Max Keiser: telling it like it is

What a breath of fresh air! Max isn't afraid to say what he knows to be true - that G.S. is corrupt, manipulates the financial system and owns the American Government

Gerald Celente - Disintegration of empire America

By 2012:

- Tent cities
- Ghost Malls
- Boss nappings
- Roving Gangs

Weekend Funnies - July 11

Enjoy!

Hyperinflation Nation

I watched this last night - an excellent, highly recommended 3 part series on our country's likely future - better prepare now before the dollar becomes worthless:

Part 1



Part 2



Part 3

Major Banks to Reject California IOU's

The State of California, virtually out of cash, started issuing IOUs, formally known as registered warrants, last Thursday after lawmakers failed to agree on a package of spending cuts to close a budget deficit that has now grown to $26.3 billion.

Since last Thursday, the state has issued nearly $230 million worth of these IOUs and there is still no budget agreement in sight.

Note: California plans to pay an interest rate of 3.75 percent on these IOUs when they mature in October.

On Monday morning (this week), a budget meeting between Gov. Arnold Schwarzenegger and legislative leaders failed to produce results - thus leading Fitch Ratings to drop California's bond rating to BBB, down from A minus the same day.

Now the problem is: Major banks (including Bank of America, Citigroup, Wells Fargo, J.P. Morgan Chase, and others) are becoming scared and plan to no longer accept these IOUs after Thursday this week (window of acceptance to close on Friday).

Bloomberg report on Bank refusal of California IOUs




Fox Business report on the same



If you want to become more informed on this IOU issue, Martin Weiss has a recent article warning of a looming, major California Bond default (Link)

This may get ugly folks

Randy

Bankruptcy filings jump 36.5% - 1.4 million expected to file this year

I've touched on this subject several times in the past - last article was in Dec 2008 (link)

In that article I discussed major changes to US Bankruptcy law that took effect in Nov 2005 - causing over 2 Million people in the US to file before the deadline that year.

The new (harsher) law worked as intended and filing numbers were dramatically down in 2006 and 2007 (590K and 826K respectively). 2008 however, was a year of major economic turmoil and the year ended with over 1M new filings.

I later opined (in that same article) that we'd likely see these numbers get far larger as the economic downturn intensified (forecasting 1.7M in 2009) and even stated 2010 would likely break all previous filing records (we'll soon see).

Anyway, new data from the American Bankruptcy Institute (July 2, 2009 release) highlights the fact that these filing numbers are indeed rising quickly, with no relief in sight:

July 2, 2009, Alexandria, Va.— U.S. consumer bankruptcy filings totaled 675,351 nationwide during the first six months of 2009 (Jan 1-June 30), a 36.5 percent increase over the 494,610 total consumer filings during the same period a year ago, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center(NBKRC). The overall June consumer filing total of 116,365 was 40.6 percent more than the 82,770 consumer filings recorded in June 2008. While the June total represented an increase over the previous year, it was a 6.8 percent decrease from the May 2009 total of 124,838 consumer filings. Chapter 13 filings constituted 27.7 percent of all consumer cases in June, a slight increase from May.

“As unemployment, foreclosures rates and health care costs continue to rise, more consumers are turning to bankruptcy as a last financial resort,” said ABI Executive Director Samuel J. Gerdano. “We expect that there will be more than 1.4 million new bankruptcy filings by year end.”

Another release today from CNN Money stated - Credit delinquencies hit record high - Mounting job losses and fallout from housing bust make it tough for consumers to make payments on bank cards and other loans.

NEW YORK (CNNMoney.com) -- Soaring unemployment and the housing bust are leaving consumers hard-pressed to make loan payments on everything from credit cards to cars.

The percentage of borrowers at least 30 days late paying a balance is the highest since the group began keeping records in 1974.

The statistics are "a natural consequence of mounting job losses in a weakening economy," ABA Chief Economist James Chessen said in a statement.

The economy is losing jobs by the thousands, and mass layoffs and pay cuts have exacerbated the credit crunch. Banks have heightened lending standards because of default risk, providing less credit to consumers.

"The number one driver of delinquencies is job loss," Chessen said. "When people lose their jobs, they can't pay their bills. Delinquencies won't improve until companies start hiring again."

Bottom line:

The data speaks for itself and depending on how bad the US unemployment situation gets in 2009 (I expect it to get much worse) I anticipate that even my 1.7M forecast will be met.


Regards

Randy

New Housing Chart to Ponder

I created this chart with newly released (30 June 09) Standard and Poor/Case Shiller housing data - selecting a few cities of interest. Problem is: I don't see a floor OR green shoots anywhere.

Vegas and San Fran have even fallen back to 2000/01 price levels - Gee, think I actually forecasted this... (link 1, link 2)

BTW: Anyone else catch which way the trend line is heading? How about a bottom - any bottom in sight?

Weekend Funnies - 4 July 09