America’s Dismal Report Card

08 Nov, 2014 by Dave Hodges
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America has gone back to sleep. The 2014 midterm elections are history and good guys, the Republicans, have kicked out the bad guys, the Democrats. We only have two more years to endure Obama. If it was only that simple. This article is going to briefly examine a cross-section of indicators which are representative of how well our nation, and to some degree, our government are meeting the people’s needs. The general areas which will be examined are employment and income, economic health of the nation as a whole, educational opportunities and heath and wellness and civil liberties. It is time to give America her report card as we brace with great trepidation the last two years of the most corrupt administration in American history.Income and Employment Opportunities “Say it ain’t so” “Say it ain’t so” First and foremost, Americans no longer live in the highest salary paying country in the world. In fact, the United States does not even crack the top ten list of the highest salary paying countries on the planet in which Switzerland, Germany, Denmark, Japan, Norway, Austria, Belgium, Ireland, the Netherlands, and the United Kingdom round out the top ten and pay their workers more than workers in the United States. In fact, the United States only ranks 20th in terms of overall gross pay!

Young adults who are degreed and/or skilled in fields such as engineering or information technology skills, are really wasting their time by working in the United States. Eight of the world’s ten highest-paying countries for information technology (IT) managers are in Western Europe, according to a new survey by Mercer Human Resource Consulting. The survey found that Swiss managers are paid the most, followed by those in Germany and Denmark. In fact, IT management is another field where U.S. workers fail to crack the top ten in income, the United States ranks 14th in IT management compensation. Even debt ridden Spain, Italy and Greece pay their IT managers more than what Americans earn on average.

Unfortunately, the public does not know what the true unemployment rate is in America because the Department of Labor plays games with the numbers. For example, if you hold a real estate license, and even if you have never sold any property, you are considered to be employed by the Federal government. If your unemployment insurance expires, it is assumed that you have found employment, even if you have not. This is referred to as the discouraged worker category.

The “Alternate Unemployment Rate” more accurately reflects the current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were eliminated from official existence by the Federal government back in 1994. That estimate is added to the Bureau of Labor Statistics (BLS) estimate of U-6 unemployment, which includes the previously short-term discouraged workers.

The “U-3″ unemployment rate is the monthly headline number. The U-6 unemployment rate is the BLS broadest unemployment measure, “including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment” as this group would be categorized as the underemployed. When all figures are combined, the Shadow Stats calculations are staggering as the unemployment and underemployment rate is approaching 24%!
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Shadow Stats is one of the most interesting financial websites that I have found in recent memory and they are worthy or a hearty recommendation as they give the public an accurate way to compare real unemployment to the government contrived games that are played with the unemployment numbers. The actual unemployment/underemployment rate, nearly 24%, is more than three times the government’s figures for unemployment. Shadow Stats calculations clearly tell us that we are in a very serious depression, or what Gerald Celente often refers to as the “Greatest Depression”. And when we isolate the numbers and only include young adults, the picture goes from bleak to hopeless and these statistics are the fertile breeding ground for revolution.

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The Big Unwind: After Messing up the Housing Market, the “Smart Money” Bails Out

by Wolf Richter • November 6, 2014

Housing Bubble 2: Sales to institutional investors plunge to lowest level since 2010

In real estate, particularly in housing, national averages elegantly paper over the gritty details on the ground in specific metro areas and neighborhoods. When a new trend starts in some locations, it’s neutered by data from other locations. Blips and squiggles are averaged out of the picture. But by the time changes consistently show up in national averages, they’ve taken on serious weight on the ground. And now the “smart money” – smart because it has access to the Fed’s free moolah – is abandoning the housing market.

Wall Street money entered the housing market gingerly in 2010 and 2011, then piled helter-skelter into select metro areas over the next two years, grabbing vacant single-family homes out of foreclosure with the goal of first renting them out, then selling to yield-desperate investors and unsuspecting mutual-fund holders their latest toxic concoction: rent-backed structured securities that are even worse than the mortgage-backed structured securities that helped take down the financial system only a few years ago.

It worked. Each wave of buying ratcheted up prices via the multiplier effect, not only in the neighborhood but beyond. It created instant and juicy paper gains on all prior purchases. In this way, the same companies, now mega-landlords, were able to push up the value of their own holdings with new waves of purchases. It was a wonderful game while it lasted. And it was funded with nearly free money the Fed graciously made available to the largest players. Housing Bubble 2 came into full bloom.

But these billions of dollars being pumped into the housing market had the effect of pushing prices out of reach for many potential homeowners who’d actually live in these homes. And first-time buyers, the bedrock of the housing market? Well, forget it. Their share of purchases dropped to 33%, the lowest since 1987.

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THE ECONOMY IS SO “STRONG” IT JUST COST OBAMA THE SENATE

Cognitive dissonance plaguing the mainstream media

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by ZERO HEDGE | NOVEMBER 5, 2014

Based on the ridiculous, seasonally-adjusted data released day after day by the various US “Departments of Truth”, also known as the BLS, the Census, the Dept of Commerce, UMichigan, ADP, the Conference Board and so on, the US economy is so strong and consumer confidence is so resurgent, America is on the verge of a second golden age.

Sadly, for Obama, and last night’s epic rout for Democrats, it was all a lie – a lie perpetuated by a manipulated S&P500 which now hits daily record highs on unprecedented central bank liquidity injections which have now terminally disconnected the “markets” from the economy, and the welfare of the vast majority of the common “folk” – and said “folk” saw right through it.

Bloomberg’s take is just one of many observations on the historic cognitive dissonance that is plaguing the mainstream media this morning, which has been furiously pumping up US confidence by pitching the endless array of “fake data” (to use Paul Singer’s words), only to see it all blow up in its face today.

The economy was voters’ most pressing concern as they cast their ballots in the midterm election, with seven of 10 rating conditions poor, preliminary exit polls showed.

More than five years after the recession ended, ordinary Americans still feel pinched. Wages and incomes haven’t recovered even as corporate profits hit records, stocks have almost tripled and the nation’s output of goods and services grew more than $1 trillion from its pre-recession peak.

Obama’s Democratic allies took the hit, with Republicans gaining a majority in the Senate for the first time during his presidency and adding seats in the House, which they have controlled for four years. Yet Republicans could hardly claim a mandate from yesterday’s results, and they’ll be judged on their ability to govern.
Irony #1: Bloomberg, which has been one of the many outlets spinning the “great recovery” is confused:

The discontent simmered even as the economy showed signs of strengthening in the run-up to the election, posting its strongest six months of growth in more than a decade. Gross domestic product expanded at a 3.5 percent annualized rate in the three months that ended in September after a 4.6 percent gain in the second quarter, the best back-to-back showing since 2003.
Maybe, just maybe, the economy never really strengthened, and it was all even more of the same propaganda that has ordinary Americans finally seeing through the lies. Bloomberg at least admits that much: “Most Americans haven’t shared in the gains. Adjusted for inflation, the July median household income of $54,045 was $2,600 lower than in December 2007…. Voters by 65-31 percent said the country is on the wrong track. That’s 12 points more negative than two years ago and was the second-gloomiest exit-poll reading since 1990, trailing only the 2008 election, the preliminary numbers showed. Half of voters expect life to be worse for the next generation.”

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Paul Singer Slams The Fake World: “Fake Growth, Fake Money, Fake Jobs, Fake Stability, Fake Inflation Numbers”

Excerpted from Elliott Management’s Paul Singer letter to investors,

FAKING IT

Nobody knows when reality will overtake the rhetoric, lies, phony statistics, wishful thinking, fake prices and tiresome poseurs pretending to be world leaders. The situation is universal, a consequence of incompetent leaders and careless (or ignorant) citizenry. Global problems are continuing to mount, along with the risk that the consequences of years of bad policies and inept leadership compound (as sometimes happens) in a short window of time. Let us start by unpacking some current examples of fakery, and then try to explore the consequences.

Monetary policy.

Either out of ideology or incompetence, all major developed governments have given up (did they ever really try?) attempting to use solid, fundamental policies to create sustainable, strong growth in output, incomes, innovation, entrepreneurship and good jobs. The policies that are needed (in the areas of tax, regulatory, labor, education and training, energy, rule of law, and trade) are not unknown, nor are they too complicated for even the most simple-minded politician to understand. But in most developed countries, there is and has been complete policy paralysis on the growth-generation side, as elected officials have delegated the entirety of the task to central bankers.

For their part, the central bankers are proud and delighted to be providing the primary support for the global economy. Their training for this role took place in the decades before the 2008 financial crisis, when central bankers (led by “The Maestro,” Alan Greenspan) “deftly” headed off crisis after crisis. These policy responses “worked,” we were told, and they promised a new era of fine-tuning, moderation in markets and complete control of the economy by central bankers. The words in quotes are meant to be ironic, of course, because in fact, the Federal Reserve Board’s moves disguised hidden – but serious and real – future costs, which came due in 2008. The ensuing crisis introduced the term “moral hazard” (not meant to be ironic) into the mainstream, meaning that risks were taken by financial institutions and others seeking private reward, while the costs of the risks were borne primarily by the taxpayers. Central bank manipulation of prices and risk taking has become the norm over the last six years, because it is so hard for investors to see the downside. QE and ZIRP have been “free,” as far as most people are concerned, in terms of stability, asset price and economic growth, and economic recovery. “Free” in this context means devoid of future countervailing negative consequences. Unfortunately, this particular magic bullet is illusory – the negative consequences are in the early stages of revealing themselves.

Among the worst consequences of the delegation of responsibility from political leaders to central bankers has been the increasing arrogance of the latter group and their inability to understand the rapidly evolving nature of the world’s major financial institutions. Prior to the crisis, central bankers were unable to understand the risks that were building up in the global financial system and the economy. They did not see the 2008 collapse coming, nor did they perceive how fragile the system had become, or that the major financial institutions had become the largest and most leveraged hedge funds on earth.

This lapse was a catastrophic error, not just of execution but also of theory and structure. During the 2008 crisis, the central bankers (rightly) applied standard (more or less) responses to financial collapse (flooding the system with liquidity and reducing interest rates), which of course truncated the crisis and stabilized the system. But their inability to understand the financial system, or to take responsibility for their massive failures in causing/allowing the crisis to occur, has resulted in a seriously deficient economic recovery phase. Central bankers do not understand that it was their tinkering, manipulation, bailouts and false confidence that encouraged and enabled the insanity that led to the fragility and collapse. Partially as a result of that misunderstanding, the developed world has doubled down on the same policies, feeding the central bankers’ supreme self-confidence. Political leaders have been content to stand aside and watch the central bankers do their seemingly magical and magnificent work.

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What Does Societal Collapse and Martial Law Look Like?

04 Nov, 2014 by Dave Hodges

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According to a survey conducted by the Adelphi University Center for Health Innovation, 55 percent of Americans believe that the government will come to their rescue when the proverbial poop hits the fan because your big brother really cares. Literally, every alternative media outlet could show conclusive proof that an EMP was going to wipe out the power grid. We could conclusively prove that nuclear bombs were going off in 39 American cities in the most horrific false flag attack in world history and it would not make any difference to 55% of all Americans because of their cognitive dissonance.

The United States is staring at an economic collapse in the face with its $17 trillion dollar deficit, $238 trillion dollars of unfunded mandates (e.g. social security, Medicare, etc.) and a one quadrillion dollar derivatives debt in which the governments of the world are being forced to assume in the form of the “bailouts”. Even if Obama and his bankster puppet masters never had any intention of executing a false flag event in order to put this country into martial law in order to fully complete the coup d’état that is already underway, a crash is coming. The banks are going to collapse, the people will riot, there will be food shortages, whether they be planned or unplanned. I do, however, believe that food will undoubtedly be used to control the unruly masses, despite the DHS and their new found friends in the Chinese and Russian personnel which are on our soil.

Are you prepared? At the bottom of this article, I will visually demonstrate to the reader with real time examples of human behavior in groups, how each of us are going to be in very grave danger when the collapse comes. But first, let’s analyze America’s present level of individual and collective preparedness.

How Prepared Is America?

The Adelphi University research center tells us that 53% of all Americans do not have a three day supply of nonperishable food and water in their homes. FEMA and DHS are not about serving the needs of the American people; These agencies are about preserving the status quo of the powers that be. But don’t try and tell that to 55% of the citizens of this country.

Most Likely Causes of a Societal Breakdown

As the TV show by the same name, there are literally a 1,000 ways to die. The following six events represent some of the most likely events which would mortally wound our society.

1. False flag attack as a result of a chemical and biological attack

2. False flag attack as a result of a series of nuclear explosions

3. World War III

4. EMP attack

5. Economic collapse

6. Military coup resulting in civil war.

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Why Housing Is Dead: First-Time Buyers Collapse To 27-Year Lows

Submitted by Tyler Durden on 11/03/2014

The Millennials (one of the biggest generations in US history) are just not getting with the status quo program. As we detailed previously, with lower credit scores, less disposable income, and a soaring number of people living with their parents; so it should be no surprise that The National Association of Realtors (NAR) today admitted that first-time homebuyers plunged to the lowest level in 27 years. The blame – of course – rather than low/no-growth fiscal policies, student debt servitude, and inequality-driving cheap-funding monetary policy, is price competition from ‘investors’ and too “stringent credit standards,” perfectly mirroring FHFA’s Mel Watt’s Einsteinian insanity desire to dramatically ease lending standards and slash minimum down-payments (as we noted previously). Perhaps NAR accidentally stumbles on the biggest reason no one is buying in their profiling: the typical first-time buyer was 31-years-old, while the typical repeat buyer was 53 – smack in the middle of the Millennial collapse.

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Here is the size of the Millennial generation in context:

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Most People Cannot Even Imagine That An Economic Collapse Is Coming

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The idea that the United States is on the brink of a horrifying economic crash is absolutely inconceivable to most Americans. After all, the economy has been relatively stable for quite a few years and the stock market continues to surge to new heights. On Friday, the Dow and the S&P 500 both closed at brand new all-time record highs. For the year, the S&P 500 is now up 9 percent and the Nasdaq is now up close to 11 percent. And American consumers are getting ready to spend more than 600 billion dollars this Christmas season. That is an amount of money that is larger than the entire economy of Sweden. So how in the world can anyone be talking about economic collapse? Yes, many will concede, we had a few bumps in the road back in 2008 but things have pretty much gotten back to normal since then. Why be concerned about economic collapse when there is so much stability all around us?

Unfortunately, this brief period of stability that we have been enjoying is just an illusion.

The fundamental problems that caused the financial crisis of 2008 have not been fixed. In fact, most of our long-term economic problems have gotten even worse.

But most Americans have such short attention spans these days. In a world where we are accustomed to getting everything instantly, news cycles only last for 48 hours and 2008 might as well be an eternity ago.

In the United States today, our entire economic system is based on debt.

Without debt, very little economic activity happens. We need mortgages to buy our homes, we need auto loans to buy our vehicles and we need our credit cards to do our shopping during the holiday season.

So where does all of that debt come from?

It comes from the banks.

In particular, the “too big to fail banks” are the heart of this debt-based system.

Do you have a mortgage, an auto loan or a credit card from one of these “too big to fail” institutions? A very large percentage of the people that will read this article do.

And a lot of people might not like to hear this, but without those banks we essentially do not have an economy.

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GAME OVER: TOTAL COLLAPSE IS IMMINENT

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Can you pick yourself out of the photo?

America, while you slept, your country was stolen from you. Your country was absconded by all the political misfits and corporate criminals that the disenfranchised former Republicans and Democrats have been trying to warn you about during the last several years.

How Did We Get Here?

Laws, originating out of New Deal legislation, written in response to the Great Depression, provided some measure of protection for the American financial system from the unsavory forces which led to its initial demise in 1929. In 2008, corporate greed, governmental sheep-think-300x240corruption and a populace who was asleep at the wheel, has succeeded in achieving what historians will someday label the “Greatest Depression of 2013-2014.” History will also show that the destruction of the late, great American economy was entirely self-inflicted.

Why the US Economy Is Irreversibly Damaged

If Americans knew their history, then we would be cognizant of the fact that one of the prime causes of the Great Depression was due to stock investors buying shares on margin (i.e., loans). Glass Steagall Act protected Americans from this shady practice by separating commercial banking from this investment practice of stockbrokers. However, with one stroke of his New World Order pen, Bill Clinton’s repeal of the Glass-Steagall Act opened the flood gates for the domestic AND foreign infusion of bad credit into both our stock market and banking system. Consequently, both industries stand in the midst of a total and complete economic collapse n what is quickly becoming known as the most massive wealth transfer in world history.

On September 30, 1999 , Fannie Mae and Freddie Mac sought governmental permission to “relax” (i.e., break) the prudent governmental regulations on sound lending practices and begin to make loans to individuals who were not credit worthy. This spelled the death of the mortgage industry as we once knew it and the housing market was collapsed.

The Uptick Rule once prevented companies from crashing due to large scale shorting of company stock. A company’s stock could not be sold short as long as it was in continuous decline. Short sellers had to wait for an uptick in the stock before engaging in shorting. The Uptick Rule was retired in 2007 and the rest, as they say, is history. The elimination of the Uptick Rule is like going to a basketball game and not being able to see the scoreboard. Who’s ahead, who’s behind? Nobody knows but “Ladies and Gentlemen, place your bets!” What is your stock portfolio worth? Who knows? Who cares? Somebody wealthy is getting wealthier at your expense and you and your middle class investors are none the wiser.

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