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.
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.
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.
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.
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).
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?
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.
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.
The video above comes from a Mother Jones fundraiser held recently out on the west coast. You can view the rest here, but this one in particular got me thinking about which sources I actually trust for economic news. Turns out, not that many. Before I list them though, I should tell you that economics, and really anything dealing with math, is about as far from my personal forte as you can get, so I specifically go with sources who A) explain everything clear enough for a blockhead like me and B) supply lots and lots of evidence to back up whatever they say.
The first source is Bob Morris who blogs…here at this site, actually. Bob and I see eye to eye on issues of social and civic justice, so I can be pretty sure that when he’s mad about something, the bailouts or the stimulus or what have you, I’ll probably be mad too by the time I’m done reading. If he’s worried, I’ll be worried. Not only that, but Bob has Sue the accountant around to mind his economic p’s and q’s, and DJ to make sure nobody gets too comfortable with their fancypants liberalism.
The next one is TPM Media. These guys have a lock on the sharp-elbowed muckraking that newspapers used to do. They’re making calls, knocking on doors, and scouring the web for all the information you could ever want about the government and its handling of the economy. What’s extra fun is if you subscribe to their RSS feed, they update constantly throughout the day with little bites of information, and then eventually someone will take all those pieces and tie them together in one massive investigative piece. The comments section on each of their posts is always active, with readers backing up, or refuting, the author with their own digital muckraking.
The last source is Hale “Bonddad” Stewart who blogs for the Huffington Post. His bio says he’s “a former bond broker with several regional firms. He has been involved with the financial markets since 1995. He is a graduate of the Thomas Jefferson School of Law’s LLM program with a dual concentration in international and domestic taxation.” You can tell he probably knows what he’s talking about, but he’s also very good at supplying evidence for every claim he makes. A lot of evidence. Take a look at this one explaining the Fourth Quarter GDP. See what I mean?
So what sources do you trust for news on the economy crisis? Or if you’ve got a chip on your shoulder, tell me who you don’t trust on the economy. Who should I be reading, and who should I avoid at all costs? Tell me in the comments!
So asks John Amato at C&L, citing a wealth of articles and sources. Read them all. It goes way beyond gaming the market by naked shorting and a compliant media. There’s hedge funds with organized crime money, a money culture that ignored laws (while regulators snoozed), illegal manipulation of stocks, and much more.
There needs to be an investigation into the use of the media outlets for ill-gotten gain. Kind of like Bernie Madoff’s for Cable TV.
I agree. This isn’t just a few bad apples but rather a financial system which appears seriously compromised.