Saturday, November 27, 2010

E-Mail For Sound Of Cannons!


Hey! We've finally set up an "official e-mail" for communicating with the editors of Sound Of Cannons! It's been promised for awhile, but it fially has arrived! Please use it for snarky commentary or thoughtful prose. No racism nor extreme profanity will be tolerated. For the time being, our associate editor Ralph will be in charge of checking the email box for interesting and timely content. We may use some emails for content, but all emails will remain confidential.

AND WITHOUT FURTHER DELAY:

SoundOfCannons@Yahoo.com

Can't Believe CNBC Let Him Say This.......Out Loud



Doug Kass: Jaw Dropping Prediction For 2011
Monday, 22 Nov 2010

The man who called the market bottom back in March ‘09 reveals two market surprises for 2011.And one's a whopper.It’s no secret that Kass tends to be a tad bearish, so you won’t be surprised to hear that he’s a little concerned about the market next year – and his predictions reflect that concern.
SURPRISE #1
Kass tells Fast Money to prepare for a rough ride in the financials
. ”I think most notably the SEC comes down in a frontal assault on mutual fund expenses by restricting or eliminating 12b1 fees,” he says.
This prediction isn’t the whopper - in fact it's not terribly dramatic at all. SEC Chair Mary L. Schapiro has already said she favors making changes in this area. However Kass isn't shy about telling us which asset managers he thinks will get hit the hardest. He’s bearish T Row Price
and Franklin Resources
which he predicts could be "some of the worst performing stocks in 2011.”
(In case you're wondering, 12b1 fees allow funds to charge investors with marketing costs. The mutual fund industry collected about $9.5 billion through 12b-1 fees last year.)
SURPRISE #2
This one's the jaw-dropper. Kass thinks terrorists send investors scrambling – not with guns or bombs but using the Internet as a weapon. He tells the desk “I believe cyber crime is going to explode exponentially next year as the web is invaded by hackers.”And he thinks they target the foundation of capitalism. ”I think we see a specific attack on the NYSE,” he says. “The aftermath will have a profound impact and cause a week-long hiatus in trading as well as a slowdown in travel.” Yup, you read that right – a week long hiatus in trading. How do you prepare for something like that?”I’d make sure to have a large amount of cash in my portfolio,” he says.We know that's a rather startling prediction, and in all fairness Kass divides his predictions into 2 categories possible and probable. Although he didn't say, we're guessing this one lies squarely in the possible (but not probable) category and investors should take it with a grain of salt. However, when Kass speaks we listen - largely because he’s had an uncanny track record for being right.
Less than a week before the S&P 500 hit a generational low of 676 on March 9, 2009, Kass went on CNBC and predicted the bottom. Also, on July 6, 2010, he said the market had made its lows for the year and so far, that has also proved to be true.

MARKET INTO YEAR END

And in case you’re looking for a little information that's more immediately tradable Kass reminds the desk that although he respects Mr. Market he’s a skeptic of the rally. ”I’m less certain than the consensus that the economy is moving toward profitable and self sustaining growth,” he says. “I mentioned a few weeks ago that I think the market has topped for the year and I continue to see that.”

Nicely Said....................

"Before anything else, preparation is the key to success." - Alexander Graham Bell

Lame-duck Democrats plan to hand $44 billion to illegals


Dream Act provisions qualify undocumented students for federal money

Want to know how the lame ducks in Congress plan to "cut" federal spending – which seemed to be a dominating theme of the 2010 elections? They're proposing a plan to take upwards of $44 billion a year from taxpayers and hand it over to illegal aliens who are in the United States so they can go to college.
The plan is called the Dream Act, for Development, Relief and Education of Alien Minors, and its critics know it as an amnesty program for illegal aliens. Its supporters say anyone who doesn't want to spend the money on college subsidies for illegal aliens is "racist."
But policy experts are warning the act is truly transformative and in the end, among other things, would authorize federal loans to literally millions of newly qualified applicants and provide a preference for the children of illegal aliens in state college admissions.

According to the Department of Education, the maximum amount one can borrow per year for undergraduate education from the federal government is $21,000. And the Dream Act would incorporate some 2.1 million new "students" into programs under which they would qualify for those loans.
"Senate Majority Leader Harry Reid [D-Nev.] has placed S. 2837, the Dream Act, on the legislative calendar, and has indicated he will seek a vote during the lame duck session of Congress," Sen. Jeff Sessions, R-Ala., ranking GOP member on the Senate Judiciary Committee, said in an immigration alert. "The Dream Act will give them access to in-state tuition rates at public universities, federal student loans and federal work-study programs."

The education provisions are buried deep within the text of a general, overall amnesty bill, which may make the U.S. the new legal home for millions of now-illegal aliens, including criminals, Sessions said.
Opponents say the lame duck session of Congress should not move forward on issues that previously were rejected by lawmakers, especially on such monumental and controversial topics.
While the issue needs to be addressed, they said, it needs a full discussion.
True immigration reform "deserves comprehensive legislation that addresses all aspects of the subject, balancing all legitimate interests," said Joseph A. Morris, a board member of the American Conservative Union and a former associate attorney general of the U.S. under President Reagan.
"It should go to the head of the agenda in the new Congress, so that there is plenty of time for thorough hearings and an open and informed national debate," he said.
But many say plans to address the landmark change not only are being pushed now by Reid, who failed to get it through the U.S. Senate earlier, and outgoing House Speaker Nancy Pelosi, but they are planning to march it through the process without hearings.
Sessions said some of the more stunning provisions of the plan are:
Section 3 of the bill repeals Section 505 of the "Illegal Immigration Reform and Immigrant Responsibility Act of 1996" (8 U.S. Code 1623) which currently prohibits the government from giving educational benefits to any "unlawfully present individual," thus ensuring that illegal aliens will qualify for "in-state tuition," at the state college of their choice, even if they live in another state.
Section 10 of the act enables illegal aliens who receive amnesty under the bill's general provisions to apply for federally guaranteed student loans under Title IV of the "Higher Education Act of 1965" (20 U.S. Code, et seq.), including Stafford Loans, Perkins Loans, Federal Direct Stafford/Ford loans, federal work-study programs and federally sponsored tutoring and counseling.
Another section of the bill ensures that illegal aliens can continue to receive these federal student loans, which are often used to cover living expenses, as well as tuition, over the course of eight years, even if they do not complete a college degree.
An earlier version of the bill failed in the Senate in September, garnering only 56 Democratic votes, when it needed 60 to prevent a GOP filibuster.
Reid, with his renewed push for the drastic changes, is believed by some observers to be paying back Latino supporters, who helped him narrowly defeat tea party favorite Sharron Angle in the Nevada senate race a few weeks ago, by bringing the controversial measure back, and enhancing it with additional goodies.
Other radical left politicians, like Rep. Jesse Jackson Jr., D-Ill., a key ally of Pelosi, D-Calif., are also publicly supporting the bill in the House.
"At a time when natural born Americans cannot afford to send their kids to college, watching the federal government take their tax dollars to pay for tuition on behalf of illegal aliens is a clear slap in the face," Rev. Isaac C. Hayes, the GOP nominee against Jesse Jackson Jr. this past fall and an emerging voice in the African-American conservative movement, told WND.
"Jesse Jackson Jr. is a staunch supporter of this amnesty bill and has demonstrated the ultimate betrayal to his community," he said.
Democrats, however, are feeling pressure. It appears clear if President Obama, a supporter of amnesty, does not get the bill through during the lame duck session of Congress, he will not see it passed at any time during the remaining two years of his term.
Rep. Lamar Smith, R-Texas, author of the 1986 immigration reform bill and incoming chairman of the House Judiciary Committee, has signaled that liberal spending programs that put taxpayers on the hook no longer on the table in the U.S. House, where Republicans will be the majority. His comments came when he said this week that he and his colleagues would be "moving forward with our agenda to rein in government spending and create more jobs."
It was Colin O'Donohoe, artistic director for the Pangean Orchestra, an all-illegal alien performing troupe, who said, "I believe the issue is purely racist in nature and does nothing more than stir up hatred for Hispanics.
"Our country has hundreds of years of history in allowing people to immigrate. Now that the economy is weak we are turning our anger towards the easiest target which is the people least able to defend themselves," he said.
E.W. Jackson Sr., who works with STAND PAC, recently wrote the Dream Act is a nightmare that will lead to chaos.
"I know why Reid and his liberal Democrats want to pass the Dream Act. They just lost an election, and they're scared. When they look at 2012, they see their prospects for success are dismal, because Americans aren't coming on board with their big government agenda.
"They desperately need to gather up millions of new voters who will support them. What better way to do this than to open up a wealth of entitlements for millions of people here illegally, making them beholden to Democrats and their socialist agenda!"
He warned, "You are going to pay for it … Dream Act recipients will immediately become eligible for federal student loans, work study programs and other forms of financial aid – all on your dime."

Gotta Love Flying These Days..............


At TSA, the hits just keep on coming....

November 26, 2010
Perhaps the Transportation Security Administration (TSA) recently has received reliable intelligence that al Qaeda has been busy recruiting cancer survivors as sleeper terrorists, and grade-school students travelling with their parents as suicide bombers. Or maybe TSA’s leaders recently reminded the agency’s many thousands of security screeners that using common sense when deciding which airline passengers to subject to the most intrusive and demeaning security check possible, would result in an unsatisfactory rating on their next performance evaluation.
Whatever the reason, and despite a rising tide of criticism and resistance from the travelling public, the parade of horror stories emanating from airport security check points continues.
A North Carolina breast cancer survivor was forced to remove her prosthesis during a “pat-down.” At Detroit Metropolitan Airport a male bladder cancer survivor was forced to remove his urostomy bag, during his screening by a TSA agent so devoid of decency that the passenger wound up covered in his own urine.
In Salt Lake City, a young boy was pulled aside for “secondary screening.” A video of the incident shows a TSA worker patting down the shirtless child while his father stands behind him watching.
The American Civil Liberties Union (ACLU) recently has documented more than 900 complaints from passengers, whose experiences at the hands of TSA left them feeling violated and humiliated by screeners who went too far in carrying out their duties.
Sadly, these stories are becoming all too familiar as the government refuses to back down from these invasive tactics; largely a show of security theater.
Yet even as TSA and its parent agency, the Department of Homeland Security (DHS), are sticking to their story that the full, naked-body scans and the intrusive manual body searches are absolutely essential to maintain the security of commercial air travel, questions abound.
Reports are surfacing, for example, that in response to a pre-Thanksgiving Day call for air travelers to “opt out” of the full-body scanners, at many TSA checkpoints the scanners were purposefully turned off in order to minimize the chance for a successful “Opt Out Day,” and to ease the PR problems faced by TSA.
In another incident, Adam Savage of the television show Mythbusters, was subjected to a full-body scan as he was making his way through security to board a flight to speak at a conference. In a video available on YouTube, Savage explains how he usually goes through his luggage to remove any items that may be potentially harmful; noting that in this particular case he forgot to do so. Savage pulled out two 12-inch steel razor blades that were accidently left in his inside jacket pocket. Holding the razor blades at the audience, he says, referring to TSA, “You’re going to look at my junk, and somehow you miss this?”
And it is not just at airports any longer. Some federal office buildings apparently are turning to the naked-image body scanners.
For DHS, the airports may be just the starting point. Homeland Security Secretary Janet Napolitano already has floated a plan to add additional security measures to mass transit, trains, and boats. While it is not yet clear whether such measures would be as invasive as those now employed at airports, I would not recommend holding your breath waiting for a more reasonable approach.

Bank & Roll!


CLSA’s Chris Wood Chimes In On The Endless European Banker Bailouts

Nov 26, 2010

CLSA’s Chris Wood has released his latest outlook on the world is out, and it is getting progressively gloomy: when even a banker says that he is “aghast” at the “grotesque” extent to which senior creditors are being bailed out left and right in Europe, one has to stop and wonder. Judging by the frequency of protests, even the most redimentary levels of European society seem to be realizing that with each passing day it is they that are funding decades of greed and foolish, not to mention wrong, decision making on behalf of the kleptoklass. And as such each rescued country is one more straw on the camel’s back of public patience, which will probably run out just as, or after, Spain is rescued, which should be within a few weeks, the reprieve for Europe’s fantastically intertwined cross creditors is shortly running out. In terms of trades, Wood recommends shorting Europe with an emphasis on Spain. On the other hand, his pro Asian bias is still here, although with ever louder rumors of tightening out of China, even that has been curbed somewhat. Looking into 2011, the CLSA strategist sees increasing signs of weakness in the US, borne out of the muni space. Of course, should senior bondholders in Europe be impaired, the weakness will come far sooner due to the extremely interconnected nature of global financial balance sheet where a writedown for one will promptly trickle down via a domino-like effect into massive haircuts for all.

From the latest Greed and Fear

The news of an estimated €80-90bn bailout for Ireland this week raises the issue of when a bailout will turn into a default or debt restructuring.
GREED & fear has been aghast ever since the financial crisis first hit at the grotesque extent to which senior bank bond holders have been let off the hook.

Greece’s goal to reduce its fiscal deficit to below 3% of GDP by 2014 is likely to require job losses in the country’s amazingly bloated and legendarily unproductive public sector. However, there is not as yet a populist clamour in Greece for a unilateral restructuring of Greek government debt.

In Greece an estimated government debt to GDP ratio of over 150% has infected the banks whereas in Ireland the opposite has been the case as a private-debt driven banking bust has undermined the state’s finances through the willingness to extend government guarantees.

GREED & fear’s guess is that the next few years will see Euroland groping its way to some Brady Plan-like equivalent of debt restructuring, a move which would involve a German-led Euroland accepting at least some partial collective responsibility for Euroland’s sovereign debt.

The end game of the ongoing sovereign debt crisis in Euroland lies in the future not the past. GREED & fear continues to recommend that those who want to hedge their long Asian equity exposure should continue to do so by shorting European financial stocks. GREED & fear also continues to recommend the Spanish flu trade.

Next year is likely to see much more focus on the ailing condition of states’ finances in America. The catalyst will be a sharp decline in federal support to state and local governments as a consequence of the fading fiscal stimulus. Equity investors will likely to have to start paying more attention to the municipal bond market where there are initial signs of rising risk aversion.

The end of last week saw yet another set of measures in Hong Kong seeking to combat speculation in the local residential property market. These latest measures seem completely over the top to GREED & fear and do not address the more fundamental need in Hong Kong, which is to increase supply of residential property. Their net result will be to reduce liquidity. A more illiquid market means a more volatile one.

A general election is likely to be held in Thailand before May next year, providing five by-elections due to be held on 12 December go well. The only Thai-specific negative of late has been its own effort at property cooling-down measures. But this seems marginal in the extreme compared to what the likes of Hong Kong has been announcing. It would also be contrary to the political interests of the current government to put the boot in on the property market.

GREED & fear will add another percentage point to the Thai overweight in the relative-return portfolio with the money taken from Australia. An extra percentage point will also be added to Thai property developer Preuksa and India’s Godrej Properties in the Asia ex-Japan long-only portfolio with the money shaved from the investments in China Mobile and ACC Limited.

The North Korean attack this week, combined with the deliberate unveiling a few days earlier of a new uranium enrichment plant, seem designed to bolster the political capital of Kim Jong-il’s designated successor, third son Kim Jong-un.

It is China’s continuing support for Pyongyang which is preventing the collapse of the North, an event which GREED & fear continues to believe would be hugely bullish for the Korean stock market in terms of precipitating a multi-year investment-driven cycle. But for now, sadly, that theory remains only an interesting hypothesis.

Europe Tries to Contain Debt Crisis


Reassurances Fail to Stem Fears That Woes Will Infect Portugal and Spain; EU-IMF Aim to Wrap Up Irish Aid Package

European finance officials set the stage for an Irish aid package they hope to complete Sunday, betting that billions of euros for the country's beleaguered banks and strained public finances will restore calm to the euro zone.
But they struggled to rise above broad fears that the debt crisis has already trampled Ireland on its way to Portugal and even Spain—the euro-zone's fourth-largest economy, representing about 10% of the currency bloc's economic activity.

"It's absolutely, completely false," European Commission President José Manuel Barroso said, echoing assurances from Berlin, Lisbon and Madrid that officials hadn't already moved on to Portugal or its much larger neighbor. "It has neither been asked for and neither have we suggested it," he said.
A Spanish government spokesman said, "The EU isn't asking Portugal to take money, and Spain of course is not either."
Spanish Prime Minister José Luis Rodriguez Zapatero added there is "absolutely" no chance Spain will seek a bailout.
View Full ImageAssociated Press
Spain's Finance Minister Elena Salgado, with the country's first Deputy Premier and Interior Minister Alfredo Perez Rubalcaba, in Madrid on Friday.

Portugal's parliament on Friday passed a budget for 2011 that aims to reduce the country's deficit from 9.3% of gross domestic product in 2009 to below 3% by 2013, and Prime Minister Jose Socrates said he hoped it would help calm markets.
"We must put Portugal out of the focus of the crisis. This budget will defend the country against the euro-zone crisis," Mr. Socrates said.
That wasn't enough to reassure investors. The euro tumbled against the dollar to $1.3248 in New York Friday. The yield premium that investors demand to hold 10-year Spanish sovereign bonds rather than German bunds widened to a fresh euro-era record of 2.67 percentage points. The spread later recovered to 2.59 percentage points, still 0.07 percentage points higher than Thursday.

The spread between Portugal's 10-year bonds and bunds was 4.33 percentage points, compared with 4.53 on Wednesday, according to Thomson Reuters, and 3.71 as November began.
Another concern, stoked this week by Bundesbank President Axel Weber, is that the cost of bailing out Ireland, Portugal and Spain could exceed the lending power European leaders built into the €750-billion ($1 trillion), three-year plan they laid out after organizing a separate package of aid to keep Greece from defaulting in the spring.
In comments over two days in Paris and Berlin, Mr. Weber speculated about Portugal and Spain following Ireland into an EU aid package, saying that the euro zone would readily provide the funds to bridge any gap. The day before Mr. Weber spoke, the European Commission was floating a plan to double the portion of the three-year plan supplied by euro-zone governments, currently €440 billion, according to people familiar with the matter.

Germany is strictly opposed to any increase to the existing package. "We have an instrument to deal with crisis in the euro zone and we are working intensively on Ireland," German Finance Minister Wolfgang Schäuble said in an interview Friday on German radio.
"I hope by the start of next week we have the necessary decisions in Europe so that we can have calm in the markets again so that we can put an end to this completely over-the-top speculation," Mr. Schäuble said.
The details of Ireland's aid package—which will come from the EU and the International Monetary Fund, as did Greece's €110 billion package in the spring—are uncertain, but it is likely to total around €85 billion. European finance ministers are to discuss details in a conference call Sunday, Spanish Finance Minister Elena Salgado said.

Some Relevant Questions You Don't (Or Won't) See Answered In The Nightly News


Happy Holidays? 28 Hard Questions It Would Be Great If We Could Get Some Real Answers To

Nov 27, 2010
Over the coming weeks, Americans will be wishing each other “happy holidays” millions upon millions of times. But are these really happy times? Record numbers of Americans are going to be going hungry and cold this winter. Millions upon millions of our fellow citizens would gladly give up all holiday celebrations in exchange for a decent job. The vast majority of us have plenty of examples of horrible personal tragedy all around us this holiday season, and much of that tragedy has been brought on by the deteriorating economic conditions. Meanwhile, we have a “control freak” government that wants to establish an even tighter grip over our lives and that now insists on either viewing our exposed bodies or groping our private areas before we can get on an airplane. Once upon a time in America the holiday season was a time to rejoice because we lived in a prosperous land where liberty and freedom were respected, but today we live in a nation with a highly centralized economy dominated by a federal government that is becoming more “totalitarian” by the day.
But we are told that centralized control by an overwhelmingly powerful national government is good in our case because “they” know what is best for us.
Oh really? They sure have done a great job “managing” our economic system, haven’t they? Unfortunately, it seems as though anything that the federal government takes control over just gets more messed up.
The following are 28 hard questions that you should ask anyone who believes that having a highly centralized economy and a highly centralized government is good for us….
#1 Why is the U.S. government trying to put a choke hold on our food production system? S. 510, The Food Safety Modernization Act, is being called one of the most dangerous bills in American history. This very vague and incredibly broad bill (which you can read here) will give the U.S. government unprecedented control over the growing, storing and sale of food in the United States.
#2 Approximately 14.8 million Americans are unemployed this holiday season. So why in the world is the “greatest economy on earth” not able to provide jobs for all of them?
#3 Why are the U.S. and South Korea insisting on conducting 4 days of naval exercises in the Yellow Sea when tensions in the reason are at an all-time high and when a single mistake could spark an all-out war? Wouldn’t it be better to postpone these naval exercises until things have calmed down a bit?
#4 What prompted Russia and China to suddenly decide to quit using the U.S. dollar and instead start using their own national currencies when trading with each other?
#5 Why does it cost $181,757 per hour for Barack Obama to travel on Air Force One?
#6 Are we still a “great nation” when so many of our citizens are going hungry? According to a recent BBC report, 15% of all U.S. households experienced a shortage of food at some point during 2009. One of our readers named Gary recently left a comment that indicated that he encountered a very big crowd during his recent visit to a local food pantry….
The line at the food pantry was very long. There are a lot of folks who have little food and no money.

#7 If the U.S. economy is recovering, why were new home sales for October down 28.9 percent from a year ago and why were existing home sales for October down 25.9 percent over the previous year?
#8 Why are there so many reports of unprofessional behavior by TSA agents? For example, it is being reported that some TSA agents have specifically targeted attractive young women for “additional screening”.
#9 Why are U.S. home builders only selling one-fifth of the homes that they were selling during the “boom times” five years ago?
#10 How did a man who had been convicted of misdemeanor harassment and stalking get hired to be a TSA agent? Now it turns out he is being accused of abducting and sexually assaulting a woman. These are the people who are supposed to be protecting us?
#11 In the “wealthiest nation on earth”, why are a record number of Americans going to be without heat this winter? According to the National Energy Assistance Directors’ Association, more than 10 million U.S. households will not be able to afford to heat their homes this winter without assistance, which would be a new all-time record. One of our readers named Elaine recently shared that she is one of those Americans that is going to be cold this winter….
It’s starting to get cold here in the mountains. I’m unemployed, no heat, at risk for foreclosure, etc. Everyone is at risk for this, it’s just that many of the muddleclass can’t face it yet. For a lot of us, it’s not cutting back on that bi-weekly latte that’s going to help, it’s cutting back on having electricity. Don’t judge the poor until you’ve been here.
#12 Why are Americans becoming so pessimistic about the future? According to one recent poll, now only 51 percent of Americans believe that today’s young people will have a better life than their parents did.
#13 How did we ever get to the point as a nation where only 39 percent of likely voters believe that the U.S. government is operating within the limits established by the U.S. Constitution?
#14 Why does the mainstream media largely ignore the fact that thousands of people are being slaughtered near the U.S. border with Mexico each year and a city just across the Mexican border is now being dubbed “the most dangerous place on earth”?
#15 What does it say about American politics that the companies that produce the new naked body scanners have more than doubled their spending on political lobbying over the last five years?
#16 Why is the Washington Post working so hard to defend the policies of the Federal Reserve?
#17 Have we now gotten to the point where the financial condition of the U.S. government is so bad that it will be virtually impossible to ever have a balanced federal budget ever again?
#18 Why aren’t more Americans deeply concerned about the dozens of nasty diseases that they could catch from TSA agents if they don’t change gloves between each groping?
#19 Why are there 18 times as many banks on the FDIC “problem list” as there were just four years ago?
#20 What does it say about the United States that now 39 percent of Americans believe that marriage is becoming obsolete?
#21 How can anyone claim that the U.S. economy is turning around as long as the number of Americans on food stamps continues to set a new all-time record month after month?
#22 As thousands of factories and millions of jobs continue to be shipped overseas, why does Barack Obama keep publicly proclaiming that globalism is so good for us?
#23 Why aren’t Homeland Security officials willing to consider changes to the new airport security procedures when many women are actually using the term “sexual assault” to describe their experiences with the new “enhanced pat downs”?
#24 The median wealth of a U.S. Senator in 2009 was 2.38 million dollars. So exactly what does that say about the health of our Republic?
#25 Why have our leaders allowed U.S. strategic grain reserves to shrivel away to almost nothing?
#26 In 2009, 54.9 million international tourists visited the United States, and those tourists spent approximately 93 billion dollars. How far will those numbers drop once stories of TSA abuse circulate all over the globe?
#27 If Congress does not authorize another emergency extension of long-term unemployment benefits, then what in the world are the 2 million Americans who are going to suddenly lose their checks going to do?
#28 Are there still any areas left in the United States where liberty and freedom are respected, where taxes are low, where regulations are not suffocating, where the people are friendly and where Americans can be free to live an independent lifestyle?

10 Steps


Ten Essential Steps To End A Nightmare
Friday, November 26, 2010
The only hope for Ireland, Scotland, Wales, and England is for folk to:
1. stop giving power to criminal bankster/elites and their duped and corrupted politicians,

2. take control of our own national currency issue and uphold common-law,

3. leave the EU, Codex Alimentarius and all corrupt globalist treaties,

4. default on all international bankster debts,

5. help those engineered to be unemployed back into genuine productive work,

6. farm and work for food, fuel and skill-base self-sufficiency,

7. cut funding/support to police, military and journalists that do not serve the people,

8. clear our airspace of chemtrailers and our soil and water of chemical toxins,

9. restore proper science, nutrition, healthcare and welfare,

10. educate children and adults so that they will never again be exploited as cattle of bankster/elites.

We cannot be rescued by the current system because it is that system which is destroying our nations and families by design: using corrupted media-culture with divide-and-rule and false-flag terror deceptions to remove our freedoms.
Ordinary people of all nations and backgrounds can indeed cooperate to build a better and peaceful world, but only if they uphold and take charge of their own national sovereignty and end the divide-and-rule elitist scams that are designed to herd us into conflict and global corporate dictatorship.
Organise, share information and protest but do not be misled into violent acts by state agent-provocateurs who want excuses to further build a police-state.
It is time to hear a different tune to that put out by the elites’ media and it is time to make up your own mind (see the links below for example). Above all, learn of and understand the centuries-old international bankster scam at: http://www.themoneymasters.com/If you do not understand this you have no hope.
Fascist eugenicists are again increasingly on the march and we are in the end game. Ordinary people are strong in number. It is we that have the power if we will but take it back and just say NO to the bankster “New World Order”.
It really is now or never. Truly; this could be our finest hour.

Back From Thanksgiving Recess!


Hey! we take some well deserved time off and looky-looky what is happening! A dope of a foreign college student gets set up by the gov't as a patsy for a "terrorist threat." (I'm sure the people of Portland are sleeping much easier tonight) North Korea starts it's usual feet stomping and lobs some shells at a South Korean island that's been in dispute since 1953. The USS George Washington is sailing in to establish American superiority for Kim Jong-Buttmunch to see. And the TSA continued it's middle-fingering of the 4th Amendment over the Thanksgiving Holiday much to the grinning-like-an-idiot delight of the MSM. And barry got a soft interview to claim he's doing just fantastic and really, really proud of his policies so far. Hmmmmmph! Pretty busy week-plus for what is usually just parades and re-runs!


And we thought it'd be a quiet break over the turkey holiday. Yeah, right.............

Thursday, November 18, 2010

Our Thanksgiving Message:Sincerely From Your Sound Of Cannons Staff


We're probably going to shut down Sound Of Cannons for the upcoming Turkey holiday early this year. Short of a truly catastrophic event (though that's an everyday occurrence in Europe and Soetoro's White House these days) we'll keep the postings down to a minimum. Several of our editors are headed out this weekend (we wish them safe travel) while our tech department will take a truly deserved whole week off. Your Chief Editor will be traveling north early next week for a big Martha Stewart-esque feast of epic proportions.


We may unveil an SOC e-mail address for our faithful readers to start directly communicating with the Sound Of Cannons staff if we get over our tryptophan poisoning soon enough.

_________________________________________________________________

Now, our holiday thoughts to you, dear reader:

~Please, please travel as safely as possible. Give the assholes on the road and in the air a wide berth. The TSA will have their comeuppance soon; but for now just get to your destination to see family.

~Be thankful that there is still some common sense in the world, though in short supply, it's still there

~Hug your kids, hug them 'til they get sick of it. We're all parents here at SOC, and our outrage for the wrongs of the world stem from our concern for the futures of our children. They truly are our future and need us all fighting for them now while they have no say.

~Be thankful for family and all the crap they represent. Families are not the Norman Rockwell ideal and most of the time they're painful reminders of how short our patience can be and at worst, a true reminder of our mortality. But they're what binds us together and they're worth fighting for, in the political sense. Even your grumpy socialist uncle who thinks Obama is doing a bang up job deserves a smile on Thanksgiving Day.

~If it's appropriate, talk current events over the cheesecake or pumpkin pie. Get other viewpoints and gently add your own. Without using a warhammer to beat it in, offer something for others to think about: whether it be freedom, socialism, disaster preparations, financial planning or whatever. People sometimes need to be cajoled into thinking correctly.

~Give a prayer of thanks for your own successes and victories in life. Use the long holiday weekend to ponder and think of the strategies you'll need to make 2011 successful. Make plans for your family's financial and physical well-being. Maybe 2011 is the year to get a second passport, explore relocation options outside the country, buy that get-away cabin in the woods for emergency preparedness or to start storing food for any potential disruptions in the future. You don't need to get it all done over a holiday weekend, just start putting some thought towards it during some time hopefully not glued to sports on television.

~Take the time to enjoy the good moments at your Thanksgiving celebration. We're only around on this ride once. While the world seems to be coming apart at the seams, take some joy in the little things, even if it's a 3-bean casserole!

Old Bonaparte Had It Right!


"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." - Napoleon Bonaparte

Wednesday, November 17, 2010

Speaking of Protecting Us – Uncle Sam Wants to Manage Your Retirement Account


Friend of many years Rick Rule sent along a link from a statist-leaning organization that attempts to debunk the idea that the government is planning to seize your IRA.
Rumors of such a grab are nonsense, says the Annenberg Foundation. They go on to explain that the government isn’t planning on seizing your IRA or 401(k) – instead, they have only been pondering a proposal recently floated whereby the government would compete with private financial institutions by offering a new account with the following features…
[The government would] force all workers to save 5 percent of their annual income in a new type of retirement vehicle… a Guaranteed Retirement Account. These savings could not be controlled by workers like IRAs and 401(k) assets, but would instead be deposited with the government. Workers could not touch the money until retirement… and even then the savings could not be drawn out any way workers might desire, but would be converted to an annuity – a guaranteed stream of income for life. Ghilarducci [the plan’s author] argues that these new accounts would avoid stock market risks; the government would guarantee that the savings earn a 3 percent annual return on top of inflation. The government would also pay each worker $600 a year in the form of a tax credit, which would help workers who now earn too little to take advantage of a tax deduction because they owe little or no federal income tax anyway.
So, the same people who mismanaged the government into bankruptcy – running up debts and obligations on the order of $70 trillion – want to force you to invest 5% of your annual income in a government-managed account that ultimately rolls into annuity that only they control, and which over time will earn you a 3% annual rate?
Of course, when (not if) the big inflation comes, it’s a certainty that the government’s CPI calculations will fall well short of reality – meaning your annuities will be a sure loser.
While I have been skeptical about any real changes emanating from the new Congress, if the Republicans and Tea Partiers can make sure that this idea – which a representative of one senior Democrat congressman called “intriguing” – can be turned back at the door, then it’s all to the good.
Meanwhile, here’s the article. It’s worth reading, if only to marvel at the sheer audacity of these miscreants in even thinking about such things.

If This Giant Bank Falls, It'll Send Shockwaves The World Over


Bank of America Is in Deep Trouble, and There May Be Financial Disaster on the Horizon
Printed on November 17, 2010
Will Bank of America be the first Wall Street giant to once again point a gun to its own head, telling us it'll crash and burn and take down the financial system if we don’t pony up for another massive bailout?
When former Treasury Secretary Hank Paulson was handing out trillions to Wall Street, BofA collected $45 billion from the Troubled Asset Relief Program (TARP) to stabilize its balance sheet. It was spun as a success story -- a rebuke of those who urged the banks be put into receivership -- when the behemoth “paid back” the cash last December. But the bank’s stock price has fallen by more than 40 percent since mid-April, and the value of its outstanding stock is currently at around half of what it should be based on its “book value” -- what the company says its holdings are worth.
“The problem for anyone trying to analyze Bank of America’s $2.3 trillion balance sheet,” wrote Bloomberg columnist Jonathan Weil, “is that it’s largely impenetrable.” Nobody really knows the true values of the assets these companies are holding, which has been the case ever since the collapse. But according to Weil, some of BofA’s financial statements “are so delusional that they invite laughter.”
Weil points to the firm’s accounting of its purchase of Countrywide Financial -- the criminal enterprise at the center of the sub-prime securitization market. Bank of America, Weil notes, hasn’t written off Countrywide’s entire value. “In its latest quarterly report with the SEC,” he wrote, “Bank of America said it had determined the asset wasn’t impaired. It might as well be telling the public not to believe any of the numbers on its financial statements.”
With investors valuing BofA at half the worth that the bank claims, it’s one titan of Wall Street that may be on the brink of collapse. But it’s not alone. “Everybody was doing this, this is not just something that Countrywide and Bank of America were doing," legendary investor Jim Rogers told CNBC. As a result, the banks’ balance sheets are "full of rotten stuff" that “is going to be a huge mess for a long time to come.”
And that “rotten stuff” will continue to be a drag on the brick-and-mortar economy until the mess gets cleaned up. Which, in turn, is a powerful argument for a second dip into the public trough.
When the financial crisis hit, those of us who view the free market as more than a hollow slogan urged the government to take over the ailing giants of Wall Street, wipe out their investors, send their parasitic management teams to the unemployment line and gradually unwind the huge pile of “toxic” assets that they’d amassed before selling them back, leaner and meaner, to the private sector.
It worked in the past -- it was Ronald Reagan’s response to the Savings and Loan crisis of the 1980s. But that was then, and today Reaganite policies are deemed to be “creeping socialism” -- thoroughly unacceptable. We were told the banks were too big to fail, and Bush saw eye-to-eye with Republicans and Blue Dogs in Congress and bailed the banks out without exacting a penalty in exchange for the taxpayers' largesse. They socialized the risk, but the financial industry went right back to its old tricks, paying its execs fat bonuses and playing fast and loose with its accounting.
Much of that toxic paper remains on their books -- somewhere. The assets are still impossible to price and now several Wall Street titans appear to be approaching a tipping point, poised to once again to extort a mountain of cash from our Treasury by claiming to be too big -- and interconnected -- to crash and burn as the principles of the free market would otherwise dictate.
But there’s a difference between then and now. At the time, most of us saw the crash as a result of hubris and greed run amok in an under-regulated financial sector. Now, we know the financial crisis was the result of unchecked criminality -- that fraud was perpetrated, in the words of University of Missouri scholar (and veteran regulator) William Black, “at every step in the home finance food chain.” As Black and economist L. Randall Wray wrote recently:
The appraisers were paid to overvalue real estate; mortgage brokers were paid to induce borrowers to accept loan terms they could not possibly afford; loan applications overstated the borrowers' incomes; speculators lied when they claimed that six different homes were their principal dwelling; mortgage securitizers made false [representations] and warranties about the quality of the packaged loans; credit ratings agencies were overpaid to overrate the securities sold on to investors; and investment banks stuffed collateralized debt obligations with toxic securities that were handpicked by hedge fund managers to ensure they would self destruct.
That homeowners would default on the nonprime mortgages was a foregone conclusion throughout the industry -- indeed, it was the desired outcome. This was something the lending side knew, but which few on the borrowing side could have realized.
And since the crash, they’ve committed widespread foreclosure fraud, dutifully whitewashed by the corporate media as nothing more than some “paperwork” problems resulting from a handful of “errors.”
It is anything but. As Yves Smith, author of Econned: How Unenlightened Self-Interest Undermined Democracy and Corrupted Capitalism, wrote in the New York Times, “The major banks and their agents have for years taken shortcuts with their mortgage securitization documents — and not due to a momentary lack of attention, but as part of a systematic approach to save money and increase profits.”
Increasingly, homeowners being foreclosed on are correctly demanding that servicers prove that the trust that is trying to foreclose actually has the right to do so. Problems with the mishandling of the loans have been compounded by the Mortgage Electronic Registration System, an electronic lien-registry service that was set up by the banks. While a standardized, centralized database was a good idea in theory, MERS has been widely accused of sloppy practices and is increasingly facing legal challenges.
Judges are beginning to demand that the banks show their work -- prove they have the right to foreclose -- and in many instances they can’t, having sliced and diced those mortgages up into a thousand securities without bothering to verify the paperwork as most states require by law. This leaves what Smith calls a “cloud of uncertainty” hanging over trillions in mortgage-backed securities -- the largest class of assets in the world -- and preventing a real recovery of the housing market. In turn, that is holding back the economy at large; according to the International Monetary Fund, it’s the drag of the housing mess that’s causing the high and sustained levels of unemployment we see today.
Big financial firms have also been cooking their books in order to obscure how shaky their balance sheets really are because honest accounting would likely bring an end to those big bonuses that drive “the Street.” Yet a day of reckoning may be fast approaching.
If the worst-case scenario should come to pass, with the banks hit by thousands of lawsuits, unable to foreclose on properties in default and with investors running for the hills, expect to hear calls for TARP II. It’d be a very heavy political lift, but given Congress’s fealty to Wall Street it could plausibly be passed.
There are alternatives. As in 2008, the federal government could put failing financial institutions into receivership. But some experts are saying that if we want to get off the roller coaster of an economy moving from one financial bubble to the next, a bolder approach is necessary: permanent nationalization of banks that can’t survive without public dollars.
“Inevitably, American taxpayers are going to pick up much of the tab for the banks' failures,” wrote Nobel prize-winning economist Joseph Stiglitz last year. “The question facing us is, to what extent do we participate in the upside return?” Stiglitz argued that the government should take “over those banks that cannot assemble enough capital through private sources to survive without government assistance.”
To be sure, shareholders and bondholders will lose out, but their gains under the current regime come at the expense of taxpayers. In the good years, they were rewarded for their risk-taking. Ownership cannot be a one-sided bet.
Of course, most of the employees will remain, and even much of the management. What then is the difference? The difference is that now, the incentives of the banks can be aligned better with those of the country. And it is in the national interest that prudent lending be restarted.
Leo Panitch, a professor of comparative political economy at Canada’s York University, wrote that "the prospect of turning banking into a public utility might be seen as laying the groundwork for the democratization of the economy.”
Ellen Brown, author of Web of Debt, points to the success of the nation’s only government-owned bank, the Bank of North Dakota. “Last year,” she wrote, “North Dakota had the largest budget surplus it had ever had…and it was the only state that was actually adding jobs when others were losing them.”
North Dakota has an abundance of natural resources, including oil, but as Brown notes, other states that enjoy similar riches were deep in the red. “The sole truly distinguishing feature of North Dakota seems to be that it has managed to avoid the Wall Street credit freeze by owning and operating its own bank.” She adds that the bank serves the community, making “low-interest loans to students, farmers and businesses; underwrit[ing] municipal bonds; and serv[ing] as the state’s 'Mini Fed,' providing liquidity and clearing checks for more than 100 banks around the state.”
Several states have considered proposals to emulate North Dakota, but such a bold move would obviously be all but impossible in Washington. But it shouldn’t be off the table. Banks provide an “intermediary good” to the economy, creating no real value. But Big Finance’s speculation economy has caused great and real pain for the rest of us. As Joe Stiglitz put it, there’s no reason in the world the incentives of the banks shouldn’t be better aligned with the interests of the country and its citizens.

Muni-Meltdown


Here at Sound Of Cannons, we forecast this morning that the municipal bond market is facing a double whammy day of reckoning, on the two following dates:


~Dec. 31, 2010: Funding for Build America Bonds runs out. These bonds were part of the “stimulus” bill passed early 2009, subsidizing municipalities’ costs for public works projects to the tune of $150 billion.
~About a quarter of all muni issuance this year has been Build America Bonds. Unless the lame-duck Democrat-controlled Congress moves quickly, this money goes bye-bye in six weeks
~June 30, 2011: Still more federal aid expires on this date -- some of it authorized by the “stimulus” bill, more under the “jobs” bill passed last summer, totaling another $150 billion to date. Without this money, states would have already slashed a host of programs, including unemployment benefits and Medicaid.


The likelihood the new Republican-controlled House will extend this aid ranges between slim and none. We saw Slim at the train station this morning… he’s leaving town.


Days of reckoning are never “fun” per se. Least of all will these be for the savers and retirees who’ve purchased municipal bonds because they’ve been deemed a safe source of tax-free retirement income for, well, ever.The iceberg looming beneath the surface: A host of corporate and state pension plans rely on munis too.

The Country Is Looking Rough...........


State of the Union
It is not just other large economies that we need to monitor, but closer to home, the individual states in the U.S., most of which are hopelessly under water.
With the reelection of Jerry Brown as governor, Californians have made a clear statement that they want a Big Brother government to fix what ails. But given that what ails is a budget deficit anticipated to be more than $25 billion over the next 15 months, layering on yet more government programs – and the taxes to pay for same – it only assures that the flight of businesses and the largest taxpayers from the formerly golden state continues apace and escalates.
Looking a bit like a deer in the headlights, when asked about his post-election plans to deal with the deficits, Brown came forth with a factual albeit not very confidence building statement, "Not a lot of people have many good ideas on how to deal with it."
And it’s not just the states that are beset with intractable problems, but the cities as well. This just in from our own Alex Daley…
While the states can play certain games and jigger their accounting, I would look to the cities before the states for the next wave of problems. Bond issues are drying up post the Harrisburg, PA mess a few weeks back.
A lot of cities are in trouble: Detroit ($710M deficit! Including $450M for this year), Oakland, Miami, Harrisburg, Norfolk VA, San Diego ($30M deficit), San Jose, Vegas, Phoenix, Reno ($20M deficit, $5.2M shortfall for 2010), Chicago ($520M deficit!!), Yonkers, Baltimore ($121M deficit), Honolulu, NYC ($4.9B!!!! deficit into 2011) – all are in imminent danger of missing debt payments and heading into default.
Norfolk and others with small per-capita shortfalls might be able to pull out something with an assessment. As the budget timelines run out for most of these places, expect a LOT more like Harrisburg.
Remarkably, so far, the mainstream is almost completely ignoring the muni-credit crunch. This is a big problem, and it’s about to get a lot worse.
As the states and cities go belly up, will the federal government sit on its hands… or reach once more for the bottomless wallet?
Regardless, it might be worth perusing your tax-free money market holdings to better understand just what you own.
Vigilance remains the watchword for the day… and for the year. We are far from out of the woods.

Nicely Said................

"The history of government management of money has, except for a few short happy periods, been one of incessant fraud and deception." - Friedrich Hayek

Gold And Silver In The Coming Dark(er) Days


The Worth of Gold and Silver During Crisis
Much has been spoken by many well meaning would be survivalist concerning precious metals before, during and after an economic collapse. However the road to Hell is paved with good intentions. And just because someone has an opinion does not make their opinion correct. History tells a tale which we should look at when if comes to finances as in every other aspect of life.
It is not hard to detect that we are in the beginning stages of what will be the greatest depression. Why is this one called the greatest depression? Simply because it is greater than what we commonly call the “great depression” of the 1930′s. There again that time period was called “great” because it was the worst depression on record for our country. We have had many many episodes of economic depression, but nothing like we are beginning to see come upon us today. We won’t focus our attention presently on those many times that few study to begin with as that is a topic for another day. We will also not discuss gold’s 5,000+ year history starting within the 2nd Chapter of Genesis. Save that the three wisest men during the time of Jesus brought to Him as gifts. They were as most know gold, frankincense and myrrh; three of the most costly commodities of that ancient time. What is today or will be soon the most costly commodity in today’s world. In my opinion taken in any order you desire; food, ammunition and precious metals.
Looking back throughout history I can only find 5 commodities that has ever been worth anything. Food, clean water, weapons, gold and silver. For anyone trying to prepare for this greatest of depressions all of our efforts should be centered around those items. Sure, those trying to nit pick with their own list will seek to counter this with additional items, but for those that desire such, please understand that all other items needed has been and always will be obtained with that which I have listed already.
Now let us focus on precious metals, something which I know a little about anyway as being a collector and dealer now for over 20 years. Many will buy an ounce of gold/silver and then watch the market price fluctuations as though they bought a piece of stock in a company. Honestly, this will drive a person mad. I have told many that precious metals are not for the weak of heart. Prices go up and prices go down, but one thing that the owner of precious metals can take assurance in is that never in history has precious metals been worth zero dollars. This cannot be said for any other common day investment such as stocks and bonds. There has been a common thread of those who would disavow the procurement of precious metals as the scripture says they would be thrown in the streets (Ezekiel 7:19). And with this one verse many have opted not to devote the time to learn nor the money to protect themselves with precious metals. And for 20+ years now I have answered this question 12,784 times, that this will occur during the “DAY OF THE WRATH OF THE LORD”, and on that day only. No one will care about metals on that day anyway, but until that day comes, precious metals will be worth something. And until that day comes precious metals will protect your wealth. It protects your wealth by maintaining your purchasing power. Which is a fancy way to say that an ounce of gold purchased today will buy you the same amount of items today or a year from today, despite what your dollar is able to purchase a year later.
No one makes money buying precious metals. If the value goes up in fiat dollars then that fiat currency is weakened in its purchasing power. The day will come (and rather quickly I might add) that it matters not how much you paid for precious metals, but rather how much you own.
As one being in the preparedness field (in every area) for over two decades, I have noticed just how much food and other commodities one can acquire. But one that is prepared must take into consideration the possibility that they would need to flee the area which they have stockpiled their supplies. Say you have an extra $5000 dollars in a 401k or savings account. Do you realize how much rice and beans that is? Imagine putting that in your vehicle with everything else you would want to have if you must leave for whatever reason (man made or natural). Just a little money put aside at an earlier date into precious metals could help you vastly.
Let us imagine some hypothetical situations using precious metals during a major social/economical collapse. Bribes. Oh yes, precious metals is an international language. If one must get from point A to point B, as one who has been sought after by foreign governments in the past, gold will get you out of anything. Maybe you must flee and you need a warm meal or a place to lay your head. The inn keepers in Bethlehem would have listened to Joesph a lot closer if he had some gold to pay for his betrothed to have her baby indoors and not in the manger. Say the government wanted the taxes paid on the property you think you own, and you don’t have the worthless paper money. Or the banker comes looking to collect the mortgage, and he wants its total due. Say your child needs medical care, silver/gold could get you to the front of the line when time is of the essence. When the paper is worth nothing in everyday transactions, precious metals will be.
Please do not think that precious metals is all one needs as one trying to prepare for whatever it is that comes down the road in our direction. Food (which includes water) should be number one on your list, many want to trade food as their gold and silver, but what happens if you cannot get to your supplies or for some reason you find your supplies have been reduced unexpectedly. Yes, you must have some way of defending yourself. Then please protect yourself with some precious metal, even if it be only one coin. That one coin could be a life saver.

QUOTE OF THE CENTURY... MAYBE EVEN THE MILLENNIUM

Some people have the vocabulary to sum up things in a way you can understand them. This quote came from the Czech Republic . Someone over there has it figured out. We have a lot of work to do."The danger to America is not Barack Obama but a citizenry capable of entrusting a man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president. The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America . Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince. The Republic can survive a Barack Obama, who is, after all, merely a fool. It is less likely to survive a multitude of fools such as those who made him their president."

(Here at Sound Of Cannons Towers East, we're all stupefied by the far-reaching simplicity of this quote. The editors debated the angles of this piece of prose over burritos at the SOC Cafe, and resoundingly believe that "We have seen the enemy and they is us!" We're the voting public populated by mental midgets and out-and-out, full-on assholes putting in the Barney Franks, Babs Boxers, Olympia Snows, Susan Collinss' and the Murkowski's while letting this once great republic dwindle. Shame on us for allowing the haters of freedom to grab such a strong hold on us)

California Will Fall, Followed By NY (Thank God Those Clueless Idiots Voted Democrat!)



California Will Default On Its Debt, Says Chris Whalen


Municipal bonds have plummeted in recent days, as investors have suddenly focused on huge state and city budget deficits that there's no easy way to fix.
Nowhere has this collapse been more visible than California, which faces a massive $25 billion shortfall and red ink for as far as the eye can see.
After years in which every looming financial crisis has been met with a government bailout, you might think that the same solution awaits California, as well as all the other states that have huge obligations that they can't afford to meet.
But this time that may not happen, says Chris Whalen, a financial industry analyst and Managing Director of Institutional Risk Analytics.
In fact, Whalen thinks that California will default on its debt--hammering all the pension funds and other investors who have loaded up on apparently safe state bonds.
The state won't immediately default, Whalen says. It will start by issuing the same sort of IOUs that it issued to by itself time during its budget crisis last year. But, eventually, the debts will have to be restructured, and this will result in those who own California's bonds receiving less than 100 cents on the dollar.
Why won't California just get a bailout?
Because the Republicans now control Congress, Whalen says. And also because, if California gets bailed out, dozens of other states will immediately line up with their hands out. The public is fed up with bailouts, Whalen says--and eventually, the country will be forced to face up to its bad debts and write them off.
Of course, if Whalen is right, the country could have a major crisis on its hands. California is hardly the only state in trouble (click here to see the worst ones), and pension funds and other "safe" investments that Americans depend on will get hammered if states begin to default.
Fixing state and local obligations will also require the renegotiation of pensions and salaries that government workers have long since taken for granted. And they certainly won't give those up without a fight.
(The fact that these two countires masquerading as states are socialist strongholds literally guarantees Barry will bail them out onto the tax rolls of the other 48 states. Soetoro's only hope is if the threat of contagion allows him to quietly do the bailouts amidst a panic. Time will tell SOC~Ed.)

What Befalls Europe? Nobody Is Sure....


Euro Dominos Will Fall Until Currency Is Split: Matthew Lynn
By Matthew Lynn - Nov 15, 2010
Who’s next? First Greece went bust. Now Ireland is on the brink of a bailout from the European Union and the International Monetary Fund.
When it happens, we’ll hear plenty of soothing words about how contagion has been stopped, the euro area has been put on a firmer footing, and the single currency saved. There will be a lot of grand rhetoric about the importance of the European project. Stern condemnations of the speculators will ring out across the continent.
Don’t listen to a word of it. The euro has turned into a bankruptcy machine. Once the markets have finished with Ireland, they will simply move on to Portugal and Spain, and after that to Italy and France.
There is a domino effect at work, and, with each rescue, the fault lines within the euro grow wider and wider. This process isn’t going to stop until the euro is taken apart.
The Irish crisis is far more serious for the euro than the Greek one. The only thing that can rescue the former Celtic Tiger now is a clear and straightforward commitment from the rest of the euro-area nations to salvage the country’s economy. No doubt that will be forthcoming. Tens of billions of euros will be thrown at shoring up confidence in Ireland’s finances.
But it is very hard for the single currency’s remaining supporters to explain why it has come to this. The Greeks fiddled their way into the euro. They should never have been allowed on board. And once inside, they should have been told to reform fast or get out again.
Irish Austerity
No one can say that about the Irish. Ireland had one of the most successful economies in the world over the last two decades. Its government was never profligate. When the crisis hit, it didn’t bury its head in the sand the way the Greeks did. It took every austerity measure imaginable to try and fix its problems by itself -- and without calling on outside assistance.
In short, the problem wasn’t Ireland. It was the euro. The logic of that is inescapable. If it is the single currency that is at the root of the crisis, it won’t stop here.
Where next? Portugal, most obviously.
The country had a deficit of 9.3 percent of gross domestic product in 2009, the highest in the euro region after Ireland, Greece and Spain. The government aims to narrow that to 7.3 percent this year, but whether that is achievable is doubtful. Bond yields suggest many investors are skeptical. In a Bloomberg poll last week, 38 percent of global investors said Portugal was “likely” to default.
Spanish Deficit
And after that? Why imagine that Spain is safe? Its budget deficit is expected to be 9.3 percent this year, the second- highest in the euro area. With a stagnant economy, it is going to be very hard to make any significant reductions in that.
On the same logic, why not target Italy? It has remained under the radar, mostly because it has managed to avoid running up big budget deficits, at least compared with some of its Mediterranean neighbors. But it has a huge stock of debt, a legacy of past over-spending. And its economy has been in terrible shape ever since it joined the euro.
What about France? True, it has a stronger economy than many of the peripheral euro-area nations. And yet as the protests over a very modest reform to the pension system last month made vividly clear, no other European nation remains as wedded to an outdated, expensive social system as the French. Even the Greeks showed more willingness to change. It would be wrong to assume France can stay out of the spotlight forever.
Credit-Fueled Bust
“Portugal faces various structural deficiencies,” Morgan Stanley said in a note to investors last week, looking at which country would need a bailout next. “In Greece, the key issue is fiscal indiscipline, in Spain a credit-fueled housing boom- turned-bust, similarly in Ireland but coupled with an outsized banking sector.”
In each country, it will be a different trigger that causes a collapse in financial confidence. The root cause is the same, though. When the euro was launched, it was a big bet that sharing the same currency would make a group of very different economies converge, and so allow the European Central Bank to operate a single monetary policy for all of them.
It was an interesting theory, but it turned out to be wrong. The economies are just too different to allow a single central bank to manage all of them. Interest rates are always wrong everywhere. How that expresses itself varies. In Greece, it was a fiscal crisis. In Ireland, a banking collapse. In Spain, a construction bubble that burst. In Germany, a massive trade surplus. But, like a river looking for the sea, it always comes out somewhere.
This crisis will keep moving from country to country. The only permanent fix is splitting up the euro into more manageable currency areas. Until the euro area’s leaders recognize that simple truth, every bailout they come up with is only going to shift the attacks elsewhere.

Gotta Love The Euro! We Need Something Like That!!!!



Euro under siege as now Portugal hits panic button


By Bruno Waterfield and Robert Winnett, The Daily TelegraphNovember 15, 2010

The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a "high risk" of requiring an international bail-out.
Photograph by: Kai Pfaffenbach, Reuters files
The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a "high risk" of requiring an international bail-out.
Portugal became the latest European nation to admit it was on the brink of seeking help from Brussels after Ireland confirmed it had begun preliminary talks over its debt problems.
Greece also disclosed that its economic problems are even worse than previously thought.
Angela Merkel, the German Chancellor, raised the spectre of the euro collapsing as she warned: "If the euro fails, then Europe fails."
European finance ministers will meet in Brussels on Tuesday to begin discussions over a new European stability plan that is expected to result in billions of pounds being offered to Ireland, Portugal and possibly even Spain.
David Cameron said he was thankful that Britain had not joined the euro, but indicated his displeasure that taxpayers in this country face a pounds 7?billion liability in any bail-out package.
The veteran Conservative MP Peter Tapsell warned that the "potential knock-on effect" of the Irish crisis "could pose as great a threat to the world economy as did Lehman Brothers, AIG and Goldman Sachs in September 2008".
Ireland has resisted growing international pressure to accept EU financial assistance amid concerns that this would lead to a surrender of political and economic sovereignty.
However, the German government is expected to signal that Ireland may have to accept a pounds 77?billion bail-out, along with a loss of economic and political independence, as the price of preserving the euro.
Mrs Merkel said that the single currency was "the glue that holds Europe together".
Her words came as fellow eurozone members Portugal and Spain rounded on Ireland. They fear that international concerns over the euro will lead to so-called market contagion spreading to them.
Fernando Teixeira dos Santos, the Portuguese finance minister, said: "There is a risk of contagion. The risk is high because we are not facing only a national problem. It is the problems of Greece, Portugal and Ireland. This has to do with the eurozone and the stability of the eurozone, and that is why contagion in this framework is more likely."
Mr Teixeira dos Santos added: "I would not want to lecture the Irish government on that. I want to believe they will decide to do what is most appropriate together for Ireland and the euro. I want to believe they have the vision to take the right decision."
He later sought to clarify his comments, insisting that Portugal was not preparing to seek assistance.
Greece had earlier added to the growing uncertainty when it said it would breach the conditions for the bail-out it was granted by the EU earlier in the year. The Greek government said its debt problem was far worse than previous dire forecasts.
Eurostat, the EU statistics agency, said Greece's 2009 budget deficit reached 15.4 per cent of gross domestic product, significantly above its previous figure of 13.6 per cent.
George Papandreou, the Greek Prime Minister, said new European-wide taxes may now be needed to fund bail-outs.
"We need a mechanism which can be funded through different forms and different ways," he said. "My proposal is that taxes such as a financial tax or carbon dioxide taxes could be important revenues and resources for funding such a mechanism."
Irish ministers continued to insist publicly on Monday that they did not require a European bail-out to help meet the cost of repaying the country's debts. However, reports suggested that it may require help to shore up its banks.
Jean-Claude Juncker, the head of the Eurogroup of finance ministers, said the eurozone was indeed ready to act "as soon as possible" if Ireland sought financial assistance. But he stressed that "Ireland has not put forward their request".
Ireland suffered the worst recession of any major economy and has amassed government debts of more than euros 100?billion (pounds 84?billion). It has an unemployment rate almost twice as high as Britain at 13.2 per cent and has a record deficit equivalent to 32 per cent of its gross domestic product.
Senior figures at the European Central Bank lined up on Monday to insist that the Irish accept international help to reassure investors that the euro was secure.
Miguel Angel Fernandez Ordonez, the Bank of Spain governor and a member of the ECB's governing council, said: "The situation in the markets has been negative due in some part to the lack of a decision by Ireland. It's not up to me to make a decision. Ireland should take the decision at the right moment."

Nicely Said.........

Shake your chains to earth like dew
Which in sleep had fallen on you —Ye are many — they are few.
Percy Bysshe Shelley, “The Masque of Anarchy”

Tuesday, November 16, 2010

Quantitative Easing Explained

Looks like the common folks are getting a bit of a clue if they're laughing at Bernanke.

Wednesday, November 10, 2010

The Mogambo Knows The Score


An Economic Certainty: Gold to Rise as Fiat Currencies Fall

I was casually eating a burrito while having lunch at my desk, and was surprised to see some guy, writing on a “Feedback” blog of TheDailyBell.com, taking exception to David Morgan of The Morgan Report saying that “On a longer term basis silver and gold are going far higher in paper terms in any currency you wish to name.”
Idly, I was chewing a rather tasty bite of burrito and thinking to myself, “This is undoubtedly true!” as precious metals are nowadays priced in fiat currencies, and it has certainly been true for every paper currency that has ever, ever existed, including a list of 600-odd fiat currencies compiled by Addison Wiggin of Agora Financial in a research project a few years ago, undertaken to list all known fiat currencies, past and present, and their fate.
He gave up, he says, after listing all those fiat currencies beginning with the letter A and half of those beginning with the letter B. This tiny section of the alphabet contained 600 fiat currencies, most all of which are gone, gone forever, disappeared long, ago, thus undoubtedly taking a lot of wealth with them.
The total worthlessness of fiat currencies does not tell you about what is known in professional economics as The Great Wiping Out (TGWO), a scientific term first discovered, you may be surprised to know, when a new parent was caught with a baby that desperately needed changing, but was without any fresh diapers, and who decided to just “wipe out” the used-diaper in the host’s bathroom enough to get home, with the disastrous result that there was stinking baby-poop all over everything, including my pants and my shoes, and I think I got some in my mouth but I don’t want to think about it because it is so disgusting and I have been repressing even thinking about it until now, thanks for asking, damn it, and everything was ruined, and I never got promoted before I got fired, which I think was because of what happened in that poor bathroom, but my boss said no, but that I was being fired for being lazy and incompetent, but we both knew the truth.
Nowadays, The Great Wiping Out (TGWO) is a scientific term of absolute precision used by professional economists like me, after being cleverly invented by me in the previous paragraph, to describe the horrific enormity of the total amount of wealth lost by an economy as a result of another fiat currency literally biting the dust due to its over-creation, and making a big, big stinking mess that has serious, catastrophic long-term ramifications.
The beauty of TGWO is that it is easy to calculate, as it is the sum total of everything, as in “Every Freaking Thing (EFT)” leading to the phenomenon known as Total Freaking Loss (TFL).
The amazing thing was that this reader laughably does not mention TGWO, perhaps because I just made it up, or perhaps because it has nothing to do with anything.
Instead, he said, “Nobody, not Mr. Morgan, not you [the reader], nor I, nor economists [even ‘Austrians’], central bankers, investment ‘gurus’, tea leaf readers etc. etc., can reliably, consistently predict future economic events!”
At this, I jump to my feet and shout, with a tone of haughty victory in my voice, “Wrong, moron! I can predict some futures! Nothing is more reliably, more predictably, or more uniquely guaranteed than that silver and gold will go up in price over the long-term when priced in a fiat currency that is being created to excess!”
In response to my compelling argument, you can almost hear the desperation in his voice as he weakly persists, “The unacknowledged fact is that the economic future is unknowable,” which is so outrageous, in light of what I had just said, that I again jump up, this time onto my chair, adding a certain dramatic flair to my outburst, and again I scornfully say, “Wrong, dork-face! And the fact that every person owning gold and silver over the entire last decade made lots and lots of money as their prices went predictably up, while you, with your stupid investments in common equities and ridiculous belief in the stability of the buying power of a fiat currency, made nothing as the major indices have not gone up in 10 years! Nothing!
“And,” I mercilessly continued, “after adjusting your zero gains for the inflation in prices over the last decade, even using the mild inflation statistics of the Bureau of Labor Statistics, you have lost 27%! Hahaha! Moron!”
Of course, if he had read anything about the Austrian business cycle theory by merely going to mises.org once or twice in his whole life, he would know that wild, constant expansions of a fiat currency always lead to ruinous inflation in prices, which leads to social instability and upheavals when people get tired of deprivation because their pitiful little bit of money cannot buy enough food or heat because their prices are rising so high and so quickly.
And, then, if he had, he would know that Mr. Morgan was right, and that “On a longer term basis, silver and gold are going far higher in paper terms in any currency you wish to name.”
And it is that kind of certainty, especially in terms of the dollar that the Federal Reserve is destroying with more multi-trillion dollar creations of money, that makes buying gold, silver and oil such compelling investments so that you thank your lucky stars that “Whee! This investing stuff is easy!”

Nicely Said................................

"All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse." - Benjamin Franklin

Usually Presidents Like Their Country To Do Well.......



The American President Happily Heralds Decline of US Dominance
November 9, 2010
RUSH: All right, little Barry is back in Indonesia, and they're all happy over there. Little Barry Soetoro is back and they're all happy over there in Indonesia. In fact, he was someplace in India, he was introduced by somebody from Kenya, and the woman says, "As a fellow Kenyan, Mr. President," of course everybody looked the other way, "What do you mean fellow Kenyan, we don't want to hear this," and now little Barry is back. But before he left India, we have this story from the Times of India: "Obama Acknowledges Decline of US Dominance." Every time he leaves the country he makes a statement like this. The previous time he was talking about the fact that the American consumer is no longer going to lead the world economy. It just isn't gonna happen. Here is how the story from the Times of India begins: "Implicitly acknowledging the decline of American dominance..." Implicitly acknowledging, implicitly, that's not an accidental choice of words. Implicitly acknowledging. Not regretfully, not by happenstance, not, "Awe, shucks," but rather in a triumphant way Obama's crowing about this. "Implicitly acknowledging the decline of American dominance, Barack Obama on Sunday said the US was no longer in a position to 'meet the rest of the world economically on our terms.'" This is by design, implicitly acknowledging. Not saying this is temporary, "Hey, this is just an accident of fate here, but we're gonna fix this," not that. This is not just happenstance. This is by design, implicitly acknowledging -- look it up -- implicitly acknowledging, with fanfare, triumphantly, finally the decline of American dominance has been made a reality, and I'm the guy who did it, and I'm happy to be telling you about it here in India. That's what implicitly acknowledging means. "Speaking at a town hall meeting in Mumbai, he said, 'I do think that one of the challenges that we are going face in the US, at a time when we are still recovering from the financial crisis is, how do we respond to some of the challenges of globalization? The fact of the matter is that for most of my lifetime and I'll turn 50 next year -- the US was such an enormously dominant economic power, we were such a large market, our industry, our technology, our manufacturing was so significant that we always met the rest of the world economically on our terms. And now because of the incredible rise of India and China and Brazil and other countries, the US remains the largest economy and the largest market, but there is real competition. This will keep America on its toes. America is going to have to compete. There is going to be a tug-of-war within the US between those who see globalization as a threat and those who accept we live in a open integrated world, which has challenges and opportunities.'" Dare I translate this for you? Do I need to translate that for you, ladies and gentlemen? We've had it our way for far too long. The US has been unfairly at the top of the heap for far too long, and we've done it by stealing the world's resources, by taking from the people of the world and making them poor. Our own selfishness and greed has propelled us to an artificial position of dominance, but those days are over now and I'm happy to see to it as I implicitly acknowledge the decline of American dominance. "Because of the incredible rise of India and China and Brazil, we do remain the largest economy, the largest market, but there's real competition." That means not for long. On this globalization business, "tug-of-war within the US between those who see globalization as a threat and those who accept that we live in an open, integrated world." Bye-bye, borders. Hello, world currency. Hello, I want to run the United Nations. Hello, open borders. "The US leader disagreed with those who saw globalization as unmitigated evil. But while acknowledging that the Chindia factor --" that's the combination of ChiComs and India factor "-- had made the world flatter, he said protectionist impulses in US will get stronger if people don't see trade bringing in gains for them." Now, ladies and gentlemen, this is a slap at people who he thinks want to start a trade war with China. And the usual suspects, when a Democrat president starts talking about people who want to start a trade war with China are the Pat Buchanans of the world, the anti-NAFTA types, the flat earthers, the people that believe in global conspiracy. But let me tell you who's behind the trade war in China. (interruption) Who, Snerdley? It is his base led by Chuck-U Schumer. It is the unions. Chuck Schumer is leading the war on trade with China, and they're trying to pass this off as some kind of Neanderthal Republican or conservative-led movement. "If the American people feel that trade is just a one-way street where everybody is selling to the enormous US market but we can never sell what we make anywhere else, then the people of the US will start thinking that this is a bad deal for us and it could end up leading to a more protectionist instinct in both parties, not just among Democrats --" (so, he admits it) "-- but also Republicans. So, that we have to guard against." Now, if you go to Obama's second autobiography -- how many people have two autobiographies? If you go to Obama's second one, it's called The Audacity of Hope, Thoughts on Reclaiming the American Dream, it is largely about the threat of globalization to the US economy and the American worker. All through that book, Obama uses the bogeyman of globalization to argue for the need for all of his social justice programs, such as health care reform and other income redistribution schemes, long before he had the US recession to blame. "Obama, who just lost control of the House of Representatives to the Republicans, unabashedly said the objective of his visit was to find jobs for his voters." What? He's in India to find jobs for his voters? What about the people who didn't vote for him?
BREAK TRANSCRIPTRUSH: Obama is joyfully overseas talking about the decline of the US economy, happily presiding over it, implicitly acknowledging the decline of American dominance. It's what he's all about. He's happy he's made it happen, and he gets to go around the world and signal to everybody that it's happened. BREAK TRANSCRIPTRUSH: You know, folks, this Times of India article, listen to the way it ends. This is how it ends: "In the context of his efforts to revive the US economy, the president clearly sees, as he wrote in an article, India and China as key drivers of economic growth." Did you ever...? Did you ever think you would see the day when the US economy would depend upon the ChiComs and India or when an American president would be so overjoyed in this? Now, never mind the US economy still has a GDP that's twice the size of the ChiComs and India's combined. Let's see. US GDP is $14.1 trillion. China's is $4.9 trillion. India's is $1.2. But we're saying we're now beholden to what happens to the ChiComs and what happens in India -- and Obama talking about protectionism? He is the protectionist! Who is it that's been complaining about foreign money coming into the Chamber of Commerce during the campaign? Who is it that's been complaining about big union buddies? Obama's attacks on domestic companies investing in foreign countries? How about our environmental and tax laws chasing out foreign investment? And this guy wants to run around and talk about how he favors globalization? What he does want is to preside over the decline of the US economy, or the United States of America, period. He's doing it. He is implicitly acknowledging it. He's happy that it's happening. And I know it's still tough for a lot of people to get their arms around this. How else would you describe it? What could possibly explain the president of the United States happily saying the days of American dominance are over? As though... Here's the thing: As though American dominance was bad for the world, as though American dominance was evil, as though American dominance led to all kinds of racism, sexism, bigotry, homophobia, environmental destruction, whatever these cliched causes the left drums up. And this is who we have running the country. That's why there's no way this guy can "move to the center." There is no "center" in Obama's world, and there is no center in the Democrat Party, particularly in Congress.
BREAK TRANSCRIPTRUSH: This is Rob in Chicago. Glad you waited, sir. You're up.CALLER: Hello, Rush, from the People's Republic of Chicago. Oh, by the way, and happy Operation Reverse Chaos dittos.RUSH: Is that not amazing? It is working, and did work, exactly as drawn up on the board.CALLER: Rush, I did one better. I was a Democrat election judge.RUSH: A Democrat election judge?CALLER: Yes, sir.RUSH: And that afforded you the opportunity to do what?CALLER: To keep an eye on the election.RUSH: Well, congratulations.CALLER: But let me get to my point, sir.RUSH: Yeah, I was hoping that was gonna happen.CALLER: Okay, okay. To my point. On October 16th of this year, Obama was calling for "an end to the tax breaks that helped send jobs away." This was in an AP article in the New York Post. Now I'm looking at Yahoo, he's announcing trade deals dismissing the outsourcing gripes. All right? So would it be fair to say, sir, that due to the shellacking that he took in the election, that now Obama is punishing the American workers for voting against him?RUSH: Well... (sigh) I think he began punishing the American worker before they rejected him in the election. CALLER: I agree, sir.RUSH: Yeah, I know. It's tough to say, folks. I know it flows off of my lips so smoothly. I know when I say this, it sounds fluent, fluid, cogent, coherent, but I'm telling you: It is uncomfortable as it can be to actually believe, much less say, that we've elected somebody who happily is presiding over our decline and goes over to India and practically applauds the fact that our days of dominance are behind us, are over. I don't like thinking this, I would love to be wrong about it, but I know I'm not. I know my gut. I know my instincts. Might there be some piling on by Obama he's been rejected? Yeah, that's liberals. You dare reject them, you dare oppose them, they will give you what-for. But this is who they are anyway, whether you vote for them, whether you vote against them.Whatever they get, it's never enough. They're never happy. I remember Madeleine Albright lamenting the fact that the Soviet Union collapsed. Yes, lamenting it! The world was not properly balanced if there was only one superpower, the United States. Balance of power was required. There needed to be another superpower -- Soviet Union, maybe the ChiComs -- to keep us on an even moral keel. So it's nothing new, really, for a Democrat leftist or a Democrat to think that America is the problem in the world, not the solution. It's just tough to accept the fact that we've elected one as president. I read these stories -- and, look, I trust the foreign press. The India Times? They make it plain as day that the president is over there happily announcing the days of American economic dominance are over, that he is happy to proclaim new competitors, the ChiComs, and the nation of India. Now, look, I'm fine and dandy with India. You know, India... If you want to know the truth about India, India did not become what it is without going capitalist. You know, Gandhi was a big believer in socialism. He was a believer in the caste system. Do you know what the caste system was, Snerdley? The caste system, there were 14 or 15 of them. You were born into whatever level and you stayed there. If you were born in the dirt poor, you stayed there. You never were able to get out of it. He believed in that. India is reviving itself by virtue of capitalism, and the ChiComs (whether they want to admit it or not) had elements of capitalism in their growth. Now, what are we doing? We're cutting ourselves down to size by abandoning it -- and it isn't by accident. It's not some quirk of fate.