The Great Retirement Takeover 2010

    By now, news of Ireland's coming bailout is not news to anyone.  Unfortunately, upon entering into the EU, they caught the same bug as so many other small economies of the region: easy lending, easy money, big booms in housing and commercial real estate.


    Followed, of course, by no lending, no money, and properties (and buildings) with little to no value when stacked up against the tremendous amounts owed on them.  Sound familiar?


    I first started to fume when Professor Paul Krugman, a Nobel Laureate with whom I often disagree, but actually respect, wrote an op-ed for the NY Times in which he chastised the bailing out of the Emerald Isle.  To wit:


    "Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts."


    Now, this is the same guy who is somehow CERTAIN that we must continue to spend in tune with the Keynesian Model we've worn out completely, and who thinks that bailing out Too Big To Fail Banks was a GOOD idea.  Apparently, Professor Krugman has some Irish in him, but not much American?  That seems a harsh assessment, but isn't this the same economist who espoused the benefits of publicizing the losses of our Wall Street Buttheads??  


    Deep sigh.


    Now, onto other outrageous crap: 


    According to my sources (see ZeroHedge.com, Lies Across America), Ireland is providing 20% of its own bailout money by seizing and utilizing pension funds.


    In France, 36 billion Euros are being taken over by the Sarkozy administration to pay current debt obligations - from the government pension plan.


    In Hungary, it was announced on November 25th, that all private pensions needed to be remanded to state control.  It was a democratic choice: Give us your private pension funds, or we'll see to it that you face a minimum of 70% losses.


    In Poland, their RRA (public retirement fund) is already being used to fund sovereign debt.


    Well, we've done this sort of monkey business with our social security trust fund, right?  I mean, it's ugly, but what can you do?  Pay into your IRA, your 401(k), and pray the market doesn't tank and take 40% of your account value with it.


    Oh, wait, that already happened.  In 2008.  Oops!  Well, the market's going through the roof now, so who cares?  Time to get back in the game, as they say!


    And, as of February of this year, the Obama Administration is seeing to it that you do just that.  You may have heard about "auto-enrollment"??  Here's the thing: Your boss will automatically start taking money from your check, and administering one of the Big Two retirement plans with it.  There's all sorts of IRS language, but it's down to a boilerplate, and you don't have to do a thing.  How nice for you!!  I'd love to be making minimum wage somewhere - if in fact I could GET a minimum wage job - and know that on top of the 30% coming out of my gross pay for taxes, I can turn over another 3 to 5% to have some overpaid flunky rubber-stamp my retirement.


    Now, don't get me wrong: you can opt out.  I'm not clear on the procedure, but it is, I understand, not that hard.  I have nightmare visions of "opt-out" eligibility dates, like open enrollment for health insurance, but I don't have anything to back it up, so I'll assume (for now) that if you don't want to contribute, there's a form for that.  


    Got me reading, though: apparently Italy tried the same tact in 2007.  75% of Italian Citizens opted out of the auto enrollment; the government regards it as a resounding failure.  The UK is currently trying it as well: apparently they're up to 4% auto enrollment. New Zealand has an 18% opt-out rate.


    And, here in the US, we have a triumphant "80% Take Up" rate.  In other words, only 20% of automatically enrolled workers have opted to keep their money in their own hands.  I see that as shameful; it is a slippery slope from "auto enrollment" to "mandatory enrollment", and the final pocket of the middle class is twisted empty, in the name of "austerity".


     From savingtoinvest.com: the major points of the Obama package are as follows:

• Expansion of Automatic Enrollment to small business, creating as near a universal enrollment of working citizens as possible.
• Converting unused Vacation time to investment in the Big Two retirement plans.
• Encouraging Americans to take their federal tax refund in Savings Bonds.

     I read this as cautionary in the extreme; first off, who handles all these retirement accounts?  The big banks, that's who.  The very assholes who got us into this mess will now pretend to be vested in our 'golden years' and their expenses.  I don't buy it.


    I also have issues with the idea of vacation time - and, one can easily extrapolate to sick time, personal days, and the advent of what may be called "retirement" days - days in which your entire days' pay goes to your IRA/401 (k).  I'm familiar with the "use it or lose it" of vacation time - I considered it pointless, as it encourages workers to take time off they may not need/want to take.


    The big kahuna of this whole thing, though, has to do with tax returns.  If you, the Fed, take my cash dollars out of my paycheck, and then encourage me to accept a slip of paper symbolizing "your" Federal debt, we're gonna box, as the saying goes.  Just like paying in too much during the year in the hopes of getting a "big" refund translates to giving the Fed an interest-free loan, I'm against it.  To think that I could, at any time in the future, be FORCED to accept Savings Bonds instead of money scares the hell out of me.  You should be scared too.


    The take-away?  Get your damned money OUT of your 401 (k), your IRA, and if you have to, stick it in a safe at home.  Hide the stuff in Mason Jars and bury it.  Hell, buy gold, or silver, or 2 years' worth of coffee, flour, corn, whatever you regard as a staple.


    And, no, I don't think Roth IRA's are safe... yes, they're funded with after-tax dollars, so they should be safe, but really, in this era of the "last great money-grab", do you trust the bankrupt Powers That Be to leave any stone unturned?  I wouldn't.


    It's time you started using your head, and not counting on Uncle Sam to hold your hand all the way to the grave.  That means getting financially educated.  Step 1: Tell Uncle Sam to get his fingers off your damn paycheck.  We'll talk next time about steps you can take to minimize your taxable income.


    Until then, be safe, be smart, be ahead of the curve.


    Brutal Truth

Will You Be Giving Thanks Next Year?

    I'm not a big eater at Thanksgiving.  I don't consider this virtue or vice; I can only reasonably eat so much at a time.  It has to do with being full.  Once there, I'm done.  Can't help it.  However, I love to cook, and I do so with gusto, happily preparing enough food to feed an awful lot of people, or a few people an awful lot. Thanksgiving is a great day to cook to my heart's content, and I'm glad to carry on the tradition this year with family and friends. 


    I couldn't help but think about food prices - I was buying food, after all (!) for this year's bonanza,  and paying more this year than last, but what the hell, it's a holiday, right? So, I bought, and I will cook, and enjoy it, and hopefully so will the people who end up eating what I bring to the table.


    What about next year?  I've already told you about food inflation, fuel inflation, etc.  What will we be eating next year?


    Things you should be buying right now: wheat flour, rice, corn products, raisins, frozen vegetables, frozen fruits. You should also be buying things with which you may well be able to barter next year: honey, sugar, syrup, soda, beer and/or booze.  If it costs money to make it or ship it to you, buy it.  I don't eat white sugar, but plenty of people do.  I'm not a big fan of soda, but I know people who can't get through a day without it.  Same thing with coffee, although I AM a fan of that.  Peanut butter.  Equal.  Vegetable and olive oils. Yeast blocks and packets.  Salt. Rice - brown and/or white.  


    Do you use heating oil, Natural Gas, or Propane in your home?  Top off the tanks.  Even if you don't need it "right now", and even if it hurts the wallet.  In six months, you can thank me.  Or not, you'll have saved a bunch of much-needed dollars if you use that money while prices aren't spiking.  I'm currently carrying 3-80 gallon tanks of propane on property.  1 is empty, and I'll refill it within 30 days.  Note that 1 tank of propane lasts 6 months; I wish I had 5 more on hand; I'd fill those too.  


    Have you done anything yet about storing water?  Get on it; in times of shortage and near-shortage, prices spike before the wells run dry.  Google "water buffalo" - you can store water safely without a huge investment.  And we all know you need water, no matter where you are.


    Thanksgiving: yes, I'm grateful.  I'm grateful for my health, my home, my loved ones, my friends, my pets, and beautiful weather (there's just nothing like going for a swim in November; I never get used to it).  I'm grateful to live in a republic that still allows me to publish and express my opinions, even if they're not party line.  I'm grateful to be able to stockpile provisions when I see bad things coming.  I'm grateful that the "worst" is not yet here.


    I'd be especially grateful if I were wrong about all of it.  Obviously, I don't think I am, but how cool would that be?  


    I've been paying a lot of attention to Ireland, Portugal, and Spain this week.  I understand, from my friends at ZeroHedge.com, that the "emergency fund" originally set up to protect EU member governments in time of crisis, will not be able to fund the bailouts needed by the three countries above.  Not even with substantial help from the IMF. 


    I'm also watching the slow train-wreck that is the passing of "austerity" measures on the populations of these countries.  You literally "ain't seen nothin' yet", as far as public unrest and civilian casualties.  This is what happens when governments reward the elites that brought down this house of cards, and punish the people who saved them.  


    So, I guess, in the end, I'm grateful that "austerity" measures haven't taken hold here, yet.  Don't take it for granted, though; somehow we 'Mericans voted in  a bunch of the cronies and lap-dogs of the Wall Street interests.  This will bring the "belt tightening" to the forefront of discussion, and don't think for a minute that you/we (the working class) will be exempt.  On the contrary, they're looking to squeeze every last gasp of hope we had up the ladder to the top 1%.


    So, eat, drink, hug the people you love.  And stock up on staples for Black Friday, instead of cheap Chinese crap.
  
    Then, maybe next year, you can be Thankful again.


    Brutal Truth

Who Do You Want In Your Village?

    After reading the latest and greatest on the financial front (can you believe we're finally talking about Sovereign Defaults?  Who knew? ;/), I started thinking about ways to protect myself and my family/friends... and as usual, my tiny brain circled right back around to...


    Russia.


    No, no, not Russia as in 'failed democratic experiment now run by mafia-type business thugs'; not 'Glasnost' Russia; not Soviet Russia.


    Russia the unconquerable.  Russia the Great Bear, as in so damn big you'll never take it over unless they send you an invitation.  And, maybe, not even then.  As a student of Russian history (I liked it at first 'cuz they had a history of blowing each other up, then there was Rasputin, and they kicked Napoleon's ass before that), I find myself reaching back to the days BEFORE the history books were written.  How in hell did they survive?  No Central Planning, no uniform currency - the ruble is recent, in historic terms - a capitol that got re-located and re-named on a regular basis... and yet, this huge mass of people, spread across one of the largest land masses on the globe, well, did all right.  How?


    Village Rule.  And, yes, I'm over-simplifying to make a point. But think of it: all of our lives we've been told that "Bigger is Better".  Bigger cars, bigger companies, bigger houses, bigger credit limits... bigger banks, bigger government, bigger taxes, bigger cities...


    To paraphrase: "How's all that Bigger Stuff workin' for ya?"  


    My hopeful synopsis: not really well at all.  Big Agra.  Monsanto.  Citi. Bank of America. Any government that needs a "czar" for anything.  Seriously?  Drug czar, crime czar, car czar - speaking of Russian history (!)...


    Okay, so the Hippies tried the commune thing... we now call it Planned Community, but the difference seems to be how much bed-hopping goes on. But my thought is that they were onto something, although I'd probably spin it a little differently.  Which brings me to my point: Who would you want in your village?


    Recent events within my extended family made me regret living so far away in a time of trouble.  I would definitely want my family close.  If someone needs help, I want to be less than a long plane ride away. Much as I love where I live, I'd have felt a lot better - and slept more easily - if I'd known I could do something to help. <sigh>...


    So, what do we need from "outside" the village?  Well, that's up to the members, I guess.  Gasoline. Coffee. Water, if we're not self-sufficient. We need a farmer.  Or two.  A mechanic; a doctor.  A builder.  Electricity?  Maybe.  Heat?  Not so much where I live, but hot water's a plus, and prevents all sorts of bacteria from spreading.  Sewer?  Septic?  
    
    Which leads me back to the beginning:  Is it time to pull the plug?  Leave the suburbs?  Leave the cities?  Food shortages, water shortages, supply lines too long to maintain... what about oil and fuel?  Oil's up another $3.00 a barrel as of Friday morning.  


    And the last, most important thing to think about this weekend: what do I bring to the village?  What is my value?  How can I help?  In a time of shortages and inflated prices, how much dead weight can a village take on?


    This is a rare, morning post.  I'm off to my day. I'd like to hear from any or all of you: who would you want in your village?  And, how can we make it work?


    Till then,
    
    Brutal Truth

Inflation Isn't Coming... It's HERE.

    And it HAS been, since 2009.  Quick review: the CPI - Consumer Price Index, published quarterly, monthly, or whenever they feel like it, is a measure of how much things cost.  Which raises the fundamental question: "What things?"  The gist:

• Cars
• Electronics
• Appliances
• Car Repairs
• Home Depot stuff

    Notice anything missing?  Not if you're in charge of the COLA (Cost Of Living Adjustment) for Social Security.  Ask a retiree - there has been NO COLA for 2 years.  Why?  Because the prices of "things" have been going down - they're calling this deflation.  Everything's really quite inexpensive now, thanks to Helicopter Ben and his ZIRP - Zero Interest Rate Policy.  Great!


    You've tumbled to it, though, haven't you?  Everything's cheap... as long as you don't drive, heat your home, turn on the lights, or say, EAT.


    If you're like me, you keep your grocery store receipts.  I do this because I live on a budget that is occasionally so tight the "Indian rides the buffalo" in old speak.  Though there have been times when the Indian didn't just ride the buffalo, they picked out china patterns and registered at Wal-Mart.  'Nuff said.


    If you don't keep your receipts, you're stuck with a nagging feeling; could be gas, could be you're burning through more money than last time, but you're not sure how long ago, or by how much.


    In 2008, there was rice rationing - remember?  I was stunned... not that I'm a great fan of rice - it's okay, right?  But the idea of any food being rationed in the US struck home.  That same year, you had people dying in food riots from Haiti to Egypt.  There just wasn't enough to go around...


    TWO YEARS AGO.


    Fast forward to spring of 2010 - in Russia, the leading grower and exporter of wheat.  Record heat, record drought, and wildfires - remember?  You may also remember this little nugget: President Vladimir Putin has BANNED export of ALL Russian wheat until AFTER next year's harvest. They will send some reserves, but it's not gonna be near what they generally ship to the world.


    As of September 3, 2010, according to Bloomberg News, Wheat futures are up 74% year over year.  They have also reported 7 deaths and numerous injuries during new food riots taking place NOW in Mozambique. 


    Aside from Russia's "problem" - this being one of the few things I will understate - there is a greater issue at hand: what is commonly being called "QE2" - Bernanke's latest round of Quantitative Easing.  It has already begun - in fact, began in 2009, but apparently there were marketing problems that delayed the publication of it.  According to Mr. Bernanke, somewhere in the neighborhood of $600 billion dollars will be henceforth printed and used to buy bonds.  What bonds?  Well, you know, whatever bonds they feel like buying.  Through 2Q2011.  Or longer.  Depending.  My friends at ZeroHedge.com have taken to calling it "QEXXXXX", since it seems endless.


    According to Meredith Whitney, part of the program - again, begun in 2009 - equates to state bail-outs. Build America Bonds from California, Illinois, and Nevada are being underwritten by the Fed.  If you buy a Califonia bond (it's debt), Uncle Sam underwrote 20% of the interest payment in 2009, and underwrites 30% of the interest this year.  In Illinois, 30%.  In Nevada, 40%.


    So, now, Ben prints money so Cally can print money, only Ben will print 20-40% of the interest money on top of the Cally money just to make sure you get some of those wet-ink bills in your pocket if you're lucky enough to own a piece of the debt pie.  Does this sound like a financial circle jerk?


    It is, and I wouldn't even go into it, except that, being the circle jerk that it is, it undermines faith in the valuation of the dollar.  Remember, we're on the hook for more money now than at ANY time in the history of America.  COMBINED.  Even with inflation adjustments.  We're spending and inflating our way to the bottom, and the only reason we haven't hit it yet is because every other currency is in the same race.  So, what do you, the prudent investor, do while all this crap is going on?


    You invest in something else.  Something... concrete.  You could put your hands on it, if you wanted to.


    Like oil.  Or wheat.  Or soy.  Or corn.  


    Unfortunately, the whole world is full of people like you, watching the debasement, looking for something "solid" to invest in, something people need, and will continue to need...


    And this is how, according to Drovers.com, corn, milk and dairy, meat, coffee, and cocoa are being driven by lots of interested buyers.


    According to CNBC's Brian Shactman (10/25/10), eggs are up 11%, meat up 6% year over year.  Apparently, due to competition issues, retailers have been absorbing most of this increase.  Since mid 2009.


    How much longer do you think they'll continue to do that? Remember also, that corn and soy are far more prevalent in our food supply - and FUEL supply - than you would immediately think.  Got mayo?  Main ingredient: soybean oil.  Got bread? Made with soy milk.  Got bread crumbs?  Progresso: partially hydrogenated soybean oil.


    Beer drinker?  Check for corn.  Yup, corn.  Most lagers are now brewed with some combination of wheat and corn. Don't forget corn syrup: depending on how much packaged crap you eat, you'll find it in a LOT of places.  Just like I found soy milk and high fructose corn syrup in my "all natural" whole wheat bread.  


    Okay, I've made my case; feel free to check my sources, and any others that pop up - it's the beauty of the internet in our modern world.  Soooo... 

    What to do?


    There are two things that inflation should always drive you to do:


1. Spend more now.  Not as in, cheap plastic crap; as in staples.  See above.  Think about 3 months' worth of rice, flour, corn meal. Ever use honey as a sweetener?  Get some.  Get a lot.  Turns out, we're running low on honeybees, too.  Hell, think about 6 months' worth.  Get some air- and water-tight containers.  Store that stuff, and if the prices don't shoot through the roof, worst case scenario is you eat it all. If they DO go through the roof, your dollars then won't be worth near what they're worth now.


2. Get your money out of the banks.  Do I need to remind you that 143 banks have failed this year?  That the FDIC has been drawing on credit lines from the Fed to meet its obligations as bank after bank has failed?  At this point, are you really earning any interest anyway?  Do you want to have to wait for 6 months for your insured deposit to be returned to you if your bank should fail? Prepare for the worst (to be fair to the FDIC, this has NOT happened.  Yet.).


  And, finally - I say this as the smell of fresh whole wheat bread wafts from my oven - it's time to get "back to the kitchen".  I can say two things about my ability as a baker: First, I'm not very good at it; my first two loaves of bread could have easily been used as wheel chocks for my truck.  Second, I know, to the gnat's behind, exactly what's IN that bread, and I'm determined to get better at making it. 


    I'm happy to watch out for you, and warn you, whenever I can.  But this is one of many situations where you can take the wheel, and drive yourselves around the obstacles I'm pointing out.  Be prepared.  Be smart.  I'll keep you posted.


    Brutal Truth


   

This Might Be Important... THIRSTY??

    Hat Tip to Beth, and Maude Barlow.  Beth because she's brilliant, and points me in the right direction on things I should know, and Maude, because she's been following this particularly important topic for years. Try Ms. Barlow's book, Blue Gold, dealing with the privatization and commoditization of water around the globe.  If this doesn't scare you, you're dead.


    A dear friend and mentor pointed out to me a few years ago her theory: the next "world conflict" would be about water.  I would have laughed, but she already had a history of being right about a scary amount of topics.  I studied.  I researched...


    And figured she was probably right, but maybe about a decade ahead of her time.  Not unusual with really smart people; they see the trends while the rest of us grope around in the dark.  I kept up with the latest and greatest, and didn't worry overmuch about it...


    Until Beth found this interview on Alternet.org.  And, yes, it's about WATER.  Plain old drinking water.  That stuff out of your tap, or your Dasani bottle...


    And we're running out of it, at a dangerous pace.  Like, next 2-3 years kind of pace.  I have a lot of choices here, so I'm gonna start with what you should know, no matter what you are told by anybody else:


    You - you personally - need to drink 1/2 ounce of water for every pound of body weight that you weigh.  Every Day.  No fail; this is what will keep you hydrated.  You can up it a bit if you want to lose weight, but the hard and fast rule is 1/2 ounce per pound of body weight.  DO NOT let anyone tell you otherwise.  Lately I've seen several articles published - by fairly reputable, or at least widely-read publications - saying you don't need all that.


    They LIE, to paraphrase Joe Wilson.  They lie, and they're wrong.  Go ahead, Google it.  If it doesn't scare you, you're not listening yet.  Pay attention.  I'm gonna leave all the "black helicopter/conspiracy" crap out of it; but think how useful it would be to get people used to drinking less of what you KNOW DAMN WELL we're running out of?  Okay, here's what I know:


    California is planning no less than THIRTY desalination plants for the state - right NOW; that would be the "shovel-ready" type of planning.  They know they're on the cusp of running short of water for basic life-support.


    Michigan, in an ever-deeper drilling effort to reach the Olagalla aquifer (one of the biggest in the northern hemisphere, now vastly depleted), has started pulling up Lake water... as in Lake Michigan.  As in, they're now drinking Lake Michigan, and the Olagalla is depleted near the empty point.  And Michigan, from a population standpoint, is declining.


    Wanna know if we're "over-drilling" for water?  Google "sink holes".  Water is what holds up the crust of the earth, and keeps us from falling down into it - water.  Everywhere we've depleted, in the name of expanding population (see Mexico, Germany, etc.), there are sink-holes.  BIG ones.  


    The Pentagon has assembled a brain trust to study the future of water; their results are titled "Global Water Futures", and involve such notables as Sandia Labs, Lockheed Martin, Coca Cola, Proctor and Gamble, and the Center for International Studies.  These guys KNOW we're gonna get thirsty. 


    What's GE doing about it?  Dow Chemical?  They've focused a boat-ton of money and time on recovering and cleaning used water.  These folks don't invest unless there's a very good - read, profitable - reason. 


    Last point: remember T. Boone Pickens?  Made a fortune in natural gas, right?  For the last 15 years, he's been buying water rights, anywhere he can get 'em.  Worth a thought - this is a rich guy who follows his gut, and it's been right for a couple generations now.  When this guy buys stuff, I research.


    So should you.


    Remember the "tap water" campaign?  Tap water is okay to drink!  Really!  It's safe!  You don't know what those bottlers are doing!


    Try salmonella.  Try cholera.  Try recent outbreaks of both diseases in major cities (google Glendale, Arizona, for a recent rash).  Try living in Chandler, Arizona, where the water literally comes out of the tap in chunks.  Bottled water is WAY okay compared to that crap.  Floaties in my water?  Thanks, but no.


    Okay, two "takeaways" for you.  If you get nothing else out of this blog, realize that if you live in the southwest, or in southern Cally, you NEED TO MOVE.  Sorry, that's all there is to it.  Move out.  Get out, while you're still hydrated.  Do it soon.  Hell, it's not like your home value's gonna come back, is it??  Pack.  Go.


    If you want to survive this crisis, you have to learn to capture and re-use water.  In your home.  Period.  Google cisterns, water buffaloes, bleaching and boiling.  FIND WATER, and keep it.  The southwest and other desert-type areas are NOT fit for human habitation - that's why only the Mob would invest in the first place!


    If you want to make money, invest in public utilities that actually OWN the water rights they utilize.  This is important.  Further down that road, if you're gonna homestead, buy a plot that INCLUDES water rights.  They're going to be fought over - sooner than you think.  If you're gonna break away from a city, and go it on your own (honestly, not a bad idea overall), get the DAMN WATER RIGHTS on your deed.  I can't stress this enough.


    What happens when you turn on the tap and nothing comes out?  Where I live, power outages don't even make the local newspaper; no electricity, no water pump, no water.  God love buckets and cisterns.  Are you ready?


    Brutal Truth
    

Take Your Austerity Measures And...

     okay, you can guess the rest of that sentence.  The whole "austerity", "budget cuts", "runaway spending" thing has gotten itself under my skin, like a sliver you can't see, but feel every time you touch something.


    According to Steve Rattner, our former "Car Czar" (who had to step down in a hurry due to an investigations about his hedge fund and "pay to play" with the New York Pension system... hmmm...), "it's going over all right in the UK..."


    Jim Rogers, of Rogers Holdings agrees - it's for the good of the country, ya know.


    Pierre LaPointe, global strategist for Brockhouse Cooper, agrees that tax hikes, expenditure cuts, et. al., are necessary to arrest a growing deficit problem... specifically, Social Security "entitlement" programs.


    Here's my sticking point with "entitlement programs"... at least Social Security and Medicare.  Since the age of 15 - quite a while ago - I've been paying into both programs.  Involuntarily.  Matched by my employer.  Okay, so have an awful lot of other people.  Why did we put up with it?


    Because we were pre-paying for our old age, that's why.  There's not one person who has worked during their adult life who HAS NOT paid into Social Security or Medicare.  There have been "contributions".  Period.  End of sentence.  No, none of us in my generation (X) thought we'd get out of it anywhere near what we put in, but we hoped we'd get some supplemental income to make our "useless" years (let's face it, that's what you are when you stop contributing, according to our government) a little less painful.


    So, am I entitled?  Well, I've paid in... faithfully, whether I wanted to or not.  The payoff?  Pennies on the dollar, especially when you factor in inflation.  What about the Baby Boomers?  They made a bunch of money, and now they want what was promised when they paid in during their entire careers. 


    So, how does that turn into a "Sense of Entitlement"?  That's plain old ROI (Return On Investment).  I helped the previous generation, now you can help me out.  Period.  So, how does this become an "entitlement program"?  It isn't, plain and simple.  This is payback for all the folks that got help from the working population during our most productive years.  Fuck you.


    Okay, that horse is now dead.  Moving on...


    This is why "austerity" programs get me even more so... here's what happened, in my denim-blue brain:


    A bunch of financial geniuses came up with yet another way to fuck the middle class - faulty loans on houses that went up in value like skyrockets, with the cooperation of surrounding regulatory agencies - our government, btw - and transferred a bunch of wealth way up the ladder.  Too bad it was a ponzi scheme, and fell apart.  Think 2008.


    GW Bush, in a last swipe of a horrible presidency, looted this generation, and at least two others, of their taxpayer dollars, and got approval for TARP.


    He left us on the hook for what would turn out to be 12.3 TRILLION dollars in direct and indirect bailouts... wait for it...


    Of the same fucks that had raped us in the first place.


    Bonuses got paid... that same YEAR... to the gambling crack-heads that got us into this mess.  And AGAIN, in 2009...


    And THIS year, the bonuses look to blow the lid off the record books.


    But I have to adopt "austerity" to pay down the deficits?


    I have a plan: it's called, "I'll Adopt Austerity Measures When..."  Here's the first of the list; feel free to add your own:

• We see "claw-backs" of the bonuses paid out in '08, '09, and stop this crap about records being set in '10.
• We see Jamie Dimon, Ken Lewis, and Lloyd Blankfein do PERP WALKS.
• We see foreclosure moratoria that MEAN something, and last long enough to save families that have done the right things STAY in their homes.
• We see job creation here in the USA, and all incentives to move labor overseas eliminated.
• We see that LESS THAN 41% of all GDP income go to the "Financial Services" sector of the economy.
• We have less than 5% unemployment.
• We pay our teachers to lead our children into the next century of innovation, not just produce a bunch of "good test-takers" that can't do a damn thing if it isn't World of Warcraft.  I want "my" teachers focused on opening and filling kids' heads with good knowledge, not sweating over whether the gas and water will be turned off today.
• I see President Obama have a ceremony on the White House lawn, where he burns his "owned by wall street" collar in effigy.
• We bring home our troops from Iraq and Afghanistan - not to settle civil unrest here, but to actually come home to their families - preferably in one, sane piece.

    It's a good starting place, anyway... maybe, if we all put in our two cents' worth, we'll come up with a good set of rules to make a difference.


    What else have we got to lose?


    Brutal Truth


    

An Open Letter to Hippy Culture...

    Dear Hippies, Yippies, and other outgrowth groups and subcultures of the Beat Movement,


    I'm here on behalf of the shreds of Middle Class America, to apologize.


    You were into Free Love: 40 years later, we still haven't legalized gay marriage, and we're still fighting Don't Ask Don't Tell...you don't even want to KNOW how screwed up that is.


    You were against Useless War: I guess Viet Nam wasn't enough for us. Countless American and International soldiers, civilians, and by-standers are so much dust for no discernible reason. We're now carrying on 2 wars, with intercessions into countries that couldn't want us less.  Iraq, Afghanistan, Pakistan, and by next week I'm sure: Nomore-istan, Notagain-istan, Pleasestop-istan.


    You were "Back To the Land":  We've only begun to scratch the surface of what has happened to our food here.  Big Agra, hormones, antibiotics, miserable conditions and "manu-farming"... Monsanto-modified foods, soy that isn't quite soy, chemicals no Liberal Arts Major would be able to pronounce, and that's just the "low fat" stuff.  The good news: Organic is growing.  The bad news: just what makes it "Organic" is now yet another marketing ploy.  We're being poisoned by our own food supply.


    You were against "The Man": I'm going to define that as corporate interests.  We've now witnessed the greatest "transfer of wealth" (read: rip-off of the century) ever known to man.  We are, politely put, screwed out of every vestige of the "American Dream" we ever tried to believe in.  The top 1% of earners now makes what the ENTIRE bottom 20% makes in a year. Our current unemployment rate rivals that of the Great Depression; far too many 50- and 60-somethings are just waking up to the idea of NEVER being able to get a job again.  As in, in life.  Young people and people of color lead the unemployment statistics, with rates as high as 27%.  The jobs are all in China, Mexico, India.  


    You didn't trust Government: We did.  And they got right into bed with the Corporations, and gave birth to Tim Geithner.  And then, they screwed us some more.  There is no government; there is, at this late date, only Goldman Sachs.


    You were into Mind Altering Drugs: Unfortunately, now, so is Big Pharma.  It is their sole desire to have each and every one of us medicated for something, real or imagined.  It's the ultimate market saturation technique, and honestly, with the state of the food supply, we'll need a lot of what they're pushing.  This ain't Timothy Leary and a little blotter full of fun.


    You were right to be outraged; you did your best to change the world, and while it didn't happen the way you wanted it to, you made an indelible mark on our culture.  In the end, though, you got pressured, you got tired, you got pregnant and married, and you were forced to "buy in".  


    I'm sorry.  For all of us.  Americans owe our Hippies an apology, for turning a blind eye, for scorning and demeaning the only ones who saw the writing on the wall.  You were right.  Stoned, but right; that should count for something, anyway.


    Brutal Truth


    

Your Homework Assignment This Week...

    Okay, so you're hopefully NOT facing foreclosure... I hope you aren't, although this entry should help you if you are:


    I've been thinking, and I think it's time, given the recent discoveries and court cases involving mortgage fraud (and I do mean fraud, not "mishandled paperwork"), for each and every homeowner to become the captain of his or her own fate.


    I got thinking about all the crap coming down the pike, and part of what I'm gleaning from the blogosphere is anecdotal evidence that several lenders are literally racing to re-finance people to clean up their dirty paper trails.  How cool, right?  You're paying on time, still working, doing all the right things, and all of a sudden you have your lender's full attention?  Reeeeeaaaallllyyyy??


    Thing is, when they issue a new loan on your property, the most recent paperwork supercedes all prior paperwork.  They do the new one all neat and tidy, and all of a sudden your note isn't part of the mess they've got on their hands, that may cost them a boat-ton of money.


    I think it just became a homeowner's market, folks.  Here's your assignment:


    Dig out your purchase paperwork.  Find out your plot number, loan number, all that good relevant stuff.  Once you've got it in hand, get online, and go to your county recorder's website.  We're looking, in particular, for not just the assignment of the note, but the assignment of title.  Remember in another article I mentioned "splitting the baby"?  Quick review: the mortgage holder MUST also have the Deed of Trust in order to enforce foreclosure proceedings.  Without it, they're f*cked, and what I'm hearing out there in Internet-land is that the "baby" has been split, diced, sliced, and tranched into oblivion.  


    Go into the county recorder's website; hell, if they're not online, take half a day and go to the office; pay the fees, and get a title search done on the property you own. Check all the signatures on the certified copies; chances are you will find MERS as the recording agent.  If you do, this is PAYDIRT, folks.  There are no less than FOUR court cases recorded in different states as of this writing denying MERS any rights as a title and/or note assignee.


    Next, you want to check all the notaries, dates, and lender's representatives.  You may very well find duplications.  That is, simply put, a GOTCHA of the highest order: it spells FRAUD, and you just bought yourself a whole lot of bargaining power with your lender.  Don't forget to check dates on Lis Pendens filings; they cloud title, and may have been filed BEFORE your note was filed - another no-no.


    Note for the rulebooks: I am NOT a lawyer, and this ain't legal advice.


    Okay, having said that, if your certified copies don't make sense to you, and/or you spot at least one of the things I've noted, talk to a legal eagle or a paralegal - just make sure you're ready, because the next thing you're gonna do is pick up the phone...


    ...And call your lender.  I don't care if you're 3 months behind, or if you pay on the dot without fail.  If your credit score is 300 or 800 has now become immaterial.  It's negotiating time, and you want to come at them from a position of KNOWING that they've made legal errors that could cost them BIG.


    So, before you call, make yourself a list of demands.  Lower interest rate?  Haircut on the value if you're underwater?  90 day deferment of payments so you can catch up a bit?  And of course, you'll be paying no closing costs, no early payment penalties, and they can bring the paperwork to YOU for signature.  How can you do all this?  Simple:  "Hi, there, Mr. or Mrs. Lender, this is So and So with Loan # X.  I've got some certified copies of my recorded deeds that I've had my lawyer review, and apparently we've got a problem..."


    The first cubicle-bot will not be able to help you; take it up the chain, until you can ask the person on the other end of the phone, "are you the decision-maker?"  When you get to the one who says, "yes", the game is on, and it's all YOURS to lose.  


    The most likely scenario is that your loan is assigned to "blank"... this does NOT fly in a court of law.  Nor does it give your original lender any power to collect from you, if what I'm reading is correct.  Hmmm...


    Be polite; you'll feel better when it's over.  Be patient, but only to a degree.


    My few readers, you have just been granted the keys to the kingdom: you can negotiate your way out of an "underwater" situation, a foreclosure situation, a financial cramp that won't go away.


    The seeds of revolution - with nary a shot fired - are lying dormant in county recorders' offices all across the country. 


    I suggest you grab the keys, and run like hell, before they get too lawyered up to deal with individuals.  I'd love to know how you make out; comments are always welcome at any rate.


    And, rock ON.


   Brutal Truth

About That Whole DADT Thing...

    And if you think that our military policies don't effect our overall Economy, picture $2.6 BILLION dollars a WEEK blowing out the door and into the countries of Iraq and Afghanistan.  


    Just recently, US District Judge Virginia Phillips ruled the Don't Ask, Don't Tell Policy of our military unconstitutional.  According to Judge Phillips, the policy violates the constitutionally protected rights of Freedom of Speech, Freedom to Petition, and the right to Due Process.  Cool, huh?  Especially in an era that has heralded the witch-hunting and dismissal of a large number of Arabic speaking translators and cryptologists at a time when, you know, we could REALLY use some help in that area...


    So, in living up to his campaign promise to abolish DADT, President Obama seized this golden opportunity to...


    APPEAL AND GET A FREEZE from the 9th Circuit Court of Appeals, effectively bitch-slapping Judge Phillips, and reversing course AFTER the Pentagon had already told recruiters they had to accept openly gay candidates for the armed services.


    The list of things that make me go "WTF?" keeps getting longer and longer....


    So, according to our President, he still stands by his promise that DADT will be repealed 'on his watch', but, "It has to be done in a way that is orderly, because we are involved in a war right now."


    Umm, that would be TWO wars, Sherlock, but whatever.  Apparently, repealing this POS piece of legislation can only be done if it's Congress' idea.  Does this sound like a sick second date to you yet?  


    And, honestly, do you think Congress, the new and improved, completely partisan, 75 IQ generation of representatives bought and paid for by the banking cartels and big oil, can spell DADT, and I do mean the initials??


    What a cop-out.  


    Got me thinking: When Roe V Wade was handed down by the Supreme Court, citing violation of the 9th Amendment, a multitude of abortion-restricting laws were nullified.


    Then, when Brown V Board of Education was handed down by the Supreme Court, citing violation of the 14th Amendment, a multitude of segregation laws were nullified.
  
    Neither of these cases "began and ended" with the Supremes; I'm simplifying for the reason that it literally "doesn't take an act of Congress" to do the right thing - for our military, for our individual soldiers who choose to serve.  


    Meanwhile, President Obama wishes upon a star.  Take the f-ing case up the ladder to the Supremes, you Log Cabin Republicans, and then we'll see how many "acts of Congress" we need to get this ill-conceived bitch-slap piece of crap legislation off our books.


    This would be a great day to email your representative, but they really don't give a shit what any of the rest of us think.


    Brutal Truth

The Foreclosure Mess: Not Obama's Problem???!!!!

     Be ready.  I'm about to go on a foul-mouthed rant... <deep breath>...
   So, I'm perusing the Huffington Post, thinking it's been a slow news day, and there's not much really happening that I think I should dial down and let my friends and family in on.  The HuffPo's big headline is "Not Our Problem", referring to ForeclosureGate.  Ooookaaay... well, legally, it is a state issue - specifically, a county issue, as it's  generally the sheriff's job to actually boot you out of your house.  So thinking, I clicked on the article, and read the next headline: "For the Banks and Servicers to Fix".  I had to ask myself this fundamental question:


    JUST WHAT THE BLUE FUCK IS WRONG WITH YOU FUCKING PEOPLE???!!!!


    Here's what the fuck is wrong: you're in bed with the Banksters, The Lobbyists, the Corporate Lackeys, and all the other shills who have sat at this blood-soaked table of carnage that used to be a thriving American Middle Class!  Let's toss out this little tidbit:
    From Shaun Donovan, HUD Secretary: "...we have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed."


    This shouldn't be the whole quote, I'm sure.  The rest of the quote should read anything from, "Ya wanna play checkers?" to "because we haven't actually LOOKED at anything, really."


    The Cook County, Illinois sheriff - hardly a Secretarial muckety-muck like this Donovan fucktard, announced on Tuesday that "he can no longer enforce foreclosures" in and around the Chicago area, until they (The TBTF's and Ally) can prove the processes were handled "properly and legally".  


    How about this one?  Affidavits of expert witness Lisa Cullaro, who attested in a court motion by Wells Fargo Bank in an attempt to finalize a foreclosure action.  Great, except that Lisa Cullaro ALSO works for the Florida State Attorney General's office... in the fucking ECONOMIC CRIMES DIVISION.  Wait! There's more:
    She did it by the books, as it were; applied for approval of "dual employment" through - wait for it - the Attorney General's office... noting that she would be employed by Florida Default Law Group, as a notary public, on specific days and times.  She got the approval.


    And, somehow, her signature got all over paperwork with date and time stamps that, according to her binding agreement with the Attorney General's office, would have placed her OUTSIDE THE F-ING STATE OF FLORIDA at the time of the signatures.


    I got a million of 'em... try the prime rib... !


    Now that I've calmed down a bit, please note that I culled these last two references from 4closurefraud.org, a great reference site worth reading.


    I'm glad someone's paying attention, and willing to talk about it, because apparently our federal administration is going to do their damnedest to sweep this whole mess under the rug.  It's disgusting. 


    


    Brutal Truth

Is Bank of America Being Thrown Under The Bus??

    ...well, maybe.  JP Morgan recently unveiled a presentation detailing BAC's potential exposure to 'putbacks' - a nice way of saying that if investor groups who hold an interest in the polluted RMBS's (Residential Mortgage Backed Securities) can find fault with the robo-signed crap they bought, they can call for BAC to buy back the asset... at FULL selling value.  That's 100 cents on the dollar, for many of the toxic assets now worth between 50 and 60% of what they were originally marked.  


    Bank of America, however, announced Monday that it will resume up to 100,000 foreclosures in the 23 states that involve a judge to complete the seizure.  This, a mere TWO WEEKS after its self-imposed moratorium that in retrospect... never really happened.  Via the statesmanjournal.com: In Tampa, Florida, Monday, 10/13, a single judge approved 11 foreclosures in just 18 MINUTES.  Meanwhile, foreclosures continued in the 27 states that don't require a judge's signature.  End result?  Less than 30,000 of the original 100,000 foreclosures already slated to be finalized were delayed - by two weeks.  Nice.  


    In Massachusetts, a petition for class-action status is being sought by a group of borrowers who accuse BAC of defrauding them via the HAMP program. All parties were apparently given the now-infamous "trial mod", apparently complied, then were told that they didn't qualify for HAMP relief, and would they kindly pay the last 3 months' difference in payments, along with penalties.  A point: BAC (and any other loan servicer) receives $1,000.00 from the US Treasury as an incentive to work with homeowners, for each loan it modifies.  BAC has filed a motion to dismiss, en-masse, the entire suit, saying that borrowers have no legal standing in an agreement between itself and the Treasury.  This should get interesting, in a slow-motion train-wreck kind of way.


    And, via Bloomberg: The New York Fed, PIMCO, and a company called Black Rock are jointly suing BAC over mortgage 'putbacks' outlined above.  The numbers begin at $47 billion, and spiral outward from there; this is fairly aggressive shit, people. 


    And the hits just keep on comin'... The Financial Fraud Enforcement Task Force, representing the Administration, has entered into the preliminary stages of an investigation into whether banks and other servicers misled Federal housing agencies with their practices during the run-up, and now during the incredible run-down.


    Sure drives an argument for BAC goin' down like a clown, doesn't it?  All these folks, and agencies, piling on, Federal Task Forces and stuff... how cool would it be for the Obama Administration to be able to take the leashes off all the hounds, grab that little clause in the Financial Reform Act, and dismantle America's largest bank?  Striking back just in time to save his chances at a second term, maybe?  It would be stunning, wouldn't it?  And a great way to rattle sabers at the other big boys, while you're at it.  Politically, it's a gold mine.  I mean, my inner, middle class nerd is doing cartwheels over the whole idea!


    Until I started digging a little deeper, anyway. <sigh>  According to ZeroHedge.com, two problems arise, and they all focus on Black Rock, the third party named above in the lawsuit.  Seems they're owned BY Bank of America; a whopping 34% owned, in fact.  And, in a particularly bizarre turn of events, Black Rock happens to be the SINGLE LARGEST SHAREHOLDER of Bank of America, at 5.35%. With that in mind, the Financial Fraud investigation sounds less like a shot across the bow, and more like a "Hey!  You guys didn't screw us, too, didja?"  Remember that the Fed owns more mortgage and RMBS's than anyone else at this point...


    Which leads me to think that this latest deal with PIMCO, NYF, and Black Rock may be the mother of all pre-settlement bluffs.  If you're stuck with a bunch of this toxic crap, and you see, essentially, BAC going after itself, you may want to consider a hasty - and reduced, of course - pre-trial settlement.  Poof!  $47 billion in putbacks gets cut - in half? by two thirds? - time will tell, but this bears watching, as it will set legal precedent for potentially stopping the unwinding of the mortgage mess.


    If that happens, it's business as usual, and as usual, we're screwed.


    On a lighter note - in a kind of hysterical, if-I-don't-laugh-I'm-gonna-puke way, here's a great clip from RJ Eskow of the Huffington Post:

    Jamie Dimon and the other mega-bankers who derailed the economy have a new PR campaign to sell you. They're saying that families who can't pay their mortgages must bear the blame -- all the blame -- for the foreclosure crisis. That means the public should just ignore banks' widespread lawbreaking in the registering and transfer of property titles. For the bankers who would appoint themselves the nation's moral arbiters, It's always somebody else's fault.

    Not that we should be surprised. After all, the Mortgage Bankers Association, which calls itself "the voice of the real estate finance industry," did a short sale on its Washington DC headquarters which left CEO John Courson uncharacteristically speechless. It seems he didn't want to talk about how he walked away from the loans he took out to buy that building. But before the cat got his tongue, Courson managed to lecture homeowners on their "legal obligation" and the terrible "message they would send" by walking away from their mortgages.

   (Thanks, RJ... I needed that.)

    

    Brutal Truth

Nature Abhors a Vacuum...

    But Politics is what you might call "shovel-ready" when it comes to throwing hats in a ring.
   I know, this is an economics blog, but I think viewing economics in a narrow scope is misguided.  Unfortunately, politics, finance, employment, religion are all interwoven in the Economy with a capital 'E'.  So, let's have a look at the mid-terms:


   As of this writing, I am profoundly disappointed in the Obama Administration.  It is my depressing belief that a potentially great leader has been purchased by the financial lobby and corporate interests.  Campaign promises are like so much dust on our unemployment checks.  I've touched on this in other posts, so 'nuff said.


   With that in mind, though, I, like other folks, am looking around at the melee that is our mid-term election cycle. What I'm seeing, frankly, scares the hell out of me.


   Yes, I believe we have a leadership vacuum; who the hell's in charge up there in DC, anyway?  I mean, besides Goldman Sachs?  You get my point.


   And, into the vacuum, filling it to overflow, comes...


   The Tea Party.  Lord help us all, these angry, pseudo-right wing Sarah Palin worshippers and their ilk are sure that the 'gov'mnt' is awful, and ought to be shot out in the barn like Old Yeller.  Greeeeaaaat.  And what, pray tell, do we do then?


  Why, the obvious!  We put the Tea Party in charge... they Take Back America!  They Protect Our Children!  They... what was that other thing?  Drill, Baby, Drill!  Yeah!  You gov'mnt types spend too much!  We'll... well, we won't, that's what!  Yeah! But, my cousin Bubba ain't had a job in a year, so we won't be cuttin' unemployment... and my uncle Earl's youngest, she's GOTTA have some dental work, and him with his back and all... so we won't be cuttin' Medicaid...and Aunt Tellulah, she's been 'on the county' for near thirty years now... so we best leave that welfare alone, at least till she passes on, God Rest Her Soul...


   Yeah, okay, I'm pokin' mean fun at the Tea Party folks.  Maybe it's not fair.  We should look at some of the real candidates that have been brought from the depths to "lead" us...

• John Ensign (NV): $550,000.00 in legal fees in the last 3 months, fighting a Senate Ethics Committee (now THERE'S a misnomer!) and US Justice Department Investigation into his cover-up of an affair.
• Joe Miller (Tea Party, AK)'s 'private security force' handcuffed and detained Tony Hopfinger during a Town Meeting event... Tony being the founder and editor of the Alaska Dispatch. Good thing the cops showed up to get him released.
• Rand Paul (KY) would "edit" the Civil Rights Act... remember that little nugget??
• Ken Buck (CO) thinks being gay is like being an alcoholic.
• Christine O'Donnell (DE) was a witch... or not... lied about which college(s) she attended, and thinks having Sean Hannity "in her back pocket" is good news.
• Carl Paladino (NY) thinks bestiality, pornography, and racist jokes are cool for e-mails.  These are his PUBLIC e-mails... just sayin'.
• Sharron Angle (NV) has recently attacked Sharia Law, a system of rules for Muslims that govern things from prayer times to inheritance law... FOR MUSLIMS.  Apparently she fears that we'll all be roped into Sharia Law if we don't watch out. <sigh>
• Carly Fiorina (CA) former CEO of HP, but by God, she's a political outsider!  Wants to extend the Bush tax cuts, and loses her ability to speak when asked how the government intends to make up for that lost revenue.

   Had enough?  I know I had... the list is actually longer than this; I just picked the most recent group of screw-ups to make a point.  My point, by the way?

   The best and brightest of us are no longer involved in the political arena.  Not that there aren't any good candidates out there, but as I, and my older friends have grown accustomed to saying, 'we're just trying for the lesser of the evils'.  

   At one time, public service was an admirable calling.  Now it's a great way to pad your bank account.  This is what happens when the leaders get out of politics, and leave it to idiots like these to run the show.

   Nothing good can come of this.

   Brutal Truth