Archive | Credit crisis

California city of Atwater bankruptcy imminent

The primarily agricultural city of Atwater in California’s Central Valley will almost certainly be the fourth California city to file for bankruptcy this year. The process leading to an Atwater bankruptcy filing begins on Oct. 3, when the city council will vote on whether or not to O.K. a fiscal emergency declaration. The expected “yes” vote will allow Atwater, which has a population of 28,000, to follow San Bernardino, Stockton, and Mammoth Lakes into bankruptcy.

The problem is the usual convergence of the real estate crash, overspending, and public pension debt. There will be more California municipal bankruptcies.

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ECB becomes insolvent to save the bondholders

While Europe is preoccupied with a possible restructuring of Greece’s debt, huge risks lurk elsewhere – in the balance sheet of the European Central Bank. The guardian of the single currency has taken on billions of euros worth of risky securities as collateral for loans to shore up the banks of struggling nations.

The ECB, the central bank of Europe, took huge amounts of junk securities as collateral before making loans to debtor nations like Spain and Ireland. They probably have the loans of their books at inflated values. Worse, since everyone knows the securities are junk, they can’t sell them. And now the debtor nations are balking at being forced to pay back the bonds at full value.

The ECB is effectively insolvent. A charade continues that somehow the bonds will all be paid in full even if that impoverishes the debtor nations. This is reminiscent of Lehman Brothers before it collapsed. But make no mistake, the only reason the ECB took on such massive risks was to save the bondholders. They are protecting the interests of the ultra-wealthy against those of all others, including countries.

Sooner or later, Greece will default. The Telegraph UK details the probable scenario. Here’s a few of the outcomes they predict.

  • Every bank in Greece will instantly go insolvent.
  • Greek government will declare a curfew, perhaps even general martial law.
  • The Irish will, within a few days, walk away from the debts of its banking system.
  • The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.
  • The European Central Bank will become insolvent
  • Attention will turn to the British banks. Then we shall see…

It’s just a question of when Greece defaults. Predatory, greedhead banksters bought bonds from Greece they knew were risky and are now trying to force Greece to pay in full rather than take a haircut on the bonds as is normal in such circumstances. The debtor nations should do what Iceland did. Default, let the banks fail, arrest any criminal banksters, and then carry on.

Yesterday Germany humiliated itself by agreeing to a second Greek bailout, but this changes nothing except to delay the inevitable default – oh excuse me, I meant to say “restructuring” – by Greece a few more months. And it could be the end of Merkel.

The banksters don’t care who or what they destroy as long as the garbage bonds they bought knowing full well were risky are paid in full.

And good luck: the Greeks are so delighted with being bailed out, pardon, with bailing out Germany’s banks, that they have been celebrating this fact for 6 nights straight in front of the parliament in Athens. Surely this latest batch of good news, will only send the popular jubilation to previously unseen highs.

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Welcome to Dystopia

Where criminals are still free and desperately arguing for a continued coverup of their crimes:

I’m not amused that the Wall Street Journal solicited an op-ed attacking the decision to try KSM in civilian court from one of the  people–John Yoo–with the biggest conflict on such a decision. It’s yet more proof that Rupert Murdoch is engaged in a partisan pursuit, even with the WSJ.

But I am amused at the way John Yoo dismantles his own argument.

Where people are starving while some of the worst people people in this nation still have it made:

The “economy” isn’t what its all about. Stock prices can rise, Goldman Sachs can give out bonuses galore, productivity can shoot through the roof, but until we start getting people back their jobs — good paying jobs — we are headed to Nowheresville. And for millions of people that means they go not only without work, but WITHOUT ENOUGH FOOD (and, yes, some things do require all caps):

WASHINGTON — The number of U.S. households that are struggling to feed their members jumped by 4 million to 17 million last year, as recession-fueled job losses and increased poverty and unemployment fueled a surge in hunger, a government survey reported Monday.

These “food-insecure” households represent about 49 million people and make up 14.6 percent, or more than one in seven, of all U.S. households. That’s the highest rate since the U.S. Department of Agriculture began monitoring the issue in 1995. Additionally, more than one-third of these struggling families — some 6.7 million households, or 17.2 million people last year — had “very low food security,” in which food intake was reduced and eating patterns were disrupted for some family members because of a lack of food.

This is something the likes of Lou Dobbs and Glenn Beck and Rush Limbaugh with all their talent on loan from Satan will never understand, nor likely care about. After all, the gull enough people into listening to them babble lies and cry on cue and scream racially divisive rants into their microphones, (or make senior executives of major media outlets so sick of their bile that they throw millions of dollars at them just to go away and not to work) not to have to concern themselves with the needs of “people looking for government handouts” (to use their own words).

Where you have to sue the government of the people, by the people, for the people so the people won’t all perish:

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The Gospel according to Goldman

As a graduate in theology, I was interested to read that Goldman Sachs believes the Gospels promote self interest.

However, I have learned there is an apocryphal basis for that position.  It turns out that biblical archaeologists have unearthed a little-known text that offers a somewhat different understanding of the teachings of Jesus.  In this new Gospel, Jesus draws his teaching not from Isaiah (“He will not break a bruised reed, or quench a smoldering wick, until he brings justice to victory”), but from Proverbs (“If you have nothing with which to pay, why should your bed be taken?”).

In Matthew, Jesus says, “The kingdom of heaven is like treasure hidden in a field…” But in the new Gospel, Jesus says, “Treasure is like the Kingdom of heaven, leave it not hidden in a field.”

Likewise Matthew quotes Jesus as saying, ““If any want to become my followers, let them deny themselves and take up their cross and follow me.” But the new text says instead, ““If any want to become my followers, let them deny their obligations to society.”

Here are some other representative quotes from the new Gospel that differ somewhat from the traditional texts:

  • “Beware of practicing piety; for then you have no reward.”
  • “Do not store up for yourselves treasures on earth, where moth and rust consume and where thieves break in and steal; but store up for yourselves treasures in banks, where professionals may decide how and when your wealth should be dispersed.”
  • “Render prayer unto God, and money unto bankers.”
  • “Truly I tell you, when you stole from the least of these who are members of my family, you enriched me.”

As these passages reveal, Jesus was in fact a capitalist.  He stood not for justice for the poor, as some weak-minded do-gooders would have us believe, but for the accumulation of wealth by any means available.  After all, why would God want the poor to join him in heaven when he could have a better dressed class of people who truly appreciate the treasures He placed on earth?

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Phantom condos and phony accounting

Jim The Realtor shows a brand new expensive looking condo development in San Diego County that has no gas meters hooked up. That means they never sold any. Just more empty condos, and they are not counted on new home inventory reports.

Financial author Michael Lewis thinks another day of reckoning is coming. I agree. Like the phantom condos that don’t appear on reports, too many of the accounting numbers are not based in reality.

LEWIS: I think that we are in for another day of reckoning down the road. I just don’t know when it is.

I think that they haven’t even properly evaluated the institutions. They haven’t been honest about what these institutions have on their books. They’ve had phony stress tests.

So, we’re in a kind of, I think, right now, in a period where there’s a false sense that it’s over, that the crisis is passed. I don’t think the crisis is passed.

There are new waves of foreclosures coming as yet more mortgages reset to higher levels. Hundreds of small banks are in wobbly condition and may fail.

Worse, too many regulators play nice with Goldman Sachs and their ilk because when they’re out of government, then those same companies will make them rich. So, it’s best to not piss them off too much.

This is not government of, by, and for the people, is it? In fact, it’s nowhere close.

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