Don Boots Jensen - In Perception is Reality

The finance ministers of the G-7 countries are meeting in Washington. The first announcements on the meetings will come this weekend. It is not too extreme to say that the outcome of these meetings could redefine how the financial markets work, certainly for months and perhaps for a generation. The Americans are arguing that the regime of intervention and bailouts be allowed to continue. Others, like the British, are arguing for what in effect would be the nationalization of financial markets on a global scale. It is not clear what will be decided, but it is clear that this meeting matters.

The meetings will extend through the weekend to include members of the G-20 countries, which together account for about 90 percent of the global economy. This meeting was called because previous steps have not freed up lending between financial institutions, and the financial problem has increasingly become an economic one, affecting production and consumption in the global economy. The political leadership of these countries is under extreme pressure from the public to do something to solve — or at least alleviate — the problem.

Underlying this political pressure is a sense that the financial class, people who run global financial institutions, have failed to behave responsibly and effectively, and have therefore lost their legitimacy. The expectation, reasonable or not, is that the political system will now supplant these managers and impose at least a temporary solution. The finance ministers therefore have a political mandate, almost global in scope, to act decisively. The question is what they will do?

That question then divides further into two parts. The first is whether they will try to craft a single, global, integrated solution. The second is the degree to which they will take control of the financial system — and inter-financial institution lending in particular. (A primary reason for the credit crunch is that banks are currently afraid to lend — even to each other.) Thus far, attempts at solutions on the whole have been national rather than international. In addition, they have been built around incentivizing certain action and increasing the available money in the system.

So far, this hasn’t worked. The first problem is that financial institutions have not increased interbank lending significantly because they are concerned about the unknowns in the borrower’s balance sheet, and about the borrowers’ ability to repay the loans. With even large institutions failing, the fear is that other institutions will fail, but since the identity of the ones that will fail is unknown, lending on any terms — with or without government money — is imprudent. There is more lending to non-financial corporations than to financial ones because fewer unknowns are involved. Therefore, in the United States, infusions and promises of infusion of funds have not solved the basic problem: the uncertain solvency of the borrower.

The second problem is the international character of the crisis. An example from the Icelandic meltdown is relevant. The government of Iceland promised to repay Icelandic depositors in the island country’s failed banks. They did not extend the guarantee to non-Icelandic depositors. Partly they simply didn’t have the cash, but partly the view has been that taking care of one’s own takes priority. Countries do not want to bail out foreigners, and different governments do not want to assume the liabilities of other nations. The nature of political solutions is always that politicians respond to their own constituencies, not to people who can’t vote for them.

This weekend some basic decisions have to be made. The first is whether to give the bailouts time to work, to increase the packages or to accept that they have failed and move to the next step. The next step is for governments and central banks to take over decision making from financial institutions, and cause them to lend. This can be done in one of two ways. The first is to guarantee the loans made between financial institutions so that solvency is not an issue and risk is eliminated. The second is to directly take over the lending process, with the state dictating how much is lent to whom. In a real sense, the distinction between the two is not as significant as it appears. The market is abolished and wealth is distributed through mechanisms created by the state, with risk eliminated from the system, or more precisely, transferred from the lender to the taxing authority of the state.

The more complex issue is how to manage this on an international scale. For example, American banks lend to European banks. If the United States comes up with a plan which guarantees loans to U.S. banks but not European banks, and Europeans lend to Europe and not the United States, the integration of the global economy will very quickly shatter, leading to significant limitations on international trade, currency convertibility and so on. You will nationalize economies that can’t stand being purely national.

At the same time, there is no global mechanism for managing radical solutions. In taking over lending or guarantees, the administrative structure is everything. Managing the interbank-lending of the global economy is something for which there is no institution. And even with coordination, finance ministries and central banks would find it difficult to bear the burden — not to mention managing the system’s Herculean size and labyrinthine complexity. But if the G-7 in effect nationalize global financial systems and do it without international understandings and coordination, the consequences will be immediate and serious.

The G-7 is looking hard for a solution that will not require this level of intrusion, both because they don’t want to abolish markets even temporarily, and more important, because they have no idea how to manage this on a global scale. They very much want to have the problem solved with liquidity injections and bailouts. Their inclination is to give the current regime some more time. The problem is that the global equity markets are destroying value at extremely high rates and declines are approaching historic levels.

In other words, a crisis in the financial system is becoming an economic problem — and that means public pressure will surge, not decline. Therefore, it is plausible that they might choose to ask for what FDR did in 1933, a bank holiday, which in this case would be the suspension of trading on equity markets globally for several days while administrative solutions are reached. We have no information whatsoever that they are thinking of this, but in starting to grapple with a problem of this magnitude — and searching for solutions on this scale — it is totally understandable that they might like to buy some time.

It is not clear what they will decide. Fundamental issues to watch for are whether they move from manipulating markets through government intrusions that leave the markets fundamentally free, or do they abandon free markets at least temporarily.

Another such issue is whether they can find a way to do this globally or whether it will be done nationally. If they do go international and suspending markets, the question is how they will unwind this situation. It will be easier to start this than to end it and state-controlled markets are usually not very attractive in the long run. But then again, neither is where we are now.

(All information for this article iwas from Stratfor.com)

Do not be a victim. Click on the picture for ways to prevent having your sticker stolen.

                                               

A guy was on trial for murder and if convicted would be executed.

 

His brother, slippery Sam, found out a redneck was on the jury and figured he would be the one to bribe. Slippery Sam told the brother he would pay him $10,000 if he could convince the jury that the charge should be manslaughter.

 

The jury was out an entire week and finally returned with a verdict of manslaughter.

 

After the trial Slippery Sam went to the red neck’s house, told him what a great job he had done and paid him the $10,000.

 

The red neck thanked him for the money, and said, “That money was hard earned; it wasn’t easy to convince the rest of the jury to make the charge manslaughter. They all wanted to let him go”.

 

While On a recent trip to Glacier National Park I came across this article written by an unknown person in Tioga, ND. Sound familiar?

”Classical Version: The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he’s a fool and laughs and dances and plays the summer away.  Come winter, the ant is warm and well fed.  The grasshopper has no food or shelter so he dies out in the cold.

Modern Version: The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he’s a fool and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed.  Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others are cold and starving.

BBC, CNN, NDTV show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food.The world is stunned by the sharp contrast. How can this be that this poor grasshopper is allowed to suffer so?

The ACLU organizes a demonstration in front of the ant’s house. Amnesty International and the U.N. criticize the Government for not upholding the fundamental rights of the grasshopper. Opposition MP’s stage a walkout. Left parties call for ‘Justice for the Poor’ and demand Judicial Enquiry.

Finally the Judicial Committee drafts the prevention of Terrorism Against Grasshoppers Act [POTAGA], with effect from the beginning of winter.The ant is fined for failing to comply with POTAGA, and having nothing left to pay his retroactive fines, his home is confiscated by the government and handed over to the grasshopper in a ceremony covered by BBC, CNN, and NDTV.

The ACLU spokesman calls it a “triumph of justice.” Koffi Annan invites the grasshopper to address the UN General Assembly, marking a victory for the rights of the poor and oppressed.”

Sound familiar? 

Bet you never thought about it that way before – but you will now!Boots 

Patriotism - what's it all about?

Everyone has their own definition of what Patriotism is to them. Below are a few thought from several noteworthy Americans:

"I think patriotism is like charity - it begins at home" - Henry James

"There is nothing wrong with America that cannot be cured with what is right in America" - Bill Clinton

"I believe with all my heart that America remains 'the great idea' that inspires the world . . . It is a gift to raise your family here, to vote here and to live here." - Arnold Schwarzengger

 

Have a great week!

"Boots"

This post in made in response to recent comments made about law enforcement in our communities.

Sometimes I do not understand why people think the way they do! Why does the public think it knows better than trained professionals?

Would you tell your dentist how to fill a cavity?

Would you tell your doctor how to do a heart operation?

Would you tell your eye doctor how to do an eye exam?

Of course not. You're not trained to do the exams and operations properly.

Then why do people think they can tell law enforcement officers how to do their jobs? Recruits receive six months of in-house training, one year of on-the-street training and everyone receives additional in-service training two times a year.

Every day is a training day, because criminals are out to scam you any way they can. They do not follow a book of rules - only their own book of rules to make you a victim. And the crime stats for Milwaukee indicate there are more victims each day of the week.

Some readers have no clue what it is like working the streets and the danger inherent in the profession. I did it for more than 25 years, and each year became more violent than the year before it. People will kill you for a pair of shoes. I have been to murder scenes because people fought over a lousy 40-ounce beer! People killed over shoes, furniture, drug sales gone bad and a number of other crazy situations.

Think about it. Opinions are one thing; reality is another.

Let law enforcement do its job. Our community will be a safer place because the coppers are willing to risk their lives for you and your family.

"Boots" 

 

Have a great holiday weekend!

"Boots"

The Silent generation, people born before 1946.

 The Baby Boomers, people born between 1946 and 1959.

 Generation X, people born between 1960 and 1979.

  Generation Y, people born between 1980 and 1995.


Why do we call the last one-generation Y?  I did not know, but a caricaturist explains it eloquently below...Learned something new!

 

 

 

 

Click on this link to view the dam break on Lake Delton. Unbelievable!

Vacations are great! We look forward to them all year long. In fact we spend hours planning for them. We gather maps, buy new clothes, check out our camping equipment, and look over our vehicles.

Be sure to cancel the mail and your newspaper(s). You can cancel your mail via the internet by going to the USPS web page. It is simple and safe. Cancel your newspaper(s) too. Newspapers stacked on the front porch are a dead giveaway you are not home.

Leave on several night nights and a radio. The appearance of someone being home is a deterrent to the ever watching burglar. Notify the police department and ask them to do a house check for you.

If you have a pet, make sure they are cared for too. Ok, you have taken care of those items, but wait . . . there is something else to do!

Before you go be sure to let a family member know of your itinerary and a contact phone number. Remember that your church, mosque, or favorite charities continue while you are away. So before you pack up and head out mail in your offering/donation so they can continue their missions in the community.

Have a great vacation and I look forward to you checking out my articles when you return!

Unless our Congress acts within the 14 days, MEDICARE and TRICARE payments to doctors will be cut by 10.6% in July of 2008. If that comes to pass your access to health care will be much reduced because more doctors will stop seeing MEDICARE and TRICARE patients.

 

In addition to cutting payments to doctors, hundreds of thousands of MEDICARE patients will lose coverage for their physical, speech, or occupational therapy unless Congress fixes the MEDICARE law within the next two weeks.

Cut and paste the below letter and send it to your Congress person. Thanks for your help in this matter. These changes will have an effect on medical care for everyone.

 I urge you to do all within your power to assure Congress acts quickly to reverse the 10.6% cut in MEDICARE and TRICARE payments scheduled for July 1.  The cut will only cause more doctors to turn away elderly and military patients.  Some doctors have already stated their intentions to do so.

If not corrected in the next two weeks, current law also will terminate speech, physical and vocational therapy coverage for hundreds of thousands of MEDICARE beneficiaries.

Finding TRICARE providers is already a major problem for retirees, survivors, and Guard and Reserve families who don't live near military installations.      

Please do all you can to ensure Congress replaces the MEDICARE/TRICARE rate cuts and sustains MEDICARE therapy coverage.  Without stability in the program, our military families and retirees' care is in jeopardy.

A phishing scam has been sent to families of fallen Soldiers. As part of the scam, the proponents request personal information, such as SSN, DOB, addresses, etc., and are instructed to come to either visit the Army Human Resources Command Offices in Alexandria, VA, or email the information to an overseas Yahoo account.

 

Like most scams, the grammar is poor, it is not on official letterhead, nor does it come from a valid Army e-mail account. CRSC will never ask for personally identifiable information to be sent over e-mail due to security concerns. CRSC will never promise payment or award of any kind. CRSC is not eligible for SBP.

 

As Ambassadors and Affiliates, the program office wants to ensure you are aware of the scam in case you are asked about it.

 

Thank you,

---- example of letter ----

 

Supplemental Guidance for Benefit Pay off Section 644, P.L. 108-375, Administration Letter (BAL) #98-109, US Army Survivor Benefit Plan).

 

21 May 2008

 

Attn: Dear Mr.Mark,

 

We believe you are the next of kin of a deceased officer who died in service in that you bear the same name and last known geographical area of same person. We wish to duly compensate the family by paying the deceased officers benefits and financial entitlements to them. So many deceased officers have the same problem of difficulty in locating their kin but we are doing the best we can. We have gone as far as Asia, Central and southern Africa, Europe, Australia and the Americas in search for next of kin of deceased officers. So the benefits entitled to you amounts to $12,859,555.23 and you can receive it in one week.

 

Our search attorney Mr.Louis Manches. undertaking Group B16 search (AMERICA ,EUROPE & AFRICA SEARCH GROUP) found & located you.

 

We need you to come to our office at: U.S. Army Human Resources Command, Army Physical Disability Agency (CRSC), 200 Stovall Street Alexandria , VA 22332-0470 With photocopies of the following documents. (As the originals will not be returnable.)
1. Letter of Introduction or ID of next of kin (In which case you)
2. Sworn affidavit of next of kin.
3. You are also required to complete the forms below.
A. FORM DD 2860, CLAIM FOR COMBAT-RELATED SPECIAL COMPENSATION (CRSC)
B. FORM DD 2656-7, VERIFICATION FOR SURVIVOR ANNUITY

 

You can download these forms from our US Army Human Resources Command website using the URL (FOR DD FORM 2860) (web links deleted) Or Defense Technical Information website using this Url (FOR DD FORM 2656-7) (web links deleted)

To make it simpler for you, if you cant come to our offices yourself to submit these documents due to ill health or whatever you can appeal to your search attorney to file these documents on your behalf. The search attornies are legal practitioners contracted by the United States Army to help locate next of kins who are in various countries of the world. Your name fell among Group 16 Search which complises of beneficiaries from EUROPE,AMERICA & ASIA. The search attorney responsible for this areas is Barrister Louis Manches. It is the search attorney who shortlisted your name for payment. You are therefore advised to contact him if you have difficulty in completing the forms as well as providing the necessary documents. We understand the problems you could face in getting these documents owing to the fact that it has taken a long time when the officer died. You can write your search attorney for clarifications through the following email (e-mail address deleted by S1NET) If you also have problems filling all these forms , just fill out and return by email the short version attached below. Your search attorney will fill the rest of the forms on your behalf but of course you will contact him and negotiate this service with your search attorney. We expect to hear from you soon.

 

H.S. Park
Defense Finance and Accounting Service,
US Army Human Resources.

 

cc. Capt Sanjay Nangalia

 

Forwarded By Sanjay Nangalia
SBP Monitoring & Control Officer
US Army Survivor Benefit Plan

 

DD FORM 2860, JAN 2008
General Purpose Sheet
CLAIM FOR COMBAT-RELATED SPECIAL COMPENSATION (CRSC)
SECTION I - PERSONAL INFORMATION1. NAME (Last, First, Middle Initial)
2. SOCIAL SECURITY NUMBER
3. RETIRED RANK/RATE
4. DATE OF BIRTH (YYYYMMDD)
5. TELEPHONE (Include area code)
6. E-MAIL ADDRESS
7. MAILING ADDRESS
8. BANK ACCOUNT NUMBER WHERE THIS PAYMENT SHOULD GO
a. STREET (Include apartment number or P.O. Box)
b. CITY
c. STATE
d. ZIP CODE

 

NB

 

You are however advised to seek legal guidance and advice from your search attorney who is presently in Europe searching for other next of kin. He could facilitate your payment by providing all necessary documents as required. Mr.Louis Manches can be reached at (Link deleted).

Pass this onto your friends and family so the word will be spread. All suspected scams should be reported to the FBI.

Info obtained from USDR sources.

 

 

PLEASE TAKE A FEW MINUTES TO VIEW THIS GREAT MESSAGE

Ever wonder how to say thank you when you see a military person in uniform?  See a simple way to do it from across a room or as you are passing by.

The Gratitude Campaign

So . . . . what do you think of the new international symbol for gasoline in the USA?

 

Pass it onto your friends and start writing your congressmen to stop this insanity!

 

The FBI has released a comprehensive new report on mortgage fraud—now posted in full. And, as you might expect given the downturn in the economy and all the troubles in the lending industry, it isn’t a pretty picture.

The information can get quite technical, with plenty of charts, graphs, and hard numbers. But we invite you to take a read if you’re interested in getting educated on the issue—and on emerging schemes that might impact your own pocketbook.

Among the key findings:

... Mortgage fraud is clearly on the rise. Although there is no central way to track the total extent of the problem, we received 46,717 Suspicious Activity Reports related to mortgage fraud last year—compared to 35,617 in 2006 and just 6,936 in 2003. Only seven percent of these reports documented an exact dollar amount in terms of losses, but even so, the total loss from this seven percent was $813 million. Our caseload has also escalated. By the end of fiscal year 2007, we were handling just over 1,200 mortgage fraud investigations—a 47 percent increase from 2006 and a whopping 176 percent increase from 2003.

... The downward trend in the housing market will continue (see forecasts provided by the Mortgage Bankers Association in the report), providing further incentive for shady real estate industry insiders to look for dishonest ways to turn a profit and growing opportunities for scam artists to prey on vulnerable homeowners.

... The subprime lending crisis is a contributing factor to mortgage fraud, both directly and indirectly. Subprime loans, designed for people with poor or limited credit histories, now represent more than 13 percent of all outstanding loans—double the percentage of five years ago. These high-interest, high-risk loans contributed to the 2.2 million foreclosures filed during 2007, up 75 percent from 2006. The trouble actually began when home prices were rising a few years ago, leading to relaxed lending practices throughout the industry and the exaggeration of assets by borrowers anxious to qualify for loans, both of which contributed to fraud.

... The top 10 hotspots nationwide for mortgage fraud in 2007, carefully mapped from multiple public and private sources, were: Florida, Georgia, Michigan, California, Illinois, Ohio, Texas, New York, Colorado, and Minnesota. The north-central region had the largest share of mortgage fraud, followed by the west and southeast regions. 

.. The latest mortgage scams run the gamut: from “builder-bailout” schemes where developers unload excess inventory through financial trickery…to foreclosure rescue frauds that trick homeowners into signing over the deed to their house; from seller-assistance scams that use false appraisals to sell homes…to identity theft that leads to home equity credit lines being opened and drained. See the report for more details.

The report also briefly recounts our proactive response to the problem, including our participation in the Department of Justice's Mortgage Fraud Working Group, through which we are helping to identify large-scale industry insiders and criminal enterprises conducting systemic mortgage fraud...our work in multi-agency mortgage fraud task forces and working groups around the country...and our recent “Mortgage Fraud Summit” to discuss the issue with special agents nationwide. 

For more information:
- The 2007 Mortgage Fraud Report
- FBI Mortgage Fraud webpage

information obtained from the FBI web page