OsgoodWisdom

<a href="”>

By Michael B. Marois and William Selway

Dec. 24 (Bloomberg) — California Governor Arnold Schwarzenegger, anticipating a $21 billion state budget deficit, plans to ask President Barack Obama to ease mandates and minimums on social programs to save as much as $8 billion.

The Republican governor plans to seek the relief, according to a California official who asked not to be identified because details haven’t been resolved. Instead of seeking one-time stimulus money or a bailout, the most-populous U.S. state wants the federal government to reduce mandates and waive rules stipulating expenditures on programs such as indigent health care, the official said.

California is among states most affected by the economic recession. It has the lowest credit rating and recorded the nation’s second-highest rate of home foreclosures, trailing only Nevada. Unemployment peaked at 12.5 percent in October amid the loss of 687,700 jobs from the year before, when the jobless figure was 8 percent. Wealth declined as the stock market lost 40 percent of its value in 2008.

“I’ve seen the reports that Governor Schwarzenegger was specifically looking for aid and it’s something that obviously folks at the White House are taking a look at,” White House spokesman Bill Burton said. He commented to reporters on Air Force One today as the president and his family flew to Hawaii for Christmas vacation.

‘No Easy Solutions’

“The problem is that there are no easy solutions left,” said Jean Ross, executive director of the California Budget Project, a Sacramento-based research group concentrating on issues facing the poor. “Where do you go to cut that doesn’t permanently compromise the level of public services that this state needs to remain economically competitive and to have some semblances of a safety net left for vulnerable populations.”

Schwarzenegger and lawmakers worked to close a record $60 billion gap from February through July with $32 billion in spending cuts, $12.5 billion of temporary tax increases, $8 billion of federal stimulus money and more than $6 billion of other one-time fixes.

California’s deficits show how local governments are being forced to chose between raising taxes or cutting more funding for schools, health care and other programs, even as the economy is emerging from the recession that began in December 2007. The nascent recovery has yet to produce any job gains, a drag on states that rely on income and retail sales taxes.

National Picture

Nationally, 35 states and Puerto Rico expect to have $56 billion less next year than they will need to pay for all of their programs, according to the National Conference of State Legislatures. In Nevada, Arizona and New Jersey, the difference amounts to more than one-quarter of their budgets, the conference said. Funds from the $787 billion federal stimulus bill passed in February run out at the end of next year.

Schwarzenegger, 62, will detail his request for help when he delivers his annual State of the State address on Jan. 6 and unveils his budget on Jan. 8, his last chance to reshape California’s fiscal policies before he leaves office in January 2011 after seven years.

The arsenal of one-time accounting maneuvers he and lawmakers have previously used to temporarily paper over parts of the gap — such as accelerating income-tax collections — has been mostly depleted, making efforts to erase the latest $21 billion deficit more difficult.

Struggling to Cut

The state also has struggled to implement cost-cutting measures that were part of the $85 billion spending plan approved in July. Courts blocked part of the budget that cut funding for home care for the disabled and another part that borrowed $800 million from an account that sets aside money for local transportation agencies.

An accounting error means the state has to spend almost $1 billion more on schools than budgeted. Officials also underestimated the cost of health care for the poor by $900 million, and lawmakers failed to pass legislation to realize $1 billion less in anticipated prison spending.

Combined, the state faces a $6.3 billion gap in the current year and another $14.4 billion in the next.

“We’ve already gone after the low-hanging fruit and the medium-hanging fruit and the higher-hanging fruit, so it’s going to get tougher and tougher now to balance the budget,” Schwarzenegger told reporters in November.

The governor has said he won’t increase taxes again to close the gap. That means more cuts, complicated by mandated expenditures for programs such as Medicaid health-care for low- income residents. With reductions already made to programs for the poor, additional trims jeopardize those federal funds.

Biggest Issuer

“In terms of programmatic reductions, we have to keep an eye on the fact that in some areas — be it education or health and human services — if you run afoul of federal maintenance of efforts requirements, you risk the loss of federal dollars,” said Schwarzenegger’s budget spokesman, H.D. Palmer. “As tough as 2009, these factors are going to make 2010 even more challenging.”

The state was the biggest bond issuer this year, selling $36 billion of debt. It may come to market with at least $5 billion more of public-works obligations in the fiscal year that begins July 1, state Treasurer Bill Lockyer said.

Moody’s Rating

California’s general-obligation debt rating from Moody’s Investors Service is Baa1, the company’s eighth-highest investment grade, and A from Standard & Poor’s, the sixth- highest. By comparison, Greece, the poorest member of the 16- nation euro region, is rated two steps higher at A2 by Moody’s and two lower at BBB+ by S&P.

“California, which is more than three times bigger than Greece, is running out of money,” T.J. Marta, chief market strategist at Marta On The Markets LLC, a financial-research firm in Scotch Plains, New Jersey, told Bloomberg Radio today.

A Standard & Poor’s/Investortools index of California state and local debt has returned 13.1 percent this year through Dec. 23, about 1.5 percentage points less than the national average.

Investors have demanded higher interest rates from California, compared with other borrowers. The state’s 10-year bonds yielded 4.6 percent by the end of last week, 1.51 percentage points more than top-rated municipal borrowers, according to Bloomberg indexes. Three months ago, that difference was as little as 1.06 percentage points. Greek 10- year bonds yield 5.72 percent, Ireland’s 4.78 percent and Spain’s 3.93 percent.

In California, “it’s never a quick budget, it’s always prolonged and when it’s prolonged the headlines get worse and spreads widen,” said Peter Hayes, who oversees $115 billion in municipal bonds for New York-based BlackRock Inc., the world’s largest asset manager.

Opposition to Cuts

Democrats, who control both chambers of the Legislature, are expected to oppose wholesale cuts to health and welfare programs. Such resistance, along with Republican opposition to tax increases, will be exacerbated as election-year politics heightens the partisan divide. Half of the state’s 120 Assembly and Senate seats go before voters in November.

Budgets and tax increases in California must be approved by a two-thirds majority, and Democrats are two votes short in the Senate and six in the Assembly.

“When you are looking at a deficit in the size we have, everything needs to be on the table,” Assembly Speaker-Elect John Perez, a Democrat from Los Angeles, told reporters on Dec. 11. “The reality is that the likelihood of passing taxes in this environment is slim, but everything has to be on the table. We have to come up with a resolution to this budget crisis that asks everyone to sacrifice, not just the people that are in the greatest need.”

To contact the reporters on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net; William Selway in San Francisco at wselway@bloomberg.net

By COREY BOLES and MARTIN VAUGHAN

WASHINGTON — Congress’s move to lift the federal government’s borrowing limit by $290 billion — enough to last about two months — sets the stage for a contentious debate early next year on government spending.

The Senate on Thursday approved the increase in a 60-39 vote that was largely along party lines. The House passed the measure last week.

The additional $290 billion in borrowing ability lifts the total public debt the federal government can hold to about $12.4 trillion and will allow the government to keep borrowing through February.

Treasury officials had warned that the current limit of $12.1 trillion was close to being breached. Congressional leaders scrambled to raise the ceiling before they began the holiday recess.

An increase in the debt ceiling is largely symbolic as it represents money already spent by the U.S. government. In the unlikely scenario where it was ever breached, however, there would be significant consequences for the financial markets. The federal government would be forced to default on its obligations, and could lose its top credit rating, having to pay much higher interest rates as a result.

Just two weeks ago, several senior Democratic lawmakers had said they were close to reaching an agreement on an increase in the debt limit of $1.8 trillion to $1.9 trillion, enough to support the federal government’s borrowing needs through 2010. That would have avoided the need to take up the issue again next year, when many Democratic lawmakers are expected to face tough re-election battles.

But when it became apparent there wouldn’t be sufficient support in the Senate for that, Democrats scaled back their ambitions and moved forward with the more modest increase.

That leaves Congress facing another debate on the issue before the end of February. Senate Majority Leader Harry Reid (D., Nev.) said this week that would be the first order of business the Senate deals with when lawmakers return Jan. 19.

Republicans are hoping to tap into the public’s anxiety about the federal government’s finances to make gains in the polls next November.

When the Senate takes up the debt issue in January, Republicans plan to hold votes on a number of measures that would seek to restrain the federal government’s ability to spend. These include discretionary spending caps, a move to strip out already-committed funding from the fiscal 2010 budget and the creation of a commission to investigate longer-term solutions to the debt issue.
—Patrick Yoest contributed to this article.

Write to Corey Boles at corey.boles@dowjones.com and Martin Vaughan at martin.vaughan@dowjones.com

Dear Fellow Arizonan,

We face a state fiscal crisis of unparalleled dimension – one that is going to sweep over every single person in this state as well as every business and every family.

That is why I held an emergency cabinet meeting yesterday morning where I outlined for our state’s elected leaders and business leaders the ills our state faces. As I told them yesterday, we ARE faced with some of the worst days in our 97-year history.

We can debate how we got here, but we CANNOT remain paralyzed in our efforts to address the situation. We must set aside partisan politics and face the problem head on.

We must accept that we ARE where we ARE.

So here’s the TRUTH:
· The state has a budget deficit for the current fiscal year of $1.5 billion.
· Next fiscal year, 2011 — a budget year that begins in just six months — is even worse. Next year’s budget deficit stands at $3.4 billion. As of today — right now, that MUST change.

Even though my Administration has already cut $1 Billion in state government spending, we must redouble our efforts to create a leaner, more fiscally responsible Arizona.

I have asked all 90 members in the State Legislature to cooperate by submitting a reasonable plan. On behalf of citizens across our state, I expect them to become active participants in the budget process.

This problem did not happen overnight.
· Five years of spending nearly doubled state government.
· The economic recession has reduced state revenues by almost 40 percent in just 3 years.
· Population growth in school children, university students, health care and welfare populations and inmates in our state prisons has fundamentally ruled out simplistic solutions like rolling the state budget back to levels from five, six, or more years ago.
· Federal and voter mandates prevent us from touching nearly two-thirds of the state budget.
· And procrastination, denial, and lack of will have allowed these problems to fester.

We must solve these problems and we must solve them now. More than calling for cooperation, today I had state government implement various emergency measures meant to ensure Arizona’s fiscal solvency. Among them:
· I ordered the Arizona Department of Corrections to return to the custody of U.S. Immigration and Customs Enforcement (“ICE”) — as soon as possible — all non-violent criminal aliens as is allowed under existing law. These inmates are the responsibility of the federal government (as is securing our border with Mexico). Arizona should not have to bear this cost.
· I am restating my Arizonans-only directives to state agencies to ensure that public benefits are provided only to those who are legally in this country and who reside in this state.
· Effective immediately, I have ordered all state agencies who benefits to citizens to implement means testing and sliding fee schedules. While the government safety net must stay in place, we need to secure help only for the neediest among us.

These measures, though they may represent tough news for many Arizonans, are necessary to keep the state moving forward. Every Arizonan must understand why this state is suffering.

That is why I invite you to take a moment now to visit my Web site to view the presentation I presented today to the state’s elected leaders and business leaders. After viewing this presentation, you will see the desperate times our state faces.

You will also understand why we MUST ACT NOW not as Democrats, Republicans or Independents but as Arizonans.

We owe it to the citizens of this state — our children and grandchildren — to adopt and approve a solution.

Sincerely,

Jan Brewer?
Governor

P.S. Simply go to www.JanBrewer.com/Crisis to view or download your personal copy of the presentation I gave yesterday.

ct. 14, 2009, 10:49 a.m. EDT · Recommend (7) · Post:
Letter of the day? W
Housing could take double dip down in 2010
Explore related topics
Banks
Story Comments Screener (214)
Alert Email Print Share

By Steve Kerch, MarketWatch

SAN DIEGO (MarketWatch) — Despite signs of stabilization at the end of 2009, next year could prove treacherous for the housing and mortgage markets as a variety of woes could rekindle the falloff of the last two years, according to mortgage-industry veterans speaking at the Mortgage Bankers Association annual convention here.

“I’m a firm prophet of the ‘W’ shaped recovery. Housing is going to go down again in the first quarter of 2010,” said Steve Horne, CEO of Wingspan Portfolio Advisors, a firm that facilitates loan modifications. “The real healing won’t begin until all these nonperforming loans start trading in earnest, until we get these borrowers back on their feet.”
Countrywide’s political loans

Rep. Darrell Issa (R-Cali) reports on the Countrywide loan scandal.

David Lowman, CEO of Chase Home Lending, also thinks the mortgage market could run into trouble early next year, especially if the Federal Reserve ends its purchases of mortgage-backed securities, a strategy that has artificially supported liquidity and kept mortgage rates at historic lows.

“A lot does depend on how long the government keeps its buying up,” he said. “Rates are at all-time lows, but once the buying stops we’re going to come to a pretty hard stop. We’re likely to see a much smaller mortgage market after the second quarter and later in 2010.”

“We still have a crisis in the number of people who can’t pay their mortgage and we haven’t seen the peak of that yet. It’s going to weigh on us for several years,” he said.

The official economic forecast from the MBA isn’t so gloomy. Jay Brinkmann, the trade group’s chief economist, told convention goers Wednesday that sales of both new and existing homes will rebound strongly in 2010 as mortgage rates remain relatively low, although mortgage originations will fall as refinancing activity drops by more than 40%.

“Housing starts will be up, but they will still only be half of what they were at the peak in 2007,” he said. “And sales will be up, but they will remain concentrated in the lower end of the market. There are still strains on the McMansion market.”

Despite the uncertainty of what will happen when the Fed pulls its support from the mortgage-securities market, Brinkmann said mortgage rates should still be relatively low in 2010, gradually moving up to just over 5 1/2 % from just under 5% today.

“There are some green shoots — fewer houses on the market, rising sales and stable prices in some markets. But the environment is fragile right now,” said Barbara Desoer, president of Bank of America Home Loans and Insurance.

Among the other issues the mortgage industry still must wrestle with: the uncertain fate of government-sponsored mortgage agencies Fannie Mae and Freddie Mac, pending regulatory changes that are still under debate and a growing unease over the soundness of the Federal Housing Authority, which has come to dominate the mortgage-origination market in the wake of the financial crisis.

“There is liquidity on the sidelines, but there is so much fear out there,” said Daniel Crockett, CEO of Franklin American Mortgage, a Franklin, Tenn.-based mortgage banker that operates in 48 states. “It’s going to be a couple of years of a really tough environment.”

The bigger concern may be unemployment, which Brinkmann predicts will hit 10.2% by mid-2010. The continued bad news on the job front is sure to push delinquencies and foreclosures to new records next year.

“We’re just getting into a lot of prime-mortgage resets, so we’re a long way from the bottom. For short sales we’re looking at another two or three years of strong activity,” said Jim Satterwhite, chief operating officer of National Quick Sale, a Jacksonville, Fla.-based company that negotiates short sales on homes that are valued less than what they are mortgaged for.

“Some markets have seen better price stability, but they are not going up yet. But it will still be two or three more years before housing even starts to appreciate in some other markets,” he said.

Steve Kerch is assistant managing editor and personal finance editor of MarketWatch in Chicago.

http://finance.yahoo.com/tech-ticker/article/354810/Inflation-or-Deflation-%22It%27s-Definitely-Deflation%22-Mish-Says

Home values expected to fall 10% nationally
Unemployment and tight credit hinder recovery of market
By Roger Showley
Union-Tribune Staff Writer

2:00 a.m. October 13, 2009
David H. Stevens, head of the Federal Housing Administration, listened during a Mortgage Bankers Association panel discussion at the convention center yesterday. – K.C. Alfred / Union-Tribune
The Mortgage Bankers Association held a panel discussion. Some housing markets are expected to do better than others.

The Mortgage Bankers Association held a panel discussion. Some housing markets are expected to do better than others.

The nation’s mortgage bankers painted a short-term gloomy picture of the housing market yesterday, even as they described steps they are taking to revive the home lending industry.

David H. Stevens, head of the Federal Housing Administration, told a panel at the Mortgage Bankers Association convention at the San Diego Convention Center that all signs point to a further 10 percent drop in home values by the first quarter of next year.

Panel moderator Michael D. Berman, chief executive of Boston-based CWCapital, followed up in an interview to say the 10 percent prediction applies nationally but some markets will likely do better than others.

“I think we’re approaching stability,” Berman said.

Charles E. Haldeman Jr., CEO of Freddie Mac, which buys mortgages from lenders and sells them to investors, said housing’s upturn will depend on an improvement in employment.

“I’ll think we’ll have to deal with that issue for quite a considerable length of time,” he said.

Many economists believe unemployment will continue to grow until next year, even if the recession is ending.

It’s been just over a year since the nation’s lending industry virtually ground to a halt in the wake of the collapse of Lehman Brothers. The federal government stepped in with hundreds of billions of dollars to support the banking industry and has since tried various approaches to jump-start lending.

Dean Schultz, president and CEO of the Federal Home Loan Bank of San Francisco, likened the lenders’ plight to someone afraid of drinking poisoned water.

“It’s a very difficult market environment,” said Edward J. DeMarco, acting director of the Federal Housing Finance Agency.

Also giving their perspective were Michael J. Williams, president and CEO of Fannie Mae, and Stephen Ledbetter, head of Ginnie Mae, two other government-sponsored enterprises that buy loans and package them as securities to sell to investors, thus freeing up funds for new loans.

Ledbetter noted that three years ago, some industry analysts said the FHA and Ginnie Mae were no longer needed in housing finance. But since last year’s financial meltdown, they have stepped in to insure loans that lenders would otherwise not make.

Meanwhile, Fannie Mae and Freddie Mac were put under government conservatorships because their massive losses threatened to disrupt the financial housing market.

DeMarco’s agency oversees the two companies. Their chiefs, Haldeman and Williams, said they are taking steps to strengthen their operations, such as hiring risk managers and replacing top executives.

On an earlier panel, experts reviewed the various steps under way to help homeowners avoid foreclosure.

Laurie Anne Maggiano, policy director of the Treasury Department’s homeownership preservation program, said the initial participants in the Obama administration’s loan modification program will get five rather than three months to show they can handle lower monthly payments.

She said a streamlined process, now going into effect, should make it easier for more distressed owners to take advantage of the program that offers incentives to lenders, servicers and borrowers to avoid foreclosure.

So far, Maggiano said, almost 2.5 million borrowers have asked about modifying their loans, 758,000 are in the process of applying and about 487,000 are in the trial period. A few thousand have succeeded in converting their trial modifications to permanent loan changes.

Union-Tribune

Roger Showley: (619) 293-1286;

Dangerous Unintended Consequences

by Martin D. Weiss, Ph.D. 10-12-09
Bernanke and Geithner

Martin here with an urgent update on the next phase of this crisis …

Fed Chairman Bernanke and Treasury Secretary Geithner are in for a rude awakening.

Even as they declare “victory” in their battle against the debt disaster on Wall Street, they face defeat in the war against four dangerous, unintended consequences on Main Street:

Dangerous Consequence #1
Fed Rewarding High-Roller Gamblers,
While Punishing Prudent U.S. Savers!

Bernanke promises he’ll keep official interest rates near zero indefinitely, vows to print as much paper money as needed, and leaves the distinct impression that he won’t change course until hell freezes over.

In a nutshell, he isn’t just following a traditional easy-money policy. He’s pushing a free-money policy!

For the world’s high-rolling speculators, this is like manna from heaven.

They borrow U.S. dollars on the cheap. And then they buy the highest yielding investments they can lay their hands on — including junk bonds and even old, discarded subprime mortgages.

But for millions of American households pinching pennies and trying to rebuild their ruined finances, it’s a direct blow to the gut.

Indeed, American savers are finding that bank CD rates are ridiculously low. They’re finding that rates on money market funds are equally bad.
Bernanke and Geithner

And for those seeking the extra safety that only 3-month Treasury bills can provide, the punishment is the harshest of all:

The Fed’s free-money policy has driven down the 3-month Treasury-bill rate from a monthly average of 5 percent in early 2007 to a meager 0.12 percent last month.

Worse, the Fed’s policy has kept the 3-month T-bill rate under one percent for a full year, with the rate averaging less than a quarter percent during 10 of the last 12 months.

Bottom line: Right now, $1,000 invested in a 3-month Treasury bill yields a meager $1.20 in yearly interest. At that rate, just to match the 5 percent interest you could have earned on T-bills in early 2007, you’d have to leave your money sitting there for 42 years! And if you wanted to match the generous 16 percent interest available in 1981, you’d need to let it sit for 135 years.

U.S. savers are obviously getting shafted.

Dangerous Consequence #2
U.S. Treasury Gobbling Up Available Credit,
Crowding Out Nearly All U.S. Businesses!

I gave you all the gory details one week ago. But they can have such a great impact on every aspect of your finances, they bear repeating:

Due to giant bailouts and out-of-control federal deficits, the U.S. Treasury is now borrowing money at the fastest rate of all time, hogging nearly all available supplies of credit. Meanwhile, American businesses and average consumers are getting shut out — or even shoved out — of the credit markets.

Specifically …

In the first half of this year, the Treasury has stepped up its pace of borrowing to annual rates of $1.4 trillion in the first quarter and $1.9 trillion in the second quarter. That’s 3.5 times and six times more than last year’s pace, respectively.

Meanwhile, businesses are getting crumbs — or less: Last year, banks provided new credit at the annual pace of $472.4 billion in the first quarter and $86.7 billion in the second. This year, on a net basis, they’re not providing any credit whatsoever. In fact, they’re actually liquidating loans at the rate of $857.2 billion in the first quarter and $931.3 billion in the second.

Ditto for mortgages. Last year, mortgages were being created at the annual clip of $522.5 billion and $124 billion in the first and second quarters, respectively. This year, they’ve been liquidated at an annual pace of $39.3 billion in the first quarter and $239.5 billion in the second.

For consumers to borrow on credit cards and with other consumer loans is even tougher. Last year, folks were able to add to their consumer credit at annual rates of $115 billion and $105 billion in the first two quarters. This year, in contrast, they’ve been forced to cut down their credit balances at annual rates of $95.3 billion in the first quarter and $166.8 billion in the second quarter.

Clearly, consumers, small businesses, and even larger businesses are also getting shafted.

Dangerous Consequence #3
Wall Street Traders Reap Gigantic Rewards;
Average Workers Face Worst U.S. Job
Market Ever Recorded!

According to the U.S. Comptroller of the Currency, the biggest single high-stakes derivatives gambler on Wall Street is Goldman Sachs:

For every dollar it has in capital, Goldman Sachs is risking a whopping $9.21 on possible defaults by its trading partners, or more than TRIPLE the risk being assumed by the larger high-rolling champion JPMorgan Chase.

So it should come as no surprise that, with the U.S. Federal Reserve virtually guaranteeing a Garden-of-Eden financial environment for banks, Goldman has hit the jackpot this year: The bank has accumulated a bonus pool of an estimated $16 billion to dish out to an exclusive group of its heavy hitters.

That’s enough to cover a $5,000 bonus check for each and every household living in Los Angeles, Chicago, San Francisco, and Detroit.

Meanwhile, all across the USA, with small and medium-sized businesses unable to get credit or hire …

* Long-term joblessness has hit the highest level in at least a half century: The share of the unemployed who were out of work for at least six months reached 35.6 percent in September, the most since the U.S. Labor Department began keeping statistics in 1948.

* More than 5.4 million people have been unemployed for at least 27 weeks, with 1.3 million expected to exhaust their benefits by the end of this year.

* 15 million unemployed Americans are competing for 3 million available jobs, the worst on record.

* More than 7.2 million jobs have been lost in the past 21 months. In contrast, in the 30 months of the past recession, only 2.7 million jobs were lost.

* The official unemployment rate, at 9.8 percent, is just the tip of the iceberg. The true unemployment rate, including part-time workers who can’t find full-time jobs and workers who have given up looking, is 17 percent according to the U.S. Labor Department and 21.4 percent according to Shadow Government Statistics.

But this is not just about the privileged few getting an oversized piece of the pie while most others get crumbs. Quite the contrary, it’s a crisis that impacts us ALL, regardless of income …

Dangerous Consequence #4
The Debt Crisis of 2008 Has
Now Been Transformed Into
The Dollar Crisis of 2009-2010!

With Bernanke and Geithner galloping ahead on all fronts — free money, bailout madness, and the greatest Treasury borrowing of all time — they have jeopardized our entire future in a way that’s never been done before.

Result: What was once strictly a crisis of Wall Street has now become a crisis for all Americans. What was once a near-term threat to financial markets is now becoming a long-term threat to the entire nation.

A growing chorus of central banks and international institutions are proposing to replace the dollar as the world’s primary reserve currency.

Foreign oil producers are threatening to abandon the dollar as the medium of exchange.

And the tidal wave has barely begun.

My recommendation: Despite their low yields, don’t let anything lure you away from the ultimate safety of Treasury bills. Plus, be sure to protect yourself from this new phase of the crisis with investments that almost invariably rise when the dollar declines.

Good luck and God bless!

Martin

Celente – People Should Brace
For ‘Greatest Depression’
2012 Forecast – Food Riots, Ghost
Malls, Mob Rule, Terror
By Bob Unruh
WorldNetDaily Exclusive
10-10-9

A trends forecaster says the current economic “rebound” from last winter’s Wall Street collapse of banks, insurance companies and automobile manufacturers is an artificial blip created by ‘phantom money printed out of thin air backed by nothing.”

And Gerald Celente of TrendsResearch.com, says people right now should be bracing for “the greatest recession” which will hit worldwide and will mark the “decline of empire America.” Crop failures could be among the minor concerns.

“Here we are in 2012. Food riots, tax protests, farmer rebellions, student revolts, squatter diggins, homeless uprisings, tent cities, ghost malls, general strikes, bossnappings, kidnappings, industrial saboteurs, gang warfare, mob rule, terror,” he writes for a quarterly publication that is available through subscription on his website.

He also talked about his forecasts with Greg Corombos of Radio America/WND in an interview that has been posted online.

The recent surge in Wall Street indexes back to near the 10,000 level, still far below the 14,000 prior to the crash, should be no reassurance for anyone, he said.

“There’s no recovery. This is merely a cover-up,” he said. “The market crashed in March of 2009 and around the world they papered over the damage from the collapse with phantom money printed out of thin air backed by nothing,” he said.

This is “much bigger” than an economic collapse, he said. “This is the decline of empire America.”

Find out what you can do to be more prepared

“Look what’s happened to the dollar,” he warned. “Gold prices are surging forward. That’s the evidence. The rest that’s coming from Washington and Wall Street is rhetoric.”

“This is the beginning of the greatest depression. We’re telling our readers to take pro-active measures in anticipation of much worse to come,” he said.

USA Today says Celente “has a knack for getting the zeitgeist right,” and CNBC says, “The man knows what he’s talking about.”

The Wall Street Jounral has said, “Those who take their predictions seriously consider the Trends Research Institute.”

He said during the Radio America/WND interview that retail sales this coming Christmas season will be the “real nail in the economic coffin.”

“The second American revolution has already begun; it just hasn’t been announced yet by the mainstream media,” he said. “Anybody waiting for hope to show up at the door with a big bag full of money is going to be in for a shock.”

Tim Barello in the Examiner noted that since 1980 Celente has made at least 40 accurate predictions about major world events, such as the 1987 stock market crash.

“Throughout the 1990’s, many other forecasts came true, including the collapse of the Soviet Union, surges in global terrorism, the popularity of spiritual and new age philosophies, public backlash against globalization, upsurges in online shopping, and the 1997 Asian financial crisis, to name a select few,” he wrote.

Now comes his forecast for a global depression and for the United States, “Obamageddon.”

“We want to make it very clear that the policies leading to the decline of ‘Empire America’ have been long in the making,” Celente told Barello.

“What has happened in the Obama administration is that they have taken policies far beyond even what Bush took with the TARP program; for example, with his stimulus package, with the buyouts, with the bailouts, the rescue packages, these are unprecedented in American history.

“Never before has so much phantom money been printed out of thin air, backed by nothing, producing practically nothing,” Celente continued.

“You don’t even have to be a student of history to know the outcome of this. All you have to do is have your eyes open, and start thinking for yourself.”

In his conversation with the Examiner, Celente warned with the “bubble” bursts, U.S. taxpayers will be slammed because, unlike during the dot-com bubble, the stock market bubble and the real estate bubble, they are stockholders in a long list of major companies.

He forecasts the possibility of a civil war, and says if people want to see what Main Street America will look like, they should “drive around Detroit. Look at all the blown out houses and empty neighborhoods. Look at the violence that’s increasing. Look at the types of heinous crimes being committed by people ­ some blowing their whole families away”