3 Course Budget:

3.1 Trillion Hefty Hors d' voures

While some might argue that the record $3.1 trillion budget proposed by President Bush on Monday would produce eye-popping federal deficits, despite his attempts to impose politically wrenching curbs on Medicare and eliminate scores of popular domestic programs, others beg to differ and argue that he served us a hefty hors d'oeuvres of a three cause meal with the hungry hobo entree enroute culminating with a jumbo dessert.

The ubiquitous truth is that the economy is in very serious trouble. The White House budget director, Jim Nussle, attributed the softening economy, continuing war costs and the deficit-financed economic stimulus measure expected to clear Congress for the worsening deficit picture. He added that the deficits experienced during the Reagan and Bush Sr. administrations were far worse, when compared to the size of the economy. This analysis did not seem to ease the Wall Street’s biggest mortgage investors and bankers who aren't betting on a recovery in U.S. credit markets any time soon.

Fearing the all-pervading signs of the impending recession, central bank heads and their sidekicks as well as commerce and financial ministers have orchestrated a battery of conventions and forums to mitigate the unprecedented crash landing which many independent analysts and economists forecast to be worse than 50 cat 5 hurricanes hitting the US simultaneously. They're searching for ways to restore investor confidence in the so-called securitization market, which has emerged as the epicenter of the U.S. subprime mortgage crisis, while bracing for further hits in commercial mortgages and credit-cards, according to experts who gathered at one forum, the American Securitization Forum (ASF) meeting in Las Vegas.


According to the latest housing data, the 2 week change of distressed mortgages has risen from 4,621,581 (January 16th, 2008) to 4,885,293 (February 4th, 2008) signifying another increase of 263,712 properties. This translates to a loss of about $1.47 trillion, almost half of the currently proposed budget. This is part of the real money that the financial institutions most of which will fold are dreading to address.

Jan 16th , 2008





February 4th, 2008



A top central banker remarked that there is no end in sight to fallout from the credit squeeze that may trigger a bigger slowdown in U.S. growth and chill other economies too. Devaney, whose net worth has been cut in half by the U.S. subprime crisis, said most American investors were burned by previous mortgage bets to take advantage of new opportunities. "There are a lot of guys who won't buy triple-A any more," Devaney said, referring to the highest credit rating provided by rating agencies and the market's loss of confidence in those agencies. "New outside guys that haven't been involved need to come in."

This cry for foreign investors has most savvy Americans on edge for the fear of loosing the country to the sovereign investment funds as the bulk of the money comes from some not so friendly countries, such as UAE, China, Qatar, Saudi Arabia and other Asian and Arabian countries. “These countries have sensed a limp in our gait and are gunning for our jugular”, said one concerned citizen outside the county library. Jay Leno caught on the vibe and tried to feel the presidential candidates on this issue but most had no clue of the severity of the current situation and like the seasoned politicians they are just brushed it aside as a non issue.

With millions of homeowners opting to walk from their mortgage obligations, the financial institutions are faced with the unthinkable option of turning the properties into rentals as a means of collecting some revenue from the otherwise desolate and fraudulently inflated properties which are increasingly harder to sell than ever before. The new trend that has quietly gripped the nation is stretching the rent free occupation of the foreclosed properties by stalling the eviction process through time tested means such as imploring the judicial system of the various states. In California, the average stay from the moment of delinquency to the time of actual eviction is 10 months without communicating with the powers that be; however this can be prolonged by simply invoking the law and filing frivolous motions to contest the foreclosure and subsequent eviction. Some people have been in their properties for over 2 years without paying a cent to the mortgage companies, an ugly practice that is forcing the mortgage companies to come up with cash incentives to get the stalling tenants out.

Although the foreclosed properties have significantly dropped in price, many are still priced high for their markets and the banks are very reluctant to write new loans especially for those that have shaky credits. While the economic stimulus is supposed to raise the jumbo loan cap from $417,000 to well over $730,000, most banks have since tightened their lending guidelines after realizing the obvious truth that previous home buyers were fraudulently overstating their incomes to qualify for loans that they could not afford. The broad panic spectrum has spread to the investors who fear the credit squeeze triggered last August by defaults in the U.S. mortgage market would tip the United States into recession. And no one seems to have a clue when the so-called collateralized debt obligations, or investments that pool together mortgage securities, will find favor again.

For starters, the severity of the credit crisis has cost banks over $100 billion in writedowns as buyers shun complex financial products linked to unpaid home loans.

According to a report released by Barclays Capital analysts, Global banks may need to raise up to $143 billion in additional capital to offset possible losses on securities backed by the beleaguered bond insurance industry. These funds are readily available from the sovereign funds which have replaced hedge funds and private equity as a major driver of the global market as they seek to invest huge currency reserves in US businesses, especially in banks.

Funds from the Middle East and Asia have invested tens of billions of dollars in major U.S. banks which badly need this capital after huge losses from U.S. subprime mortgage investments.

There is a school of thought which is of the opinion that we have dug ourselves so deep a grave that only a war will actually save the union from disintegration. This train of thought is echoed by the recent crescendo of the drum beat of President Bush in his repeated mention of the 3rd world war. With the Russians stepping up their readiness, it wouldn’t surprise me one bit if the nation woke up tomorrow to the realization that we were actually engaged in military maneuvers in some of these countries that are maliciously masquerading as first responders to our ailing economy but are laden with surreptitious usurpation motives. That we are the laughing stock of the world is acutely overt; According to Kristin Halvorsen, the finance minister of Norway which also has an oil-financed sovereign fund "They need money and are, shall I say, in deep shit and can't manage without foreign capital in many areas of the U.S. market”.

The sovereign wealth funds managers have already started flexing their economic muscles as evidenced by the Singapore Foreign Minister, George Yeo Yong-Boon calling for China and India to immediately join the G7 and G8 world policy talks.


At this point no one knows for sure how much SIVs have invested in the US but it is safe to take the conservative approach of about 20%-30% of the economy. This simply translates to the foreigners owning 20%-30% of the country. Rather than the metered tone when addressing the level of the sovereign investments, President Bush should take a meaningful gravitas approach with all options on the table.



Increasingly independent economists acknowledge the fact that President Bush inherited an unsustainable economy on the brink of a major recession; nevertheless, he might be the one to get the country out of this conundrum given the nail-biting field of possible successors. He might have to launch a 3rd world war to reclaim the country from those who seek to use our fledgling economy as a weapon against our sovereignty.

THE YEAR OF THE RAT

The technology-focused Nasdaq fell for the sixth straight session and showed its steepest percentage decline since a market pullback on Feb. 27 last year. The Nasdaq declined 98.03, or 3.77 percent, to 2,504.65, in part after the downgrade of Intel, but also because its smaller-capitalization components are seen as more vulnerable in an economic slowdown.

The Dow fell 256.54, or 1.96 percent, to 12,800.18, while the S&P 500 index declined 35.53, or 2.46 percent, to 1,411.63.

It was the steepest point drop for the Dow and the S&P 500 since Dec. 11. In 2008, the Dow is off 3.5 percent and the S&P is down 3.86 percent.

A Federal Reserve announcement Friday that it is ramping up the amount of cash available to banks through a new auction process did little to calm the markets. After two auctions of $20 billion each, the Fed has now scheduled auctions Jan. 14 and Jan. 28 at $30 billion each.

The dollar was mixed against other major currencies. Gold prices, which have risen to nearly 30-year highs in recent days, declined.

It's been a difficult start to 2008 on Wall Street, the year most analysts predict to be the make or break year for our economy. After selling off in the final session of last year on Monday, investors spent the first three sessions of the new year absorbing a weaker-than-expected reading on the manufacturing sector, oil that reached $100 a barrel and Friday's dismal employment numbers.

Dividend cuts or suspensions will continue to pick up among financial services firms in 2008, said Howard Silverblatt, a senior index analyst at Standard & Poor's. In 2007, fewer companies increased dividends, according to Standard & Poor's, while more companies in 2007 than in 2006 actually cut or suspended dividends.

Many investors rely on dividend payments as a source of income, and financial institutions in particular have been rich sources of large payouts. Their need to raise capital in the face of rising loan defaults, though, has made their dividends one of the first places they look to save money.

Diane Merdian at Keefe Bruyette & Woods noted that banks, in general, are offering a dividend yield that is near an all-time high when measured against the dividend yield on the S&P 500. Yields are based on a company's full year of dividends compared to the current share price.

Higher yields indicate the company might be distributing more cash to investors than it can afford. Drastic dividends cuts or outright suspensions are likely steps if companies are struggling with earnings or other cash needs.

Since early July, credit markets have been in a free fall, mostly due to rising defaults on mortgages, especially subprime loans given to customers with poor credit history.

As a result of the rising defaults, investors have shied away from purchasing bonds and debt backed by the loans because of fears of mounting losses. As investors stopped buying the debt, banks and other holders of the bonds have been forced to write down their value.

The write-down - which eclipsed $100 billion in 2007 - have strained earnings, forcing companies to look for new ways to raise capital and preserve cash.

The Bush administration, faced with a deteriorating economy and a big jump in unemployment, said Friday it was considering an economic stimulus package that might include tax cuts to ward off a recession.

Officials stressed that President Bush has not decided yet to offer a proposal but was looking at a variety of options with a plan possibly being unveiled around the time of his Jan. 28 State of the Union address.

"The president is always looking at options ... always talking to people and looking at data," Commerce Secretary Carlos Gutierrez said in an interview with The Associated Press.

Bush met Friday with top economic officials including Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, who are part of the president's working group on financial markets, a group formed after the 1987 stock market crash to monitor markets.

The president was given an assessment of how the economy is behaving and how financial markets are performing after the severe credit squeeze that hit in August. A number of big financial institutions have declared multibillion-dollar losses because of rising defaults in the subprime mortgage market.

White House spokesman Tony Fratto said tax cuts were an option being considered.

Bush in his first term included a tax refund of up to $300 per person to combat the impact of the 2001 recession. Private economists said another round of tax cuts would be the best approach to get money to people who would spend it.

The rest of the world is gloomily contemplating economic slowdown and even recession. Not in Beijing. China is set to make 2008 the year it asserts its status as a global colossus by flexing frightening economic muscle on international markets, enjoying unprecedented levels of domestic consumption and showcasing itself to a watching world with a glittering £20bn Olympic Games.

The world's most populous nation will mark the next 12 months with a coming-of-age party that will confirm its transformation in three decades from one of the poorest countries of the 20th century into the globe's third-largest economy, its hungriest (and most polluting) consumer and the engine room of economic growth.

Appropriately, 2008 marks the Year of the Rat, an animal considered in Chinese folklore to be a harbinger and protector of material prosperity.

Britain will feel the full power of the new superpower's confidence. This month, for the first time, China's state-controlled banks will begin spending some of its $1.33trn (£670bn) in foreign currency reserves on London's financial markets. Beijing has ruled that Britain should become only the second destination after Hong Kong to be allowed to receive investors' money via so-called "sovereign funds" – the huge state-controlled surpluses built up by cash-rich economies from Qatar to South Korea. Throw in the biggest round of Chinese art exhibitions ever to tour these islands and the oriental bias to 2008 becomes even more pronounced.

The UK has made it clear that Beijing's investment, which could reach as much as £45bn, is welcome and it follows the recent acquisition by Chinese banks of stakes in such blue chip stocks as Barclays and the US private equity firm Blackstone, at a cost of $3bn. The talk in the finance houses is that the label "Made in China" will soon be replaced by one reading "Owned by China". Takeover speculation has provoked concern in some quarters at the wisdom of selling large assets to organs of a democratically unaccountable state where the financial sector remains underdeveloped.

China's trade surplus with the rest of the world will widen from £130bn in 2007 to £145bn this year as it tries to tame its burgeoning economy amid pressure from Washington and Brussels to narrow the trade gap and raise its currency's value.

Stephen Perry, chairman of the 48 Group Club, a Sino-British business network, said: "China has become an international player much more quickly than it would have wanted to do, in part to meet its need for natural resources. But I don't think China has any intention of taking on American power. The West is important to China in this stage of its development as it seeks inward investment. But that is beginning to be much less important and it is looking more to the development of a strong Asia, in which it is one of the strongest players because of its enormous consumer base."

But while some may question Beijing's political motives, there is no doubt that China has arrived as serious power-broker. Last year, it surpassed America as the greatest driver of global economic demand. It is also widely predicted to overtake Germany as the world's third largest economy this year.

While nearly all of its success since Premier Deng Xiaoping began China's economic transformation in 1978 has been driven by producing goods for the outside world, the country has a burgeoning urban middle-class whose insatiable appetite for consumer durables is hoped to put the economy on a more stable footing.

The arrival of conspicuous consumption and entry of Shanghai's sovereign funds into foreign investment markets, with London soon expected to be followed by the US, is symptomatic of a China increasingly willing to assert itself as a political and cultural influence, according to experts.

From global warming to Darfur and North Korea, the views of Beijing and its willingness to act have become prerequisites to any solution to the world's most pressing problems.

The Chinese New Year on 7 February will herald the beginning of the largest-ever festival of China's culture in Britain with an accent on contemporary artists in fields from video art to neon signs. But others warn 2008 has as much potential to be a disaster as a triumph for Beijing's attempts to herald its own arrival on the world stage. The Chinese capital will host 31,000 journalists for the Olympics and any sign of protest or an attempt to quell dissent with violence would be catastrophic.

The drum beat of protectionism is already sounding in America and will only get louder in a presidential election year, putting pressure on both Republican and Democratic candidates to take a "strong" stance on China. In the meantime, Beijing will have to grapple with issues from rising inflation to Taiwan, which holds presidential elections in March, to its status as the world's biggest emitter of carbon dioxide and likely role as the largest consumer of primary energy resources.

Important contributions from the AP and ICH.

NEW YEAR, SAME DOWNHILL TREND

As always, delicious negativity receives the lion's share of media attention and today is special because as the first day of trading of 2008, we crossed the mythical mark of $100/ Barrel and closed under 200 points confirming the health of our crippled economy is deteriorating rapidly.

Most Americans believe that they know the direct causes of the present housing collapse and the broader economy: low interest rates; lax mortgage lending; rampant speculation. While there maybe merit to this school of thought, the two major reasons are that Americans are wastrels, and prefer everything Big. Americans' devotion to homeownership as with everything else is not a secret; it explains why government officials, politicians and journalists overlooked abuses in "subprime" lending.

It explains why the banks were able to get away with the biggest scam in American History. At the height of the boom in, 2005, the homeownership rate had surpassed 70%, up from 64 percent in 1990. Great. A good cause shielded bad practices. The same complacency lulled ordinary Americans into paying ever-rising home prices. Something so embedded in the national psyche must be OK. This psyche, our Achilles heel, is what the foreign investors saw through their crystal balls and decided to capitalize on.

Everything in America is big; People want bigger cars, bigger roads, bigger homes, bigger loans, and bigger debts. The Chinese and Arabians were all too eager to finance our enormous appetite for everything big. We borrowed money to buy big trucks, SUVs, gas guzzlers and ever bigger homes that we did not need nor could afford. There is absolutely no reason on earth for a family of 4 to own a 5000 sq ft home with 5-6 bedrooms and 2-3 living rooms. Ordinarily these are luxuries exclusive reserved for the rich and famous, but the fraudulent banks somehow convinced the ordinary public that they could afford them and advanced them the loans to buy them. Similar, there is no way on earth a household with a combined income of $60,000/ year can qualify for a $400,000+ home. This is the biggest crime because these banks fraudulently played on our devotion to homeownership, our emotions, our psyche, our appetite for everything big. They threw tantalizing loans in our face and concocted the numbers to qualify us, then bundled the phony loans and offered them as mortgage backed securities on the broader market. These fraudulent lending practices are the biggest cause for the current recession; they have a cancerous effect which is malignantly affecting the broader economy. America is the worst hit of all the economies and its effects are reverberating globally with the other hard hit economies being those of Western Europe. On the contrary the Chinese economy is appreciating at the rate ours is depreciating. Corporate greed has fueled the collapse of our manufacturing sector, effectively wiping out our middle class. Our manufacturing capacity has dipped below the threshold of 50%, the transition mark by which our economy enters the reconstruction phase versus expansion. Once again the repercussions of outsourcing are overt and it is sad to see that some otherwise unfriendly nations such as china, having attracted most of our manufacturing jobs are thriving at our expense.

Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

With oil having briefly touched the once unfathomable price of $100 a barrel, consumers can expect the cost of filling their gas tanks, heating their homes - in fact, the price of most everything - to also keep rising. Some analysts predict gas prices could rise as high as $3.50 to $4 a gallon next summer. And the Energy Information Administration predicts gas prices will set a new record national average above $3.40 a gallon this spring. This is all wishful thinking, and false predictions. The truth is that by this summer the cost of gas will have doubled and a gallon will sell at $6.00 to $7.00 the price the Europeans pay.

Given that ours is a speculators market, the Arabians find themselves in the unique and superior position of imposing their will on the global economies on account of their direct control of oil supply to the market. That we urgently need an alternative source of energy is an understatement and every tool in our kit should be put to use to identify a renewable and sustainable source of energy, freeing us from the bondage of our Arabian masters.

It’s up to the American consumer and investor to read through the lines and study the data for it is unequivocally clear that what we just like all other dynasties and empires have primed ourselves for a hostile takeover. The President is faced with a unique dilemma; if he tells the public the whole truth and nothing but the truth, whatever little hope that may exist to salvage this fledgling economy will evaporate instantaneously, alternatively, the Americans might band together like we always do in times of crisis and weather this storm together. Failure to act is not an option; delaying the action is courting disaster; managing the disaster is a mistake Americans don’t have to make.

Just like the terrorists used our planes to hit us on 9/11 the Chinese and Arabians are using our economy against us. If the golden rule applies, he who has the gold makes the rules; then foreigners will soon own a substantial chunk of the US. Of course this means war.

These foreigners are pseudo-government conglomerates masquerading as holding companies with the sole purpose of toppling our nation in a hostile takeover of our economy. We might as well kiss Israel goodbye!

SubPrime Mortgage Burst

The housing market plunged deeper into despair last month, with sales of new homes plummeting to their lowest level in more than 12 years.

The slump worsened even more than most analysts expected, heightening fears that the country might be thrust into a recession.

New-home sales tumbled 9 percent in November from October to a seasonally adjusted annual sales pace of 647,000, the Commerce Department reported Friday. That was the worst sales pace since April 1995.

The housing picture turned out to be more grim than most anticipated. Many economists were predicting sales to decline by 1.8 percent to a pace of 715,000.

By region, sales fell in all parts of the country, except for the West.

In the Midwest, new-home sales plunged 27.6 percent in November from October. Sales dropped 19.3 percent in the Northeast and fell 6.4 percent in the South. In the West, however, sales rose 4 percent.

Over the last 12 months, new-home sales nationwide have tumbled by 34.4 percent, the biggest annual slide since early 1991, and stark evidence of the painful collapse in the once high-flying housing market.

"I think you can classify what we are seeing in the housing market as a crash," said Mark Zandi, chief economist at Moody's Economy.com. "Sales and home prices are in a free fall. The downturn is intensifying."

The median sales price of a new home dipped to $239,100 in November. That is 0.4 percent lower than a year ago. The median price is where half sell for more and half for less.

On Wall Street, the Dow Jones industrials, after an erratic session, managed to squeeze out a small gain even as the grim home sales report added to some investors' angst. The Dow closed up 6.26 points at 13,365.87.

Would-be home buyers have found it more difficult to secure financing, especially for "jumbo" mortgages - those exceeding $417,000. The tighter credit situation is deepening the housing slump. Unsold homes have piled up, which will force builders to cut back even more on construction and look for ways to sweeten the pot to lure prospective buyers.

"A lot of borrowers are being disqualified for loans. If you can't qualify for a mortgage the game is over. For those who do qualify, it takes longer to get loans," said Brian Bethune, economist at Global Insight.

Ultimately the foreclosures will set the new home prices, which will be substantially lower than the current market value; consequently the overly inflated homes will bottom down and people will be able to qualify and afford the homes. The other alternative, the scary alternative is: Just like the terrorist used our planes to hit us on 9/11, the Chinese are using our free markets and corporate greed in a hostile takeover of our economy. If the golden rule applies, he who has the gold makes the rules, within the next decade; China will own a substantial chunk of the US. The repercussions can only mean war. Once our leaders wake up to these back door acts of war, they will retaliate.


The Arabs have followed suite and are investing heavily in our crippled economy, infusing tremendous sums of money in our fraudulent and fledgling banks for a share of the pie. The Arabians have a superior hand in all this because they have direct control over the price of oil, adjusting it at will to suit their objectives.



These foreigners are pseudo-government conglomerates masquerading as holding companies with the sole purpose of toppling our nation in a hostile takeover of our economy. We might as well kiss Israel goodbye!

The Whistler

Now that the Fed has launched investigations on Wamu, one has to hope that they can expend to the rest of the industry. The banks are criminals and should be addressed as such. If the administration is bend on doing something about these criminals and possibly rescuing the country from the major recession it's heading to, then it needs to completely overhaul the entire banking system.



The banks that were involved in the fraudulent and predatory lending scams should be investigated, and prosecuted. Their assets should be frozen by the Government and used to correct the system. Since when did a bum from the street, a bum without a job or the prospects of getting one, a bum that has not filed income tax for 15 years, qualify to buy a $1/2 million home? The stated income scam should be investigated because it led to inflation in home values and subsequently major defaults, and foreclosures. The single biggest scam in History, right under the watch of the administration.

So rather than negotiate with the one that is bleeding you to death, the Govt. should cut ties immediately and pursue an aggressive and real solution to this mess. If this was to happen, it would not only exonerate the administration for all its shortcomings and absurdities, but it would propel this administration into the history books as the administration that saved America from the first aggressive attack and possible colonization since independence.

The bad credit the Americans have accrued due to defaults, coupled with loss of employment through outsourcing have effectively set the foundation for a hostile takeover of our beloved country by foreigners who not only have virgin credit, but in most cases bring cash to the table. These foreign investors are gobbling our distressed banks, the same scandalous banks that initiated this whole mess, and now own the defaulted mortgages and the foreclosed homes. Look at Citi And Meryl. These foreign investors are buying up stock in these banks and once they take full control, they will not only own and control our economy, they will become our new landlords. Just take a look and see what they have done with our oil dollars, transformed their desolate desert into an oasis of envy!!

Watch out America!! The Arabs are coming.

According to Greenspan

Very few in the world of economics can challenge the genius of Alan Greenspan. This 81 year old financial genius was at the helm of the strongest economy in the world, the Chairman of the Federal Reserve, for 2 decades. He led The Fed through 4 presidencies, until last year when he voluntarily stepped down and was succeed by Ben Bernanke.

While his last years were mired by criticism for his handling the economy and keeping the interest rates too low which some critics blame for the housing bubble, he is also credited with saving the economy from disastrous recessions; notably 1997 and more recently following the 911 attacks in 2001.

I will not delve into Greenspan's biography nevertheless I will mention that he is learned and has previously served in several seniority positions. A well traveled man, Greenspan wined and dined with the wealthiest in the world and as such had numerous connections and ideas of how and where the market was heading.

While one might argue that some senility associated with old age had started to erode his brilliant mind, it's his global connections that dictated the direction of the markets.

This brings me to today's observation: Greenspan single-handedly facilitated the collapse of the US economy not only by cutting and maintaining key low interest rates, but also by encouraging banks to aggressively promote alternative lending products, specifically, subprime loans. While this was his idea of revamping the economy, he has as of 2005 admitted that he had no idea that it would get out of hand, nevertheless, he did predict that the housing bubble that he had created would burst in a relatively short period of time. Perhaps this might have played a role in his untimely resignation from his coveted chairmanship.

If he helped to create this problem, then perhaps he should know how to resolve it. When he suggested financial aid to the home owners, perhaps it's because he understood that most had bit more than they could chew and in the interest of the overall economy, it would be best to give the home owners some money to pump back in to the economy. Consumer spending has tremendously fallen in the wake of high mortgages and market uncertainties.

After conferring with several of my friends, all of whom have been or know someone whose home has been foreclosed on, the consensus was that the Government should take a more aggressive approach into this quagmire in the interest of saving the economy and the nation at large. They all concur that the home values were inflated and if the Govt. would reappraise them and rewrite new loans then perhaps they would be tempted to keep them otherwise they would just walk out of the loans. They figured that it was easier to rebuild their credit than to pay off their non-recourse interest only mortgages that would reset every 6 months. Very easy decision given the fact that most of them were paying an average of 4k-9k/ month. Big loans.

It seemed like a good idea to investigate all the banks involved with the mortgage fraud that became evident as more owners defaulted on loans that should have never been written in the first place based on their inability to honor their obligations. That it was in the interest of the economy and nation at large to prosecute these banks and brokers rather than bail them out in the guise of bailing out the home owners (victims).

While Greenspan would probably fall in this category for facilitating the whole fiasco under his watch, the best solution forwarded was to dissolve the Fed and replace it with a Govt. owned and operated central bank. The discussion also pointed out that several members of both houses of Congress were very hesitant in "grabbing this bull by the horns" because they too were guilty of not activating or heeding to the recession and inflation prevention mechanisms in place, but that they profited from the said scam by turning into overnight investors and using their influence to score big deals. They exploited the bubble by delving head first into the real estate business and when they could have stymied the bleeding earlier, held back until they unloaded their investments.

One should not look for a meaningful reaction from Congress regarding the investigation and prosecution of the fraudulent banks or the immediate decommissioning of the Fed. At least not from the current do nothing bunch.

So where does this leave us? In a nut shell, this leaves us between a rock and a very hard place. We are now ripe for a hostile take over from foreign investors such as the Chinese and the Arabians. While the Chinese are guilty of swiping away our manufacturing jobs, (the second major reason for our recession), the Arabs are systematically and increasingly buying controlling interests in our fledgling banks and corporations, the most recent being Citi.

If history holds true, then the golden rule will prevail; those who have the gold make the rules!! The Arabs give us oil, but do we know what they do with our dollars? Are they using our dollars and our capitalistic system against us? Why do they have Govt. sponsored holding companies buying everything they can get their oily hands on? And to think that they have transformed their desolate desert into an oasis of envy at our expense is not only Inferiororating but criminal.

Perhaps the next adminsistration will usher a new dawn of economic policies; perhaps they will continue business as usual. Perhaps they will heed to Greenspan's suggestions to arm the consumers with financial aid. Whatever their game plan is, they will inherit a country waist deep in the greatest depression in history.

ATTACK ON THE NEW FRONT: OUR ECONOMY

Neither candidate from either side has a serious economic or foreign policy agenda that addresses the impoverished nations especially those in Africa and South America.

The two continents combined boast 65-70% of the world’s natural resources, from minerals, to manpower. Left unaddressed, other emerging powers such as China and the Arabians will tap into those resources to our demise.

We are living in a different era, where corporate warfare has replaced field combat and artillery shells. Not to undermine the sacrifice our young men and women in uniform give everyday in the grinding wars around the globe in our continuing effort to combat global terrorism, we need to understand that there are other nations that have waged a different kind of war on us. An economic war. Just like the masterminds of 911 used our planes against us, these warring nations are using our identity, Capitalism, against us.

That the candidates are steering away from this vital economic issue is not a coincidence. Those who were in Congress joined the administration in taking credit for the booming economy, rather than activating the mechanisms in place to prevent the mortgage fraud that is now crippling the nation.

Foreign Government sponsored corporations have emerged with the sole purpose of investing in our crippled economy, effectively becoming our new masters. The constant bickering and infighting amongst our leaders and candidates has diverted the nation from the prime focus of maintaining its grip as the leader of the free world. Eventually when all is said and done, and the dust has settled, the fighting candidates will rally behind the victor, the one they have been bombarding with flimsy accusations all along the campaign, to undermine the nominee from the other party. However, after the general elections, and the new President is chosen, the politicians will switch gears and do what they do best, start preparing for the next election, with new attacks on the leadership. Others will embark on returning favors for the endorsements while all along ignoring the task at hand.

It's in the interest of the west, especially America to ensure that Africa gets preferential trading deals and grants, without strings attached. While this does not call for the re-colonization of Africa and South America, it mandates aggressive protection of their resources from nations that will not only exploit those resources to boost their own economies, but will abuse them to deteriorate our economy and National Security. Preventative measures have to be implemented to prevent such nations from undermining the effort by circumventing the assumed policies. China is currently exploring setting up an auto assembly plant in Mexico, a country that has preferential trade agreements with the US. This not only defeats the purpose of the implementing policies to promote and safeguard the developing nations resources, but is a direct threat to the US auto industry.

One needs to travel outside America to see the rate at which the Chinese and Arabians are infiltrating the impoverished and in most cases corrupt African and South American countries. They lure them with infrastructure, and money; however, the roads lead to the abundant natural resources which are easily and cheaply converted to finished products that flood our stores.

With a lock on these natural resources, the Chinese and Arabians are gradually and systematically destroying our economy and national security. We, the American consumers are giving up an opportunity not only to help these poor nations, but are embarking on a self destructive mode.

The Arabians armed with the knowledge that their oil reserves are swiftly diminishing have embarked on an aggressive approach to diversify their petroleum $$ by investing in renewable and sustainable economies.

These high powered Govt. backed foreign investors are after our blood. Like a predator in the wild targets the limping prey, they have sensed a limp in our stride and are converging on our economy's jugular with the help of the greedy and fraudulent banks that should be investigated and prosecuted for fraud and predatory lending practices.

The -ve credit the Americans have amassed from defaults, coupled with massive unemployment resulting from outsourcing have laid the foundation for a hostile takeover of our beloved country by foreigners who bring virgin credit and cash to the table.

These foreign investors are gobbling our distressed banks, Oil dollars at work!! the same scandalous banks that initiated this whole mess, and now own the defaulted mortgages and the foreclosures. Once they take full control, these foreign investors will not only own and control our economy, they will become our new landlords.

Just take a look and see what they have done with our oil dollars, transforming their desolate desert into an oasis of envy!!


Watch out America!! The Arabs are coming!!!