The Market Ticker

President Obama stood in New York at "high noon" and talked about how we must have "change", and that we have "helped homeowners avoid foreclosures", how "we must put in place reforms" and that "we have helped come back from the brink" and "an irresponsible period of crisis."

In fact, in his speech he said:

So I want to urge you to demonstrate that you take this obligation to heart. To put greater effort into helping families who need their mortgages modified under my administration's homeownership plan. To help small business owners who desperately need loans and who are bearing the brunt of the decline in available credit. To help communities that would benefit from the financing you could provide, or the community development institutions you could support. To come up with creative approaches to improve financial education and to bring banking to those who live and work entirely outside the banking system. And, of course, to embrace serious financial reform, not fight it.

Really Mr. President?

Perhaps you would like to explain this - the outcome of the FHA under your Administration thus far?

Bluntly: You're lying when it comes to having these institutions make only sustainable, safe and sound loans, along with helping Americans keep their homes.

(The spreadsheet can be found here: http://spreadsheets.google.com/ccc?key=0AirpBiMjpGTLdHdfWkJlM2JBbHBiZkpuZk9vTldBV1E&hl=en) and reproduced off  HUD's own web page at https://entp.hud.gov/sfnw/public/.

The worse news?  The portfolio has doubled over the last two years, with 2.6 million loans added (of a total of 5.18 million.)

So what's the story on recent loans?  We don't have an accurate number on that, but this much is clear: The claim that FHA only has a single-digit default and delinquency rate, and is helping Americans own and keep their homes is a BALD-FACED LIE.

Sustainable mortgages eh?  "Helping homeowners" eh?

Not a snowball's chance in Hell according not to your lies but the mathematical FACTS as represented in ACTUAL default rates.

ONE IN FIVE FHA mortgages is either late or in foreclosure?

ONE IN FIVE?!

I'm tired of the lying and so is everyone else.

We The People demand THE TRUTH.

THE TRUTH is that:

FHA has been and still is putting Americans into loans they cannot afford, as is proved by the default and foreclosure statistics.

The housing and banking industry HAS NOT reformed its ways, specifically, pushing loans on people they cannot afford, and the FHA is blatantly conspiring with these clowns in APPROVING loans that statistically have a one in five shot at failure.

The claim that these mortgage programs are "helping Americans" is a damned lie.  No program that winds up with one in five borrowers unable to pay - a rate double that of credit-card defaults - can be said to be "sustainable", "safe", or 'helping homeowners."

We must clear the bad, un-serviceable debt from the system.  Papering it over or worse, transferring it to The Federal Government where you think people won't find it won't work.

The only solution to the housing crisis is that prices for homes must come down to where they are actually affordable on a long-term, sustainable basis.  This means that we must demand 20% down payments, 28% front end and 36% back end ratios, without exception.

I have said this must happen for more than two years and now the results on "the alternative" pushed by the Federal Government, including Fannie, Freddie and the FHA are in: their promulgated "alternative" does not work, cannot work, and is leading to ruinously-bad default rates, leaving homeowners just as screwed as they were before - if not more so.

FHA and VA are today writing loans with 3.5% down (and in fact 0% down if you use the $8,000 "home buyers credit") and ignoring safe and sound front and back end ratio limits in a desperate attempt to prevent that which must happen to restore a sound housing industry: A decline in prices to sustainable levels.

THE EFFORT TO PAPER OVER THE TRUTH WITH MORE AND MORE LIES HAS FAILED.

I understand that the housing and lending "industry", particularly the latter, are desperate to prevent a contraction to sustainable pricing as house prices returning to sustainable levels will wipe out a huge number of banks - including some of our nation's largest institutions.

But whether they (or you) like it or not this has to happen and the longer we "resist" the inevitable decline all the way to sustainable pricing and closing the insolvent institutions you and The Fed are propping up through blatant accounting fictions the worse the outcome will be for America and our economy.

Thanks to Krista for digging up the facts.  We cannot allow, as citizens, the outrageous lies of our government, delivered by a grinning teleprompter-reading handmaiden to those who have and continue to loot the public and its' Treasury, to stand unchallenged.

It is time for America to stand up and say "ENOUGH DAMNIT!"

Last week Glenn Beck blew the doors off a story that he had been cooking for a while: an undercover independent film-maker and associate had walked into an ACORN office pretending to be a pimp and prostitute and "asked for help" in cheating the government by obtaining both a housing subsidy and committing tax fraud.

But that's not where they stopped - they disclosed "intent" to bring in underage girls from El Salvador as the essence of their "business" to serve as prostitutes as well.

In short, they declared themselves as traffickers in the sexual abuse of children and asked this government-supported and funded "community organization" - an organization that Barack Obama was associated with very closely in his time as a Chicago "machine" politician before he ran for President - for help.

Instead of being tossed out on their tail (or having the cops called) they instead received advice from ACORN on how to swindle the United States Federal Government in the promulgation and practice of their alleged-unlawful scheme!

When the first tape broke there was outrage.

The second, in Baltimore, provoked a threat from the prosecutor - a threat to prosecute the filmmaker for "unlawful wiretapping" under Maryland statute.

(Note that not one word was said about prosecuting ACORN for suborning felony tax evasion, say much less suborning felony transport of minors across state and international borders for the purpose of prostitution!)

Once is a "rogue employee."  Twice is "troubling."

But now a third tape has surfaced of the same pair asking the same questions in an ACORN Office in NYC.

You decide what this is for yourself.

As someone who has spent more than two decades trying to rid The Internet of kiddie porn, as someone who has worked with law enforcement in the past in the development of strategies to combat this heinous (and felonious) act, as an individual who had multiple death threats made against him and his family in the 1990s for standing up repeatedly IN PUBLIC and stating that Internet Providers who were carrying Usenet groups that comprised 70% of the total volume of traffic under names such as "alt.binaries.pictures.teen-$#ck" were knowingly suborning and contributing to felonious conduct and should be prosecuted I will make my position clear:

In my opinion once is a rogue person in an organization a second time is deeply troubling, but with three separate tapes in three separate locations and three separate groups of staff, one must now ask: Is this systemic, organized support and suborning of felonious conduct?  And if so, does it not rise to the level of racketeering and thus demand a full and complete federal prosecutorial response?

Where are the cops folks?

Have we descended into such a sea of lawlessness in this nation with all the bankster bailouts and hiding of "white collar" scams and frauds through the use of taxpayer funds that the apparent suborning of not only felony tax evasion but trafficking in underage girls as prostitutes - one of the most heinous and outrageous acts of exploitation of children and a bona-fide worldwide problem - is overlooked by our Federal Prosecutorial apparatus because the organization involved has strong ties to our President and his administration?

AGAIN: IS THE GOVERNMENT A FELON?

ARE THOSE  OF YOU WITH DAUGHTERS GOING TO SIT ON YOUR FANNIES AND ALLOW THIS SORT OF SCANDAL TO BECOME NOTHING MORE THAN  A PISSING MATCH BETWEEN FOX NEWS AND ACORN'S SPOKESWOMAN?

OR ARE THE MOTHERS, FATHERS, GRANDMOTHERS, GRANDFATHERS AND ALL OTHER GOOD, SOLID AMERICANS FINALLY GOING TO STAND UP AND SAY:

NO MORE DAMNIT, WE HAVE HAD ENOUGH!  LOCK EACH AND EVERY ONE OF THE CROOKS UP - THE CROOKS ON WALL STREET, THE CROOKS ON K STREET, THE CROOKS IN BALTIMORE, DC, NEW YORK AND EVERYWHERE ELSE.  ALL OF THEM.  AND BY THE WAY - THIS IS NOT A REQUEST; WE CAN AND WILL DO WHATEVER IS NECESSARY TO PRESS OUR DEMAND.  YOU WORK FOR US, NOT THE OTHER WAY AROUND, AND WE WILL NO LONGER SIT, WATCH AMERICAN IDOL, AND TAKE THIS OUTRAGE.  PERIOD.  NOW GET OFF YOUR ASS AND GET TO WORK.

Just eight short years ago a handful of madmen flew aircraft into buildings in the United States on purpose, killing over 3,000 Americans and threatening to destabilize our financial and political systems.

One day later, on 9/12/2001, America came together and said "Like Hell." 

230 years ago a handful of madmen thought they would dictate to those across an ocean that they should pay taxes yet have no representation in how that money was spent.  They said "Like Hell" and went to war.

Two days ago over a million Americans descended on Washington DC and stood on The Mall, rallying around a singular viewpoint and position:

YOU HAVE CROSSED THE LINE WASHINGTON.

They came to protest "big government" in all its forms. 

Socialized health care, banking system bailouts, automakers who got in over their heads and demanded money from ordinary Americans, US Government Officials crowding Representatives and Senators into a room and threatening the collapse of the economy and imposition of martial law unless their "buddies" were given $700 billion taxpayer dollars.

All forms of taxation without representation; do recall that when TARP was under debate public sentiment was one hundred or more to one against passage of the bill to enact the ransom demanded in the dead of night, yet Congress passed it anyway.

A shot across the bow?  Yes.

A peaceful shot?  Yes.

Will it remain simply a mass of fed up Americans making speeches on The Mall, will it turn to voter anger, or will it become something even more ugly.

That depends on Congress and The White House.

No government has the right to exist other than by the consent of the governed.  This is not a "radical position", it is a foundational principle of The United States, and every Congressperson, President, or other person employed by same swore an oath to protect and uphold that very foundational principal, up to and including with their life.

Public service is a choice. 

The oath of office and what it means, once taken, is not a choice. 

It is a sacred obligation.

The people who came to Washington this last weekend had many beefs in detail but only one in principle: Our government no longer stands for what it did 230 years ago.  It no longer stands for the rule of law.  It no longer stands against oligarchs who would plunder private property and the public treasury alike.

Our government was founded by men and women who yearned to be free.  To practice Capitalism.  To witness "the invisible hand" of a free market convey wealth upon those who make good choices, and ruin upon those who make bad.  To live with a government that feared the people, not among a people who feared the government.

Bernie Madoff supposedly was a "little person" who made it big.  In reality he lied and swindled.  For this he was sentenced to prison for a term that amounts to the rest of his natural life.

Yet many large financial institutions and some not-so-large did things not so different from Bernie Madoff.  They created securities they either knew or should have known were worthless.  They concocted "lending programs" that had onerous penalties and fees associated with them, not to make a legitimate loan to a person who wanted to borrow money, but as a means to skim yet another piece of "vig" off a transaction for themselves.  They enlisted the federal government to stop state lawmakers from putting an end to these programs once The States called them out as scams - that is, contrary to public policy.  They entered into bets with companies they knew or should have known could not pay, yet claimed they were "covered" and reported billions in "profits" that in fact never existed.  They paid dividends out of fictitious "earnings" that they had every reason to believe would never be realized as actual cash.

Lehman didn't bring down the financial system because it wasn't rescued.

Lehman failed for the same reason Bear Stearns failed and the same reason that Goldman, Morgan Stanley and JP Morgan, not to mention Citibank and Bank of America should have failed - they made loans to people who could not pay, either knowing or willfully disregarding the fact that they were lending on what amounted to an unsecured basis hundreds of billions of dollars more than they had in capital.

Let me be clear: So long as a bank never has more outstanding in unsecured loans (that is, beyond the market value of collateral pledged) than it has in excess, liquid capital (cash) itself, that bank will never go broke.

But as soon as any bank does lend out more in unsecured loans that it has in excess capital it is broke at that instant, and any claim otherwise is nothing more than a legally-permitted LIE.

We have not fixed any of these problems in the banking system.

None.

We have simply allowed the liars and thieves to steal some more - this time from the US Treasury, with its full faith, credit, and (unbelievably) actual support.

Mark-to-market was called "wrong", yet the fact remains that subprime MBS that in the "panic" were trading for a nickel are, today, trading for..... four cents.

Those trading for a quarter a year ago in the height of the panic are, today, trading for..... 22 cents.

Wrong? 

Nope. 

In fact the market was right - these securities will never recover their value, and the people who bought them were and remain screwed.

The latest outrage was Obama's "Health Reform" proposal - a bill that has over 300 pages that have never seen the light of day by the common man held up in Senate Committee.  Why?  What is The Senate so afraid of?  Is it that there really are "death panels" in the bill?  Is it that there really is federal preemption in yet more of our markets?  Is there yet another giveaway like Medicare Part "D" to the pharmaceutical industry, which raised drug prices seventeen percent in the year that "benefit" was passed? 

We the people don't know, but we're expected to live with the consequences.

Mr. Axelrod appears to be unhappy with on 9/12 America took to The Mall in protest, calling them "a fringe":

White House senior adviser David Axelrod said Sunday that the protesters, part of the "tea party" movement, do not represent the views of the broader public when it comes to health care reform. 

"I don't think it's indicative of the nation's mood," Axelrod said on CBS' "Face the Nation." "You know, I don't think we ought to be distracted by that. My message to them is, they're wrong." 

Arrogance is dangerous Mr. Axelrod.  We do remember leaked sealed divorce records during senatorial campaigns and other similar dirty tricks, and an awful lot of America is quite sure that you don't give a good damn what America thinks on this issue or any other.  That is why over a million people showed up in Washington DC Mr. Axelrod, and if you ignore their voice, it will simply grow stronger - until you can't ignore it any longer. 

You think this is a fringe eh?  This time-lapse security-camera video is damning evidence - that's not a few thousand people, that's almost certainly north of a million, and maybe two.

And here's a still shot down The Mall from the inauguration - compare for yourself:

That's close to equal or better than came to DC to watch Obama be inaugurated.  You might want to contemplate on that for a while sir, and what it could mean if you choose to ignore the message being sent in a rather-clear form.

Finally, here's another shot sent to me by a participant (no time stamp on it):

There were 56 men who signed The Declaration of Independence in 1776.  I'd expect we could find at least that many in Congress today who will stand on the steps of the Capitol tomorrow and say in one, loud, coherent voice:

You, American Business and we, The Representatives and Senators of this nation, have gone too far. 

Whether you be bankers, lobbyists, pharmaceutical companies or any other form of business, the days of corruption and grift are over.  We confess that we have sinned against the Founders and the People of this great nation and you shall confess your sins, effective today.

We assert that we shall not take upon ourselves nor force upon the people of this nation debt that they are unable to pay in a futile and fraudulent attempt to cover up past scams.

We shall return to a Constitutional and law-abiding system and form of government. 

We shall not permit banks to make loans for which they have no collateral value and no excess capital, and we shall impose this standard upon them each and every day.

We demand, today and every day forward, that every firm shall produce a true and correct balance sheet, marked to the market, with no off-balance sheet games - without exception.  We shall insist that those who refuse or lie go to prison.

We demand the strong application of anti-trust laws to the banking system, a lowering of the maximum concentration of deposits from 10% to 1%, a break-up of all institutions that exceed this amount, a reinstatement of Glass-Steagall in its entirety and an absolute ban on cross-ownership of banks and investment, finance or insurance-related firms.

We demand that bills be filed with sufficient time to read them before being voted upon, in full, with "sufficient time" being at least one full business day for each 100 pages of bill, without exception, and that the full and complete text be made available both to us and to the public before the clock begins to run.

We demand that every law that compels a government agency to act shall have as a default "or else" clause the immediate removal from office of any official who willfully disregards that law's tenets.

Finally, we assert that we work for the people as their representatives, and for good or bad, we shall listen to and be beholden only to them.  In furtherance thereof any lobbying contact of any sort shall be recorded or in written form and be made available to the public immediately, so that all speech from corporate interests shall be disclosed to the people for their consideration, without exception.

If we cannot find at least one hundred good men and women in Congress who will stand on the steps of the Capitol tomorrow and make this speech then it is clear from the 9/12 protest that the next step shall and must be the ballot box next year, where we shall be forced to remove you from office and replace you with men and women who actually will and do represent us.

And should that fail?

Let's hope it does not for the good of all in America.

Come talk with us today at 3:30 Central at http://blogtalkradio.com/marketticker where we will explore the Tea Party, ACORN and more.

I know I keep hammering on 30% contractions in various metrics of shipping and traffic, asking "how can we have a 5% GDP contraction when 30% downstrokes are taking place literally almost everywhere I look in commercial activity?"

But this article, published today, should end the stupidity:

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.'

12 percent of all global ships?

Decreases from 850 pounds to 180 (pound sterling) to move a container from China to the UK?

Bulk freighter charter costs going from $300,000 to $10,000 earlier this year?

Remember, this is the time when Christmas goods are on the way.  You can't order something from China, have it produced, and then have it sent in a ship in a week.  Uh uh.  Those goods have been ordered now, they are in the pipeline for delivery now, or they're not coming.

They're not coming.

I know I keep harping on debt ratios, GDP and bailouts.

But what we really need to harp on is the LIES.

Lies told in 2007, 2008 and now, in 2009.  Claims of "green shoots" by the media, by politicians, by industry.

Lies intended to get you to sink yourself further into debt peonage and slavery.

Lies that reach back to the passage of the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" - a law that, like so many others, was a lie in not only its text but in its title.

Consumer protection?  Where?  NOWHERE.

This law changed the presumptions in bankruptcy code, but only for consumers, not for corporations.  If your income is above the median income of their state, you may not be able to file for bankruptcy and discharge debts.

The law establishes a presumption that you are abusing bankruptcy if you have as little as $166.67 in monthly income available after the allowed deductions.  That's right - less than one week's grocery bill for an average family of four in income beyond their claimed "means test" with you making minimum debt payments (under which your debt would not be discharged for up to ten years!) results in a finding of presumptive abuse.

President Obama, when in the Senate, voted against this bill.  But he has not, and I am willing to bet he will not, send up a bill to Congress demanding the repeal of this law.

A law intended to render you a slave to debt, even if your enslavement results from the unilateral change to terms made by your creditors, such as millions of Americans have encountered in the last year from their credit-card companies.

President Obama claimed to be opposed to this law in 2005.  Where is your bill sent up to Congress, now that you have a majority in both houses, to repeal it, IF IN FACT YOU WERE REALLY OPPOSED?  I charge that President Obama was a LIAR as a Senator standing opposed in 2005 to this legislation AND STILL IS IN FACT IN SUPPORT OF IT.

The bottom line is right here folks:

This cannot be sustained.  It simply cannot.  I don't care if people want it to be, I don't care if bankers want it to be, it does not matter.

At a ratio of 375% of debt to GDP with an interest rate of just five percent the nation expends $2.65 trillion in interest costs, or about 20% of GDP.

That's $2.65 trillion dollars that does not go to salaries of productive workers, it does not go toward inventing new machines and technologies, and it does not help advance the common weal of The United States.

That interest rate, by the way, is likely to be impossibly low.  Remember that included in there is not just the manipulated short-term rate for credit to the Federal Government; indeed, most credit is not Federal.  It is private in some form or fashion, whether charged to consumers for credit card use, to companies for inventory and expansion, or to investors and speculators who wish to deploy capital in the markets in a leveraged format.

The lies must stop and we must accept that the position we are in today is untenable.  GDP cannot rise dramatically, as it must to contract the debt-to-GDP ratio if debt is not to be defaulted, under a regime where global trade "forces" labor overseas because a poor woman in Vietnam will sew jeans for 25 cents/day, while a laborer in America would require (under minimum wage laws) $8/hour to do the same job.  We cannot have a "global trade paradigm" where China literally robs intellectual property wholesale without any retaliatory action by the United States, yet we will buy billions of dollars of their lead-painted toys in our nation without regard to their safety - or the labor conditions under which they were produced.

The bankers who shoved this debt upon the public knew when they did it that there was no way those obligations could be met.  The simple mathematical principle of exponents guaranteed this fact, and each and every one of those "geniuses" with advanced degrees, including Chairman Bernanke, is well-aware of this foundational mathematical principle.  Yet none of them told the truth to Congress or The American People - a people that are largely educated in government schools where the application of these foundational mathematical principles to the claims of economic growth and stability made by government are not taught, for if it were the government would be instantly exposed as having lied for the past thirty years - both Democrat and Republican administrations.

"No Child Left Behind" should be better entitled "No child left un-screwed", as our nation's leaders have intentionally fostered more than a generation of economic illiteracy, and our so-called "educators" have refused to fix it on their own initiative.  Many of our so-called educators are in fact in debt up to the necks themselves and believe that there is some way out other than a massive repudiation - that is, default - of the existing debt in the system.

There is not. 

The math is irrefutable.

The impact on global trade unmistakable.

The claims of "recovery" made on the back of cooked economic data, ignoring the actual counts for things such as the household survey (we lost over 900,000 jobs last month, not 211,000), sales tax receipts (cratering), Federal tax receipts (ditto) and similar are not challenged by the mainstream media nor presented in our schools.

The Federal Reserve essentially buys the entire economics profession:

One critical way the Fed exerts control on academic economists is through its relationships with the field's gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue for rising economists, more than half of the editorial board members are currently on the Fed payroll -- and the rest have been in the past.

How do you get a fair presentation and debate on economic facts when an institution that grows only through enabling more and more debt peonage controls ALL of the of the editorial board of the journal where you must publish in order to obtain credibility in the field?

It would be one thing if this sort of incestuous relationship only led to some people becoming poor and others rich. 

But in this case the pervasive nature of the lying and outright fraud visited upon the public has fed on itself, because irrespective of how much you lie you cannot change the mathematical realities involved.

The law of exponential growth cannot be repealed, and it is impossible for an exponential growth process to continue forever in any venue where there is a hard, physical boundary on the maximum expansion possible.

We live in such a venue.  It is called the Planet Earth and it has a finite size, surface area, and carrying capacity for people. While we can (and have) expanded that carrying capacity through the exploitation of technology it is nonetheless finite and eventually must and will succumb to the pressure placed on our economic system by the abusive nature of exponential growth mandates.

We appear to have hit that wall when it comes to debt, just as we did in the 1920s, resulting in The Great Depression.

The Depression was not caused, as Bernanke and others have (knowingly falsely) claimed, by a "failure" of The Fed to appropriately loosen monetary policy.

The Depression was caused by the more than decade-long expansion of credit in exponential fashion - a mathematical impossibility to sustain.  That expansion in turn led to a demand for the consumption of ever-more of output in the form of interest payments.  When those payments exceeded the ability of persons and corporations to pay the system collapsed, as defaults cascaded through the system causing unemployment, slack capacity and thus more defaults.

The premise of being able to "halt the damage" through the issuance of more credit is in fact a Ponzi Scheme.  It is mathematically impossible to do anything more than delay the taking of damage and by doing so the ultimate loss is made worse.  The very definition of a Ponzi Scheme - that is, the taking of money (credit) from new "investors" (citizens) to pay off the claims of the old, is exactly what was done in 2001 and is being done now.

Such frauds are supposed to be illegal under the general context of a fraudulent transaction: That is, the making of a promise that is mathematically impossible over an extended period of time.

Why is not Ben Bernanke, along with the remainder of the Fed Governors and every public official who has made such a statement under oath before Congress (including Tim Geithner) not now under indictment?

"We The People" may have been dumbed down in our public schools but we still have the right and ability to learn for ourselves, to apply mathematics to the issues before us, and to demand that our government act in lawful fashion in punishing those who perpetrate frauds upon the public.

Even if they do control the peer-review process in so-called "scholarly publications."