The Great Recession, What a Joke (Where We Are – Part 1)

It’s called a d-e-p-r-e-s-s-i-o-n.

Although this does cut against the grain of those who in the words of Paul to the Romans, "Professing to be wise, they became fools", we need to recognize the current economic climate in which we live so as not to join the fools in their endeavors. However, this past foolishness has led to our current predicament and it is these same individuals who presently maintain that we are "on the road to recovery". This is not only short-sighted, it is destructive of personal wealth, happiness and in many instances, life itself. So it is through these means that we arrive at the question - Where do we stand now?

From Vox Day, a man who also saw the current depression coming -

At the end of 2009, conventional economists are claiming that the economic contraction which began in 2008 is over. Most government published statistics show growth and the stock markets have recovered half of their previous losses. While some of the wiser economists are hedging their bets by stating that they expect growth to be "sluggish" with "downside risks," there are no more expectations of market crashes, financial collapse or widespread economic contraction than there were at the beginning of 2008. The question is not one of growth versus contraction, but rather how much the economy will grow. However, the conventional economists are just as wrong to think the contraction is over as they were to believe that it was not on the horizon before.

The United States Gross Domestic Product (GDP) = private consumption + gross investment + government spending + (exports - imports).

This figure will be become important over this series as we will use it to analyze our current economic standing and health. In our review Private Consumption is the first component of GDP and can be viewed as you and I or more specifically, the private sector. Let's look at some facts and figures from the perspective of John Q. Public

Unemployment
One method of examining whether or not private consumption is healthy is to measure unemployment. Why? In order to purchase something, an individual needs to have something that the other party would like to trade for. Generally this would mean that a person would need to be employed in order to have money to trade for goods and services in the economy.

But just how is the employment situation doing? Let's examine the government numbers.

• U3 data - The much trumpeted "official" 10 %.
• U6 data - 17.2%
• U6 data historic as calculated by John Williams is over 22.4%. (This leaves out the birth death ratio of government "guessing".)

So from this we can safely conclude that there is massive unemployment already. While the unemployment rate of increase is slowing slightly it is hardly comforting for those without a job that less people are losing jobs currently. This uptick does not necessarily mean improvement, but only a slowing in the plunge down, especially when viewed in light of the massive amount Federal stimulus, but we'll cover that later.

In November unemployment slowed down even more as temporary workers were added to payrolls. But here is a question - Do these numbers reflect a seasonal increase for the holidays and 4th quarter numbers? In other words are we "adding jobs" because it's Christmas and afterwords these temporarily fortunate individuals will go back to being unemployed? In addition, how many are presently dropping off the unemployment numbers because they're running out of benefits and therefore no longer counted?

Some numbers from Calculated Risk-

According to the BLS, there are a record 5.887 million workers who have been unemployed for more than 26 weeks (and still want a job). This is a record 3.8% of the civilian workforce. (note: records started in 1948)

And regarding our seasonality -

It appears that businesses are under the impression that this holiday season is going to be better than last year. Note that November hires are outpacing last year.

Retailers only hired 54.2 thousand workers (NSA) net in October. This is essentially the same as in 2008 (59.1 thousand NSA). However retailers hired 321.3 thousand workers in November (NSA), an increase from the 233.7 thousand last year. This suggests retailers are a little more optimistic than last year.

And it doesn't look like it will get any better soon -

At best, it could take until the middle of the decade for the nation to generate enough jobs to drive down the unemployment rate to a normal 5 or 6 per cent and keep it there. At worst, that won't happen until much later - perhaps not until the next decade.

Wages and Purchasing Power
The previous data looks discouraging, but it ignores the millions of individuals that are employed, so let's assume we currently have a job. In today's terms this means wages or in lieu of wages, credit, as many turn to credit cards to make ends meet.

A cursory review of employment data reveals that wages are flat at best and available hours are plunging.

To make matters worse, purchasing power has declined 22% from 2000 to 2009 and of this even less is disposable income. (Meaning available to purchase items other than necessities) With inflation at an annual rate of 7%, there is nothing to suggest that this will be getting better.


Capitol Savings
Perhaps John Q. Public can dip into his savings, 401k, bonds, etc.? Some of that money has to be hitting the market as our consumer is running out of income? With 401k, most have been pummeled down and unbeknown to John Q. Public, fund managers are taking risky and wild gambles in an attempt to make up the difference. When the stock bubble pops, it will place these pensions in jeopardy. We just haven’t gotten there yet.

“Schneider…the privately owned company imposed a pay freeze earlier this year and stopped paying into 401(k) retirement plans.”

Real estate prices are plummeting, median home prices have fallen more than 30% from their 2006 peaks. Remember yesterday when the mantra was 'housing has never gone down, you can't lose!"? Well chew on this little tidbit

More homes were foreclosed in the last 12 months than in an entire decade in the first Great Depression of the 1930’s.

Credit
What some view as an option of last resort, others actually use for daily operating expenses, but how is the final piece of our Private Consumption puzzle fairing?

"Total credit market debt remained essentially flat since the fourth quarter of 2008. Total loans and leases by commercial banks decreased 6.2 percent in 2009, which was six times more than the largest previous decline in 1975."

Consumers are jettisoning credit cards, which is actually a good thing long term, but has negative short term consequences. But this says little of the average debt load that the consumer has been building up until this point.
For many students - $40,000 in educational debt becomes an avoidable noose as they are unable to procure a job in their field as current applicants are able to take the salary with more experience. This is having the effect of creating a whole new wave of revolutionaries disatisfied with the status quo and ripe to be used for rebellion.

Bankruptcies are rising fast as the canary in the coal mine has alerted many that debt can be, in fact, toxic.

So what's the verdict? Is the consumer spending?

The Consumer Confidence Index, released by The Conference Board, sank unexpectedly to 47.7 in October -- its second-lowest reading since May. Forecasters predicted a higher reading of 53.1. A reading above 90 means the economy is on solid footing. Above 100 signals strong growth. The index has seesawed since reaching a historic low of 25.3 in February and climbed to 53.4 in September.

And from the U.K. -

the UK Office of National Statistics reported an unexpected contraction of -0.4% GDP growth in the third quarter. This confounded widespread expectations of 0.2% growth and extends the length of the “recession” to six quarters, which is the longest continuous contraction since the 1950s.

In June, I posted the following -

‘90% of economists believe we are recovering economically’ and ‘we have hit bottom and we will see slight growth in the Q3 and moderate growth in Q4.’ …' Responding to that, I will say the following: They are wrong! Absolutely in no uncertain terms dead wrong.”

Take a good look. This is the true condition of the American consumer as of now. In many instances, a decade of growth, wiped out.

To summarize, the American consumer has less jobs to apply for, to receive a smaller wage, with a dollar that is quickly fading. In addition, his last 10 years of capitol growth has vanished and there are rumblings that the safety nets meant to catch him are failing. Not exactly promising.

In light of all this, it was reported that the GDP of the United States is up 3.5%! But given what we now know about the American consumer, how could this be? Well, to be sure, there is a modicum of spending going on out there but the relevant question is what is it being spent on and by whom?

In part two, we shall review the other side of Private Consumption, business consumption.

They Were Wrong (Where We Were)

Can any impartial and unprejudiced mind doubt the motive? Was it not to compel the people to continue its monopoly and privileges, not on account of the benefits conferred by it, but to escape from the suffering which the [Bank] had the power to inflict?

- Roger Taney to Andrew Jackson regarding manipulation of the nation’s money supply

I am reminded of the tragic fate of the Titanic, in which the rich elite of the time rebuke any attempt to save their sorry hides by invoking the brilliance of the ship’s design and seaworthiness, thereby nullifying any supposed misinformed proclamation of perceived danger.
It was if they were trying to say in their snooty sort of way 'Let’s not be hasty, shall we?'

Fast forward to today and it appears that supreme arrogance is still in good form. Let’s review the grand picture, shall we?

Over the past year we've had a funding crisis, namely the inability to continue the over-leveraged positions that most people and institutions have created. This crisis was invasive and extended to the stock market, government, manufacturing, commodities; you name it and it was affected severely.

But just how did the establishment perceive this situation going in? What was there take on the now obvious "economic crisis" as it was developing? More specifically, how did the Federal Reserve, our designated knights in shining armor, perceive this issue?

Here are some Bernake quotes -
On housing:

July 1, 2005 (responding to a CNBC question about whether there was a housing bubble and whether it could cause a recession): “It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

May 17, 2007: “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”

On employment:

July 18, 2007 (a month before the subprime mortgage market began having problems and five months before the recession began): “Employment should continue to expand. … The global economy continues to be strong. … Financial markets have remained supportive of economic growth.”

On the banks:

Feb. 28, 2008: “Among the largest banks, the capital ratios remain good, and I don’t expect any serious problems … among the large, internationally active banks that make up a very substantial part of our banking system.”

July 16, 2008: Chairman Bernanke said that Fannie Mae and Freddie Mac are “adequately capitalized” and “in no danger of failing.”

On business:

February 15, 2007: "Overall economic prospects for households remain good. The labor market is expected to stay healthy. And real incomes should continue to rise. The business sector remains in excellent financial condition."

During the crisis:

May 5, 2009: “Currently, we don’t think [the unemployment rate] will get to 10 percent.” (Five months later, the rate reached 10.2 percent.)

McCain on the economy:

I’m very strong on the economy. I understand it. I have a lot more experience than my opponent. (July 2, 2008, on Good Morning America)

But let me just add, Peter, the fundamentals of America’s economy are strong. (Apr. 17, 2008, interview with Peter Cook)

You know, that there’s been tremendous turmoil in our financial markets and Wall Street and it is — people are frightened by these events. Our economy, I think, still the fundamentals of our economy are strong. (Sept. 15, 2008, from a campaign speech aired on CNN)

... And by the way, I don't believe we're headed into a recession. I believe the fundamentals of this economy are strong, and I believe they will remain strong. This is a rough patch, but I think America's greatness lies ahead of us. - January 10, 2008

Hank Paulson:

“The long-term fundamentals of our economy are strong," but "[w]e believe the economy is going to continue to grow slowly here. This is not an emergency.“ - January 18, 2008

'The worst is likely to be behind us . . . . ” - May 7, 2008

George Bush:

"In the long run, we can be confident that our economy will continue to grow, but in the short run, it is clear that growth has slowed." - March 15, 2008 in his weekly radio address.

Morgan Stanley:

We believe that with our strong capital base and liquidity, we have a strategic advantage to capture the many opportunities arising in the midst of this market turbulence." (February 6, 2008 - CFO Kelleher of Morgan Stanley at the Credit Suisse Group Financial Services Forum) - Morgan Stanley later posted record losses

The Washington Post:

“Anyone who says we’re in a recession, or heading into one —- especially the worst one since the Great Depression —- is making up his own private definition of “recession.” —- commentator Donald Luskin, the day before Lehman Brothers filed for bankruptcy, The Washington Post, Sept. 14

What we have here is a scene out of Monty Python and the Holy Grail in which The Black Knight of government being mortally wounded states that it’s "merely a flesh wound". This attitude reveals the attitude and perhaps the intent of our great leaders. And how does it stack up? It belies common sense and worse yet, it’s not even funny.

LAPD on course to takeover Explorer Program

By Rick Orlov, Staff

With a pledge to develop a program that does not tolerate discrimination, Los Angeles police officials said Tuesday they are on target to take over the Explorer Program on Jan. 1.

New uniforms, patches and other insignia will be unveiled - along with a new name - to make the long-debated transition of the program from the Learning for Life subsidiary of the Boy Scouts of America to the LAPD's control.

"There has been a major push to get this together and we are there," Assistant Chief Earl Paysinger told the Police Commission.

More than 3,000 young people - including the most recent graduating class of 220 members - are part of the program that trains young people to prepare for law enforcement careers.

The Los Angeles Police Department has been working for a year to remove the program from the Boy Scouts because of that organization's policies discriminating on basis of sexual orientation and religion.

Paysinger said one of the biggest issues to deal with was providing insurance for participants, which was resolved with the city agreeing to assume responsibility.

In addition, Paysinger, Saltzman and others have been meeting with various organizations to raise money to support the new group.

Commissioner Alan Skobin said the new program has drawn requests for information from other law enforcement agencies around the country who also are interested in breaking away from the Boy Scouts.

Paysinger said the LAPD operates other youth programs, including the Police Athletic League and a program aimed at children ages 8-13.

Commissioner Robert Saltzman said he attended last week's Explorer graduation, where he met with supervisors in the program.

"What was encouraging is they all support nondiscrimination," Saltzman said. "Their only concern is that the program remains a success. We all want that. I believe this will be not only as good, but better."

Iran Situation Break Down

The situation in Iran gets more interesting.

An oil well is seized -

The Iraqi government Friday demanded the withdrawal of an Iranian "armed group" that it says seized an oil well in southern Iraq on Thursday night.

Iran is denying any takeover took place.

The Iraqi government issued a strong statement deploring the act after Iraqi Prime Minister Nuri al-Maliki headed an emergency meeting of Iraq's National Security Council to discuss the situation.

"The council stressed that such incidents would be considered a violation of the border and violated Iraq's sovereignty and its territories and calls upon Iran to pull out the group from well No. 4 and take down the Iranian flag from the tower of the well immediately," Iraqi government spokesman Ali al-Dabbagh said in the statement.

Gen. David Petraeus tells Bahrain conference calls in Mideast countries to join forces in order to curb Tehran's nuclear ambitions -

The United Arab Emirates, a key US ally in the Persian Gulf, has the capability to overpower Iran's Air Force, US Centcom commander Gen. David Petraeus said last week.
"The Emirati Air Force itself could take out the entire Iranian Air Force, I believe, given that it's got ... somewhere around 70 Block 60 F-16 fighters, which are better than the US F-16 fighters."

Iran Test Fired a Missile -

Islamic republic's Arabic-language satellite television says tested missile has longer range than Shahab, which Iranian officials have said can reach targets 2,000 kilometers away, putting Israel and US bases in Gulf within reach

The Real Effect
All this is in light of Russia delivering a state-of-the-art missile defense system at the end of January that will greatly reduce if not eliminate the effectiveness of an air strike against Iran.

Very interesting.

Panic in Detroit: Unemployment Stands at 50%

Infowars.com

December 17, 2009

AOL’s job site reports the following:

Nearly one out of two workers in Detroit are unemployed, according to a report by The Detroit News. It’s a figure far higher than the government’s official figure, which is still close to a staggering 30 percent.

But the newspaper says that rate doesn’t take everything into account. For every person who is still looking and collecting unemployment, there are scores of others who have had benefits run out, accepted a part-time position, taken early retirement or a job outside of their regular field.

This is higher than the unemployment during the Great Depression. In 1931, the official unemployment rate was 24.9%. It took a world war to bring it down to 4.7%.

Will it take another war to bring the unemployment rate down again?

Anti-Iran Sanctions Punish Civilians, Are an Act of War

Ron Paul
Campaign For Liberty
Thursday, Dec 17th, 2009

Statement of Congressman Ron Paul
United States House of Representatives
Statement Opposing the Iran Refined Petroleum Sanctions Act
December 15, 2009

I rise in strongest opposition to this new round of sanctions on Iran, which is another significant step toward a US war on that country. I find it shocking that legislation this serious and consequential is brought up in such a cavalier manner. Suspending the normal rules of the House to pass legislation is a process generally reserved for “non-controversial” business such as the naming of post offices. Are we to believe that this House takes matters of war and peace as lightly as naming post offices?

This legislation seeks to bar from doing business in the United States any foreign entity that sells refined petroleum to Iran or otherwise enhances Iran’s ability to import refined petroleum such as financing, brokering, underwriting, or providing ships for such. Such sanctions also apply to any entity that provides goods or services that enhance Iran’s ability to maintain or expand its domestic production of refined petroleum. This casts the sanctions net worldwide, with enormous international economic implications.

Recently, the Financial Times reported that, “[i]n recent months, Chinese companies have greatly expanded their presence in Iran’s oil sector. In the coming months, Sinopec, the state-owned Chinese oil company, is scheduled to complete the expansion of the Tabriz and Shazand refineries — adding 3.3 million gallons of gasoline per day.”

Are we to conclude, with this in mind, that China or its major state-owned corporations will be forbidden by this legislation from doing business with the United States? What of our other trading partners who currently do business in Iran’s petroleum sector or insure those who do so? Has anyone seen an estimate of how this sanctions act will affect the US economy if it is actually enforced?

As we have learned with US sanctions on Iraq, and indeed with US sanctions on Cuba and elsewhere, it is citizens rather than governments who suffer most. The purpose of these sanctions is to change the regime in Iran, but past practice has demonstrated time and again that sanctions only strengthen regimes they target and marginalize any opposition. As would be the case were we in the US targeted for regime change by a foreign government, people in Iran will tend to put aside political and other differences to oppose that threatening external force. Thus this legislation will likely serve to strengthen the popularity of the current Iranian government. Any opposition continuing to function in Iran would be seen as operating in concert with the foreign entity seeking to overthrow the regime.

This legislation seeks to bring Iran in line with international demands regarding its nuclear materials enrichment programs, but what is ironic is that Section 2 of HR 2194 itself violates the Nuclear Non Proliferation Treaty (NPT) to which both the United States and Iran are signatories. This section states that “[i]t shall be the policy of the United States… to prevent Iran from achieving the capability to make nuclear weapons, including by supporting international diplomatic efforts to halt Iran’s uranium enrichment program.” Article V of the NPT states clearly that, “[n]othing in this Treaty shall be interpreted as affecting the inalienable right of all the Parties to the Treaty to develop research, production and use of nuclear energy for peaceful purposes without discrimination and in conformity with articles I and II of this Treaty.” As Iran has never been found in violation of the NPT — has never been found to have diverted nuclear materials for non-peaceful purposes — this legislation seeking to deny Iran the right to enrichment even for peaceful purposes itself violates the NPT.

Mr. Speaker, I am concerned that many of my colleagues opposing war on Iran will vote in favor of this legislation, seeing it as a step short of war to bring Iran into line with US demands. I would remind them that sanctions and the blockades that are required to enforce them are themselves acts of war according to international law. I urge my colleagues to reject this saber-rattling but ultimately counterproductive legislation.

“When the people find they can vote themselves money, that will herald the end of the republic.”

Increase Your Carbon Footprint

Excerpts from Butler Shaffer -

Our two-year old granddaughter was at our house recently. She was joyously stomping her feet, in rhythm to some piece that had been performed in her music class. The delight with which she carried out her highly-energized dance reflected a spirit that is particularly evident among small children, an approach that the adults in their lives are often quick to squelch. Our birth certificate announces to the institutional order the arrival of another conscript to be molded into servo-mechanisms programmed to serve “obligations” that are neither of our origins or to our benefit: dancing and other joyous expressions that serve no institutional ends are to be discouraged.

...I am reminded of the many misanthropic humanoids who will beset them with demands to restrain their sense of well-being and to temper their happiness. Unable to find meaning within themselves, such pathetic beings endeavor to compensate for this shortcoming by seeking power over others. They do so by identifying with and becoming agents of institutions, those well-organized entities that are destructive of both individual lives and civilizations. It is on behalf of the interests of such instrumentalities that most of our social pathologies get played out.This campaign to draw children into the vortex of personal and societal destructiveness will initially be undertaken by parents whose best-of-intentions are matched by their own lifelong conditioning in the cult of duty. Soon thereafter, the child will be brought into schools and churches for further inculcation, while the media and, ultimately, the state await with their more persistent and forceful reinforcement.

If there was but one message I would hope readers would draw from my writings it would be an awareness of how we condition our minds to make our lives subservient to institutional interests. With the emergence of the current forces of perpetual war, ubiquitous policing, and state-managed economic dislocation that are combining to bring about the collapse of American civilization, there is no more opportune time in which to examine the mess we have made of ourselves.

Even as the virus of institutionalism continues to spread its deadly influences — dangers to life that far exceed the hyped threats of “swine flu” — a sense of desperation emanates from within the establishment. Even more regulations, more surveillance, more weapons of torture and suppression, and more laws to be enforced by more police, more prisons, and longer sentences are demanded by those who rule from the heights of a failed system. Even with a polychromatic display of “terror alerts,” the specter of bogeyman “terrorists” no longer entertains most Americans. In a nation saturated with fear-objects used for political control, threats of a more far-reaching nature than child abductors, street-gangs, or drug-dealers must be dredged up.

I suspect that Johann Gutenberg’s invention of movable type made possible the second stage of the information revolution that quickly spread its liberating influences to the rest of humanity. The Renaissance, the Reformation, the Scientific Revolution, the Enlightenment, all contributed to that most humanizing period in human history: the Industrial Revolution. Mankind quickly discovered that its well-being was not to be found in obedience to earthly powers commanding them through structured political forms, but in the release of their own creative energies. Industrialism helped us learn how to produce and exchange the economic values that sustain life; we learned how to maximize human well-being; how to produce the surpluses that provided the earliest evidence of this most prolific system: an increasing population.

Such productiveness did not occur without costs. Through this system, we expanded our capacities for converting natural resources into material goods, a process occasioned only by mankind “increasing its carbon footprint” in the world. It is a biological fact that life itself — at least on this planet — is based upon carbon,and its interchange among living beings. Plants produce oxygen that is breathed in by animals, and expelled as carbon dioxide which, in turn, is taken in by plants. Whatever the source of the energy that fuels human action — be it carbon, sunlight, wind, or some untapped element — a consequence will necessarily be that humans will be expelling carbon dioxide.

Unless, of course, Homo Boobus can become convinced that the expenditure of energy — whether in play or the production of goods and services — is somehow a threat to the human species. What better way for those who want nothing more — or less — than a universal control over their fellow beings than to convince them that the essence of life itself (i.e., the vigorous and lively interaction of an organism with its environment) is anti-life. They will be reminded of the basic tenet of their conditioning: that only by submitting oneself to the authority of rulers — who will never moderate their energies on behalf of schemes to extend their power over others — can they enhance their lives by renouncing its very nature. The pursuit of individual preferences for living will come to be regarded as a secular form of original sin, to be dealt with most severely. Even school children will learn that as harmless an activity as running on the playground is to be prohibited, lest the energies that inhere in childhood be allowed to carry over into the stultifying atmosphere of the classroom. Free-spirited dancing will quickly evolve into well-ordered and supervised marching.

Be aware, my grandchildren, you may find yourselves beset by people-pushing gangs of sociopaths who have ambitions over the very ownership of your lives. They will likely cajole and coerce you into minimizing your “carbon footprint” on this planet. But to give in to their importunities is to abandon the creative and joyous nature of life itself. Continue to direct your energies over what is yours to own, and make your footprints as grand and glorious as your imaginations are capable of generating. If I am still fortunate enough to be around in your young adulthood, I may help you to discover the most polite but insistent words with which to tell such misanthropic humanoids to “go to the devil; I have more dancing to do!”

WHO Admits Mutated Swine Flu Cases Increase

From the World Health Organization -

WHO-swine-flu-update-Tamiflu resistant-H275Y-cases-of-H1N1-flu-have-nearly-doubled-in-two-weeks
The World Health Organization (WHO) provided an important swine flu update on the second of December. According to the WHO, the number of Tamiflu-resistant cases of H1N1 (swine flu) that have been identified have nearly doubled in the previous two week period.

Clusters of this H1N1 mutation, H275Y, have been found in North Carolina and Maryland, in the U.S., and Wales, in the United Kingdom.

According to the latest report from the WHO, the number of reported cases of Tamiflu-resistant swine flu have increased from 57 to 96 in just two weeks.

The Real Effect
Doubled (almost) in two weeks, now where does that sound familiar?

As I said on November 25 -
Look for increasing cases going into the weekend in the Midwest especially as this appears to be ground zero. I believe that it will continue to increase the infection rate until roughly Christmas when it will slow down.

I have some statistical information on the spread of this disease, but I don't want to go predicting anything until we see if it's actually going to become the same type of epidemic that the Ukraine is dealing with. But following that lead, here's a real rough ballpark on what the United States is looking at: 10,869,165 Infected; 653,384 Hospitalized and 2,544 dead.
As you can see, lots of bark and not a lot of bite.

D225G Mutation Spreads

As I predicted, the mutation is spreading both here and abroad -

Maryland reports 2 cases -

Maryland health officials are reporting the state's first two known cases of swine flu resistant to Tamiflu. Johns Hopkins Hospital announced Wednesday that the two patients were treated there and have been discharged.

North Carolina has three deaths -

Three of the four patients infected with the mutated virus at Duke University Medical Center died Friday.
All four of the patients suffered from multiple ailments, which weakened the patients’ immune systems and their abilities to fight the virus. But it is still unclear what part the drug-resistant flu played in the deaths of three of the patients.

Denver -

The clearest sign of the marked rise is coming from the Denver area, which usually records about 20 cases of "invasive pneumococcal disease" each October. This year, it has had 58...
Most invasive pneumococcal infections normally occur in the elderly, but in the Denver cases 62 percent were in people age 20 to 59

It has also been spotted in several other countries - South Korea, U.K., Italy, France, Vancouver, Winnipeg

The Real Effect
This raises an intriguing question about how one goes about determining . Do the doctors actually test the patient for the bug, or if the Tamiflu doesn't "work", that's grounds for determining that the virus has "mutated".
If the latter is true, is this just a race to be the next novel sufferers to secure government funding and prestige?

Dubai and AIG - A Neutron Bomb Goes Off

A report on A.I.G. from the N.Y. Times -

An independent analysis of whether the insurance industry has been setting aside enough money to pay its claims estimates that the American International Group has a shortfall of $11.9 billion in its property and casualty business.

...researchers have raised doubts about A.I.G.’s total worth since it was bailed out last year, and even the federal government has acknowledged that the company might have difficulty repaying all the money it owed taxpayers, currently about $120 billion.

In a report distributed to clients on Monday, the investment research firm Sanford C. Bernstein pointed to a big shortfall in A.I.G.’s property and casualty insurance business — which has been renamed Chartis and is intended to be the future core of the company’s operations.

The stock fell by almost 15 percent, to $28.40 from $33.30, in trading on Monday. Bernstein cut A.I.G.’s price target by 40 percent, to $12 from $20. The report’s author, Todd R. Bault, called the results “a big surprise.”

When his first rough cut of the data “made no sense,” he wrote, he looked more closely at A.I.G.’s history of setting aside reserves over the last 10 years.
That’s when he identified a shortfall so large it was distorting the industry as a whole. He ran three separate tests, all described in the report, to make sure he was correct.

The Real Effect
The Dow's up 150 points. Double down! Double down!!!

V Flu Vaccine Plot

The Second Wave

In what is sure to be a critical breaking story over the next 48-72 hours, the Ukrainian plague has spread massively throughout the world over the last month. Countries infected include the Ukraine, Norway, Poland, Belarus, Georgia, Turkey, Bulgaria, Serbia, Moldova, Hungary, Lithuania, Uzbekistan, Turkmenistan, Kazakhstan, Afghanistan, India, Hong Kong, China, Brazil, Russia, Israel, the U.K., Canada and it seems to have made it’s way to the United States. With cases in North Carolina, Nebraska, and most importantly Iowa, this is a powder keg waiting to blow.

As if on cue this report from the CDC comes out –

Federal officials said today they have noticed "a worrisome spike in serious pneumococcal disease" linked to infections with pandemic H1N1 influenza. Health authorities normally see an increase in such infections associated with seasonal flu, but this year the rate is substantially higher than normal and the disease is striking younger people than normal, according to Dr. Anne Schuchat, director of the Centers for Disease Control and Prevention's National Center for Immunization and Respiratory Diseases.

Why would they say this now?

Most of the pneumococcal infections can be prevented with a vaccine called Pneumovax that is recommended for people with medical conditions that leave them at high risk, but only about a quarter of people at risk have received an immunization.

Oh, another vaccine! Splendid!

Pneumovax is manufactured by Merck the company embroiled in scandal because it chose not to share that it’s drug, Vioxx, was killing people.

So what does this new flu look like?

In Dobrush all started with two patients in early November. Temperature may rise to all different ways - to 37, 38, 39 degrees. Shortness of breath increases, there is a cough, pain between the shoulder blades, arthralgia, diarrhea may be a violation of the digestive system. People tend to, when you begin to torment the shortness of breath, cough appeared. The worst thing, when they came already with sputum containing blood - this is aggravating factor, suggests that lung tissue was destroyed.

The Real Effect
I have been following the Ukrainian mutation since the day it was reported. Since that date, I have posted 11 articles detailing the spread in Eastern Europe which are available in the archives. From October 30th –

Could this be the dreaded mutation that would be the real pandemic? Only time will tell.

And on the 2nd of November -

My take at this point is this – I believe that there is a new ‘strain’ of the flu circulating in the Ukraine that seems very similar to the hemoraghic pneumonia that was reported being reported by Steve Quayle a few months ago and later sighted. It is very possible that this is being spread via vaccination and I doubt that the reported chemtrailing is helping. If anything it’s probably spreading the symptoms which will increase the panic and increase the vaccination rate.

This version seems primed to hit the Midwest hard. I believe this version is going to be strike the middle class the worst as several trends are appearing:

1. Spraying first – An area that was reported as sprayed seems to get sick within 48 hours. This has been reported in Iowa and Western Wisconsin.
2. Fast spread – The virus seems to make a lot of people sick, very quickly and be psychologically traumatizing. (Lightning fast onset and graphic deaths)
   
3. Reportedly low mortality rate – While the deaths are scary, the reported death count is low. So it appears to be more of a psychologically tuned illness. Whereas swine flu panicked, Ukrainian plague will terrorize.
   

Look for increasing cases going into the weekend in the Midwest especially as this appears to be ground zero. I believe that it will continue to increase the infection rate until roughly Christmas when it will slow down.

FDIC Is Bust

Running in the red -

Unfortunately, a dire prediction made by government officials in early 2009 has come true: the FDIC's deposit insurance fund is now broke, according to published reports.

I love how no specific individuals are named.

"The deposit insurance fund dropped by $18.6 billion during the third quarter of 2009 to negative $8.2 billion, as the Federal Deposit Insurance Corp. set aside $21.7 billion in provisions for additional bank failures,"

Back in September of last year I posted the following:

Oh and the FDIC is running out of money to "protect" you. Guess you'll be paying yourself to get your money back.

And the following -

The long and short is they are bleeding the real assets out of the United States and passing them into foreign control. Make no mistake, they will bleed this country dry. Savings, checking, 401K, gold, assets, they want it all and will not stop until they get it. The only companies that survive will be those that primarily serve the industrial military complex. Overnight this country will be transformed into the new prison state for the Global Order. Get food, get water, get a gun and get ready to defend yourself.

I might remind the reader that this was posted two weeks before the market collapse of October 2008.

In March the FDIC took steps to stave off the possibility that its insurance fund would run dry, instituting new fees on banks, forcing them to pay to protect consumers.

But, it's ok, they can borrow -

"The FDIC has not yet accessed a temporary $500 billion fund of capital it has available to it from Treasury for the insurance fund," Marketwatch notd. "The FDIC estimates that bank failures will cost the agency as much as $100 billion over the next five years, with the majority of the losses taking place in 2009 and 2010.

The Real Effect

Just so everyone is clear, let's summarize: The banks speculate wildly by leveraging(usury) loans on fraudulent assets certified safe by bogus ratings and make a financial killing doing it. Then, when the inherent position comes back to haunt them, they cry foul and the taxpayers are forced to bail them out with their current assets. They then use this money not to 'fix' the bad loans, but merely shift them to dead carcass corporations that they purchase and then drop the institutions like a bad habit. On top of this they give themselves record bonuses for a job well done.
Just for clarification, robbing a bank/people this way is legal, but if you go in and grab it out of drawer, you'll rightly be put in jail.

These government programs are black holes because they were designed that way. They are a "legal" way of committing the otherwise illegal.

Anyone else notice how gold has gone up like 30%? Seem odd to you? That's because it's not, the dollar is going down. Look for the tidal wave to continue, taking the dollar with it.

Sure are a lot of zombies out there...

Reality Creeps In

The public is starting to take notice of the enormous white elephant that has taken up residence in the middle of the economic living room:

Employment

“Job seekers now, outnumber openings six to one, the worst ratio since the government began tracking..."

50% of US children, one out of every two children, will need to use food stamps to eat. That is starvation for half of America’s children.

Capitol Wealth

"Workers between the age of 55 - 60, who have worked for 20 - 29 years, have lost an average of 25 percent off their 401k."

Housing

"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes. During that time, 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.

"3.4 million homes are expected to enter foreclosure by year’s end, with some experts estimating that next year will be even worse."

State Bankruptcies
Been there, done that.

Federal Government

Neck deep in debt. And what happens if we cannot raise the debt ceiling? It won’t be able to send out Social Security checks or make payments for Medicaid and unemployment insurance to state governments. And, it will not be able to make interest payments on government bonds, effectively defaulting on the national debt."

The Real Effect
Of course the Feds will raise the debt ceiling, they're not that dumb. However state and local governments don't have the benefit of an unlimited checkbook. Basic boil down - the consumers are broke, this is breaking the states and the Fed will back some amount of state debt. This is and will lead to a Federal debt bubble. This is the last line of defense and when this bubble breaks, all hell will break loose. The question I have is, who's head will be in the noose?
But at least the government is spending! That will save us, right? Right?!? Hello?

China Cold Open

Video Recaps | Full Episodes | Webisodes

WHO Releases Test Results

The WHO is hiding something -

Release:

17 November 2009 -- Preliminary tests reveal no significant changes in the pandemic (H1N1) 2009 virus based on investigations of samples taken from patients in Ukraine. Analyses are being performed by two WHO influenza collaborating centres as part of the global influenza surveillance network.

Preliminary genetic sequencing shows that the virus is similar to the virus used for production of the pandemic influenza vaccine, reconfirming the vaccine's efficacy at this time.

And

The World Health Organization says tests on swine flu samples from Ukraine show no significant mutation of the virus. The global body said Tuesday that preliminary genetic sequencing at laboratories in Britain and the United States showed that the virus in Ukraine was similar to that used for production of the pandemic flu vaccine. The Ukrainian Health Ministry has registered some 1.4 million cases of flu and respiratory illness since the start of the swine flu outbreak. WHO says most cases are likely swine flu and the infection rate is in line with neighbouring countries such as Russia and Poland.

The Real Effect

Why the 13 day delay in the release of the sample results? Did they take samples from individuals that weren’t exhibiting pneumonic plague symptoms?

Their bottom line – Nothing to see here, just take the vaccine.

I suppose getting 1.4 million cases in two weeks is normal? Correct me if I am wrong, but obliteration of one’s lungs wasn’t a symptom of the swine flu? Right? Reports of planes spraying the region right before the outbreak, all of that is just happenstance.

So far a little over 3% of the country is officially infected and the mortality rate is reportedly low. As of 11/15. it appeared that the infection rate is slowing down a bit, however today the numbers are showing another uptick in infection and hospitalization. “and the infection rate is in line with neighbouring countries such as Russia and Poland.” That’s because it’s spreading to those countries. Nice cover.

Is WHO just a hopelessly corrupt and useless organization?
No doubt.

States Going Bankrupt

WND reports that the State’s situation deepens -

The National Governor's Association has reported state revenues across the nation were down 11.7 and 16.6 percent in the first two quarters of 2009, respectively.

The study further observed that state revenues will not return to 2008 levels in real dollar terms until fiscal year 2014, under the most favorable assumptions that the economy has already begun a slow and largely jobless recovery.

Red Alert reports that among the most severe problems facing the states is the outstanding liability of about $2.73 trillion in employee retirement, health and other benefits coming due over the next several decades, of which more than $271 billion is unfunded.

The National Governor's Association presented the reality that "it will take states nearly a decade to fully emerge from the current recession."

Just last week, Red Alert reported that the real unemployment number, including those who have dropped out of the labor force because they have become discouraged after looking for a job for a year or longer, was 22.1 percent for October 2009, not the 10.2 percent reported by the Bureau of Labor Statistics.

Red Alert continues to predict that as the state budget crisis deepens, the Obama administration will propose federal guarantees on state loans, even though the move would add trillions to the contingent liabilities of the United States.

The Real Effect

As I posted back on June 15 -

States will declare bankruptcy, Republicans will point at Democrats and Democrats will blame Republicans.

While it hasn't happened yet, we are at most a one to two years away from this realization. Now the Feds may come in and guarantee that debt and we might see some bookkeeping shenanigans, but the states will be bankrupt none-the-less.

Edited for appearance and labels on 5/4/2010.

900,000 Norwegians Infected

From Norway -

Less than 17 percent of Norway's population is now infected with the swine flu. The estimates of Public Health (FHI) for the latest updated situation report that was published late Wednesday night.

Both the incidence of influenza-like illness and the number of confirmed flu cases has increased sharply throughout the country in recent weeks. Men i forrige uke gikk kurven bratt oppover. But last week was a steep upward curve.

We estimate that just under 900,000 Norwegians are now infected and that nearly half a million were infected just last week. There are a large number and it tells us that we are in the middle of a new and powerful wave of infection which is significantly stronger than the one we had this summer, "said Hans Blystad, superintendent at the NIPH.

WHO Silent on Ukraine Flu Sequences

From Recombinomics -

It has now been more than a week since samples from Ukraine were sent to the WHO regional lab, Mill Hill in London. Although comments have been made that at least 15 samples were H1N1 confirmed, and the sequences showed no large changes or resistance to oseltamivir, there have been no updates. The absence of additional information or release of sequences, increases concerns that small changes undergoing further analysis are causing delays.
In the days post shipment, cases in Ukraine have quadrupled to over 1 million and the reported fatalities have grown from 30 to 174. The clinical presentation of 90 of the fatalities was classical H1N1 linked hemorrhagic pneumonia, which led to the "total destruction" of both lungs. These fatal cases were hospitalized 3-7 days after disease onset, highlighting the rapid progression of the infection in a large number of patients, suggesting genetic changes in the H1N1 virus.
Although politicians and media reports continue to downplay the significance by citing a small number of lab confirmed cases or more traditional pneumonia deaths, the number of fatal hemorrhagic cases was unusually large. These deaths involve hemorrhagic pneumonia in previously health young adults. Most deaths were 19-40 years of age. The age group with the second highest totals was 41-55. Thus, the age profile of these cases parallels those seen in other countries in H1N1 infected patients.

Ukraine Official Numbers - One in 45 sick

Here are some statistics on the deepening situation in the Ukraine -

1,031,597 SICK (1 in 45 or 2.24% of the population)

52,742 IN HOSPITALS ( 1 in 872 or 0.11%)

174 DEAD (1 in 264,335)


All of this after only about two weeks. Following the same percentages, if just half of the Ukraine gets sick it will result in 1,175,765 Ukrainians hospitalized and 75,869 dead. Sobering statistics.