By Patrick Wood, Editor
Civil unrest
As reported in The Washington Times, Academy Award winner Jon Voight may be the first highly visible entertainment professional to ask the question, “Is Obama trying to start a civil war in America?”
“The real truth is that the Obama administration is professional at bullying, as we have witnessed with ACORN at work during the presidential campaign. It seems to me they are sending down their bullies to create fist fights among average American citizens who don’t want a government-run health care plan forced upon them,” Mr. Voight says. “So I ask again. Is President Obama creating a civil war in our own country?”
Voight was alluding to the incident in St. Louis where imported union thugs beat up a black patriot and otherwise disrupted peaceful protesters who were attending a town hall meeting on Obama’s health care reform plan.
This is what I have noted as the “radical polarization of law enforcement” that is turning our public safety forces into government enforcers. The FBI and Homeland Security are both in this up to their necks, as they legitimize left-wing crazies like the Southern Poverty Law Center. They are pitting left against right and hoping for a fight in order to blame the people on the right.
The Hal Turner expose fits this scenario perfectly. Turner was trained by the FBI to be an agent provocateur to make threats to judges and legislators. Then he is used by the FBI to prove that all conservatives are likely right wing-nuts who capable of domestic terrorism.
I think Voight has it right, and I’m glad to see him speak out publicly.
Mortgage defaults
A significant change is taking place concerning the reason for mortgage defaults. Originally, one could rightly blame lousy sub-prime loans that were doomed to fail no matter what. That wave of defaults has mostly passed.
Today, defaults are due to rising joblessness.
Loans in foreclosure or at least one payment past due has hit an all-time high of 13.16 percent, since the collecting of such statistics were started in 1972. This means that one house in eight is currently in trouble. This doesn’t count any homes that already passed through foreclosure.
The administration’s program to modify bad loans will be completely ineffective with this shift in direction. Unemployment and the resulting lack of income is the problem.
Banking
Frankly, predatory banking disgusts me. Financial Times reports that U.S. banks will earn $38.5 billion this year on overdraft fees, the great majority of which will be soaked from those who can least afford it.
Here’s one really ugly practice. Say you have $175 in the bank. Throughout business hours, the bank receives three claims in the amounts of of $50, $75 and $160, and in that order. Do you think the bank would apply the debits in the order they were received, which would result in a single overdraft fee? Not so. In fact, at the end of the day they will rearrange the order so as to most quickly empty your account, thus leaving the maximum number of checks to bounce. This at least doubles their fees collected, and in some cases can multiply them many times. The use of debit cards exacerbates the problem because people tend to make more and smaller purchases during the day, only to find out that their account was overdrawn by a larger check written days earlier.
A few people have asked me if I have seen the Internet rumor floating around that there will be a bank holiday on Monday. I have traced this down to an 08/21/09 article by Bill Sardi on www.lewrockwell.com, “Days Away From Economic Chaos?”
This article does have some useful facts and charts that explain the condition of banks and the FDIC, but it concludes at the end,
“Now if just a small portion of American bank depositors hear that the FDIC had to tap into the US Treasury for funds, and these depositors feel their banked money is at risk and want to withdraw some of it, the mother of all bank runs could ensue. This could create the day of reckoning that many have predicted. A short banking holiday would have to be declared and who knows what happens from there – troops in the streets, issuance of new currency, martial law?”
This is possible, but I don’t think it is too plausible. For the time being the Feds will not let the FDIC fail, no matter how much money it needs. As the banking crisis unfolds, it will undoubtedly get ugly, but it will be a gradual buildup before a final “snap.”
Having said that, I have always advised that people have enough green cash on hand to carry them for a week or two just in case of an unexpected bank closure. That advice is still good for today.
Market
The expected “b” wave materialized but without much magnitude. Today’s new highs imply that the “c” wave is in play, and that prices may move higher.
The above chart gives some big-picture perspective. After the Primary Wave I low last March, the rally has been steep and persistent, but nevertheless holding to an “A-B-C” corrective type pattern. Since early July, a large wave C has been developing, and within that, a smaller a-b-c pattern. The current wave c up could be the final action for Primary Wave I up.
Market internals are not super-strong, but that does not automatically prevent higher prices. The rally since March is definitely getting “ripe” and will one day be completed. When it does, Primary Wave III down will begin and it should prove to be a very rocky ride to the basement.
While we wait, we watch. This is not a good place to take new positions of any kind, in my opinion. If you have been looking for a good place to sell assets that were locked up in retirement plans, consider doing so, or at least lighten up.
The declining SRL’s above are very orthodox. The rally since early July has broken away from the lower SRL and is moving toward the upper SRL, which currently is about 10,100 straight up. It is entirely plausible that this upper SRL will be the ultimate stopping point for the entire move.
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The sad aspect of the Obama pesidency is Americans — the vast majority, white Americans — are oblivious to the nation’s accelerating downward spiral and unwilling to stop it. They refuse to acknowlege the persons responsible or to bing them to justice.
Since the ‘Gilded Age’ of he late 19th. century, some 1,500 Wealthy Old White Men and their Servants have systematically dismantled this nation’s Democracy. Since the Nixon years, they’ve Looted the Treasury, Robbed the Taxpayer and sent, High Pay Jobs in Manufacturing & Industry oversees. Moreover, they’ve moved their wealth offshore and paid a declining share of Income Taxes. At he same time, they’ve reduced the value of the Dollar and eliminate job-related benefits such as he pensions, health care and worker share of corporate profits.
Sadly, over 75% of hite Americans have sat by and allowed these WOWMs to perpetrate their evil deeds or have actively aided and abetted them. If this nation falls into a Revolutionary Abyss, white American men have only themselves to blame for not protecting this Democracy and the Future for their children. Unfortunately, too many of these men believe hey can some how become members of the WOWM ‘ruling class’. Hence their utter disregard for what is going on around them. Now, because of their self serving greed and arrogance. They’ll all have to get 3 truly deaqdly Swine Flu shots cooked up by the Wealthy who’re mudering America!