|Progressive Calendar 01.10.07||<– Date –> <– Thread –>|
|From: David Shove (shove001tc.umn.edu)|
|Date: Wed, 10 Jan 2007 06:37:46 -0800 (PST)|
P R O G R E S S I V E C A L E N D A R 01.10.07 1. Guantanamo/film 1.10 7pm 2. No Anoka stadium 1.10 7pm 3. AI StPaul 1.10 7:30pm 4. Vs Bush surge 1.11 7am 5. Guantanamo vigil 1.11 4pm 6. Eagan peace vigil 1.11 4:30pm 7. Northtown vigil 1.11 5pm 8. Rondo histories 1.11 7pm 9. Iraq/Steger 1.11 7pm 10. PlannedParenthood 1.11 7pm 11. Peace/planet 1.11 7pm 12. 9-11/CTV 1.11 8:30pm 13. Jeff Zeleny - Amy Klobuchar and the war 14. Mike Whitney - The Fed's Rrle in the housing crash of '07 15. ed - LEPers (poem) --------1 of 15------- From: wamm <wamm [at] mtn.org> Subject: Guantanamo/film 1.10 7pm FREE Film: "Road to Guantanamo" Wednesday, January 10, 7:00 p.m. Jack Pine Community Center, 2815 East Lake Street, Minneapolis. "The U.S. government has not only banned the International Red Cross, human-rights organizations and even detainees' lawyers from the Guantanamo 'detention center'd - it's also banned journalists. Hence, few American know what tortures and human rights abuses are being committed in our names there. British director Michael Winterbottom takes us past the wall of censorship by merging documentary and fictional film-making in "Road to Guantanamo". He tells the story of prisoners who've been released, the Tipton Three, Pakistani-British citizens swept up while on a vacation/wife-search in Pakistan after the 9/11 attacks.'Road to Guantanamo' goes back and forth between interviews with the actual Tipton Three and an intense dramatization of their arbitrary capture by U.S. troops and their harrowing ordeal at Guantanamo." ("TC Daily Planet" weekly column "Ten Days Out" by Lydia Howell) Endorsed by: WAMM. FFI: 612-729-2837. --------2 of 15------- From: Ron Holch <rrholch [at] attg.net> Subject: No Anoka stadium 1.10 7pm Taxpayers For an Anoka County Stadium Referendum WE WILL HAVE LAWN SIGNS AVAILABLE AT THE MEETING. Wednesday January 10, at 7:00 PM Centennial High School Red Building - Room 104 4704 North Road Circle Pines, MN The red building is on the east end of the high school complex, and is set back furthest from North Road. Enter on the East side of the building. The largest parking lots are near this building. Our work is not over yet and it is important for us to remain vigilant. Anoka County Officials claim they have taken back their more than generous offer to Zygi Wilf for stadium in Blaine. However the County Board has not had a vote to rescind the offer to the Vikings. The 2007 legislative session has now convened. No One has said that Anoka County Taxpayers will not pay for a Vikings Stadium no matter where it is located. Nor has anyone yet offered us a chance to vote on a tax increase. This means a Hennepin County Vikings Stadium can still increase taxes for us in Anoka County. There is now talk of a new metro-wide sales tax. Now would be a good time to think about what you will write to your newly elected representatives to tell them we do not need to waste more money on stadium giveaways to Billionaires. Please continue to tell them we want a vote as required by state law for any tax increase to pay for a stadium. Write letters to your local paper too. If you have done these things once already please do it again. AGENDA ITEMS INCLUDE: Website Lawn Signs for sale! What is happening in the 2007 Legislative Session? Any Questions, comments contact me at: Ron Holch rrholch [at] attg.net --------3 of 15-------- From: Gabe Ormsby <gabeo [at] bitstream.net> Subject: AI StPaul 1.10 7:30pm There are several local Amnesty International groups in the Twin Cities area. All of them are welcoming and would love to see interested people get involved -- find the one that best fits your schedule or location: AIUSA Group 640 (Saint Paul) meets Wednesday, January 10th, at 7:30 p.m. Mad Hatter Teahouse, 943 West 7th Street, Saint Paul. http://www.aistpaul.org. --------4 of 15-------- Reply-To: crocushillpeace [at] yahoogroups.com Subject: Vs Bush surge 1.11 7am An early announcement for this protest went out Friday evening. The time in this announcement (9:00 - 11:00am) was INCORRECT. The **CORRECT TIME** for the protest is 7:00 - 9:00am. Protest Against President Bush's Iraq War Escalation 7:00 - 9:00am Highway 280 and University Ave WHAT DAY: Day After Bush's Escalation Speech, TBA (Emails will go out as soon as the date of the speech is announced.) - Phil Steger, Friends for a Non-Violent World/ Peace in the Precincts --------5 of 15-------- From: PRO826 [at] aol.com Subject: Guantanamo vigil 1.11 4pm TWIN CITIES VIGIL AND MARCH TO SHUT DOWN GUANTANAMO 4:00 PM, THURSDAY, JANUARY 11, 2007 MEET AT HENNEPIN COUNTY GOVERNMENT CENTER, 3rd AVENUE AND 5TH STREET IN MPLS Everyone is invited, but not required, to BE A GUANTANAMO PRISONER Prisoner names are available at _www.witness_ (http://www.witness/) torture.org and will be available at the vigil. WEAR AN ORANGE JUMP SUIT, IF YOU CAN, AND A BLACK HOOD We wish for a large number of folks in orange jump suits to represent the Guantanamo prison population of about 400. Those not participating in this bit of street theater can still protest Guantanamo in other ways at this vigil. * Commemorate the 5th anniversary of the first detainees' arrival at Guantanamo. Many of these prisoners are still languishing there, suffering torture and abuse and complete lack of legal due process. * Sign a petition to demand due process or immediate release for Guantanamo prisoners and to demand the closing down of Guantanamo. January 11 is the INTERNATIONAL DAY TO SHUT DOWN GUANTANAMO. * March in an orderly silent procession, hauntingly evoking the moral disgrace that is Guantanamo. Deliver petitions. Demand justice. * The film, "Road to Guantanamo" will be shown Wed, Jan 10, 7PM at the Jack Pine Center, 2815 E. Lake, Minneapolis 612-729-2837 * We have a supply of orange jump suits and black hoods! Get yours while the supply lasts. We are selling orange jump suits for only $7, which is slightly less than our cost. We also have a supply of black hoods that we are selling for $1, which is also slightly less than our cost. So, you can get a suit and black hood for $8.00. Hoods and suits will be available beginning on Friday, 1/5/07 on a first come, first serve, at the office of Bob Kolstad, 1005 W. Franklin, #3. This is upstairs from Sebastians. Call Bob first to make sure he will be there (612-721-3425). Remaining hoods and suits will be available at the filming of "Road to Guantanamo". If we still have some left over, we will bring them to the anti-Guantanamo vigil, Jan 11 at 4:00 PM, Hennepin County Government Center, 3rd Ave and 5th St. The hoods are made out of cambric cloth that looks opaque, but which you can see out of. To make your own hood, take a rectangle of cloth 18"x36". Fold so that it is 18" square. Sew or safety pin the two sides, leaving the bottom open where you insert your head. No need to make hoods, though. We made up 50 of these! * Sponsored by:T3: Tackling Torture at the Top, Twin Cities Peace Campaign, Anti-War Committee, the War Resisters League, and Witness Against Torture. UW PICO(tm) 4.3 File: /home/s/shove001/mess Modified For questions or help in obtaining inexpensive jump suits contact Roger Cuthbertson, _rojo [at] visi.com_ (mailto:rojo [at] visi.com) . --------6 of 15-------- From: Greg and Sue Skog <skograce [at] mtn.org> Subject: Eagan peace vigil 1.11 4:30pm CANDLELIGHT PEACE VIGIL EVERY THURSDAY from 4:30-5:30pm on the Northwest corner of Pilot Knob Road and Yankee Doodle Road in Eagan. We have signs and candles. Say "NO to war!" The weekly vigil is sponsored by: Friends south of the river speaking out against war. --------7 of 15-------- From: EKalamboki [at] aol.com Subject: Northtown vigil 1.11 5pm NORTHTOWN Peace Vigil every Thursday 5-6pm, at the intersection of Co. Hwy 10 and University Ave NE (SE corner across from Denny's), in Blaine. Communities situated near the Northtown Mall include: Blaine, Mounds View, New Brighton, Roseville, Shoreview, Arden Hills, Spring Lake Park, Fridley, and Coon Rapids. We'll have extra signs. For more information people can contact Evangelos Kalambokidis by phone or email: (763)574-9615, ekalamboki [at] aol.com. --------8 of 15-------- From: Write On Radio <writeonradio [at] yahoo.com> Subject: Rondo histories 1.11 7pm Thursday January 11th 7:00 P.M. Editor Kate Cavett discusses Voices of Rondo: Oral Histories of St. Paul's Historic Black Community. Ridgedale Library, 12601 Ridgedale Dr, Mtka; 952-847-8595. --------9 of 15-------- From: barbara Vaile <barbara [at] organicconsumers.org> Subject: Iraq/Steger 1.11 7pm Monday 1/8, or Thursday. 1/11, 7 to 9 pm, Phil Steger presents Intensive Iraq Training, Friends for a Nonviolent World, 1050 Selby Ave, St Paul. info [at] fnvw.org --------10 of 15-------- From: erin [at] mnwomen.org Subject: PlannedParenthood 1.11 7pm Thursday, January 11: Planned Parenthood MN/ND/SD 2007 Legislative Preview. 7PM-8PM at their Uptown location. Join Planned Parenthood as they discuss Planned Parenthood's legislative agenda. RSVP to Sally at shassell [at] ppmns.org or call 612/821-6164. www.ppmns.org. --------11 of 15-------- From: Charles Underwood <charleyunderwood [at] hotmail.com> Subject: Peace/planet 1.11 7pm Thursday, 1/11, 7 pm, peace prof and activist Jack Nelson-Pallmeyer speaks to Northwest Neighbors for Peace on "Where Peace and Environment Meet: Action Priorities for a Planet in Crisis," Parish Community of St Joseph, 8701 - 36th Ave N, New Hope. carydberg [at] comcast.net --------12 of 15-------- From: altera vista <alteravista [at] earthlink.net> Subject: 9-11/CTV 1.11 8:30pm Thurs. Jan. 11, 8:30 pm St. Paul cable channel 15: Prof. Emeritus David Ray Griffin, speaking on the inconsistencies of the government's explanation for 9/11, University of Madison, Fall 2005. --------13 of 15-------- >From The New York Times January 9, 2007 Democrats Split Over Iraq Approach Amy Klobuchar and the war [ed head for MN] By JEFF ZELENY "I don't think we should be pulling back any funds," said Senator Amy Klobuchar, a Minnesota Democrat who was elected in November. She said she would oppose a proposal to block money for a troop increase. WASHINGTON, Jan. 8 - The new Democratic majority in Congress is divided over how to assert its power in opposing President Bush's plan to send more troops to Baghdad, as leaders explore ways to block financing for a military expansion without being accused of abandoning American forces already in Iraq. While Democrats find themselves unusually united in their resistance to a troop increase, party leaders are locked in an internal debate over how far to go in objecting to the administration's Iraq strategy. The White House has invited some Democrats to meet with Mr. Bush before he gives his Iraq speech on Wednesday, even as others have scoured the history books to find cases when Congress has reined in the commander in chief. In the most aggressive of the new tactics, Senator Edward M. Kennedy, Democrat of Massachusetts, has said he will introduce legislation on Tuesday to require the president to gain new Congressional authority before sending more troops to Iraq. The bill is the first proposal in the Senate that would prohibit paying for an increase in American troops over their level on Jan. 1. "Is there any American in this country who thinks the United States Senate would vote to support sending American troops into a civil war in Iraq today?" Mr. Kennedy said Monday in an interview. "Is there any American that believes this? I don't think so, but that is what's happening, and we have to do everything we can to insist on accountability." The Kennedy plan is intended to provide Democrats with a road map for how to proceed in Iraq. Mr. Kennedy, as he begins his 45th year in the Senate, recalled that Congress interceded during conflicts in Vietnam and Lebanon, and he said Democrats should not hesitate to do so in Iraq. The new House speaker, Representative Nancy Pelosi of California, has similarly suggested that Democrats consider blocking financing for a troop increase, and the Senate majority leader, Harry Reid of Nevada, vowed Monday "to take a look at it." But the House majority leader, Representative Steny H. Hoyer of Maryland, has not endorsed the idea. Other Democrats, either looking ahead to a possible presidential candidacy or their own re-elections, have also distanced themselves from such a proposal, fearful of being cast as opposing the troops. "I don't think we should be pulling back any funds," said Senator Amy Klobuchar, a Minnesota Democrat who was elected in November. She said she would oppose a proposal to block money for a troop increase. The Democratic Party sailed to victory in midterm elections in the fall on a promise to change course in Iraq. Still, there is little consensus over how to proceed. Some Democrats are urging an immediate withdrawal of troops and a drastic reduction in war spending. Others are calling for a gradual re-deployment of troops to move them out of Iraq. Still other Democrats are waiting for Mr. Bush to present his plan before criticizing it. The expectations set by the elections, Democrats say, present a complicating challenge as they begin to govern. Take, for example, Mr. Reid, who said on Dec. 17 that he would support a plan for a temporary increase in increase troops. Two weeks later, he announced his opposition, saying his change had nothing to do with other Democratic senators having spoken out against it, but rather with military officials having disagreed with a call for more troops. Senator Russell D. Feingold, Democrat of Wisconsin, said he believed that his party lost the White House in 2004 because of Iraq. "My concern now is that too many Democrats are going to want to play it safe on this issue and not take the strong stand that American people demand," he said Monday. The pressure from war critics on the Democratic left has been particularly intense. "The bottom line is that they were elected on a mandate to get the nation out of the mess in Iraq," said Eli Pariser, the executive director of MoveOn.org, a liberal political action committee. By law, Congress can limit the nature of troop deployments, cap the size of military deployments and cut financing for existing or prospective deployments. Since 1970, there have been dozens of occasions in which Congress has tried to step into military action, from Haiti to Bosnia to Kosovo, according to a memorandum being sent Tuesday to lawmakers by the Center for American Progress, a liberal policy group. Representative Adam Smith of Washington, vice chairman of the moderate New Democratic Coalition, said he feared that withholding financing - even for new troops being sent to Iraq - could have a detrimental effect on all forces. "I don't want our troops to be caught between the president and Congress in a political fight," said Mr. Smith, who was to receive a briefing on Tuesday at the White House. "If there are any risks that our efforts to slash the budget would place them at greater risk, that would be unacceptable to me." But Democrats who are trying to stop Mr. Bush's proposed troop increase, a group led by Mr. Kennedy, say their proposal to block financing will apply only to new troops. Mr. Kennedy said he hoped that his legislation would be urgently considered by the full Senate, but acknowledged that it remained an open question whether his Democratic leaders would schedule it for a quick vote. "The importance of this legislation is that it will apply now before we could get the escalation," he said. "If you wait, this thing is going to be past. I'm not sure that all of our colleagues in the Senate understand that, quite frankly." Sabrina Pacifici contributed research. --- Comment from Michael Cavlan, 2006 Green candidate for US Senate It will be interesting to watch the Peace and Justice communities dangle and make excuses for this. Why one could almost make the argument that the Democratic Party and their apologists are a critical part of the war machine. --Michael Cavlan RN Can't we send out an email to the DFLer's who were against Iraq but who supported Amy anyhow & say... WE TOLD YOU SO! You should have VOTED GREEN!!! [The so-called "lesser-evil" becomes greater. We apply fake remedies and the disease worsens daily. Give us the varnished truth, dark layer after layer, till the image below is only hinted at, insubstantial, a shadow among shadows. -ed] --------14 of 15-------- The Fed's Role in the Housing Crash of '07 by Mike Whitney www.dissidentvoice.org January 9, 2007 "This is the biggest housing slump in the last 4 or 5 decades: every housing indicator is in free fall, including now housing prices.. -- Economist Roubini Nouriel, Dow Jones, August 23, 2006 "The Fed, in effect, has become a serial bubble blower.. -- Stephen Roach, chief economist, Morgan Stanley The American people appear to be oblivious to the economic hurricane that is expected to touchdown in late 2007. That's when $1 trillion in ARMs (Adjustable Rate Mortgages) will "reset" triggering a massive increase in foreclosures and plunging the country into a deep recession. If energy costs continue to rise at the same time or if the dollar loses more ground, we may be rooting around in the backyard garden plot looking for passed-over spuds and radishes. The crisis is entirely the work of former Fed Chairman Alan Greenspan, whose "cheap money" policy caused a speculative frenzy in the real estate market that sent home prices through the stratosphere. In fact, the bubble originated in 2001 when Greenspan lowered interest rates to a meager 1% and ignited a refinancing boom as well as a sudden up-tick in home sales. Now, after 17 straight interest rate increases, the bubble is quickly losing steam and the effects are being felt from sea to shining sea. Rest assured, the sudden downturn in the housing market is just the first gust from an impending tornado. By the end of 2007, America's matchstick economy will look like the rubble strewn landscape of New Orleans 9th Ward. Greenspan has been the biggest player in this pre-Depression operetta. He kept the printing presses whirring along at full-tilt while the banks and mortgage lenders devised every scam imaginable to put greenbacks into the hands of unqualified borrowers. ARMs, "interest-only" or "no down payment" loans etc. were all part of the creative financing boondoggle which the kept the economy sputtering along after the "dot.com" crackup in 2000. It worked like a charm too. Aided by the Fed's cheap money policy, the housing market sizzled. In just six years the total value of real estate jumped from $11 trillion to $21 trillion! ("From 2001 through 2005, outstanding mortgage debt rose 68% from $5293 billion to $8888 billion") It's the biggest expansion of debt in history and it was all engineered by seductively low interest rates. Greenspan executed the swindle with the adroitness of a carnival huckster, luring millions of buyers to the real estate gold rush. Now, many of those same buyers are stuck with enormous loans that are about to reset at drastically higher rates while their homes have already depreciated 10% to 20% in value. This phenomenon of being shackled to a "negative equity mortgage" is what economist Michael Hudson calls the "New Road to Serfdom": paying off a mortgage that is significantly larger than the current value of the house. The sheer magnitude of the problem is staggering. For example, an article in the New York Times last week noted that, "1 in 5 sub-prime loans will end in foreclosure. . . . About 2.2 million borrowers who took out sub-prime loans from 1998 to 2006 are likely to lose their homes." In real terms, that translates into roughly 10 million people! Greenspan, of course, nodded approvingly while the new regime of shaky lending practices was being put into place. What really mattered to the Fed chief was making sure the economy could be kept on life support while the massive "unfunded" tax cuts were provided for his well-healed buddies in corporate America and while the country charged off to war in Iraq. Greenspan knew that his "low interest rate bonanza" was driving the wooden stake into America's heart. In fact, every banker understands the effects of interest rates; it's fundamental to their trade. Lower the interest rates and the people will swarm to the banks like piranhas to a hambone. It never fails. The housing bubble has nothing to do with "market forces" or (Gawd help us) supply-and-demand. That's all gibberish. Low interest rates provide a channel for pumping cheap money into the economy, which inevitably creates equity bubbles. When Greenspan lowered rates to 1%, he knew that he was simply trading a technology bubble for a real estate bubble. Now, of course, he has retired before the wheels fall off the cart so he can avoid being blamed for the coming catastrophe. The fallout from the housing explosion will be much more destructive than what most people imagine. In fact, Peter Schiff, president of Euro Pacific Capital Inc., believes that the NY Times. estimates are too optimistic. Schiff anticipates that failures in the sub-prime loan market will put greater downward pressure on housing by increasing inventory and lowering prices. Schiff says: "The secondary effects of the "1 out of 5" sub-prime default rate will be a chain reaction of rising interest rates and falling home prices engendering still more defaults, with the added foreclosures causing the cycle to repeat. In my opinion, when the cycle is fully played out we are more likely to see an 80% default rate rather than 20%." 80%?! 40 million Americans headed towards foreclosure? Better pick out a comfy spot in the local park to set up the lean-to. Schiff's calculations may be overly pessimistic, but his reasoning is sound. Once mortgage holders realize that their homes are worth tens of thousands less than the amount of their loan they are likely to "mail in their house keys rather than make the additional mortgage payments". As Schiff says, "Why would anyone stretch to spend 40% of his monthly income to service a $700,000 mortgage on a condo valued at $500,000, especially when there are plenty of comparable rentals that are far more affordable?" Why indeed? There's simply no incentive to hang on to a home or condo that's losing value every day. "Lobster Potted"? Economist Nigel Maund describes what over-leveraged homeowners can expect as real estate values continue to plummet: "For the majority of homeowners, they are now "lobster potted" for the rest of their lives in the 21st Century's version of the Victorian treadmill. Welcome to modern debt-controlled serfdom, where if you lose your job, either through retrenchment or illness, you lose your home. It has become a veritable Sword of Damocles, or a stick with which to beat recalcitrant labor into a bloody pulp, should they ever prove restless or disobedient. The ruthless and faceless plutocrats who benefit vastly from this dreadful scheme must be laughing on their return to a status of demagogic power which is the modern equivalent of Roman or Medieval Aristocracy at its exploitative worst. . . . The mortgage weapon forms an integral part of the armory of the so-called New World Order (NWO) as it seeks to accumulate wealth and power to control people by stealth." Maund nails it. The "mortgage weapon" has been used effectively to thrust millions into debt servitude and shift the nations' wealth to the upper 1%. Meanwhile the Decider-in-Chief has been busy rewriting the nation's laws so they meet the requirements of an economically polarized society. (The erosion of civil liberties is the unavoidable consequence of the greater divisions in wealth) The first wave in the tsunami is timed to hit in late 2007 when $1 trillion in ARMs reset, wreaking havoc across the country. That means that millions of borrowers will see dramatic increases in loans on homes that are of steadily diminishing value. (Many monthly payments will nearly double!) The number of foreclosures will skyrocket, unemployment will soar, and America's consumer economy will swoon. How bad will it be? According to statistical analyst, Jim Willie, "One third of job creation has come from the housing industry in the last 5 years". How will we make up those losses in employment? Equally worrisome, is the amount of money that will stop flowing into the economy because of the declining home values. In 2005, Americans pulled $732 billion out of their home equity to spend on consumer items. By the 2nd quarter of 2006 that number was down to $327 (annualized) a loss of more than half. In an economy where 90% of growth has depended on the housing boom, these are ominous signs of impending disaster. (Current Fed Chairman Ben Bernanke said that the slowdown in housing has been a "major drag" on the economy, which has already caused a 1% decrease in GDP in 2006. What effects will it have in 2007 when the real storm hits?!) If homeowners can't tap into their equity to augment their stagnant wages, GDP will shrink and investment will flee to foreign markets. That's when we're likely to see the lines at the neighborhood shelter winding around the block and whole families camping out in the backs of their Suburbans. The Sub-prime "Time Bomb" It looks like the meltdown in sub-prime loan business will trigger a steady downturn in the entire housing industry. The Center for Responsible Lending (CRL) issued a report which says that they anticipate a "humanitarian disaster worse than Katrina". The report states: "The sub-prime market was designed with a built-in time bomb. In testimony to the Senate Banking Committee in September, Michael Calhoun, the President of the CRL, showed an example of the most typical sub-prime loan, known as a 2/28, with an "exploding ARM" (adjustable rate mortgage). Buyers can qualify for this type of loan if the original ("teaser") monthly payment is not higher than 61% of their after-tax income. At the end of two years, even without a rise in interest rates, the payment will typically rise to 96% of the purchaser's monthly income. No wonder then, that the study conservatively forecasts that one-third of families who received a sub-prime loan in 2005 and 2006 will ultimately lose their homes!" "96% of the purchaser's monthly income"?!! That leaves a measly 4% of one's earnings to pay for clothes, food and other essentials! The disaster in sub-prime loans is leading the housing market into a waterfall type decline. It's the first indication that a real catastrophe is just around the corner. The inability of over-leveraged borrowers (many with a poor credit history) to meet their obligations is spreading to other areas of the market. This is called "contagion". The defaults are symptomatic of a larger problem that could quickly affect the entire system. Realtor Don Stacey describes the phenomenon this way: "The fact of the matter is that sub-prime lenders are closing shop and dropping like flies . . . What does this signal? To me it suggests that the sub-prime lending cycle is history. And, if it is history, then a very large chunk of the nonconforming borrowing seen in 2004, 2005 and most of 2006, will not be repeated in 2007." Why should this matter to the average homeowner? Because in 2003, 35% of all mortgages were "nonconforming" loans. In 2004, it went up to 59%. And in 2005, nonconforming loans were a mammoth 65% of all mortgages! As the lenders return to more conventional practices the pool of potential customers will dry up accordingly and housing prices will fall precipitously. Once again, we need to remind ourselves that the housing boom was not created by market forces, "real demand" or increases in wages. It is entirely the outcome of Greenspan's "cheap money" policy (low interest rates) as well as the widespread shabby lending practices. ("Creative financing", ARMs etc.) These factors have caused the largest expansion of personal debt in history and are creating a real risk of a complete financial collapse. So, why would the banks commit to such a risky scam when the standard criterion for loaning money has been understood for hundreds of years? For the banks to ignore the rules for prudent lending (20% down payment, fixed interest rate, sufficient collateral and income) is like a scientist saying that the rules of gravity no longer apply or that the chemical composition of water has changed. It simply makes no sense, does it? It's different for the Federal Reserve. The Fed knows that the US consumer is already overextended and mired in debt. They've decided to increase our (collective) obligations while their corporate colleagues load the boats for more promising markets in Asia and Europe. They cling to the notion that they can preserve the greenback as the "reserve currency" even after it has been deflated to the value of the Peso. (The actual face value of the dollar makes no difference to the Fed as long as they continue to produce the "international currency". That preserves their power base and control of the global system.) "Cheapening" the dollar by doubling the money supply paves the way for hyperinflation and (the Fed believes) a more competitive American workforce going nose-to-nose with competitors in China and India. It's a plan that globalization's foremost champion, Tom Friedman, would probably greatly admire. By pulverizing the dollar, the Fed can crush the middle class and lay the foundation for a "class-based" police state - Bush's nascent Valhalla. The first step to "reordering" society is destroying the currency. Famed economist John Maynard Keynes showed a keen grasp of this when he said: "Lenin was right. There's no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose". This suggests that the greatest threat to "democratic institutions" is not repressive legislation (as most believe) but monetary policy. The manipulation of currency can precipitate economic divisions in society that make democracy impossible. That's why Thomas Jefferson said: "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of our currency, first by inflation, then by deflation, the banks and the corporations that will grow up around (the banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs". Jefferson understood that monetary policy is central to the maintenance of personal freedom and should not be ceded to a few "unelected" and unaccountable men whose interests diverge from the public good. The Fed's ability to "inflate and deflate" the currency allows privately-owned banks to decide the country's future and remake society according to their own inclinations. America's political transformation is being engineered by the Federal Reserve. But what about the banks? What would compel the banks to break with traditional lending practices and put themselves at risk of millions of foreclosures? The banks eke out their survival in an extremely competitive environment where short-term profit determines their behavior. Not only have they loaned out zillions of dollars to people with poor credit, they've also played a major role in repackaging substandard loans and selling them off to Wall Street as "mortgage backed securities" (MBS) These MBS are high-yield debt instruments that evolved through "deregulation". They're sold to hedge funds as securities and are rarely (if ever) checked for the reliability of the borrower. This has created a great opportunity for the banks to loan as much money as possible using funky ARMs and nontraditional loans knowing that they'll be rubber-stamped on their way to Wall Street. (The practice of shipping B-grade loans to fund managers is like gift wrapping dog poop and selling it as Belgium chocolates. Nevertheless, it has fattened the bottom line for nearly all the major lending institutions) Unfortunately, the terms of the MBS allow non-performing loans to be sold back to the lender that originated the loan. Now that the number of "non-performing" loans is on the rise, (through defaults) the banks are scrambling to avoid liability. (In fact, according to National Mortgage News, Fifth Third Bank is selling $11.4 billion in securities (almost all MBS) before year-end 2006 and is taking a loss of approximately $500 million.) This reflects the new mood in steering away from shaky loans. As the great housing Hindenburg continues its downward trajectory, the banks will undoubtedly do their best to prevent the deluge of foreclosures (and failing MBSs) from dragging them under. Perhaps, they will offer more flexible terms to over-leveraged homeowners as a way of recouping their losses; it's impossible to know. It's also hard to gage how many struggling homeowners will be able to hang on even with a more flexible payment schedule. Unfortunately, the present trend lines offer little reason to be hopeful. These are grim times for the mortgage industry and we shouldn't be too surprised if one or two major banks hobble into receivership before the storm is over. Housing Hullabaloo: "The worst is yet to come" Reports in the mainstream media tend to obscure the severity of the housing bubble. Typically, the articles are full of "Sunny Jim" claptrap about a "rebounding market" that is suddenly "correcting" after an explosive decade of growth. For example, over 250 articles appeared in US newspapers this week celebrating; "New Home Sales Rise in November". Readers should not be taken in by this type of hype. A careful reading of the facts indicates that, "rather than foreshadowing a quick rebound, the news highlighted how fragile the residential construction remained and suggested that the downturn rattling the housing market has not run its course". (NY Times) Translation: The worst is yet to come. The number of homes sold in November was the LOWEST IN ALMOST 4 YEARS causing inventories to swell to a "7.7 month supply, the highest since December 1995". These are very bad numbers. So, why is the media cheering? The news reports draw attention to a slight 3.4% increase in sales in November from a thoroughly dreadful October! If, however, we compare the figures from November 2005 to November 2006, we find that housing sales are actually down 12.4% from a year earlier. (And this, of course, is how one normally evaluates a downturn in the market) The media is no more dependable in their coverage of the housing bubble than they are about Iraq. The reader must do his own research and draw his own conclusions. But one thing is certain, house prices are way beyond any historical relationship to rents or salaries. They are bound to come down . . . and fast. We can also assume that the number of foreclosures will skyrocket in 2007 from defaults on sub-prime loans and the "resetting" of Adjustable Rate Mortgages. (The monthly payments on these loans will go up significantly whether the Fed raises interest rates or not) Business Week summarized our current predicament saying: "Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken." The real estate slump will seriously dampen consumer spending and further shrink the already miniscule US GDP (1.9%) This will undoubtedly have the added effect of curtailing foreign investment, putting more downward pressure on the floundering dollar and triggering a round of hyperinflation. Ultimately, the Fed will be forced to make one of two choices: either lower interest rates and forgo foreign investment ($2.5 billion a day) or keep interest rates where they are and accelerate the collapse of the housing market. There is no "third" option. Most analysts and traders believe that Fed Chief Bernanke will follow the well-worn path of Dr. Weimar and begin "hurling bundles of greenbacks from helicopters" rather than allow the economy to grind to a halt. Hence, we are likely to see the further "debauching of the currency" sometime in the very near future. As Stephen Jen, the chief currency economist at Morgan Stanley, said recently in an article in the New York Times, "All the policy makers still believe in the possibility of a dollar crash. It's still lingering out there." No doubt, Fed-master Bernanke will work towards that goal by keeping the printing presses humming along while praying for the elusive "soft landing". The Fed's Plan to Reshape American Democracy: "One bubble after another" As a privately owned organization the Federal Reserve cannot be expected to operate in the public interest. The Fed's views on policy are primarily shaped by elite opinion, which favors a small group of powerbrokers at the top of the economic food-chain. The Fed's power to manipulate interest rates and increase the money supply, allows it to engage in "social engineering" which merely reinforces its own class interests. This, in fact, is what Jefferson intimated when he warned that if "private banks" were allowed to control the issuance of currency, then they would inevitably "deprive the people of all property until their children wake up homeless on the continent their fathers conquered." That shift in wealth is underway even as we speak. These massive equities bubbles (stock market and housing), which have had such a devastating effect on working class people, are the predictable result of a class-based orthodoxy. They inevitably widen the chasm between rich and poor and strengthen the power of the ruling elite. It is crazy to think that they are merely "accidental." The upcoming recession is the direct result of policies which originated at the Federal Reserve and which were intended to create a crisis. It is a clear attempt to change American society on a structural level by exacerbating the divisions in wealth. The expansion of debt invariably strengthens private ownership and enhances corporate profits. It also weakens democratic institutions and national sovereignty. Democracy cannot long endure when the money supply and interest rates are controlled by privately owned banks. Their behavior is guided by self-interest and profit and is hostile to liberty and the equitable distribution of wealth. The policies of the Federal Reserve are transforming the country in a way that will eventually make democracy in America unworkable. We are becoming a de facto aristocracy and will continue along that path until the "issuing power of currency is taken from the banks and restored to the people, to whom it properly belongs." The Federal Reserve System was established by President Woodrow Wilson in 1913. Wilson bitterly regretted his foolishness from the very onset and said in his book, The New Freedom: "I am a most unhappy man. I have unwittingly ruined my country. A great industrial country is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all of our activities are in the hands of a few men. We have come to be the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government of free opinion, no longer a government of conviction and the vote of the majority, but a government by the opinion and the duress of a small group of dominant men." As millions of people lose their homes and life savings from the crashing of Greenspan's Housing Bubble, we should reconsider Wilson's words and make a concerted effort to dump the Federal Reserve. Mike Whitney lives in Washington state, and can be reached at: fergiewhitney [at] msn.com. --------15 of 15------- Those in the Lesser Evil Party are LEPers. Best keep your distance. LEPers lose fists feet knees spines fingers ears eyes teeth tongues hearts guts minds souls. ------------------------------------------------------------------------------ - David Shove shove001 [at] tc.umn.edu rhymes with clove Progressive Calendar over 2225 subscribers as of 12.19.02 please send all messages in plain text no attachments To GO DIRECTLY to an item, eg --------8 of x-------- do a find on --8
- (no other messages in thread)
Results generated by Tiger Technologies Web hosting using MHonArc.