Average Age Of Exxon Valdez Worker: 51 Years

Considering there is no end in site to the oil volcano, parts of the gulf coast have a strong probability of becoming uninhabitable. Seeing as the majority of oil refineries in the U.S. are found in the area this situation is getting worse every day.

Pensacola Beach Boiling

Prepare for likely mass diaspora from the gulf (according to Matt Simmons)

Starting To Lose Faith In General Public

This doesn't even justify a response

Currency Collapse May Stimulate Economic Expansion, BIS Says

June 14 (Bloomberg) -- Currency collapses tend to spur a resumption of economic growth rather than fueling a decline in gross domestic product, according to the Bank for International Settlements.

Currency collapses are associated with permanent output losses of about 6 percent of GDP, on average, though the drop tends to appear beforehand, the Basel, Switzerland-based BIS said in its quarterly review yesterday.

“This suggests that it may not be the currency collapse that reduces output, but rather the factors that led to the depreciation,” Camilo E. Tovar wrote in the study. “To gain a full understanding of the implications of currency collapses on economic activity it is important to carefully examine the full circle of events surrounding the episode.”

The positive effects of a weaker currency on GDP, including making local products cheaper than imported goods, may outweigh the negative ones, such as rising inflation. Currency collapses occur when the annual exchange rate drops by about 22 percent, according to the BIS, which identified 79 such episodes, “more commonly in Africa than in Asia or Latin America,” since 1960, Tovar said.

“They also occurred under all types of currency regimes, except possible floating-exchange-rate regimes, where there are simply too few observations to obtain meaningful estimates,” the BIS said.

Economic Contraction

The euro tumbled about 20 percent against the dollar between Nov. 25, 2009, and last week as investor concern over record budget deficits in countries including Greece spurred speculation the 16-nation currency union may split. The European Union in May crafted a 750 billion-euro ($908 billion) rescue package to stem the crisis.

Greece’s economy will contract 3.9 percent this year and 1.2 percent in 2011, after shrinking 2 percent in 2009, according to the median of eight economist estimates compiled by Bloomberg. The euro-region will expand by 1.1 percent this year and 1.5 percent in 2011, after falling 4.1 percent last year, median forecasts show.

Hans-Werner Sinn, president of Germany’s Ifo economic institute, said on June 3 that it would be best for Greece to leave the euro instead of implementing an austerity program to reduce its deficit. Greek Prime Minister George Papandreou pledged budget cuts worth almost 14 percent of GDP to bring the deficit within the EU limit of 3 percent by the end of 2014.

“The real solution for Greece would be to leave the euro followed by a depreciation” of the new currency, Sinn said in an interview at a conference in Interlaken, Switzerland.

Growth May ‘Dominate’

European Central Bank Executive Board member Lorenzo Bini Smaghi said on May 28 that there are “no alternatives” for Greece beyond following the austerity program.

“Before drawing policy conclusions we should emphasise that these results are subject to a number of caveats,” the BIS said in the report. “Most importantly, the analysis does not address the reasons why currency collapses occur in the first place. Our analysis also has little to say about the mechanisms involved after the currency collapse takes place. While we cannot disentangle the various factors, our results do suggest that expansionary mechanisms tend to dominate.”

EPA: Amish Farming Bad For Environment

Only in Barry Soetoro's America

Amish Farming Draws Rare Government Scrutiny

LANCASTER, Pa. — With simplicity as their credo, Amish farmers consume so little that some might consider them model environmental citizens.

“We are supposed to be stewards of the land,” said Matthew Stoltzfus, a 34-year-old dairy farmer and father of seven whose family, like many other Amish, shuns cars in favor of horse and buggy and lives without electricity. “It is our Christian duty.”

But farmers like Mr. Stoltzfus are facing growing scrutiny for agricultural practices that the federal government sees as environmentally destructive. Their cows generate heaps of manure that easily washes into streams and flows onward into the Chesapeake Bay.

And the Environmental Protection Agency, charged by President Obama with restoring the bay to health, is determined to crack down. The farmers have a choice: change the way they farm or face stiff penalties.

“There’s much, much work that needs to be done, and I don’t think the full community understands,” said David McGuigan, the E.P.A. official leading an effort by the agency to change farming practices here in Lancaster County.

Runoff from manure and synthetic fertilizers has polluted the Chesapeake Bay for years, reducing oxygen rates, killing fish and creating a dead zone that has persisted since the 1970s despite off-and-on cleanup efforts. But of the dozens of counties that contribute to the deadly runoff of nitrogen and phosphorus, Lancaster ranks at the top. According to E.P.A. data from 2007, the most recent available, the county generates more than 61 million pounds of manure a year. That is 20 million pounds more than the next highest county on the list of bay polluters, and more than six times that of most other counties.

The challenge for the environmental agency is to steer the farmers toward new practices without stirring resentment that might cause a backlash. The so-called plain-sect families — Amish and Old Order Mennonites, descended from persecuted Anabaptists who fled Germany and Switzerland in the 1700s — are notoriously wary of outsiders and of the government in particular.

Best Buy Sized Bars - ESPN Zone - To Close

The good old days are gone folks - and they are not coming back. Palatial, mahagony & marble bars are going to be replaced with corner dives that serve dollar Pabst Blue Ribbons.

Disney Said to Be Closing Most of Its ESPN Zone Restaurants

The sports-themed restaurants operate in seven cities, including L.A. and Las Vegas. The Anaheim outlet is expected to remain open.

Walt Disney Co. is shutting down most of its ESPN Zone stores, a chain of sports-themed restaurants in seven cities, according to a person familiar with the matter. The only outlets to remain open are those tied to a Disney property, such as the Downtown Disney shopping district in Anaheim.

ESPN Zone opened in 1998 to capitalize on ESPN's brand, while bringing Disney's family-friendly atmosphere to the sports bar concept. The upscale eateries serve burgers and brews as walls of big-screen TVs beam baseball and other sporting events into the dining area. Separate gaming rooms, dubbed "Sports Arenas," provide access to interactive games, such as virtual golf and boxing.

It's unclear what has prompted Disney to close the establishments, although the bars may well be a casualty of the recession. A poll released in March by AlixPartners found that 30% of consumers planned to eat out less frequently, and spend less per meal than they did the year before.

In addition, some of the ESPN Zone restaurants are in high-priced real estate areas, such as Times Square in New York.

"Since their inception, the Zones have served sports fans very well," said an ESPN spokesman, who declined to comment further. "But from a pure business perspective, the economics have been challenging."

Harry Balzer, chief industry analyst for research firm NPD Group, said the restaurant business was undergoing its biggest decline in three decades.

"This year was horrible," Balzer said. "A restaurant meal is a very discretionary behavior. You could always eat at home and save money doing it. And going out for dinner is the most expensive food you could buy."

Balzer said casual-dining restaurants like ESPN Zone have been among the hardest hit, as consumers gravitate to less expensive chains such as Chipotle Mexican Grill or Panera Bread, which offer sit-down dining at fast-food prices. ESPN may also have suffered from the problem that afflicted Planet Hollywood, which closed several restaurants — the novelty simply wore off, he said.

In addition to Anaheim, Disney operates ESPN Zone restaurants in Baltimore, Chicago, Las Vegas, New York and Washington. The company also licenses the ESPN Zone brand to a restaurant at the L.A. Live shopping and entertainment complex in downtown Los Angeles. It's unclear whether that location will remain open. Disney closed the Atlanta and Denver locations last year.

Celente: Fascism Has Come To America

Buy Guns, Barbed Wire: Advisor

I'll throw in freeze dried food as well. Considering the magnitude (and ineptitude)
of the oil spill - there will certainly be an impact on crops grown in the southeast. Throw in the already blistering inflation rate of food items with the certainty of future inflationary pressures and you have a volatile situation.

Costco offers a well rounded bucket for $74.99: Emergency Food Supply

Markets About To Turn Nasty: Buy Barbed Wire, Advisor

Bond markets could get very nasty over the coming months, while stock investors could take a few months off and stop attempting to trade volatile swings in the markets, Anthony Fry, senior managing director at Evercore Partners, told CNBC Monday.

“The current problems will be with us for 5 years or more and uncertainty is very high," Fry said.

"Sentiment is extremely volatile as shown by the collapse of the Prudential’s attempt to buy AIA. When the deal was thought up just a few months ago it was a very different world,” Fry told CNBC on Monday.

Fry says the best we can hope for in the current environment is a soft landing, but sees little chance of this happening.

“Look at the current situation. You have Greece, now you have Hungary and huge issues surrounding Spain and Portugal,” he said.

Fry believes many European banks have yet to fess up on losses and says governments across the world are between a rock and a hard place.

“Governments need to cut spending and raise money and if they do not do so credibly will be killed by the bond market demanding higher rates,” he said.

No Exit Strategy

Fry sees three outcomes for the global economy and none of them makes very good reading.

“You can have lower rates and deflation, higher rates and higher inflation or the nightmare scenario of higher rates and deflating asset prices,” he said.

“If the nightmare scenario plays out as I suspect it may then the debt situation gets worse. There is currently no exit strategy and the reaction to the crisis of policy makers remains a big worry.”

As a result, Fry is telling investors to play it safe and buy physical assets like land.

“I don’t want to scare anyone but I am considering investing in barbed wire and guns, things are not looking good and rates are heading higher,” he said.

The comments mirror those of bearish Bob Janjuah from RBS, who told CNBC on Friday that we are facing big stock market losses and told investors to get into gold before G20 governments attempt to throw another $15 trillion in quantitative easing in a bid to jump start the economy.

“The policymakers' response to the crisis has been new debt and this is an old game” said Janjuah.

“Over the next 6 months we will see private sector deflation pushing 10-year yields down to 2 percent," he predicted.

"This will see the policy makers mistakenly attempt to kick start the economy and market with a global quantitative easing program worth between $10 and $15 trillion dollars.”

Oil Spill Not Going Away

North Korea, Iran, Israel Vs. Turkey - the real pressing issue for the US is the evolving mega disaster in the Gulf of Mexico. With a best case scenario of the oil volcano being plugged in the fourth quarter of 2010, the air in and around the gulf will become multiple times more toxic and potentially force mass evacuations should the methane gas make landfall. According to the Cleveland Leader, some beach goers are already falling ill simply by going near the water.

Workers Hired To Help Cleanup Oil Spill Are Falling Ill

Fisherman and others hired by BP to help save the Gulf have been hospitalized in increasing number with nausea, high blood pressure and pounding headaches. They blame the oil giant and the chemical they have been pouring in the Gulf of Mexico to help disperse the growing oil slick.

Some of those sick workers are now suing BP and Transocean, the owners of the Deepwater Horizon oil rig that exploded in late April.

Entire crews have gotten ill after coming into contact with the dispersant, Corexit, which is supposed to break up the oil into small droplets that are biodegradable. According to the company that makes the chemical, it's safe. The federal government, however, has asked that BP limit its use.

But it's not just the workers who are getting sick. Some beach-goers are even reporting illness after being just near the water.

Russell: You Won't Recognize America By The End of The Year

As the financial clouds on the horizon darken, we continue to hear warnings of an approaching crises.

So who is Richard Russell ?

Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.

Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron's during the late-'50s through the '90s. Through Barron's and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-'66 bull market. And almost to the day he called the bottom of the great 1972-'74 bear market, and the beginning of the great bull market which started in December 1974.

The Letters, published every three weeks, cover the US stock market, foreign markets, bonds, precious metals, commodities, economics --plus Russell's widely-followed comments and observations and stock market philosophy.

In 1989 Russell took over Julian Snyder's well-known advisory service, "International Moneyline", a service which Mr. Synder ran from Switzerland. Then, in 1998 Russell took over the Zweig Forecast from famed market analyst, Martin Zweig. Russell has written articles and been quoted in such publications as Bloomberg magazine, Barron's, Time, Newsweek, Money Magazine, the Wall Street Journal, the New York Times, Reuters, and others. Subscribers to Dow Theory Letters number over 12,000, hailing from all 50 states and dozens of overseas counties.

A native New Yorker (born in 1924) Russell has lived through depressions and booms, through good times and bad, through war and peace. He was educated at Rutgers and received his BA at NYU. Russell flew as a combat bombardier on B-25 Mitchell Bombers with the 12th Air Force during World War II.

One of the favorite features of the Letter is Russell's daily Primary Trend Index (PTI), which is a proprietary index which has been included in the Letters since 1971. The PTI has been an amazingly accurate and useful guide to the trend of the market, and it often actually differs with Russell's opinions. But Russell always defers to his PTI. Says Russell, "The PTI is a lot smarter than I am. It's a great ego-deflator, as far as I'm concerned, and I've learned never to fight it."

Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By Year's End

WHOA!

Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

That's pretty intense!

Update: By popular demand, here's more on what he sees in the market. The gist is that the markets recent gyrations are telling him that the economy is in trouble:

And I ask myself, "Am I seeing things? The April 26 high for the Dow
was 11205.03. The Dow is selling as write at 10557 down 648 points
from its April high. If business is even better than expected, then
why is the Dow down over 600 points? And why, if there were 674 new
highs on the NYSE on April 26, were there only 20 new highs on Friday,
May 14? And if my PTI was 6133 on April 26, why is it down 17 points
since its April high?

The fact is that I've been seeing deterioration in the stock market
ever since early-April, and this in the face of improving business
news. The D-J Industrial Average is composed of 30 internationally
known top-quality blue-chip stocks. These are 30 of "America's biggest
companies." If Barron's is so bullish on the future of America's
biggest companies, then why isn't the Dow advancing to new highs?

Clearly something is wrong. But what could it be? Much as I love
Barron's, I trust the stock market more. If I read the stock market
correctly, it's telling me that there is a surprise ahead. And that
surprise will be a reversal to the downside for the economy, plus a
collection of other troubles ahead.

About Dow Theory -- First, we saw the recent April highs in the
Averages. Then we saw a plunge in both Averages to their May 7 lows --
Industrials to 10380.43, Transports to 4298.12, next a short rally. If
ahead, the two Averages turn down and violate their May 7 lows, that
would be the clincher. Such action would signal the certain resumption
of the primary bear market.

Just as for years I asked, cajoled, insisted, threatened, demanded,
that my subscribers buy gold, I am now insisting, demanding, begging
my subscribers to get OUT of stocks (including C and BYD, but not
including golds) and get into cash or gold (bullion if possible). If
the two Averages violate their May 7 lows, I see a major crash as the
outcome. Pul - leeze, get out of stocks now, and I don't give a damn
whether you have paper losses or paper profits!

Read more: http://www.businessinsider.com/dow-theorist-richard-russell-sell-everything-liquid-you-wont-recognize-america-by-the-end-of-the-year-2010-5#ixzz0oNglP8DO

GM Has No Shame

If you aren't convinced the next downturn will be a showstopper, take a look at the article below where GM is seeking leniency in loaning to sub prime buyers. Simply shocking.

GM Wants More Subprime Customers Approved For Auto Loans

General Motors, looking to boost sales and gain customers, wants to give more auto loans to consumers with bad credit. But without its own captive lending arm, it is losing customers to other automakers, who are more willing to take on the risk of approving an auto loan to a customer with less-than-perfect credit.

GM's top North American executive Mark Reuss said a shortage of subprime lending is holding back sales in the U.S., the AP reports. GM sold most of its former auto finance unit, GMAC (now called Ally), in 2006.

Ally provides consumer auto loans not only for GM, but for Chrysler, along with dealer floor plan financing. Therefore, Ally, not GM or Chrysler, decides who gets a car loan. If GM decides to try and buy back its stake in Ally or start its own finance arm, it can decide who to give car loans to.

And since Ally lost money in the mortgage crisis, it is nervous to lend money to car shoppers with bad credit. GM knows that bad credit car loans are a good source of profit, since the interest rates tend to be very high at about 10 to 20 percent.

According to Experian automotive, about 16 percent of all new-vehicle loans approved in the fourth quarter of 2009 were to customers with non-prime credit (those with credit scores below 620).

U.K. Broke as Joke

"There's No Money Left" = the last lifeboat has left the Titanic

'There's No Money Left,' U.K. Minister Learns

May 17 (Bloomberg) -- Arriving for work at the U.K. Treasury last week, the incoming chief secretary, David Laws, found a note from his predecessor, Liam Byrne, offering advice on the job.

“Dear Chief Secretary, I’m afraid to tell you there’s no money left,” Laws cited it as saying.

“Which was honest,” Laws, whose position is the No. 2 in the Treasury after the chancellor of the exchequer, told a press conference in London today. “But slightly less than I was expecting.”

The note underscores the task facing Britain’s Conservative-Liberal Democrat coalition as it seeks to reconcile demand for improved health and education services with promises to reduce the largest budget deficit since World War II.

It was also in the tradition of Reginald Maudling, Conservative chancellor of the exchequer from 1962 to 1964. Leaving his residence after election defeat, he was reported byJames Callaghan, his successor, to have remarked, “Sorry, old cock, to leave it in this shape.”

Byrne didn’t respond to requests for comment. He was quoted by Sky News as saying the note was a joke. “I do hope David Laws’ sense of humour wasn’t another casualty of the coalition deal,” he said, according to Sky News.

According to the Treasury, the letter read as follows: “Dear Chief Secretary, I’m afraid there’s no money. Kind regards -- and good luck! Liam.”

More Than Meets The Eye

Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given.

The environmental, economic and international impact of this catastrophe cannot be understated. This new information indicates the initial spill numbers were lowballed and some estimates indicate that the oil volcano spews off the equivalent of an Exxon Valdez like spill every 4 days.

Giant Plumes of Oil Forming Under The Gulf

Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given.

“There’s a shocking amount of oil in the deep water, relative to what you see in the surface water,” said Samantha Joye, a researcher at the University of Georgia who is involved in one of the first scientific missions to gather details about what is happening in the gulf. “There’s a tremendous amount of oil in multiple layers, three or four or five layers deep in the water column.”

The plumes are depleting the oxygen dissolved in the gulf, worrying scientists, who fear that the oxygen level could eventually fall so low as to kill off much of the sea life near the plumes.

Dr. Joye said the oxygen had already dropped 30 percent near some of the plumes in the month that the broken oil well had been flowing. “If you keep those kinds of rates up, you could draw the oxygen down to very low levels that are dangerous to animals in a couple of months,” she said Saturday. “That is alarming.”

The plumes were discovered by scientists from several universities working aboard the research vessel Pelican, which sailed from Cocodrie, La., on May 3 and has gathered extensive samples and information about the disaster in the gulf.

ATMs That Dispense Real Money

Ireland Boiling Over

Countries with north of 20% unemployment and 50% or more for those 18-25 are in for some major problems.

Greek Debt Contagion

Greek Debt Crisis--The Preview of What is to Come 5-6-10

The Illusion of Market Health

Commercial real estate has been overrun by wildcat charlatans that have leveraged themselves out of their assets. Their is used lightly as equity positions by major players is typically 1-5%...AT MOST. Let's call them group C and get to them in a moment.

Institutional commercial real estate is completely dominated by pension funds and sovereign wealth with a bit of independent wealth funds thrown in for good measure. Groups like CALPERS, CALSTERS, MRPT, China Investment Corporation and Singapore Investment Corporation controll the lion's share of equity in the market. This is what we call group A.

Group B includes managers like Invesco, Goldman Sachs and JP Morgan who court the equity for fees and assume the roll of deploying it. Most of the time when these groups "buy a building" they are doing so on behalf of a client.

Group C includes developers and owners who position to win the business of the money managers in finding and servicing commercial real estate assets.

At the end of the day Group C really owns next to nothing - only the right to service these assets. With this in mind, why in the world would they continue to be awarded business with their dismal track record? One hears from every group C player that they have hundreds of millions if not billions to deploy...the problem is they are all drawing from the same sources...group A (at least most of this and let's save REITS for another day).

It remains to be seen how much liquidity is truly in the market after the GGP, Tishman and Beacon Portfolios are taken down. My feeling is not much...particularly now that Europe is totally out of the game.

Gone are the days of building an empire the hard way - through cash flow. Below you will see the sugar coated line "sent to special servicer" which is really a fancy way of saying DEFAULT!

When we roll from the Bear Stearns of the Soverign Debt Crisis (Greece) on to the Lehmans, Fannie & Freddie and AIG's of the world the SWHTF and some of these "assets" will be worth less than zero when consider the cost of maintenance, utilities and taxes.

Loan on Simon's Lakeforest Mall to Special Servicer

A $141.05 million loan on the 1.045M SF Lakeforest Mall in Gaithersburg, MD, has been transferred to a special servicer amid doubts that the property's owners will be able to pay the loan back when it becomes due, according to Fitch.

According to CMBS.com, the loan is now at $121,050,000 with a 4.895 percent interest rate and comes due on July 8, 2010.

Simon Property Group owns 25 percent of the mall, according to filings with the SEC. Located off I-270, Lakeforest Mall is 25 miles northwest of downtown Washington, D.C. Here's the information from Fitch:

Transaction: BSCMS 2005-Top20
Property: Lake Forest Mall
City/State: Gaithersburg, MD
Property Type: Retail
Balance: $141,050,000
MS: Wells Fargo
SS: C-III Asset Management, LLC
Reason for Transfer: Imminent Default

Beacon Portfolio Placed With Special Servicer

A Beacon Capital Partners portfolio that includes 11 Washington-area properties was transferred to a special servicer April 7, but some in the real estate industry say the transfer is a strategic move that would allow the Boston-based firm to hold onto the properties and renegotiate the loan.

Four of the area properties in the portfolio are in the District and seven are in Virginia. The group of local properties includes 11911 Freedom Drive at the Reston Town Center, the Booz Allen Hamilton Inc. complex on Greensboro Drive in McLean, and The Polk and Taylor buildings on Clark Street and Crystal Drive in Arlington, as well as the Market Square at 701 and 801 Pennsylvania Ave. NW and Liberty Place at 325 7th St. NW in D.C.

Beacon borrowed $2.7 billion for the 20-building portfolio in 2007. At the time, the buildings were 94.6 percent leased with a debt service coverage ratio of 1.25. When that ratio falls below 1.0, that indicates negative cash flow.

That ratio fell to 1.0 with building occupancy at 89.5 percent for the nine months ending in September 2009, according to an April 16 report by Standard and Poor’s Financial Services LLC.

Beacon said that debt service coverage ratio will be just 0.2 after it pays off its capital and leasing expenses, according to the report, and it is not willing to reach into its own pockets to fund leasing costs and capital improvements in the buildings.

Master servicer Wells Fargo Bank placed the portfolio with special servicer Centerline Servicing LLC.

An April 23 report on the portfolio by the Seattle Times said the placement with a special servicer — a necessary step before renegotiations can begin — came at Beacon’s request.

Beacon could not immediately be reached for comment, but Beacon reportedly is not in default on the commercial mortgage backed securities loan. With CMBS loans, it is typical for a property owner to request a special servicer to initiate discussion to extend a loan or amend its provisions.

“In our view, the cash flows generated by the properties will not be sufficient to support future debt service and capital expenditure requirements,” said Standard and Poor’s regarding the transfer.

“I think there are plenty of borrowers that are saying — in this market — we are coming out of pocket to support our property or we can’t possibly refinance right now, so let’s approach the servicer to see what we can work out,” said Manus Clancy, managing director of New York-based Trepp LLC, a commercial mortgage data and analytics firm. “If Beacon is in that situation, they would be crazy not to see what they could work out.”

Clancy said the chances of Beacon getting relief from the transfer will depend on a number of things, including the subordinate debt on the portfolio, which is debt that tends to have a higher return, but is riskier because it takes a lower priority in bankruptcy liquidation proceedings.

Area properties included in Beacon's portfolio:

* 1300 North 17th St., Arlington
* 1616 Fort Myer Drive, Arlington
* Polk and Taylor Buildings, 2521 S. Clark St. and 2530 Crystal Drive, Arlington
* Booz Allen Complex, 8251 Greensboro Drive, 8281 Greensboro Drive, 8283 Greensboro Drive, McLean
* 11111 Sunset Hills Road, Reston
* Reston Town Center, 11911 Freedom Drive, Reston
* 8300 and 8330 Boone Blvd., Vienna
* One, Two and Three Lafayette Centre, 1120 20th St. NW, 1155 21st St. NW, 1133 21st St. NW, District
* Market Square, 701 and 801 Pennsylvania Ave. NW, District
* Liberty Place, 325 7th St. NW, District
* Army and Navy Club Building, 1627 I St. NW, District

Vornado Realty Trust's Springfield Mall Sent to Special Servicer

Vornado Realty Trust’s loan for its Springfield Mall property was referred to a special servicer on Thursday.

Loans are generally placed with a special servicer when they are in or approaching default. The special servicer will pursue workout strategies, according to Vornado (NYSE:VNO).

“Vornado is in discussions with the lender to restructure the loans on the Springfield Mall,” the company said in a statement.

The loan’s special servicer, C.W. Capital, cited “imminent default” as the reason for the transfer of the $160 million loan, which is made up of two $80 million loans.

According to Trepp, a New York-based commercial mortgage information and analysis firm, the property was 67 percent occupied and had a debt service coverage ratio of .26 as of June 30. A ratio of less than 1 means negative cash flow. Trepp also said the Springfield loans were current as of Dec. 1.

Leasing representatives from the Springfield Mall could not be reached to confirm the level of occupancy.

Vornado Realty may now have to rein in some of its renovation plans for the 80-acre site, which include adding 175,000 square feet of new retail space, 1.1 million square feet of new office space and a 225-room hotel.

Jeff McKay, the Fairfax County supervisor representing the Springfield Mall's district, said that though he did not know the specifics of the property’s financial status, he is confident that the mall site will still see redevelopment.

“The value of the site is so great that regardless of whose money is used, I’m convinced it will be revitalized whether it’s done completely by Vornado or through a creative partnership,” McKay said.

Vornado paid $36 million in 2005 to enter an option agreement to buy the mall from an undisclosed owner.

The property’s mortgage was $181 million at the time and will be reduced to $149 million when it matures in 2013.

Vornado currently manages the 1.4 million-square-foot mall.

When Money Dies

When Money Dies: The Nightmare of the Weimar Collapse is widely known as the most complete assessment of the Weimar Republic's runaway inflation and includes narratives describing the insanity of the time. The free text has been removed online due to the publisher's complaint and copies begin at $800 online. Keep your eyes open. Two excerpts obtained from online sources below.

Money is no more than a medium of exchange. Only when it has a value acknowledged by more than one person can it be so used. The more general the acknowledgement, the more useful it is. Once no one acknowledged it, the Germans learnt, their paper money had no value or use — save for papering walls or making darts. The discovery which shattered their society was that the traditional repository of purchasing power had disappeared, and that there was no means left of measuring the worth of anything. For many, life became an obsessional search for Sachverte, things of 'real', constant value: Stinnes bought his factories, mines, newspapers. The meanest railway worker bought gewgaws. For most, degree of necessity became the sole criterion of value, the basis of everything from barter to behaviour. Man's values became animal values. Contrary to any philosophic assumption, it was not a salutory experience.

In war, boots; in flight, a place in a boat or a seat on a lorry may be the most vital thing in the world, more desirable than untold millions. In hyperinflation, a kilo of potatoes was worth, to some, more than the family silver; a side of pork more than the grand piano. A prostitute in the family was better than an infant corpse; theft was preferable to starvation; warmth was finer than honour, clothing more essential than democracy, food more needed than freedom.

Welcome to the Global Dystopia

This is worse than Ayn Rand ever imagined. All forms of work and education are now suffering from diminishing returns. First you get indifference, then you get desperation, then you get anger, then you get conflict. The gates are open.

States: Let Taxpayers Cover Your Mortgage

NEW YORK (CNNMoney.com) -- Unemployed? Owe more on your mortgage than your home is worth? Your state might one day pay your mortgage.

Giving people free money to cover their home loans is just one of the radical ways that four states -- Florida, Michigan, California and Arizona -- plan to use $1.4 billion the Obama administration is sending their way to help the unemployed and underwater avoid foreclosure.

Many consumer advocates have said the government should help cover the payments of these troubled homeowners, lest the mortgage crisis continue spinning out of control and dragging down everyone's property values. But other housing experts warn that paying off loans creates a moral hazard and could actually dissuade people from looking for work.

Innovative programs, however, are exactly what the administration was hoping for when it unveiled the Hardest Hit Fund initiative in February. Officials are looking to help the unemployed and underwater, who are now at the heart of the crisis. Despite the administration's best efforts to stabilize the market, home prices are still sliding and foreclosure filings are at record highs.
States have radical ideas to stop foreclosures

The federal government is doling out a total of $2.1 billion to 10 states, which also include Nevada, North Carolina, South Carolina, Rhode Island, Ohio and Oregon. The others have not yet submitted their plans to Treasury for approval or have not made them public.

To be sure, the proposals will only a touch a small percentage of the unemployed and underwater homeowners who need help. But it will provide assistance to some of those who presently don't qualify traditional loan modifications.

Administration officials will spend the next few weeks reviewing the proposals, but Assistant Treasury Secretary Michael Barr told CNNMoney.com that they contained some good ideas.

Subsidizing troubled homeowners

The recently unveiled initiatives are not identical, but they have two common themes: Helping the unemployed by subsidizing part or all of their monthly mortgage payments for up to two years and paying down underwater homeowners' loan balances.

The states want the loan servicers and investors to match their largess, hoping to woo them by paying down as much as $50,000 of underwater homeowners' loan balances.

But until now, financial institutions have been reluctant to reduce principal.

These proposals may irk Americans who are keeping up with their mortgage payments or don't want tax dollars used to help their neighbors. But Alan White, a law professor at Valparaiso University, said all homeowners will suffer if neighboring properties fall into foreclosure.

"There are benefits for all of us for stopping foreclosures any way we can," White said.

Plus, he added, many of the people who would be helped are those capable of paying their mortgages again once they find work. By example, he pointed to a longstanding Pennsylvania program that provides loans to the unemployed, which gives them assistance while they look for new jobs.

Also, covering homeowners' mortgages is a better use of government funds than giving incentives to the servicers and relying on them to assist borrowers, said Paul Willen, senior economist at the Federal Reserve Bank of Boston. This way, he said, states have more control over who benefits from the initiatives.

"Every dollar spent will go to families who need it," he said.

But delinquent homeowners aren't the only ones who would benefit from these subsidies. In fact, the banks would come away with a huge win, said Mark Calabria, director of financial regulation studies at The Cato Institute. Not only would they have government money securely in hand, but they'd avoid the time and expense of the foreclosure process.

"This is a lot more than they would have collected otherwise," Calabria said. "The lenders should bear the losses for this. They are the one who made the loans."

Another concern is that these proposals will dissuade the unemployed from finding work or from relocating to an area with better job prospects, said Casey Mulligan, an economics professor at the University of Chicago. Such programs incent people to maintain their financial hardships.

"Why should anybody work if you are going to be in your house either way?" he said.

A Few Thoughts On Gold

World Gold Production

World Populatoion


Put together you have a situation where the number of ounces per gold being produced per human being on this earth is falling.

Batten Down The Hatches

John Williams of Shadowstats gives a powerful interview and warns explicitly of a coming hyper-inflationary depression.

A Hyper-Inflationary Great Depression Is Coming

The Gold Report: John, last December you stated, "The U.S. economic and systemic crisis of the past of the past two years are just precursors to a great collapse," or what you call a "hyper-inflationary great depression." Is this prediction unique to the U.S., or do you feel that other economies face the same fate?

John Williams: The hyper-inflationary portion largely will be unique to the U.S. If the U.S. falls into a great depression, there's no way the rest of the world cannot have some negative economic impact.

TGR: How will the United States' decreased economic power impact global economies? Will the rest of the world survive?

JW: People will find to their happy surprise that they'll be able to survive. Most businesses are pretty creative. The thing is, the U.S. economic activity accounts for roughly half that of the globe. There's no way that the U.S. economy can turn down severely without there being an equivalent, at least a parallel downturn outside the U.S. with its major trading partners.

When I talk about a great depression in the United States, it is coincident with a hyper-inflation. We're already in the deepest and longest economic contraction seen since the Great Depression. If you look at the timing as set by the National Bureau of Economic Research, which is the arbiter of U.S. recessions, as to whether or not we have one, they've refused to call an end to this one, so far. But assuming you called an end to it back in the middle of 2009, it would still be the longest recession seen since the first down-leg of the Great Depression.

In terms of depth, year-to-year decline in the gross domestic product, or GDP, as reported in the third quarter of 2009, was the steepest annual decline ever reported in that series, which goes back to the late '40s on a quarterly basis. Other than for the shutdown of war production at the end of World War II, which usually is not counted as a normal business cycle, the full annual decline in 2009 GDP was the deepest since the Great Depression. There's strong evidence that we're going to see an intensified downturn ahead, but it won't become a great depression until a hyper-inflation kicks in. That is because hyper-inflation will be very disruptive to the normal flow of commerce and will take you to really low levels of activity that we haven't seen probably in the history of the Republic.

Let me define what I mean by depression and great depression, because there's no formal definition out there that matches the common expectation. Before World War II, economic downturns commonly were referred to as depressions. If you drew a graph of the level of activity in a depression over time, it would show a dip in the economy, and you'd go down and then up. The down part was referred to as recession and the up part as recovery. The Great Depression was one that was so severe that in the post-World War II era, those looking at economic cycles tried to come up with a euphemism for "depression." They didn't want to create the image of or remind people of the 1930s. Basically, they called economic downturns recessions, and most people think of a depression now as a severe recession.

I've talked with people in the Bureau of Economic Analysis and the National Bureau of Economic Research in terms of developing a formal depression definition. The traditional definition of recession—that of two consecutive quarters of inflation-adjusted contraction in GDP—still is a solid one, despite recent refinements. Although there's no official consensus on this, generally, a depression would be considered a recession where peak-to-trough contraction in the economy was more than 10%; a great depression would be a recession where the peak-to-trough contraction was more than 25%.

We're borderline depression in terms of where we're going to be here before I think the hyper-inflation kicks in. You've certainly seen depression-like numbers in things such as retail sales, industrial production and new orders for durable goods, where you're down more than 10% from peak-to-trough. In terms of housing, you're down more than 75%, and that certainly would be in the great depression category. With hyper-inflation, you have disruption to the normal flow of commerce and that will slow things down very remarkably from where we are now.

TGR: After a period of recession, isn't inflation considered a good sign?

JW: There are a couple of things that drive inflation. The one that you're describing is the relatively happy event where strong economic demand is exceeding production, and that's pushing prices higher, as well as interest rates. That's a relatively healthy circumstance. You can also have inflation, which is driven by factors other than strong economic activity. That's what we've been seeing in the last couple of years. It's been largely dominated by swings in oil prices. That hasn't been due really to oil demand, as much as it has been due to the value of the U.S. dollar. Oil is denominated in U.S. dollars. Big swings in the U.S. dollar get reflected in oil pricing. If the dollar weakens, oil rises. That's what you saw if you go back to the 1973-1975 recession, for example. That was an inflationary recession.

Indeed, the counterpart to what you were suggesting earlier about the strong demand and higher inflation is that usually in a recession you see low inflation. The '73 to '75 experience, however, was an inflationary recession because of the problem with oil prices. That's what we were seeing early in this cycle, where a weakening dollar rallied oil prices, and then the dollar reversed sharply and oil prices collapsed. We have passed through a brief period of shallow year-to-year deflation in the consumer price index, but, as oil prices bottomed out and headed higher since the end of 2009, we're now seeing higher inflation, again.

I'm looking at hyper-inflation, which is a rather drastic forecast. This has been in place as an ultimate fate for the system for a number of years. Back in the '70s, the then Big 10 accounting firms got together and approached the government and said, "Hey guys, you know you need to keep your books the way a big corporation does. You're the largest financial operator on earth." The government then, as well as today, operates on a cash basis with no accrual accounting and such. Yet, over a period of 30 years, the accountants and government put together generally accepted accounting principles, or GAAP, accounting for the federal government and introduced formal financial statements on that basis in 2002, which supplement the annual cash-based accounting.

If you look at those GAAP-based statements and include in the deficit the year-to-year change in the net present value of the unfunded liabilities for Social Security and Medicare, what you'll find is that the annual operating shortfall is running between $4 and $5 trillion; not $500 billion as we saw before the crisis or the $1.4 trillion that they announced for fiscal 2009. Now to put that into perspective, if the government wanted to balance its deficit on a GAAP basis for a year, and it seized all personal income and corporate profits, taxing everything 100%, it would still be in deficit. It can't raise taxes enough to contain this. On the other side, if it cut all government spending except for Social Security and Medicare, it still would be in deficit. With no political will to contain the spending, eventually the government meets its obligations by revving up the currency printing press.

TGR: With all this new paper money coming into the system, wouldn't we see a bigger bubble than we've ever seen prior to a hyper-inflationary great depression?

JW: No, in fact, it's a very unusual circumstance that we have now. Put yourself in Mr. Bernanke's situation—he had to prevent a collapse of the banking system. He was afraid of a severe deflation as was seen in the Great Depression, when a lot of banks went out of business. The depositors lost funds and the money supply just collapsed. He wanted to prevent a collapse of the money supply and keep the depository institutions afloat. Generally, that has happened. The FDIC expanded its coverage and everything that had to be done to keep the system from imploding was done. The effects eventually will be inflationary.

In the process, what Mr. Bernanke did was to expand the monetary base extraordinarily, more than doubling it over a period of a year. The monetary base is money currently in circulation plus bank reserves. If you go back to before September 2008, the bank reserves were in the $50 to $60 billion range. Where the currency was maybe $800 billion, we've gone over $2 trillion in total reserves. Most of that is in excess reserves and not required reserves that banks have to keep to support their deposits. Normally banks would take their excess reserves and lend them out into the regular stream of commerce, and in doing so, that would create money supply. Instead they're leaving the excess reserves on deposit with the Fed. Money supply and credit are now generally contracting. We're going to see an intensified downturn in the near future. I specialize in looking at leading indicators that have very successful track records in terms of predicting economic or financial turns. One such indicator is the broad money supply.

Whenever the broad money supply–adjusted for inflation–has turned negative year over year, the economy has gone into recession, or if it already was in a recession, the downturn intensified. It's happened four times before now, in modern reporting. You saw it in the terrible downturn of '73 to '75, the early '80s and again in the early '90s. In December of 2009, annual growth in real M3 turned negative. It's now at a record low in terms of decline, down more than 6% year over year. What that suggests is that in the immediate future you're going to see renewed downturn in economic activity.

In all the prior instances that I mentioned, this event led recessions, except for '73 to '75. That's when you had the oil spike and a recession that came from that. When the money supply turned down in that recession, the economy accelerated in its decline. We're going to see something along those lines, now, with about a six-month lead time. You're going to have negative economic growth this year. The implications for that are extraordinary, because the projections on the federal budget deficit, a number of the state deficits, and the solvency and stress tests for the banking system all were structured assuming positive economic growth in the 2% to 3% range for 2010. Instead it's going to be negative. Many states are going to be in greater difficulty than they thought. Most likely, you're going to have federal bailouts there. The banks are going to have more troubles. All this means more government support, more government spending, greater deficits and greater funding needs for the U.S. Treasury. We have a global market that already is increasingly reluctant to hold the dollars and U.S. Treasuries.

TGR: The U.S. dollar is still the reserve currency, and it's holding its value while the euro struggles. Wouldn't decoupling precede hyper-inflation?

JW: I don't know if it will decouple from being the reserve currency formally, but it will de facto. The reserve status is the reason the dollar didn't collapse per se a year and a half ago during the September '08 panic. The movement is already afoot, however, to try to relegate the dollar to some status other than a reserve currency. For example, OPEC purportedly is looking to price oil in something other than U.S. dollars. The pressure is there to change the status.

Again, if you start to see a great depreciation of the U.S. currency or a tremendous increase in lack of confidence in the soundness of the government's fiscal condition, there is a problem. You mentioned Greece, for example. The sovereign solvency issues there are minuscule compared to what we have with the United States, which is the elephant in the bathtub. The markets know it's there. The central bankers know it's there. Again, with the downturn in the economy, all the issues are going to be brought to a head. As they come to a head, there will be that effort to dump the dollar. I would expect that, indeed, it will be decoupled from its reserve status, although it could follow after the fact as opposed to before the fact.

TGR: Major economic indicators suggest significant improvement; even the IMF has stated that we've averted a global depression. What are you seeing that these governing bodies are not?

JW: What I'm using is a leading indicator of economic activity: year-to-year change in inflation-adjusted broad money supply. We're now seeing a very sharp year-over-year decline, which has not been seen since the 1990 recession. This indicator does not work always in the upside; it doesn't necessarily give you a signal for a rising economy. It is, however, basic. If you strangle liquidity you can always contract an economy. Deliberately or not, liquidity's being strangled. You're seeing very sharp declines in consumer credit, commercial and industrial loans and commercial paper outstanding.

You are getting happy news from governments, central banks, financial markets, Wall Street analysts and the popular media, which does tend to cater to Wall Street. Such is standard practice. Happy news is what sells and you don't want to discourage people. The Obama administration, interestingly, started talking-down the economy when it wanted to get its stimulus package in place. As soon as that was done, it started talking-up the economy. Everything was just fine and dandy again. This is the most extraordinary downturn most people living today have ever seen. In terms of modern economic reporting, which basically started after World War II, we've never had a downturn as long or as severe. Perversely, the extreme nature of the downturn actually has warped recent reporting of seasonally-adjusted data to the upside.

TGR: Earlier you mentioned that business around the world will survive in the event of a depression. Aren't there sustainable businesses in the U.S. as well? Won't an influx of printed currency and green-tech job creation offer some value? At some point, doesn't stimulus money become real cash producing real goods? Surely the economy would be viable at some level?

JW: Not without income growth. There's nothing there that you've described to me that is growing, aside from inflation. To have sustainable growth in the economy, you have to income growth, net of inflation. That is not happening, and there is nothing in existing government stimulus that will cause real income growth.

Beyond income issues, the problem with the hyper-inflation is that very quickly the use of cash will cease. Let me contrast our circumstance here with a very popularly followed hyper-inflation case that's now run its course in Zimbabwe. There you had probably the worst hyper-inflation that anyone's ever seen. After devaluation upon devaluation, they successively lopped the zeros off the bills. If you took a $2 bill that they first issued back in the '80s and then tried to come up with the equivalent of a $2 bill in the last form of the currency, it would be very difficult to do because it was so worthless. If you put a pile of those together to equal the original $2 bill, it would actually stretch from the earth to the Andromeda Galaxy. We're talking light years. There are not enough trees on earth to print them. Yet the Zimbabwe economy survived and functioned. They had a lot of problems, but they operated. The reason they functioned was because they had a back-up system, which was a black market in U.S. dollars. People switched out of the Zimbabwe dollar to U.S. dollars. They could live with that. In the U.S., we don't have a back-up system.

TGR: You mentioned in a recent interview with CNN that you're recommending individuals move into both cash and gold. With the euro and the dollar in jeopardy, where does that leave us?

JW: I don't like the euro. I don't think that's going to hold together, and I've thought so for some time. If it should break up and you have a new German currency, a new mark or something like that might be a strong one option. At the moment I like the Canadian dollar, the Australian dollar and the Swiss franc. For anyone living in the United States, rather than looking at the short-term volatility in the markets and trying to make money off of that, this is the time to batten down the hatches and to look to preserve your wealth and assets.

In terms of preserving the purchasing power of your assets, the best thing I can think of is physical gold. That's worked over the millennia. I'm not per se a gold bug. It just happens to be a circumstance in which it's the cleanest asset around for that. You don't need to put all your assets into gold, but hold some. Hold some silver. I'd look to get some assets out of the U.S. dollar and look to get some assets out of the U.S. When I say outside of the U.S. dollar, again, I look at the Canadian dollar, Australian dollar, Swiss franc in particular. I think they will tend to do particularly well, whereas the U.S. dollar is going to become effectively worthless.

As the dollar breaks down, you'll also likely see disruptions in supply chains, including shipments of food to grocery stores. People should consider maintaining stockpiles of basic goods needed for living, much as they would for a natural disaster. I sit on the Hayward fault in California. I have a supply of goods and basic necessities in case something terrible happens—natural or man-made—that will carry me for a couple of months. It may take that long for a barter system to evolve, which I think is what you're going to end up with; at least until a new currency system is reorganized and you get a government that's able to bring its fiscal house into order. No currency system in the U.S. is going to work unless the fiscal conditions that drove it into oblivion are also addressed.

On a global basis, where the dollar is the world's reserve currency, 80% of currency transactions involve the U.S. dollar. There's going to have to be an overhaul of the global currency system. To gain credibility with the public, the powers that be likely will design a system that has some kind of a tie to gold, but that's purely speculative.

TGR: From a personal investment point of view, you emphasized that this is a time to conserve assets, including gold and other currencies. How else can investors protect themselves?

JW: I like physical gold and silver. I look to gold as a primary hedge. If you can come out of this holding gold, you'll be in a position where you'll be able to take advantage of some extraordinary investment opportunities that will follow. With inflation, real estate is usually a pretty good bet. It tends to hold its value over time. There may be periods of illiquidity, though, and it's not portable. Neither of those limitations is an issue with gold. Maybe gold will become the black market to support U.S. economic activity. It certainly would be the area that people will try to transfer their assets to as time goes along.

You see people now as gold gets to a new high saying, "Oh my goodness, I bought at $200, and I can sell out at $1,100 making a good profit." What people don't realize is that they haven't made a real profit. What they've done is retained the purchasing power of the dollars that they invested in gold, and they've lost proportionately the purchasing power of the amounts left in dollar-denominated paper assets over the same time. Gold is a long-term wealth preserver. Again, where many people are used to an investment environment where they can buy a stock, make a quick profit and then sell, with gold you need to hold on for the long haul as an insurance policy, not as a quick investment.

TGR: Thank you very much for your time.

Fudd Goes Dudd

Overpriced, sub-par food goes under. This is probably 20 years late but indicative of the market that is out there. Consumers simply do not have $15 to spend on a burger, fries and pop.

For a truly surreal experience go to a Sears and walk around - it's like being in a parallel dimension where the products are 10-15 years old, not laid out in specific departments and there are no workers on site. Be careful, you may get lost or mugged in a dark aisle.

Burger Chain Fuddruckers Files For Chapter 11

By JACQUELINE PALANK By ERIC MORATH

Burger chain Fuddruckers Inc. and its parent, Magic Brands LLC, filed for Chapter 11 bankruptcy protection Wednesday to ease the sale of its assets to Tavistock Group.

Tavistock Group, a private-equity firm that owns other restaurant companies, has agreed to pay $40 million for the company, including the Koo Koo Roo restaurant brand.

None of the 135 franchisee-owned Fuddruckers restaurants are included in the filing. More than 200 restaurants operate under the Fuddruckers name. The company plans to close 24 of the corporate-owned Fuddruckers by April 30.

"During the course of the transaction, Fuddruckers and Koo Koo Roo guests will see no difference in the quality dining experience they have come to expect in our restaurants," Peter Large, the chief executive of Magic Brands, said in a statement.

Magic Brands plans to subject the Tavistock bid to a court-supervised auction process. The company expects to complete the sale in 60 to 90 days.

Fuddruckers was founded in 1980 in San Antonio, with the goal of serving hamburgers that are cooked to order and made with fresh ingredients. The chain serves burgers ranging from 1/3 of a pound to one pound.

Magic Brands, based in Austin, Texas, purchased the chain in 1998 and has sought to broaden its appeal by expanding its menu.

Based in Windermere, Fla., Tavistock Group's holdings include interests in real estate, sports teams, energy and financial services companies. Its restaurant unit manages a group of boutique eateries, including ZED451, Blackhawk Grille and California Cafe.

According to documents filed with the U.S. Bankruptcy Court in Wilmington, Del., Fuddruckers' top unsecured creditors include food distributors US Foodservice Inc., owed $2.6 million, and Sysco Corp. (SYY), owed $290,000.

Economists: Stimulus Didn't Help

Don't rely on statistics - go with your gut. How many people do you know in your own life that are unemployed or unemployed? Those you do know that have jobs - how many are not in the service sector? How many engineers or factory workers do you know? How many products can you think of that are manufactured here in the United States?

How does your own economy look in your home town? Did the stimulus help you? Is the "recession" over for you and your family or is it getting harder and harder every month to make ends meet?

Economists Say The Stimulus Didn't Help

NEW YORK (CNNMoney.com) -- The recovery is picking up steam as employers boost payrolls, but economists think the government's stimulus package and jobs bill had little to do with the rebound, according to a survey released Monday.

In latest quarterly survey by the National Association for Business Economics, the index that measures employment showed job growth for the first time in two years -- but a majority of respondents felt the fiscal stimulus had no impact.

NABE conducted the study by polling 68 of its members who work in economic roles at private-sector firms. About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act, which the White House's Council of Economic Advisers says is on track to create or save 3.5 million jobs by the end of the year.

That sentiment is shared for the recently passed $17.7 billion jobs bill that calls for tax breaks for businesses that hire and additional infrastructure spending. More than two-thirds of those polled believe the measure won't affect payrolls, while 30% expect it to boost hiring "moderately."

But the economists see conditions improving. More than half of respondents -- 57% -- say industrial demand is rising, while just 6% see it declining. A growing number also said their firms are increasing spending and profit margins are widening.

Nearly a quarter of those surveyed forecast that gross domestic product, the broadest measure of economic activity, will grow more than 3% in 2010, and 70% of NABE's respondents expect it to grow more than 2%.

Still, the survey suggested that tight lending conditions remain a concern. Almost half of those polled said the credit crunch hurts their business.

When War Becomes Business (As Usual?)

Lockheed Martin, Boeing, KBR and others have quietly been building some solid gains in the past several months. Power Shares Aerospace & Defense, an ETF covering much of the industry has built up a head of steam since March.

Although equities have been rising in general, the defense sector has been outperforming the competition.

Headlines like North Korea Torpedoed South's Navy Ship: Report and heightened saber rattling in the middle east are cause for concern.

History Lesson

Economics, foreign policy and natural disasters team to create discontent - which feeds upon itself.

Food on hand in a time of crisis is even more valuable than gold and silver. Ask the hungry in UK...

How an Icelandic Volcano Helped Spark the French Revolution
Greg Neale - Guardian UK

Just over 200 years ago an Icelandic volcano erupted with catastrophic consequences for weather, agriculture and transport across the northern hemisphere – and helped trigger the French revolution.

The Laki volcanic fissure in southern Iceland erupted over an eight-month period from 8 June 1783 to February 1784, spewing lava and poisonous gases that devastated the island's agriculture, killing much of the livestock. It is estimated that perhapsa quarter of Iceland's population died through the ensuing famine.

Then, as now, there were more wide-ranging impacts. In Norway, the Netherlands, the British Isles, France, Germany, Italy, Spain, in North America and even Egypt, the Laki eruption had its consequences, as the haze of dust and sulphur particles thrown up by the volcano was carried over much of the northern hemisphere.

Ships moored up in many ports, effectively fogbound. Crops were affected as the fall-out from the continuing eruption coincided with an abnormally hot summer. A clergyman, the Rev Sir John Cullum, wrote to the Royal Society that barley crops "became brown and withered … as did the leaves of the oats; the rye had the appearance of being mildewed".

The British naturalist Gilbert White described that summer in his classic Natural History of Selborne as "an amazing and portentous one … the peculiar haze, or smokey fog, that prevailed for many weeks in this island, and in every part of Europe, and even beyond its limits, was a most extraordinary appearance, unlike anything known within the memory of man.

"The sun, at noon, looked as blank as a clouded moon, and shed a rust-coloured ferruginous light on the ground, and floors of rooms; but was particularly lurid and blood-coloured at rising and setting. At the same time the heat was so intense that butchers' meat could hardly be eaten on the day after it was killed; and the flies swarmed so in the lanes and hedges that they rendered the horses half frantic … the country people began to look with a superstitious awe, at the red, louring aspect of the sun."

Across the Atlantic, Benjamin Franklin wrote of "a constant fog over all Europe, and a great part of North America".

The disruption to weather patterns meant the ensuing winter was unusually harsh, with consequent spring flooding claiming more lives. In America the Mississippi reportedly froze at New Orleans.

The eruption is now thought to have disrupted the Asian monsoon cycle, prompting famine in Egypt. Environmental historians have also pointed to the disruption caused to the economies of northern Europe, where food poverty was a major factor in the build-up to the French revolution of 1789.

Volcanologists at the Open University's department of earth sciences say the impact of the Laki eruptions had profound consequences.

Dr John Murray said: "Volcanic eruptions can have significant effects on weather patterns for from two to four years, which in turn have social and economic consequences. We shouldn't discount their possible political impacts." Greg Neale

NASA Cut

More money for bailouts, more money for wars...no money for research and development.

Obama's NASA Policy: The White House VS Neil Armstrong

It's not easy to go up against a living legend, but that's what President Obama will be doing Thursday when he gives a speech on new NASA policies that are being blasted by Neil Armstrong.

Armstrong, the first man to walk on the moon, criticized Obama's plans to scrap NASA's return-to-the-moon program and other projects.

"Without the skill and experience that actual spacecraft operation provides, the USA is far too likely to be on a long downhill slide to mediocrity," said a letter signed by Armstrong and two other famed ex-astronauts, James Lovell and Eugene Cernan.

Obama travels tomorrow to Cape Canaveral, Fla., to speak at NASA headquarters.

Spokesman Robert Gibbs said an independent commission found some NASA programs to be "years behind schedule, (and) massively over-budget." Gibbs added that "the timetable prescribed was un-executable."

Instead, the president will outline a renewed strategy that "will provide more jobs for the area, greater investment in innovation, more astronaut time in space, more rockets launching sooner, and a more ambitious and sustainable space program for America's future," Gibbs said.

The press secretary also noted that Obama's plans have a high-profile supporter: Buzz Aldrin, the second man to walk on the moon.

Cerberus Takes Nonprofits Private

Cerberus, (pronounced /ˈsərb(ə)rəs/[1]; Greek form: Κέρβερος, [ˈkerberos][2]) in Greek and Roman mythology, is a multi-headed hound (usually three-headed[1][3][4]) which guards the gates of Hades, to prevent those who have crossed the river Styx from ever escaping.

This is beyond an outrage as this type of move is now ho-hum as the merger between state and corporate powers is solidified more each day. Politically connected equity groups are looting while the getting is good and positioning themselves for windfall profits from heavily lobbied new legislation like the health care bill.

Pop quiz for the day: Who heads up Cerberus Capital?

John Snow of course - the former treasury secretary under George W. Bush.
Who are the Clintons connected to - think largest company in the world from Arkansas.
How about the sitting president and his involvement in carbon trading companies?

Folks had better grow up and realize that by getting riled up and charging the blue flag (democrats) or the red flag (republicans) they are partaking in distraction while the financial matadors prepare for the economic slaughter.

Nonprofit Hospitals Now In Play

CHICAGO — Private-equity group Cerberus Capital Management LP yesterday said it would buy Boston’s nonprofit Caritas Christi Health Care for $830 million, taking over the Catholic system’s long-term debt and spending $400 million on capital upgrades.

The deal needs approval from the Massachusetts attorney general, which will make a recommendation to the Massachusetts Supreme Judicial Court, whose approval is needed for the charitable hospital to become a for-profit entity.

The Massachusetts Department of Public Health and the Archbishop of Boston also need to sign off on the proposal. Caritas is the second-largest hospital group in the state.

The announcement comes several days after another for-profit outfit announced a plan to take over a struggling, urban nonprofit hospital system, and three days after President Obama signed into law an overhaul of the country’s health care system.

Last Friday, Tennessee-based for-profit Vanguard Health Systems Inc. announced its intention to buy Detroit Medical Center — Michigan’s largest charity-care provider — for $417 million plus an additional $850 million for capital improvements.

The interest in the systems could be driven by the new federal law, said market participants.

“The fact that these two hospitals, which have struggled over the years and are situated in markets with lower incomes and higher uninsured patients, are targets of takeovers suggests [private companies] are looking at these types of systems as being beneficiaries under the new rules,” said Richard Ciccarone, head of municipal research at McDonnell Investment Management.

For-profit companies are “looking at areas for improvement of potential profitability because of wider insurance penetration,” Ciccarone said.

In both deals, the new owners would need to either retire all outstanding tax-exempt bonds or refinance it into taxable debt as the transactions would change the systems’ status to for-profit from nonprofit.

As of Nov. 30, 2009, Caritas had $243.9 million of outstanding bonds. As part of the transaction, Cerberus would either defease the bonds or refinance them into taxable debt — either way, the bondholders will be repaid, said Robert Fraiman, president and chief executive officer of Cain Brothers & Co., financial adviser to Caritas.

“From the perspective of the current debt holders, the expectation is that they will be repaid — the methods for doing that have not yet been fully determined,” Fraiman said. “This is a transaction that will take many months to reach closing because there are quite a few approvals that are required.”

It would be the first hospital acquisition for Cerberus, a private-equity group best known for its acquisition of Chrysler. The firm has said it is considering expanding Caritas and buying other hospitals across the country, according to reports.

Under the deal, Cerberus said it would maintain all 13,000 employees as well as the system’s current management team and its Boston headquarters. The firm also said Caritas would retain its Catholic identity and existing community-benefit policies.

A Catholic health care system that operates six acute-care hospitals throughout eastern Massachusetts, Caritas spent years struggling financially before beginning to see positive earnings starting four years ago.

Last year, Caritas, working with Cain Brothers, implemented a number of strategies to improve the system, including layoffs, the sale of a medical lab, and changes to its pension plan.

The restructuring increased profitability and prompted Moody’s Investors Service to boost its rating on the system’s debt to Baa2 from Baa3 and Standard & Poor’s to revise its outlook to positive from negative and affirm its BBB rating. Standard & Poor’s yesterday said its rating on Caritas’ debt is unaffected by the pending acquisition. If the bonds are defeased, the agency said it would withdraw its rating.

Cerberus and Vanguard are both taking over systems that are faced with aging structures in need of major capital improvements. The average age of a facility at DMC is 19.1 years and 15.3 years at Caritas — both significantly higher than the national average median age of 10.1, Ciccarone pointed out.

“They’re going to have a big transition period,” he said. “Someone is going to need deep pockets to get through that transition.”

Caritas reportedly had planned to issue roughly $100 million of new-money debt this year for capital projects and had also estimated that annual depreciation expenses total $50 million, according to a November 2009 report from Standard & Poor’s.

Caritas issued $197.7 million of bonds in 1999 through the Massachusetts Health and Educational Facilities Authority. The debt featured maturity dates from 2000 through 2039, with the largest chunks maturing in 2015 and 2020. The system sold $113.6 million of bonds in 2002. That debt had maturity dates from 2003 through 2031.

Credit analysts have noted that much of Caritas’ debt matures through 2015, and that the system had considered refinancing some of the debt this year to smooth out debt service. The system has no ­interest-rate swaps.

The Ultraverse

A little perspective for Wednesday morning on our small place in the universe. To our knowledge, earth is the only habitable planet in the ultraverse (collection of universes across all 13 known/proposed dimensions) accessible to humanity at this point in time and is dwarfed by the size of other heavenly bodies. Analogous to this is the role of gold and silver, the only known stores of value out there. Like moths to a light investors flock towards the bright, enormous dense masses of paper whose overwhelming gravity pulls investors in only to scorch them.

As in the ultraverse, there are forces at work in the economy which cannot be sensed directly and are difficult to comprehend. Just because one can not see, touch or feel market cycles and capital flows which draw investors back to earth (gold and silver) like they cannot hear radio waves in their own ears, does not mean they are not out there.

US Mint

According to a US Mint employee, 2010 eagles will not be available to the public. There really is no comment needed here:

American Eagle Gold Proof Coins:
Due to the continued, sustained demand for American Eagle Gold Bullion Coins, 2009-dated American Eagle Gold Proof Coins will not be produced.

American Eagle Gold Uncirculated Coins:
Due to the continued, sustained demand for American Eagle Gold Bullion Coins, 2009-dated American Eagle Gold Uncirculated Coins will not be produced.

American Eagle Silver Proof Coins:
Due to the continued, sustained demand for American Eagle Silver Bullion Coins, 2009-dated American Eagle Silver Proof Coins will not be produced.

American Eagle Uncirculated Coins:
Due to the continued, sustained demand for American Eagle Silver Bullion Coins, 2009-dated American Eagle Silver Uncirculated Coins will not be produced.

Taser Precedents

In addition to tasering for confessions and collecting DNA, it is also now acceptable to taser pregnant women.

Court: Seattle Police OK to Taser Pregnant Woman

SEATTLE — A federal appeals court says three Seattle police officers were justified when they used a stun gun on a pregnant mother who refused to sign a traffic ticket.

Malaika Brooks was driving her son to school in 2004 when she was stopped for doing 32 mph in a school zone. Rather than give her the ticket and let her go on her way, the officers arrested her. They used a Taser three times when she refused to get out of her car.

A panel of the 9th U.S. Circuit Court of Appeals ruled 2-1 Friday that the officers were justified in using force because of the threat that Brooks could have picked up her car keys off the floor, started the car and driven away erratically.

The dissenting judge called the ruling "off-the-wall," and said the police officers had no authority to arrest Brooks — let alone the authority to use a Taser on a nonthreatening woman who was seven months pregnant.

10 Year Treasuries Spike

Very difficult to foresee what waits ahead but important to focus on the fundamentals.

Sell-Off In U.S. Treasuries Raises Sovereign Debt Fears

The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis. Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be "the canary in the coal mine", a warning to Washington that it can no longer borrow with impunity. He said there is a "huge overhang of federal debt, which we have never seen before".

David Rosenberg at Gluskin Sheff said Treasury yields have ratcheted up 90 basis points since December in a "destabilising fashion", for the wrong reasons. Growth has not been strong enough to revive fears of inflation. Commodity prices peaked in January and US home sales have fallen for the last three months, pointing to a double-dip in the housing market.

Mr Rosenberg said the yield spike recalls the move in the spring of 2007 just as the credit system started to unravel. "The question is how the equity market is going to handle this back-up in rates," he said.

The trigger for last week's sell-off was poor demand at Treasury auctions, linked to the passage of the Obama health care reform. Critics say it will add $1 trillion (£670bn) to America's debt over the next decade, a claim disputed fiercely by Democrats.

It is unclear whether China is selling US Treasuries after cutting its holdings for three months in a row, or what its motive may be. There are concerns that Beijing may be sending a coded message before the US Treasury rules next month on whether China is a "currency manipulator", though experts say China is clearly still buying dollar assets because it is holding down the yuan against the greenback. Some investors may be selling Treasuries as a precaution against a trade spat.

Looming over everything is the worry that markets will not be able to absorb the glut of US debt as the Fed winds down its policy of bond purchases, starting with an exit from mortgage-backed securities. It currently holds a quarter of the $5 trillion of the MBS market.

The rise in US bond yields has set off mayhem in the 10-year US swaps markets. Spreads turned negative last week, touching the lowest level in 20 years. The effect was to drive credit costs for high-grade companies such as Berkshire Hathaway below that of the US government. This may have been a technical aberration.

The President and The Press

And there is very grave danger that an announced need for increased security will be seized upon by those anxious to expand its meaning to the very limits of official censorship and concealment.

FULL SPEECH TEXT HERE

Use Your Illusion

Those that can't learn from history are doomed to repeat it, or so the saying goes. When the history lesson is just a year or two old and people let it slip from their memories there is likely a bigger issue at hand than the ability to learn. 2010 is starting to look and feel a lot like 2007.

In this case, most of the world is living under the illusion that governments have the ability to stimulate the economy to avert disaster...that governments can pay for social welfare programs and endless wars...that the party never ends.

The reality is that there is no longer any capital behind the full faith and credit of most governments - it is an illusion.

Watch the video all the way through and take notice of what happens at 1 minute and 50 seconds in. Soon many will see the true depth of the world they are living in.

Social Security Payoutt to Exceed Revenue

Default/devaluation or hyperinflation are already baked into the cake. The end result is really the same for the average Joe - poverty. There isn't a legitimate debate about health care because there will be no money to pay for it or much else in the next several years.

So long as people continue to parrot out the party line and align themselves with political zeitgeists and demagogues there is no stopping the runaway train of debt.

Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravening wolves. Ye shall know them by their fruits. Matthew 7:15

Social Security to See Pay-out Exceed Pay-in This Year

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.

Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.

“When the level of the trust fund gets to zero, you have to cut benefits,” Alan Greenspan, architect of the plan to rescue the Social Security program the last time it got into trouble, in the early 1980s, said on Wednesday.

That episode was more dire because the fund could have fallen to zero in a matter of months. But partly because of steps taken in those years, and partly because of many years of robust economic growth, the latest projections show the program will not exhaust its funds until about 2037.

Still, Mr. Greenspan, who later became chairman of the Federal Reserve Board, said: “I think very much the same issue exists today. Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years.”

The Social Security Administration is expected to issue in a few weeks its own numbers for the current year within the annual report from its board of trustees. The administration has six board members: three from the president’s cabinet, two representatives of the public and the Social Security commissioner.

Though Social Security uses slightly different methods, the official numbers are expected to roughly track the Congressional projections, which were one page of a voluminous analysis of the federal budget proposed by President Obama in January.

Mr. Goss said Social Security’s annual report last year projected revenue would more than cover payouts until at least 2016 because economists expected a quicker, stronger recovery from the crisis. Officials foresaw an average unemployment rate of 8.2 percent in 2009 and 8.8 percent this year, though unemployment is hovering at nearly 10 percent.

The trustees did foresee, in late 2008, that the recession would be severe enough to deplete Social Security’s funds more quickly than previously projected. They moved the year of reckoning forward, to 2037 from 2041. Mr. Goss declined to reveal the contents of the forthcoming annual report, but said people should not expect the date to lurch forward again.

The long-term costs of Social Security present further problems for politicians, who are already struggling over how to reduce the nation’s debt. The national predicament echoes that of many European governments, which are facing market pressure to re-examine their commitments to generous pensions over extended retirements.

The United States’ soaring debt — propelled by tax cuts, wars and large expenditures to help banks and the housing market — has become a hot issue as Democrats gauge their vulnerability in the coming elections. President Obama has appointed a bipartisan commission to examine the debt problem, including Social Security, and make recommendations on how to trim the nation’s debt by Dec. 1, a few weeks after the midterm Congressional elections.

Although Social Security is often said to have a “trust fund,” the term really serves as an accounting device, to track the pay-as-you-go program’s revenue and outlays over time. Its so-called balance is, in fact, a history of its vast cash flows: the sum of all of its revenue in the past, minus all of its outlays. The balance is currently about $2.5 trillion because after the early 1980s the program had surplus revenue, year after year.

Now that accumulated revenue will slowly start to shrink, as outlays start to exceed revenue. By law, Social Security cannot pay out more than its balance in any given year.

For accounting purposes, the system’s accumulated revenue is placed in Treasury securities.

In a year like this, the paper gains from the interest earned on the securities will more than cover the difference between what it takes in and pays out.

Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete. Mr. Goss said that large cushion could start to grow again if the economy recovers briskly.

Indeed, the Congressional Budget Office’s projection shows the ravages of the recession easing in the next few years, with small surpluses reappearing briefly in 2014 and 2015.

After that, demographic forces are expected to overtake the fund, as more and more baby boomers leave the work force, stop paying into the program and start collecting their benefits. At that point, outlays will exceed revenue every year, no matter how well the economy performs.

Mr. Greenspan recalled in an interview that the sour economy of the late 1970s had taken the program close to insolvency when the commission he led set to work in 1982. It had no contingency reserve then, and the group had to work quickly. He said there were only three choices: raise taxes, lower benefits or bail out the program by tapping general revenue.

The easiest choice, politically, would have been “solving the problem with the stroke of a pen, by printing the money,” Mr. Greenspan said. But one member of the commission, Claude Pepper, then a House representative, blocked that approach because he feared it would undermine Social Security, changing it from a respected, self-sustaining old-age program into welfare.

Mr. Greenspan said that the same three choices exist today — though there is more time now for the painful deliberations.

“Even if the trust fund level goes down, there’s no action required, until the level of the trust fund gets to zero,” he said. “At that point, you have to cut benefits, because benefits have to equal receipts.”