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Guest Post: Extend And Pretend Coming To An End
Submitted by Jim Quinn of The Burning Platform,

The real world revolves around cash flow. Families across the land understand this basic concept. Cash flows in from wages, investments and these days from the government. Cash flows out for food, gasoline, utilities, cable, cell phones, real estate taxes, income taxes, payroll taxes, clothing, mortgage payments, car payments, insurance payments, medical bills, auto repairs, home repairs, appliances, electronic gadgets, education, alcohol (necessary in this economy) and a countless other everyday expenses. If the outflow exceeds the inflow a family may be able to fund the deficit with credit cards for awhile, but ultimately running a cash flow deficit will result in debt default and loss of your home and assets. Ask the millions of Americans that have experienced this exact outcome since 2008 if you believe this is only a theoretical exercise. The Federal government, Federal Reserve, Wall Street banks, regulatory agencies and commercial real estate debtors have colluded since 2008 to pretend cash flow doesn’t matter. Their plan has been to “extend and pretend”, praying for an economic recovery that would save them from their greedy and foolish risk taking during the 2003 – 2007 Caligula-like debauchery.
I wrote an article called Extend and Pretend is Wall Street’s Friend about one year ago where I detailed what I saw as the moneyed interest’s master plan to pretend that hundreds of billions in debt would be repaid, despite the fact that declining developer cash flow and plunging real estate prices would make that impossible. Here are a couple pertinent snippets from that article:
“A systematic plan to create the illusion of stability and provide no-risk profits to the mega-Wall Street banks was implemented in early 2009 and continues today. The plan was developed by Ben Bernanke, Hank Paulson, Tim Geithner and the CEOs of the criminal Wall Street banking syndicate. The plan has been enabled by the FASB, SEC, IRS, FDIC and corrupt politicians in Washington D.C. This master plan has funneled hundreds of billions from taxpayers to the banks that created the greatest financial collapse in world history.
Part two of the master cover-up plan has been the extending of commercial real estate loans and pretending that they will eventually be repaid. In late 2009 it was clear to the Federal Reserve and the Treasury that the $1.2 trillion in commercial loans maturing between 2010 and 2013 would cause thousands of bank failures if the existing regulations were enforced. The Treasury stepped to the plate first. New rules at the IRS weren’t directly related to banking, but allowed commercial loans that were part of investment pools known as Real Estate Mortgage Investment Conduits, or REMICs, to be refinanced without triggering tax penalties for investors.
The Federal Reserve, which is tasked with making sure banks loans are properly valued, instructed banks throughout the country to “extend and pretend” or “amend and pretend,” in which the bank gives a borrower more time to repay a loan. Banks were “encouraged” to modify loans to help cash strapped borrowers. The hope was that by amending the terms to enable the borrower to avoid a refinancing that would have been impossible, the lender would ultimately be able to collect the balance due on the loan. Ben and his boys also pushed banks to do “troubled debt restructurings.” Such restructurings involved modifying an existing loan by changing the terms or breaking the loan into pieces. Bank, thrift and credit-union regulators very quietly gave lenders flexibility in how they classified distressed commercial mortgages. Banks were able to slice distressed loans into performing and non-performing loans, and institutions were able to magically reduce the total reserves set aside for non-performing loans.
If a mall developer has 40% of their mall vacant and the cash flow from the mall is insufficient to service the loan, the bank would normally need to set aside reserves for the entire loan. Under the new guidelines they could carve the loan into two pieces, with 60% that is covered by cash flow as a good loan and the 40% without sufficient cash flow would be classified as non-performing. The truth is that billions in commercial loans are in distress right now because tenants are dropping like flies. Rather than writing down the loans, banks are extending the terms of the debt with more interest reserves included so they can continue to classify the loans as “performing.” The reality is that the values of the property behind these loans have fallen 43%. Banks are extending loans that they would never make now, because borrowers are already grossly upside-down.”
Master Plan Malfunction
You have to admire the resourcefulness of the vested interests in disguising disaster and pretending that time will alleviate the consequences of their insatiable greed, blatant criminality and foolish risk taking. Extending bad loans and pretending they will be repaid does not create the cash flow necessary to actually pay the interest and principal on the debt. The chart below reveals the truth of what happened between 2005 and 2008 in the commercial real estate market. There was an epic feeding frenzy of overbuilding shopping centers, malls, office space, industrial space and apartments. During the sane 1980’s and 1990’s, commercial real estate loan issuance stayed consistently in the $500 billion to $700 billion range. The internet boom led to a surge to $1.1 trillion in 2000, with the resultant pullback to $900 billion by 2004. But thanks to easy Al and helicopter Ben, the bubble was re-inflated with easy money and zero regulatory oversight. Commercial real estate loan issuance skyrocketed to $1.6 trillion per year by 2008. Bankers sure have a knack for doing the exact opposite of what they should be doing at the exact wrong time. They doled out a couple trillion of loans to delusional developers at peak prices just prior to a historic financial cataclysm.

The difference between bad retail mortgage loans and bad commercial loans is about 25 years. Commercial real estate loans usually have five to seven year maturities. This meant that an avalanche of loans began maturing in 2010 and will not peak until 2013. With $1.2 trillion of loans coming due between 2010 and 2013, disaster for the Wall Street Too Big To Fail banks awaited if the properties were valued honestly. A perfect storm of declining property values and plunging cash flows for developers should have resulted in enormous losses for Wall Street banks and their shareholders, resulting in executives losing not only their obscene bonuses but even their jobs. Imagine the horror for the .01%.

The fact is that commercial property prices are currently 42% below the 2007 – 2008 peak. The slight increase in the national index is solely due to strong demand for apartments, as millions of Americans have been kicked out of their homes by Wall Street bankers using fraudulent loan documentation to foreclose on them. The national index has recently resumed its fall. Industrial and retail properties are leading the descent in prices according to Moodys. The master plan of extend and pretend was implemented in 2009 and three years later commercial real estate prices are 10% lower, after the official end of the recession.

Part one of the “extend and pretend” plan has failed. Part two anticipated escalating developer cash flows as the economy recuperated, Americans resumed spending like drunken sailors and retailers began to rake in profits at record levels again. Reality has interfered with their desperate last ditch gamble. Office vacancies remain at 17.3%, close to 20 year highs, as 12.3 million square feet of new space came to market in 2011. Vacancies are higher today than they were at the end of the recession in December 2009. The recovery in cash flow has failed to materialize for commercial developers. Strip mall vacancies at 11% remain stuck at 20 year highs. Regional mall vacancies at 9.2% linger near all-time highs. Vacancies remain elevated, with no sign of decreasing. Despite these figures, an additional 4.9 million square feet of new retail space was opened in 2011. The folly of this continued expansion will be revealed as bricks and mortar retailers are forced to close thousands of stores in the next five years.

It is clear the plan put into place three years ago has failed. Extending and pretending doesn’t service the debt. Only cash flow can service debt.
Now What?

Extending and pretending that hundreds of millions in commercial loans were payable for the last three years is now colliding with a myriad of other factors to create a perfect storm in 2012 and 2013. The extension of maturities has now set up a far more catastrophic scenario as described by Chris Macke, senior real estate strategist at CoStar Group:
“As banks and property owners continue to partake in loan extensions amid a softening economy, commercial banks continue to “delay and pray” that property values will rise. Many loans are piled up and concentrated in this year, and at the same time, the economy is slowing. This dilemma has resulted in the widening of what is commonly termed the “loan maturity cliff,” which is attributed to the so called extend-and-pretend loans. During the market downturn, lenders extended the maturity dates of loans with properties that had current values below their balances. Instead, however the practice has resulted in a race for property values to try to catch up with the loan maturity dates.”
The Federal Reserve, Wall Street banks, Mortgage Bankers Association and the rest of the confederates of collusion will continue the Big Lie for as long as possible. They point to declining commercial default rates as proof of improvement. The chart below details the 4th quarter default rates for real estate loans over the last six years. Default rates in the 4th quarter of 2009 peaked for all real estate loan types. Still, today’s default rate is 450% higher than the rate in 2006. A critical thinker might ask how commercial default rates could fall from 8.75% to 6.12% when commercial vacancies have increased and commercial property values have fallen. It’s amazing how low default rates can fall when a bank doesn’t require payments or collateral to back up the loan and can utilize accounting gimmicks to avoid write-offs.
|
|
Real estate loans |
|||
|
All |
Booked in domestic offices |
|||
|
Residential |
Commercial |
Farmland |
||
|
2011:4 |
8.22 |
9.86 |
6.12 |
3.26 |
|
2010:4 |
9.07 |
10.11 |
7.98 |
3.61 |
|
2009:4 |
9.55 |
10.45 |
8.75 |
3.43 |
|
2008:4 |
6.03 |
6.64 |
5.49 |
2.28 |
|
2007:4 |
2.90 |
3.07 |
2.75 |
1.51 |
|
2006:4 |
1.70 |
1.95 |
1.32 |
1.41 |
The reality as detailed by honest analysts is much different than the numbers presented by Ben Bernanke and his banker cronies. A recent article from the Urban Land Institute provides some insight into the current state of the market:
Ann Hambly, who previously ran the commercial servicing departments at Prudential, Bank of New York, Nomura, and Bank of America said a wave of defaults is coming in commercial mortgage–backed securities (CMBS). And Carl Steck, a principal in MountainSeed Appraisal Management, an Atlanta-based firm that deals in the commercial real estate space, said property values are still falling.
Noting that CMBS investors booked $6 billion in real losses in 2011 and have already taken on $2 billion more in losses so far this year, Hambly told reporters in a private briefing that “it’s going to take a miracle” for many borrowers to refinance their deals when they come due between now and 2017.
Carl Steck said that lenders who are taking over the portfolios of failed institutions are finding that the values of the loans “are coming in a lot lower than they ever thought they would.” And as a result, he thinks a “fire sale” of commercial loans is just over the horizon.
Analysts expect 2012 to be a record-setting year for commercial real estate defaults. Last week delinquencies for office and retail loans hit their highest-ever levels, according to Fitch Ratings. The value of all delinquent commercial loans is now $57.7 billion, according to Trepp, LLC. If you think the criminal Wall Street banks limited their robo-signing fraud to just poor homeowners, you would be mistaken. The fraud uncovered in the commercial lending orbit will dwarf the residential swindle. Research by Harbinger Analytics Group shows the widespread use of inaccurate, fraudulent documents for land title underwriting of commercial real estate financing. According to the report:
This fraud is accomplished through inaccurate and incomplete filings of statutorily required records (commercial land title surveys detailing physical boundaries, encumbrances, encroachments, etc.) on commercial properties in California, many other western states and possibly throughout most of the United States. In the cases studied by Harbinger, the problems are because banks accepted the work of land surveyors who “have committed actual and/or constructive fraud by knowingly failing to conduct accurate boundary surveys and/or failing to file the statutorily required documentation in public records.”
The Wall Street geniuses bundled commercial real estate mortgages and re-sold them as securities around the world. The suckers holding those securities, already staggering from the overabundance of empty office space, will be devastated if it turns out they have no claim to the properties. They will rightly sue the lenders for falsely representing the properties. Mortgage holders in these cases may also turn to their title insurance to cover any losses. It is unknown if the title insurance companies have the wherewithal to withstand enormous claims on costly commercial properties. It looks like that light at the end of the tunnel is bullet train headed our way.
One of the fingers in the dyke of the “extend and pretend” dam has been removed by the FASB. The new leak threatens to turn into a gusher.


Andy Miller, cofounder of Miller Frishman Group, and one of the few analysts who saw the real estate crash coming two years before it surprised Bernanke and the CNBC cheerleaders sees a flood of defaults on the horizon. In a recent interview with The Casey Report Miller details a dramatic turn for the worse in the commercial real estate market he has witnessed in the last few months. His company deals with distressed commercial real estate. This segment of his business was booming in 2009 and into the middle of 2010. Then magically, there was no more distress as the “extend and pretend” plan was implemented by the governing powers. The distressed market dried up completely until November 2011. Miller describes what happened next:
“All of a sudden, right after Thanksgiving in 2011, the floodgates opened again. In the last six weeks we probably picked up seven or eight receiverships – and we’re now seeing some really big-ticket properties with major loans on them that have gone into distress, and they’re all sharing some characteristics in common. In 2008 and 2009, these borrowers were put on a workout or had a forbearance agreement put into place with their lenders. In 2009, their lenders were thinking, “Let’s do a two- or three-year workout with these guys. I’m sure by 2012 this market is going to get a lot better.” Well, 2012 is here now, and guess what? It’s not any better. In fact I would argue that it’s still deteriorating.”
Why the sudden surge in distressed properties coming to market in late 2011? It seems the FASB finally decided to grow a pair of balls after being neutered by Bernanke and Geithner in 2009 regarding mark to market accounting. They issued an Accounting Standards Update (ASU) that went into effect for all periods after June 15, 2011called Clarifications to Accounting for Troubled Debt Restructurings by Creditors. Essentially, if a lender is involved in a troubled debt restructuring with a debtor, including a forbearance agreement or a workout, the property MUST be marked to market. Andy Miller understands this is the beginning of the end for “extend and pretend”:
“I believe it’s a huge deal because it means you don’t have carte blanche anymore to kick the can down the road. After all, kicking the can down the road was a way to avoid taking a big hit to your capital. Well, you can’t do that anymore. It forces you to cut through the optical illusions by writing this asset to its fair market value.”
Ben Bernanke and the Wall Street banks are running out tricks in their bag of deception. Wall Street banks created billions in profits by using accounting entries to reduce their loan loss reserves. They’ve delayed mortgage foreclosures for two years to avoid taking the losses on their loan portfolios. They’ve pretended their commercial loan portfolios aren’t worth 50% less than their current carrying value. Bernanke has stuffed his Federal Reserve balance sheet with billions in worthless commercial mortgage backed securities. The Illusion of Recovery is being revealed as nothing more than a two bit magician’s trick. In the end it always comes back to cash flow. The debt cannot be serviced and must be written off. Thinking the American consumer will ride to the rescue is a delusional flight of the imagination.
Apocalypse Now – The Future of Retailers & Mall Owners

When I moved to my suburban community in 1995 there were two thriving shopping centers within three miles of my home and a dozen within a ten mile radius. Seventeen years later the population has increased dramatically in this area, and these two shopping centers are in their final death throes. The shopping center closest to my house has a vacant Genuardi grocery store(local chain bought out and destroyed by Safeway), vacant Blockbuster, vacant Sears Hardware, vacant Donatos restaurant, vacant book store, and soon to be vacant Pizza Pub. It’s now anchored by a near bankrupt Rite Aid and a Dollar store. This ghost-like strip mall is in the midst of a fairly thriving community. Anyone with their eyes open as they drive around today would think Space Available is the hot new retailer. According to the ICSC there are 105,000 shopping centers in the U.S., occupying 7.3 billion square feet of space. Total retail square feet in the U.S. tops 14.2 billion, or 46 square feet for every man, woman and child in the country. There are more than 1.1 million retail establishments competing for every discretionary dollar from consumers.
Any retailer, banker, politician, or consumer who thinks we will be heading back to the retail glory days of 2007 is delusional. Retail sales reached a peak of $375 billion per month in mid 2008. Today, retail sales have reached a new “nominal” peak of $400 billion per month. Even using the highly questionable BLS inflation figures, real retail sales are still below the 2008 peak. Using the inflation rate provided by John Williams at Shadowstats, as measured the way it was in 1980, real retail sales are 15% below the 2008 peak. The unvarnished truth is revealed in the declining profitability of major retailers and the bankruptcies and store closings plaguing the industry. National retail statistics and recent retailer earnings reports paint a bleak picture, and it’s about to get bleaker.

Retail sales in 1992 totaled $2.0 trillion. By 2011 they had grown to $4.7 trillion, a 135% increase in nineteen years. A full 64% of this rise is solely due to inflation, as measured by the BLS. In reality, using the true inflation figures, the entire increase can be attributed to inflation. Over this time span the U.S. population has grown from 255 million to 313 million, a 23% increase. Median household income has grown by a mere 8% over this same time frame. The increase in retail sales was completely reliant upon the American consumers willing to become a debt slaves to the Wall Street bank slave masters. It is obvious we have learned to love our slavery. Credit card debt grew from $265 billion in 1992 to a peak of $972 billion in September of 2008, when the financial system collapsed. The 267% increase in debt allowed Americans to live far above their means and enriched the Wall Street banking cabal. The decline to the current level of $800 billion was exclusively due to write-offs by the banks, fully funded by the American taxpayer.

Credit cards are currently being used far less as a way to live beyond your means, and more to survive another day. This can be seen in the details underlying the monthly retail sales figures. On a real basis, with inflation on the things we need to live like energy, food and clothing rising at a 10% clip, retail sales are declining. Gasoline, food and medicine are the drivers of retail today. The surge in automobile sales is just another part of the “extend and pretend” plan, as Bernanke provides free money to banks and finance companies so they can make seven year 0% interest loans to subprime borrowers. Easy credit extended to deadbeats will not create the cash flow needed to repay the debt. The continued penetration of on-line retailers does not bode well for the dying bricks and mortar zombie retailers like Sears, JC Penny, Macys and hundreds of other dead retailers walking. With gas prices soaring, the economy headed back into recession and the Federal Reserve out of ammunition, Andy Miller sums up the situation nicely:
“Well, I think we’re headed into an economy right now where there’s just not a lot of upside. Do we think, for example, in the shopping center business, that retail and consumer spending is going to go way up? Certainly not. I think that as times get tougher and unemployment remains high, it’s going to have a negative impact on consumer spending. In almost in any city in America right now, it doesn’t take a genius to see how much retail space has been constructed and is sitting there empty. Vacancy rates are as high as I’ve seen them in almost every venue that I visit. I’m very concerned about the retail business, and I think it’s extremely dangerous right now.”
The major big box retailers have been reporting their annual results in the last week. The results have been weak and even those whose results are being spun as positive by the mainstream media are performing dreadfully compared to 2007. A few examples are in order:
- Home Depot was praised for their fantastic 2011 result of $70 billion in sales and $6.7 billion of income. The MSM failed to mention that sales are $7 billion lower than 2007, despite having 18 more stores and profit exceeded $7.2 billion in 2007. Sales per square foot have declined from $335 to $296, a 12% decline in four years.
- Target made $2.9 billion on revenue of $67 billion in 2011. $953 million of this profit was generated from their credit card this year versus $744 million last year because they reduced their loan loss reserve by $260 million. Target is supposedly a retailer, but 33% of their bottom line comes from a credit card they desperately tried to sell in 2009. They have increased their store count from 1,600 to 1,800 since 2007 and their profit is flat. Sales per square foot have declined from $307 to $280 since 2007.
- J.C. Penney is a bug in search of a windshield. Their sales have declined from $20 billion in 2007 to $17 billion in 2011 despite increasing their store count from 1,067 to 1,114. Their profits have plunged from $1.1 billion to a loss of $152 million. Their sales per square foot have plunged by 14% since 2007. Turning to a former Apple marketing guru as their new CEO will fail. Everyday low pricing is not going to work on Americans trained like monkeys to salivate at the word SALE.
- The death spiral of Sears/Kmart is a sight to see. As the anchor in hundreds of dying malls across the land, this retail artifact will be joining Montgomery Ward on the scrap heap of retail history in the next few years. Its eventual bankruptcy and liquidation will leave over 4,000 rotting carcasses to spoil our landscape. The one-time genius and heir to the Warren Buffett mantle – Eddie Lampert – has proven to be as talented at retailing as his buddy Jim Cramer is at picking stocks. He has managed to decrease sales by $10 billion, from $53 billion to $43 billion in the space of four years despite opening 247 new stores. That is not an easy feat to accomplish. At least he was able to reduce profits from $1.5 billion to $133 million and drive the sales per square foot in his stores down by 15%.
- Widely admired Best Buy has screwed the pooch along with the other foolish retailers that have massively over expanded in the last decade. They have increased their domestic sales from $31 billion to $37 billion, a 19% increase in four years. This increase only required a 444 store expansion, from 873 stores to 1,317 stores. A 51% increase in store count for a 19% increase in sales seems to be a bad trade-off. Their chief competitor – Circuit City – went belly-up during this time frame, making the relative sales increase even more pathetic. The $6 billion increase in sales resulted in a $100 million decline in profits and a 13% decrease in sales per square foot since 2007. It might behoove the geniuses running this company to stop building new stores.
- The retailer that committed the greatest act of suicide in the last decade is Lowes. Their act of hubris, as Home Depot struggled in the mid 2000’s, is coming home to roost today. They increased their store count from 1,385 to 1,749 over four years. This 26% increase in store count resulted in an increase in sales from $47 billion to $49 billion, a 4% boost. Profitability has plunged from over $3 billion to under $2 billion over this same time frame. They’ve won the efficiency competition by seeing their sales per square feet fall by an astounding 21% over the last four years. I’ve witnessed their ineptitude as they opened four stores within 10 miles of each other in Montgomery County, PA and cannibalized themselves to death. The newest store, three miles from my house, is a pleasure to shop as there is generally more staff than customers even on a Saturday afternoon. This beautiful new store will be vacant rotting hulk within three years.
Do the results of these retail giants jive with the retail recovery stories being spun by the corporate mainstream media? When you see some stock shill on CNBC touting one of these retailers, realize he is blowing smoke up your ass. These six struggling retailers account for over 1.1 billion square feet of retail space in the U.S. One or more of them anchor every mall in America. Wal-Mart (600 million square feet in the U.S.) and Kohl’s (82 million square feet) continue to struggle as their lower middle class customers can barely make ends meet. The perfect storm is developing and very few people see it coming. Extend and pretend has failed. Americans are tapped out. Home prices continue to fall. Energy and food prices continue to rise. Wages are stagnant. Job growth is weak. Middle and lower class Americans are using credit cards just to pay their basic living expenses. The 99% are not about to go on a spending binge.
As consumers reduce consumption, retailers lose profits and will be forced to close stores. It is likely that at least 150,000 retail stores will need to close in the next five years. Less stores means less rent for mall developers. Less rent means the inability to service their debt as the value of their property declines with the outcome of Ghost Malls haunting your community. Maybe good old American ingenuity will come to the rescue as we convert ghost malls into FEMA prison camps for uncharged Ron Paul supporters, Obamacare death panel implementation centers, TSA groping educational facilities, housing for the millions kicked out of their homes by the Wall Street .01%ers, and bomb shelters for the imminent Iranian invasion.
Debt default means huge losses for the Wall Street criminal banks. Of course the banksters will just demand another taxpayer bailout from the puppet politicians. This repeat scenario gives new meaning to the term shop until you drop. Extending and pretending can work for awhile as accounting obfuscation, rolling over bad debts, and praying for a revival of the glory days can put off the day of reckoning for a couple years. Ultimately it comes down to cash flow, whether you’re a household, retailer, developer, bank or government. America is running on empty and extending and pretending is coming to an end.
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True dat
The capitalists will simply demand more capital from the taxpayers. John Galt is a douche, even if he has a nice Bentley.
You really ought to read Atlas before condemning it. Galt fought against that kind of "capitalism."
"Atlas Shrugged: Directive 10 289...
In the name of the general welfare, to protect the peoples security and total stability, it is decreed for the duration of the national emergency that:
#1. All workers, wage earners, and employers of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail. The penalty shall be determined by the Unification Board, such Board to be appointed by the Bureau of Economic Planning and National Resources. All persons reaching the age of 21 shall report to the Unification Board, which shall assign them to where, in its opinion, their services will best serve the interests of the nation.
#2. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any and all of their property.
#3. All patents and copyrights, pertaining to any devices, inventions, formulas, process and works of any nature whatsoever, shall be turned over to the nation as a patriotic emergency gift by means of Gift Certificates to me signed voluntarily by the owners of all such patents and copyrights. The Unification Board shall then license the use of such patents and copyrights to all applicants, equally and without discrimination, for the purpose of
eliminating monopolistic practices, discarding obsolete products and making the best available to the whole nation. No trademarks, brand names or copyrighted titles shall be used. Every formerly patented product shall be known by a new name and sold by all manufactures under the same name, such name to be selected by the Unification Board. All private trademarks and brand names are hereby abolished.
#4. No new devices, inventions, products, or goods of any nature whatsoever, not now on the marker, shall be produced, invented, manufactured or sold after the date of this directive. The Office of Patents and Copyrights is hereby suspended.
#5. Every establishment, concern, corporation or person engaged in production of any nature whatsoever shall henceforth produce the same amount of goods per year as it, they or he produced during the Basic Year, no more and no less. The year to be known as the Basic or Yardstick Year is to be the year ending on the date of this directive. Over or under production shall be fines, such fines to be determined by the Unification Board.
#6. Every person of any age, sex, class, or income, shall henceforth spend the same amount of money on the purchase of goods per year as he or she spent during the Basic Year, no more and no less. Over or under purchasing shall be fined, such fines to be determined by the Unification Board.
#7. All wages, prices, salaries, dividends, profits, interest rates and forms of income of any nature whatsoever, shall be frozen at their present figures, as of the date of this directive.
#8. All cases arising from the rules not specifically provided for in this directive, shall be settled and determined by the Unification Board, whose decisions will be final."
Your "support" of Big Brother is duly noted -- just don't think you'll be exempt...
America is in later stages of financial and social decline. No surprise that millions of our fellow citizens are watching the hypocritical, self-congratulatory shitfest known as the Academy Awards. Our society is rotten to the core.
Too true
just for shits n' giggles, what is the dominant group at the EPICENTER of this cultural shitfest and the one in the east?
Let's see here, entertainment and "high finance"...who's known for that shit?
The same group of people that's been scamming everyone for 2 millenia based on a pretty good fairy tale which supposedly elevates them to a chosen people. I'm beginning to have my doubts about the whole Egyptian slave angle Just can't see them having ever worked that hard.
Jews were never slaves in Egypt. We have records that the Egyptians paid laborers to construct the pyramids. There's no evidence whatsoever of an Exodus , or anyone named Moses, for that matter.
It's a simpleton's interpretation to attribute all ills to "Jews" when there are plenty of Jews who don't at all agree with the 'system' as it is now running. But if it makes your world less complicated, have at it.
And it's an obscurantist's attitude to reply to any attempt to notice non-PC reality with bromides like yours. It's not a case of "all ills", genius. It's a case of pervasive influence. Get a clue.
Get your head out of your ass long enough to take a good look around.
And BTW, your point about "plenty of Jews who don't at all agree with the 'system' as it is now running" would resonate better if more of them did not circle the wagons every time necessary mention of Jewish dominance in "the system" is made.
Think about it.
So, jews who oppose the banking system as it is now run (a high % of OWS are Jewish), jews who disagree with Israel's policies (or even some who oppose its existence), jews in civil liberties groups fighting things like the NDAA, jews in anti-war groups, etc...should all just sit silent while being told they are dominating 'the system'. Because, if they object to any logically fallacious smear, they are "circling the wagon".
So either they can object to the assertion that all jews are X way, thus , in the mind of the accuser confirming their accusation ("they all function together and defend one another")
or they can sit silent and acquiesce that all jews are X way.
That is what is known as a double-bind.
Perhaps you should travel outside of your hick town sometime
CITIZEN: I am TeleScreen Monitor badge #11986. This information has been declared DANGEROUS CRIMETHOUGHT under Sec. 1776, Sec. 1913, and sec. 1971.
You will surrender yourself immediately for re-education.
Good read. With "healthy" retailers like Lowes and "unhealthy" retailers like Sears showing unsustainable margins, extend and pretend is a thing of the past.
musical chairs. As with jobs.
All already know facts I'm more interested in WHEN AND WHO WILL TAKE THEM FUCKING BANCHEROS DOWN?!?!
The point about title companies needs to be explored further. In fact, in just two more years there may not be a solvent title company in the US. Then what?
No mortgages for houses without title insurance. So house prices plummet to the point where houses go for what people can pay in cash. Your 20% down becomes the sales price? But all the banks and mortgage lenders will already be bankrupt from their 80% haircut to date. And if you are not sure you have a clean title to the property, even 20% down as the total sales price is still a lot at risk. But if inflation is roaring,
Why i think Jubilee is the only practical answer. Stay where you are and wait for the big reset.
We just traded about $220 worth of repair work for a case of scotch today. We are happy. Cheers, bitchez!
What a great idea.. A bottle of Scotch can be a unit of new currency.
Sure it can. So can mechanical aptitude. Made another deal last week with a dermatologist because I have skin cancer but no health insurance currently. See more and more of these arrangements going on all the time. This is Good news for people with skills.
The SPF scam will soon be exposed. Forget the "dermatologist". Rub coloidal silver on your skin.
And for beelzebub's butt, please lay off those sun blockers.
I don't wear that shit, I just stay covered. I'm (mostly) the whitest skinned Irish mother-fucker you'll ever meet. My father, ALL (3) of his siblings and their mother had lots of skin cancer. I just need some stuff blasted off my face and shoulders before they get dangerous.
Get your vitamin D level checked and raise it if it's low. Theraputic range for someone with cancer should be around 55-70 current research shows. Vit D is a misnomer, it's really more than a vitamin, acts as a regulator on I believe 2000 genes including those involved with cell death (cancer equals faulty cell death). Most Americans are extremely Vit D deficient. Lots of info out there about the subject. Check out grassroots health and mercola.com. Good Luck!
Miffed :-)
Thanks. I actually take a D supplement but haven't been check out skin-wise or blood-wise in a long time. And I'm getting old-ish. I may seek you out after "consultation".
Edward Longshanks Redux: "The beauty of Scotland is...it's full of Scotch!"
These days, I'd rather laugh myself all the way to the liquor store than the BANK.
Jubilee Debt, Bitches!!
That word Jubilee again...
Jew-bilee...not for Gentiles.
from: http://www.chabad.org/library/article_cdo/aid/513212/jewish/When-is-the-...
The only workable long-term solution is a new currency without debt. There is probably still enough time to transistion with the competing currency model, but current political leadership won't even consider it.
I smell riots in the UK!
they will only show footage on RT where they laugh at PC
Dont u just love the logic of the Krugmans, we need to steal from the savings of those who lived responsibly to save those who did not !! Message to Krugman, and the Obamites, your opportunity to reshape the world in your view is imploding...............see ya !!
Nooooooooo. We cannot stop playing this game. Grandpa must not let us know what the future direction is going to have on the proles. Save us all Oracle of Omaha.
LOL
+ 1
Nice job by FOFOA tearing the American Oligarch a new one, no?
doesn't the fact that the banks are now getting greeces gold render the entire freegold concept null and void? It was a nice fantasy, but shit aint ever going to be that easy.
How so? Just a few tons in someone elses hands...or are you saying that if the ECB gets Greeces gold it means something?
If Greece has gold IN GREECE, I doubt they will let it go...
Please enlighten me if I am wrong.
who is this "they" you speak of? The Goldman Sacks appointed technocrat leaders? Oh sure, "they" will "definately" do what is in Greece's best interests. Or humanities. Not the banks.
come to think of it, i have seen a LOT (i mean at least ½ the block, each block, if not more) of commerical real estate vacant around three cities i have worked in recently. Mountain View, Ca., South San Francisco, and now Novato, Ca. a lot of these properties look like they haven't been leased in quite some time.
i've been hoping I can outlast them with my negative cashflow but their legs are longer than mine.
Marxist like Krugman believe Government is about WHO GETS WHAT..........conservatives believe individuals determine what they get out of life,,,,,,,,,,,,,thru hard work and aptitiude............The central planners are the problem...........not the solution.........the next shortage will be tar and feathers!!
Ding ding ding ;)
conservatives also believe they should be allowed to come into your house and moralise, lock you up if they don't like what you are doing and start wars with everyone
you have let liberals define 'conservative' for you. Granted there are some real assholes wearing that name tag but to me a conservative is a libertarian...anything else is a coop of the name ('social' conservative = liberal who is against abortion)
"you have let liberals define 'conservative' for you"
ahhh no. I have let all the self titled conservatives define it for me. You know, like the ones running for the nomination at the moment.
Under your defintion nearly every Republican is an asshole, cause they sure as fuck aren't libertarians.
With all the vacancies at my local mall, I was sure that opening a Cinnabon and a hotdog on a stick franchise
would be profitable. After reading this article I have rethunk it.........I'll just buy Lowes stock and put it on auto pilot.
Krispy Kreme, Chi Chis, and "cash for gold".
There is an air of desperation in the "economy in recovery" soliloquies and presentations in the MSM lately.
Mustard seed, green shoots, and all that. What's on tap for 2012? Daffodils? Tulips? Roses?
Guess what; when you fuck people in the ass they usually realize it. You can say all the nice things and send a dozen roses you want but sooner or later they are going to turn around and stomp your sorry ass into the ground.
I hope Barnes & Noble doesn't go down... Damn! Where would I get to LOOK at a book before buying it?
Plus, I still have that gift card from Christmas,
B&N has a good chance for long term survival as they have a lock on text books which are very profitable.
That's probably true in a parallel universe where Apple didn't launch iBooks:
http://www.apple.com/education/ibooks-textbooks/
I seriously hope you are not holding any B&N junk stocks.
Ahmeexnal, he of the long beard, how fucking gosh, sad, Egyptian, sadder, son of dictator living on stolen money taken from the most destitute people on Earth and crying foul on whitey, un - fucking- real!
Also have a decent chance of recovery as the aging electrical grid becomes less and less reliable- you can read a printed book with a candle, but a kindle needs electricity.
Lots of hidden money in books- my shelves have gotten me through some lean times. A bunch of Stephan King paperbacks isn't much of a retirement plan, but first editions, classics and limited print runs do pretty well when it comes to holding their value. I've had a few I bought for $20-30, then resold for a few hundred bucks a couple of years later. Ferfal agrees as well- paperbacks did pretty well in Argentina when TSHTF.
Cash flow means little when you have "a technology known as a printing press". The cash will flow, it just may be worth a touch less. :~)
Bankers,Bankers,Bankers. When are you gonna wake up and realize its the fucking governments. Is it that hard to understand.
I have an old college friend who says the same thing. He is a banker... Commercial real-estate...... Fuck him, I once loved him like a brother but he crossed over to the dark side, I doubt I would even hide him in may attic when they come for him.
You reap you sow, Bitchez.
The hollow rationalization that bankers use to excuse their torrid affair with their government bed fellows.
I never thought in my life time I will see economic 101 in action,i.e. "no economy can pay off their debt if it is equal to its GDP".
"Maybe good old American ingenuity will come to the rescue as we convert ghost malls into FEMA prison camps for uncharged Ron Paul supporters, Obamacare death panel implementation centers, TSA groping educational facilities, housing for the millions kicked out of their homes by the Wall Street .01%ers, and bomb shelters for the imminent Iranian invasion."
Now THIS is my kind of article!
I see many strip malls now with no tenants and a relatively new one (3 years old) with 12 store fronts with only 2 occupied. I also see banks with few patrons. All support by Bernanke and Fed propping up failed financial banks and real estate with more and more printed money. Rather than letting the economy rid itself of waste Bernanke is making matters worse. The criminals that created the mess, 2004 to 2008, are still doing business and on to their next caper. Criminal behavior is encouraged bey Bernanke, the SEC and other oversight agencies. Much of the same, just extend and pretend.
Next episode, a war with Iran to divert your attention.
When going to war with Iran, I do hope you'll have upgraded your helicopter blades. Remember that hostage rescue thingee in 1979 that blew Carter out of the water?
Every day business rolls on
The really amazing part is that storefront rents just keep going up even as shops bail out. You'd think with all the vacant properties these management companies would cut some local outfit a break but you'd be wrong. CRE either has alot of money in the bank to lean on or is getting a handout that we don't see for whatever reason.
Jim Quinn - Thanks for speaking truth to power about the rampant criminality.
"A systematic plan to create the illusion of stability and provide no-risk profits to the mega-Wall Street banks was implemented in early 2009 and continues today. The plan was developed by Ben Bernanke, Hank Paulson, Tim Geithner and the CEOs of the criminal Wall Street banking syndicate. The plan has been enabled by the FASB, SEC, IRS, FDIC and corrupt politicians in Washington D.C. This master plan has funneled hundreds of billions from taxpayers to the banks that created the greatest financial collapse in world history."
About time to cue the Middle East war. Surely some folks have got to see the opportunity from lending all the funds all the interested parties need to borrow to fight each other, right? Just think of the spoils afterwards. "What a world, what a world..."
Long Halliburton.
This article is littered with 'in my area malls are empty'....
Mind you, I agree with the the general gist of the article, but the author must live in the rust belt, here in texas (last home of freedom) retail is doing fairly well.
In the Summerlin area of Las Vegas (upscale part) there is a cineplex with about 50% vacancies. Scarey.
Last home of freedom?
Then why are the majority of politicians you send to DC such a pack of pro big government establishment scum? Send some steers for a change.
I'm going long quarter pounders and short bonds. Hell ya gotta eat.
My small biz's lease is up in June. I'm shopping around to see if I can lower my rent. Lots of empty space to be had. So far, comparable space is being quoted at less than half of my current rent. Make of that what you will....
That's where the rubber hits the road, at the end of the day retail biz is about rents.
This means stocks are going up...right?
You may be right Mr.Quinn. But, every commerical real estate ETF is up, up, UP! ...and has been. I've been betting SHORT on things where "it's only a matter of time before..." for 2 years now. I have lost way more money that TPTB have lost sleep. So, excuse me if I'm skeptical.
Total corruption prevails . . . .
So who is in Jail yet? not one G.S. perp, J.P Morgue? No.
A local banker near you? Not.
Lawyers, Accountants, Polit's? None.
MF Global arrests or even a strongly worded letter? No.
Maidoff is sleeping with the ghosts of several suicides in his Penitentiary cot, who did he piss off?
Is he even there? or is he chillin in Java with a Pina Colada, would we know?
A truthfull article i think and the Telegraph link(below) will be posted in British history books in 300 years, but there will not be any British history books in 300 years.
No, sorry to tell you. People in fact never learn. We have to go through with the same mistakes, the same failures and ultimately the same pain as before. It's inevitable. it's our fate. Think people can put aside their greed? :-) lol. Think that people really care about "the long term" after we've been on a 30-40 year binge? Think again. And do you believe that even if people were offered 'the solution" that they would embrace it lovingly, chart a new course and go forth with courage and face the challenge? In the movies, perhaps
Wow. Thanks for the macro view update.
I am saving it.
Govt illusion is potent and powerful till it isn't.
Govt is getting the same lower growth as big box per dollars printed.
Thanks again!
The Boxi s rotten, the rats are in, open the box, pick a box, 1,2, or 3!
oh! sorry, the box is full of shit....................
Next contestant please!
There is a vacant strip mall near me. The thing is, it has never been used. It was built 3 years ago or so and the anchor store was going to be...CompUSA. They went bankrupt, and no store has ever moved in.
EVERYONE with an anecdote not just in this thread but all threads with a bearing on local economics please state an approximate geographical location. Metroplex name perhaps as it is really helpful to those of us out here who do not know you personally.. Thanks
Ultimately it comes down to cash flow, whether you’re a household, retailer, developer, bank or government. America is running on empty and extending and pretending is coming to an end.
*************
That's right -cash flow is decreasing as people cannot afford to spend like they did when credit was easy and the value of their 100% financed mansions kept increasing in value-but now that is all reversing as personal and corporate "money supply" decreases and yet so many people somehow see inflation coming-
What this post explained is not synonymous with inflation-it is in fact genuine deflation-
Great read ! It really is all about cash flow. Unfortunately, the 99% can't create it out of thin air like the 1% can.
The 1% can't create it out of thin air... Comes from the 99% savings.
the filthy rich bastards that stole everyones wealth could give a flying fuck about the people that they stole it from
do not think even for one second that they're going to permit one cent of the newly printed money to touch the hands of the ones that truly need it,
thats why their filthy fucking rich
bankers don't give anything to anyone
they only steal
The retail and consumer stocks are broken like the banks - just propped up a little more:
http://chartistfriendfrompittsburgh.blogspot.com/2012/02/weekly-charts-2012-02-26-bank-trend-in.html
Biflation nation is what we're facing and what the article is describing: everything you need is up, everything you're worth is down. The buying power of your money is getting destroyed. So cash flow and credit are negatively affected. And it's accelerating
And that applies to business as margin compression since the cost of doing business rises but costs can't be passed on to constrained consumers and demand undergoes progressive destruction. In other words, the selling power of the supply side is negatively affected just as buying power on the demand side
It's a gradual grind downward as we've seen over the last few years: a downtrend in economic growth punctuated by brief and narrow bounces. But there's never enough to fuel a recovery. There's little to no organic growth beyond the effect of money printing but buying power gets destroyed more and more as a side effect
Biflation nation is what we're facing and what the article is describing: everything you need is up, everything you're worth is down.
**********
I don't understand your term "Biflation" is it different than stagflation?
Because your statement above is comparing two very different dynamics-
Prices rising and money supply decreasing-
For example-the price of your home is listed as net worth and the price of groceries or gas is simply expense-
When the US had Stagflation interest rates rose-today they're down-
http://research.stlouisfed.org/fred2/series/DGS30
The money supply patterns today is not even remotely close to the so called Stagflation of the 70's and 80's-
http://1.bp.blogspot.com/_nSTO-vZpSgc/SRVLM8Kif0I/AAAAAAAADs8/Ad1Iwf_fPJ...
Banks did not hoard cash through the 70/80's Stagflation and today they are-
http://research.stlouisfed.org/fred2/series/EXCRESNS
So maybe your Biflation has a different definition than what i understand as Stagflation?
Biflation means a decrease in debt-based assets such as housing and automobiles and an increase in cash-based assets such as fuel and food. Biflation means your net worth of houses and cars is decreasing in value while it's harder to buy gas.
Biflation means your net worth of houses and cars is decreasing in value while it's harder to buy gas.
**********
That sounds like deflation to me-
The price of a home is likely the largest dollar valued asset most people hold-
If you paid cash for a $500K home and it's value dropped by 50% the deflation (decrease in money supply) would far outweigh any food or gas costs that you might incur-
I really don't see how any of those cars/gas are really comparable to any sort of monetary measure-
Cash flow is for suckers. I am looking to buy an oil well and pump my cash out of the ground until it dries up. Oil and gold is the only real currency left.
(delete)
This article is true. The average family mostly has the appliances, furniture, televisions and so on and can afford not to have to replace them as often as they used to. America can easily cut discretionary spending further in order to pay for necessities, that leaves a lot of marginal retailers selling widgets on the cliff. These marginal retailers pay rent, have employees and so on.
When they go it will not be a pleasant thing to watch.
More space for patriot products.
Bullish!
DOW 15,000 before 11,000.
In respinding to some of the comments above, who would have thought global labor convergence would come so quickly?
Food is still cheao enough here we wont have to work like foxcon employees. And i have found quite a few people will gladly give up their gadgets if the alternative is to work harder.
We will all just double and triple up in homes, ahare vehicles, get our interwebz at mcdonalds when we get a dollar burger, and shope at resale shops. Instead of happy hour someone will bring a bottle of liquor to the house. Eat all those strange unpronouncable cuts of meat instead of steak. Eat lots of rice.
But work like foxconn employees? Not gonna happen. I will learn to cook raccoon and possum first. Making your own bread from 50 lb bags of grain costs ten cents a loaf.
It will be a long boring vacation for most of us, but still better than working like a chinaman.
Who says extend and pretend has to stop. All we need to do now is borrow and spend the entire future earnings of our children's children's children. Two IPads and a Chevy Volt in every pot and we'll be fine.
Its a little hard for me to be objective as I live in the economic wasteland once known as Las Vegas (do come visit; bring money - we've found it hard to exist since people ran out of money to drop a grand at the blackjack tables). Out here, vacant store fronts outnumber operating stores; even what one would consider really good retail outfits (those that actually sell stuff you need all the time) in good locations are going belly up. To me, the story is easy to figure out - I'm not a particularly poor person but I've given up on shopping. The TV in the family room is on the fritz but I just don't feel like replacing it - spending hundreds of dollars to obtain the privilege of viewing mindless, amoral garbage just doesn't appeal to me. I did get a Kindle for Christmas, and I'm grateful for that...but I can't think of any other electronic gadget that makes me want to go spend money...my cell phone is an antique (by modern standards), but as long as it still allows me to make calls, why replace it? When it is time to shop, why spend $299 on a coffee table when I can buy one at Goodwill for $20, refinish it for $10 and have something as good as the new item? Just what is wrong with used items? Why buy that shirt today when I know I'll see it moved over to one of the cheaper stores in a month or two at a 50% (or more) discount? The wife found a really nice blouse she wanted to buy at $39 but refused to be drawn...and the next day found the exact same thing for $12.99 at a discount store.
In short, we're not being quite a much suckers as we used to be - nothing particularly wrong with staying home and reading a book, or going out to an inexpensive restraunt with friends for dinner. Don't need new; and don't need nearly as much stuff as we thought we did a few years ago. I wonder just how many other people out there are getting like this? I know plenty of other people who are now willing to admit to shopping at thrift stores and/or who refuse to jump at the next bit of I-Crap which comes out (always, it seems, with a host of up-charges for their spiffy new services)...I sense a trend.
Go Galt.
Downscale your life.
Spend as little as possible.
Buy used and second hand.
Grow your own.
Fuck a lot.
We are gonna bring this system down, and we can still have fun. Working for peanuts while watching others get bennies and disability for not working is bullshit.
It costs very little to live off rice and beans. Fuck the government and the bankers. You cant tax my idleness and my home grown fresh vegetables.
Best buy in town ... Savers at Warm Springs and Marks (near Sunset Station) great prices and great quailty. There is nothing better than a Las Vegas thrift store ... Tommy Bahama shirts 6.99-9.99. 20% savings if you bring in a donation. I live in Vegas and glad for it; homes cheap, plentiful, and services abound ... for now.
Haha... the analysis of the retail quagmire was hilarious.
Best Buy is my favorite whipping boy. That place has death written all over it.
Competes with Amazon? Buy (if you must) Amazon ... sell BBY
Things heating up in Afghanistan tonight. Gonna cost
Home Depot was praised for their fantastic 2011 result of $70 billion in sales and $6.7 billion of income. The MSM failed to mention that sales are $7 billion lower than 2007, despite having 18 more stores and profit exceeded $7.2 billion in 2007. Sales per square foot have declined from $335 to $296, a 12% decline in four years.
So in 2007 Home Depot had $63 billion in sales.
USD has lost 40% of its value since 2007, so HD would need $105 billion in 2011 sales just to stay even with inflation.
This means HD's $70 billion 2011 sales are DOWN 33% from 2007 adjusted for inflation.
This is the trend across most of retail. Slight sales increases yoy in nominal terms, but steady decline when numbers are adjusted for inflation.
Currency printing is how Bernanke makes an economic depression look like a mere recession.
Since 2007 we've had -9% GDP yoy on average, but running the presses makes it look like break-even 0%, maybe slightly positive.
For example home prices have dropped 50% overall, but currency printing and resulting inflation makes it look like 25% drop.
The grocery store and gas station is where the truth comes out. Grocery and gas prices have risen 100% since 2007, more in some cases.
A lot of people HOPE kick-the-can currency printing will stop before their savings and USD-based assets lose all their value.
But no, kick-the-can isn't coming to an end. Currency printing isn't going to stop. Bernanke will keep printing to keep funding trillion dollar government deficits and keep bailing out banks.
And yes USD will keep losing value, eventually losing world reserve currency status, ultimately becoming worthless.
I work for Walgreens and really hope my store doesn't close. It's in a rural area and the next closest location is about a half hour's drive away.
Utah has $1/2B surplus.
You can't believe the commercial construction in N. Utah. Money changes hands like there's no tomorrow (115k population).
At the USU police office a 19 year old student staffs the front desk. In CA it would be a 55 year old civil service affirmative action hire with bad (union and entitilement) attitude to spare.
People are so polite in N. Utah that it's like a parallel universe compared to CA.
You park 15' from the DMV front door. You walk in. A sweet person sitting at a desk asks, "May I help you?" If you're from CA you look around behind your back and wonder, "Is this person talking to me?"
I get the distinct feeling the coming debacle will look quite different throughout the USA. CA will soon be a sink hole, looking like a 3rd world country. Other places, maybe not.
Most civil servants are not affirmative action hires. What are U smoking?
Excellent post. The end of this road is near. What a coincidence, the newest mall here just announced that the developers are having trouble making the next multi million dollar payment on their loans. Here we are a town of 250,000 people and they build this mall that belongs in Chicago. We laughed at the time and wondered how it would ever succeed. Well, I guess we have our answer.
There's a regional bank that started building a new, big branch on the main drag in town about a year ago. I used to bank with them, but they should already be taken under by the FDIC, so I moved on before TSHTF. Anyway (about a year ago when the dirt work started), I told my wife the next leg of this financial crisis will hit when the branch is complete. They're moving the furniture in right now.
The system will be allowed to collapse when the elite has milked the cow dry to the bone and their latest fiat experiment is no longer working. In the interim the elite has converted as much fiat as they've been able to scam (read print) into tangibles and they will get ahead unscathed.
As long as their fiat experiment is still working and their beloved fiat is still accepted as currency, they will continue printing!
Think of it this way. The biggest parasites are of course those that have never worked a day in their lives and yet, their wealth grows steadily due to their claim to own the resources and the labor. For every dollar that you earn, they earn two. If you're unemployed, their "welfare" experiment will ensure that you will spend enough fiat to keep you from starving. The fiat gets spent for resources and at stores that they own, it comes back to them.
Public debt? No problem. Leverage? No problem. It's their game, their rules. The only way to change it for good is to take from them what they've been taking over decades if not centuries. It's not theirs. Their wealth is just as illegitimate as your debts.
At the end of the day, every man puts his pants on one leg at a time.
The system will be allowed to collapse when the elite has milked the cow dry to the bone and their latest fiat experiment is no longer working.
No longer working?
it's working perfectly well, doing exactly what it's designed to do, drain wealth away from everybody using US dollars.
And no it's not an experiment. It's a carefully crafted plan they know will work.
And yes it will lead to economic collapse when the US dollar collapses.
It's already happening. The economy is slipping further into depression every month as more of people's wealth is drained away (and given to the government, banks, euro banks, IMF, and no telling what other crony insiders).
A fiat currency is a license to steal.
When this thing went down a few years back, I remember GW on television say a "Depression Greater than the Great Depression". I don't care for GW that much but the look on his face told me he was telling the truth. He looked scared. I warned my kids and family to keep cash at home as the banks could not be trusted. What I didn't count on was the printing machine and bailouts.
Now the day of reckoning is coming at hand. Britain admitted today it has no more coin. We know the PIIGS don't have any either. Neither does the US, Canada or most other countries. Very few countries have a surplus and those in debt equal or above their GDP is rising.
I see empty malls or partially filled ones all over, many of them new. They try and lure in businesses with low rents and other incentive, but I know they cannot be meeting their mortgage requirements.
People think I am wacko for not letting up on my prediction. I know it is going to happen, the fundamentals are not there for a recovery, and now that fuel is going up, that is the straw which will break the camels back.
I wish all of you well, but I fear we are going to see things we haven't seen before in the next few years.
Apparently a couple of local jokers bought Crossroads Mall in south OKC last fall FROM the Federal Reserve for 3.5 mil (yeah you read that right). No doubt they are betting on a big retail comeback and looking to flip it. Gangs have deadly shoot-outs in that place. I don't know what they have there any more. Probably just cell phone and trinket vendors. Anyway, these jokers were all over the news saying all the mall needed was a little "TLC" and paint on the railings... Keep dreaming you schmucks. Bennie just suckered you for 3.5 mil.
Apparently a couple of local jokers bought Crossroads Mall in south OKC last fall FROM the Federal Reserve ...
Yep, Fed will be the biggest land owner in America after they buy up all the (worthless) residential and commercial mortgages from banks & Fannie & Freddie & MBS trusts
... with YOUR wealth of course.
A fiat currency is a license to steal from everybody.
Complete your basketball items jointly with your favored NBA team cap. The NBA store provides a broad range of NBA fitted hats bfgjafvbd
San Jose Sharks Hats
Tampa Bay Lightning Hats
Toronto Maple Leafs Hats
Vancouver Canucks Hats
Washington Capitals Hats
Winnipeg Jets Hats
This bastard has gotten past the screening process and is now a prolific spammer...someone turn of mimiss account ASAP.
NBA Stores in malls ... short them now
An interesting stat would be the percentage of Wall St brokers going long with their own money.
If the Vix is low tomorrow I'm buying puts. This rally has fizzled.
Nobody has yet commented, and the author himself ignored, the fact that much of the retail business has been duplicated by online "stores". In the last ten years or so, places where consumers can buy goods have doubled.
It doesn't take a genius to predict a huge shakeout of retailers. Half of the brick-and-mortar establishments will have to go belly up just to return competition back to historical norms. That's a lot of mall space going vacant, and lots of investors jumping out of windows.
OK, OK, I didn't comment because I'm sick of pointing it out. B&M has been trying to commit suicide for at least a decade with its disinterested employees and shrinking selection at higher prices. I'd love to have the KayBee Toys of 1985 back, but it and any other defunct chain can stay dead if more of the last decade is all it has to offer.
Gamblers should gamble with their money.
This debt is more onerous than a normal loan default.
The Banksters who gamble should end up behind bars and NOT be bailed out.
Those who bail these banksters out should also be put behind bars at the first opportunity.
Meanwhile the ad next to the article wants me to go bonk some local chicks for a small joining fee (welcome STD). The world is truly up the creek and even with gold, silver, food and firearms, life is going to get very sketchy for everyone without a private army.
Very good article :)
http://american_almanac.tripod.com/liebig.htm#9.
http://www.google.co.uk/url?sa=t&rct=j&q=harold%20james%20%2B%20interwar...
Reading Harold James on the inter-war period shows how much of the European Depression in the 1920s was caused by France and its policies towards Germany and Austria and the budget deficits run in France and US that destabilised capital flows. It is really well worth reading just how far bond market perceptions of public deficits and funding issues under the overvalued Gold Standard caused complete collapse only to be stabilised under dictatorships for fear of Soviet takeover.
Plus ca change......
Oh and for Bernie Madoff try Alexandre Stavisky 1934 and Clarence Hatry
Thank you for your analysis ... selling April XRT calls tomorrow (2/28/2012). XRT near highs for year ... priceless information
fuck the banks return to honest cash and low / no taxes fuck ccards lets have a real society not a plastic one.!!!!!!
I want to get my kicks before this whole shithouse goes up in flames...
http://youtu.be/imSc29PCPzw
"Where are the feasts we were promised...?"
An American Prayer
http://youtu.be/-pkymTQysNg
Extend and Pretend has failed...is this the legacy of history written as epitaph on the tombstone of hyperconsumer model built on the outsourcing/debt to infinity mantra?
Nice pic of the Dixie Square Mall. I love the documentary photographs of dead and dying malls. To me, it really captures what's happening in the US, as the former icons of middle-class consumerism wither away.
Some more pics of the old Dixie Square Mall:
www.flickr.com/photos/jonrev/sets/72157628167229775/
OT - Dixie Square Mall is where they shot the chase scene from Blues Brothers.
Capitalism is a ponzi scheme. However, as long as ressources are not running short and the growth of population provides for an ever increasing number of players in this game, it will continue to be successful.
You dont have to be a genius to realize that the nature will eventually set limits.
Too bad there is no alternative system that will ensure endurable public order. There are simply too many people and we need a complex economy based on complex hierarchy to keep all these people alive and satisfied. Only money can provide for a hierachy like that. It keeps people motivated and gives them an illusion of freedom and equal opportunities. It people start to lose confidence in money they will realize that their satisfaction was based on illusions. Oppression by force wont work for long.
Prepare for the worst. If you think you are already prepared, think again - it's gonna be much more worse.
I think you are confused. This is not capitalism. This is corporate facism with a population subdued using socialism, fluoride, anit-depressants, and brainwashing academies aka "colleges and universities". I suspect you are a victim of the latter.
"This is not capitalism. This is corporate facism...". The first leads to the latter. An economic system based on capital accumulation and centralisation cant be a good idea in a finite world.
First there were small local stores for daily necessities, and rare large "malls". The catalog companies led the charge into the malls, canabalizing their own catalog sales. They were the anchor stores of the new gigantic malls. Now, the new catalog stores, Newegg, Amazon, etc, are online instead of paper catalogs, and use ups and fedex instead of USPS to deliver the goods. We have gone full circle. Bye, bye, mall.
Expand EBT by 500B/yr and permit its use for all purchases (except booze, pot, and charitable donations).
Have the Fed buy up alll CRE paper.
Good to go.
just saying what the chart tells you - maybe that's why it's underperformed the broader index by 5600bps in the past 20years....
We’ve got several ghost malls in our area with no tenants at all. If anyone needs a brand new never-used roller coaster you can probably have it for free, but, you’ll have to remove it from the parking lot yourself. Oh yea, they built that too, the first time the mall came out of bankruptcy.
Death is inevitable and a good thing. Capitalism is supposed to be survival of the fittest.
As with any classic corporate crisis plan, when the truth fails, just "stall, baby, stall".
I've been studying chaos theory, complexity theory, and stability bias. There are branches of science dedicated to them. They are related.
We are being lead to think that things will always remain as we have known them. We are being placated to think that peace, freedom, and prosperity are the norm. They're not! Chaos is! Tyranny and war is!
The world is returning to its norm. We had better be prepared!
Thanks for this piece! Well Done! This part here, "The major big box retailers have been reporting their annual results in the last week. The results have been weak and even those whose results are being spun as positive by the mainstream media are performing dreadfully compared to 2007. A few examples are in order:" and the breakdown of Big Box results is outstanding!
Thanks
That's all super, but what happens when the Fed just buys all this commercial RE debt? Hmmm, problem (for the banks) solved!Get this straight buster: the Fed is NEVER out of ammo. The printing press is an awesome weapon. The Fed will print or the banks which own the Fed will die...wonder what the Fed will choose to do?