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The Wall Street Crisis May Be Over, But The Real Economic Crisis Still Looms

(Update: to be fair, Bank of America did take a hit this past quarter)

In order to create incentive and get consumers’ as well as investors’ confidence back up to levels before the financial crisis started, it seems the media and their overlords, whoever they may be (I personally think Goldman, JPMorgan, BofA, et al. :] ), are intent on continuing to mask the reality of the actual crisis in the housing market and the broader market that is getting worse and apparently far from over, where there is an increasing amount of pain and hurt; something those very banks helped create and are profiting from now.

Case in point: foreclosures for the third quarter versus foreclosure filings year over year.

“The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.”

Now while the above is certainly a true number and an accurate reading of the number of actual foreclosures for the third quarter, the reality going on behind the scenes can be seen in this article, which has come out on the same day as the last article:

“U.S. foreclosure filings climbed to a record in the third quarter as lenders seized more properties from delinquent borrowers, according to RealtyTrac Inc.

A total of 937,840 homes received a default or auction notice or were repossessed by banks, a 23 percent increase from a year earlier, the Irvine, California-based seller of default data said today in a report. One out of every 136 U.S. households received a filing, the highest quarterly rate in records dating to January 2005.”

Discussion of a Financial Coup D’Etat on our Economy … on PBS

http://www.pbs.org/moyers/journal/10092009/watch.html

(For the record, I do not necessarily agree with every view in this interview. As far as Moore is concerned, I agree with him concerning the assessment of the problems, that bankers (though I would add the government intertwined with the bankers) have created the problems. But I do not agree with his assessment that capitalism, as a theory, is the problem that perpetuated this crisis … bankers and big government are the problem.)

It stunned me this was aired on PBS with Bill Moyers, of all places: http://www.pbs.org/moyers/journal/10092009/watch.html … really worth watching. These are not some right-wing, gun-slingin,’ militia crazies from the boondocks. In this 20 minute interview, former IMF Chief Economist Simon Johnson and Rep. Kaptur (D-OH) discuss the likelihood that a financial coup d’etat has taken place in our economy. Very fascinating and startling. I never thought I would be hearing these things coming from the likes of PBS with Bill Moyers. Glenn Beck? Sure, you would expect that. But PBS? The conversation in the financial industry is taking a major turn now.

Dumping the Dollar in the Middle East, Russia, China, Japan, and France?

From the Independent: The demise of the dollar:

“In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

“Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

“‘These plans will change the face of international financial transactions,’ one Chinese banker said. ‘America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.'”

Ambrose Evans-Pritchard on the Real Cause of the Crisis

Germany declares economic war

“… Banks did not cause this global crisis. Governments around the world caused the crisis by forcing down the price of credit (Greenspan, Bank of Japan, and ECB on short rates: China et al on long rates, by flooding the global bond market) far too low for many years, encouraging debt. Banks were the instruments, not the cause. That is an elementary point that many people … still fail to understand.” – Ambrose Evans-Pritchard

Commercial Real Estate Watch

“In order to sort through the disaster that is Wells Fargo’s commercial loan portfolio, the bank has hired help from outside experts to pour over the books… and they are shocked with what they are seeing. Not only do the bank’s outstanding commercial loans collectively exceed the property values to which they are attached, but derivative trades leftover from its acquisition of Wachovia are creating another set of problems for the already beleaguered San Francisco-based megabank.”

“The CRE alarmists may yet be proven right, but the delayed reckoning due to CDS [credit default swap’s] accounting means it may take a while for these shoes to start dropping.”

“The next wave of the credit crisis is about to hit — a collapse in com mercial real estate and potential explosion of bank failures. With its resources tapped out by the first wave, what should Washington do?

“Over the last year, the Federal Reserve doubled the size of its balance sheet, and took unprecedented action in monetizing government debt and extending credit to financial institutions. Now it must head off inflation and extricate itself from $5 trillion-plus in credit exposure from various bailouts. The Treasury, meanwhile, is issuing debt at the fastest pace in peacetime history.

“Now comes the next crisis. The same factors that caused the residential bubble — easy credit, lax lending standards and booming mortgage-backed-securities underwriting — also drove commercial real-estate overvaluation. But the commercial market lags the residential one by about a year, so this bubble is still popping.”

Peter Schiff is Officially Running For Senate

Commercial Real Estate Loan Foreclosures Coming to Pass

From Calculated Risk:

This is happening all across the country: falling demand [for commercial real estate] and still more office supply coming available as large commercial real estate projects are completed. This means falling rents and property values. And as the construction loans come due, there will be more and more losses for lenders.

From WashingtonPost article cited in Calculated Risk’s blog:

“We may see the commercial version of the subprime situation,” said Steve Silverman, director of the Montgomery County Department of Economic Development.

This was predicted earlier this year by Gerald Celente, founder of Trends Research Institute. The question is, will the effects of this and other situations prove to be as dire as he predicted? We’ll have to see I guess.

Orwellian Financial Doublespeak – Update 1

This really makes you wonder who is really running the engine of this nation now: from politics to corporations to the media, it really seems to be the moneychangers now, the banks and major investment firms. And instead of the Fed addressing the “too big to fail” issue, the bailed out banks are even bigger than before after all of these tax-payer funded bailouts.

Don’t believe everything you read in the headlines out there about the state of things in the economy, or in this case the bailouts. It is not rosy nor can we determine the state of the economy based solely upon what the stock market is doing, as some seem bent on doing.

It seems alternative media are more faithful these days to doing actual economic and financial journalism than many of the big hitters, including blogs like Naked Capitalism, Mish’s Global Economic Trend Analysis and Calculated Risk. In addition, though Alex Jones may be the leader of conspiratorial hype movement in the alternative media world, where everyone and their dog is an agent of the Fed and the global elitist interests that are coming to enslave us, he at least has one thing completely right that I agree on: we are in an information war of vast proportions against some wealthy stake holders in this country now.

Take for example this from Naked Capitalism: More Bogus Bailout Reporting: “As Big Banks Repay Bailout Money, U.S. Sees a Profit” (Archive)

“Clearly, the spin is in. As a post earlier today discusses, the Financial Times is running a story that claims that the Fed made money on its rescue programs, then slips in all the tidbits in the body of the article to let discerning readers know that the reporter understands that the analysis is utter rubbish while looking like it is not crossing the Fed.

Come Attend Yet Another ‘Life-Changing’ Event!

Why is it that many times, whenever some special guest comes and speaks at a church, business or any other kind of special organizational event, it is pitched as a ‘life-changing’ event? Can’t it just be merely informative or helpful?

I believe the label ‘life-changing’ actually has the reverse intended effect and reduces groups of people to passivity (or mere short-term conformity) toward the objective the leaders have set for the event, mainly as a result of setting the expectation bar so high by labeling it ‘life-changing’.

If every event is life-changing, then (generally speaking) no event will be life-changing, which inevitably produces stagnation and complacency in the group. I mean if it really is a life-changing event, well then okay, maybe it is.

But how often do you generally walk away from a meeting of this kind with a complete paradigm shift in your perspective or understanding (apart from radical conversion by the work of Christ)? You may walk away informed or even affected, given new ideas on how to approach something, or change some area in your life. But is your life generally radically changed by some motivational speaker? 95-99% of the time, I would say probably not. Maybe in the short-run to be sure. But after this wears off, it’s business as usual.

Why can’t we just be honest and call an event what it is in reality, not what we want to project it or market it as (in this case ‘life-changing’)? If every event is described in these terms, people will catch on to the truth of what these kind of events are and begin coming with the expectation that it’s just another okay, mediocre or poor event as a result of having the bar set to an extreme. Just a thought …

Peter Schiff on Warren Buffett’s Assessment

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