As U.S. Housing, So Goes the Economy

The U.S. economy will not see any significant change until these housing numbers rebound. The number of housing starts has never seen such a slump as it's seen since 2007.  In July 2011 there were 604,000 new starts and in January 2006 it was at 2,273,000—a 73% dive!  Of course, that 2 million plus was over-building, represents the great American bubble and was completely unsustainable, but it could be 5-10 years before it bounces back to half that number!  What does that mean?  Expect dismal growth and a dismal job market as the new norm for the foreseeable future, the U.S.'s loss decade.  I just hope it's as good as Japan's lost decade where unemployment really never got worse than 5 or 6%—if only the U.S. could be so lucky!

More Veiled Republican Racism!

As usual Republicans display their racism:  Recently Tom Coburn—extremist right-winger from Oklahoma—committed the usual Republican trick of subtly playing off Southern American's racist tendencies and hints that the African American President Obama is a product of affirmative action and perhaps welfare.  Republicans are rarely overtly racist, but usually play off of generational racist tendencies that have plagued the U.S. for centuries.  Rick Perry—right-winger extremist presidential candidate from Texas—recently said there's a black cloud hanging over America.  Of course, at the last second he added a reference to the debt, but the mission was accomplished as he reminded his racist Republican audience that he's white, like them, and that other guy is black.  Rick Perry and Tom Coburn should be publicly flogged (figuratively speaking) for the lowest-common-denominator politics they practice, but not before they are voted out or down by the progressive electorate.  I believe this sort of Republican bullshit is a dying form of politics but they will use it as long as they can and as long as it helps them win elections—which it still does, unfortunately.

Loony Michele Bachmann Proves She's an Idiot!

This headline says it all.  I just hope she keeps on leading the Republicans!  This is even better than McCain! (see UPI story here)

Teapublicans Are Repeating Historical Failures

There's hardly anything that economists can agree on , but one thing that many econmists can agree on is that now is not the time to reduce spending.  The U.S. economy is teetering on the brink of disaster and all Republicans and their Tea Party extremists can talk about is how we should cut spending.  That, and that alone should be enough to banish all of them from public office yet thanks to subtle racism, (which we know is always veiled by right wingers) a constant distortion of the facts and fear mongering  the Republicans hold on to continue fighting for their special interests.  Here's a bit of background from an International Business Times article:

In 1937, President Franklin D. Roosevelt, despite the fact that the first four years of massive New Deal fiscal stimulus had lowered U.S. unemployment from a staggering 20.6 percent during the Hoover Administration at the start of the Great Depression, to 9.1 percent, felt pressure from Congressional Republicans, and he -- as current President Barack Obama did with the Tea Party-led House GOP in 2011 -- gave-in to conservatives and cut government spending in 1937. The result? U.S. unemployment started rising again, and hit 12.5% in 1938.

Sound familiar?  It's as if we are re-living a completely failed past.  That saying that history is doomed to repeat itself seems to be our living horror at this time.  Republicans and their Tea Party cohorts would like nothing else than to kill this weak recovery to enhance their chances to steal the Presidency again.  I think a more appropriate solution would be public executions (figuratively speaking, in case any nutters are reading) for these traitors to the American people.

More Evidence of Government Collusion & Corruption

SEC destroys records to cover up its inaction when financial fraud came to its attention.  No surprise here!  As I've been writing for months, the U.S. is fundamentally corrupt and it will continue on this path until it breaks.  See Matt Taibbi's article at RollingStone (or here if the link is dead).

Roubini Warns of Global Recession Risk

Commodity ETFs Will Kill You!

As anyone who looked at commodity ETFs can attest, esspecially USO and UNG, they make for terrible investments as they don't track the prices of the physicals.  Oil goes up but the oil ETF, USO, goes down.  Same thing for UNG—surprise surprise the system was all but rigged for Wall Street.  No shocker there for an industry that preys on the public and looks for ways to use it's clout to game systems and take advantage of market participants.  Check this article or more. 

Fraudulent System Yet No Reprisals

Only in banana republics and the good old U.S. of A can corporations get away with fraud without any accountability.  The system was gamed, abused and the government picked up the tab without even a perfunctory "thanks" by the con artists that devised a system where they win whatever way it ended up and the public would lose.  It was criminal yet no one is a criminal or deemed to be criminal.  Only in an utterly corrupt system can this occur—guess what?  We are in that totally corrupt system now and don't even know it.  Merrill Lynch's from CEO John Thain summed it up nicely with this comment in 2010: 

[W]hen you have a system where you pay someone for originating mortgages simply on volume and nothing happens to them if the credit quality is bad, and nothing happens to them if the borrower is fraudulent on his loan application, and nothing happens to him if the appraisal’s fraudulent, then that’s probably not a very smart system.

No shit!  Well it's not a bad system for all those who collected their fat bonuses and then left others to clean up the mess.  Civil cases are popping up faster than wack-a-mole and yet we don't hear a peep from the government regarding prosecutions for all the fraud that was taking place.  Why is that you might ask yourself:  and the answer appears to be that the U.S. government is fundamentally corrupt at its very core. The proof:  the absolute inaction to hold anyone accountable.  It's just that simple.  They are above the law.  Their lobbyists get their cronies elected to do their bidding in congress—and it is very effective as we can see!

In an AIG lawsuit against Bank of America, AIG said that BOA's "representations regarding the underwriting processes, underwriting quality, loan selection, credit enhancements, use of exceptions and alternative documentation programs, and ratings were all untrue.  The mortgage loans underlying AIG’s certificates did not comply with the underwriting standards the Offering Materials described because those standards were systemically ignored.  In their roles as both originators and as acquirers of the loans, Defendants ignored borrowers’ actual repayment ability and the value and adequacy of
mortgaged property used as collateral.  Systematic, bulk exceptions to underwriting standards were granted without consideration of any compensating factors."  These lawsuits will likely get settled but where is the government?  Where are the regulators?  Utter silence or some superficial jaw-boning would be the only way to characterize our government's response.  That response, or lack of, is criminal itself.

And worst of all, the fraudsters have proven that they can get a away with this criminal behavior.  It will happen again and again until there is real reform—something like what ended the last gilded age—real substantial regulation that worked for 70 years until the anti-government Republican gutted all regulations as out-dated.  Well those "out-dated" regulations prevented the very things that they allowed to happen.  Surprised?  That's corruption and it's at the core of the U.S. government and it will probably only get worse until the divide between the top and the rest is too much and must be stopped before the whole system just implodes on itself.  I'm betting implosion, 15-20 years out. Hope I'm wrong, but this level of corruption seems to just perpetuate itself to absurdity.  Watch Fox news for a bit for example after example of this absurdity!

Warren Buffett Refutes Republican Nonsense!

Warren Buffett recently said:

I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 percent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain.

 How many times have we heard Republicans say that higher taxes will hurt the job creators?  It's all Republican talking points and complete  nonsense, but it's nice to see one of these job creators debunk their bullshit.  Nice job Warren Buffett!

Youth Unemployment Will Kill This Generation

Unemployment has huge costs and I guess rioting is just one of them.  I guess it's easier to throw them in jail rather then educate and pursue policies that might employ them.  Congratulations right wing deregulatory zealouts.  Your policies of the last 20 or 30 years have failed miserably for the masses but were an amazing success for you and your wealth.  Well done.  Let's hope these masses catch up with you before you've absconded with all that booty.

http://www.economist.com/blogs/freeexchange/2011/07/youth-unemployment

They Looted Our Banks and the Government Let Them!

Unfortunately, firms covered by government guarantees are not the
only ones that face severely distorted incentives. Looting can spread
symbiotically to other markets, bringing to life a whole economic under-
world with perverse incentives. The looters in the sector covered by the
government guarantees will make trades with unaffiliated firms outside
this sector, causing them to produce in a way that helps maximize the
looters' current extractions with no regard for future losses. Rather than
looking for business partners who will honor their contracts, the looters
look for partners who will sign contracts that appear to have high current
value if fulfilled but that will not-and could not-be honored.

This is from an old paper from 1993, but it could have been written just the other day.  From real estate agents, bank loan officers, rating firms to investment bankers, they are all guilty of fraud and looting!  There is no doubt that banks knew what they were doing—no doc loans, loan fabrications, securitizations of known worthless shit, AAA ratings on complete garbage, etc, etc!  If we listened and believed  all their lies about how it was the perfect storm and there was no chance to foresee the collapse of the financial industry, we are the fools!  The shocking thing from the crisis that continues to this day, for the past 3 years, is that no one is being held accountable.  At least when the savings and loan scandals took place in the 80's people were held accountable and went to jail.   In this latest case of institutional fraud and looting the government bailed them out, made many of the perpetrators whole and just moved on.  I think we are getting the government that they paid for, through lobbyists, and that we all literally pay for in the end.

Will Americans Ever Riot?

Very interesting blog here on why the riots are taking place in England.  I wonder what will be the breaking point in the U.S.  I'm sure riots are on the way, and it's a matter of when they will take place and not if.  Between a government that largely serves corporate interests and leaves large swaths of the population to fend for themselves to a supreme court that has all but given it's full stamp of approval, it's just a matter of time before Americans will say enough is enough and demand drastic change.  Of course, being a semi-police state that the U.S. has become any riots or uprising will be doomed to failure and violently squashed faster than you can say, "unlimited campaign contributions by corporations."  Thank you Justice Scalia and you other right wing Supreme Court ideologues!  I hope someday the people recognize you for what you are and catch up to you.  Changing "Justice" Scalia to "prisoner" Scalia would be a welcome and righteous outcome to it all! 

Crazy Woman Michele Bachmann Wants to Be President! Oh my God!

As the saying goes, a picture is worth a thousand words.  Well, surprise surprise, Michele Bachmann not only sounds like a lunatic she actually truly looks like one too!  Not one iota of surprise for anyone who has listened to her for more than a few seconds.

Bush Administration War Criminal May Pay

Finally one of the Bush Administration war criminals may be held accountable.  Still holding out hope that Bush will end up behind bars one of these days.  Poor Bush can't even travel in Europe without possibly ending up in the Hague as a war criminal charged with crimes against humanity.  I'm betting they will get him or a future administration will turn him over, but in the mean time Rumsfeld can do a warm up act and be held accountable.  Getting closer!

What Happened to the U.S.?

Republicans Are NOT Childish, Screwing Us is the Agenda!

It seems recently we keep hearing the word "childish" over and over again in the press—from Apple, Microsoft, the Chinese to Republicans the word keeps getting spewed as though it explains all of their behavior.  This is nonsense and and makes it more difficult to hold perpetrators truly accountable.

The Republicans weren't being childish when they chose to screw the American middle class and the American working poor while committing domestic political terrorism over raising the debt ceiling:  they were advocating for the very people that sent them to Washington to pursue a policy against the majority and for the special interests.  To say that that's childish completely absolves them of a much deeper wrong, obfuscates their true intentions and allows them to just continue on without any accountability.  It gives these treasonous hypocrites a pass without the public to get a chance to truly pass judgment on their policies and actions.  These treasonous Republicans will lose in the end but not until we call the policies what they are and not pretend it's child's play!

Republican Kill the Economy and Claim Victory

Intentionally or unintentionally the Republicans have managed do duplicate the policies of the 1930's—cutting spending in an extremely weak economy.  It didn't work then and won't work this time.  Actually, there's a strong case that these cuts will hurt the economy much more than closing tax loop holes or raising taxes on the wealthier among us since the wealthy are awash in cash already and aren't spending it and a lot of these cuts will come from the most vulnerable of us that tend to spend every penny they get their hands on.  Congratulations Republicans!  I hope this deed catches up to you by the next election when the general population figures out what you have done!