Is the dollar terminal?

[JMarsigli]

If we let pessimism paralyze us into inaction, nothing improves.
If we let optimism blind us from the truth, causing inaction, nothing improves.

JMarsigli, you are correct that we need to be optimistic, and we should probably focus a lot more on the good things than we do. However, like many things that are great to a point, it can be taken in the wrong direction.

Either we are in recovery or we are not. We can't say "I am being optimistic, and there IS some good news about the economy, therefore we must be recovering." I have seen you accuse Mummy and OI of being too pessimistic, ignoring the good news, and ignoring quotes from prophets that support your view.

My view is we're not in a death spiral. I don't see how the words of the prophet support or deny that. The Mummy in fact did either ignore all the good news I posted, or search for the most negative spin he could. At which point it was rather clear she is married to doom and gloom (especially following her end of the world 2011 prophecy, the spiraling downward statements, etc.), and so I switched to what I saw as appropriate prophetic counsel. I pretty much ignored everything the Mummy wrote for the last two+ pages. (Actually, I'll let you in on a little secret: I could make every one of the Mummy's points if I wanted to. I had read just about every source she posted, minus the zerotic hedge stuff, prior to the posting.)

However, you are being equally 'too optimistic' (optimistic to the point that you may not always be willing to hear the truth if it sounds pessimistic), ignoring the 'bad' news, and ignoring quotes from prophets that do not support your point of view. I hope I am getting the right point across when I say "too optimistic". As long as we don't get too comfortable and stop working for improvement or denying that something is a problem that needs to be fixed, we can't be optimistic enough. Once we go beyond that point though, we are counterproductive and are little better off than the pessimists.

What is true is true whether you are optimistic or pessimistic. What matters is seeing the truth and doing something about it, being optimistic (having faith) that our efforts will be worthwhile and that we are on God's side.

Well said. I disagree with you, however, and never said things were all rosy. I said we are not in a death spiral. OI put those words in my mouth, apparently to score more points, and I guess you've taken him at his word. Actually, I'm sure you read where I said it would be a tough slog for a few years (I said this 2x). So I guess I don't see how you can accuse me of ignoring the pessimism when I've put up some obstacles myself.

Why don't you give me the words of the prophets and show me what I've ignored rather than accusing me of doing so without pointing to any specifics. I've posted parts of 5 or so talks over the last couple of days, and have given a link to each of them. If you want to accuse me of it, and if you are actually being sincere, then please back it up so I can at least attempt to correct my errors. If you're sincere then I'll listen to you. OI is not. OI has been following me around offering various psychoanalyses, then asking for solidarity [out of the other side of his mouth]. I see no sincerity there and have responded accordingly.

Thank you.

Actually, Why did you chose to take issue with what I have written rather than the 3 or 4 who automatically wrote off the quotes I put up (and I was the only one quoting prophets, mind you), and mocked and ridiculed them? I'd think that would be more of a priority.

[give_me_liberty]

If we let pessimism paralyze us into inaction, nothing improves.
If we let optimism blind us from the truth, causing inaction, nothing improves.

JMarsigli, you are correct that we need to be optimistic, and we should probably focus a lot more on the good things than we do. However, like many things that are great to a point, it can be taken in the wrong direction.

Either we are in recovery or we are not. We can't say "I am being optimistic, and there IS some good news about the economy, therefore we must be recovering." I have seen you accuse Mummy and OI of being too pessimistic, ignoring the good news, and ignoring quotes from prophets that support your view.

My view is we're not in a death spiral. I don't see how the words of the prophet support or deny that. The Mummy in fact did either ignore all the good news I posted, or search for the most negative spin he could. At which point it was rather clear she is married to doom and gloom (especially following her end of the world 2011 prophecy, the spiraling downward statements, etc.), and so I switched to what I saw as appropriate prophetic counsel. I pretty much ignored everything the Mummy wrote for the last two+ pages. (Actually, I'll let you in on a little secret: I could make every one of the Mummy's points if I wanted to. I had read just about every source she posted, minus the zerotic hedge stuff, prior to the posting.) Actually, the way Mummy puts it is on the optimistic side when it is taken into account that these things preceed the Second Coming. He seems to keep this in view constantly, which is not that pessimistic. I haven't looked into Mummy's reasons for naming 2011 as the big year, so I am not sure about that, but it seems far from impossible that he is correct. I can see how you could take it as pessimistic if you haven't seen his posts on certain other threads though.

However, you are being equally 'too optimistic' (optimistic to the point that you may not always be willing to hear the truth if it sounds pessimistic), ignoring the 'bad' news, and ignoring quotes from prophets that do not support your point of view. I hope I am getting the right point across when I say "too optimistic". As long as we don't get too comfortable and stop working for improvement or denying that something is a problem that needs to be fixed, we can't be optimistic enough. Once we go beyond that point though, we are counterproductive and are little better off than the pessimists.

What is true is true whether you are optimistic or pessimistic. What matters is seeing the truth and doing something about it, being optimistic (having faith) that our efforts will be worthwhile and that we are on God's side.

Well said. I disagree with you, however, and never said things were all rosy. I said we are not in a death spiral. OI put those words in my mouth, apparently to score more points, and I guess you've taken him at his word. Actually, I'm sure you read where I said it would be a tough slog for a few years (I said this 2x). So I guess I don't see how you can accuse me of ignoring the pessimism when I've put up some obstacles myself. I realize that you didn't say everything was perfect, but as pessimistic as Mummy's information looks, it is more than plausible, but you seemed (to me) to dismiss it as too pessimistic. This is what I was referring to. Also, I didn't see where they ignored your quotes, only where they thought your interpertation was wrong and how they viewed the quotes instead.

Why don't you give me the words of the prophets and show me what I've ignored rather than accusing me of doing so without pointing to any specifics. I've posted parts of 5 or so talks over the last couple of days, and have given a link to each of them. If you want to accuse me of it, and if you are actually being sincere, then please back it up so I can at least attempt to correct my errors. If you're sincere then I'll listen to you. OI is not. OI has been following me around offering various psychoanalyses, then asking for solidarity [out of the other side of his mouth]. I see no sincerity there and have responded accordingly.
I apologize for not being more specific. I will post it at the end of my post, it is a long one. I admit there were less than I thought there were, so I was probably a little harsh on the part about ignoring the prophets. I apologize.
Thank you.

Actually, Why did you chose to take issue with what I have written rather than the 3 or 4 who automatically wrote off the quotes I put up (and I was the only one quoting prophets, mind you), and mocked and ridiculed them? I'd think that would be more of a priority. Again, I didn't see where they did this. I did have to skim past a couple of Mummy's longer posts for lack of time though, so if you could show me where they mocked and ridiculed the prophets, I would be happy to yell at them.

Ok, in retrospect, I was harsh on you for one post from Mummy with quotes from prophets and your one response (see below) in a 4-page-thread, so for that I apologize. That being said, I stand by everything else from my previous post. In addition to the quotes from Mummy, we also have many Biblical/Book of Mormon prophets testifying of the wickedness of society in latter days and the destruction that is imminent. No amount of optimism can change prophecy. We know that preceding the Second Coming are many destructions of many different kinds, and I don't see why an economic destruction can't be included with the others, and there is evidence as posted by Mummy that it will. While I don't know whether it is coming in 2011 or some other year, there are plenty of signs that the destruction and the Second Coming are right on top of us. A pessimist would focus on the destruction...an optimist would focus on what happens right afterward...

OK, here are your quotes:

Simple litmus test - Is Wall Street run by honest men? Is the government run by honest men? Is the Pentagon run by honest men? Is the banking system run by honest men? Is the legal system run by honest men?

Don't you think that's quite dogmatic? Americans have been saying pretty much the exact same thing for a good 150 years or so, but we keep on truckin'. Besides, I fail to see how owning a personal judgment meter will point you to the correct conclusion. I don't own one anyway, and choose not to judge the thousands of people in these institutions that I know nothing of.

(and yes, there are a lot of honest people in those institutions)


Yeah this time will be different right. Suppose the Nephites or those at Sodom and Gamorrah, along with everyone else in history, said the same things. Truckin' on borrowed money! We passed the debt saturation point (for the final time - i.e. no more extensions imho) in Q1 2010 witnessed by the negative GDP generated by every additional dollar of new debt.

I don't own the prophets but I do try to listen to them. Also entitled to the prompting of the Holy Spirit. Also have access to non-propaganda (knowledge/truth) via the internet in quantities unavailable for thousands of years. But by all means if you believe in the charade....don't let me cloud your view!

As for knowing nothing.....or in one word - Ignorance


Quote:
To become a son of perdition, one must sin against great knowledge. That is the sin of the greatest enormity. But the sin of the greatest frequency is ignorance. That is, not to know in the first place. The religion of Jesus has always suffered more from those who did not understand and those who did not care than from those who opposed. It is largely our ignorance that stands between us and our blessings.

Through the prophet Hosea the Lord said, “My people are destroyed for lack of knowledge: because thou hast rejected knowledge, I will also reject thee, that thou shalt be no priest to me: seeing thou hast forgotten the law of thy God, I will also forget thy children” (Hosea 4:6).

The Lord also talked to Isaiah about the sin of ignorance: “Therefore my people are gone into captivity, because they have no knowledge: and their honourable men are famished, and their multitude dried up with thirst” (Isa. 5:13).

Then upon the cross Jesus said, “Father, forgive them; for they know not what they do” (Luke 23:34). One of the sins of the Romans at the crucifixion of Jesus was the sin of ignorance. As Jesus himself said, they didn’t understand. Pilate didn’t know the real identity or importance of this young peasant carpenter who was standing before him.

But why didn’t he know? There is only one logical answer, and that is that he had not invested the time or the honest effort necessary to find the truth. It was Pilate who asked the great question, “What is truth?” And then, without waiting for the answer, he turned and left the scene. Pilate could have found out who Jesus was and what His doctrines were if he had made an earnest and adequate investigation. For “they never sought in vain who sought the Lord aright.” The Lord said, “seek and ye shall find,” and they only fail to find who fail to seek.

Many of the sins in the world seem to be, in one way or another, the sins of ignorance. This was true in the days of Noah; it was true in the days of Jesus; it is true in our own day. The young man who disobeys the Ten Commandments frequently doesn’t really understand the consequences that will follow. Some sins may be forgiven, but who can forgive us of our ignorance?

http://lds.org/ldsorg/v/index.jsp?hideN ... 82620aRCRD


Quote:
Ignorance is expensive; in fact, it is the most expensive commodity we know anything about. Certainly we make many mistakes through ignorance. If it is a violation of a commandment of God which we have never received and thus do not know, then the Lord does not hold us guilty of the sin. “… to him that knoweth to do good, and doeth it not, to him it is sin.” (James 4:17.) And in Paul’s words, “… where no law is, there is no transgression.” (Rom. 4:15.) But even though we may not be guilty of the sin because of our ignorance, neither can we receive the blessing, which is predicated on obedience, without rendering obedience to that law. Therefore, we are denied the blessing through our ignorance. If it is a traffic law we have violated through ignorance, the penalty assessed us is exactly the same as if we had known. Also, if we stick a finger in an electric light socket, we will receive the same shock, irrespective of our knowledge of electricity. I repeat, ignorance is expensive. Particularly is this true since the Lord has decreed, “It is impossible for a man to be saved in ignorance.” (D&C 131:6.) For surely no man is truly enlightened unless he knows the Lord.

http://lds.org/ldsorg/v/index.jsp?hideN ... 82620aRCRD


Quote:
In the relatively short span of years covered by the New Testament, the historic pattern repeats itself again. This time the people turned against Christ and His Apostles. The collapse was so great we have come to know it as the Great Apostasy, which led to the centuries of spiritual stagnation and ignorance called the Dark Ages.

Now, I need to be very clear about these historically reoccurring periods of apostasy and spiritual darkness. Our Heavenly Father loves all of His children, and He wants them all to have the blessings of the gospel in their lives. Spiritual light is not lost because God turns His back on His children. Rather, spiritual darkness results when His children turn their collective backs on Him. It is a natural consequence of bad choices made by individuals, communities, countries, and entire civilizations. This has been proven again and again throughout the course of time. One of the great lessons of this historical pattern is that our choices, both individually and collectively, do result in spiritual consequences for ourselves and for our posterity.

The 179 years that have passed since The Church of Jesus Christ of Latter-day Saints was officially organized have been extraordinary by any measure. Never in recorded history has there been a period of such remarkable progress in terms of science and technology. These advances have helped to facilitate gospel growth and expansion throughout the world. But they have also contributed to the rise of materialism and self-indulgence and to the decline of morality.

We live in an era when the boundaries of good taste and public decency are being pushed to the point where there are no boundaries at all. The commandments of God have taken a beating in the vacillating marketplace of ideas that absolutely rejects the notion of right and wrong. Certain factions of society seem generally mistrustful of anyone who chooses to live according to religious belief. And when people of faith attempt to warn others of the possible consequences of their sinful choices, they are scoffed at and ridiculed, and their most sacred rites and cherished values are publicly mocked.

Does any of this sound familiar, my young brothers and sisters? Do you see the historical pattern emerging again—the pattern of righteousness followed by prosperity, followed by material comforts, followed by greed, followed by pride, followed by wickedness and a collapse of morality—the same pattern we’ve seen again and again within the pages of the Old and New Testaments and the Book of Mormon? More importantly, what impact will the lessons of the past have on the personal choices you make right now and for the rest of your lives?

Learning the lessons of the past allows you to walk boldly in the light without running the risk of stumbling in the darkness. This is the way it’s supposed to work. This is God’s plan: father and mother, grandfather and grandmother teaching their children; children learning from them and then becoming a more righteous generation through their own personal experiences and opportunities. Learning the lessons of the past allows you to build personal testimony on a solid bedrock of obedience, faith, and the witness of the Spirit.

Of course, it’s not enough to learn these lessons as a matter of history and culture. Learning the names and dates and sequence of events from the printed page won’t help you very much unless the meaning and the message are written in your hearts. Nourished by testimony and watered with faith, the lessons of the past can take root in your hearts and become a vibrant part of who you are.

And so it returns, as it always does, to your own personal faith and testimony. That is the difference-maker, my young brothers and sisters. That is how you know. That is how you avoid the mistakes of the past and take your spirituality to the next level. If you are open and receptive to the whisperings of the Holy Spirit in your lives, you will understand the lessons of the past, and they will be burned into your souls by the power of your testimonies.

http://lds.org/ldsorg/v/index.jsp?hideN ... 82620aRCRD

Wickedness never equals happiness nor long lasting prosperity. Ignorance dooms one to repeat the past!

I'm afraid that's about all I can do for you. If you can't perform your own litmus tests and recognize what's going on around you....there isn't much hope. I could spend all day touting news of SEC workers spending all day looking at porn or government contractors engaged in child prostitution or nationwide support of illegal wars or the illegal presidency or false flag events or domestic black ops or daily constitutional violations or government complicit fraud or government complicit murder of innocent civilians or government complicit illegal activity (drug trafficking for example) or expound on the 1/5 of the population that is incarcerated, the 1/5 of the population subsisting on food stamps,the 1/5 of the population what works for the government/MIC and the resulting destruction of economic prosperity or that with ever increasing wickedness the costs to transact business increase creating no additional economic value or the lasting impact of debt or more appropriately the impact of a system of money that is designed to transfer all assets to the creator of the currency/debt for little or no cost.......or any myriad number of examples and you would simply block it out and add another layer or two of rose paint to your lenses. Best of luck to you in your 4 to 5 year rebound window!

I suppose there were some honest accountants at the Pentagon sincerely trying to track down the missing $2.3 trillion dollars....but they are dead now! fyi - Hawaii opened up a line of credit with the Fed last Friday for unemployment borrowing...15 states to go!


Quote:
“Our great Constitution has been beaten and torn until now it hangs by a single thread, and that thread is our franchise to vote.”

- Ezra Taft Benson, Freeman Institute, Provo, Utah, 1976.


Quote:
“Secret combinations flourished because, as Helaman tells us, the Gadianton robbers ‘had seduced the more part of the righteous until they had come down to believe in their works and partake of their spoils’ (Helaman 6:38)... even as today.”

- Ezra Taft Benson, The Savior’s Visit to America, Ensign, p. 4. May 1987.


Quote:
“Those who subscribe to this [totalitarian] philosophy stop at nothing to achieve their ends...force, trickery, lies, broken promises, mayhem, and individual and mass murder.”

- Ezra Taft Benson, Conference Report, October 1960.


Quote:
“I testify that wickedness is rapidly expanding in every segment of our society. It is more highly organized, more cleverly disguised, and more powerfully promoted than ever before. Secret combinations lusting for power, gain, and glory are flourishing. A secret combination that seeks to overthrow the freedom of all lands, nations, and countries is increasing its evil influence and control over America and the entire world.”

- Ezra Taft Benson, I Testify, Ensign, p. 87. November 1988.


Quote:
“If America is destroyed, it may be by Americans who salute the flag, sing the national anthem, march in patriotic parades, cheer Fourth of July speakers — normally good Americans, but Americans who fail to comprehend what is required to keep our country strong and free — Americans who have been lulled away into a false security.”

- Ezra Taft Benson, Conference Report, April 1968.


Quote:
“It is time, therefore, that every American, and especially every member of the priesthood, became informed about the aims, tactics, and schemes of socialistic-communism. This becomes particularly important when it is realized that communism is turning out to be the earthly image of the plan which Satan presented in the pre-existence. The whole program of socialistic- communism is essentially a war against God and the plan of salvation—the very plan which we fought to uphold during ‘the war in heaven.’”

- Ezra Taft Benson, Secret Combinations, Conference Report, October 1961.


Quote:
“As important as are all other principles of the gospel, it was the freedom issue which determined whether you received a body. To have been on the wrong side of the freedom issue during the war in heaven meant eternal damnation. How then can Latter-day Saints expect to be on the wrong side in this life and escape the eternal consequences? The war in heaven is raging on earth today. The issues are the same: ‘Shall men be compelled to do what others claim is for their best welfare’ or will they heed the counsel of the prophet and preserve their freedom?”

- Ezra Taft Benson, Conference Report, April 1965.


Quote:
“We are going through what J. Reuben Clark, Jr., once termed the greatest propaganda campaign of all time. We cannot believe all we read, and what we can believe is not all of the same value. We must sift. We must learn by study and prayer.”

- Ezra Taft Benson, The Teachings of Ezra Taft Benson, p. 302.


Quote:
“Pride results in secret combinations which are built up to get power, gain, and glory of the world. This fruit of the sin of pride, namely secret combinations, brought down both the Jaredite and the Nephite civilizations and has been and will yet be the cause of the fall of many nations.”

- Ezra Taft Benson, Beware of Pride, Ensign, May 1989.


Quote:
“Our families may be corrupted by worldly trends and teachings unless we know how to use the [Book of Mormon] to expose and combat the falsehoods in socialism, organic evolution, rationalism, humanism, and so forth.…And our nation will continue to degenerate unless we read and heed the words of the God of this land, Jesus Christ, and quit building up and upholding the secret combinations which the Book of Mormon tells us proved the downfall of both previous American civilizations.”

- Ezra Taft Benson, A Witness and a Warning: A Modern-Day Prophet Testifies of the Book of Mormon, p. 80. January 1988.




Last edited by Mummy on Mon Oct 04, 2010 3:53 pm, edited 3 times in total.

And your response:

You're very long winded and off topic. What are you saying? Are you calling me ignorant?

I'm afraid that's about all I can do for you. If you can't perform your own litmus tests and recognize what's going on around you....there isn't much hope.

Ahh, fellow, your true colors are showing. It really is too bad you feel it necessary to resort to these sorry attacks when you become overwhelmed.

I feel safe in assuming you know what a self-righteous, cantankerous, know-it-all sounds like. Do you worship yourself and your own knowledge? If not then you can quit assuming you understand everything, and quit making these pathetic statements. You quoted "Beware of Pride", now go read it. There's an important message that you've obviously missed.

Personally, I thought it was very on topic and pertinent (spelling? ) to the discussion.

[Jason]

1) Tis not a she!

2) The ignorance was implied by J herself in the post I responded to (she claimed not to know what was going on in government...or at least the thousands of employees though by principle it should be obvious to the observant).

3) The whole reason for the Blipits tirade was to show that prophecy is being fulfilled on a daily basis. The conglomerate of news clips paint a macro picture of a country, a society, and an economy in decline.....not to mention the "acts of God" (shaking of the earth, seas heaving beyond their bounds, extreme weather, etc.) that are increasingly prevalent.

4) Ezekiel 4:6 one day = one year. Daniel 12:11 1290 days from daily sacrifice being taken away to the abomination of desolation being set up or the vision. Justinian did away with the daily sacrifice in 530 AD and Joseph Smith's vision occurred 1290 years later in 1820. Daniel 12:12 then states 1335 days until the end....or 1335 years which would put the end at 3155 AD. Subtract out the 1000 year millenium. Make an estimate at the adversary's "little season" at the end. Then you have a ballpark range. Daniel Chapter 4 lays out the 7 times which when calculated out (based on the accuracy of the 1st Nisan date in 546 BC) gives the 2011 date - which is basically 2,557 years or 7 X 365.25 (don't forget the months to be precisely accurate). Anyways no crystal ball or prophetic inspiration....just a somewhat educated guess. Take it for what it is!

5) And speaking of news, prophecy fulfillment on a daily basis, economic collapse, wars and rumors of wars, earth shaking, floods, disasters, and other things that cause men's (and women's) hearts to fail them (because they will not repent)....

Another good analysis of ISM data -
http://wallstreetexaminer.com/2010/10/0 ... t-the-ism/

Mission Accomplished: Stranguflation
http://www.wallstreetexaminer.com/blogs ... ahoo!+Mail

Mortgage rates fall to decades-low of 4.27 pct.
http://finance.yahoo.com/news/Mortgage- ... et=&ccode=

Inside the Global Banking Intelligence Complex, BCCI Operations
http://ampedstatus.com/inside-the-globa ... operations

Opinion: $80/b oil – an obstacle to US economic recovery
http://www.petroleum-economist.com/defa ... =EMS439953

Global slowdown could be start of downward plunge
http://www.noonehastodietomorrow.com//i ... &Itemid=35

Thirty Six Years Later the Beat Goes On
http://www.cakewalkblogs.com/antiestabl ... -goes.aspx

Billions more for Mercenaries courtesy US Taxpayers
http://www.noonehastodietomorrow.com//i ... Itemid=114

GI’s Brains Fried by Military Dispensed Nose Candy
http://www.noonehastodietomorrow.com//i ... Itemid=114

Father Tried to Report Rogue 'Thrill Kill' Soldiers
http://www.noonehastodietomorrow.com//i ... Itemid=114

Fighting Femicide in Mexico and throughout the Americas
http://www.mexidata.info/id2826.html

Unfiltered News
http://www.realityzone.com/currentperiod.html

Google Tries to 'Get Right Up to The Creepy Line', Not Working on Brain Implants (Yet)
http://www.noonehastodietomorrow.com//i ... Itemid=112

Man Tasered 13 times
http://www.noonehastodietomorrow.com//i ... &Itemid=27

Organ Harvest Witness Says Remaining Silent is also a Crime
http://www.noonehastodietomorrow.com//i ... &Itemid=38

China’s one-child policy will cause demographic 'disaster'
http://www.noonehastodietomorrow.com//i ... &Itemid=38

Hungarian chemical sludge spill reaches Danube
http://www.bbc.co.uk/news/world-europe-11491412

Bt Toxin From Genetically Modified Corn Found in U.S. Streams
http://www.noonehastodietomorrow.com//i ... Itemid=115

Hazards of GM Food: Female Sex Organs Affected by GMO Soybeans
http://www.noonehastodietomorrow.com//i ... Itemid=115

The Food Crisis is Not About a Shortage of Food
http://www.noonehastodietomorrow.com//i ... Itemid=115

Latest Earthquakes in the World - Past 7 days
http://earthquake.usgs.gov/earthquakes/ ... es_all.php

Floods continue to punish Asia, killing nearly 140
http://www.google.com/hostednews/ap/art ... =D9IMPOO02

Vietnam flooding kills dozens, inundates homes
http://www.reuters.com/article/idUSTRE6951ZV20101006

Heavy Rains in Jamaica
http://earthobservatory.nasa.gov/Natura ... &src=nhrss

Flooding in Pakistan
http://earthobservatory.nasa.gov/Natura ... &src=nhrss

Subtropical Storm Otto, the 15th named storm of this very busy 2010 Atlantic hurricane season, is here. Otto is not a threat to bring high winds to any land areas, but will produce heavy rains over Puerto Rico, the Virgin Islands, and northern Lesser Antilles. Radar estimated rainfall over Puerto Rico and the Virgin Islands (Figure 2) shows rainfall amounts in excess of eight inches have fallen in several locations over the past three days, and the St. Thomas Airport officially recorded 9.30" of rain so far from Otto. Not surprisingly, Flash Flood Warnings are posted for both the Virgin Islands and Puerto Rico. Weather radar out of Puerto Rico shows that a large area of heavy rain will continue to affect the Virgin Islands and eastern Puerto Rico today. Martinique radar shows considerably less activity over the Lesser Antilles.
http://www.wunderground.com/blog/JeffMa ... rynum=1647

[Rincon]

Removed

[Jason]

A flood of toxic sludge
http://www.boston.com/bigpicture/2010/1 ... ludge.html

Toxic red sludge reaches the Danube River
http://news.yahoo.com/s/ap/eu_hungary_sludge_flood

Oil Spill Commission Hits Feds on Flow Rate, Dispersant, How Much Oil Is Left
http://www.propublica.org/blog/item/rea ... oil-is-lef

M2 Update: 12th Consecutive Weekly Increase, The Seasonal Adjustment Inflection Point, And The FDIC's "Free Capital Transfer" Plan Is Working
http://www.zerohedge.com/article/m2-upd ... d-fdics-su

Pentagon: Elements in Pakistani Intelligence Agency Support Terror
http://www.foxnews.com/politics/2010/10 ... ng-terror/

...lol....google isi cia

Obama Signs New Wiretap Law! Intelligence Authorization Bill
http://www.youtube.com/watch?v=h5ZPIy1X ... r_embedded

Stephen Colbert laughs at Federal Food Raids, Mocks Individualists
http://deadlinelive.info/2010/10/07/ste ... ood-raids/

Obama slams GOP’s ‘open floodgates’ of foreign cash
http://www.rawstory.com/rs/2010/10/obam ... loodgates/

9/11: Firemen Explosion Testimony
http://cryptogon.com/?p=18100

U.K. Home Prices Plunged Record 3.6% in September, Halifax Says
http://www.bloomberg.com/news/2010-10-0 ... -says.html

How did Las Vegas, Diseneyland and Hawaii get the California Welfare handouts
http://dailycensored.com/2010/10/05/how ... ensored%29

State officials cancel access to welfare benefits on cruise ships and at all casinos
http://www.latimes.com/news/la-me-1005- ... 4920.story

....that just might be the final stake in the heart of Vegas!

Q&A: Putting the Foreclosure Paperwork Scandal in Perspective
http://www.propublica.org/blog/item/qa- ... to-context

Guilty Plea in NY’s Pension Scandal Highlights Corruption Concerns Elsewhere
http://www.propublica.org/blog/item/gui ... -elsewhere

Large crevice confuses residents
http://www.uppermichiganssource.com/new ... ?id=522312

NATO Contractors “Attack Their Own Vehicles” in Pakistan
http://publicintelligence.net/nato-cont ... -pakistan/

Food as a Weapon with Professor Poochenstein
http://farmwars.info/?p=4342&utm_source ... rm+Wars%29

Enemy of The State - TRAILER
http://www.youtube.com/watch?v=N-hitTRg ... r_embedded

Study Shows Monsanto Roundup Herbicide Link to Birth Defects
http://www.federaljack.com/?p=17352

US Mayor says no Flight 93 plane at Shanksville and no bodies
http://nomorecensorship.com/911-truth/u ... no-bodies/

Government Misplaces $162 million in “Stimulus” Money
http://www.fiscalaccountability.org/ind ... ent=100710

China’s stolen children: Tens of Thousands of Children Snatched And Sold Every Year
http://www.infiniteunknown.net/2010/10/ ... Unknown%29

Failing U.S. transportation system will imperil prosperity, report finds
http://www.washingtonpost.com/wp-dyn/co ... id=topnews

Afghanistan: 57 NATO Tankers Set Ablaze in Fresh Assaults
http://www.globalresearch.ca/index.php? ... leId=21342

Corporate Cash Floods US Congressional Elections
http://www.globalresearch.ca/index.php? ... leId=21346

US Banks Fake Documents to Rush Foreclosures
http://www.globalresearch.ca/index.php? ... leId=21345

Inside the Global Banking Intelligence Complex, BCCI Operations
http://ampedstatus.com/inside-the-globa ... operations

Weekly Claims Drop to 445,000, 4-Week Moving Average at 455,750; Where to From Here?
http://globaleconomicanalysis.blogspot. ... nalysis%29

Gallup Survey Shows Unemployment Jumps From 9.4% to 10.1%
http://globaleconomicanalysis.blogspot. ... nalysis%29

Morning Update/ Market Thread 10/7
http://economicedge.blogspot.com/2010/1 ... d-107.html

Consumer Credit declines in August
http://www.calculatedriskblog.com/2010/ ... ed+Risk%29

Lawler: “Foreclosure-Gate”: Who Will, and Who Should “Pay”?
http://www.calculatedriskblog.com/2010/ ... ed+Risk%29

The Austerity Battlefront: Cities Behind the Eight Ball
http://forums.wallstreetexaminer.com/to ... ight-ball/

Cash-Strapped States Resurrect "Debtors' Prisons"
http://www.angrybearblog.com/2010/10/ca ... ry+Bear%29

Citibank + SunTrust? Herbert Gold on the Great Contraction in State Finances
http://us1.irabankratings.com/pub/IRAstory.asp?tag=446

The heyday in Payday at Dollar Financial…
http://www.footnoted.com/my-big-fat-dea ... ted.com%29

Diamond Foods extracts a problematic chemical…
http://www.footnoted.com/buried-treasur ... ted.com%29

Inflation Or Deflation? It Is The Fourth Branch Of Government (The Federal Reserve) That Will Make That Decision For Us
http://endoftheamericandream.com/archiv ... ion-for-us

China and Russia Finally Tie the Knot
http://www.energytribune.com/articles.c ... e-the-Knot

SUCCESS!: Russia Tests its ‘Advanced’ Submarine Based Ballistic Missile
http://defensetech.org/2010/10/07/succe ... c-missile/

[Jason]

What is the Fed going to do to the dollar?

The trillion dollar question!!!

[Original_Intent]

What is the Fed going to do to the dollar?

The trillion dollar question!!!

I had heard QE2 projected 4 trillion +.

[Jason]

What is the Fed going to do to the dollar?

The trillion dollar question!!!

I had heard QE2 projected 4 trillion +.

Time will tell the story for better or worse!

[Jason]

Karl Denninger Explains Foreclosure-Gate On The Ratigan Show

Karl Denninger, who has been tracking the issue of title fraud in the mortgage space for years, was on the Dylan Ratigan show earlier, and not only provided one of the most comprehensive explanations of where we are, how we got here, and where we are going (unfortunately nowhere pleasant) to date, but also was gleefully and sarcastically rhetorical with his closing remarks: "What if we find that of these $6 trillion in securities that are out there, outstanding right now, half or more of them are defective. You put them back on the banks and they all blow up. You know what - we have a resolution authority under Frank-Dodd, how about if we use it?" We would only add that courtesy of second degree, third degree, and fourth degree leverage, as we presented yesterday, the final amount of net capital at risk, courtesy of numerous other layers of debt, will end up being far, far greater than just $3 trillion. And yes, there is a reason why the OCC keeps a track of the $233 trillion in total derivatives held by US banks.

http://www.zerohedge.com/article/karl-d ... an-ratigan

....really need to see the clip at the link!

here's the write-up...

Property Rights Gone Wrong
http://www.huffingtonpost.com/dylan-rat ... 54586.html

[Jason]

Federal Reserve Officials: Americans Are Saving Too Much Money So We Need To Purposely Generate More Inflation To Get Them Spending Again
http://theeconomiccollapseblog.com/arch ... ding-again

Afghan Contractors Hire High, Warlord, Taliban Commander, Iranian Spies
http://publicintelligence.net/afghan-co ... ian-spies/

Senate Report on Private Security Contractor Oversight in Afghanistan
http://publicintelligence.net/senate-re ... ghanistan/

DHS Retail Sector Suspicious Activity Reporting Video
http://publicintelligence.net/dhs-retai ... ing-video/

Why Is Unemployment Rising?
http://georgewashington2.blogspot.com/2 ... ising.html

Unemployment by Level of Education and Employment Diffusion Indexes
http://www.calculatedriskblog.com/2010/ ... ed+Risk%29

Employment-Population Ratio, Part Time Workers, Unemployed over 26 Weeks
http://www.calculatedriskblog.com/2010/ ... ed+Risk%29

September Employment Report: 18K Jobs Lost ex-Census, 9.6% Unemployment Rate

From the BLS:

Nonfarm payroll employment edged down (-95,000) in September, and the unemployment rate was unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment declined (-159,000), reflecting both a drop in the number of temporary jobs for Census 2010 and job losses in local government. Private-sector payroll employment continued to trend up modestly (+64,000).

Both July and August payroll employment were revised down. The change in total nonfarm payroll employment for July was revised from -54,000 to -66,000, and the change for August was revised from -54,000 to -57,000.

Nonfarm payrolls decreased by 95 thousand in August. The economy has gained 334 thousand jobs over the last year, and lost 7.75 million jobs since the recession started in December 2007.

For the current employment recession, employment peaked in December 2007, and this recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only early '80s recession with a peak of 10.8 percent was worse).

Note: The preliminary benchmark payroll revision is minus 366,000 jobs. This is a little larger than the normal adjustment (last year was especially large). The actual adjustment will be made in February 2011.

http://www.calculatedriskblog.com/2010/ ... ed+Risk%29

Here’s the entire report from the BLS:

Right off the bat we can see the wave C mentality as the government lost 159,000 jobs. Why? Because the same levels of stimulus are no longer palatable because it is finally being recognized that we have far too much debt.

Just look at all the numbers that increased… Sadly, “The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose by 612,000 over the month to 9.5 million. Over the past 2 months, the number of such workers has increased by 943,000. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.”

Also, “About 2.5 million persons were marginally attached to the labor force in September, up from 2.2 million a year earlier.” Gee, that’s only an increase of another 300,000 in one month!

And, “Among the marginally attached, there were 1.2 million discouraged workers in September, an increase of 503,000 from a year earlier.”

Those are some dramatic increases, much larger than we’ve seen recently. I do not see a large change to the Employment Population Ratio, it is obvious that the rate was able to stay low due to the large increases in the number sets just above.

Looking at the Alternate Table, we can see that seasonally adjusted U-6, the number most closely resembling how it has been tracked in the past, rose to 17.1% from 16.7%. Note that this is worse than last year’s 17.0%. How many jobs were “created” in the past year?

I have been mentioning that this report would be worse than expected due to the Birth/ Death model. That’s exactly what happened as the adjustment was only 11,000 for September this year which is still more than the zero correction this month last year. Note that next month is a mild correction and then there’s a negative correction coming in November – yes, these do tend to follow this same pattern:

The Birth/ Death model is simply a ridiculous notion and a way for the BLS to manipulate the data. It is not accurate when the economy is contracting or expanding, which would be all the time. That means this model is never accurate! To say that small businesses are adding jobs while small businesses in general are going out of business is simply a lie and an economic distortion.

Below is John Williams Employment chart from ShadowStats.com, you can see that it has now exceeded 22%!

These are depression era readings people, this is no “recession.”

And recently Bernanke so much as admitted that adding QE money will do little to help! Can you say, Wave C mentality?” I thought you could!

Oct. 7 (Bloomberg) -- For $2 trillion, Federal Reserve Chairman Ben S. Bernanke may buy little improvement in growth, employment or inflation over the next two years.

Firms with large-scale models of the U.S. economy such as IHS Global Insight, Moody’s Analytics Inc. and Macroeconomic Advisers LLC project only a moderate impact from additional Fed asset purchases. The firms estimate that the unemployment rate will remain around 9 percent or higher next year whether the Fed buys $500 billion or $2 trillion of U.S. Treasuries in a second round of unconventional stimulus.

“This is not a game changer for the economic outlook,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, whose models show that $500 billion of purchases would boost growth 0.1 percentage point in 2011 and leave the unemployment rate at 9 percent or above for the next two years. “There is clearly a risk that people start to perceive monetary policy as impotent.”

The meager impact shows the conundrum U.S. central bankers face. Interest rates near zero have failed to produce the intended cycle of borrowing and spending among consumers and businesses. Unemployment hovering near a 26-year high, partly a symptom of weak demand, keeps downward pressure on prices, and further declines in inflation would raise borrowing costs in real terms, making credit more expensive.

Uh, huh. They can QE all they want, but if they don’t help those who are saturated with debt, this economy is going exactly nowhere. In fact, it is quite the opposite. If they simply do nothing then the debts will clear and the economy will move forward. It’s their attempts to help it that are destroying it. Each infusion simply lowers the value of our money making it harder and harder for folks to live. The more they do it, the WORSE the economy gets.

The fly in that ointment is the Yen. Yesterday it broke down (down is higher on this chart) below a very power trendline than comprised the bottom of a large descending wedge. I warned yesterday that prices can waterfall out of descending wedges, and today it is continuing to strengthen – that will pressure the dollar and other currencies. This type of move in the Yen is very unwelcome and it has the potential to get disorderly:

The Japanese yesterday did announce yet another stimulus program although they swear they are going to keep them smaller in the future, LOL. They are hosed, there is no other way to put it, but it was their own actions that put them in their current predicament.

Yesterday the McClelland Oscillator finished barely above zero. Turning negative is a warning sign, one that puts the Hindenburg Omens in play. This is a very dangerous time for equities. Alcoa and Micron both reported earnings yesterday. While Alcoa met their revised expectations, get this… “which declined 21% from the year-earlier period and 55% from the previous quarter. " And Micron (MU), while earning more than last year, flat out missed on both earnings and revenues.

No, QE 666 won’t bring our economy back, our money will be destroyed long before we get there. This employment report is all bad. There is no POMO scheduled for today, the key level is the 1150 mark.

http://economicedge.blogspot.com/2010/1 ... d-108.html

Fantastic News: Nonfarm Payrolls Decline by 95,000, Much Weaker than Expected; Involuntary Part-Time Work Soars by 612,000!
http://globaleconomicanalysis.blogspot. ... nalysis%29

Food Stamp Friday - Newt Shows America His True Colors
http://www.zerohedge.com/article/food-s ... to+zero%29

Bank of America Halts Foreclosures In All 50 States
http://www.zerohedge.com/article/bank-a ... -50-states

Janet Tavakoli On The "Biggest Fraud In The History Of Capital Markets"
http://www.zerohedge.com/article/janet- ... al-markets

NY Times: Foreclosure-Gate starting to impact home sales
http://www.calculatedriskblog.com/2010/ ... ed+Risk%29

Millstein Says Greenspan Made `Complete Mistake'
http://www.bloomberg.com/news/2010-10-0 ... take-.html

Greenspan Says U.S. Creating `Scary' Deficit By Borrowing
http://www.bloomberg.com/news/2010-10-0 ... rease.html

Junk Bonds Are Back on Top

Jim Casey remembers the fast times when Michael R. Milken ruled Wall Street as the billionaire king of junk bonds.

But now even those heady days of the 1980s, when Mr. Milken played kingmaker and rainmaker in the great takeover wars of that era, seem a little tame.

The market for high-yield securities, as junk bonds are more politely known in the business, is booming as never before. And Mr. Casey, one of today’s junk-bond kings, is in the midst of a run unlike anything Mr. Milken saw from his X-shaped trading desk in Beverly Hills.

Like many blue-chip corporations, companies with less-than-sterling credit are rushing to sell bonds and take advantage of low interest rates. In the first nine months of this year, a record-breaking $275 billion of junk bonds have been issued worldwide, up from $163 billion during the period last year, according to the financial data provider Dealogic, a research company.

“Other than 1988 at Drexel, this is the best time I’ve ever seen, and it’s getting better,” said Mr. Casey, who worked at Drexel Burnham Lambert with Mr. Milken and now runs the junk-bond business at JPMorgan Chase. “In high-yield, it’s undeniable that these are the best years that anyone has seen in their career.”

Of course the Milken era of the Predators’ Ball ended with the collapse of the mighty Drexel and the market it virtually invented. Mr. Milken today is a philanthropist and businessman, after spending two years in jail.

http://www.nytimes.com/2010/10/08/busin ... .html?_r=1

California Passes Budget Package

SACRAMENTO, Calif.—California's Legislature passed a budget package Friday morning for the fiscal year that began in July, ending a standoff that brought the state close to a financial crisis.

The budget, more than three months late, closes a $17.9 billion shortfall for the fiscal year. The budget package includes about $7.5 billion in spending cuts, including $3 billion from schools, some of which will be repaid next year; $1.1 billion from public safety, largely because of lower medical costs for inmates; and $1.5 billion in cuts through lowered employee compensation, in keeping with new agreements with state-worker unions

The package also includes about $2.4 billion in higher revenue, including $1.2 billion from delaying a corporate tax break. The rest of that revenue comes from higher-than-expected sales- and income-tax receipts.

An assumption of $5.4 billion in new or extended federal dollars and $3.1 billion in other adjustments make up the remainder of the shortfall and provide a reserve of more than $300 million.

http://online.wsj.com/article/SB1000142 ... TopStories

...$13.1 billion of what if's, wildly optimistic assumptions, etc....

Since too often financial articles consist of some stooge blathering on and on with opinions instead of facts, I thought today we’d simply focus on some FACTS about our current financial system which few if any want to acknowledge.

#1: The US Fed is now the second largest owner of US Treasuries.
#2: “There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years.”
#3: The US will Default on its Debt

http://economicedge.blogspot.com/2010/1 ... ts_08.html

Tensions Are Rising Dramatically As The Middle East Inches Closer To War
http://themostimportantnews.com/archive ... ser-to-war

[Jason]

Many Americans Plan to Skip Flu Shot This Year

THURSDAY, Oct. 7 (HealthDay News) -- Although vaccination against influenza can protect people from illness and help prevent the spread of flu, many Americans say they and their children won't be getting a shot this coming season, new surveys reveal.

Despite the attention surrounding last year's outbreak of H1N1 flu, 43 percent of Americans say they will not be getting the vaccine this fall, according to a survey from the National Foundation for Infectious Diseases (NFID).

Another survey from the same group found a third of American mothers saying they have no plans to get a flu shot for their children.

Those decisions could come back to haunt Americans, experts said.

"Flu is serious. Every year millions of people get sick; more than 200,000 people are hospitalized and thousands of people die from influenza," Dr. Thomas R. Frieden, director of the U.S. Centers for Disease Control and Prevention, said during a Thursday morning press conference. In keeping with CDC guidelines, "everyone over the age of 6 months should get a flu shot," he said.

Flu vaccination remains the best way to protect yourself against the illness, Frieden added.

"There is plenty of vaccine available," he said. "This year we think that the three strains of influenza in the flu vaccine are going to be excellent matches with the flu that's circulating."

This year's shot contains vaccine against the H1N1 pandemic flu that caused a major outbreak in the last flu season, Frieden noted.

"More than 119 million doses [of flu vaccine] have already been distributed in the United States. That's more than 30 million more doses than were distributed by this time last year," Dr. Daniel Jernigan, Deputy Director of CDC's Influenza Division, said during the press conference.

However, as important as flu vaccine is, many people still don't get vaccinated.

Flu expert Dr. Marc Siegel noted that many people who opt not to get a flu shot are falling prey to myths about the vaccine. "It's all because of this nonsense that's been circulating that somehow the flu shot is dangerous," he said. "The fear of the vaccine outweighs the fear of the disease and that's a huge mistake, because the disease is more dangerous than the vaccine."

In addition, children should be vaccinated not only so they won't get the flu, but so they can't spread it, Siegel, an associate professor of medicine at New York University, said. "Children don't have any immunity. They are super-spreaders of the flu," he explained.

http://news.yahoo.com/s/hsn/20101007/hl ... otthisyear

....word is getting out!

[Rincon]

Removed

[Jason]

The Fed has no choice other than to default on the debt. Every Congressmen who continually voted to raise the ceiling on the National Debt needs to be replaced.

The Fed doesn't have any debt. The country will default and then will turn over the assets.....but states, counties, and cities get to go first in order to complete the power shift. I think it will disintegrate prior to completion.

JMar seems to have disappeared...

Impact of estimated Benchmark Revision on Job Losses

As part of the employment report, the BLS released the preliminary annual benchmark revision of minus 366,000 payroll jobs. This will be finalized next February when the January 2011 employment report is released. Usually the preliminary estimate is pretty close to the final benchmark estimate.

The red line on the graph is the current estimate, and the dotted line shows the impact of estimated coming benchmark revision. This puts the current payroll employment about 8.1 million jobs below the pre-recession peak in December 2007.

Using the preliminary benchmark estimate, this means that payroll employment in March 2010 was 366,000 lower than originally estimated. This is slightly larger than a normal adjustment (see table below). So in February 2011, the payroll numbers will be revised down to reflect this estimate. The number is then "wedged back" to the previous revision (March 2009).

For details on the benchmark revision process, see from the BLS: Methodology

"The benchmark adjustment, a standard part of the payroll survey estimation process, is a once-a-year re-anchoring of the sample-based employment estimates to full population counts available principally through unemployment insurance (UI) tax records filed by employers with State Employment Security Agencies."

http://www.calculatedriskblog.com/2010/ ... ed+Risk%29

CHRIS WHALEN DESCRIBES WHY 2011 COULD MAKE 2008 LOOK LIKE A CAKEWALK

The U.S. banking industry is entering a new period of crisis where operating costs are rising dramatically due to foreclosures and defaults. We are less than ¼ of the way through the foreclosure process. Laurie Goodman of Amherst Securities predicts that 1 in 5 mortgages could go into foreclosure without radical action.

Rising operating costs in banks will be more significant than in past recessions and could force the U.S. government to restructure some large lenders as expenses overwhelm revenue. BAC, JPM, GMAC foreclosure moratoriums only the start of the crisis that threatens the financial foundations of the entire U.S. political economy.

The largest U.S. banks remain insolvent and must continue to shrink. Failure by the Obama Administration to restructure the largest banks during 2007‐2009 period only means that this process is going to occur over next three to five years –whether we like it or not. The issue is recognizing existing losses ‐‐ not if a loss occurred.

Impending operational collapse of some of the largest U.S. banks will serve as the catalyst for re‐creation of RFC‐type liquidation vehicle(s) to handle the operational task of finally deflating the subprime bubble. End of the liquidation cycle of the deflating bubble will arrive in another four to five years.

Fast forward to the 1:07 minute mark where Mr. Whalen begins.

http://pragcap.com/chris-whalen-describ ... a-cakewalk

40 State Attorneys General to Investigate Mortgage Fraud; Bank of America Halts Evictions Nationwide; Senator Reid Calls for More Suspensions
http://globaleconomicanalysis.blogspot. ... nalysis%29

There is Only One Way Out of the Foreclosure Crisis
http://georgewashington2.blogspot.com/2 ... ut-of.html

A record 30% of unemployed out of work at least a year
http://www.usatoday.com/money/economy/e ... 8_ST_N.htm

Economic Collapse Update: Acceleration In Autumn
http://www.pakalertpress.com/2010/10/09 ... t+Press%29

Mexican president wants to do away with local police - President Felipe Calderon's reform would eliminate Mexico's 2,000 local police departments, seen as tainted by corruption from the drug war. The plan must still be approved by Congress and the states.
http://articles.latimes.com/2010/oct/06 ... m-20101006

[tsc]

This is a great explanation of why the banks are halting foreclosures, and why the dollar will keep dropping:

King World News conducted an interview today that included comments from Jim Sinclair and Dan Norcini regarding incredibly important events that are unfolding in both the financial system and the gold and silver markets. This interview describes what may very well bring the financial system to its knees.

October 6, 2010

Dan Norcini:
“Where we are at on the charts with regards to the precious metals is that they are blowing through resistance levels like they are not even there. If we can clear $23 on silver, there isn’t much resistance until $25 and if silver plows through $25, then you have a realistic possibility of it running up to $35.”

Because we are at new highs in nominal terms on gold, we can’t go back and reference charts so we are projecting levels. The next technical resistance is at $1,380 with light selling possible at $1,350.

The primary drivers in gold and silver today had to do with concerns over currency devaluation as well as securitized debt problems and the implications associated with it. Here is what Jim Sinclair had to say:

Jim Sinclair: “Each time that happens an item of collateral on the securitized debt publicly dies. That is why this is dynamite that people will realize very soon. This is one reason gold is up hard today.”

Norcini continues:

“That collateralized debt obligation is now effectively worthless because the collateral behind the debt can no longer be collected. The banks cannot go and get it.

Let’s say you have 10 mortgages at $1 million a piece, the sum total of those mortgages are $10 million. So, the banks took the 10 mortgages and bundled them together into a collateralized debt obligation or CDO with a face value of $10 million.

They then sold that new entity that they created to an investment group of some sort, a pension fund, hedge fund, etc. promising them a yield of let’s say 7%. The sales pitch would emphasize the fact that this CDO was backed by real collateral. In the event of loan defaults by the borrowers, the banks would tell the buyer of the CDO that the collateral behind the loan could be sold to recapture any potential losses on the part of the purchaser.

Everything seemed to work fine until the defaults began and the foreclosure process kicked into high gear. The foreclosure process has exposed fatal flaws in the system and the flaw is that the banks cannot prove clear ownership of the mortgage.

Consequently, they are then barred from foreclosing on the property. Because they can no longer foreclose on the properties, the CDO is now effectively worthless.

The hedge funds and the pension funds cannot now sell these CDO’s on the open market, so how are they going to recover their original investment? Perhaps you may say that won’t be a problem because these instruments were insured. The problem is now the credit default swap or the insurance policy that was purchased to protect against default assumes that the insurer has the financial wherewithal or resources to make good on the claim.

If there were only a small number of these problem CDO’s this would not be an issue. But as the number of the foreclosures continue to skyrocket, and more and more banks are prohibited from seizing the collateral behind the property, the sheer magnitude of the number of claims presented to the insurer will overwhelm their balance sheet.

In effect what you have is an insurance company which doesn’t have enough money to pay off the claims. Compounding the problem is the fact that the CDO’s and credit default swaps related to these claims form a mass network of interdependence. This then ripples through the entire system and creates a domino effect which can cause the failure of entities creating the next financial crisis.

Ultimately the Federal Reserve will be asked to step in and buy up the now worthless CDO’s and put those on its balance sheet. In order to do this the Federal Reserve will have to engage in massive quantitative easing, taking onto its balance sheet the worthless CDO’s in exchange for newly issued treasuries.

This of course will have a horrific effect on the US Dollar which is why gold and silver are heading much higher.

This interview with Dan Norcini turned out to be an incredibly concise explanation of a financial hurricane that threatens the entire system. Make sure you are insured by owning physical gold and silver.

Eric King
KingWorldNews.com

[Jason]

This is a great explanation of why the banks are halting foreclosures, and why the dollar will keep dropping:

King World News conducted an interview today that included comments from Jim Sinclair and Dan Norcini regarding incredibly important events that are unfolding in both the financial system and the gold and silver markets. This interview describes what may very well bring the financial system to its knees.

October 6, 2010

Dan Norcini:
“Where we are at on the charts with regards to the precious metals is that they are blowing through resistance levels like they are not even there. If we can clear $23 on silver, there isn’t much resistance until $25 and if silver plows through $25, then you have a realistic possibility of it running up to $35.”

Because we are at new highs in nominal terms on gold, we can’t go back and reference charts so we are projecting levels. The next technical resistance is at $1,380 with light selling possible at $1,350.

The primary drivers in gold and silver today had to do with concerns over currency devaluation as well as securitized debt problems and the implications associated with it. Here is what Jim Sinclair had to say:

Jim Sinclair: “Each time that happens an item of collateral on the securitized debt publicly dies. That is why this is dynamite that people will realize very soon. This is one reason gold is up hard today.”

Norcini continues:

“That collateralized debt obligation is now effectively worthless because the collateral behind the debt can no longer be collected. The banks cannot go and get it.

Let’s say you have 10 mortgages at $1 million a piece, the sum total of those mortgages are $10 million. So, the banks took the 10 mortgages and bundled them together into a collateralized debt obligation or CDO with a face value of $10 million.

They then sold that new entity that they created to an investment group of some sort, a pension fund, hedge fund, etc. promising them a yield of let’s say 7%. The sales pitch would emphasize the fact that this CDO was backed by real collateral. In the event of loan defaults by the borrowers, the banks would tell the buyer of the CDO that the collateral behind the loan could be sold to recapture any potential losses on the part of the purchaser.

Everything seemed to work fine until the defaults began and the foreclosure process kicked into high gear. The foreclosure process has exposed fatal flaws in the system and the flaw is that the banks cannot prove clear ownership of the mortgage.

Consequently, they are then barred from foreclosing on the property. Because they can no longer foreclose on the properties, the CDO is now effectively worthless.

The hedge funds and the pension funds cannot now sell these CDO’s on the open market, so how are they going to recover their original investment? Perhaps you may say that won’t be a problem because these instruments were insured. The problem is now the credit default swap or the insurance policy that was purchased to protect against default assumes that the insurer has the financial wherewithal or resources to make good on the claim.

If there were only a small number of these problem CDO’s this would not be an issue. But as the number of the foreclosures continue to skyrocket, and more and more banks are prohibited from seizing the collateral behind the property, the sheer magnitude of the number of claims presented to the insurer will overwhelm their balance sheet.

In effect what you have is an insurance company which doesn’t have enough money to pay off the claims. Compounding the problem is the fact that the CDO’s and credit default swaps related to these claims form a mass network of interdependence. This then ripples through the entire system and creates a domino effect which can cause the failure of entities creating the next financial crisis.

Ultimately the Federal Reserve will be asked to step in and buy up the now worthless CDO’s and put those on its balance sheet. In order to do this the Federal Reserve will have to engage in massive quantitative easing, taking onto its balance sheet the worthless CDO’s in exchange for newly issued treasuries.

This of course will have a horrific effect on the US Dollar which is why gold and silver are heading much higher.

This interview with Dan Norcini turned out to be an incredibly concise explanation of a financial hurricane that threatens the entire system. Make sure you are insured by owning physical gold and silver.

Eric King
KingWorldNews.com

CDO's are the third layer down in leverage so your $10 million worth of loans is actually leveraged about 25X so you are actually talking about $250 million that doesn't have an asset behind it. Nice little graphic here -

http://www.zerohedge.com/article/karl-d ... an-ratigan

[Jason]

Foreclosure-Gate (FG) is breaking fast and furious, and unless the fundamental issue (title) is addressed, and soon, property ownership in the US will develop a decidedly third world tenor. The glass empty point of view is expressed here [Mortgage Title Fraud]. There is also political interference to make an even bigger deal out of this [Reid, Brown Call for Foreclosure Pause] . This is very much related to the squatter movement [Squatter Socialized Loss Fiasco] that few others are writing about, but that I feel is another conscious, politically misguided, and costly “stimulus” policy.

The threats to real estate and banks are already material, starting with title insurers backing away from issuing title insurance on anything involving foreclosure (30% of all transactions) and even mortgages that have been securitized (most of the Bubble mortgages between 2005-2008). Title insurers are claiming that they and their insured are protected by the rights of good faith, and that any liabilities will fall on the lenders [CNBC: Title Insurers Take Pause]. Title insurance and clean ownership (called “marketable title”) are fundamental to property values, and are essential to the collateral lenders require to make mortgage loans.

The cost to lenders of handling this hot potato should increase substantially. It is clear that the private market for mortgage lending had collapsed even before FG. Without marketable title or private lending secured by collateral, property values will be in a world of hurt. Buyers will demand even deeper price concessions to account for title risk, or have sellers pay for more expensive title insurance. Or buyers will just stand down, because they fear a shadow inventory backlog tidal wave will inevitably be coming. If this persists the moral hazard message it sends to borrowers who are on the fence concerning default will lead to even more non-payments. The system can ill afford that now. The only winners I can see from this are the lawyers.

William Black in the NPR piece discusses the worst case nuclear option that could come from all this: “If judges start digging deeper into the foreclosure mess, they’re also going to find that many loans from the housing bubble were so badly documented that many are unenforceable. That’ll be an even bigger mess.”

Some have called this “fraud” at worst, and “cheap cutting corners” at best. The answer is probably somewhere in the middle; mostly about professional “gotcha” legalities that has now opened up trouble. I can only imagine the legal delays and tactics that could be employed on this. To keep the courts from becoming bogged down, and in turn the system, I think the focus needs to return to the real issue: Virtually all of these foreclosures involve borrowers who have not paid their mortgages. On average they have not paid for more than a year, and in some cases for two years or more. All of them have been served the foreclosure action. If the property was abandoned, they are served by publication. If it is disputed the borrower can appear in court and furnish proof or payment, really the only defense that should matter. Bottom line there is plenty of delay and due process already, arguably too much so. Adding even more can only lead to a third world outcome.

http://www.wallstreetexaminer.com/blogs ... ahoo!+Mail

[Squally]

Here's a comment from that article that is relevant:

The official story today is that everyone wishes the problem would just go away. Axlerod from the White House wants foreclosures to continue. The GOP chimed in:

“The No. 2 House Republican, Representative Eric I. Cantor of Virginia, said a national moratorium would remove the protections that lenders need.

“You’re going to shut down the housing industry” with a national stoppage, Mr. Cantor said. ”People have to take responsibility for themselves.”

That is as I say the official story today from the NY Times. No mention of the trouble with the court filings much less the problems with the titles or notes. Troubles that can’t be solved with winks and nods and back room decisions because thousands of people are going into hundreds of courts and so it has slipped out of the grasp of the White House, Congress the Fed or the Treasury. Those guys in the Beltway can hope all they want the problem will go away but it isn’t going to.

The very foundation of MBS’s are now subject to legal review in cases having nothing to do with home buyers but by MBS holders. Those MBS holders are also looking to stick the servicers who often were the originators of the MBS deals with liability in every disputed area from dodgy court filings to the losses arising from botched foreclosure. Which soon is going to lead to suits questioning the very suitability of selling MBS to investors. None of which has anything to do with home buyers. If it was just little guys fighting big guys this could all be fixed but it is now finally going to jump into a fight among the players in the financial arena itself.

So the NY Times can ignore all that and frame it as a political issue with dirty hippie Democrats trying to help out deadbeat home owners while responsible people want things to just go along as before for the good of the system but I don’t believe that is going to wash.

The servicers by the way are Citi, Bank of America, GMAC, Wells Fargo I suppose. They are in a world of hurt.

*on the Cantor quote “protection lenders need” and “People have to take responsibility”. No mention of lenders taking responsibility. Only “people”.

[Jason]

Here's a comment from that article that is relevant:

The official story today is that everyone wishes the problem would just go away. Axlerod from the White House wants foreclosures to continue. The GOP chimed in:

“The No. 2 House Republican, Representative Eric I. Cantor of Virginia, said a national moratorium would remove the protections that lenders need.

“You’re going to shut down the housing industry” with a national stoppage, Mr. Cantor said. ”People have to take responsibility for themselves.”

That is as I say the official story today from the NY Times. No mention of the trouble with the court filings much less the problems with the titles or notes. Troubles that can’t be solved with winks and nods and back room decisions because thousands of people are going into hundreds of courts and so it has slipped out of the grasp of the White House, Congress the Fed or the Treasury. Those guys in the Beltway can hope all they want the problem will go away but it isn’t going to.

The very foundation of MBS’s are now subject to legal review in cases having nothing to do with home buyers but by MBS holders. Those MBS holders are also looking to stick the servicers who often were the originators of the MBS deals with liability in every disputed area from dodgy court filings to the losses arising from botched foreclosure. Which soon is going to lead to suits questioning the very suitability of selling MBS to investors. None of which has anything to do with home buyers. If it was just little guys fighting big guys this could all be fixed but it is now finally going to jump into a fight among the players in the financial arena itself.

So the NY Times can ignore all that and frame it as a political issue with dirty hippie Democrats trying to help out deadbeat home owners while responsible people want things to just go along as before for the good of the system but I don’t believe that is going to wash.

The servicers by the way are Citi, Bank of America, GMAC, Wells Fargo I suppose. They are in a world of hurt.

*on the Cantor quote “protection lenders need” and “People have to take responsibility”. No mention of lenders taking responsibility. Only “people”.

Some great points.....the bomb is about to go off!!!

The irresponsible actions by MERS are rapidly becoming the stuff of folklore: from their direct and indirect involvement in every fraudclosure, to the president himself falling for what appears to be a MERS agent with a split signature personality, to MERS just-released refutation of it ever having done something wrong, the hammer on MERS seems to be preparing to fall with a resounding thud. Yet with everyone focusing on MERS' involvement in the residential mortgage space, pundits have ignored that "other" space where MERS made the possibility of outright robosigning fraud a distinct possibility - commercial real estate. For specifics one has to go back 7 years in time, to July 28, 2003, and read the following press release from the company titled: "MERS Liberates Commercial Marketplace From Assignments" in which we read that "MERS announces the release of its latest product, MERS® Commercial, designed to eliminate the repurchase risk and costs associated with preparing, recording and tracking assignments for the commercial mortgage-backed securities (CMBS) marketplace." Ah yes, how convenient for MERS to come to the CMBS market with a "time saving" yet fraud facilitating product, at precisely the time when various CMBS issues would start propagating and flooding the market with hundreds of billions of commercial real estate securitizations. Which begs the question: if residential mortgage foreclosures are being halted and if the very fabric of the MBS securitization architecture is put into question, when will someone ask whether MERS® Commercial allowed such pervasive title fraud as is now apparently ubiquitous in the residential space, to take the CMBS space by storm, and how many billions in dollars will Banc of America Securities, Bear Stearns (d/b/a JP Morgan), GE Capital Real Estate, GMAC Commercial, John Hancock and Wells Fargo be forced to buy back loans that were fraudulently certified.

Oopsie. Perhaps the perfect solution to the CMBS industry will also just end up being its perfect downfall. At least we now know that once MERS fraud is exposed for all to see, that Banc of America Securities, Bear Stearns (d/b/a JP Morgan), GE Capital Real Estate, GMAC Commercial, John Hancock and Wells Fargo (and likely many others), will soon be forced to "repurchase all those loans" they thought were safe in the title certifiation department.

We, for one, can't wait to see how long the CMBS market tries to stay mum about this so overdue next leg down in the commercial mortgage industry. On the other hand, with various CMBX tranches trading close to all time highs, it may be a fitting epilogue to the most contrarian story in the history of commercial real estate. Plus it is not like any one of those tenants are actually paying their rents.

http://www.zerohedge.com/article/mers-c ... mbs-market

A halt in home foreclosures at the largest U.S. mortgage firms may sideline buyers worried about legal issues, further depressing sales at a time when distressed properties account for almost a quarter of all transactions.

Revelations of mistakes in foreclosure proceedings are causing buyers to have misgivings about property titles, the right of home possession, said Richard DeKaser, chief economist at Woodley Park Research in Washington. Confidence in the legality of repossessions will cut foreclosure sales more than a reduction of available properties because the market already is flooded with repossessed homes, he said.

“The legal problems we’re seeing will hit sales as people worry about the legitimacy of the process,” DeKaser said. “The implications are that there’s been shoddy work.”

Bank of America Corp., the largest U.S. lender, extended a freeze on foreclosures to all 50 states Oct. 8 as concern spread among federal and state officials that homes are being seized based on faulty data. JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage unit stopped repossession cases in 23 states where courts supervise home seizures, amid allegations that employees submitted documents with unverified or false information to speed the process.

Nevada, Arizona

Foreclosure sales accounted for 24 percent of all home transactions during the second quarter, according to a Sept. 30 report by RealtyTrac Inc., an Irvine, California-based data seller. They made up a greater share in the states hardest-hit by the housing crisis, accounting for 56 percent of purchases in Nevada, 47 percent in Arizona and 43 percent in California.

In Florida, Massachusetts, Michigan and Rhode Island, the share was about a third.

http://www.bloomberg.com/news/2010-10-1 ... sales.html

....so much for the August bounce back! On a positive note....just for JMar....at least all those people who stopped making payments a year or two ago can continue to live rent free! That should help boost the economy for at least another 6 months while the lawyers make a killing! Of course the bottom is now out of sight and the lake just got a bit deeper....but for the glass half full crowd....we now have more thin ice!

Over the past 10 years, the S&P 500 has achieved a total return, including dividends, averaging -0.03% annually. Over the past 13 years, the total return for the S&P 500 has averaged just 3.23%. Why have stocks performed so poorly? One word. Valuation. If investors take nothing else from these commentaries, there are two primary lessons that should be clear. First, the poor market returns that investors have achieved for more than a decade were entirely predictable during the late 1990's, based on the historical relationship between valuations and subsequent returns. Second, from current valuations, the similarly poor returns that investors are likely to achieve over the coming 5-7 year period are also predictable based on the same evidence.

While we regularly emphasize that valuation is not particularly useful as a timing tool, we know of no factor with a better record in setting expectations for long-term market returns. We spend a great deal of time discussing market conditions, economic policy, investor sentiment, and other factors in these weekly comments. But it is critical to recognize that these factors simply modify the short-term course that market returns take over periods of perhaps 1-2 years. They do not significantly affect the long-term course of market returns. Once valuations become unusually rich, disappointing long-term returns become baked in the cake.

Citing "imminent funding pressures" in the global banking system, the IMF released a report last week suggesting the potential for a fresh round of bank stress. The primary focus of concern was the European banking system, due to "relatively greater pressure in European banking systems from both sovereign risks and wholesale funding strains," but the IMF indicated that U.S. banks may also need to raise additional capital "to reverse recent deleveraging trends, and possibly to comply with U.S. regulatory reforms." The IMF warned that "Conditions in the global financial system now have the potential of jumping from benign to crisis mode very rapidly."

It will come as no surprise that we agree, but at least for now, investors evidently could not care less. Had investors been correct in ignoring the ultimately disastrous risks of the dot-com bubble, the tech bubble, the housing bubble, and the overleveraging of U.S. financial institutions that preceded the recent credit crisis, we would concede that the market's wisdom on these issues should take precedence over our own concerns. But in our view, those disasters were predictable. Likewise, as noted above, the persistent willingness of investors to misprice stocks is exactly why they have gone nowhere for over a decade. We'd love to be bulls, scampering happily about. But that would be helped if stocks were priced appropriately and if there was not a large anvil suspended on a fraying string overhead.

The global financial system continues to be unsound in the same way that a Ponzi scheme is unsound: there are not enough cash flows to ultimately service the face value of all the existing obligations over time. A Ponzi scheme may very well be liquid, as long as few people ask for their money back at any given time. But solvency is a different matter - relating to the ability of the assets to satisfy the liabilities.

The way you prevent Ponzi schemes is by requiring that assets are audited based on their tradable market value, and that the auditors make certain those assets are actually in custody. Unfortunately, banks are now allowed to value many of their assets with substantial discretion, and the models may be no better than the ones that assigned investment-grade ratings to sub-prime loans. Meanwhile, numerous banks have been abruptly suspending foreclosures, because it is increasingly evident that in many cases they do not even have documentation of the underlying mortgages. It is difficult to see how this can possibly inspire confidence that the credit crisis is over and everything is back to normal.

To be clear, I should emphasize that our expectation for poor equity returns over the coming 5-7 years is driven by valuations, not by any particular expectation regarding credit strains or economic pressures. The importance of the economic factors is that they threaten to front-load the longer-term reversion of valuations into the immediate future.

http://www.hussmanfunds.com/wmc/wmc101011.htm

Insider Selling To Buying Update: 1,169 To 1
http://www.zerohedge.com/article/inside ... ate-1169-1

[Jason]

Nothing worse than taking the time to post 50 links and then having someone eradicate the post!

[Squally]

Nothing worse than taking the time to post 50 links and then having someone eradicate the post!

Are you serious? Why would the post be deleted?

[Jason]

Nothing worse than taking the time to post 50 links and then having someone eradicate the post!

Are you serious? Why would the post be deleted?

Great question!

[Jason]

Haven't rattled on about California in some time....here's a brief headline overview from the latest numbers released -

Revenue:
Sept 07 - $10.7 billion
Sept 08 - $10.1 billion
Sept 09 - $8.9 billion
Sept 10 - $8.1 billion

Expenses (spending):
Sept 07 - $12.6 billion
Sept 08 - $11.6 billion
Sept 09 - $11.8 billion
Sept 10 - $6.8 billion

Found here -
http://www.sco.ca.gov/ard_state_cash_summaries.html

and here -
http://www.sco.ca.gov/ard_state_cash_fy1011.html

Here's the formula for the decline in Personal Income Tax which makes up 40%+ of Cali's total tax revenue (based on data from March 2007 to present) -
y = -3E+07x + 5E+09

....and total revenue over same time period -
y = -4E+07x + 9E+09

[Squally]

Haven't rattled on about California in some time....here's a brief headline overview from the latest numbers released -

Revenue:
Sept 07 - $10.7 billion
Sept 08 - $10.1 billion
Sept 09 - $8.9 billion
Sept 10 - $8.1 billion

Expenses (spending):
Sept 07 - $12.6 billion
Sept 08 - $11.6 billion
Sept 09 - $11.8 billion
Sept 10 - $6.8 billion

how did they lower spending so much from just a year ago......

[Jason]

Haven't rattled on about California in some time....here's a brief headline overview from the latest numbers released -

Revenue:
Sept 07 - $10.7 billion
Sept 08 - $10.1 billion
Sept 09 - $8.9 billion
Sept 10 - $8.1 billion

Expenses (spending):
Sept 07 - $12.6 billion
Sept 08 - $11.6 billion
Sept 09 - $11.8 billion
Sept 10 - $6.8 billion

how did they lower spending so much from just a year ago......

No toilet paper in the parks....LOL! September was pretty low too as the budget wasn't passed and a lot of expenses got put on hold (construction contractors, city/county reimbursements, etc.). I expect October to bounce back. That said, they are cutting pretty drastically. Sad thing is they are still far too optimistic in terms of projecting future revenue/financing arrangements. As you can see from the past years.....they have a lot of ground to make up for (deficit).....so they have to suck it up going years forward far beyond what the current economic circumstances demand.

Same with all the states and unemployment borrowing. Not only do you have to cover current demands on the trust fund but you have to pay back borrowed dollars.....and starting 1st of 2011 they will start paying interest in addition. So long story short, excessive pain when tomorrow rolls around and we have to pay the piper!

[Jason]

Mexican officials: Police investigator probing lake shooting was killed
http://www.rawstory.com/rs/2010/10/mexi ... ng-killed/

Lawmaker: Severed head delivered to Mexican army
http://www.brownsvilleherald.com/news/m ... -head.html

Family Farm Ordered to Destroy 50,000 Pounds of Cheese
http://hartkeisonline.com/2010/10/11/fa ... of-cheese/

Hurricane Paula put on a respectable burst of intensification early this afternoon, popping an eye and reaching Category 2 strength. Last night and early this morning, Paula set a modern record for the fastest intensification from the issuance of the first advisory to hurricane strength, performing the feat in just 12 hours. At 1pm this afternoon, an Air Force hurricane hunter aircraft measured surface winds of 104 mph with their SFMR instrument in Paula's northeast eyewall. On the second pass through the eyewall at 2pm, the SFMR saw top winds of 85 mph, in Paula's northwest eyewall, and the pressure had dropped 1 mb in one hour. The aircraft passed through the northeast eyewall again near 3pm EDT, and found weaker surface winds, just 83 mph, compared to the 104 mph seen at 1pm. The pressure remained the same as at 2pm, suggesting that Paula is done intensifying. Paula is a small hurricane, with hurricane force winds that extend out just 10 miles from the center. The eye is very tight, with a diameter of 11 miles. The Hurricane Hunters noted something in their comments I've never seen before--the eye was more square than circular.

http://www.wunderground.com/blog/JeffMa ... rynum=1654
Bold and Underline mine