XIAM007 - Making Unique Observations in a Very Cluttered World: 06/14/11

Tuesday, 14 June 2011

It's official: The housing crisis that began in 2006 is now worse than the Great Depression -

It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.

Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

The news comes as the Federal Reserve considers whether the economy has regained enough strength to stand on its own and as unemployment remains at a still-elevated 9.1 percent, throwing into question whether the recovery is real.

"The sharp fall in house prices in the first quarter provided further confirmation that this housing crash has been larger and faster than the one during the Great Depression," Paul Dales, senior economist at Capital Economics in Toronto, wrote in research for clients.

According to Case-Shiller, which provides the most closely followed housing industry data, prices dropped 1.9 percent in the first quarter, a move that the firm interpreted as a clear double dip in prices.

Moreover, Dales said prices likely have not completed their downturn.

"The only comfort is that the latest monthly data show that towards the end of the first quarter prices started to fall at a more modest rate," he said. "Nonetheless, prices are likely to fall by a further 3 percent this year, resulting in a 5 percent drop over the year as a whole."

Prices continue to tumble despite affordability, which by most conventional metrics is near historic highs.

Read more - http://www.cnbc.com/id/43395857

Prisoners earning $0.23 / hour in U.S. federal prisons are manufacturing high-tech electronic components for missiles -

Prisoners earning 23 cents an hour in U.S. federal prisons are manufacturing high-tech electronic components for Patriot Advanced Capability 3 missiles, launchers for TOW (Tube-launched, Optically tracked, Wire-guided) anti-tank missiles, and other guided missile systems. A March article by journalist and financial researcher Justin Rohrlich of World in Review is worth a closer look at the full implications of this ominous development. (minyanville.com)

The expanding use of prison industries, which pay slave wages, as a way to increase profits for giant military corporations is a frontal attack on the rights of all workers.

Prison labor — with no union protection, overtime pay, vacation days, pensions, benefits, health and safety protection, or Social Security withholding — also makes complex components for McDonnell Douglas/Boeing’s F-15 fighter aircraft, the General Dynamics/Lockheed Martin F-16, and Bell/Textron’s Cobra helicopter. Prison labor produces night-vision goggles, body armor, camouflage uniforms, radio and communication devices, and lighting systems and components for 30-mm to 300-mm battleship anti-aircraft guns, along with land mine sweepers and electro-optical equipment for the BAE Systems Bradley Fighting Vehicle’s laser rangefinder. Prisoners recycle toxic electronic equipment and overhaul military vehicles.

Labor in federal prisons is contracted out by UNICOR, previously known as Federal Prison Industries, a quasi-public, for-profit corporation run by the Bureau of Prisons. In 14 prison factories, more than 3,000 prisoners manufacture electronic equipment for land, sea and airborne communication. UNICOR is now the U.S. government’s 39th largest contractor, with 110 factories at 79 federal penitentiaries.

The majority of UNICOR’s products and services are on contract to orders from the Department of Defense. Giant multinational corporations purchase parts assembled at some of the lowest labor rates in the world, then resell the finished weapons components at the highest rates of profit. For example, Lockheed Martin and Raytheon Corporation subcontract components, then assemble and sell advanced weapons systems to the Pentagon.

Increased profits, unhealthy workplaces

However, the Pentagon is not the only buyer. U.S. corporations are the world’s largest arms dealers, while weapons and aircraft are the largest U.S. export. The U.S. State Department, Department of Defense and diplomats pressure NATO members and dependent countries around the world into multibillion-dollar weapons purchases that generate further corporate profits, often leaving many countries mired in enormous debt.

But the fact that the capitalist state has found yet another way to drastically undercut union workers’ wages and ensure still higher profits to military corporations — whose weapons wreak such havoc around the world — is an ominous development.

According to CNN Money, the U.S. highly skilled and well-paid “aerospace workforce has shrunk by 40 percent in the past 20 years. Like many other industries, the defense sector has been quietly outsourcing production (and jobs) to cheaper labor markets overseas.” (Feb. 24) It seems that with prison labor, these jobs are also being outsourced domestically.

Read more - http://www.workers.org/2011/us/pentagon_0609/

Anthony Weiner Doll Released by Action Figure Company - offering "standard" doll and the anatomically correct doll -

An online action figure company has jumped on the Anthony Weiner sexting scandal bandwagon with a doll of the New York congressman in two versions: censored and uncensored.

HeroBuilders.com of Oxford, Conn., is offering the "standard" doll for $39.95 and the anatomically correct "for adults only" version for an extra $10.

Both are dressed in a gym shirt and shorts with a label that reads "Tweet This."

Weiner has acknowledged exchanging messages and photos that ranged from sexually suggestive to explicit with several women online.

Congress on Monday approved a two-week leave of absence for Weiner while he seeks treatment.

The action figure company also makes a plastic Sarah Palin, Barack and Michelle Obama and other talk-of-the-town figures.

Obama on Monday said he'd resign if he were in Weiner's shoes.

Retail Sales Fall in May for First Time in 11 Months - Consumers are struggling with high gasoline prices and no hiring -

Consumers spent less on cars in May, sending retail sales down for the first time in nearly a year.

The Commerce Department says retail sales dropped 0.2 percent last month. It was the first decline after 10 straight increases.

A cutback on incentives and supply disruptions stemming from the Japan crises pushed auto sales down 2.9 percent. It was the biggest setback for the industry in three years. When excluding autos, retail sales rose 0.3 percent.

The slump in retail sales was the latest report signaling that the economy lost momentum in May. Consumers are struggling to deal with high gasoline prices and a slowdown in hiring. While the surge in gas prices eased in May, pump prices are still significantly higher than a year ago.

1.9 Million Fewer Americans Have Jobs Today Than When Obama Signed Stimulus -

Twenty-eight months after Congress passed President Obama’s signature economic stimulus law, and nearly one year after he declared the summer of 2010 to be “Recovery Summer,” 1.9 million fewer people are employed.

In February 2009, the Bureau of Labor Statistics (BLS) reported that 141.7 million people were employed. By the end of May 2011 – the last month for which data are available – that number had fallen to 139.8 million, a difference of 1.9 million.

While the number of people with jobs has increased slightly from its low point during the recession – 137.9 million in December 2009 – those 1.9 million jobs have been lost despite $800 billion in stimulus spending.

This does not mean that the economy is not creating jobs, but rather that it is not creating jobs fast enough to keep up with a combination of layoffs and people entering the job market for the first time.

In a Washington Post op-ed, former White House chief economist Larry Summers noted that the percentage of the population that has a job has not improved, even though the economy is technically in recovery.

“From the first quarter of 2006 to the first quarter of 2011, the U.S. economy’s growth rate averaged less than 1 percent a year,” Summers wrote. “The fraction of the population working remains almost exactly at its recession trough, and recent reports suggest that growth is slowing.”

The fraction of the population with a job has in fact fallen in the 28 months since Congress passed the stimulus – down from 60.3 percent in February 2009 to 58.4 percent in May 2011.

The economy cannot create jobs fast enough to keep pace with layoffs and recent high school and college graduates seeking employment. If the trend continues, as Summers notes may happen, the economy will suffer further in the future as college graduates delay entry into the labor force, reducing their lifetime productivity.

“Beyond the lack of jobs and incomes, an economy producing below its potential for a prolonged interval sacrifices its future,” argued Summers. “Huge numbers of new college graduates are moving back in with their parents this month because they have no job or means of support.”

Is Gold in Fort Knox Real? Ron Paul Wants to Know - Or is it replaced with metal bars that are only painted gold? -

Giving legitimacy to an Internet conspiracy theory that the gold in Fort Knox is fake, the iconoclast Republican congressman from Texas has asked adminstration officials to audit the purity of the nation's 700,000 gold bars held in Fort Knox, according to an internal Treasury document obtained by CNBC. Paul, a presidential candidate who chairs the House's subcommittee on Domestic Monetary Policy, had previously called for the U.S. gold reserve to be counted and for a return to the gold standard. He now appears to be going a step further in his request that representatives from the U.S. Treasury Department and the U.S. Mint testify at a subcommittee hearing on June 23 about the authenticity of the nation's gold.

The Treasury document says it would cost about $15 million to conduct an audit. The process would take about 30 minutes to verify the gold content of each bar, or 350,000 man hours; to do that would would take 400 people working for six months, according to the document. The Mint is audited annually by the Treasury's Office of the Inspector General. An audit of the "Schedule of Custodial Deep Storage Gold and Silver Reserves" was published in September 2010.

A Google search of the phrase "Is the gold in Fort Knox fake" returns 623,000 results. Many of them reference a single, unverified report in 2009 that the Chinese received a fake shipment gold that, in fact, was tungsten.

One conspiracy theory says that no one has actually seen the gold since the 1930s. But in a letter to Paul in September, the Treasury Inspector General said he had "personally observed the gold reserves located in each of the deep storage compartments."

As a postscript to the story, CNBC asked for a tour of Fort Knox to film the gold, since our only footage of Fort Knox is from 1974. An official at the Mint told us that not he was not aware that any member of Congress had toured the facility since that year. Fort Knox is "a closed facility," the official said.

And so the conspiracy theory continues...

Read more - http://www.cnbc.com/id/43391588

Oops! Missing $6.6 B for Iraq may have been stolen - part of $12 B biggest international cash airlift of all time -

After the U.S.-led invasion of Iraq in March 2003, the George W. Bush administration flooded the conquered country with so much cash to pay for reconstruction and other projects in the first year that a new unit of measurement was born.

Pentagon officials determined that one giant C-130 Hercules cargo plane could carry $2.4 billion in shrink-wrapped bricks of $100 bills. They sent an initial full planeload of cash, followed by 20 other flights to Iraq by May 2004 in a $12-billion haul that U.S. officials believe to be the biggest international cash airlift of all time.

This month, the Pentagon and the Iraqi government are finally closing the books on the program that handled all those Benjamins. But despite years of audits and investigations, U.S. Defense officials still cannot say what happened to $6.6 billion in cash — enough to run the Los Angeles Unified School District or the Chicago Public Schools for a year, among many other things.

For the first time, federal auditors are suggesting that some or all of the cash may have been stolen, not just mislaid in an accounting error. Stuart Bowen, special inspector general for Iraq reconstruction, an office created by Congress, said the missing $6.6 billion may be "the largest theft of funds in national history."

The mystery is a growing embarrassment to the Pentagon, and an irritant to Washington's relations with Baghdad. Iraqi officials are threatening to go to court to reclaim the money, which came from Iraqi oil sales, seized Iraqi assets and surplus funds from the United Nations' oil-for-food program.

It's fair to say that Congress, which has already shelled out $61 billion of U.S. taxpayer money for similar reconstruction and development projects in Iraq, is none too thrilled either.

Read more - http://www.latimes.com/news/nationworld/world/la-fg-missing-billions-20110613,0,4414060.story

Another reason not to go to Mexico - drug traffickers kidnapping bus passengers for gladiatorlike fights to the death -

The elderly are killed. Young women are raped. And able-bodied men are given hammers, machetes and sticks and forced to fight to the death.

In one of the most chilling revelations yet about the violence in Mexico, a drug cartel-connected trafficker claims fellow gangsters have kidnapped highway bus passengers and forced them into gladiatorlike fights to groom fresh assassins.

In an in-person interview arranged by intermediaries on the condition that neither his name nor the location of his Texas visit be published, the trafficker also admitted to helping push cocaine worth $5 million to $10 million a month into the United States.

Law enforcement sources confirm he is a cartel operative but not a fugitive from pending charges.

His words are not those of a federal agent or drawn from a news conference or court papers.

Instead, he offers a voice from inside Mexico's mayhem — a mafioso who mingles among crime bosses and foot soldiers in a protracted war between drug cartels as well as against the government.

If what he says is true, gangsters who make commonplace beheadings, hangings and quartering bodies have managed an even crueler twist to their barbarity.

Members of the Zetas cartel, he says, have pushed passengers into an ancient Rome-like blood sport with a modern Mexico twist that they call, "Who is going to be the next hit man?"

"They cut guys to pieces," he said.

The victims are likely among the hundreds of people found in mass graves in recent months, he said.

In the vicinity of the Mexican city of San Fernando, nearly 200 bodies were unearthed from pits, and authorities said most appeared to have died of blunt force head trauma.

Many are believed to have been dragged off buses traveling through Mexico, but little has been said about the circumstances of their deaths.

The trafficker said those who survive are taken captive and eventually given suicide missions, such as riding into a town controlled by rivals and shooting up the place.

The trafficker said he did not see the clashes, but his fellow criminals have boasted to him of their exploits.

Killing 'for amusement'

Former and current federal law-enforcement officers in the U.S. said that while they knew Mexican bus passengers had been targeted for violence, they'd never before heard of forcing passengers into death matches.

But given the level of violence in Mexico — nearly 40,000 killed in gangland warfare over the past several years — they didn't find it tough to believe.

Borderland Beat, a blog specializing in drug cartels, reported an account in April of bus passengers brutalized by Zeta thugs and taunted into fighting.