Ugghh! It is Getting Harder and Harder to Report This Stuff!

I mentioned in an earlier Post that this year is the end of the Government Bailouts! You know why? Because it is coming down to either the Banks, GE and AIG go under or the Federal Government goes under! It is coming to that.

The Big Banks, those that are too big to fail hold about $200 Trillion in Toxic Derivatives, CMO's CDO's and CDS's. Last time I looked, they were estimated to be worth anywhere from 50% down to 5% of the value noted on the bank's balance sheets. There is simply not enough money in the world to keep these cash sucking vampire zombies and their blood thirsty management afloat, period.

Look at this. I fully expect the employment numbers to be released on Friday to be north of 700,000, maybe not when they are released, but perhaps when they are "revised" next month when even worse figures will make them look not so bad.

It is official, the stock market has now lost 50% of its value since 10 '07 meaning that 10-12 years worth of accumulated wealth, over 5 Trillions in asset values have been destroyed.

Where will the Dow end up? I predicted in Oct Nov when it was about 10,000 that it would hit 5000 in the next 6 months, and it looks right on target. After that? Below 3,000 is likely. Why?

Corporate profits, the driver of stock prices are down 61% that is the biggest drop in 141 years and they are going lower. Assisting will be a default rate of at least 10% in corporate bonds which will ripple through the bank's asset valuations.

They say that 1 in 5 mortgaged homes is underwater, the owners owe more than the property is worth with prices down about 30% since the peak and since there was only a 25% equity cushion to begin with... With prices slated to go down another 15% this year, that will mean between 25 and 30% of mortgaged homes will be underwater. What was that sound? Jingle Mail, the sound of keys being mailed to the banks! They won't have to bother to foreclose.

10% of mortgages are delinquent, about 4x normal.

Let's see, total consumer debt is is closing in on 350% of GDP, and that GDP is an inflated number! We'll see a record level of credit card defaults as the debt bloated consumers flatulate their way back to normal debt and spending levels.

Where does that leave you, and me? Relying on the Internet to generate cash flow. This is the only out for the Middle Class to become the Internet Class. High paying jobs, like Master's degrees will be nostalgic relics of a time long ago before this century is out.

The only train out of here? Not the feeble pokes the Obama team is making at the problems, with Rush and the Kno Nothings cowering them into feebility.

Precious metals will be the only antidote to the Ultimate Solution to the problem, probably though in Obama's first term, will be precious metals as they have always been in times of chaos and hyper inflation.

Stay tuned as I fleshout these options.

Taking Worthless Securites from Banks and Putting Them on the Backs of American Workers!

"...moving that heavy load of dubious and worthless paper --out of the banks and putting it on the back of American labor.

That is what the Reconstruction Finance Corporation is doing now. They talk about loans to banks... but they say very little about that other business of theirs which consists in relieving the swindlers who promoted investment trusts in this country and dumped worthless foreign securities into them and then resold that mess of pottage to American investors under cover of their own corporate titles.

The Reconstruction Finance Corporation is taking over those worthless securities from those investment trusts with United States Treasury money at the expense of the American taxpayer and the wage earner."

These excerpts are from Congressional testimony by Congressman Louis T. McFadden during the the First Great Depression. Has sort of a familiar ring to it, doesn't it? Make certain substitutions, such as mortgage derivatives instead of "investment trusts, " and mortgage securities for "foreign securities" and you realize that this has happened before!

The Federal Reserve Bank was neck deep in producing the First Great Depression and it and its minions are equally involved in this evolving, 2nd Great Depression! Substitute the Reconstruction Finance Corporation for the "Bad Bank" being dredged up by Wall st and you will see they want to do the same thing this time that they did last.