Housing; The Lost Decade

Housing faces a lost decade leaving millions of homeowners with little or no equity in their homes. One in five Americans with a mortgage owes more than their home is worth and $7 trillion of homeowners' equity has been lost in the bust. Homeowner's share of their home value has fallen from 59.7 % to 38.6% in 2005 alone.

The housing bust and the personal tragedy left in it's wake is weighing heavily on the economy and Washington is doing nothing about it. Policy makers are engaged in self interest bickering while the housing market rots leaving Americans to feel their lives are hopeless.

Banks are holding nearly 500 million homes on their books with 400 million in some stage of foreclosure. With no hope in sight homeowners are turning down jobs in others areas because they cannot sell or rent their homes. New Job applicants are losing job prospects because of recent bankruptcy history.

Maybe there is light at the end of the tunnel. Officials and the housing industry are studying ways and pressuring banks to write down loan balances for borrowers that are seriously underwater. Lower interest rates, government and low interest rate loans are now available to homeowners wishing to refinancing and rent their homes. If you are desperate and underwater on your mortgage check with your lender to see how you can benifit.

Running The Economy In The Ditch; Day One Of Obama's Three Day Campagin Trail

"I put a deal before the Speaker of the House, John Boehner, that would have solved this problem," Mr. Obama said, "and he walked away because his belief was we can't ask anything of millionaires and billionaires and big corporations in order to close our deficit." So America's main job creators are still on notice that a tax increase is in their future in 2013, if not sooner. Barack Obama on his three day campaign trail through Minnesota.

President Obama has other ideas on how not to grow an economy that includes the Fed continuing to be deeply involved in the mortgage markets with loan guarantees and preserving Fannie Mae and Freddie Mac. (Ignoring the fact that the Fed could simply reduce or drop the 0.25% interest rate it pays banks not to lend.)

Last week Obama discussed another stimulus plan. Once again it is for roads and another tax credit for companies to hire more workers. His hapless ideas would be laughable if it were not for the undermining effect it has on consumer confidence.

The administration is now suing Standard and Poors, not Moodys or Fitch, over it involvement in the 09 financial crisis. Not to mention Exon announced last week it is fighting the government to retain the leases on the biggest oil discoveries ever made in the Gulf of Mexico showing a government still not afraid to threaten, lawyer-up and take away from it's citizens.

On his brief and expensive campaign trail start, President Obama has shown his idea's have not changed. The fact that they have not worked in the past and that he is losing political capital in their failures seems not to matter. To quote Footloose, "Mama says it doesn't matter if you're a king or you're a clown, once you drive up a mountain, you can't back down,"

Fed Audit Uncovers $16 Trillion In Secret Loans

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study.

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world. This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else." Sen. Bernie Sanders

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland. No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president,"

The Student Loan Tax

Johnathan Lott

As summer comes, a new class of graduates will be entering America’s job markets.  Entering, though, may not be the right word.  Although no official statistics state how many recent graduates have jobs, anecdotal evidence indicates that the answer falls in the range of “not very many.”

The lack of jobs, however, is not the only thing that makes the Class of 2011 unique.  They’re saddled with debt.  The Wall Street Journal reported on Monday that the average graduate held nearly $23,000 in debt – up 8% from last year and up nearly 50% from ten years prior.

Plenty of factors are behind this.  Skyrocketing tuition at universities is the go-to response.  A lack of need-based aid due to lower charitable giving in a down economy is another good guess.

But there is a more devious reason for the debt.  The federal government is behind it.

Click to read more ...

Please Someone Show Barney The Door

The central bank is approaching its 100th anniversary, a good time to consider reform. But the reform should be the product of serious discussion and debate. It should not be an ill-considered change in the Fed's fundamental structure accompanied by political sloganeering about bringing democracy to central banking. Gerald O'Driscoll, Jr., Cato Institute

Just when you thought you had heard enough from Barney Frank, he has come up with another brilliant idea. In a short bill he is promoting getting rid of the regional Federal Reserve Banks that make up the diversity of decision making on the Fed board and leave the "tough" decisions to Washington and Ben Bernanke.

Barney Frank's ideas starting with the government's policy regarding Fannie Mae and Freddie Mac and the Dodd-Frank Bill have effectually brought this country to a standstill. He is the prefect example of what's wrong with government. In this new bill he is proposing to eliminate the voices of main street, the regional Fed banks, and let the decision making come from people who know what they are doing; a laughable and dangerous concept. On PBS last week he was making his case;

"To have people who are simply picked by private citizens who have a disproportionate vested interest, for example, in higher interest rates setting this government policy is just undemocratic."

Another Reason to End the Fed

In his first press conference as chairman of the Federal Reserve, Ben Bernanke discussed rising gasoline prices, blaming higher demand from emerging economies and Mideast oil-supply disruptions as the cause of the zooming prices. Bernanke did not mention the US government's role in the higher energy prices, and he explicitly absolved the Federal Reserve of any blame.

Bernanke's deceitfulness is appalling, although not unexpected. He knows that Federal Reserve monetary policy plays a significant role in gasoline prices. Mark Brandy - Mises Institute

If you are not familiar with the Ludwig Von Mises Institute we encourage you to visit their web page. The monetary policy of this country is the number one issue the U.S. faces today and the information you will gleam from their columns and book selections will change your thinking forever. The Austrian School of Economics has been the number one searched website since the Keysean approach the administration has taken over the past two years has proved to be an utter failure. - DSMW

Fed Up With the Fed?

When people in Washington start creating fancy new phrases, instead of using plain English, you know they are doing something they don't want us to understand.

It was an act of war when we started bombing Libya. But the administration chose to call it "kinetic military action." When the Federal Reserve System started creating hundreds of billions of dollars out of thin air, they called it "quantitative easing" of the money supply.

When that didn't work, they created more money and called it "quantitative easing 2" or "QE2," instead of saying: "We are going to print more dollars-- and hope it works this time." Thomas Sowell - Politico

Running From The Dollar

"Our currency but your problem" U.S. Treasury Secretary Tim Geithner response to developing countries.

Investors are fleeing the U.S. in search of higher earnings and sustainable growth to places like South America and Asia. The incoming wall of money is causing big problems to developing countries. So much in fact that The IMF endorsed guidelines last week for it member countries to "protect themselves" from the "spillover effects" of the mismanagement of the U.S. dollar and it's eroding financial leadership.

China is allowing more trade to be done in the yuan and the idea has been floated at a recent meeting of the developing countries, the BRIC, that a "broad based international currency" that is stable be used and they were not referring to the dollar. These countries are now having to resort to capital controls to stop the inflow of the dollar. In the third quarter of 2009 turkey saw a 6.9% inflow of capital as a percentage of their GDP. The list goes on. Commodity prices that fired up places like Egypt and the middle east are now spilling over to this country. Utah is taking steps to make gold the de facto currency.

The decline of the U.S. economic credibility can be laid at the feet of Ben Bernanke, the Federal Reserve and President Obama. Fiat money has run its course and in a perverse move the Fed has encouraged the world to invest in hedges against the falling dollar. Geithner, Bernanke and the administration have pursued a policy of unprecedented monetary stimulus to reflate the economy and it's a global failure.

Fed Hawks Wary of Bond Buying

I believe that banking institutions are more dangerous to our liberties than standing armies.  If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. -  Thomas Jefferson 1820

 Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, said Tuesday at the University of Delaware that he's not ready to stop the bond purchases referring to the Federal Reserve's central bank's program to purchase hundreds of billions of U.S. Treasury bonds.

Bailout #1: How The Fed Spent Your Money

What this disclosure tells us, among many other things, is that despite this huge taxpayer bailout, the Fed did not make the appropriate demands on these institutions necessary to rebuild our economy and protect the needs of ordinary Americans. Senator Bernie Sanders comenting on the Federal Reserve bail-out.

At a Senate Budget Committee hearing in 2009, Senator Bernie Sanders asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later, as a result of an amendment he was able to lift the veil of secrecy at the Fed, and the American people now have this information.  It is shocking.