Evangelist Tony Alamo used his stature as a self-proclaimed prophet to force underage girls into sham marriages with him, controlling his followers with their fears of eternal suffering. The judge who sentenced Alamo yesterday to 175 years in prison for child sex abuse warned of another kind of justice awaiting the evangelist.
A former Louisiana congressman who famously stashed cash in his freezer was sentenced yesterday to 13 years in prison for taking hundreds of thousands in bribes in exchange for using his influence to broker business deals in Africa.
The sentence handed down in suburban Washington was far less than the nearly 30 years prosecutors had sought for William Jefferson, a Democrat who represented parts of New Orleans for nearly 20 years.
Agents investigating the case found $90,000 wrapped in foil and hidden in boxes of frozen pie crusts in his freezer.
Prosecutors had asked a judge to follow federal guidelines and sentence him to at least 27 years. The defense asked for less than 10 years, arguing that a stiffer sentence would be far longer than those imposed on congressmen convicted of similar crimes in recent years.
Jefferson said nothing in court after he was sentenced. He was convicted in August of 11 counts, including bribery and racketeering. Prosecutors said he took roughly $500,000 in bribes and sought millions more. He was acquitted of five other charges, including the one most closely associated with the money in his freezer.
A staggering 22 percent of all mortgages in the state of Florida are non-current, according to a new report from Lender Processing Services.
By non-current, they mean loans that are either delinquent or in some stage of foreclosure; perhaps more troubling is the fact that 10.4 percent of home loans in Florida are in foreclosure.
The LPS October Mortgage Monitor also revealed that the nation’s foreclosure rate was 3.12 percent as of September 30, up 2.6 percent from a month earlier and 88.9 percent year-over-year.
And remember that’s with all the government intervention, foreclosure moratoria, loan modifications, and the like; the national mortgage delinquency rate was 9.37 percent as of September 30.
The report also highlights the large shadow inventory of foreclosed properties that could wreak havoc on home prices and a possible housing recovery.
“The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of troubled loans in an already clogged loan pipeline,” the company said.
“Nearly one-third of foreclosures remain in pre-sale status after 12 months – twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further.”
The only bit of good news in the report was increased loan production, with year-to-date 2009 loan totals of 2,032,973 (28 percent FHA) versus 1,903,723 (16 percent FHA) for the same period in 2008.
U.S. state and local governments sold $9.5 billion of bonds this week, led by California, as demand from investors allowed Connecticut to almost double the size of its offering of tax-exempt securities.
The Federal Reserve faces the biggest blows to its authority and independence in five decades under legislation championed by its lead overseer in the U.S. Senate. The financial-regulation overhaul proposed yesterday by Senator Christopher Dodd would strip the Fed of its role as a bank supervisor and give Congress a greater voice in naming the officials who set interest rates. The measure opens the door to interference from politicians who might disagree with any move by the Fed to raise rates from record lows, former central bank officials said.
Brazil, South Korea, Russia and other developing nations are fighting a losing battle to mute gains in their currencies as a falling dollar and economic recovery create more demand for their assets than central banks can handle. South Korea Deputy Finance Minister Shin Je Yoon said… the country will leave the level of its currency to market forces after adding about $63 billion to its foreign exchange reserves this year. Chile Finance Minister Andres Velasco said… that lawmakers approved an increase in local debt sales to finance spending, a move that will allow the government to keep more of its dollar-based savings overseas and slow the peso’s rally. Governments are amassing record foreign-exchange reserves as they direct central banks to buy dollars in an attempt to stem the greenback’s slide.
China, rejecting calls from Europe and Japan, will keep the yuan from gaining against the dollar until exports revive, state researchers said. Policy makers are unlikely to allow the currency to resume its appreciation this year after keeping it almost unchanged since July 2008. Zhu Baoliang, the chief economist at the State Information Center, said. China will stick with its ‘tough stance’ on the currency, Zhang Ming, a researcher at the Chinese Academy of Social Sciences, said.
The number of U.S. homeowners who owe more than their properties are worth fell in the third quarter as values stabilized and some homes were lost to foreclosure, Zillow.com said. About 21% of owners of mortgaged homes were underwater, down from 23% in the second quarter.
Bloomberg (Darrell Preston): U.S. states, which are closing $250 billion of budget deficits, will be forced to grapple with diminished revenue until at least 2012, a survey of fiscal officials found. The only thing that kept states from ‘draconian’ spending cuts has been $135 billion of funding under President Barack Obama’s economic stimulus package, according to a report from the National Governors Associations and the National Association of State Budget Officers. Revenue fell 7.5% in fiscal 2009, forcing states to close budget gaps of $72.7 billion. These are the worst numbers we’ve ever seen,’ said Scott Pattison, executive director of the budget directors group. States have been forced to lay off and furlough employees, raise taxes, drain rainy day funds and sharply cut state spending.
Last week the Dow rose 2.5%; the S&P 2.3%, the Russell 2000, up 1% and the NASDAQ 100 rose 3.3%. Cyclicals surged 4.7%; transports 2.8%; consumers 2.7%; utilities 1.0%; banks 0.7%; broker/dealers 2.6%; high tech 3.7% semis 5.2%; Internets 3.1% and biotechs were unchanged. Gold bullion rose $24.00 and the HUI rose 4.1%. The dollar fell 0.7% to 75.25.
Two-year T-bills yielded 0.81%, down 4 bps; the 10’s were 8 bps lower at 3.42%, as the German 10-year bund rose 2 bps to 3.38%.
Freddie Mac 30-year fixed rate mortgages fell 7 bps to 4.91%. The 15’s fell 4 bps to 4.36%; the one-year ARMs fell 1 bps to 4.46% and the 30-year fixed jumbos fell 19 bps to 5.91%.
Fed credit declined $33.2 billion to $2.116 trillion. Fed foreign holdings of Treasury, Agency debt increased $6.9 billion to a record $2.917 trillion. Custody holdings for foreign central banks expanded at an 18.4% rate ytd and yoy 16.3%.
M2, narrow, money supply declined $6.5 billion to $8.387 trillion. Year-to-date it is up 28% and 5.7% yoy.
Total money market fund assets fell another $3.8 billion to $3.335 trillion. They are off $495 billion ytd, or 14.9% annualized, and 8.3% yoy.
Those who believe we are in a recovery mode and that we have seen the bottom of the residential real estate problem are mistaken. Wait, as well, for the commercial market to start collapsing over the next three years.
Mortgage resets and rising unemployment are spreading foreclosure all over the country not just in the hot spots. Those cities that have been spared are about to get hit. Wall Street and Washington would have us believe recovery is upon us. That is not true, as we see sharp increases in foreclosure activity. Just think what it would be like if our government wasn’t writing lots of subprime loans? Foreclosures continue to outpace sales as exotic ALT-A, Option ARM pick-and-pay, and quality loan foreclosures run rampant.
We ask how can you have a recovery with these ongoing foreclosures and 22.2% unemployment? These problems are not temporary. They are systemic and long-term. 8.4 million jobs have been lost since November 2007, and over the previous seven years five million jobs were lost, mainly to free trade, globalization, offshoring and outsourcing, which hasn’t abated. That is 13.4 million jobs.
In the recent unemployment report 34,000 temporary jobs were created, unfortunately they will for the most part only last through Christmas. Unemployment was 25% during the depression. It is headed much higher then anyone anticipates. David Rosenberg and Meredith Whitney see unemployment at 13%. If you super impose that 2-3/4% increase on our 22.2% real unemployment you have 25%. That is because serious structural problems underlie our entire labor, economic and financial markets that are not being addressed. All that is being done by government and the fed is more money being thrown at the problem and that is not the answer. Those who believe that U6 and U3 will somehow meet are engaging in wishful thinking. The birth/death ratio is a bogus scam, yet none of the economists or analysts dares to address it. This isn’t economics – it is politics and lying by government, Wall Street and the economic community. We are Japan in 1992 only worse. We could go on like this for 20 years in depression. Save that the Illuminists will pull the plug when they are ready to plunge the world into darkness and chaos.
As a result of unemployment Americans are spending less. Sales taxes have fallen on average 12% nationwide. All states had yoy negative collections in October. Any gains being made by individual stores are due to less competition. You could say it is creative destruction. If this is so how did our economy grow 3.5% in this past quarter? Some say government has just thrown out this number. The adjustment will come in at 2-1/2%. The 3.5% was used to rig the stock market and take heat off of banking, Wall Street and the government. A lot of misdirection for the common good, or the end justifies the means. Very simply how can sales be up, or for that matter the economy, when unemployment is still rising? The administration says 55% of the stimulus has been spent. We see very little as a result. Supposedly 21% is to be spent in 2010 and the rest in 2011. The economy needs 125,000 jobs a month for the next five years to get even. Even if another $1 to $2 trillion stimuli and bank lending packages are completed for next year all they will gain is another year of parallel movement. Worse yet, over the next ten years 2.5 million new workers will enter the workforce each year. This means at the minimum the unemployment rate of 22% plus will be with us for three or more years. Unfortunately on top of all this grief, Nancy Pelosi wants to increase taxes substantially. That would knock the economy out of the box. If HR 1207 is not passed 75% of the public that wants it passed will finally come to realization that they are never going to have representation in Congress, because it is controlled by great wealth from behind the scenes by elitists. That will be the seminal moment that will signal a move toward revolution, as the Illuminists final move toward world government begins. The same situation is arising in Europe with unemployment over 30% for workers from 17 to 35 years old. How long can their social system carry that burden? Muslims have virtually overrun Europe as illegal aliens have overrun the US. In neither case has the system been purged, nor has an environment where small business, that creates 70% of the jobs, can thrive. Government stimulus only temporarily creates jobs. It is private investment that creates permanent jobs and real increases in productivity.
We wonder what the 96% of experts think about, who believe that gold is going down, think about as it increases in value almost every day? Speculative funds now hold more than 23 million ounces of gold in Comex positions. In just a month in a half the GLD positions are up 300,000 ounces, as many holders sell to buy bullion and shares because they do not believe the ETF GLD has the gold they say they have. Presently all 12 ETFs hold 56.7 million ounces of gold, worth about $63 billion. Gold and silver related mutual funds held about $20 billion.
We are finally starting to see upward pressure in real interest rates, although the Fed is fiercely fighting the trend and on the short end of the market has remained successful. It is only a matter of time before yields rise as inflation picks up momentum in 2010. We see 10-year T-note yields of 4% and perhaps 4.5% by the end of next year as a result of monetization and increased money and credit to combat the strong deflationary undertow.
We find it disappointing other professionals only see the inflationary reflection in yields and not into a flight to quality, as investors seek safety from all fiat currencies. Part of gold’s strength is a result of anticipation of inflation, but what has been really driving gold prices over the past two years has been a flight to safety and the preservation of assets.
Another positive for gold, which virtually no one discusses, is rising trade differences and the imposition of tariffs, which we just saw as the US slapped tariffs on Chinese tires and steel pipe. At the same time as election year 2010 appears so does increased Treasury debt issuance, Fed monetization and talk of more major stimulus. They are assisted by $8,000 home credits for anyone who hasn’t owned a home for three years. They figure that will throw $25 billion into clearing housing inventory. They know 60% of these subprime loans will come right back at them in two years, but they could care less. It is all about buying time.
Default is still 1-1/2 to 2-1/2 years away. Government refuses to cut spending and it will have great difficulty in raising taxes. Reflation signs are everywhere. It began last May and now officially inflation is 1.2%. Do not think for one moment that many professionals know real inflation is 6-1/8%. The monetary base has doubled in just two years. Anyone who understands the gold market knows that production decreased 10 years ago. There definitely is peak gold.
As a result central banks are buyers of gold. India ostensibly purchased 200 tons of gold from the IMF leaving it with foreign exchange reserves of gold of 6%. If they increased that back to 20% where it was 15 years ago gold prices would increase by $200 an ounce or to $1,320 an ounce. If China did the same thing the result would be $1,420. If the US did the same thing that would put gold at $2,770. These kind of possible factors have in fact become in part probable. What other central banks are buyers that we don’t know about? Another positive factor is 96% of gold experts are bearish and 88% of market pundits are bullish. As you know, when almost all the market experts agree, they are almost always wrong. if you take just a quick look at what government and the Fed are doing you have to conclude that economic, financial, fiscal and monetary policy is worsening, not getting better. We are facing major inflation and the dollar continues its trip downward. We see no dollar rally until we hit 71 to 72 on the USDX and even then a rally to 76 or 78 would be normal. Besides gold has decoupled from the dollar. Technicians continue to fool themselves on the short term by refusing to admit our markets are manipulated by the President’s “working Group on Financial Markets.” We are in a bear market rally and it is on its last legs, just as similar rallies were in 1931, 1932 and 1933.