Cascadians
Leska Emerald Adams
The total collapse of the current world system is underway. Even the mainstream media is chronicling it. Go to this link every day. You can click on the headlines for the full article. Other posters have given this link before, and it is amazing!
http://www.lifeaftertheoilcrash.net/BreakingNews.html
MUST-READ LINK !!! EVERY DAY !!!
Today:
Breaking News: Friday January 23rd, 2009
Gerald Celente: "Code Red Alert, economy in collapse, drastic measures to be taken, possible bank holidays, gold confiscation, and mega-bailouts"
"We are forecasting dramatic measures will soon be taken by the Obama
Administration that will worsen the credit crisis and severely damage the
nation's economic system," says Celente. For example, Timothy Geithner,
President Obama's nominee for Treasury Secretary, has pledged to expand
and prolong government intervention in the financial markets. He said his
economic team would take "forceful" and "substantial action" on a "very
dramatic scale" to "forge an integrated strategy on how best to achieve
currency realignment." Celente advises to closely read the signals that
have been clearly telegraphed by Mr. Geithner. "From proclaiming a bank
holiday, confiscating gold to backstop devaluing currencies, mega-bailouts
for the too-big-to-fails to nationalizing public firms and dollar devaluation . .
Daily Reckoning: "Secretly, bankers are already being advised about how to handle a bank holiday . . ."
"Inflation could return sooner than you think," says MoneyWeek magazine.
"Instead of deflation, by the end of this year we could have the beginnings
of really rapid inflation," said hedge fund manager Jim Mellon, "which could
get out of control, particularly in America." "It could be a year…maybe 24
months," said an old friend yesterday. Terry Easton, who put the key
question to Ben Bernanke last week, thinks Obama will follow Roosevelt's
program. "Secretly, bankers are already being advised about how to handle
a bank holiday," says Terry. "There will be limits on how much money you
can take out of a bank. And probably limits on what you can do with it."
The Economist: "Blank cheques, bankruptcy, nationalisation: the options are dire, but governments must choose between them"
"Starting today," President Barack Obama declared in his inaugural address
from the Capitol, “we must pick ourselves up, dust ourselves off, and begin
again the work of remaking America.” In fact his first, urgent task is to
remake finance. As Mr Obama spoke in Washington, DC, the markets in
New York were sinking under the weight of failing banks despite the
promise of a plan from his economic team. A day earlier Britain had put
forward its second attempt to get its banks to lend. Others, such as
Germany and Italy, may before long need to step in; France, Ireland and
Denmark already have. The crisis has shown up flaws in financial markets
and the global economy. Huge flows of capital into debtor nations like
America and Britain pumped up asset markets. These fed the instabilities of
financial markets — which were themselves plagued by poor regulation,
dangerous incentives and the reckless use of mathematical models . . .
Bloomberg: "U.S. government's pledge of billions to Citigroup and Bank of America is simply nationalization by another name"
The U.S. government’s decision to pledge billions of additional dollars with
strings attached to Citigroup and Bank of America may be nationalization
by another name, according to former bankers and regulators. Faced with
pressure from lawmakers, banks have shaken up management, eliminated
executive bonuses and staff and canceled conventions. They’ll be forced to
do monthly reports on how they’ve boosted lending while slashing quarterly
dividends to one cent a share for three years. "When the Treasury tells a
bank to pay a penny a share vs. its old dividend, you know who’s calling the
shots,” said Jon Bruss, a 40-year industry veteran and founder of Hartland,
Wisconsin-based Fortress Partners Capital Management Ltd., which invests
in banks. "It may not be de jure nationalization but I think it’s de facto
nationalization." While avoiding steps taken by the U.K., which this week
acquired a 70 percent stake in Royal Bank of Scotland Plc, U.S. regulators
are no longer just passively injecting capital into the nation’s biggest banks.
UK Guardian: Cabinet Minister Says "The banks are ****ed, we're ****ed, the country's ****ed" as Desperation Begins to Grow Inside Government
[Brown's] tactics betray a nervousness in Labour circles that the public will
not understand why there is a second tranche of help going to Britain's
bankers, who have already received billions of pounds of loans, guarantees
and capital. There is also a worry that Brown's inadvertent title as saviour
of the world might be slipping. Privately, something close to desperation is
starting to develop inside government. After watching the slide in bank
shares on Friday, one cabinet minister did not altogether joke when he
said: "The banks are ****ed, we're ****ed, the country's ****ed . . ."
Wall Street Journal: What to Do if Your Bank is Seized by the Government
Could your bank turn into the Bank of the U.S.A.? The latest wave of
banking problems has investors worried the government will nationalize
deeply wounded institutions, such as Bank of America and Citigroup Such a
dramatic step could make it easier for some bank customers to get a loan.
And customers with deposits will still be protected by federal insurance,
just as they are today. Still, consumers could see more branch closings,
more standardization across bank products and a deterioration in customer
service. Common and preferred shareholders, meanwhile, will likely get
wiped out in a bank nationalization. With all of the problems banks are
facing, here is a primer on bank collapses and the impact of nationalization.
Reuters: Obama Plans on Borrowing Another $2 Trillion to Revive Economy
The Obama administration will have to persuade the world that the U.S.
strong dollar policy is for real this time as it prepares to borrow $2 trillion
to revive the U.S. economy from its worst crisis in decades. Less than 48
hours after Barack Obama became president, his choice for U.S. Treasury
secretary, Timothy Geithner, said a strong dollar is in the United States'
interest. That phrasing -- first used by former Treasury Secretary Robert
Rubin more than 14 years ago -- lost its weight and credibility when it was
over-used by the Bush administration. The greenback lost about 40 percent
of its value versus the euro and more than 15% versus the yen between
2000 and 2008. A weaker currency was an important step for the Bush
White House in rebalancing a global economy plagued by a U.S. trade deficit
and huge Chinese surplus. "This time around the administration probably
means it when it says it backs a strong dollar" said Samarjit Shankar, a
director for global strategy at the Bank of New York Mellon, in Boston.
Tom Whipple: "The world's economy is either collapsing or is putting on a very good imitation of collapsing . . ."
The purpose of reciting a list of woes is to remind ourselves that we are
living on one big interrelated, interconnected earth. Attempting to solve
one problem will either mitigate or perhaps exacerbate the others, for
nothing much remains static these days. Economic growth has come to a
halt in most countries and even China's meteoric growth is subsiding
towards half what it was a couple of years ago. How long this will last is
anybody's guess. While Wall Street babbles on about rebounds in six or
nine months, others are convinced that the damage done to the world's
financial systems in recent years is so great that, despite the trillions in
bailouts and stimuli, there is no hope for recovery in the foreseeable
future. Those of us who worry about such things are concerned that low oil
prices have stifled investment to such an extent that in a few years the oil
industry will find it impossible to stem declining production from depletion.
Washington Post: "Shadow banking system has effectively shut down . . ."
In thinking about all this, a good place to start is not with the banks
themselves but with the "shadow" banking system -- those markets in
which packages of loans are sold off in pieces to investors. In the United
States over the past several decades, this shadow system has come to
provide roughly half the financing for businesses and households, including
many of the loans that are initially written by banks. Now this shadow
system has effectively shut down because investors lost confidence in their
ability to know the risks involved in those loan packages . . .
Economist: State Pension Funds Have Lost 30% of Value Since Oct. 2007
It was a proud moment for Illinois this week, as the state’s favourite son
became president. At home, though, matters are more depressing. Like
dozens of other states, Illinois faces a budget deficit. Moreover, another
problem is in the offing. The state’s five pension funds are looking pasty.
Illinois has $54.4 billion of unfunded pension liabilities, with just 54% of the
assets it needs to pay for future promises to its workers; 80% is the
proportion experts usually consider adequate. These figures, the most
recent available, are from June 2008. Since then, they have probably got
worse. Other states face similar woes. A sample of 109 state pension funds
lost $865 billion, about 30% of their value, between October 2007 and
December 2008, according to the Centre for Retirement Research (CRR) at
Boston College. In Illinois the state treasurer, Alexi Giannoulias, wants to
streamline the pension funds; he hopes a bill will be ready this month or
next. But the funding gap will not be filled easily. The short-term outlook is
bleak in Illinois and elsewhere. Pension problems only add more uncertainty.
Catherine Austin Fitts: Will the Government Covertly Confiscate 401(k)s?
I had never considered the possibility of overt or covert confiscation of
IRAs and 401(k)s until I read one of Franklin Sanders‘ comments about gold
confiscation: "Finally, gold and silver today don’t represent the huge pool of
wealth they represented in 1933. Why risk wide-spread disobedience to
steal such a tiny plum? If the government wants to steal a big pool of
wealth, they’ll snatch your pension funds and IRAs, not your gold." In fact,
if you look at the value of most 401(k)s and IRAs lately, a great deal has
already been "confiscated." The mainstream media has described these
losses as part of the normal economic cycle, but this is a fallacy. The
losses are the result of a financial coup d’etat, including fraudulent housing
bubbles, pump and dump schemes, naked short selling, precious metals
price suppression, and intervention in the markets by the government and
central bank . . . Which begs the question, where is all this going?
Option Armageddon: Is It Time to Start Stuffing Money in Our Mattresses
If the banking system is insolvent, so is your bank. If the FDIC has no
money, it’s quite possible the government can’t protect you. If the bank is
not paying any interest, then you are paid nothing for exposing yourself to
these risks. So why not convert at least a portion of your savings to
Benjamins and put them in your mattress? Two reasons: cash can be
stolen and can lose its value due to inflation. But if banks pay no interest,
then the purchasing power of your savings is as vulnerable in the bank as it
is in your mattress. So inflation is a moot point. The only real risks are fire
or theft. These are real risks, of course. So it probably makes sense to
diversify: keep some in the bank and some elsewhere. In a total collapse of
the financial system, cash equivalents are not cash . . .
The New Yorker: Fraudulent Schemes Detonating as Economy Collapses
On Wall Street, fraudulent schemes tend to thrive during economic booms,
and to blow up when times turn tough. While bank robbers are getting
busier, the Bernard Madoffs are starting to get caught. Madoff is just the
latest in a long line of fraudsters who took advantage of investor euphoria.
Time and again, as asset markets have become frothier, fraud has always
flourished. During England’s South Sea Bubble, in 1720, a host of bogus
joint-stock companies arose, including one that described its enterprise as
"nitvender," or the selling of nothing. The boom of the nineteen-twenties
featured men like Arthur Montgomery, who ran a Ponzi scheme promising
investors four-hundred-per-cent returns in sixty days, and the Match King,
Ivar Kreuger, who sustained match monopolies all over the world with
forged bonds and doctored books. More recently, the stock bubble of the
90s gave rise to enormous frauds at companies like Enron and WorldCom.
Washington Post: Delays in Bank Aid Spur Frustration Among Executives
A massive backlog of bank applications for emergency federal aid has
provoked widespread frustration over how the Treasury Department is
allocating rescue funds and raised suspicions among executives that
political connections are playing a role. The delay is pushing executives
across the nation to lobby their lawmakers, financial groups and friends
within the federal government to try to expedite their requests. "I think
there is a suspicion among a large number of our members that it's who
you know rather than the merits of the application," said Camden Fine,
chief executive of the Independent Community Bankers of America. "I don't
know that to be a fact, but I know there is a strong undercurrent of
suspicion that you have to have some sort of connection before you get
the golden touch or the blessing from Treasury to get money." Treasury
officials have been secretive about why certain banks received the money
first, citing the need to protect sensitive market information . . .
Economist: Mounting Joblessness Setting Stage for Dramatic Social Unrest
Tens of thousands protested in Zaragoza recently. A city that in 2008
enjoyed the limelight of a World Expo is now one of Spain’s most troubled.
The protesters show that negative indicators are more than mere
numbers. In the country with Europe’s highest unemployment rate, jobs
have overtaken terrorism as voters’ main concern. In few places does the
social fallout from recession look so dramatic. Predictions keep getting
worse. The government expects unemployment to rise from 13% to 16%
this year. The ESADE business school predicts 20% . . . The pain is uneven.
Immigrants and the young, many of Aragón’s new workers, were the first
to be sacked. They have not built up a decent cushion of unemployment
benefit. Some 5m foreigners have multiplied Spain’s immigrant population
eightfold in a decade. Offering them lump-sum payments to go home has
not worked. Many young people dropped out of school because jobs were
plentiful, says Mr Buey. Now they are both unemployed and uneducated.
Los Angeles Times: Woes at Microsoft Offer Window Into Financial Crash
Microsoft's first-ever mass layoffs showed Thursday that even the most
rock-steady technology companies are feeling the pain of the global
recession. Consumers and corporations are deciding they can do without
the latest computers, software and even cellphones as they grapple with
what Microsoft Chief Executive Steve Ballmer called a "once-in-a-lifetime
set of economic conditions." Worldwide technology spending is projected to
fall 3% in 2009 after seven years of growth, according to Forrester
Research. Tech companies continue to shed jobs to adjust to the changing
economic landscape. Intel, Advanced Micro Devices, Motorola, Autodesk
and others have disclosed plans to lay off thousands of employees . .
USA Today: Even Stalwarts Microsoft and Sony Hit by Financial Collapse
Not even high-tech is immune from the economic meltdown. Despite
predictions — wishful thinking? — by some financial analysts that it would
remain relatively unscathed, Silicon Valley and the rest of the industry
buckled under distressing news Thursday. Microsoft announced 5,000
layoffs — its biggest cutback ever — and Sony said it will report an
operating loss for the first time in 14 years: $1.65 billion. A day earlier,
Intel said it will close several older factories, displacing 5,000 to 6,000
workers. It is sobering news for the tech industry, which had resisted the
gravitational pull of the tottering economy over as consumers continued to
snap up laptops and iPhones. Not anymore. In the span of several weeks,
orders for both business and consumer tech products have cratered, and
technology companies began shedding workers. Despite quarterly results
from Google and Apple this week, and job losses that aren't as deep as
those in the financial and automotive industries, the technology industry is
suffering its worst downturn since the dot-com bubble burst in the early
2000s. As jobs evaporate, so is funding for companies both large and small.
Associated Press: Pay Freezes Spreading Rapidly as Economy Crumbles
What do Tropicana Casino and Resort, Avis and the White House now have
in common? They're all freezing the pay of some of their workers. It's part
of a growing trend by employers facing the fallout — economic and political
— from a brutal recession. For companies, pay freezes are a key cost
cutting tool for surviving hard times. For President Barack Obama, who
ordered a pay freeze for White House employees earning over $100,000 a
year, the move on his first full day in office sent a message to a nervous
country: We're in this together. "During this economic emergency," Obama
said, "families are tightening their belts, and so should Washington."
Wall Street Journal: Collapsing Market Sends Rental Rates Plummeting
Now it's a renter's market, too. As the housing downturn deepens, rental
rates are falling in many major U.S. cities, including New York and Los
Angeles, and tenants are finding they have greater leeway to renegotiate
their leases. Early in the housing crisis, former homeowners were starting
to rent again, supporting demand for rentals. Now, with more condos being
converted into rental units, landlords are struggling to keep their buildings
occupied . . . The overall weak rental market has emboldened a number of
tenants to start negotiating with their landlords. Richard Laermer, owner of
a public-relations firm, was heading toward 2009 with the prospect of lower
income and a rent of $4,700 for a two-bedroom, two bathroom apartment
in midtown NYC. So in November, he asked his landlord for a break. Even
though it was months before his lease was up, he won a $200 decrease . .
Los Angeles Times: Special Zones Urged for Those Sleeping in Their Cars
Tough economic times have spilled onto the streets of Venice, which has
become a favorite place to park for scores of otherwise homeless people
living in cars and campers. The practice has ignited a mini-uprising among
residents living in the pricey coastal community. The number of cars and
recreational vehicles has swelled so much that Councilman Bill Rosendahl,
who represents the city's coastal areas, has proposed creating zones
away from neighborhoods where people can sleep in their vehicles. "The
community has been going ballistic," Rosendahl said. "They can't park their
own cars. Some of the folks who live in their cars and in campers defecate
and urinate outside and create other issues of quality of life and health."
Dmitry Orlov: Barrack Obama is America's Version of Mikchail Gorbachev
Congratulations, everyone, we have a new president: a fresh new face, a
capable, optimistic, inspiring figure, ushering in a new era of responsibility,
ready to confront the many serious challenges that face the nation; in
short, we have us a Gorbachev. I don't know about you, but I find the
parallel rather obvious. Obama wishes to save the economy, and to inspire
us with words such as "We will harness the sun and the winds and the soil
to fuel our cars and run our factories." At the same time, he cautions us
that "We will not apologize for our way of life, nor will we waver in its
defense" -- an echo of Dick Cheney's "The American way of life is non-
negotiable." And so we descend from the nonexistent but wonderfully
evocative "clean coal" to the more pedestrian "Put a little dirt in your gas
tank!" But these are all euphemisms: the reality is that it is either fossil
fuels, which are running out while simultaneously destabilizing the planet's
climate and poisoning the biosphere, or the end of industrial civilization . . .
http://www.lifeaftertheoilcrash.net/BreakingNews.html
MUST-READ LINK !!! EVERY DAY !!!
Today:
Breaking News: Friday January 23rd, 2009
Gerald Celente: "Code Red Alert, economy in collapse, drastic measures to be taken, possible bank holidays, gold confiscation, and mega-bailouts"
"We are forecasting dramatic measures will soon be taken by the Obama
Administration that will worsen the credit crisis and severely damage the
nation's economic system," says Celente. For example, Timothy Geithner,
President Obama's nominee for Treasury Secretary, has pledged to expand
and prolong government intervention in the financial markets. He said his
economic team would take "forceful" and "substantial action" on a "very
dramatic scale" to "forge an integrated strategy on how best to achieve
currency realignment." Celente advises to closely read the signals that
have been clearly telegraphed by Mr. Geithner. "From proclaiming a bank
holiday, confiscating gold to backstop devaluing currencies, mega-bailouts
for the too-big-to-fails to nationalizing public firms and dollar devaluation . .
Daily Reckoning: "Secretly, bankers are already being advised about how to handle a bank holiday . . ."
"Inflation could return sooner than you think," says MoneyWeek magazine.
"Instead of deflation, by the end of this year we could have the beginnings
of really rapid inflation," said hedge fund manager Jim Mellon, "which could
get out of control, particularly in America." "It could be a year…maybe 24
months," said an old friend yesterday. Terry Easton, who put the key
question to Ben Bernanke last week, thinks Obama will follow Roosevelt's
program. "Secretly, bankers are already being advised about how to handle
a bank holiday," says Terry. "There will be limits on how much money you
can take out of a bank. And probably limits on what you can do with it."
The Economist: "Blank cheques, bankruptcy, nationalisation: the options are dire, but governments must choose between them"
"Starting today," President Barack Obama declared in his inaugural address
from the Capitol, “we must pick ourselves up, dust ourselves off, and begin
again the work of remaking America.” In fact his first, urgent task is to
remake finance. As Mr Obama spoke in Washington, DC, the markets in
New York were sinking under the weight of failing banks despite the
promise of a plan from his economic team. A day earlier Britain had put
forward its second attempt to get its banks to lend. Others, such as
Germany and Italy, may before long need to step in; France, Ireland and
Denmark already have. The crisis has shown up flaws in financial markets
and the global economy. Huge flows of capital into debtor nations like
America and Britain pumped up asset markets. These fed the instabilities of
financial markets — which were themselves plagued by poor regulation,
dangerous incentives and the reckless use of mathematical models . . .
Bloomberg: "U.S. government's pledge of billions to Citigroup and Bank of America is simply nationalization by another name"
The U.S. government’s decision to pledge billions of additional dollars with
strings attached to Citigroup and Bank of America may be nationalization
by another name, according to former bankers and regulators. Faced with
pressure from lawmakers, banks have shaken up management, eliminated
executive bonuses and staff and canceled conventions. They’ll be forced to
do monthly reports on how they’ve boosted lending while slashing quarterly
dividends to one cent a share for three years. "When the Treasury tells a
bank to pay a penny a share vs. its old dividend, you know who’s calling the
shots,” said Jon Bruss, a 40-year industry veteran and founder of Hartland,
Wisconsin-based Fortress Partners Capital Management Ltd., which invests
in banks. "It may not be de jure nationalization but I think it’s de facto
nationalization." While avoiding steps taken by the U.K., which this week
acquired a 70 percent stake in Royal Bank of Scotland Plc, U.S. regulators
are no longer just passively injecting capital into the nation’s biggest banks.
UK Guardian: Cabinet Minister Says "The banks are ****ed, we're ****ed, the country's ****ed" as Desperation Begins to Grow Inside Government
[Brown's] tactics betray a nervousness in Labour circles that the public will
not understand why there is a second tranche of help going to Britain's
bankers, who have already received billions of pounds of loans, guarantees
and capital. There is also a worry that Brown's inadvertent title as saviour
of the world might be slipping. Privately, something close to desperation is
starting to develop inside government. After watching the slide in bank
shares on Friday, one cabinet minister did not altogether joke when he
said: "The banks are ****ed, we're ****ed, the country's ****ed . . ."
Wall Street Journal: What to Do if Your Bank is Seized by the Government
Could your bank turn into the Bank of the U.S.A.? The latest wave of
banking problems has investors worried the government will nationalize
deeply wounded institutions, such as Bank of America and Citigroup Such a
dramatic step could make it easier for some bank customers to get a loan.
And customers with deposits will still be protected by federal insurance,
just as they are today. Still, consumers could see more branch closings,
more standardization across bank products and a deterioration in customer
service. Common and preferred shareholders, meanwhile, will likely get
wiped out in a bank nationalization. With all of the problems banks are
facing, here is a primer on bank collapses and the impact of nationalization.
Reuters: Obama Plans on Borrowing Another $2 Trillion to Revive Economy
The Obama administration will have to persuade the world that the U.S.
strong dollar policy is for real this time as it prepares to borrow $2 trillion
to revive the U.S. economy from its worst crisis in decades. Less than 48
hours after Barack Obama became president, his choice for U.S. Treasury
secretary, Timothy Geithner, said a strong dollar is in the United States'
interest. That phrasing -- first used by former Treasury Secretary Robert
Rubin more than 14 years ago -- lost its weight and credibility when it was
over-used by the Bush administration. The greenback lost about 40 percent
of its value versus the euro and more than 15% versus the yen between
2000 and 2008. A weaker currency was an important step for the Bush
White House in rebalancing a global economy plagued by a U.S. trade deficit
and huge Chinese surplus. "This time around the administration probably
means it when it says it backs a strong dollar" said Samarjit Shankar, a
director for global strategy at the Bank of New York Mellon, in Boston.
Tom Whipple: "The world's economy is either collapsing or is putting on a very good imitation of collapsing . . ."
The purpose of reciting a list of woes is to remind ourselves that we are
living on one big interrelated, interconnected earth. Attempting to solve
one problem will either mitigate or perhaps exacerbate the others, for
nothing much remains static these days. Economic growth has come to a
halt in most countries and even China's meteoric growth is subsiding
towards half what it was a couple of years ago. How long this will last is
anybody's guess. While Wall Street babbles on about rebounds in six or
nine months, others are convinced that the damage done to the world's
financial systems in recent years is so great that, despite the trillions in
bailouts and stimuli, there is no hope for recovery in the foreseeable
future. Those of us who worry about such things are concerned that low oil
prices have stifled investment to such an extent that in a few years the oil
industry will find it impossible to stem declining production from depletion.
Washington Post: "Shadow banking system has effectively shut down . . ."
In thinking about all this, a good place to start is not with the banks
themselves but with the "shadow" banking system -- those markets in
which packages of loans are sold off in pieces to investors. In the United
States over the past several decades, this shadow system has come to
provide roughly half the financing for businesses and households, including
many of the loans that are initially written by banks. Now this shadow
system has effectively shut down because investors lost confidence in their
ability to know the risks involved in those loan packages . . .
Economist: State Pension Funds Have Lost 30% of Value Since Oct. 2007
It was a proud moment for Illinois this week, as the state’s favourite son
became president. At home, though, matters are more depressing. Like
dozens of other states, Illinois faces a budget deficit. Moreover, another
problem is in the offing. The state’s five pension funds are looking pasty.
Illinois has $54.4 billion of unfunded pension liabilities, with just 54% of the
assets it needs to pay for future promises to its workers; 80% is the
proportion experts usually consider adequate. These figures, the most
recent available, are from June 2008. Since then, they have probably got
worse. Other states face similar woes. A sample of 109 state pension funds
lost $865 billion, about 30% of their value, between October 2007 and
December 2008, according to the Centre for Retirement Research (CRR) at
Boston College. In Illinois the state treasurer, Alexi Giannoulias, wants to
streamline the pension funds; he hopes a bill will be ready this month or
next. But the funding gap will not be filled easily. The short-term outlook is
bleak in Illinois and elsewhere. Pension problems only add more uncertainty.
Catherine Austin Fitts: Will the Government Covertly Confiscate 401(k)s?
I had never considered the possibility of overt or covert confiscation of
IRAs and 401(k)s until I read one of Franklin Sanders‘ comments about gold
confiscation: "Finally, gold and silver today don’t represent the huge pool of
wealth they represented in 1933. Why risk wide-spread disobedience to
steal such a tiny plum? If the government wants to steal a big pool of
wealth, they’ll snatch your pension funds and IRAs, not your gold." In fact,
if you look at the value of most 401(k)s and IRAs lately, a great deal has
already been "confiscated." The mainstream media has described these
losses as part of the normal economic cycle, but this is a fallacy. The
losses are the result of a financial coup d’etat, including fraudulent housing
bubbles, pump and dump schemes, naked short selling, precious metals
price suppression, and intervention in the markets by the government and
central bank . . . Which begs the question, where is all this going?
Option Armageddon: Is It Time to Start Stuffing Money in Our Mattresses
If the banking system is insolvent, so is your bank. If the FDIC has no
money, it’s quite possible the government can’t protect you. If the bank is
not paying any interest, then you are paid nothing for exposing yourself to
these risks. So why not convert at least a portion of your savings to
Benjamins and put them in your mattress? Two reasons: cash can be
stolen and can lose its value due to inflation. But if banks pay no interest,
then the purchasing power of your savings is as vulnerable in the bank as it
is in your mattress. So inflation is a moot point. The only real risks are fire
or theft. These are real risks, of course. So it probably makes sense to
diversify: keep some in the bank and some elsewhere. In a total collapse of
the financial system, cash equivalents are not cash . . .
The New Yorker: Fraudulent Schemes Detonating as Economy Collapses
On Wall Street, fraudulent schemes tend to thrive during economic booms,
and to blow up when times turn tough. While bank robbers are getting
busier, the Bernard Madoffs are starting to get caught. Madoff is just the
latest in a long line of fraudsters who took advantage of investor euphoria.
Time and again, as asset markets have become frothier, fraud has always
flourished. During England’s South Sea Bubble, in 1720, a host of bogus
joint-stock companies arose, including one that described its enterprise as
"nitvender," or the selling of nothing. The boom of the nineteen-twenties
featured men like Arthur Montgomery, who ran a Ponzi scheme promising
investors four-hundred-per-cent returns in sixty days, and the Match King,
Ivar Kreuger, who sustained match monopolies all over the world with
forged bonds and doctored books. More recently, the stock bubble of the
90s gave rise to enormous frauds at companies like Enron and WorldCom.
Washington Post: Delays in Bank Aid Spur Frustration Among Executives
A massive backlog of bank applications for emergency federal aid has
provoked widespread frustration over how the Treasury Department is
allocating rescue funds and raised suspicions among executives that
political connections are playing a role. The delay is pushing executives
across the nation to lobby their lawmakers, financial groups and friends
within the federal government to try to expedite their requests. "I think
there is a suspicion among a large number of our members that it's who
you know rather than the merits of the application," said Camden Fine,
chief executive of the Independent Community Bankers of America. "I don't
know that to be a fact, but I know there is a strong undercurrent of
suspicion that you have to have some sort of connection before you get
the golden touch or the blessing from Treasury to get money." Treasury
officials have been secretive about why certain banks received the money
first, citing the need to protect sensitive market information . . .
Economist: Mounting Joblessness Setting Stage for Dramatic Social Unrest
Tens of thousands protested in Zaragoza recently. A city that in 2008
enjoyed the limelight of a World Expo is now one of Spain’s most troubled.
The protesters show that negative indicators are more than mere
numbers. In the country with Europe’s highest unemployment rate, jobs
have overtaken terrorism as voters’ main concern. In few places does the
social fallout from recession look so dramatic. Predictions keep getting
worse. The government expects unemployment to rise from 13% to 16%
this year. The ESADE business school predicts 20% . . . The pain is uneven.
Immigrants and the young, many of Aragón’s new workers, were the first
to be sacked. They have not built up a decent cushion of unemployment
benefit. Some 5m foreigners have multiplied Spain’s immigrant population
eightfold in a decade. Offering them lump-sum payments to go home has
not worked. Many young people dropped out of school because jobs were
plentiful, says Mr Buey. Now they are both unemployed and uneducated.
Los Angeles Times: Woes at Microsoft Offer Window Into Financial Crash
Microsoft's first-ever mass layoffs showed Thursday that even the most
rock-steady technology companies are feeling the pain of the global
recession. Consumers and corporations are deciding they can do without
the latest computers, software and even cellphones as they grapple with
what Microsoft Chief Executive Steve Ballmer called a "once-in-a-lifetime
set of economic conditions." Worldwide technology spending is projected to
fall 3% in 2009 after seven years of growth, according to Forrester
Research. Tech companies continue to shed jobs to adjust to the changing
economic landscape. Intel, Advanced Micro Devices, Motorola, Autodesk
and others have disclosed plans to lay off thousands of employees . .
USA Today: Even Stalwarts Microsoft and Sony Hit by Financial Collapse
Not even high-tech is immune from the economic meltdown. Despite
predictions — wishful thinking? — by some financial analysts that it would
remain relatively unscathed, Silicon Valley and the rest of the industry
buckled under distressing news Thursday. Microsoft announced 5,000
layoffs — its biggest cutback ever — and Sony said it will report an
operating loss for the first time in 14 years: $1.65 billion. A day earlier,
Intel said it will close several older factories, displacing 5,000 to 6,000
workers. It is sobering news for the tech industry, which had resisted the
gravitational pull of the tottering economy over as consumers continued to
snap up laptops and iPhones. Not anymore. In the span of several weeks,
orders for both business and consumer tech products have cratered, and
technology companies began shedding workers. Despite quarterly results
from Google and Apple this week, and job losses that aren't as deep as
those in the financial and automotive industries, the technology industry is
suffering its worst downturn since the dot-com bubble burst in the early
2000s. As jobs evaporate, so is funding for companies both large and small.
Associated Press: Pay Freezes Spreading Rapidly as Economy Crumbles
What do Tropicana Casino and Resort, Avis and the White House now have
in common? They're all freezing the pay of some of their workers. It's part
of a growing trend by employers facing the fallout — economic and political
— from a brutal recession. For companies, pay freezes are a key cost
cutting tool for surviving hard times. For President Barack Obama, who
ordered a pay freeze for White House employees earning over $100,000 a
year, the move on his first full day in office sent a message to a nervous
country: We're in this together. "During this economic emergency," Obama
said, "families are tightening their belts, and so should Washington."
Wall Street Journal: Collapsing Market Sends Rental Rates Plummeting
Now it's a renter's market, too. As the housing downturn deepens, rental
rates are falling in many major U.S. cities, including New York and Los
Angeles, and tenants are finding they have greater leeway to renegotiate
their leases. Early in the housing crisis, former homeowners were starting
to rent again, supporting demand for rentals. Now, with more condos being
converted into rental units, landlords are struggling to keep their buildings
occupied . . . The overall weak rental market has emboldened a number of
tenants to start negotiating with their landlords. Richard Laermer, owner of
a public-relations firm, was heading toward 2009 with the prospect of lower
income and a rent of $4,700 for a two-bedroom, two bathroom apartment
in midtown NYC. So in November, he asked his landlord for a break. Even
though it was months before his lease was up, he won a $200 decrease . .
Los Angeles Times: Special Zones Urged for Those Sleeping in Their Cars
Tough economic times have spilled onto the streets of Venice, which has
become a favorite place to park for scores of otherwise homeless people
living in cars and campers. The practice has ignited a mini-uprising among
residents living in the pricey coastal community. The number of cars and
recreational vehicles has swelled so much that Councilman Bill Rosendahl,
who represents the city's coastal areas, has proposed creating zones
away from neighborhoods where people can sleep in their vehicles. "The
community has been going ballistic," Rosendahl said. "They can't park their
own cars. Some of the folks who live in their cars and in campers defecate
and urinate outside and create other issues of quality of life and health."
Dmitry Orlov: Barrack Obama is America's Version of Mikchail Gorbachev
Congratulations, everyone, we have a new president: a fresh new face, a
capable, optimistic, inspiring figure, ushering in a new era of responsibility,
ready to confront the many serious challenges that face the nation; in
short, we have us a Gorbachev. I don't know about you, but I find the
parallel rather obvious. Obama wishes to save the economy, and to inspire
us with words such as "We will harness the sun and the winds and the soil
to fuel our cars and run our factories." At the same time, he cautions us
that "We will not apologize for our way of life, nor will we waver in its
defense" -- an echo of Dick Cheney's "The American way of life is non-
negotiable." And so we descend from the nonexistent but wonderfully
evocative "clean coal" to the more pedestrian "Put a little dirt in your gas
tank!" But these are all euphemisms: the reality is that it is either fossil
fuels, which are running out while simultaneously destabilizing the planet's
climate and poisoning the biosphere, or the end of industrial civilization . . .
