Posts Categorized: USAWatchdog.com

Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Last week, this story from Reuters really got me upset.  The headline read: “States negotiating immunity for banks over foreclosures.”  The story said, “A coalition of all 50 states’ attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks.”  (Click here for the complete Reuters story.)  I was outraged.  I posted a link to the story on the USAWatchdog site with my commentary that said, “Negotiating with criminals!!! POX on AG’s!!!”

It has been alleged that millions of loan documents have been forged in so-called foreclosure mills because the banks did not possess the correct documents to kick people out of their homes.  One name, “Linda Green,” has shown up signed differently more than 20 different ways.  The name has been so widely used in the mortgage mess it is now synonymous with fraudulent mortgage documents. (Click here to read more about mortgage documents with fake signatures from the AP.)

I think investigators should be able to find evidence of fraud at the loan origination level, the securitization level and the foreclosure level.   This is an outrage, and I think criminal activity is so widespread that the AG’s should be considering RICO charges, not cutting immunity deals for the bankers!  The Iowa AG, Tom Miller, is spearheading negotiations for the states.  He and other AG’s who signed on to the immunity deal should be ashamed and fired at the same time!!  Why did Mr. Miller even bother to go to law school?  I thought these guys were supposed to investigate and prosecute crimes.

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Posted by & filed under USAWatchdog.com.

Greg Hunter’s USAWatchdog.com

Dear CIGAs,

It looks like even the mainstream media (MSM) can see a calamity if we are right on top of one.  Finally, the dire debt ceiling negotiations between Congress and the White House were covered wall-to-wall on all the major media outlets yesterday.   No comment better describes the frightful situation America faces over its debt problem than what Treasury Secretary Tim Geithner said yesterday on FOX, “. . . we’re running out of runway.  I never thought they would take it this close to the edge and let politics get in the way of demonstrating we will pay our bills on time.”  To extend that metaphor, even if the debt ceiling is reached just before the August 2nd deadline, doesn’t mean the government can get enough altitude to clear the trees.  It will take some time to implement the new bill, and time is very short.

Meetings in the nation’s capital yesterday did not produce a bill that can garner approval of the House, Senate and President.  At the open of the Asian markets overseas, gold was up $20 an ounce in the first hour of trading.  It hit another record high (with many more to come.)  Who knows if the yellow metal will hold onto the gains, but that amounts to a giant vote of no confidence from overseas consumers of our dollar and debt.  Remember, there are $12 trillion in liquid assets (treasury bonds and dollars) held outside the country.  A panic over the stalled debt talks in the United States could cause massive selling of those assets.  Interest rates would spike and the value of the dollar would plunge.  It would cause immediate pain for U.S. consumers and could disrupt markets worldwide.  The stakes in Washington D.C. couldn’t be higher.  What has been called a “cloud of default” could start hurling thunder bolts and producing torrential rain in the global economy.

To say the Democrats and Republicans are not on the same page is an understatement—they’re not on the same planet.  The argument between raising taxes and cutting spending has morphed.  It now includes a “must do” deal to take negotiations on raising the debt ceiling out of 2012 elections.  When the idea of a short-term debt increase was posed to White House Chief of Staff Bill Daley on “Meet the Press” yesterday, it was soundly shot down.  Host David Gregory asked, if “The President would veto a plan if it does not extend the debt ceiling into 2013?”  Daley quickly said, “Yes.”

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Posted by & filed under USAWatchdog.com.

From Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Last week, in testimony on Capitol Hill, Fed Chief Ben Bernanke said, “The pace of the economic recovery will pick up.”  As far as the weak economy is concerned, Mr. Bernanke also said there would be, “a notably better performance than we have seen so far this year.”  I could not believe what I was hearing.  It was totally opposite to other economic news that came out in the very same week.  For example, unemployment claims stayed above 400,000 for the 14th straight week!   I do not see how that trend is going to reverse itself anytime soon with the anemic job growth in the economy.

Another big economic downer came from RealtyTrac.  Even though the happy headline splattered all over the mainstream media was similar to what CNN posted, “Foreclosures plunge in first half of 2011,” the real story was buried.  CNN went on to say, “RealtyTrac’s CEO, James Saccacio, sounded a sour note, however, contending that the drop-off in filings can be traced not to economic improvement or a pick-up in the housing market, but to processing delays . . . ‘[That’s what is] pushing foreclosures further and further out — we estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012, or perhaps even later,’ Saccacio said.” (Click here for the complete CNN story.)  How do you put out a headline that misses the point of your own story by that much?  I guess CNN has the same problem Mr. Bernanke has–grasping reality.  The expert quoted in the CNN story said the housing market may not recover until “2016”!  (And you thought I was bearish.)  

Can we count on Mr. Bernanke when he says the “recovery will pick up”?   Treasury Secretary Tim Geithner recently stated just the opposite.  He said, “I think for a lot of people it’s going to be – it’s going to feel very hard, harder than anything they’ve experienced in their lifetime now, for some time to come.”  Based on many wrong market calls and current economic facts, I say we cannot count on a recovery for most Americans, at least not anytime soon.

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Thank goodness the Casey Anthony case is over!  The jury thinks she is not guilty of murder.  I don’t know if they got right or wrong, but I do know many dollars and much air time was devoted to a story that will have zero effect on the lives of 99.999% of Americans.  I think the discovery of a walking, talking Martian would have gotten about the same attention.  I guess this stuff sells newspapers and gets TV ratings but is sure not what U.S. citizens should be focused on.  Maybe that’s the point.  Are stories like Casey Anthony just our version of a Roman Circus?  Are the masses being kept preoccupied with events that have no bearing on their lives while the country burns in a cloud of debt?  I think so.

Most people have no idea of the perilous position the U.S. is in.   One wrong move by our government or even a government the size of Greece, Portugal, Spain or Italy, and there could be a daisy chain of debt explosions around the globe.  The people are in the dark, and I blame the mainstream media (MSM.)  A story that should have people really terrified is the battle going on in Washington D.C. over raising the debt ceiling some $2.4 trillion dollars.  If the issue is not settled by early August, the U.S. could have the mother of all debt defaults.  The Democrats and Republicans cannot agree on a package that contains both tax increases and budget cuts.  President Obama has called for a “balanced approach.”  Bloomberg reported yesterday, “The Obama administration and congressional leaders are working to complete a deal on a long-term budget reduction package by July 22 as part of a plan to raise the $14.3 trillion debt limit. The Treasury Department has said that its borrowing authority expires Aug. 2 and could result in a first-ever U.S. default on its obligations.  Obama’s comments came as Democrats were intensifying a showdown with Republicans over whether tax increases should be part of a deficit-cutting deal before the Aug. 2 deadline.”  (Click here for the complete Bloomberg report.)

Everyone should be watching this debt ceiling negotiation because, no matter the outcome, it will affect the lives of 99.999% of Americans and many people around the globe.  If a deal is not reached, catastrophic consequences would follow.  In his latest report, economist John Williams from Shadowstats.com said, “Such a default would be a serious mistake, and it most likely will be avoided as political games push the limits of brinksmanship.  An outright default likely would trigger massive dumping of the U.S. dollar, and it would accelerate movement to much higher U.S. inflation and, ultimately, to hyperinflation.”  According to Williams, there are $12 trillion in liquid dollar assets held outside the U.S.  That is where the hyperinflation would come from.

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

The second round of quantitative easing (QE2) is scheduled to end June 30, and already there are calls for more financial stimulus to keep the economy from falling off a cliff.  The latest call came from Larry Summers, former head of the Obama Administration’s financial team.  In an Op-Ed piece that ran on Reuters last Sunday, Summers pitched the idea of a $200 billion cut in the payroll tax. The Reuter’s story said, “Fiscal support should be continued and indeed expanded by providing the payroll tax cut to employers as well as employees,” Summers wrote.  “Raising the share of the payroll tax cut from 2 percent to 3 percent would be desirable as well.” . . . He also said the economy would benefit from an extra $100 billion in infrastructure spending over the next several years and recommended additional aid to states and cities.”(Click here for the complete Reuters story.) The way I see it, Mr. Summers is proposing another $300 billion be added to the national debt.

Summers is not the only high profile economist that wants to print more money.  Nobel Prize winning economist Paul Krugman thinks the U.S. didn’t provide near enough financial stimulus back in 2009 when Congress passed more than $800 billion in new spending.  In a recent New York Times Op-Ed piece, Mr. Krugman said, “In fact, in important ways we have already repeated the mistake of 1937. Call it the mistake of 2010: a “pivot” away from jobs to other concerns, whose wrongheadedness has been highlighted by recent economic data. . . . Back when the original 2009 Obama stimulus was enacted, some of us warned that it was both too small and too short-lived. (Click here to read the complete NYT story.) Mr. Krugman implies that the money already spent to keep the economy from plunging (which in essence is more than $12 trillion including all Fed actions) has not really caused any problems.   He wrote, “This consensus was fed by scare stories about an imminent loss of market confidence in U.S. debt. Every uptick in interest rates was interpreted as a sign that the “bond vigilantes” were on the attack, and this interpretation was often reported as a fact, not as a dubious hypothesis. . .  Well, the bond vigilantes continue to exist only in the deficit hawks’ imagination. Long-term interest rates have fluctuated with optimism or pessimism about the economy; a recent spate of bad news has sent them down to about 3 percent, not far from historic lows.”

Mr. Krugman conveniently leaves out the fact the Federal Reserve has spent more than $600 billion in the past 8 months buying Treasuries that have artificially held rates down.  I suspect interest rates would be much higher if quantitative easing (QE 2 or money printing) was not Fed policy.  And what about the big increases across the board in food and energy?  These are not scare stories but facts that are quite damaging to the economy, especially the unemployed.  Still, economists like Krugman claim more money printing will save the day and create jobs.  With the 2012 election looming, that will surely be the path taken—inflation be damned.

Economist John Williams at Shadowstats.com thinks that is exactly what Fed Chief Ben Bernanke was signaling last week at the International Monetary Conference in Atlanta.  In his remarks, Mr. Bernanke admitted, “Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.” In a recent report, Williams said, “Despite the mixed language in his comments on how well Fed policy has been working, I take the more-negative economic tone as an early warning of an eventual QE3 (third-quarter 2011).”(Click here to visit the Shadowstats.com site.)

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

It seems the mainstream media (MSM) is waking up from its long sleep.  The dream world of “green shoots” and “recovery” is fading into staggering unemployment and plunging home prices.  Most of us in the real word have known for some time that there is no recovery.  People are not optimistic no matter how many times they are told things are getting better, and a recent poll by the Daily Beast and Newsweek proves it.  The story said, “. . . reality is beginning to break down Americans’ normally optimistic attitude. Three-quarters of our respondents think the country is on the wrong track. A majority say the anxiety wrought by this recession has caused relationship problems and sleep deficiency. Two-thirds even report being angry at God.” (Click here for the complete poll results and story.)

How can the MSM be so wrong for so long?  I think talking bad about the economy is perceived as bad for ad sales by top management in the MSM.  It is only when things get so obvious that they finally report some real truth or risk looking even more irrelevant than they already are.   In a Jack Cafferty segment on CNN last week, the question was asked, “Will Our Economy Trigger Violence In U.S.?” There is no way this kind of segment sees the light of day without people in the organization accepting the idea that things are officially bad.  That means the happy talk and wishful thinking that the economy is turning around is pretty much dead, at least for a while.  Check out the Cafferty segment in the video below:

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

I have been saying repeatedly that the one thing you can count on is inflation.  If you take housing out of the picture, that is exactly what we have been getting.  The Fed wants inflation and loathes deflation.  Ben Bernanke and other Fed officials have consistently said they want to support “asset prices.” In an October statement from the Federal Reserve Bank of New York, it attempted to explain its bloated balance sheet and explain why it was buying government bonds and mortgage-backed securities.  The Fed said in part, “Nevertheless, balance sheet policy can still lower longer-term borrowing costs for many households and businesses, and it adds to household wealth by keeping asset prices higher than they otherwise would be.” (Click here to read the entire Fed statement from October 2010.)

According to financial expert James Rickards, the Federal Reserve is playing an inflation game called “financial repression.”  The goal is to get the U.S. out from under at least $77 trillion in debt and future liabilities.  The Fed would like to cut the deficit in half in 10 years.  How do you do that without actually cutting anything?  Rickards said in a recent interview on King World News, “The answer is 4% inflation.  It doesn’t have to be that high, it just has to be persistent.  It’s like holding an ice cube in your hand.  It just melts away.  Well that’s what the Fed is doing, and that’s what financial repression is all about.” (Click here for the complete King World News interview with Mr. Rickards.) (Click here for James Rickards’ bio.)

In simple terms, in order for this to work, the Fed needs both inflation and growth.  This has been implemented in the past, and a great example is the post WWII economy.  There was growth because the U.S. was helping to rebuild the world after the carnage in Europe and the South Pacific. There was also some inflation, but not so much that would alarm the public because back then, everyone had a job and wages rose.  By the 60’s, the debt overhang from the war was largely in check.

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Remember back in early-2009, when the mainstream media (MSM) started with the ridiculous “green shoots” talking point?  Even though the data was dismal and there were no signs of the economy recovering, the “green shoots” term was used by just about everyone in the MSM.  I think not long after economist Nouriel Roubini said that the much talked about “green shoots” was really “yellow weeds,” the talking point changed to “recovery.” (Click here to read the complete “Yellow Weeds” article from professor Roubini.) Ever since, the MSM has described the so-called “economic recovery” in terms such as  “fragile,” “jobless” and “tenuous,” to name a few.   The data has repeatedly shown the “recovery” isn’t any of these terms because THERE IS NO RECOVERY.  Oh sure, the stock market has gone up, but so have the number of people on food stamps, which is at a new record of 44 million.  There is also no recovery for the 33 million people who are unemployed.  Forget the government B.S. of 9%, the true unemployment rate has been stuck north of 22% for months according to Shadowstats.com.

The latest numbers have shown there is bad news across the board for housing, autos, manufacturing, employment and consumer confidence.  Well, here we go again with the spin by the MSM.  Even though many are now admitting there is a double-dip in the economy, the talking points used to describe this new downturn are things like “temporary,” “transitory” and a good old fashion “soft patch.” Here’s how the Associated Press reported the story after a nearly 300 point drop in the Dow this week.  It said, “We’re definitely in a soft patch,” says Steve Blitz, senior economist for ITG Investment Research.  No one knows whether the slowdown is a temporary setback or the start of a prolonged period of anemic growth. Many analysts hold out hope that the economy will rebound in the second half of 2011.” (Click here for the complete AP story.) “Soft patch, temporary,” see what I mean?  Since when is holding out “hope” and investment strategy?  Me and the people I have been quoting on this site have been clearly telling readers there would be another plunge in the economy.  We were right and the MSM was wrong—again.

Money manager Hank Smith of Haverford Trust said yesterday on FOX Business, “It looks like we are having a soft patch for a quarter of two as we are in the expansion phase.” Mr. Smith blamed this “soft patch” on higher energy prices, the Japan earthquake and extreme weather.  Mr. Smith went on to say, “All these are transient or cyclical factors.  So while it is having an impact near term we do expect growth in the second half.”  “Transient, cyclical” all words that scream the message–don’t worry, it will be ok, just keep spending all your money!

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