washington - guardian.co.uk
Former presidential candidate triumphs against Tea Party-backed talkshow host with a little help from Sarah Palin
The former Republican presidential candidate, John McCain, has repulsed a challenge from rightwing conservatives by defeating a talk-radio personality in the Arizona primary.
The Tea Party activists had hoped to claim their biggest scalp of the Republican primary season but McCain - seeking a fifth term as senator - saw off JD Hayworth, a former congressman and conservative radio talkshow host.
At the end of a bruising campaign, one of McCain's spokesmen on Tuesday morning described Hayworth "as dead as Elvis".

Murkowski trails tea party foe in Alaska
Joe Miller ahead in Senate race
By Sean Lengell - The Washington Times
Alaska Sen. Lisa Murkowski trails a "tea party"-backed challenger by a slim margin in the state's Republican primary held on Tuesday that's still too close to call.
If the results hold, Mrs. Murkowski would join a growing list of Republican Party insiders who have fallen to political upstarts in primary elections in a year that has featured an unusually high level of GOP infighting.
"It was really her race to lose, and she's almost lost it," said University of Alaska at Fairbanks political science professor Jerry McBeath. "It's going to be very difficult for her to come through."

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