MACRO ANALYSIS REPORT
ECONOMICS, CENTRAL BANK POLICY
BANKS, BONDS, GEOPOLITICS

* Miscellaneous Morsels
* Police State & Mega-Crimes
* Banks Surrounded by Barbarians
* USEconomy in Quicksand
* Housing Market Disintegration


HAT TRICK LETTER
Issue #81
Jim Willie CB, 
“the Golden Jackass”
12 December 2010

"Fundamentally it would appear as if this fraud riddled carcass is getting ready to be snuffed. Geithner and Bernanke and Henry Paulson stuffed Countrywide and Merrill Lynch, two hugely fraudulent Wall Street creations, into Bank of America in order to shift the burden of monetizing the fraud onto the Government. Now they will go in for the kill and bury all the evidence, just like so many before it: Enron, Refco, Amaranth, Lehman, and Bear Stearns. Of course, first they will let the Pimpcos of the world flip fraudulent mortagage paper back into Bank of America as per the terms of the mortgaging servicing agreements under which BAC is liable." ~ Dave in Denver (Truth in Gold)

"This [breakdown collapse] cannot be stopped because the central banks, big banks, and economists have screwed things up that bad. I mean the place is a wreck, and nobody wants to fix anything. Everybody wants just to make it go one step further. They have kicked the can, and kicked the can, and the can has gone nuclear." ~ Jim Sinclair

"American commercial and residential real estate is wrecked for two decades. Property ownership, banks, credit unions, title companies, loans, lender loan ownership, and ability to pay are all simply destroyed." ~ Roger Weigand

"This was the prime error made during The Depression. Contrary to Bernanke's claims of being a student of The Depression, he is really the Fool-in-Chief for that era. FDR's devaluation of the currency trashed the tax base and guaranteed sky high unemployment for the same reason it is happening now. Devaluation of the currency destroys the finances of the middle class and below from greater spending on essential commodities (food, fuel, clothing)." ~ Karl Denninger

"Deficits do not matter." ~ Dick Cheney (ex-VP under Bush, suffering terminal cancer)

MISCELLANEOUS MORSELS

◄See the Special Report entitled "The Plan For State Wreckage " for the December Hat Trick Letter. The California train wreck is in progress, ready for climax. Economic impact from budget distress at the state and local levels is imminent. Numerous different state debt downgrades to junk level are certain. The ripple effect will be felt in WashingtonDC, where neglect is engrained. Lawsuits against Wall Street banks dominate the scene from bond fraud, the opposite of state aid or federal revenue sharing. Profound economic damage comes. States and municipalities currently have around $2.8 trillion worth of outstanding bonds, but that number is tiny compared to guaranteed pension obligations. The hidden shortfalls total up to $3.5 trillion by some estimates, plus health benefits promises. Incoming governor Jerry Brown faces a gigantic budget deficit, a situation nowhere resolved. The past actions imitated the federal delays for appropriate action, remedied nothing, and only delayed difficult decisions for massive cutbacks. The pattern of the deadlock stalemate is not simple. Democrats do not want to cut services and Republicans do not want to increase taxes. California takes it a bit too far in providing a generous diversity of state agencies. The state's enlightenment is not offset well against cost management and judicious usage of state money. One might wonder if the Golden State has more agencies than the federal government. A long long detailed list is given in the Special Report that will shock the most casual reader.

Wreckage of state employee unions might be the USGovt objective. The consistent neglect shown by the USCongress to the states is shocking. The devotion to major USBanks is obvious. But a second agenda is emerging, to break state unions and force the cancelation of pension obligations. The general motive is to weaken state power as well, some embroiled in Tenth Amendment battles over over-reaching federal power. What the nation might see next is a grand movement to weaken the state unions generally. Abandonment of the states appears to be a federal agenda item for 2011. The end of the Build America Bonds, a great aid device to state bond issuers, acting as indirect subsidies, finds no support for continuation. A massive skein of state bond defaults is coming, which will force the USFed's hand in bailouts or debt monetization. The USCongress appears to be quietly but methodically executing a plan that would curtail all federal bailouts of states, and to cripple public employee unions by pushing certain states into bankruptcy. A gigantic battle will ensue.

◄$$$ THE WIKILEAKS SCANDAL COMES FROM INSIDE THE USMILITARY WITH PASSWORD CLEARANCE AND THE USBANKS FROM ABSCONDED DISK DRIVES. THE BANK SOURCE EXTENDS FROM A FAILED ICELAND BANK AND PROSECUTION WITH THE KAUPTHING BANKER, WHO HAS TURNED STATE EVIDENCE. A PLOT TO RESTORE THE USGOVT FROM INSIDE SOURCES IS UNDERWAY. A BATTLE BETWEEN GOOD & EVIL IS APACE IN A GRAND BLOWBACK AFTER 911 AND THE $TRILLION MORTGAGE BOND FRAUD. A SOURCE WITH GREAT TIES TO BANKS, MILITARIES, AND SECURITY SYSTEMS PROVIDED SOME INSIGHT. $$$

"The Anglo American fraud and genocide cartel will be exposed. WikiLeaks was just a teaser. The Boyz took the bait, exposed their reaction profile, and aligned the forces, leaving it vulnerable. This is not directed against the American people but against the syndicate which was allowed to highjack the United States government. The real terrorists are deep within your own structures. A flash event will be generated for use that will create a political and economic vortex. The 21st American Revolution just started. It is all inter-connected. The Asians are the ones who will push the US over the cliff after the bankers themselves stepped to the edge by blowing themselves up. The WikiLeaks information comes from several hard drives from DeutscheBank and Goldman Sachs. The hard drives where handed over by a Goldman midlevel banker whom the European authorities had in custody in reference to the Euro 350 billion fraud Goldman Sachs engineered for the Greek Govt's Treasury Department. The evidence that is piling up all over the place is incomprehensible. The big break was a top Kaupthing Bank executive from Iceland & Luxembourg, who led the investigators to the right back doors to lift data out of the systems. They found that the mega-banks are operating a shadow world with its very own bookkeeping and back-office set up, all totally off-balance sheet and out of sight and reach of the regulators. Those two systems, the overt and covert, have disconnected and are ripping the system to shreds. It is basically a mega-Madoff scheme that they are running, only a thousand times bigger. Madoff's game was a satellite office that blew up when it was not properly supervised. The blowback was and is horrific since the entire system is now cratering.

The WikiLeaks site is being fed the information obtained from deep inside the system. There are people inside who very well understand that the system can only be brought down from the inside out. Witness how they hit Hillary Clinton by exposing her spy instructions to the US diplomats worldwide. In the latest Wall Street Pentagon Papers, the people were told that data was allegedly released by the babyface soldier, of rank private.. The papers reveal a $12 trillion unauthorized grant to global bankers as the hidden part of the TARP Fund used for buying up global assets after the price ambush following the Lehman Brothers failure. The flow of data comes from the top, not the bottom.The data grab required access with three passwords to enter the archives, something only known to 4-star generals at the Pentagon. The access was not through hacking but through opendoor access with proper credentials. Beware of a military Coup d'Etat going on in America and no one gets it. Next, WikiLeaks will next go global and viral in pure decentralized fashion. Thousands of WikiLeaks will be set up in lightning speed that will be fed from a central invisible source, which then publishes simultaneously all over the world. Their counter-attack retaliation against those who assisted on the WikiLeak crackdown is impressive [credit card companies]. Things don't just happen; they are allowed to happen. Problem-Reaction-Solution."

◄$$$ THE USFED AUTHORIZED APPARENT GIFT GRANTS TOTALING OVER $12 TRILLION TO BUY UP AMBUSHED ASSETS FOLLOWING THE LEHMAN BROTHERS COLLAPSE. THE EXPANDED SUPER-T.A.R.P. FUND HAD AN ASSOCIATED CREDIT LINE 17 TIMES LARGER THAN THE VISIBLE T.A.R.P. FUND ITSELF. THE LIST OF GRANT RECIPIENTS IS AS LONG AS YOUR ARM. THE EXPOSURE IS BEING CALLED THE WALL STREET PENTAGON PAPERS, A STORY STILL NOT ON THE MAINSTREAM NEWS NETWORKS. $$$

My view from the start about the TARP Fund in October 2009 was steeped in suspicion. Word came to my desk that grand payoffs to foreign entities, even paid extortion, going so far as payments to avert murders of Wall Street bankers for bond fraud against well-heeled investors. Such information has not come been forthcoming in the open. Instead, something much greater took place. The USFed saw fit to extend $12.3 trillion in loans at 0% with no collateral provided, and probably no expectation ever to be paid back. Therefore, think grants, not loans. The one-time glimpse into the USFed, aided by the new Financial Regulatory Bill has resulted in a quiet firestorm, indicative of the US being a Banana Republic in a literal sense. The revelation brims with corruption and high volume of apparently stolen money, since not properly authorized. In the months following the Lehman Brother failure, the AIG failure and nationalization, and the Fannie Mae takeover to avert a mortgage disaster and exposure, the entire commodity and precious metals complex was taken down significantly in prices. The publicized targets were supposedly hedge funds who had through speculation driven up the commodity prices. In doing so, Wall Street attacked with vengeance their enemies in the hedge fund arena, so that the Wall Street firms themselves could take the commodity positions with free grant money. Also, so that their syndicate comrades could buy up commodity positions with rapidly fallen prices.  Now we know why. Put the amount into perspective. It equals the entire USGovt debt built up after a half century. Like the article URL link name, this is indeed too big to comprehend.

The elite bankers of the world had a $12.3 trillion credit line to go shopping. Details of their shopping spree at bargain prices will probably never be known. The list of borrowers (more like grant recipients) included central banks from Australia, Denmark, Japan, Mexico, Norway, South Korea, Sweden, Switzerland, and England. The list included the foreign primary dealers acting with the USFed like Credit Suisse (Switzerland), DeutscheBank (Germany), Royal Bank of Scotland (UK), Barclays (UK), and BNP Paribas (France). Foreign banks and financial corporations tapped 4200 different types of purchases under 13 different USFed bailout programs. The list included Toyota, Mitsubishi, Nissan, BMW, Volkswagen, and Honda. The list included lesser central banks of Mexico, Bavaria, South Korea, and the Arab Banking Corporation in Bahrain. It included HSBC, Societe Generale, Santander, Banco Popular, ING, and Dexia. The USFed extended other loans totaling over $60.8 billion to more than 100 hedge funds, private equity funds, and other funds located in the Caymans or other British off-shore havens. These funds are currently deeply involved in speculations on the bonds of various European nations, in particular those of Spain, Portugal, Ireland, Belgium, even Germany. The same purchasing entities have engaged in public attacks of the European Central Bank for not adding adding sufficient purchase volume, which would ensure they make superprofits. So the big banks, using central bank ideology and interference, staged the financial system collapse, and then bought prized assets like carpetbaggers!!

All their Ponzi team players were gifted in a grand way. All the Racketeer Influenced & Corrupt Organizations got their cut. The author concluded with this bold statement. "Ben Shalom Bernanke is wanted for violating the United States Constitution, committing acts of financial terrorism and crimes against humanity. As a leading member of the Global Banking Cartel, he is considered a highly dangerous  enemy combatant. Citizens of the United States hereby demand that he be properly detained under the laws and customs of war." See the Amped Status article (CLICK HERE) and the Keiser Markets Finance Scandal article (CLICK HERE). Expect the well-heralded WikiLeaks attack against the unnamed US bank to be a continuation of syndicate exposure. The USFed is operating a secret global pawnshop with no strings attached, courtesy of the US asset base as implied collateral, or better described as target of exploit. By the way, that targeted bank is Bank of America. This is not a joke. Americans have been turned into debt slaves while the elite bankers are given free money to buy up global assets.

◄$$$ HALF OF AMERICANS WANT THE USFED ELIMINATED. GOOD FOCUS, BUT IT IS WAY TOO LATE, SINCE WRECKAGE IS TOTAL. $$$

The timing of the Bloomberg survey is suspicious. Clearly, something big is going on. Why would such a survey be conducted at all? Perhaps the division among news organizations runs deep. FoxNews have an occasional shocking expose, like with engineers in opposition to the official 911 Commission. Perhaps the public is being prepared for an important shift in the power structure. Perhaps the USFed is going to become a focal point of national anger. A long shot, perhaps the USFed is planning to resign soon, which would force a USTreasury Bond default. Recall that the USFed balance sheet is broken completely. Regardless of the motive for promoting such a highly charged survey, the people favor a US Federal Reserve with less power and less independence. Good Luck!! Too late!! They already wrecked the entire building. The results of the survey were "More Accountability" = 39%, "Less Independent" = 37%, and "Abolish It" = 16%. See the Bloomberg article (CLICK HERE).

◄$$$ THE USDEPT JUSTICE HAS CRACKED DOWN ON SCORES OF PENNY ANTE PONZI SCHEMES. THEY ARE SMALL BUT ADD UP IN VOLUME. ONE MUST WONDER IF SOME OPERATE IN OPPOSITION TO THE WALL STREET BANKERS AS AN AGENDA IS BEING WORKED. MAYBE NOT, MAYBE JUST THE APPEARANCE OF PROSECUTION IS THE AGENDA. WALL STREET FIRMS REMAIN SCOT-FREE, WITH LICENSE TO COMMIT $TRILLION FRAUD AND EVEN RECEIVE BAILOUTS. $$$

The USDept Justice has conducted numerous crackdowns on investment frauds including Ponzi schemes and stock market manipulations. The initiative might be somehow associated with the SAC expert networks. The arrests and actual insider sting operations will be one of the biggest in history. The federal prosecutions began in August, and have targeted over 300 criminal defendants and 180 civil defendants. They are nickel and dime Ponzi schemes, and focus often on Connecticut. Not one single operation has involved a Wall Street firm, the heart of the multi-$trillion bond fraud. The rackets pursued by the DOJ so far have been diverse. They include some big names out of Connecticut, but also numerous other cases. In Florida, one man operating an $880 million scheme duped investors from across the country. He used the money to buy floor seats at professional basketball games and to make payments on his personal yacht, his beach house, and his Mercedes car. A New Jersey man charged with operating an investment scam allegedly used investor funds to make payments on three different luxury cars and to pay fees at two country clubs. One man in Florida was convicted for his role in an investment swindle that exploited the local Haitian community. In Ohio, a former police officer operating a racket drew investment funds from active and retired police officers and firefighters. In Chicago, another sting caused $30 million in losses to hundreds of victims, mainly elderly Italian immigrants. The appearance of prosecution is clear, evident in news headlines. The focus has been constantly away from Wall Street firms.

◄$$$ A DIRECT BYPRODUCT OF THE PROMINENT FINANCIAL SECTOR, COMBINED WITH THE FASCIST BUSINESS MODEL, AGGRAVATED BY A SEQUENCE OF ASSET BUBBLES WITH FULL BUSTS, IS THAT THE ELITE INCOME GAP HAS WIDENED GREATLY. NOTICE THE FLAT MIDDLE CLASS AND RISING ELITE INCOME. $$$

The Fascist Business Model has led to a profound eruption of corruption, marked by a staggering shift in wealth to the elite in control. The prelude was two decades of asset bubble expansions, each well orchestrated by the Wall Street bankers. The result was been an utter disaster for the middle class. Whether tax cuts for the wealthy or organized bond fraud for the Wall Street preferred clients, the outcome is proof positive of the failure in policy and pathogenesis in the USEconomy.

◄$$$ FOOD STAMP USAGE AND RELIANCE CONTINUES TO RISE, AS POVERTY SPREADS LIKE A DISEASE. ONE IN 7 AMERICANS PARTICIPATES IN THE S.N.A.P. PROGRAM TO PROVIDE FOOD SUSTENANCE. $$$

Food Stamp rolls continue to rise. In all, 42.9 million people collected Food Stamps in the month of September, up 1.2% from the prior month. The count has risen alarmingly in the last twelve months, as per USDept Agriculture. Nationwide, 14% of the population rely on Food Stamps. In just a couple months, the ratio has gone from 1 in 8 Americans to almost 1 in 7. The worst affected zones in the nation are WashingtonDC, Mississippi, and Tennessee, where more than one fifth of the population actively collected food stamps. The fastest rising states for food assistance are Idaho, Nevada, New Jersey, Rhode Island, Utah, and Florida, all over 25% in annual growth. A total of 13 states have suffered over 20% gains in Food Stamp usage. A key fact is that no direct correlation is detectable to the housing bubble states. This is a national trend, a systemic effect of despair. The actual Supplemental Nutrition Assistance Program (SNAP) data for September was 42,911,042 versus 42,389,614 in August, an increase of 521 thousand in one month, over half a million people. Furthermore, SNAP participation has risen by 6.0 million since September 2009 and by 11.5 million since September 2008. The trend is hardly the type of change to believe in. See the Wall Street Journal article (CLICK HERE). This hunger trend is occurring in the midst of a supposed economic recovery.

◄$$$ THE USBOND BUBBLE HAD A TURNING POINT IN LATE NOVEMBER. BOND FUNDS RECORDED AN OUTFLOW. THE HALF-YEAR STRING OF STOCK FUND OUTFLOWS HAS JUMPED THE TRACKS TO BECOME A BOND FUND OUTFLOW. THIS IS A NEW NASTY TURN IN PUBLIC ABANDONMENT, AND A DEADLY SIGNAL OF A RECOGNIZED BOND BUBBLE. $$$

Since December 2008, just after the climax death chapter of the US banking system, US investors had been consistently pouring money into bond funds every week. The enduring streak has been of an historical record, lasting two full years. The streak has ended. The ICI Institute disclosed that the bond fund inflow streak came to an end. According to ICI, investors withdrew $4.33 billion from bond funds for the week ending November 17th. This is just the beginning of a possible shift in sentiment trends. The current evidence could be the key inflection point ahead of a new trend. The outflow of money from equity (stock) funds is slowing, but still continues as an outflow. Again according to ICI, investors withdrew $1.16 billion to total equity funds for the week ending November 17th. More importantly, on that week, they withdrew $2.80 billion from domestic funds. See the Business Insider article (CLICK HERE).

◄$$$ THE USTREASURY YIELD ON THE 10-YEAR NOTE HAS MOVED ABOVE 3%, AGAINST MY FORECAST. REGARD THE NEW TREND TO BE A GLOBAL REJECTION OF BOTH THE USGOVT FISCAL CONDITION AND USFED ACTIONS. THE USFED HAS FAST LOST ALL CREDIBILITY. THE ECONOMIC IMPACT WILL BE FELT NEXT YEAR, WITH DAMAGE TO HOUSING MARKET AND USECONOMY. $$$

The Jackass made another forecast error on the 10-year USTreasury yield, the asset class where almost all errors have occurred. My expectation was for the yield (also called TNX) to descend toward 2.0% to mark the climax top of the USTreasury Bond bubble. This makes perhaps the third forecast error in Jackass history related to the USTreasurys. It would be best never to forecast bond yields ever again. The announced Quantitative Easing #2 marked the bottom in bond yields, and the top in bond principal value. The reversal pattern indicates a 3.75% target, no forecast, just a chart target. The world has turned wise to the USFed, its skein of failures, its lunatic views, its consistently wrong perceptions, and the broken nature of the USGovt debt. The world might also be wise to the broken insolvent US banks, and the insolvent ruin among households, even that the United States is unable to make right its economic ship. It seems a great dare has taken place by global USTBond holders, a dare in the bond market for USFed to wreck the USDollar foundation further. Instead of front-running the USTreasury Bond market, the global bond investors have abandoned it.

The foreign creditors have lost respect for the USFed, and for Chairman Bernanke. Insults cast at the G-20 Meeting in South Korea testify to the lost respect, lost credibility, and lost leadership of the USFed itself. The USTBond selloff is a follow-up insult after the global meeting. History has made a turning point. The global central bankers have accelerated their conversion from USTBonds to Gold. They no longer believe the propaganda of a USEconomic recovery, the new byline of propaganda. Closer to the harsh reality is fast falling USDollar and fast rising price inflation, which urgently require a higher bond yield to address the asset erosion. The bond market has responded to the crystal clear continued preference still by the USGovt for costly stimulus over deficit reduction. Hyprocrisy is clear, since the deficit reduction committee just last week released their conclusions. The USGovt stands alone among major nations without any conceivable austerity program. The next story in 2011 will be the rising debt borrowing costs and rollover costs that catapult the deficit higher. Higher mortgage loan rates, even car loan rates, will damage the ruined housing market and work their way into the entire USEconomy. Quietly lurking as a grand damage factor is the Social Security pendulum swing. Its cash flow at the USDept Treasury has turned negative. No longer can the people deceive themselves that some sort of imaginary Trust Fund is going to turn their financial tide, or even fund their retirement with supplemental checks. It does not exist.

Another very large hidden factor is at work in my view, almost a generational factor. From 1990 onward, big banks including the central Bank of Japan have played the Yen Carry Trade, borrowing 0% Japanese Yen and investing in US stocks and USTreasurys at much higher yields. This is a multi-$trillion financial engine!! The yield differential was compounded by a falling Japanese Yen, enforced with vigor by the Japanese Govt, which has perhaps the worst debt ratio of any industrial nation. With the USTBill yields near 0% and the long-term USTreasury Notes having bottomed at 2.4%, the game is over. The great unwind of the Yen Carry Trade involves selling USTreasurys as much as selling the major US stock indexes. To be sure, the USTreasurys continue to be affected by a huge force that arbitrarily sets the bond yields, by means of Interest Rate Swaps. The Hat Trick Letter has often warned that a rise in USTBond yields would deliver staggering blows to deeply damage the JPMorgan credit derivative positions centered on Interest Rate Swaps. Add one more multi-$billion losing department to the JPMorgan ship moored in acidic syndicate waters, to mortgages fraud and gold/silver manipulation.

Meanwhile back at the office, the November USTreasury deficit rang in at $150.4 billion. The USDept Treasury reported the figure on December 3rd. One year ago, the November deficit was $120.29 billion. Not only is a recovery not happening, but the fiscal condition is growing dangerously worse. Leaders are proved liars on both ends. The deficit last month was $8 billion above what the clowns in the USCongress estimated. Income in November was $15 billion higher than receipts in November 2009, but spending ruined the month. Never lose sight of the endless war, its sacred budget, and the staggering toll to American prestige, as the syndicate agenda is untouchable.

POLICE STATE & MEGA-CRIMES

◄$$$ FASCISM VERSUS COMMUNISM, AN EVOLUTION. THE UNITED STATES IS WELL ALONG ON A PATH TO A GRAND MERGER OF BOTH. THE SYMBOL OF THE MERGER IS THE MOVEMENT OF THE TWO MAJOR POLITICAL PARTIES TOWARD 6 O'CLOCK ON THE DIAL FROM THE RIGHT AND FROM THE LEFT. WITNESS THE FASCIST DICTATORSHIP IN HIDDEN FORM, LED BY THE MILITARY, BUT MORE ACCURATELY BY THE SECURITY ESTABLISHMENT. THE PENDULUM SWINGS IN CONTROL OF THE USCONGRESS TESTIFY TO THE MERGER PROCESS. LEADERS ARE LED BY BANKERS TOWARD THEIR DESIRED GOAL. $$$

The USGovt political makeup has been swinging like a pendulum from conservative to liberal, then from ultra-conservative to ultra-liberal over the last two decades. In my view the label of Democrat and Republican has obscured the dominant emergence of the Narcos, who act like a syndicate but control like a party since Reagan was shot in office in October 1981. The blue-coated Narcos led by Clinton and the red-coated Narcos led by the Bushes have transformed the nation. My call for a military dictatorship has in my opinion already occurred, despite the lack of recognition. When the Patriot Act shredded the US Constitution and the Bill of Rights in a single deft stroke of fascism, the Narcos took control of the USGovt, run roughshod over the USCongress, seized control of the USMilitary, and established the USDept Fear to wield the billyclub of abuse. It was a Narco Coup d'Etat hidden from view. The fear byproduct is the work of the USGovt security establishment, whose powers are unchecked, led by the USDept Homeland Security, a veritable Gestapo. If the recent sexual assualts by the airport security staff across the nation is not convincing enough, then the observer is braindead. Respect given to the general public by the federal government has never been lower in the nation's history. Profiteering on federal policy is rampant, as many rules for airport passage are dictated by narcotics angles. Pat-downs are intended to find loaded billfolds of cash wrapped that avoid machine detection. Also, water bottles are a perfect method for transporting diamonds, commonly used to make payments for narcotics shipments. The USGovt narco competitors are thereby limited.

The USGovt might switch party control of the USCongress, but the Narcos with their whore Bankster handlers have total control. When the Obama Admin took control in January 2009, the Jackass predicted a Goldman Sachs captain would be selected as Treasury Secy. It happened, except that Geithner is more like a lieutenant. With the same transition, the Jackass predicted the CIA would continue to occupy the Defense Secy position, with Gates not to be replaced. It happened exactly as expected, confirming the Narcos would not cede power in transition. The recent evidence of that control was the Financial Regulatory Bill, originated to curb banker control, but whose final legislation enhanced their power, since written by the banker lobby. When the party control of committees changes again in January 2011 as a result of the Midterm Election sweep, the red-coated Narcos will in hidden fashion resume control, relinquished from the blue-coated Narcos. The pendulum is swinging with smaller moves left and right, converging on the extreme 6 o'clock position of a fascist dictatorship. To 80% or 90% of Americans, the reality is obscured. The bankers on Wall Street orchestrate the political transition. Bond fraud, money laundering, and weapons sales are their province. This type of government is common for failed states. The natural conclusion of a capitalist system is a fascist state. Given the predatory destruction of the middle class by the corporate elite and the bankers, and their predilection for total control, the natural conclusion is also a dictatorship. Given the national bankruptcy, with insolvent sectors galore, a communist system is not only highly likely, but well on course. The mammoth USGovt deficits dictate the movements toward confiscation. The tragedy unfolds.

COMMUNIST MANIFESTO

  • Abolition of private property
  • Heavy income tax burden
  • Oppressive regulatory controls
  • Abolition of inheritance rights & benefits
  • Confiscation and Collectivism of private property
  • Central Bank dominant role in control of money, banks, credit
  • Government control of communications & transportation
  • Government ownership of factories and agriculture (nationalization)
  • Government dominance over labor
  • Corporate farms, regional planning
  • Government control of education

FASCISM CHARACTERISTICS

  • Powerful and far reaching nationalism
  • Disdain for human rights
  • Identification of enemies (scapegoats) as a unifying cause
  • Supremacy of the military
  • Controlled mass media
  • Obsession with national security
  • Religion & Government intertwined (cross wrapped in a flag)
  • Corporate power protected, its crimes covered up
  • Labor power suppressed
  • Disdain for intellectuals & the arts
  • Obsession with crime & punishment
  • Rampant cronyism and corruption, profits from privilege & position
  • Fraudulent rigged elections, with broad smear tactics

◄$$$ FORMER MINNESOTA GOVERNOR JESSE VENTURA PUT THE SPOTLIGHT ON CONSPIRACY THEORIES AND THE MARCH TOWARD A FASCIST DICTATORSHIP. HE IS CREDIBLE, BUT RECENTLY SILENCED TO SOME EXTENT. $$$

His credibility is founded upon experience as a former USNavy Seal, with strong contacts in the USGovt intelligence community. Former Minnesota Governor Jesse Ventura should be taken seriously. He has written a book, established a private cableTV channel, and served as speaker on broadcasted television, even speaker circuits. He openly accuses the World Trade Center of inside job attacks. He discusses the FEMA Camps, the creeping Police State, and more in the following 3-part video series (CLICK HERE & HERE & HERE). In the last couple months, Ventura's TrueTV channel was ordered by the USGovt to be shut down, an obvious censorship maneuver to halt public exposure. He spoke too much about current and future pathways toward the police state. He knows too much. See the TrueTV video (CLICK HERE). Furthermore, Ventura has long maintained that the CIA murdered popular Beatle singer and songwriter John Lennon, exactly 30 years ago last week. The CIA had staff details follow Lennon for several months before his murder, a routine practice before an assassination. His killer was likely a hired gun by the CIA as part of a special mind altering project. The Beatles sang about revolution, but more focused on hair, attire, and attitudes.

◄$$$ THE AE911TRUTH MOVEMENT IS GATHERING MOMENTUM AND POPULAR SUPPORT. ITS STORY HAS BEEN GIVEN EXPOSURE BY SOME BRAVE NEWS NETWORKS. THE OFFICIAL 911 STORY DOES NOT REMOTELY PASS THE SMELL TEST. PROFESSIONAL ORGANIZATIONS HAVE SHREDDED THE OFFICIAL COVERUP FABLE STORY, A GRAND CHARADE. ARCHITECTS, ENGINEERS, CHEMISTS, AND PHYSICISTS HAVE FORMED OBJECTIVE EVIDENCE TO DISPUTE THE ABSURD OFFICIAL STORY, AS THEY CONTINUE TO CONFRONT THE USGOVT SYNDICATE FORTRESS. PURSUIT OF TRUTH HAS BEEN GIVEN A TARISHED AND UNPATRIOTIC IMAGE. $$$

Leave aside for now the demolition of the World Trade Center twin towers. At least two hundred police, fire, and emergency medical personnel have attested to witnessing over two hundred bombs that went off, mostly in the basement structures. That is where the bank vaults stored bonds, gold, and diamonds. Their testimony was forbidden entry into the official 911 Commission Report. The WTC attack official story fails to account for gravity acceleration, the low burning point of jet fuel, architectural support, and more. The more vulnerable part of the 911 event pertains to the third building at the same World Trade Center site. It was not struck by any aircraft, but rather was the object of a basic demolition. The official nonsensical story is that Building #7 fell from structural sympathy after the twin towers fell. Try cutting down two strong trees in your back 40 acres (or 10 hectares) and let me know if smaller nearby trees fall out of structural sympathy!!

Give some credit to Geraldo Rivera of Fox News for his courage to report an obvious demolition. Before long, continuation of the investigative threads will arrive at evidence that Building #7 contained Enron fraud records and USTreasury Bond fraud records, both owned by JPMorgan Chase, a primary center for the financial crime syndicate. See the Geraldo Rivera and Building What, the story of Bldg #7 at the World Trade Center (CLICK HERE). Also, for background, check the Architects & Engineers for 911 Truth (CLICK HERE). Not only do architects and engineers dispute the infantile and absurd stories promoted by the syndicate that wrested control of the USGovt on that fateful day, but chemists and physicists do also. The thermite explosive residue is laced through the debris from the WTCenter site. The structural strength of the twin towers was sufficient to support the burning upper section of the towers. See the Venezuelan precedent of a skyscraper in Caracas in the 1990 decade that burned for two weeks after an aircraft crash and explosion, complete with extreme fire.

◄$$$ CONSIDER THE TROPOS THEFT OF A CHINESE FORTUNE COOKIE FROM TAIWAN. THE USFED OPERATES WITH IMPUNITY IN GRAND LARCENY WITH PROTECTIVE COVER PROVIDED BY THE BANK FOR INTERNATIONAL SETTLEMENTS. THE USFED ANSWERS TO NOBODY AND STEAL WITH TARGETED VICTIMS, BUT ONLY FROM WORTHWHILE VERY LARGE TRANSACTIONS. A CASE IN POINT THAT REVEALS DEEP CRIMES BY THE USFED, AS PART OF THE FASCIST BUSINESS MODEL. $$$

Behind the curtain in the marbled world of high finance, fraud, deceit and government sanctioned criminal theft is common. Consider a recent $700 billion stolen in a single stroke, from a passive swipe. The license to steal comes by virtue of the fact that the funds in question are US$-based. Therefore, they must pass through the USFed system. At that juncture, at that filtered pit stop, it is stolen. Imagine a monopoly on a highway where at the tollgate the cars are robbed clean during examination of the currency in wallets and purses, but only the biggest cars since they hold the most money by the passengers. The Tropos Capital Corp of America is a Canadian based firm. In November 2004, an account transfer was facilitated by the Bank of Taiwan. The Automated Customer Account Transfer Service (ACATS) usually is a routine exercise. For this large transfer of $700 billion, the funds entered the US Federal Reserve but they never arrived at their proper destination, a Wells Fargo account #84113424. They were confiscated and stolen. The Bank For Intl Settlements denied any capability to assist in any resolution, and the office of the US Presidency was mum. Letters were exchanged again in November 2010. Appeals by Lerners LLP, a Toronto law firm, have fallen on deaf ears. The matter remains an open issue to this day. See the Scribd webpage, complete with letters to various parties in va in (CLICK HERE). A Chinese document provides other details on the transaction that never was completed (CLICK HERE).

A letter was sent on November 22, 2010 from Robert Hryniak of Tropos to Diego Devos and Liam Flynn, general counsel at the BIS in Basel Switzerland, by both email and standard mail.

In its conclusion, Hryniak wrote "Your failure to act, to inform and to invoke the relevant policing authority is an appalling abdication of your institution's Reason for Being. Why have you not contacted Interpol or the Swiss authorities about this apparent international financial crime, which includes mail and wire fraud? It would seem that the assurance of the fidelity and credibility of the international financial system would be the primary interest of the BIS, but this is apparently not true. Your letter and stark admission of impotence have elevated international level of financial risk for all parties immensely and exacerbated the existing crises in global banking stability." This is work of the US crime syndicate, basic grand theft in plain view.

Harvey Organ provided a summary of the Tropos controversial situation, which is highly charged but surprisingly has not generating much publicity. He wrote, "Tropos, an American company. The elders who reside in Taiwan had accumulated great private wealth over the past several decades and collectively they decided that this money, denominated in USA dollars ($700 billion), was to have the Chinese people as the beneficial owners. Also there was great progress in starting the unification of Taiwan with Mainland China. The elders decided to send the money through a trustee Mr Hryniak, to Tropos at the account at Wachovia. Many large sums of money of this sort must travel through an ACAT which is an electronic transfer of funds. The BIS, as central bank to all central banks, provides the Clearing Payment & Settlement Systems that assists in the clearing of the funds as the sole Transfer Trustee. In this case, it seems that the US Federal Reserve kept the funds for themselves and called upon its ally at the BIS to state that the BIS function is not clearing but only of supervision. There have been many lawyers on both sides of the border that have seen and verified that the ACAT was true and real. The BIS and the Federal Reserve have had their lawyers call the Tropos lawyers, but the Fed and BIS lawyers refuse to put in print what they discussed on the phone. You will see in one of the correspondence, a file number has been instituted by the American authorities. The November 2nd letter to the BIS official, Corunna, is very interesting. The letter to Obama in June 2010 describes in detail, the ACAT from Taiwan to New York and how the proceeds have been kept for their own use instead of the beneficiary's. The above letters were widely distributed to members of the G-20 during their last meeting. Originally, Mainland China at various times accused Taiwan and the trustee with malfeasance but have now realized that it was the US Federal Reserve who has absconded with the money. Here are the letters sent to the various parties. From the body of the letters you can deduce that the other side did engage in various conversations. You can imagine what China would do if they found out what that the United States did something with their money. Maybe buy up all of the gold and silver at the COMEX?" So the USFed, a crime syndicate nexus, has found a way to alleviate its grotesque insolvency, by direct theft.

BANKS SURROUNDED BY BARBARIANS

◄$$$ USFED ANNOUNCED A STRING OF QUANTITATIVE EASING STAGES. THE CHIEF OF INFLATION ENGINEERING HERALDED AN EVENTUAL QE3 LAUNCH AMIDST A SEQUENCE OF GRAND LIES INTENDED TO GARNER PUBLIC SUPPORT. HIS DESPERATE PET PROJECT WILL DELIVER A DEATH BLOW TO THE USFINANCIAL STRUCTURES. THE BERNANKE USFED HAS SHATTERED ITS CREDIBILITY ON THE GLOBAL STAGE. $$$

As most important diagnosis, the USFed Chairman Bernanke is fighting extreme insolvency problems with extreme liquidaty measures. He has misdiagnosed the US national disease and cancer. In a recent Jackass article in November entitled "QE2 & The Great Misdiagnosis" (CLICK HERE) Bernanke was accused of working the monetary firehose when the building is collapsing, as global leaders realize no liquidity strains exist whatsoever. Those same global bankers and heads of state have lost respect for the US bankers, vividly clear in the last G-20 Meeting of finance ministers in South Korea. Even members of the USCongress contradict Bernanke in displays never seen in the Greenspan Fed Era. The irreversible decision to undertake new bond purchases has ignited a political backlash in WashingtonDC. Some lawmakers have argued openly that the USFed's policy of Quantitative Easing will do little to bring down unemployment and will likely fuel price inflation. Officials in other countries such as China and Germany have offered open criticism, the German Finance Minister calling Bernanke clueless (his words). Political and banking leaders in emerging market nations have expressed concern the USFed path will drive down the USDollar and cause a surge of capital abroad that will create new asset bubbles. Worse, the US Elite wish to use free money to purchase global assets in the grandest theft in modern history!!

Bernanke, in a rare appearance on a nationally broadcast US news program, defended the USFed's efforts to prop up a recovery via hyper-inflation. Bernanke is compounding the problem while losing large chunks of credibility. He claimed the USEconomy is barely growing at a sustainable pace, which permits the USFed to expand bond purchases beyond the $600 billion announced last month to spur growth. He is setting up the public to accept endless rounds of Quantitative Easing, the official euphemism for massive monetary expansion for the purpose of monetizing debt. He is practicing bad science in public. He said, "We are not very far from the level where the economy is not self-sustaining. It is very close to the border. It takes about 2.5% growth just to keep unemployment stable and that is about what we are getting... The other concern I should mention is that inflation is very, very low. Unemployment is 9.8%, and if we did not take these drastic measures, it would be 25% like it was during the Great Depression. I guess I do not buy your premise. It is a pretty unlikely possibility. We have never had a decline in house prices on a nationwide basis." Excuse me, but doesn't a 30% nationwide decline qualify? Price charts are too plentiful to be needed here. The public knows better. Also, the public is well aware of a 20% price rise in many consumer and insurance items. The actual jobless rate is 22%, a fact he is blind to. Bernanke is an economic moron on a global stage, whose victims will be the USDollar and USTBond, whose bubble requires an infinite amount of funds.

Bernanke has begun a tragic comedy of committing professional suicide in full public view. He seems either oblivious or ignorant or unconcerned that the USDollar and USTreasury Bond are at great risk. Sean Callow is a senior currency strategist at Westpac Banking in Sydney Australia. He said "Bernanke is defending his decisions to a mass American audience. He is not giving way to criticism, whether it is domestic or international. It is another reminder that the dollar is a side effect of Quantitative Easing and not a top factor in the Fed's view." See the Bloomberg article (CLICK HERE). In my view, Bernanke is totally delusional, myopic, and psychotic in his departure from reality. A climax of diametrically wrong perceptions has been provided the American public and the global audience in a grand display to demonstrate how he is ignorant of economic principles. The tragedy is being played upon the American people.

◄$$$ A QE3 IN PUBLIC APPEAL TO THE AMERICAN POPULATION SEEMS A BLATANT LAST DITCH EFFORT TO WIN ACCEPTANCE OF A PLAN TO KILL THE ITS FINANCIAL SYSTEM WITH A SERIES OF NUCLEAR SHOTS. IN HIS APPEAL, BERNANKE LIED THROUGH HIS TEETH ON SEVERAL COUNTS. THE GOOD CHAIRMAN LEFT HIMSELF VULNERABLE TO SIMPLE PROOF OF HIS LIES BEFORE THE PUBLIC SPOTLIGHT. USTREASURY BOND CREDITORS HAVE BEGUN TO REALIZE THE USFED HAS GONE ASTRAY ON A PATH TO PERDITION. $$$

The most outrageous example of profound lies and grand deception from his 60 Minutes interview was when USFed Chairman Bernanke denied the charge of Printing Money, which he claimed (today) he is not doing after admitted he was doing in March 2009. He actually stated, "We are not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way." To refute and prove him a liar is a simple task. Check the M1 Money Supply index, which is rising steadily. Of course the money in circulation is changing, and rising fast.

Harken back to 15 March 2009, during another 60 Minutes interview. Take Bernanke's own words. He made clear that the USFed was using funds not from tax money. He said, "It is not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. So it is much more akin to printing money than it is to borrowing. We need to do that, because our economy is very weak and inflation is very low. When the economy begins to recover, that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation." See the Michael Reinstein article (CLICK HERE). Thanks, Ben, that explains it well. The man will not react in time because he is blind and follows all the wrong signals.

Jon Stewart of Comedy Central on HBO shows Bernanke to be a liar and fool in four quick minutes. A public campaign to deny the foundation of hyper-inflation must succumb to a public rebuttal. Stewart uses brief clips from Bernanke interviews to slice him to pieces, in the height of mockery and ridicule. He even comments on a recent event where the USDept Treasury printing press hiccupped and barfed as it folded over bills during the complex process of layered security devices and implants. He evoked great laughter from the comedy audience. Stewart said, "We have outsmarted ourselves with our our fancy security measures to the point where our money is committing suicide on the press. I hope we still remember our passwords, or at least the answer to the security question prompts. What is our country's maiden name? Great Britain, I believe." See the Market Ticker video (CLICK HERE). Derision of the USFed has gone mainstream, well deserved. Going hand in hand with it is ruin of the USDollar and USTBond.

The Jackass disagrees most vigorously with Bernanke. Despite his claims, the QE2 debt monetization program is NOT about USEconomic support, as he said on national television during the popular 60 Minutes show. That is pure policital cover. QE2 is all about USTreasury Bond asset bubble maintenance, and to some extent bank bond redemption. The inflation based support is soon to go out of control, Weimar style. The ultimate irony is that in order to prevent price inflation, the consistently inept destructive USGovt will institute capital controls (fund transfers across borders) and price controls (limits for raft of products), which will result in the exact hyper-inflation designed to prevent it. In no way will the Bernanke USFed be able to withdraw money from the system when he spots price inflation. He cannot react quickly when perceptions are blind. He could not spot a mortgage bond fiasco. He could not spot a Fannie Mae collapse. He saw economic recovery where none existed. He was talking about an Exit Strategy when the financial crisis was intensifying. The Jackass forecasted an obvious second chapter to follow up QE1, in contradiction. The foreign creditors have begun to realize the USFed is on a misguided path, marred by desperation, and devotion to inflation, even clueless. Their reaction is conversion of USTBonds to GOLD !!

Aaron Krown of the Mortgage Lender Implode web journal agrees. In a new article entitled "Why What The Fed's Doing is Inflationary" a rebuttal was lodged. Krowne wrote, "There is no way to back out of the Fed's QE. It is not only a bluff by the Fed. It is mathematically impossible to get out without absorbing the losses, which is tantamount to printing the money to do so. The only question is the timing. The end result is no longer in question. What is going on now is that the market is figuring this out (particularly the US major creditors), especially since the Fed has continued to kick the can on its promised exit from the bond buying programs, and instead is doing more of the same right in the creditor faces. The road can stretch on longer than most expect, as long as sufficient buying of Treasuries and holdings of dollars continues.  But those parties depended upon to do this buying are increasingly realizing where this road must inevitably lead to: inflation, devaluation, and possibly hyper-inflation." See the ML Implode article (CLICK HERE).

◄$$$ THE HIDDEN BENEFICIARY TO THE VAST QE PROGRAMS, THE MONETARY EXPANSIONS, HAS BEEN THE STOCK MARKET. THE DIRECT BENEFIT IS TO THE USTREASURY BOND MARKET, WHERE A GRAND GLOBAL BUBBLE MUST BE MAINTAINED. THE URGENCY TO KEEP THE BUBBLE GOING HAS LED TO POLICY THAT PACIFIES THE LAST ASSET HELD BY THE PUBLIC IN PENSION FUNDS, NAMELY STOCKS. $$$

When QE1 was announced, the support of the housing and mortgage markets was of paramount importance. True to their word, the USFed gobbled up so much mortgage bond securities, that it wrecked its balance sheet. The venerable corrupt nexus owns a ruined asset book of assets, with value somewhere between minus $800 billion and minus $1.3 trillion. Other analysts have concluded that a mere 3% to 5% decline in their mortgage assets would render their balance sheet as negative. The mortgage assets are obviously worth 30% to 50% less than taken in, especially the leveraged credit asset rubbish. See the Collateralized Debt Obligation wreckage, all worthless, extreme losses to the bone. If the USFed truly wished to aid the USEconomy, it would support the housing market. But QE2 and QE Lite targeted USTreasurys, with open statements. The verbage distraction spoke of aiding the USEconomy, all nonsense. The USFed wishes to support the unsupportable, the USTreasury Bond bubble, the same asset class that is seeing a growing global boycott movement. The PIMCO frontrunning of mortgage assets bought on credit margin appear to be headed either to the Fannie Mae bottomless pit or the likes of big US banks, such as Bank of America. The movement for Put-Backs, return of fraudulent or poor under-written mortgages to the issuing banks, is soon to begin with tremendous fanfare and revelry. Instead, the USFed is lying again, along with being grossly incompetent.

The QE2 program will provide an urgently needed prop for USTreasurys, the most liquid asset group on the planet, hardly in need of support if a healthy financial environment was in the process of restoration. The hidden QE benefit comes to the stock market, the home of myriad private pension funds. Both large pension management firms like TIAA-CREF and corporate conduits rely upon the stock market. The majority of IRA, 401k, and Keough plans also rely upon the stock market. Take it further. The public outcry for financial loss has been acute for the home equity vanishing act. A remarkable correlation can be seen between the USFed purchase volume of USTreasurys in the dreaded debt monetization scheme and the S&P500 index. The graph is indisputable and more than a little surprising even to the most suspicious of analytic observers. The maestros must use the USTBonds as a conduit for the Working Group for Financial Markets, aka the Plunge Protection Team, which purchases the stock market index directly in a major hidden prop. Most of the entire US financial market structure is therefore supported by monetary press output, pure inflation. See the Zero Hedge article (CLICK HERE). From personal experience, the stock market is a highly accurate bellwether alarm signal for public outcry. The only time anyone in my family actually called me with alarm, was my younger sister after her 401k work pension fund took a deep hit in the autumn months of 2008. She wanted nothing to do with gold or silver, and was soon lulled back to a slumber when the stock market recovered.

◄$$$ BANK OF AMERICA MORTGAGE TROUBLES ARE ABOUT TO REACH THE NEXT GEAR. THE THREAT OF MASSIVE PUT-BACKS OF MORTGAGE BONDS COULD DELIVER MORE MIGHTY LOSSES. EVIDENCE MOUNTS THAT NO ATTEMPT TOOK PLACE TO PERFECT THE LIENS INHERENT TO THE MORTGAGE SECURITIES. LEGAL CASES BUILD UPON THE ENTERED EVIDENCE. $$$

The legal nightmare for Bank of America (BOA) continues. Its financial condition has degraded rapidly from the full impact of the series of important setbacks, mostly featuring victories for the homeowners. But the damage is hidden from view and its stock rises. The crux of the matter is that mortgage bond holders and mortgage loan portfolio owners do not have perfected liens. They are sitting on $trillions of basic unsecured notes. The unwind process can only result in a death of the major US bank. Given its key role as the primary narcotics money laundering bank, the process will be filled with grand buttresses of support until the bank collapse cannot be avoided any longer. The money laundering role is not minor, but rather a primary bank function on behalf the US security establishment. Infusions have been regular and frequent and large in volume. The patience of the national narco king is surely being tested. It is becoming widely known within the banking industry that without the narco money in the September-October 2008 timeframe, the US banks might have collapsed in unison.


The giant US bank is in the process of suffering an historically unprecedented series of lilliputian holes punched in its financial structure. The mortgage fraud at the grassroots level, where property titles were neglected in the mortgage bond securities, is blowing wide open. Some of the most damaging testimony to date came recently from a BOA employee in New Jersey. The setting was a personal bankruptcy case that will certainly give more ammunition to homeowners and investors in their legal home foreclosure challenges against the other corrupt big US banks. Precedent and evidence are building. Linda DeMartini is a a team leader in the BOA mortgage litigation management division. DeMartini actually said during a US Bankruptcy Court hearing in New Jersey last year that it was routine for the lender to keep mortgage promissory notes even after loans were bundled by the thousands into bonds and sold to investors. Sloppy practice, deadly consequences. The transcripts are being circulated, usable as evidence in other cases. Security contract law requires the documents to be transferred to the trustee of the mortgage bond investor. BOA did not. Their mortgage bonds sold are therefore worthless. Thus the grounds for Put-Backs to the big bank.

On November 16th, the honorable Judge Judith Wizmur rejected a bank foreclosure claim on the home of one John Kemp, ruling that his mortgage company, since gobbled up by Bank of America, had failed to deliver the note to the trustee. Precedent made. The offending financial firm was Countrywide Financial. Thus the trustee was left with no standing to seize the property. Hundreds of thousands of other home foreclosures could similarly be blocked using the same challenge. Extremely weak and vacant denials were issued by BOA attorneys. With the conviction and credibility of a serial killer in protest, a Larry Platt disavowed the statements by DeMartini, stating that she was mistaken. It is a wonder that she was not cast as a purveyor of child pornography and her office computers seized. See the Bloomberg article (CLICK HERE). These are crime syndicate activities under observation and dissection finally. The gigantic threat looms over the Wall Street major banks for truly magnificent Put-Backs of mortgage bonds worth well over $1 trillion from investors to the banks who sold them in fraudulent manner. Their violations are being catalogued. The process of dumping entire truckloads of rotten credit assets on bank lawns is imminent. However, that process since so highly charged and deadly, will require court action. It will start with a dribble of activity, then reach a climax in court decisions that decide the life or death of big US banks.

◄$$$ BANK OF AMERICA IS WORKING WITH THE USDEPT JUSTICE IN MUNICIPAL BOND FRAUD THAT INVOLVES RIGGED BIDDING PROCESSES. A DRAGNET OF VICTIMS AMONG MUNIPALITIES IS IN PROGRESS. THIS IS PANDORA'S BOX. WHILE THE D.O.J. PURSUES THE CASES IN PROSECUTIONS, THE S.E.C. OVERSEES LAWSUITS IN PASSIVE MANNER. THE INTRIGUE IS CLEAR, AS B.O.A. AIDS THE PROCESS DURING ITS OWN DEATH SPIRAL. THE MUNI BOND FRAUD PROSECUTION HAD MORE VICTIMS AT THE SWISS U.B.S. BANK. $$$

The Wall Street streak of deep fraud in the municipal bond market is soon to blow sky high. A case was just completed, certain to have opened Pandora's Box. The venerable criminal body known as Bank of America cut an agreement to pay $137 million in restitution for its role in a nationwide bid-rigging conspiracy for municipal bond investment contracts, a deal made with the sword held overhead by the USDept Justice (DOJ), in the Antitrust Division. The lead warrior is Christine Varney, the antitrust chief. She said, "Stay tuned to this channel. I think you will see a lot more activity in the coming weeks and months. We are committed to getting restitution, full restitution, to all the municipalities that were victims of this scheme. The bank's participation in the leniency program has also resulted in this resolution to address the harm caused by its wrongdoing. As a result of its voluntary disclosure of its anti-competitive conduct and its ongoing cooperation, Bank of America will not be required to pay penalties as a part of the agreements." So light punishment in return for nailing other banks to the wall. The list is long for the victimized municipalities. The intriguing part of the story is the total absence of the Securities & Exchange Commission, which continues to give a full pass on bond fraud to Wall Street firms, since the SEC is a tool run by Wall Street firms. Its officers come from the very firms it is supposed to enforce securities law against, whose loyalty is obvious. The Obama Admin might actually be removed from it all, as the USDept Justice has become a team on a mission.

By serving as the open door in assisting the USGovt in the official probe of the $2.8 trillion municipal bond market, Bank of America has won leniency. BOA has provided documents, e-mails, and telephone tapes, according to court records of civil suits. In a September case, Douglas Lee Campbell, formerly an employee of the BOA municipal derivatives group, pleaded guilty on September 9th (with full court transcript) for his role in a conspiracy to pay state and local governments below market yields when bonds matured and turned over. The other guilty banks will likely pay much higher penalties in settlements in civil lawsuits. They include JPMorgan, UBS, a subsidiary of General Electric, and a former subsidiary of the Belgian bank Dexia, all of whom have reported in mandatory regulatory filings that they face civil suits by the Securities & Exchange Commission in the United States. The SEC permits lawsuits while the USDept Justice conducts prosecutions, a huge difference. The companies say they are cooperating with the government. To date, eight former bankers and financial advisers, including former employees of UBS, JPMorgan, and Bank of America, have pleaded guilty in connection with the municipal bid-rigging probe. But BOA has opened its book and has aided the dragnet.

Varney has invited the press and analysts into the chambers, where they have obtained details on the continuing probe. The investigation centers on investment agreements that municipalities enter into with money raised through bond sales in continuous fashion. They are called guaranteed investment contracts, since they permit local governments to earn a return on the funds when they mature and roll over, invested again. The churn continues until the cash is needed for schools, roads, or other public works. The USDept Treasury encourages competitive bidding to ensure that localities receive market rates of return. Therein lies the criminal fraud. Prosecutors have charged that favored bankers received inside information from brokers who handled bidding for the contracts, so they could slice the market in a rigged scheme, that featured kickbacks to brokers by the big banks. The bond issuers (municipalities) received lower amounts of funds. The same BOA banker Campbell admitted to a federal judge that he had conversations prior to the bid with the brokers about who the bidders would be, what the bids would be, and who would win.

The legal process will chew its way to the top of the pyramid, where the Wall Street upper echelon reside, closer to the syndicate helm. Bank of America did not act as the leader or organizer of the bid-rigging conspiracy, according to the DOJ. So far, BOA bank agreed to pay restitution and interest ranging from a tiny $8418 for the Missouri development finance agency to $6.2 million for Massachusetts. In the next several weeks, the door is open. Over 20 state attorneys general and BOA will cooperate to identify municipalities who have claims against the bank. The lead position in ferreting out complainants is the California Govt legal crew. The leniency for BOA will continue into other civil restitution when they sign up in formal complaints. See the Bloomberg article (CLICK HERE). The problems will turn much worse for BOA when the deeply damaging WikiLeaks exposures come next.

Three former UBS bank executives were indicted last week in the municipal bond rigging fraud case in focus. Peter Ghavami, Gary Heinz, and Michael Welty were charged with six counts in US District Court in New York. Antitrust chief Christine Varney said, "The individuals charged today allegedly participated in complex fraud schemes and conspiracies that subverted competition in the market for municipal finance contracts and deprived municipal bond issuers of the benefits of their investments." The USDept Justice is making great progress in its four-year criminal investigation of the $2.8 trillion municipal bond market. None of the three from UBS is expected to be cooperative. They will all flee or fight. See the Bloomberg article update (CLICK HERE).

◄$$$ JPMORGAN IS ACCUSED OF COMPLICITY WITH THE MADOFF PONZI SCHEME. THEY ACTED AS THE MADOFF BANKER IN GIGANTIC FRAUD. ALSO H.S.B.C. IS ACCUSED IN A SEPARATE COMPLAINT AND GIANT CLAIM. THE ANGLO BANKS ARE BEING SURROUNDED FOR POPULAR ATTACK. $$$

Irving Picard will become a household name soon. He was appointed as trustee by a New York bankruptcy court to recover investor funds from the ransacked depleted Madoff Fund, an uphill task. The Madoff trustee Picard filed a lawsuit against JPMorgan on December 2nd, seeking $5.4 billion in damages plus $1 billion in fees. Picard counsel David Sheehan said, "JPMorgan was willfully blind to the fraud, even after learning about numerous red flags surrounding Madoff. JPMC was at the very center of that fraud, and thoroughly complicit in it. JPM has designated virtually all of their information as confidential. We intend to move to have the complaint made public as soon as possible." So far, Picard has recovered $1.5 billion for Madoff creditors, firms which lent to the Ponzi artist who worked with USGovt protection and Wall Street complicity. Recovered funds from legal action will be returned to Madoff victims on a pro-rata basis. Think a few pennies per dollar. The response from the criminal HQ at JPMorgan Chase responded with claims of blatant distortion, news headline grabs, and denials of knowledge or assistance to Madoff. They used words like irresponsible and over-reaching. Picard filed a separate complaint at the same time seeking $3.14 million from an unidentified company, formally cited as XYZ Corp. The complaint was filed under seal in US Bankruptcy Court in Manhattan. Picard called JPMorgan the primary banker for Madoff. The lawsuit is the second biggest filed by Picard in the Madoff bankruptcy case, behind a $7.2 billion claim made against Jeffry Picower in May 2009, who soon afterwards died. See the Bloomberg article (CLICK HERE).

In a double-barreled attack, Picard as trustee announced a lawsuit against HSBC out of London. The complaint on December 5th seeks $9 billion in illicit earnings and damages, filed in the US Bankruptcy Court for the Southern District of New York. Picard accused HSBC of key complicity in funneling over $8.9 billion to Madoff through a dozen feeder funds based in Europe, the Caribbean, and Central America. He also says it ignored warnings from its own accountants that the Madoff phenomenal investment record was suspect. See the FoxNews article (CLICK HERE). It would be naive to believe that JPMorgan, the custodial of the fraud-ridden SLV silver exchange traded fund, and HSBC, the custodial of the fraud-ridden GLD gold exchange traded fund, engaged in isolated massive fraud. Their fraud is laced across mutual funds, mortgage bonds, USTreasury Bonds, municipal bonds, insider stock trading, narcotics money laundering, precious metals funds, and much more like USDept Treasury $trillion role programs. No chamber has been spared of profitable fraud. These two banks are integral parts of the US & London criminal banking cartel, the financial arm to a broad syndicate.

◄$$$ BIG USBANKS AND USGOVT PREFER FORECLOSURE TO HOME LOAN MODIFICATION. THEY EARN SIGNIFICANT PROFITS FROM LEGALIZED COLLUSION WITH THE F.D.I.C. IN PROCESSING HOUSEHOLD MISERY. THE USGOVT HOME LOAN PROGRAMS ARE A SHAM USED AS POLITICAL COVER. $$$

The USGovt and Wall Street are running a grand mortgage loan scam right under our noses. Home foreclosures are much more desired than home loan modifications, since profitable to the big US banks. Therefore nonsensical deceptions and official justifications are put forth in public stories, when the real story is that sweetheart deals are set with the Federal Deposit Insurance Corp for massive large scale profiting for the big US banks. My analysis has stressed how the mortgages are not modified in meaningful volume in order to prevent exposure of massive bond fraud, from duplicate property titles within bonds, missing property titles, even counterfeit bonds without legitimate titles. The FDIC deals with the big US banks close the loop with a powerful incentive. The banks push the foreclosure process from a big profit incentive. Banks have little no incentive to modify a home loan with an inherent loss suffered, when a ripe profit can easily be plucked with FDIC collusion. They pay lipservice to official modification scam revolving doors conducted by the USGovt. Take for instance, IndyMac Bank, which was shut down in July 2008. Its buyer was One West Bank, owned by Goldman Sachs, investors from a George Soros group, and the John Paulson fund. The mortgage portfolio of ruined loans was purchased at 70% of book value. The FDIC then bought the loans from One West, reimbursing them with 80% payment of the loss, but from the original book value, not the discounted price. A typical deal bagged 25% to 30% profit to One West in a short sale after foreclosure. The homeowner was often left with a promissory note. The bank suffered no loss at all, in fact a hefty profit. The process is ongoing, in parallel to the pointless futility of the USGovt revolving doors with HOPE NOW banners. The USGovt sponsored programs are a ruse, while the real deals are struck with FDIC collusion to generate significant bank profits. The USGovt deficits spiral upward in the process. See the YouTube video from Fierce FreeLancer (CLICK HERE).

USECONOMY IN QUICKSAND

◄$$$ THE CHOICE AGAIN IS STIMULUS INSTEAD OF DEFICIT REDUCTION, DURING A TIME OF SEVERE ECONOMIC RECESSION THAT GOES UNRECOGNIZED, A RECESSION OF 7% IN BASIC TERMS. A WILD CARD IS THE PROPOSED OBAMA ADMIN PLAN THAT IS WORKING TOWARD CONSENSUS ON MANY TAX FRONTS. IT IS TAKING SHAPE, ALTHOUGH HEAVILY DEBATED. THE STIMULUS IS REAL BUT SMALL. THE SAFETY NET IS FRAYED BUT STILL IN PLACE. THE BUSINESS TAX BREAK IS PERFECT BUT TWO YEARS LATE. MORE THAN A WILD CARD, THE TAX PLAN MIGHT BE THE WATERLOO FOR THE OBAMA ADMIN. $$$

The Obama Admin has proposed a 10% reduction in the federal workforce, as part of his belated deficit reduction plan. Excluding postal workers, 2.1 million executive branch civilian employees report to work each week. A 10% reduction would be 210k jobs axed. Now that the USGovt deficits have been three years running over $1.4 trillion, the politicians in clown suits have decided to act seriously in spending printed money to cover the yawning gigantic debts (debt monetization). City and state cutbacks could easily result in another 400k in nationwide job cuts. The significant government bloat must come down much more. The civilian workforce must grow, but it will not for a long time. The current consensus agreement on the tax package calls for the Bush tax cuts for the wealthy to continue two more years, at a cost of $60 billion. Also, the 15% capital gain tax will remain in place, with an estate tax of 35% considered punitive. The payroll tax holiday, a favorite among the masses, will permit $120 billion to remain in household pockets. The extended unemployment benefits will continue in extended form, costing another $60 billion. The Alternative Minimum Tax nightmare has been given patchwork treatment through 2011 and 2012, not properly addressed yet. A nice new tax measure, one the Jackass proposed for a few months, is the 100% business expense writeoff. All equipment costs can immediately be written off, instead of the usual 3 to 5 years. It should actually result in some hiring, although its effect will be limited during a powerful deterioration phase for the USEconomy. The writeoff rule should result in $200 billion in business savings, applied to a whopping 1.5 million businesses. The Tax Plan might not be approved by the USCongress, in a fit of austerity, good judgment, or admission of policy defeat. The crowning blow to the Obama Admin could be this tax plan, yet another massive deficit producer. President Obama left Bill Clinton on the podium for 20 minutes to explain the plan's rationale, an irresponsibile gesture without precedent. This is game over, possibly, for US leadership, a Waterloo.

The housing market and financial sector declines in progress have extraordinarily powerful momentum and endurance. Estimates above in the tax plan effect were provided by Macro Economic Advisors. To be sure, the USGovt continues to make active choices in favor of stimulus in whatever form instead of budget deficit reduction in any type. The federal deficit continues to spiral upwards, sure to be on public display early in 2011 when the debt limit is met, then debated, in global view. The comparison of actual full-year nominal (unadjusted) GDP versus a year ago is minus 7%, more the reality. The simplest most accurate way to measure the economic growth is to compare nominal activity versus the same quarter a year ago. It avoids all the deception, lies, and amplifications from dealing with consecutive (sequential) quarterly nonsense. The USGovt favored method involves errors from sequential calculations coupled with the distortions from inflation and hedonic (value) adjustments to be then multiplied by four to achieve absurd claims of slow growth, when deep recession is in progress. Even more simplicity and common sense is used to compare one year's performance versus the previous year, without any adjustments, shown below in the astonishing graph. The USEconomy is mired in a powerful recession, bordering on depression. The catapult into the abyss occurred in the year 2009, coincident with the death of the US banking industry. Let's not mince words!!

◄$$$ THE USGOVT PRICE INFLATION INDEX IS ABSURDLY DISTORTED. PITTED AGAINST THE COMMODITY COMPONENTS, IT IS LAUGHABLY INCORRECT, SUBJECT TO DERISION FROM CHILDREN. MANY FORECASTS CALL FOR 1% CORE C.P.I. OUTCOMES FOR 2011, WITH CONTINUED NORMALCY. THE PROPAGANDA IS AN INSULT TO THE PEOPLE, WHO KNOW VIVIDLY OF UNIFORMLY RISING PRICES. $$$

That tiny bar on the far right is the official Consumer Price Inflation index, which might reflect the price structures on the planet Zenon but not on planet Earth. What are shown to accompany the CPI serve as important commodity components. Other rising items are insurance, health care, utilities, city fees, tuition, telephones, shipping costs, and roadway tolls, which are all up significantly in the last year. This is a great chart, thanks to the Casey folks, that provides excellent exposure of the cockeyed CPI. The Producers Price Index would be better to compare and contrast with the commodity items. The PPI is also in the absurd 2% to 3% range, when all components are zooming upward sharply. Many forecasts call for 1% core CPI outcomes for 2011, which is madness wrapped in delusion, seeping with incompetence and overrun by compromise. The economists in clown suits at the Federal Reserve Board of San Francisco actually put in written documents (therefore accountable professionally) that the 'Other CPI' measure, namely the personal consumption expenditures price index (PCEPI), rang up at +1.3% over the last 12 months. This second standard price inflation metric is derived from personal income data published by the USDept Commerce Bureau of Economic Analysis. They call the PCEPI a relatively low level of headline inflation, but by no means the lowest reading ever recorded. See the Federal Reserve article (CLICK HERE). The absurdly low figure permits the USGovt to reduce nominal economic activity by a mere 1% to 2% on a continual basis, and thereby badly over-estimate the GDP growth. They should reduce the bare nominal growth by at least 6% and perhaps 8% to account properly for inflation. Hence, the ongoing USEconomic recession of minus 5% or worse is called slow growth at plus 2% to plus 4%. Their deception is an abomination, consistently applied for several years.

◄$$$ THE JOBLESS RATE IN THE USECONOMY IS AGAIN TRENDING HIGHER AFTER FAILED ATTEMPTS AT STIMULUS AND CONTINUED DANGEROUS HOUSING MARKET DECLINE. THE GENERAL DETERIORATION HAS YET TO BE RECOGNIZED. QUANTITATIVE EASING WILL ACCELERATE THE DOWNWARD MOMENTUM IN THE LABOR MARKET, NOT EASILY HIDDEN. $$$


The jobless rate is moving higher. The official BLS remains under 10%, but it only tracks those receiving state unemployment insurance. As the ranks of the insured exhaust their benefits, the official jobless rate is kept down, ruining it as an accurate measure. The official U-6 measured by the BLS is a small breath of fresh air to see. The USGovt realizes that hundreds of thousands of workers are depressed and on the sidelines, discouraged after several months of failed efforts to land a job. Twenty years ago, my brother searched for a law firm post over two years, endured fifty interviews, before he quit and changed professions to becoming a private math tutor. Most people quit the effort and go discouraged after one year of search. The real ugly in the chart is the resumed rise in the SGS alternative jobless rate. They count able bodied people who want work and cannot secure it, a novel concept. Since the beginning of 2009, the SGS jobless rate has been over 20%, now at 22.5% and rising. Curiously, its rise is not joined by the other two tainted statistics. Paradoxically, the extension to the extended unemployment benefits argued in the USCongress will lift the official U-3 statistic, as participants will not fall off the welfare wagon. Except for agricultural sector comparisons, the USEconomy labor market is equally depressed as during the Great Depression.

◄$$$ THE NOVEMBER NON-FARM JOBS REPORT WAS SICKLY PATHETIC WEAK. EXPECTATIONS WERE FOR BETWEEN PLUS 130K AND 150K. THE FINANCIAL MARKETS HAD BEEN BUSY DIGESTING THEIR OWN PROPAGANDA. THE REALITY IS AN EXTREMELY BAD LABOR REPORT. RATHER THAN ADJUSTED TO REALITY, THE POWERZ WILL TWIST EXPECTATIONS AND REKINDLE NEW FALSEHOODS. $$$

The November Jobs Report came in extremely feeble with just 39k new jobs supposedly created. The reality is probably an order of magnitude worse, if cockeyed adjustments are removed. The report was an unblemished disaster. Even the 50k in private sector hiring was way worse than expected. The redefined jobless rate rose to 9.8%, enough to threaten the important 10% level again where alarm bells will ring. No gains were logged either in workweek hours or earnings. Even the vaunted retail sector shed an amazing 28k jobs, going into the biggest shopping season of the year, something almost never seen. Retail activity is brisk, but purchases are not, unless at heavy discount, which harms job security of the sales clerks. The consensus among poorly educated and badly misguided US economists was between plus 130k and 150k on the headline number, but with the whisper number as high as perhaps 200k. The weekly jobless claims distortions had set up the financial sector for good news, not to come. The nonsense about the ongoing economic recovery has been totally contradicted by the labor market, since a recovery bears the direct fruit of job growth. A built-in upward bias exists in the BLS data. They typically over-estimate each month by 200k to 250k, due to hack methodology like the Birth-Death Model. This month, the BD Model accounted for minus 8 thousand jobs. The annual benchmark revisions remove the nonsense, but they do so with such emphasis into the past that the present distortions are given little attention in a recycle process of deception. See the Business Insider article (CLICK HERE), and the Bureau of Labor Statistics (CLICK HERE).

◄$$$ THE FINANCIAL PRESS AND USGOVT EACH CELEBRATED THE LOWER JOBLESS CLAIMS TWO WEEKS AGO. BUT AGAIN THE SEASONAL ADJUSTMENT DEVICE CAN TAKE THE RESPONSIBILITY, NOT FEWER JOB CUTS. $$$

The USDept Labor has a knack for lowering the bar of expectation on household misery. In gearing up for the holiday season, the job cuts are typically not so robust. For the week of November 20th, a case in point, the headlines celebrated the big decline in jobless claims. It heralded the lowest count since July 2008, great tidings. It was all in the seasonal adjustment device, the handy abused tool. A few years ago, the metric mark used to be 300k jobless claims for turning the corner into favorable territory. Then it was 500k imposed by fiat last year. Now it is 400k.  The jobless claims without benefit of seasonality tell a more accurate story. The week of Nov 13th had 409.5k jobless claims, then the week of Nov 20th had 462.5k, a jump and surely not a decline as reported. Then the week of Nov 27th had 410.6k, explained by the US Thanksgiving holiday week. The climax was a huge increase of 169k on December 4th to reach 582k in jobless claims (without seasonal adjustment), the highest level since January 16th. The chart tells a clearer story of stable jobless insurance claims. The total continuing state claims count is 3.854 million as of Nov 13th, down from 5.057 million a year ago. However, the Extended Unemployment Claims, a program enacted in 2008 to handle the hidden great depression, had 3.944 million participants. See the John Galt article (CLICK HERE). The USGovt relies very heavily upon constantly changing seasonal adjustment techniques that suit their needs and tell whatever story they choose. Its device should rarely be altered in order to reflect the stable nature of seasonal change.

John Galt describes the deception well in plain detail. The standard USGovt method is based again of hokey models without substance. Grand methodology differences exist between the basic method and the adjusted method, which contains a fallacious model. He wrote, "The dirty secret the bubbleconomists, stock hucksters, and propagandists do not want you to know is that the Seasonally Adjusted number is based on a model which is keyed off the prior year's data and calculates what the theoretical job losses are, based on the reporting data from the state. Results are derived at by something similar to the Birth/Death model used by the BLS. In other words, it is made up to be convenient and subject to the approval of the White House Chief of Staff. On the other hand, the Non-Seasonally Adjusted numbers consist of the raw data reported directly from the states on a weekly basis of which the deadline used to be Tuesday afternoon at 4 pm. This number [by contrast] reflects actual bodies, humans, and not seasonally-adjusted people who may or may not exist. That increase in NSA claims and the revision upward reflects a massive deterioration which usually does not occur until after the Christmas Retailers begin to lay off temporary hires and manufacturing facilities move into shut down mode, generally the Friday before Christmas week. If this trend continues, we will see well over 1.8 to 2 million new claims for unemployment for December of this year. As January rolls around, a statistically horrible month for first time claims, the idea that this translates into a decline in the monthly unemployment report is inevitable. If not during the first cut, at least as future revisions are issued." Labor market conditions are growing worse!!

◄$$$ LARGE CORPORATIONS INDICATE A NOTABLE RISE IN LAYOFFS, AS CITED BY THE CHALLENGER REPORT. THEY ALSO CITED MUCH FEWER JOB HIRES. SMALL BUSINESS GAINS CANNOT COMPENSATE FOR THE LARGE SITE SECTOR. $$$

In a rare public article that covers the respected work of Challenger, Gray & Christmas, a contrasting picture is presented. Some divergence exists between its report and the ADP payroll report which showed optimism with 93 thousand jobs added in November, the largest gain in three years. The Challenger report cited large corporate layoffs announced in November to total 48,711 jobs, the greatest in eight months. John Challenger said, "Job cuts that have been concentrated at the state and local level could expand to include federal workers in the new year. Other sectors have seen significant declines in job cuts this year and, at the moment, there is little evidence of a possible resurgence in 2011." The same report cited large employers announced plans in November to hire 26,012 workers, a significant decline from the 124,766 in the prior month. Much of the big drop was attributed to seasonal hiring factors, they believe. Retail businesses led the gains, planning to add 15,900 workers. Government and non-profit agencies have announced plans shed 138,979 workers this year, which is 177% more than the 50,168 firings by the pharmaceutical industry, the next biggest sector to cut jobs.

A pay freeze will be imposed to cover two million federal workers in the next fiscal year. The biggest local cuts are scheduled for New York City, which faces a $3.3 billion deficit next year. The Big Apple will cut its workforce by more than 10 thousand people over the next 18 months, according to Mayor Bloomberg's office. A combination of cuts and attrition will reach the desired reductions. The typical wind-down from the holiday season, together with federal and state/city worker cuts, would jettison the unemployment rate back over the 10% level. Given the rising interest rates, burdensome health care costs, and weak household balance sheets, small business cannot be expected to compensate for large firms.

◄$$$ THE NOVEMBER NON-FARM PAYROLL DATA WAS FLAT. THE LABOR MARKET HAS FALLEN AND CANNOT GET UP!! THE CENSUS HIRE DISTORTION IS IN THE PAST. SO LETHARGY AND SLUGGISH DETERIORATION REMAINS. TO CLAIM EMPLOYMENT IS RISING IS AN EXERCISE IN FANTASY. $$$

Refer to the Shadow Govt Statistics, borrowing a few of their adept comments. The level of payroll employment stands lower than a decade ago, despite the US population growing by more than 10% during that time. The ruinous condition of the USEconomy, with grotesque debt insolvency, wretched impairments like an absent manufacturing core, and dead banks, prevent anything remotely resembling a recovery in business activity. The blip up in midyear 2010 was attributed to the Census project hiring, all temporary and minimum wage. The red line reflects the anticipated benchmark revision due in early 2011, whose reductions are as reliable as they are indicative of a corrupt method. The SGS analysis concludes that the industrial production numbers and upcoming payroll revisions suggest that the timing for an official double dip recession will be declared to have begun in the August/September 2010 timeframe. The outgoing Lawrence Summers warned last week of the double dip, a sign of his failure. The SGS group expects the upcoming benchmark revision to feature a reduction in current employment levels by over 600 thousand. As of November 2010, the official payroll data contends that the USEconomy increased by 951 thousand jobs (=0.7%) since the December 2009 bottom. But their methods use the constantly altered (and therefore corrupted) seasonal adjustments. The coefficients are massaged to suit their political needs, in departures from valid analysis, if not statistical fraud.

◄$$$ GENERAL MOTORS HAS USED BRUTE FORCE TO STUFF THE DEALERSHIP CHANNEL WITH INVENTORY. THE STOCK PRICE IS REGARDED BY THE USGOVT SPONSORED INVESTOR AS A SUCCESS MEASURE. IT IS MORE LIKE ANOTHER DECEPTION AFTER  HEAVY HANDED MANAGEMENT. LATER, THE STOCK PRICE WILL FALTER, AFTER THE USGOVT STOCK DUMP IS LARGELY FINISHED, AND THE UNEASY DIGESTION PROCESS GIVES OFF HEARTBURN. $$$

The USGovt is too quick to proclaim a success in its rescue of General Motors, often called Government Motors in ridicule. Hidden deep in the disappointing November car sales report is the significant inventory rise, a tumor on the greater balance sheet. GM sold 168,739 cars in November, a 11.4% increase from November 2009, during dark disastrous times. The figure came in well below the hyped expectations of a 13% rise. Ugly is the sharp linear rise in the GM car inventory cramming at tens of thousands of dealer locations. It is unsold inventory at almost 537k units. The chart attests to blatant channel stuffing. So the parent corporation sold over 11% more cars, but they sit unsold on dealer lots, who were coerced to accept the higher allotment. The USEconomy is experiencing widespread inventory growth. We see a follow-up effect of gross flatullence after the blockheaded Clunker Car Program meal. Witness the near record inventory accumulation that provided a hollow boost to economic numbers. Of course, no strength exists.

The GM executive orders assured an aggressive channel stuffing program whereby it offloaded over 110,000 cars since July onto dealer lots. Meanwhile, dealers enjoy floorplan leases subsidized by taxpayers. Liquidation of the cars at reduced prices and 0% loans will come later after the congame conducted against shareholders. The USGovt is busy selling its GM stock at a profit with heavy publicity of a success. If the October GM inventory level were held flat, the sales data would have recorded a mere 2.4% rise in November sales, no cause for celebration. The stock price for GM DMM GETCO would be forced to endure downdrafts. The pendulum has swung to each extreme. The dealer inventory level was 385 thousand at the end of 2009. It has risen with alarm to almost 537 thousand at the end of 2010, a huge 40% jump. That is not progress, but rather bloat, evidence of USGovt mismanagement already. See the Zero Hedge article (CLICK HERE).

◄$$$ PROFLIGATE AMERICAN CONSUMERISM HAS MET HARSH INSOLVENCY REALITY. A QUICK DEBT SURVEY REVEALS A CRIPPLED POPULATION. THE DEBT BURDEN AND ITS BANKRUPTCY AND INSOLVENCY AFTERMATH ARE A NATIONAL TRAGEDY. REVERSAL OF THE INDEBTED POSITION IS A SLOW BLEED. $$$

The Burning Platform has provided a nice quick survey of the deeply cratered debt landscape and its burden. Austerity will become a standard feature of that landscape, since the home equity ATMachine has been removed for usage, while job security with income vanishes too. Consumer credit outstanding stands at $2.41 trillion, roughly the same level as in early 2007, but still significantly higher than the $1.5 trillion in year 2000, a 60% increase in ten years. Personal income has risen from $8.4 trillion to $12.6 trillion over this same time frame, if one believes the rubbish from USGovt agencies. Americans have substituted debt for income in order to maintain a certain unsustainable lifestyle, often in competition with neighbors and peer groups. A mass delusion of wealth extended from the housing asset bubble and its associated mortgage finance bubble. Spending habits changed, difficult to reverse. Wind-down of the debt incurred is even more difficult unless bankrutpcy is declared. The peak in US consumer debt of $2.56 trillion in 2008 will forever be etched in history of the national folly. Consumers have not been cutting back and paying off debt, as the mainstream media reports. Non-revolving debt includes car loans, student loans, mobile home loans, even boat and aircraft loans, which remains significant and unaddressed. Non-revolving debt stands at $1.6 trillion, matching the record high set in 2008. Credit card debt has been reduced from $957 billion to $814 billion, from defaults, not payments. The large Wall Street banks have written off $20 billion per quarter in credit card debt losses since early 2009, accounting for the entirety of the reduction. The consumer bulge is still an American fixture. Worse, the consumer metric is monitored for supposed health of the USEconomy and the households. The financial news networks have learned nothing. What folly!

Details are ugly. The average credit card balance per household at $15,788 stands a little less than half the average annual wage. In all, 609.8 million bank credit cards are held by US consumers, with a 13.01% credit card default rate. In 2006, the United States Census Bureau determined that nearly 1.5 billion credit cards were in use by Americans. Put that in perspective. Imagine them to form a stack of credit cards that would extend 70 miles into space. The abuse of credit cards is rampant, as penalty fees from credit cards totaled about $20.5 billion in 2009. The national average default rate in January 2010 stood at 27.88% for Americans. Personal bankruptcy filings totaled 1.40 million in 2009, a rise from 1.09 million in 2008. Bankruptcies in 2010 are on pace to exceed 1.6 million. Over 58 million adult Americans, equal to 26% of the population, admit to being late in prompt bill payments. The federal role model is wretched beyond words. For perspective, the USGovt is the worst example. It goes $5 billion deeper into debt every day. Competent analysts anticipate the USGovt deficit to remain stuck above the $1 trillion level for the next decade. As Howard Davidowitz says in plain terms, "In other words, we are bankrupt." See his ugly truth YouTube video (CLICK HERE).

HOUSING MARKET DISINTEGRATION

◄$$$ THE HOUSING MARKET FLOOR IS IN THE PROCESS OF CONTINUED DISINTEGRATION. EVEN WITH LOWER PRICES, THE PURCHASE OF FORECLOSED HOMES IS VANISHING, WHILE THE HIDDEN INVENTORY ACCUMULATES IN PILES ATOP PILES. AVENUES TO DUMP FORECLOSED HOMES ARE DRYING UP, ASSURING A DEEPER DUNGEON FOR BOTH THE HOUSING MARKET AND THE BANKS STUCK WITH THE DEAD ASSETS. THIS IS THE SPREAD OF DEAD FINANCIAL TISSUE IN AN ORGANISM LACKING CIRCULATION FROM AMPLE CREDIT. $$$

Chalk up another victim, an unintended consequence, from the terminated program by the USGovt to provide homebuyer tax credits. RealtyTrac reported that the market for foreclosed homes has practically vanished, and suddenly so. This is very big news, but not reported by the intrepid sleepy subservient hack US press. They are too busy citing some nonsense about a USEconomic recovery. Here are some details provided by the real estate tracking firm. Sales volume has plunged and price discounts are soaring. The volume of foreclosed home sales fell by 25% from 2Q2010 to 3Q2010, and fell by 31% from 2Q2009. The home price discount of homes in foreclosure versus those not in foreclosure has risen considerably. The discount was 26% in Q2 of this year. It was 29% in 3Q2009. It is most recently reported at 32%, a discount at five year high. Demand for ultra bargain properties has collapsed following the expiration of the homebuyer tax credit. RealtyTrac wrote, "Foreclosure homes accounted for 25% of all US residential sales in the third quarter of 2010. The average sales price of properties that sold while in some stage of foreclosure was more than 32% below the average sales price of properties not in the foreclosure process, up from a 26% discount in the previous quarter and a 29% discount in the third quarter of 2009."

Many details are gory ugly. Purchaser interest has evaporated as little or no purchasing power remains in the lower and middle sections of the housing market. A total of 188,748 homes were in some stage of foreclosure in 3Q2010 from loan default, on track for auction sales or bank owned inventory (REO), to be sold to third parties. This figure has decreased in recent months. The average sales price of properties in some stage of foreclosure was $169,523 but in a steady decline of dangerous proportions. Banks are recovering less and less. An anomaly has occurred in the non-foreclosed home market. While the average price of non-foreclosed homes posted a slight gain in Q3, the volume decline was very significant. RealtyTrac wrote, "The average sales price of properties not in foreclosure was $249,721, up 6.42% from the previous quarter and up 4.36% from the third quarter of 2009. Sales volume of non-foreclosure properties decreased 29% from the previous quarter and nearly 31% from the third quarter of 2009." See the Zero Hedge article (CLICK HERE).

If the discounted market has vanished, the regular conventional market must be in tatters, in total shambles. The dead assets are clogging the banking system, going through a decomposing stage, rotting in place, stinking up the joint. Yet on the other hand, perhaps foreclosed homes have suffered vandalism damage, even sabotage from previous angry owners. If banks cannot dump their stench inventory gathered from the foreclosure process, they will surely drag down the entire market while suffering deeper death experiences themselves. The inventory is rotting on the bank shelves. In my opinion, the already dead banks are in the process of dying again, like a second tier morgue beneath the first level where zombies reside and move about under the disguise of life forms. The zombies are in effect slowly dying, again. Again, this is the spread of dead financial tissue, necrosis, the morphological changes indicative of cell death caused by progressive enzymatic degradation. The banks are decomposing gradually, and producing a balance sheet stench the nation has never seen in its entire three centuries of history!!

◄$$$ THE HOUSING INVENTORY REMAINS A BULGE OF 2.1 MILLION UNITS. ALTHOUGH REDUCED, IT IS LARGE ENOUGH TO SUPPRESS HOME PRICES FOR SEVERAL YEARS. THE HIDDEN INVENTORY IS LAYERED AND LYING IN WAIT. $$$

The local realtor Multi-List inventory numbers show a 3.2% national drop in active listings from September to October on www.Realtor.com. The data overlooks layers of hidden inventory held by banks and financial firms, since not within the visible system. The real estate industry estimates a shadow housing inventory to be 2.1 million units, which equates to about 23 months of supply. The normal inventory level is 7 months of supply. In no way is the housing market stabilizing. It contends with tumors of hidden bloated inventory. My forecast is for home prices to fall to levels 15% to 20% BELOW construction costs before this nightmare ends. Housing and mortgages will kill the US banks, amplified by bond fraud and contract fraud, littered with the disruption of lawsuits. The big US banks will be buried when the nation takes a firm step into the Third World. The USEconomy, which the banks no longer serve adequately, either from syndicated bond speculation or credit derivative distraction or absent reserves, will assure the path to the dead zone for the banks like a two-ton pair of shoes.

Confusion (if not chaos) in the mortgage foreclosure process will continue to render the housing market in disarray. Home purchases are 30% linked to foreclosures, but a growing number are working toward court decisions. The big US banks push for foreclosure, which churns properties into the supply line while the courts take them out of the supply line. A multi-faceted storm of historical proportions will continue to heap wreckage.

◄$$$ GOOGLE HAS PROVIDED A SATELLITE VIEW OF THE AMERICAN FORECLOSURE NIGHTMARE, LIKENED TO A MEASLES EPIDEMIC, OR BETTER YET TO CANCER. CLICK ON YOUR REGION THEN LOCALITY TO SEE THE EXTENT OF DAMAGE. NO HOUSING MARKET RECOVERY CAN BE SEEN ON THE HORIZON FOR AT LEAST TWO MORE YEARS. $$$

Google Map has expanded the tools for people to drill down into granular detail. A capability made available since 2008 can be used to examine your region or metropolitan area, even neighborhoods. Home foreclosures and their sales can be viewed with a magnifying glass for inspection. A shortcoming is that the millions of REOs (bank owned homes) that have been seized and/or sold are not shown, just foreclosure sales. Here is a step-by-step procedure for Google Maps Foreclosure Listings:

1.      Punch in any US address into Google Maps

2.      Your options are Earth, Satellite, Map, Traffic and... More (select More)

3.      The drop down menu comes. Check the box option for Real Estate

4.      The left column will give you several options (select Show Options)

5.      Check the box marked Foreclosure.

The maps reveal an entire nation plagued with foreclosures and their associated sales. It is a stark shocking graphic depiction of the extreme level of inventory in the United States. To think the housing market is in recovery is pure folly, a grand departure from reality, and the subject of political disinformation. The housing market is still many years away from being healthy or in balance. Supply must be cleared by the market, which is it not. Lower prices are coming. See the Ritholtz article (CKLICK HERE) which shows a zoom to examine the extent of plague in Florida, one of the biggest regional disasters. The link for each Google Map is below each screenshot.

◄$$$ COMMERCIAL PROPERTY PRICES PLUNGED IN OCTOBER. BANKS ARE TOSSING IN THE TOWEL FINALLY, EARLY IN THE PROCESS. HMMM, OR DID THEY? A CONFLICTING REPORT COMES FROM A DIFFERENT PRIVATE SOURCE. MY VOTE GOES WITH THE PLUNGE VIEWPOINT, SINCE CONSISTENT WITH THE RESIDENTIAL PROPERTY MARKET SITUATION AND BADLY STRUGGLING HOUSEHOLDS AND A STUCK LABOR MARKET. $$$

The USEconomy's dependence upon assets for wealth generation has still a long way to reverse. The process of de-leveraging is early in its natural course. The tech-telecom stocks rendered much damage in 2000 and 2001, but nothing compared to the systemic wrecking ball banging into asset structures throughout the USEconomy from 2007 through 2011. Every type of property asset was puffed up. The residential housing has come down signficantly, with still more room to fall. The commercial decline is well along in its decline. New data from CoStar indicates that commercial real estate pulled back sharply in October after a few positive months. Data is sketchy though from CoStar, with a release due soon. The news dovetails perfectly with what is going on in the residential market, and thus adds credibilty to the parallel. The residential sector has faltered since the summer gains directly attributed to the federal buyer tax credit. Wretched condition of households and the labor market add credence to the commercial decline. See the Business Insider article (CLICK HERE).

A conflicting report came from the independent research firm Green Street Advisors. They report a 2% rise in commercial property values in November over the previous month, and that prices are only 19% below peak values. Green Street claims commercial prices are up 32% from their recent lows as investors flock to higher yield investments. If true, then half the value that was wiped out from 2007 to 2009 has been restored. They maintain the Green Street Advisors Commercial Property Price Index. Prices hit a peak in August 2007 but plummeted by 38.3% through May 2009. The attraction supposedly is the higher offered yields when compared to fixed income investments that are ultra low on yields. Higher risk accompanies commercial real estate investments since the property cannot be sold quickly and the sales price is unknown. That seems to be a contradiction, as managing director Michael Knott unwittingly declares. If unknown, then it casts doubt on the basis of their price index. Their index was flat in October. See the Reuters article (CLICK HERE). My conjecture is that the Green Street index is dominated by Real Estate Investment Trusts (REIT) whose securities have indeed risen. The rise in my view will be met with heavy losses later, in more bad speculation. Their index in question might be an investment security index more than a commercial property price index.

◄$$$ USHOUSING MARKET VALUE IS EXPECTED TO FALL BY $1.7 TRILLION IN THE FULL YEAR 2010. SINCE THE 2006 PEAK, THE NATION HAS LOST $9 TRILLION IN HOME EQUITY AND THUS ITS LARGE PIGGY BANK TO RAID AND SPEND. ALMOST ONE IN FOUR AMERICAN MORTGAGE HOLDERS HAS NEGATIVE HOME EQUITY. EXPECT HISTORICAL RECORDS TO BE SET IN THE UNITED STATES FOR HOME PRICES TO GO WELL BELOW CONSTRUCTION COSTS. $$$

The total stock of US housing is expected to have dropped by $1.7 trillion in year 2010, almost 70% more than the previous year. This estimate is according to Zillow, a provider of home price data. More than $1 trillion of the home value decline this year occurred in the second half, following the tax credit expiration (accomplished nothing). Foreclosures are rising fast, unemployment is chronically at work, and the homebuyer tax credit is in the past. The decline in year 2009 was $1.05 trillion. Zillow reported the total total market decline across the United States since the June 2006 peak to be a staggering $9 trillion. More homeowners are being pushed underwater each month with ongoing price declines, as their home loan balances begin to exceed their home equity.

Former USFed Chairman Alan Greenspan is on record as being extremely concerned that the next 10% in home price decline will capture many million more Americans, given the huge number of homeowners who sat on the edge of insolvency by summer 2010. The latest figure is 23.2% in 3Q2010 for homeowners saddled with mortgages in negative equity, a rise from 21.8% at the end of 2009. The future prospects for homeowners is bleak. Stan Humphries is the chief economist at Zillow. He said, "With foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief. Government incentives can only temporarily hold back the tide." This is an endless bear market made worse by an insolvent banking system. The missing piece is solid industry and legitimate income, a fact that corrupted clueless clowns operating at economic counselors cannot possibly comprehend. All they preach is putting money into the hands of consumers, even if from a dole or printing press. Utter heresy, utter disaster!!

The National Assn of Realtors announced in late November that housing demand has slumped since the start of the year, the USGov tax credit having expired. They cited the stubborn 10% unemployment rate in their assessment. Sales of existing homes in October fell to an annual pace of 4.43 million, compared with 5.98 million a year earlier. The annual average was 5.81 million over the past decade. The median price was $170,500, only slightly lower than the $172,000 average a year ago. With an entire mountain range containing unsold bank owned inventory, the median price no longer tells the story about the market wreckage and household ruin. Almost one quarter of the metropolitan areas tracked by Zillow realized gains in home values in 2010. The details are 31 metro areas with gains among the 129 tracked, and the gainers include Boston and San Diego. See the Bloomberg article (CLICK HERE).

Notice the hitch in US median home prices in the 1989-1991 recession and during the 1980-1982 recession. Also bear in mind that the US housing market suffered virtually no decline from 1992 onward. So in my view, a double pullback was in order. However, given the demise of the US banking industry under the weight of grotesque insolvency, this recession in housing will be almost endless. The bottom will be seen only when housing prices are at least 20% below construction costs. The bizarre wrinkle is that builder costs are rising. In my view, national records of historical proportions will be made concerning the depth of the price declines, with prices descending perhaps 30% below construction costs. A deep record is assured because of the economic damage and labor market devastation. The liquidation is going to be too great, while the available credit is going to be too limited. The story in England is not much different, with peak in 2006 and further declines coming.

The housing declines in the US & UK will occur without mercy and seem without end. But that is deserving, since the two Anglo nations boasted as paragons of financial engineering, having turned up their noses on industry as they each embraced war. The US & UK are homes to the banking crime syndicate, which killed their native economies in predatory manner. Inflation kills economies, always has, always will, a lesson the Anglo bankers and their attending economists refuse to learn since it is so profitable to manage the inflation machinery to the end when they control the government finance ministries at the same time.

Thanks to the following for charts StockCharts,  Financial Times,  UK Independent,  Wall

Street Journal,  Northern Trust,  Business Week,  Merrill Lynch,  Shadow Govt Statistics.