Larouche, on The Dollar, Jobs, and Healthcare

The video comes from the Larouche political action committee.

Recession IS Ending, DOW 10,000 ...Right?

We've been getting e-mails and voice mails all asking: "how can you print that the recession is far from over, when the DOW has hit 10,000?

Larry Levin says it best in his daily comments:

Dow 10,000! Uh Really?

This has happened before, not too long ago in fact.  Each time I turned the channel from one financial station to the other yesterday and this afternoon, I thought I was watching a scandalous XXX movie.  I kept hearing, "Oh Yes!...OH GOD, OH YES!  That's the stuff 'Big Ben and Timmah'...you know how I like it.  Oh my GOD!!"  Was I hearing an audio replay of Mr. Spitzer's liaisons with his high priced call-girls?  Nope.  I was once again witnessing the on-air hosts experiencing multiple DowGasms.

After all, isn't Dow 10,000 exciting?  Dow 10,000?  Uh, really?  Not so much.  As usual, the so-called financial experts are not giving you the whole story.  And why would they?  The truth sucks.

The truth lies with the value of the US dollar.  Another great illustration of the amazing loss of purchasing power by the US public are the recent ignorant statements about the Dow at 10,000.  While in absolute terms the Dow may cross whatever the Fed thinks is a sufficient mark before its quantitative easing begins to taper off (Dow crosses 10k just as Treasury purchases expire), the truth is that over the past 10 years (the first time the DJIA was at 10,000) the dollar has lost 25% of its value...TWENTY FIVE percent!

On a real basis (not nominal) the Dow at 10,000 ten years ago is equivalent to about 7,500 today!  In other words, not only have we had a lost decade for all those who focus on the absolute flatness of the DJIA, but it is also a decade where the consumer has lost 25% of its purchasing power from the perspective of stocks!  You won't hear this fact on TV.

You don't believe me?  The value of the US dollar only effects high-flying world travelers you say?  Huh - that's odd.  Then why did President Obama give a special $15-billion "bailout" to the elderly this past February?  It was part of the "spendulus bill" in case you forgot.  By definition they're already retired so they haven't lost their employment.  They are losing their purchasing power, like you, so the Pres stepped in for a lil' bailout.

What else should we expect with trillions upon trillions of new dollars flooding into the system via the Fed's printing machine?  It makes the money supply that was available before the money & credit that was created out of thin air worth less than other wise would be.

President Obama, Helicopter-Ben at the Fed, and Tax-Cheatin-Timmy at the Treasury all apparently want the U.S. currency to be used as Kleenex and toilet paper.

With such a great reaction by the media to Dow 10,000, Big Ben and Tax-Cheatin-Timmy must be receiving many messages: "Hey big boy, voulez vous coucher avec moi?"

Trade well and follow the trend, not the so-called "experts."

Do Banks Make Money On Foreclosures? JPMorganChase Does!

Consider this - JPM Chase bought WAMU in September of 2008 for all of $1.9 billion dollars. For that they got a bank with almost $310 billion in assets, $188 billion of it bank deposits. Now Chase will tell you that the deal wasn’t that great as they had to absorb a hemorrhaging mortgage portfolio of $176 billion that they immediately wrote down by $31 billion. That’s true, but hides what really is going on.

If you ignore all the other debt and assets, Chase got $176 billion in home loans for $1.9 billion. That’s just over 1% of face value. Assuming an average loan balance of around $300,000, that’s almost 600,000 mortgages and corresponding homes. That means they paid an average of only $3,000 for each of those loans. Even if they foreclose on the ENTIRE portfolio, do you think they can make money by reselling houses they got for $3,000 each? -Loan Survivor

The Recession Has Ended They Say Part 1

Fact: US foreclosures jumped to an all-time high of 937,840 in the third quarter. According to RealtyTrac that's a 23% rise from the same time last year.

Fact: According to the Mortgage Brokers Association, 58% of the foreclosure starts are now in Prime Loans, not subprime loans.

Fact: 46% of Option Arms are currently 30 days past due. An Option Arm is A monthly adjusting adjustable-rate mortgage (ARM) which allows the borrower to choose between several monthly payment options.

The bottom line is that far too many Americas, not simply those with low credit scores, have borrowed more money then they are realistically capable of repaying. The credit boom was created by initially low adjustable rate mortgages, interest only, or negative amortization loans, and an appreciating real estate market that allowed homeowners to extract equity to help make mortgage payments. Now that real estate prices have stopped rising, and mortgage payments are resetting higher, borrowers can no longer “afford” to make these payments.

According to the Financial Times, JP Morgan's U.S. credit card division lost $700 million in the quarter, it wrote off $7 billion in noncollectable consumer loans. So how is it that they are making profits? JP Morgan took bailout money, paid bonuses, then played the stock market before paying some of the bailout money back which was the profits it made in the market. They also got some multi-billion worth of mortgages for a song and then wrote down some $31 billion of that which means that their profit was a sure thing from the get-go. Yet despite the bailout, JP Morgan is not lending much of anything to spur the U.S. economy. It made more profits recently trading the stock market instead.