U-6 Total unemployed, plus all marginally

attached workers, plus total employed

part time for economic reasons, as a

percent of the civilian labor force

plus all marginally attached workers

17.5 %

A Reader Asks "How Did 558,000 People

Lose Their Jobs When Only 190,000

Jobs Were Lost?"

Here is an excerpt from today's Bureau of Labor Statistics Non-farm Payrolls report."The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarmpayroll employment continued to decline (-190,000), the U.S. Bureau of LaborStatistics reported today. The largest job losses over the month were in con-struction, manufacturing, and retail trade.
Household Survey Data
In October, the number of unemployed persons increased by 558,000 to 15.7million. The unemployment rate rose by 0.4 percentage point to 10.2 percent,the highest rate since April 1983. Since the start of the recession inDecember 2007, the number of unemployed persons has risen by 8.2 million,and the unemployment rate has grown by 5.3 percentage points...
The civilian labor force participation rate was little changed over the monthat 65.1 percent. The employment-population ratio continued to decline inOctober, falling to 58.5 percent."
An astute reader noticed that the BLS press release says that 190,000 jobs were lost from payroll employment, but the number of unemployed persons increased by 558,000. What's up with that?
The BLS report consists of two independent data samples. BLS has two monthly surveys that measure employment levels and trends: the Current Population Survey (CPS), also known as the household survey, and the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey.
There is the "Establishment Survey" which is based on responses from a sample of about 400,000 business establishments, about one-third of total nonfarm payroll employment. The headline payroll number, the job loss of 190,000, is based on this data. ( Power more at )

Gold suppression is public policy and public

record, not 'conspiracy theory'

Submitted by cpowell

on Sat,2009-11-07

18:16. Section:
Essays

Remarks by Chris Powell, Secretary/TreasurerGold Anti-Trust Action Committee Inc.International Precious Metals and Commodities Show Olympia Park, Munich, GermanySaturday,
November 7, 2009

Thank you for coming to listen to me today. Please forgive my inability to speak German. I'll be discussing many documents, some of them fairly complicated, but don't worry if you miss something about them. They'll be posted at GATA's Internet site with these remarks.
On Friday, September 25, Jim Rickards, director of market intelligence for the Omnis consulting firm in McLean, Virginia., was interviewed on the cable television network CNBC in the United States. Talking about the currency markets, Rickards remarked: "When you own gold you're fighting every central bank in the world." ( Power more at )

Select Quotes

Democracy has been diluted by the actions we have taken to get out of this crisis.
The government is willing to willy nilly print money to prevent any bank from going into receivership which I think is a galacticly bad idea.
Credit derivatives added to the problems by providing leverage and opacity.
They increased people’s ability to borrow in hidden ways.
There is a lot of debt in the system that is invisible. And banks themselves were often running invisible hedge funds.
The legacy investment banks were running invisible hedge funds, but so were our major banks, and that includes JPMorgan, and Citigroup Bank of America.
Collateralized Debt Obligations (CDOs) were overrated and overpriced the minute they came to market. If that wasn’t enough, investment banks were creating these things in their financial meth labs , knowingly selling things they knew or should have known were overrated and overpriced.
In 2007 when it was clear that this activity should be shut down, because we had mortgage lenders failing throughout the country, instead of shutting down the financial meth labs, the investment banks sped up, they accelerated the bad deals they were bringing to market.
Many of them were just phony secutritizations with no other purpose than to hide losses.
I was hopeful that when someone like Obama came in, there would be meaningful change.
If anything, the situation has gotten worse. But this is bipartisan. You’ll notice that President Bush when he was in office, he elevated Roland Arnold who was the head of Ameriquest, that had been involved in alleged mortgage fraud, massive, sued by almost every state in the union, and he was elevated to the position of Ambassador to the Netherlands.
The Netherlands did not even like it.
This was not a model issue.
This was a management issue. We had people who knew or should have known they were selling things that were value destroying securitizations, and their sale provided money to lenders were originating fraudulent loans, overrated by complicit rating agencies.

Janet Tavakoli is a straight shooter and an equal party basher. You have to like that.
Mike "Mish" Shedlock

Stacy Blog:

Barbarians at the gate of a gas guzzling empire

November 2nd, 2009

by stacyherbert

Stacy Summary: From what I can tell looking at history, all peoples of every empire at its peak, just before its imminent collapse, belligerently maintain their lifestyles at all cost to their own wealth and their own chance of survival. For a number of reasons, you cannot talk them into saving themselves.
While thousands upon thousands of hours are spent in America, for example, trying to prove that spewing exhaust and carbon into the air is, in fact, perfectly natural with zero cost and that there is, also, in fact, (according to one Big Oil study) enough fresh water, fertile land and oil to provide for a doubling of the global consumer class for thousands of years into the future, Americans (most who, by the way, believe the Earth is only a few thousand years old) continue to insist with an almost religious fervor on getting from point A to point B in the most inefficient manner.
Again, from my reading of history, it is impossible to fight this sort of end of empire bankruptcy of morals, wealth and, most importantly, ideas. The American empire and her citizens want to blow it on oil, so that’s how they will do it. No amount of science or reasoning can stop them. And as they will use any means necessary to get whatever oil remains, it makes no sense to try to develop your own economy using a resource that the Empire has devoted all their military might toward securing. The British, Dutch, French, Germans and other Europeans did not dare stand in the way of Spain’s maniacal quest for gold in the New World; instead, they took the gold-less lands and with them developed manufacturing and trade routes in sugar, cotton, wheat, fur, etc. (Power more at )

This is NOT good

Debt Slave Bait and

Audit the Fed Bill Gutted:

What You Can Do

This should come as no surprise but Ron Paul says Federal Reserve Policy Audit Legislation ‘Gutted’Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.
The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today.
“There’s nothing left, it’s been gutted,” he said in a telephone interview. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.” ( Power more at )

Obama creates 640,329 jobs at a

cost of $323,739.83 per job

Inquiring minds are asking the question "How many jobs were created out of the various stimulus programs so far and at what cost per job?"
That is a good question. Not that we can believe the reported number of jobs created, but let's assume for the sake of argument that the figures provided by the administration are correct.
White House Hails Stimulus Jobs
The Financial Times is reporting White House hails 650,000 stimulus jobs.The US economic stimulus programme has directly created or saved 640,000 jobs so far, the White House said on Friday as it battled to find ways to show that its $787bn package was working, despite persistently high unemployment. ( Power more at )

I TOLD YOU LAST JULY CIT WAS BACKRUPT

CIT Group files for prepackaged bankruptcy

Sun Nov 1, 2009 4:24pm EST

NEW YORK (Reuters) - CIT Group Inc, a century-old commercial lender, filed for bankruptcy on Sunday, as the global credit crisis left it unable to fund itself and the recession left it with too many bad loans.
CIT's creditors have already approved its reorganization plan. Analysts have said that getting through bankruptcy is crucial for CIT if it wishes to keep its customers, which include Dunkin' Donuts franchisees and film production company Dark Castle Entertainment.
CIT's operating subsidiaries, including CIT Bank, are not included in the bankruptcy filing, and expect to continue operating, the company said in a statement.
CIT, which filed for bankruptcy protection in the Southern District of New York, plans to reduce its total debt by about $10 billion in bankruptcy.
Under the bankruptcy plan approved by bondholders, creditors will end up owning the company. Most bondholders will also end up with new CIT debt worth about 70 percent of the face value of their old debt. Preferred shareholders, including the U.S. government, will get money only after other creditors are paid back. Current common shareholders will receive nothing.
The U.S. government invested $2.33 billion in CIT preferred shares in December 2008 through the Troubled Asset Relief Program.
CIT financed itself mainly by borrowing from bond markets, which has proven to be a flawed strategy as the credit crunch that began in 2007 has made it much more expensive for troubled companies to fund themselves.
(Reporting by Dan Wilchins; Editing Bernard Orr)

Will Stimulus Take Hold?

Timothy R. Homan, writing for Bloomberg says GDP Probably Grew as Stimulus Took Hold
The economy in the U.S. probably grew in the third quarter at the fastest pace in two years as government stimulus helped bring an end to the worst recession since the 1930s, economists said before reports this week.

The world’s largest economy grew at a 3.2 percent pace from July through September after shrinking the previous four quarters, according to the median estimate of 65 economists surveyed by Bloomberg News. Other reports may show sales of new homes and orders for long-lasting goods increased.

Americans flocked to auto showrooms and real-estate offices last quarter to take advantage of government programs such as “cash-for-clunkers” and tax credits for first-time homebuyers. Growing demand caused stockpiles to keep falling, which will prompt companies to rev up assembly lines and help sustain the recovery into 2010 even as unemployment climbs.

“The recovery is off to a decent but unspectacular start,” said Joe Brusuelas, a director at Moody’s Economy.com in West Chester, Pennsylvania. “While another large drawdown in inventories will be a drag on third-quarter growth, it sets the stage for a longer and stronger upturn in manufacturing.”

Consumer spending last quarter probably jumped at a 3.1 percent annual rate from the previous three months, the biggest gain since the first quarter of 2007, the GDP report is also projected to show. ( power more at )

IS THIS WHAT OUR MOTHERS & FATHERS FOUGHT FOR??

65 and Up and Looking for Work

By STEVEN GREENHOUSE

It is well known that during the nation’s gale-force recession, many older Americans who dreamed of retirement continued to work, often because their 401(k)’s had plunged in value.
In fact, there are more Americans 65 and older in the job market today than at any time in history, 6.6 million, compared with 4.1 million in 2001.
Less well known, though, is that nearly half a million workers 65 and older want to work but cannot find a job — more than five times the level early this decade and this group’s highest unemployment level since the Great Depression.
The situation is made more dire because of numerous recent trends: many people over 65 have lost their jobs as seniority protections have weakened, and like most other Americans, a higher percentage of them took on debt than in previous generations.
The expectation once was to pay off your 30-year mortgage before you retired, or come close. Instead, the level of indebtedness among older Americans has risen faster than in any other age group, partly because so many obtained second mortgages to take money out of their homes.
This financial squeeze is one reason President Obama has proposed giving a special $250 one-time payment to all Social Security recipients.
Many out-of-work older Americans complain that they face foreclosure or have had to give up their car. (Power more at )

U.S. Bank Failures Exceed 100

for Year, First Time Since 1992

By Dakin Campbell and Michael McKee

Oct. 24 (Bloomberg) -- U.S. regulators closed more than 100 banks in a single year for the first time since 1992, signaling the financial crisis hasn’t abated for lenders struggling with mounting losses tied to commercial real estate.
Seven banks -- three in Florida and one each in Georgia, Wisconsin, Minnesota and Illinois -- were shut yesterday, according to the Federal Deposit Insurance Corp., pushing this year’s total to 106. That’s the most since the savings-and-loan crisis led regulators to shutter 179 institutions in 1992.
“It’s very painful, it costs a lot of money, it ruins careers,” said Gerard Cassidy, an RBC Capital Markets analyst in Portland, Maine. “But shutting down failed banks and writing off the bad loans is a necessary solution that has to be done to get the economy and the banking system back on its feet.” ( Power more at )

Citigroup's "Hail Mary Pass":

How To Know Citigroup Is In Serious Trouble

Citigroup is in serious trouble. It's easy to tell by what they are doing.
Inquiring minds note that Citi Abruptly Shutting Down Gas-Linked Credit Cards.Citi (C) is abruptly shutting down credit cards linked to gas station partners.
The bank is offering few details:
The bank said in a statement it "decided to close a limited number of oil partner co-branded MasterCard accounts." That includes not only Shell, but Citgo, ExxonMobil and Phillips 66-Conoco cards.
The close date was Wednesday, and letters were sent out Monday to customers informing them of the change, a Citi spokesman said. The bank would not say how many cards were shut down or how much available credit they represented.
In a followup article the Business Insider notes ....
Citi Jacks Credit Card Rates To 29.99% On Unsuspecting Customers.Yesterday, we reported on how scores of people across the country had found their gas station-linked credit cards from Citibank had been canceled.
One reader, Rachel, emailed us and explained her frustration.
I received two letters by mail from Citibank yesterday. One said that because I always paid my account on time and that I was such a great customer they were increasing my credit limit. The next letter I opened stated that Citibank was raising my interest rate from the current 18.99% to 29.99%. (Power more at )

EPIC Renews Call for Release of

Bush Warrantless Wiretap Memos:

In court papers filed this week in Washington, DC, EPIC and the ACLU asked a federal judge now reviewing an open government case to consider the publication of the Inspectors General Unclassified Report on the President's Surveillance Program. EPIC and the ACLU are seeking the release of the relevant legal memos relating to the program, but the government contends that the entire matter is secret. However, the Inspector General's report, which is widely available, discusses several of the memos at issue in the case. EPIC filed the original request for the legal memos in December 2005 after the New York Times first reported on the warrantless wiretapping program. The case is EPIC v. Dep't of Justice. (Sep. 18, 2009)

Obama and the Nobel Prize:

When War becomes Peace,

When the Lie becomes the Truth
by Michel Chossudovsky

When war becomes peace,
When concepts and realities are turned upside down,
When fiction becomes truth and truth becomes fiction.
When a global military agenda is heralded as a humanitarian endeavor,
When the killing of civilians is upheld as "collateral damage",
When those who resist the US-NATO led invasion of their homeland are categorized as "insurgents" or "terrorists".
When preemptive nuclear war is upheld as self defense.
When advanced torture and "interrogation" techniques are routinely used to "protect peacekeeping operations",
When tactical nuclear weapons are heralded by the Pentagon as "harmless to the surrounding civilian population"
When three quarters of US personal federal income tax revenues are allocated to financing what is euphemistically referred to as "national defense"
When the Commander in Chief of the largest military force on planet earth is presented as a global peace-maker,
When the Lie becomes the Truth.
Obama's "War Without Borders"
We are the crossroads of the most serious crisis in modern history. The US in partnership with NATO and Israel has launched a global military adventure which, in a very real sense, threatens the future of humanity. ( Power more at )

Where The Hell Is The Outrage?

The number of articles and opinions on Goldman Sachs earnings, bonuses, and influence pedaling over the past several days is quite stunning.
Many have pointed out the problems; few have expressed outrage over what is happening in general, not just at Goldman Sachs. Let's take a look.
My take is at the end.
Letting The Dice Roll
Rolfe Winkler at Contingent Capital is writing Letting Goldman Roll The Dice.Is Goldman really such an indispensable financial intermediary? One look at the firm’s revenue breakdown shows that it’s more casino than anything else, and some of the markets it makes still put the economy in danger. ( Power more at )

China and Russia Developing

Yuan-Ruble Trade Settlement

by Washington's Blog

You've heard the rumor that Middle Eastern oil producers, plus China, Japan and France have all agreed to start trading oil using a basket of currencies - instead of the dollar - starting in 9 years (see this explanation for why the governments are denying the rumor).
But - whether or not the rumor is true - the world has actually been moving away from the dollar as the preferred method for settling trades for years.
The Wall Street Journal reported yesterday:
China and Russia are working on ways to eventually settle their trade with the Chinese yuan and Russian ruble, senior government officials from the two countries said Tuesday.
In January, it was reported that China had reached a similar arrangement with Brazil:
The Brazilian Central Bank announced it had reached an initial understanding with China for the gradual elimination of the US dollar in bilateral trade operations which in 2009 are estimated to reach 40 billion US dollars.
Indeed, as I pointed out in March 2007, many countries started moving out of the dollars as the basis for international trade settlements, including: ( power more at )

Spying on Americans:

The Bipartisan National Security State Telecoms

Lobby US Congress

by Tom Burghardt

The bipartisan consensus that encourages unaccountable secret state agencies to illegally spy on the American people under color of a limitless, and highly profitable, "war on terror" was dealt a (minor) blow October 13.
Federal District Court Judge Jeffrey White denied a motion by the Obama administration that the court issue a 30-day stay to "release records relating to telecom lobbying over last year's debate over immunity for corporate participation in government spying," the Electronic Frontier Foundation reported.
The Justice Department had argued that the Bush, and now, the Obama administration's Office of Director of National Intelligence (ODNI) and Congress were exempt from releasing lobbying records under the Freedom of Information Act, since consultations amongst said grifters were protected as "intra-agency" records.
One might add, since the 2001 terrorist attacks on New York and Washington, a well-funded surveillance-industrial-complex fueled by giant defense firms and the telecommunications industry have, as investigative journalist Tim Shorrock reported back in 2005 "fielded armies of lobbyists to keep the money flowing."
White's denial of a motion for a stay followed a startling admission by Department of Justice (DoJ) attorneys that America's telecommunication firms are actually "an arm of the government--at least when it comes to secret spying," Wired reported October 8. The government had argued that: ( Power more at )

Economic Madness Is Repeatedly Endless

Demand for goods and services in Japan are plunging. Please consider Japan’s Deflation Deepens as Prices Fall Record 2.4%.Japan’s consumer prices fell the most in at least 38 years in August, heightening the risk that prolonged deflation may hamper the country’s recovery from its deepest postwar recession.
Prices excluding fresh food slid 2.4 percent from a year earlier, topping July’s 2.2 percent decline, the statistics bureau said today in Tokyo. The drop, the sharpest since the survey began in 1971, matched economists’ estimates.
“We’ll soon start to see that there isn’t enough domestic demand to push up wages,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo. “As households’ spending power falls, there’s concern that this deflation will lead to further deflation -- in other words, that we’ll enter into a deflationary spiral.”
Much of the drop in prices reflects last year’s peak in oil costs. Crude reached an unprecedented $147.27 a barrel last July, and has dropped more than 50 percent since then.
The oil effect “will diminish over the next few months, quite quickly,” said Richard Jerram, chief economist at Macquarie Securities Ltd. in Tokyo. Even so, Jerram expects prices will keep falling for at least another three years as the country enters a period of “persistent deflation.” Economic Madness Over Pork Prices
In what amounts to economic madness, Japan to Buy Domestic Pork to Boost Prices After Demand Drops.Japan, the world’s largest pork importer, will purchase about 70,000 swine carcasses from local herds to boost prices after an economic slump cut consumption and sent stockpiles of the meat to the highest level in 20 years.
The government will spend 292.9 million yen ($3.3 million) on the purchasing program, the Ministry of Agriculture, Forestry and Fisheries said in a statement today.

Gold Manipulation Smoking Gun

Numerous people have asked me to comment on the Zero Hedge article Exclusive Smoking Gun: The Fed On Gold Manipulation.
The "Smoking Gun" is a now declassified document about gold, sent to president Gerald Ford on June 3, 1975 by Arthur Burns, chairman of the Fed from 1970 to 1978.
The document concerns the "broad question as to whether central banks and governments should be free to buy gold, from one another or from the private market, at market related prices"
Market prices at the time were $160-$175 and the official price was $42.22 per ounce.
Arthur Burns states "It is an open secret among central bankers that, at a later date, the French and some others may well want to stabilize the market price within some range".
Arthur Burns also states "The Federal Reserve has sought to avoid taking a rigid position", while going "some distance to try and conciliate the French view". Yet... "If we do ever acceded to French views on gold, we should at least use our bargaining leverage to some major political advantage".
Finally Burns states "All in all I am convinced that by far the best position for us to take at this time is to resist arrangements that provide wide latitude for central banks to purchase gold at market-related prices."
Shocking Revelation?
Burns sought an agreement whereby central bankers and governments would not buy gold at market prices. Because gold prices never traded at $42.22 again, essentially that was an agreement to not buy gold.
After Nixon closed the gold window, why is it such a revelation that events like this happened? Did any governments cheat?
The most interesting thing in the document was Burns' willingness to bargain for "political advantage". However, the idea that governments are lying manipulators willing to sell their soul for the right political advantage can hardly be a considered a startling revelation. ( learn more at )

Barney Frank, Mel Watt are you guys in the pocket

of the Fed. Watt and Frank should be exposed for

the bought and paid for politicians they are!

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.These are the people entrusted with the job of

fight for the and protecting YOU THE AMERICAN

PEOPLE??

.

I'm not to sure.

A great read

Very informative

Very important for today

-

From the New Middle Ages

to a New Dark Age:

The Decline of the State

and U.S. Strategy

-
Authored by Dr. Phil Williams. June 2008

SUMMARY
Security and stability in the 21st century have little to do with traditional power politics, military conflict between states, and issues of grand strategy. Instead, they revolve around governance, public safety, inequality, urbanization, violent nonstate actors, and the disruptive consequences of globalization. This monograph seeks to explore the implications of these issues for the future U.S. role in the world, as well as for its military posture and strategy.
Underlying the change from traditional geopolitics to security as a governance issue is the long-term decline of the state. Despite state resilience, this trend could prove unstoppable. If so, it will be essential to replace dominant state-centric perceptions and assessments (what the author terms ?stateocentrism?) with alternative judgments acknowledging the reduced role and diminished effectiveness of states. This alternative assessment has been articulated most effectively in the notion of the New Middle Ages in which the state is only one of many actors, and the forces of disorder loom large. The concept of the New Middle Ages is discussed in Section II, which suggests that global politics are now characterized by fragmented political authority, overlapping jurisdictions, no-go zones, identity politics, and contested property rights.
Failure to manage the forces of global disorder, however, could lead to something even more forbidding?a New Dark Age. Accordingly, Section III identifies and elucidates key developments that are not only feeding into the long-term decline of the state but seem likely to create a major crisis of governance that could tip into the chaos of a New Dark Age. Particular attention is given to the inability of states to meet the needs of their citizens, the persistence of alternative loyalties, the rise of transnational actors, urbanization and the emergence of alternatively governed spaces, and porous borders. These factors are likely to interact in ways that could lead to an abrupt, nonlinear shift from the New Middle Ages to the New Dark Age. This will be characterized by the spread of disorder from the zone of weak states and feral cities in the developing world to the countries of the developed world. When one adds the strains coming from global warming and environmental degradation, the diminution of cheaply available natural resources, and the proliferation of weapons of mass destruction, the challenges will be formidable and perhaps overwhelming.

(read the full pdf here)

House Financial Services Cmte.

Hearing on Regulatory Overhaul

Friday

Rep. Barney Frank (D-MA) chaired a hearing on legislation that would require the Government Accountability Office to audit the Federal Reserve. Scott Alvarez, General Counsel to the Board of Governors of the Federal Reserve and Thomas Woods of the Ludwig von Mises Institute testified before the committee. ( Watch the video here )

Barney Frank, Mel Watt are you guys in the pocket of the Fed. Watt and Frank should be exposed for the bought and paid for politicains they are!

US government MANIPULATING GOLD YET AGAIN

FREE MARKET MY AS*

Questions to ask yourself

1. Does the normal market forces move the market in such a way?

2. Are these dramatic moves in gold connected in any way the G-20 meeting?

3. Are these dramatic moves in gold connected to the IMF's 403.3 ton sales?

4. What should the real price of gold be?

5. Why is dollar gain in value against gold but weakening against other currencies?

Good questions what are the answers?

Do you have any questions yourself ?

An Army near the Breaking Point

– studies & reports

We spend more on defense (broadly defined) than the rest of the world combined. Nobody has military technology as advanced and powerful as ours. American military journals assure us that our doctrines range from adequate to awesome. None of this matters if we cannot attract and retain quality people in sufficient quantities.
Designed to wage 2.5 wars, after five years of fighting two “small wars” already our Army shows signs of breaking under the strain. That is unfortunate, as these wars are like those we will likely fight in the future. Worse, experts tell us that such struggles often take a decade or more to win (in the few cases in which foreign forces have been able to claim victory). What will our Army look like after another five years if we cannot substantially reduce our forces in Iraq and Afghanistan?
What does it mean to say that an army is “breaking”? Hilzoy at Obsidian Wings writes:
For one thing, there is no sharp, discontinuous transition between an “unbroken” Army and a “broken” one: the kind that happens when a plate shatters, a fuse blows, or a motor finally gives out. For another, a “broken” Army will still be able to function, more or less … So there is no sharp contrast between an “unbroken” Army, which works, and a “broken” Army, which doesn’t.
What we are doing to the Army is less like breaking something, and more like slowly degrading its ability to perform its tasks to an unacceptable level. It’s a gradual process, one that does not provide us with clear points at which we can look at the Army and say: well, now it is well and truly broken. It’s not like breaking a chair or a statue.
Here are a selection of reports about the stress cracks in the body of the US Army. None of these look good for the prospects of an Army of “strategic corporals” capable of implementing sophisticated COIN doctrines. ( learn more at )

Top News

Department of Justice Limits Use of State Secrets Privilege: Today, the Department of Justice announced a new policy that limits the government’s use of the state secrets privilege. The state secrets privilege is a rule of evidence intended to prevent genuine matters of national security from being disclosed in open court. However, recently it has been misused by both the Bush and Obama administrations in order to derail litigation completely. For instance, in 2007 EPIC filed a “friend-of-the-court” brief in a warrantless wiretapping case, Hepting v. United States, in which the government argued that the case should be dismissed because it would reveal “state secrets.” Under the new policy, the privilege will be invoked only "to the extent necessary to protect against the risk of significant harm to national security." The Attorney General will also have to approve each determination. The State Secret Protection Act of 2009, legislation with a similar purpose, is now pending in Congress. For more information, see EPIC Open Government. (Sep. 23, 2009)

New Report on Government Secrecy Released: The 2009 Secrecy Report Card, from Openthegovernment.org, chronicles slight decreases in government secrecy during the last year of the Bush-Cheney Administration. The report, released by a coalition of more than 70 open government advocates, also provides an overview of the Obama Administration’s proposed transparency policies. Among the issues discussed are the Open Government Directive, Classified Information, the Freedom of Information Act (FOIA) memo, signing statements, and the state secrets doctrine. For more on open government and transparency, see EPIC Open Government. (Sep. 11, 2009)

EPIC Renews Call for Release of Bush Warrantless Wiretap Memos: In court papers filed this week in Washington, DC, EPIC and the ACLU asked a federal judge now reviewing an open government case to consider the publication of the Inspectors General Unclassifed Report on the President's Surveillance Program. EPIC and the ACLU are seeking the release of the relevant legal memos relating to the program, but the government contends that the entire matter is secret. However, the Inspector General's report, which is widely available, discusses several of the memos at issue in the case. EPIC filed the original request for the legal memos in December 2005 after the New York Times first reported on the warrantless wiretapping program. The case is EPIC v. Dep't of Justice. (Sep. 18, 2009)

PATRIOT Act Revisions Introduced in Senate: Today, Sen. Russ Feingold (D-WI) and seven cosponsors introduced the Judicious Use of Surveillance Tools In Counterterrorism Efforts (JUSTICE) Act. The bill would amend the PATRIOT Act, the FISA Amendments Act, and other surveillance and intelligence laws. Among other changes, the JUSTICE Act would reform the National Security Letter process, revise the guidelines for business records orders, eliminate the catch-all provision for "sneak-and-peek" searches, and add new safeguards for FISA roving wiretaps. The JUSTICE Act would also repeal retroactive immunity for telecommunications companies, and is supported by many civil liberties organizations. For more information, see EPIC USA PATRIOT Act, EPIC FISA, EPIC Wiretapping, and EPIC National Security Letters. (Sep. 17, 2009)

Senators Consider PATRIOT Act Reforms: Senators Russ Feingold (D-WI) and Dick Durbin (D-IL) are drafting legislative reforms to revise the USA PATRIOT Act. The USA PATRIOT Act allows authorities to conduct surveillance without judicial review through the use of National Security Letters. The Senators asked the Attorney General and the Chairmen of the Senate Judiciary and Intelligence Committee to consider two previous bills that add protections to PATRIOT ACT. Pursuant to a EPIC lawsuit, a federal judge had ordered the Justice Department to provide for independent judicial inspection of documents relating to warrantless wiretapping. For more information, see EPIC USA PATRIOT Act, EPIC FISA, EPIC Wiretapping, and EPIC National Security Letters. (Aug. 7, 2009)

Inspector Generals Release Report on President's Surveillance Program: The Inspector Generals of the Intelligence Community released a report on the President's Surveillance Program. The report summarizes the unclassified collective results of the reviews. The Program involved the massive, warrantless surveillance of Americans in the United States. The IG Report finds that the absence of effective oversight contributed to the ineffectiveness of the program. In December 2005, EPIC had requested the legal opinions that were prepared to justify the program. The government has refused to produce many key documents, and EPIC sued under the Freedom of Information Act. In March this year, the Attorney General released several related memos, which previously were secret, following President Obama's statement on government transparency. See EPIC FISA, EPIC Surveillance FOIA, EPIC Wiretapping, and EPIC National Security Letters. (Jul. 10, 2009)

U.S. mortgage delinquencies set record

Mon Sep 21, 2009 8:32pm EDT
By Nick Zieminski

NEW YORK (Reuters) - High U.S. unemployment keeps pushing up the rate of mortgage delinquencies, which could in turn drive personal bankruptcies and home foreclosures, monthly data from the Equifax Inc credit bureau showed on Monday.
Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30 days late on payments in August, up from 7.32 percent in July, according to the data obtained exclusively by Reuters.
August marked the fourth consecutive monthly increase in delinquencies, and the report showed an accelerating pace. By comparison, 4.89 percent of mortgages were 30 days past due in August 2008, while in August 2007, the rate was 3.44 percent, Equifax data showed.
The rate of subprime mortgage delinquencies now tops 41 percent, up from about 39 percent in each of the prior five months.
The results, which correlate with consumer bankruptcy filings, suggest U.S. homeowners remain under financial stress despite signs of improving sentiment and fundamentals in the U.S. housing market.
August bankruptcy filings were up 32 percent from a year earlier, compared with a 35 percent year-over-year increase in July.
Still, while more Americans were late with mortgage payments, they are keeping up with other bills. The proportion of credit card accounts at least 60 days past due was down in August for the third straight month, while subprime card delinquencies also fell. ( learn more at )

Now ask yourself some questions

1. If the economy is doing so good, why then are mortages delinquiencies up?

2. What is an economy? What makes an economy moveup or down?

3. Why do the banks get help from the US Gov. but not the American peoeple, why?

4. If all Americans didn't show up for work and did buy anything what would happen to the US economy?

Why is the IMF selling 403.3 ton of gold for some

pocket change around 13 billion, is it really to help

poor countries?

-

The IMF recieved 200 billion from the US and a

hundred billion from Japan in 2008.

Why now why right before October?

-

Why has gold maintain it's price in the face of

such news?

-

These are the real questions find the answers and

you know what is happening and where to put

your money.

Economic Duplicity:

Recession and Record Profits

The Real Estate Bubble is Not Over
by Rev. Richard Skaff

In December 14, 2008, in his interview on the CBS sixty minutes show, Whitney Tilson an investment fund manager predicted that the subprime collapse was only half way of the total real estate bubble, and that the second half will begin take place around 2010 and will continue until about the year 2013. Tilson also discussed the two fancy Wall Street terms for bad mortgages namely Alt-A (Alternative-A paper) and option arms mortgages. These loans lured borrowers with teaser rates that will begin to reset this year.

Tilson has also predicted that seventy percent of these loans will eventually default, based on existing evidence of pre-reset default rates [1].
A mortgage reset is when the homeowner who bought a house with a low "teaser rate" and planned to refinance as soon as the house price went up suddenly gets a new payment that is usually far higher. Often, homeowners can't afford these resets.
The first wave of resets, as we recall was subprime. As this chart from Whitney Tilson shows, that's basically done with: [2].
However, Alt-A is actually a much larger category of mortgages, and the big Alt-A reset boom is just around the corner as Tilson’s second chart reveals.
Karen Weaver of Deutsche Bank observes that Alt-A mortgages are already mostly underwater. The combination of resets plus severely underwater status will likely exacerbate defaults and foreclosures. [2].


Ironically, Federal Reserve Chairman Ben Bernanke said on Tuesday September 15, 2009 that the worst recession since the 1930s is probably over, although he cautioned that pain especially for the nearly 15 million unemployed Americans will persist. [3].

So while unemployment keeps rising, consumer spending is slumping, inflation is creeping up (food, gasoline, and other commodities), the commercial real estate is plunging into the abyss, the dollar is weakening, and the other half of the housing bubble is exploding, Bernanke remains hopeful!

Could it be that Mr. Bernanke is anticipating the occurrence of a contrived international incident that will trigger an invasion of Iran ? A new war is always good for a military based economy! Or maybe Bernanke’s optimism on the economy is strictly founded on the performance of the global corporations and their profit margins? ( learn more at )

Looming Global Debt Crisis
by Bob Chapman

What do you do after you have zero interest rates and you have flooded the world with money and credit?
The answer is you attempt to fight off higher interest rates and see if you can dodge the inflation bubble that follows. The commitment for this current fiasco to save the world’s Illuminist banks has already caused an official debt responsibility for the US of more than $23 trillion or about 40% of world GDP. That is staggering and it is official. We wonder what the real figure is? It is also wise to remember that the Federal Reserve, and other reserve banks worldwide, all international, are responsible for the carnage we are witnessing.

The public is now paying for their gambling and corruption as central banks, who started this scam, transfer the debt to the taxpayers by buying up toxic garbage, guaranteeing losses and making sure none of the key Illuminist banks don’t go under. The Fed, privately owned, won’t let us look at their books, so we can tell what they are paying for these almost worthless assets. We are told it is a state secret.

There have been some salutary affects, but they are only transitory. As we can see the pace of job losses has slowed and will slow over the next year in anticipation of elections. About 80% of the stimulus package hits before the next election. There will be a slight increase in production and some inventory building. The real question is what will the Fed, government, Wall Street and banking due for an encore? They will most likely demand another stimulus package of some $2 trillion; keep zero interest rates and perhaps go to negative rates and continue to increase M3, money and credit, by 14%. That will neutralize the undertow of deflation and cause higher inflation. This game could last for a few more years, but one thing is for sure, many more are discovering what the game is and they are flocking to gold and silver in a flight to quality to preserve their wealth. If you have any doubts our Treasury Secretary, Mr. Geithner, has recently told us the same plan of easing is in effect. The manipulation and losses in fixed assets will continue. The underlying deflation will not go away. The remedy more money and credit and low interest rates will prevail. The manipulation of markets will continue; world monetization is going on full bore not only in the US but in the UK, China, Japan and many other countries as well. They are all working together to bring down the world financial system when it pleases them to institute world government.

A good part of money and credit injections have been into world stock markets to give a semblance of normality and to make people think all is well. At the same time we hear of eliminating this orgy of money and credit, but it gets pushed off further and further into the future, as it forms another speculative inflationary bubble. There is no doubt that a groundswell is forming as inflation begins to appear again, an event that really started in May, five-months ago. As you can see jobs are not being created and that this financial largess is again flowing mostly into financial markets. The inflationary bubble is on the way again worldwide. ( learn more at )

Ghost Fleets and Protectionism

The Mail Online has some stunning images of The ghost fleet of the recession.The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year.

Above: The 'ghost fleet' near Singapore. The world's ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world's economies
Just 12 months ago these financiers and brokers were enjoying fat bonuses as they traded cargo space. But nobody wants the space any more, and those that still need to ship goods across the world are demanding vast reductions in price.
Do not tell these men and women about green shoots of recovery. As Briton Tim Huxley, one of Asia's leading ship brokers, says, if the world is really pulling itself out of recession, then all these idle ships should be back on the move.This is the time of year when everyone is doing all the Christmas stuff,' he points out.
'A couple of years ago those ships would have been steaming back and forth, going at full speed. But now you've got something like 12 per cent of the world's container ships doing nothing.'
As the shipping industry teeters on the brink of collapse, the activity at boatyards like Mokpo and Ulsan in South Korea all looks like a sick joke. But the workers in these bustling shipyards, who teem around giant tankers and mega-vessels the length of several football pitches and capable of carrying 10,000 or more containers each, have no choice; they are trapped in a cruel time warp.
There have hardly been any new orders. In 2011 the shipyards will simply run out of ships to build

Above: 750ft-long merchant vessel is standing absurdly high in the water. The low waves don't even bother the lowest mark on its Plimsoll line. It's the same with all the ships parked here, and there are a lot of them. Close to 500. An armada of freighters with no cargo, no crew, and without a destination between them.
If ever you had an irrational desire to charter one, now would be the time. This time last year, an Aframax tanker capable of carrying 80,000 tons of cargo would cost £31,000 a day ($50,000). Now it is about £3,400 ($5,500).
This is why the chilliest financial winds anywhere in the City of London are to be found blowing through its 400-plus shipping brokers.
Between them, they manage about half of the world's chartering business. The bonuses are long gone. The last to feel the tail of the economic whiplash, they - and their insurers and lawyers - await a wave of redundancies and business failures in the next six months. Commerce is contracting, fleets rust away - yet new ship-builds ordered years ago are still coming on stream.There are many more images in the story as well as tales of the local fisherman, such as Ah Wat who says:
"'We don't understand why they are here. There are so many ships but no one seems to be on board. When we sail past them in our fishing boats we never see anyone. They are like real ghost ships and some people are scared of them. They believe they may bring a curse with them and that there may be bad spirits on the ships."
The ghost fleet is not exactly "secret" given the availability of satellite images. Nonetheless, there has not been widespread reporting of this phenomenon by mainstream media.
Baltic Dry Index Shows Collapse In Shipping Demand
Given the buildup of ships sitting empty on the ocean, the collapse in the Baltic Dry Index is readily explainable.

Please see Investment Tools for more charts and information on Baltic Exchange Dry Index (BDI) & Freight Rates.
Protectionism Will Make Matters Worse
Growing protectionism will exacerbate the problems facing the global economy.
In the 1930's Smoot Hawley completely ruined the agricultural sector in one fell swoop. Now, Obama Risks Global Trade War With Misguided Tariffs over steel and tires.
China has retaliated by "investigating" automotive and chicken exports from the US.
Note that rising protectionism is a symptom of global trade problems and issues. Unfortunately, rising protectionism does nothing but make matters worse.
Mike "Mish" Shedlockhttp://globaleconomicanalysis.blogspot.com/

"Greenspanism" the

Root Cause of this Depression

Bernanke, Geithner, and others have stated the biggest mistake in this depression was the failure to rescue Lehman. I have long disagreed, instead declaring the Bankruptcy of Lehman was one of the few things the Fed got right, even if by accident.
Ambrose Evans-Pritchard has similar thoughts in Lehman is a footnote in the great East-West globalisation crisis.As my colleague Jeremy Warner puts it, Lehman no more caused the economic convulsions of the last year than the assassination of an Austrian prince caused the First World War. There was the little matter of a rising Germany then, and a rising China now. Both scrambled the international system, albeit in different ways.
As of last week, the ABX index of sub-prime mortgage debt showed that AAA-rated securities from early 2007 were trading at 28 cents on the dollar – AA was at 4 cents, near all-time lows. No one can say that $2 trillion (£1.2 trillion) of sub-prime and Alt-A debt is still trading at panic levels, exaggerating losses. The dust has settled. What we can see is that creditors will never recoup their money.
Foreclosures reached 358,000 in August alone. More Americans are being evicted each month than during the entire Depression year of 1932.
We know why the bubble occurred. Call its Greenspanism. Central banks rescued assets each time there was a hiccup, but let booms run unchecked. They pulled "real" rates ever lower, creating addiction to monetary stimulus. Larger doses were required with each cycle, until we hit zero, and it is still not enough. Debt burdens rose to records across the OECD.
Couldn't they see that this was cheating: stealing from the future? No, they were seduced by "inflation targeting" – watch goods, ignore assets – just as cheap imports from China rendered the doctrine obsolete. It always takes ideology to consummate massive error.
China is trying to plug the gap, belatedly, by ramping up credit 70pc this year, but it will take a cultural revolution to induce the Chinese to spend. The liquidity is leaking into stocks, metals, and property.
The Great Game can continue only as long as deficit countries – currently, US (-$628bn), Spain (-$109bn), Italy (-$62bn), France (-$58bn), Britain (-$53bn), Greece (-$42bn), and east Europe – are willing to bankrupt themselves buying Asian goods. Obviously, this is absurd.Absurd is correct.
China, in spite of all those misguided souls who believe otherwise, is not close to decoupling. Proof is easy to find in China's need to ramp up credit and force banks to lend.
In the US, Great Britain, etc, the "Great Game" depends not on US consumers who long ago threw in the towel, but on stimulus packages that shift the demand curve forward. As soon as the stimulus runs out so will purchases.
An economic relapse is coming as sure as night follows day.
Mike "Mish" Shedlockhttp://globaleconomicanalysis.blogspot.com

We Need a Special Prosecutor for

Blackwater and Other CIA "Contractors"
by Jeremy Scahill

Some parts of Blackwater’s clandestine work for the CIA have begun to leak out from behind the iron curtain of secrecy. The company’s role in the secret assassination program and its continued involvement in the CIA drone attacks that occur regularly in Afghanistan and Pakistan have become front page material in the Washington Post and New York Times. There is much more to this story than has been reported publicly and details will continue to emerge, particularly about Blackwater’s aviation division(s).
Now we learn (unsurprisingly) that Blackwater offered “foreign” operatives to work on the CIA assassination program. Blackwater told the CIA that it “could put people on the ground to provide the surveillance and support — all of the things you need to conduct an operation,” a former senior CIA official familiar with the secret program told The Associated Press. If that’s true, those foreign individuals would appear to have been privy to information that vice president Cheney and other US officials deemed not appropriate for Congressional ears, not to mention oversight.
In light of all of these developments, it is important to remember how Erik Prince essentially hired George W Bush’s top people from the CIA’s Directorate of Operations to create his own private CIA, Total Intelligence Solutions. He also offered Alvin “Buzzy” Krongard, the former number 3 man at the CIA, a paid position on Blackwater’s board. Buzzy was the guy who got Blackwater its first known CIA contract back in 2002 in Afghanistan. Buzzy is also the one whining about the CIA’s “morale” problem, in light of the recent scandals, in the Washington Post. “Morale at the agency is down to minus 50,” he told the paper.
When you hear reports that a “private” company was hired to do clandestine work, remember that this particular “private” company, Blackwater, is, in part, being run by Agency veterans, including several of the top people running the torture and assassination programs under Bush. At the end of the day, using Blackwater and/or other companies represents taking covert, lethal operations even further away from anything vaguely resembling oversight by the Congress. By using ex-Agency people instead of “current” Agency personnel, yet another barrier is thrown up and the case for “plausible deniability” becomes stronger. When you are dealing with a billionaire like Erik Prince who apparently viewed himself as a crusader tasked with eliminating muslims and Islam globally, as has been alleged by a former Blackwater official, it is not difficult to imagine how all of this could remain—at least in part— off the books. Would it be a great shock if we learn that Prince volunteered some of his men or his company’s time to lethal missions for the CIA free of charge? “I’m not a financially driven guy,” Prince told Congress in October 2007. Take that with a grain of salt, but it is probably not flat out false. He was a believer in the crusade. ( learn more at )

"Undoing the Imperial Presidency"

Reviewing David Swanson's "Daybreak"
by Stephen Lendman

David Swanson is co-founder of AfterDowningStreet.org and Washington Director of Democrats.com. He's also a board member of Progressive Democrats of America, the Backbone Campaign, and Voters for Peace as well as a member of the legislative working group of United for Peace and Justice.

Subtitled "Undoing the Imperial Presidency and Forming A More Perfect Union, Daybreak" is Swanson's first book, a timely and impressive account of presidential extremism, congressional complicity, the urgency for progressive change, and how to do it.

Swanson exposes what was wrong under George Bush and provides a compelling prescription for real change.

In his book "Cracks in the Constitution," Ferdinand Lundberg explained that the supreme law of the land, the Constitution, never deterred presidents or sitting governments from doing what they wished, then inventing justifications for their actions. During eight years in office, George Bush personified it and said so in his own words. In 2005, he told congressional Republican leaders:
"I'm the president and the commander-in chief. Do (things) my way. Stop throwing the Constitution in my face. It's just a goddamned piece of paper." Both parties acceded. The administration got away with murder. Separation of powers were abandoned. Checks and balances barely exist. Lawlessness became the new standard, and the republic took a giant step backward toward despotism and dystopia under a culture of violence, police state laws, and a Wall Street-run asset-stripping system - parasitically destroying America, wrecking the economy for profit, and forcing the public into permanent debt peonage.
Swanson's book is a call to arms for change, an alert about what's wrong with the nation, the urgency to restore the rule of law, save the republic, and necessity to get engaged enough to matter. After eight years under Bush - Cheney and Obama's early months, the government is more than ever corrupted, imperial, and extremist. Undoing the damage will take years of committed effort, and Swanson explains how: ( learn more at )

OLD BANKING SYSTEM MUST DIE BEFORE

THE ONE WORLD BANKING SYSTEM

CAN BE BORN

International regulators agree on new bank rules

Sun Sep 6, 2009 3:42pm EDT
BASEL, Sept 6 (Reuters) -

Central banks and regulators of the world's leading economies agreed on a set of new banking rules on Sunday aimed at preventing future financial crisis.
The Group of Central Bank Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, said in a statement the new measures would substantially reduce the probability and severity of economic and financial stress.
The measures include new rules on banks' capital requirements, the introduction of a leverage ratio, a minimum global standard for funding liquidity and a framework for countercyclical capital buffers above the minimum requirement.

FACTBOX-Global regulators

set banking regulation framework

Sun Sep 6, 2009 4:55pm EDT Sept 6 (Reuters) -

Central banks and regulators of theworld's leading economies agreed on a set of new banking ruleson Sunday aimed at preventing future financial crisis.The Group of Central Bank Governors and Heads ofSupervision, the oversight body of the Basel Committee onBanking Supervision, said concrete proposals would be made byyear-end and the calibration should be done by end-2010. Following are the key measures planned: CAPITAL REQUIREMENTS: The regulators aim to raise the quality, consistency andtransparency of the Tier 1 capital base. The predominant formof Tier 1 capital must be common shares and retained earnings.Appropriate principles will be developed for non-joint stockcompanies to ensure they hold comparable levels of high qualityTier 1 capital.

(The New America)

U.S. Recovery Leaving Workers Jobless

May Spur Company Profits

By Carlos Torres
Sept. 5 (Bloomberg)

Employers kept Americans’ working hours near a record low in August, signaling that economic growth is poised to reward companies with added profits while postponing any recovery in the job market.
The average workweek held at 33.1 hours, six minutes from the 33 hours in June that was the lowest since records began in 1964, the Labor Department said yesterday. The report also showed that while payrolls fell by the least since August 2008, the unemployment rate rose to a 26-year high of 9.7 percent.
The preconditions for gains in payrolls, including giving the army of part-timers longer hours and taking on additional temporary employees, weren’t met last month. At the same time, with economic growth forecast to resume this quarter, the figures set the stage for a surge in worker productivity and drop in labor costs that will stoke corporate profits.
“It’s disappointing and it tells us that we are not quite there yet,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York who used to work at the Federal Reserve. “It’s great for business and terrible for households” for coming months, Feroli said.
There were almost 9.1 million Americans working part-time last month who would rather have a full-time job, up 278,000 from July, yesterday’s report showed. It almost matched May’s reading, when it reached the highest level since records began in 1955. ( learn more at )

Foreclosure activity reaches

record Mecklenburg's filings

rise 80 percent in August as

job losses put more borrowers

at risk of losing their homes.

By Stella M. Hopkins

Posted: Friday, Sep. 04, 2009

N.C. regulators are looking for new ways to help more homeowners as the foreclosure crisis spreads, hitting another unwelcome record last month.
Statewide, foreclosure filings rose 43 percent in August, compared with a year ago, according to Observer analysis of court data compiled by the state. Filings, which mark the start of foreclosures, rose above 6,500 for the first time last month.
Mecklenburg County saw an 80 percent increase, to 1,316, the second highest number on record for the county.
The foreclosure problem that tipped the nation into recession began with subprime loans, often made to home buyers with sketchy credit and with payments they couldn't afford. The recession has pushed N.C. unemployment to double-digit levels, putting more people at risk for falling behind on payments. In addition, home values have fallen, making it harder for people to sell houses they can no longer afford.
As a result, more prime borrowers – people who had good credit – are facing the threat of foreclosure.
“We've got to do more to reach those people,” said Mark Pearce, N.C. deputy commissioner of banks.
Pearce oversees a program that helps connect homeowners facing foreclosure with counselors. In its first 10 months, the program has reached 5,632 people statewide and linked them with foreclosure-prevention counselors. So far, that's helped 1,790, or more than 30 percent, avoid foreclosure, Pearce said. In Mecklenburg, 218 home owners contacted have avoided foreclosure. ( Learn more at )

Capmark Distress May Signal Bank

Failures Topping 100
By Linda Shen

Sept. 4 (Bloomberg) -- Capmark Financial Group Inc.’s possible collapse may signal a new wave of real estate losses for banks -- this one tied to business property -- that could push the year’s tally of failures past 100.
Capmark, ranked among the largest U.S. commercial real estate lenders by Moody’s Investors Service, posted a $1.6 billion quarterly loss on Sept. 2 and said it might go bankrupt. The Horsham, Pennsylvania-based company struggled as the default rate on commercial mortgages held by U.S. banks more than doubled to the highest since 1994.
“We haven’t really experienced the full extent of the distress,” said Sam Chandan, chief economist at property research firm Real Estate Econometrics LLC in New York. “When you look at community banks and some smaller regional banks, they tend to have a far greater concentration in terms of their exposure to commercial real estate.”
Lenders are still reeling from residential real estate losses that helped push U.S. bank failures to 84 so far this year. The tally included Colonial BancGroup Inc., the sixth- largest failure in the history of the Federal Deposit Insurance Corp. The total may rise later today because the agency customarily announces the week’s shutdowns on Fridays. (learn more at )