THERE'S NO RECOVERY and HERE's WHY:

First of all the FED did NOT raise rates at the recent meeting, when it could widely be expected that it is time. See, all this talk about economic recovery and the stock market bull run and the big banks repaying TARP money, but yet they DON"t raise rates.Not even a quarter of ONE percent. That's a deafening silence from Bernanke, and yet the market sees it as a good sign, WHY: because its more free money for their "carry trade" i.e. take the Fed money and invest in anything except the thing that they're giving you the money for, to stimulate the economy by providing that money on to consumers and businesses.
So number one, the lack of action by the Fed clearly signals the economy still sucks.

Secondly, look at the global picture, Dubai World, Greece, Portugal, Spain and Ireland all got massive problems. Ireland as a nation is now absorbing virtually ALL the big banks, and assuming billions of dollars of bad loans at a discount of some 47%. That means basically that if you invested 47% of your own money in a project that is now floundering, then you lost ALL your money. The bank will get the money first whenever the property is sold, or in Ireland's case - the good old taxpayers whose money is rescuing everything in the first place.
And we're talking about 80 BILLION euros of problems in Ireland.

Next, we turn back to the USA, where banks are being shuttered every Friday evening now. The FDIC estimates theres still over 100 billion dollars worth of insurance needed to cover the next year of closures. The Treasury secretary Tim Geithner says commercial real estate loans are still a big problem, and I would imagine the "commercial" portfolios are wayyy bigger than the residential ones that already got rescued. The commercial loans go to big high rises, and shopping malls, and hotel luxury condo towers and strip malls and so they're much bigger numbers than residential. Billions. That's right, one shining example is the brand new Ritz Carlton tower in downtown LA, that single development is exactly that, a billion dollar catastrophe, unsold condos, no demand, and never to reach the threshold occupancy required for the bank to even release the building to the tenants. Thats right, if theres not 50 percent occupancy, then the bank can refuse to let ANYONE move in till that threshold is reached.
And then we come to AEG, the Los Angeles corporation of Tim Lieweke, who financed their own luxury condo development towers, but because they don't have the bank looking over their shoulder, they can lie about their numbers, and occupancy, but HAHAHA, they can't even let the bank carry some loss, they lost it ALL themselves. They're broke. Not even a Michael Jackson tribute can save their sorry ass.

Next we look at all the State governments who are broke, slashing jobs and services everywhere to meet budget 'gaps', yet all along they have STRUCTURAL budget deficits every year going forward, in the form of pension obligations, because all the pension money was funnelled into many of these grand property developments, and like Ireland, its all gone. Following on from State governments we move to City municipal governments, who are not only being stung by falling property tax revenue, but who also tipped their pension money into the real eatate bubble and succeeded in losing it all. Now the Los Angeles City obligation is 660 million out of their total revenue of 1000 million [1 billion]. So if two thirds of your money goes out the door before you even SEE it, how can you run a billion dollar city with only 330 million? So they're firing 4,000 people, however, that only closes a hole THIS YEAR!. As I said, a STRUCTURAL DEFICIT is there every year, and all these cities and states have these structural deficits. The ONLY WAY to fix them is to restructure, through bankruptcy proceedings. Its ugly, but the alternative is to enter a bad ending death spiral of lowering bond ratings, and higher loan costs and ultimate default anyway.

Which brings me to DEFAULT. The buzz word now in the finance world. See, the whole world is now derived, and by that I mean everything in the finance world is connected to derivatives, which are financial instruments which go up and down in value relative to the value of the item which that derivative tracks. The number one derivative now is a CREDIT DEFAULT SWAP [CDS] which tracks the creditworthiness of debtors [people who owe money]. This includes sovereign countries like Greece etc who all borrow money to 'turn over' previous debts and pay out those creditors from before. As one gets deeper into the debt cycle though, with insufficient income to repay the loans, then the cost of getting those loans goes up because of the risk. The cost of insuring those loans against default also goes up. The CDS derivative is attached to that insurance rate and is measured in basis points which represent how many thousand dollars to insure 10 million of debt for one year. Croatia is at 187, California is at 200, and Greece was recently OVER 400 before settling back around 360 after a pledge from the EU for support.
But as you can see, if the banks hold a bunch of these derivatives, then clearly they now prefer the default because then their millions of derivatives all go up in value, and they profit.

Its really the ultimate insider trading scandal, because countries like Greece who were struggling to meet EU guidelines to stay in the Eurozone, they came to American banks like Goldman Sachs in order to find a way to mask their debt balloons from the EU. Goldman introduced them to 'currency swaps' and other instruments which helped hide billions off their financial reports. At the same time though, these same banks and institutions started buying default swaps on Greece and insurance giant AIG because they knew these guys were in big trouble, and frankly they had been actually putting them in deeper. Why wouldn't they buy CDS's?

So, here's the bottom line, the world has been sold a depression by the big banks, big developers, and political wannabes who know nothing about honesty and transparency. America is floundering in its mortgage backed securities debacle...the banks kept repackaging all their bad loans and onsell them to others....but eventually they forgot how bad they all were and got sold them back around and around till they're all worthless. The governments at City and State level are structurally defeated. Everything needs to be restructured and a depression will do that.

And I direct you now to the opening line, if I'm wrong about the economy, then why wouldn't they raise the benchmark rate???

Why VISA is the SAFEST stock to own. Our Wall Street News.

Visa does not loan money, it just collects fees.
It does not carry debt, in fact, it is cash heavy.
The company has purchased back 400million dollars worth of its own shares in the last quarter.
Another 600 million has been approved for share buybacks. Total $1billion.
Wall Street just crashed from 10,700 to 9980 on the DOW yet VISA has stayed unchanged.
Recently reported a 33 % increase on profit over expectations.

Here's a company that will gain increasing revenue forever as the whole world makes more transactions with plastic. I use a VISA card many times a month.
This is the kind of stock you want to own, things that you actually consume every day.
That way, every time you swipe the card you're actually contributing to your own company.
If you're a shareholder, then you own part of that company.

Roll on the Winter Olympics!!!

OBAMA is a Fraud!!! War is what he's good for.

So please correct me if I'm wrong, but this is the President of 'Change', the campaign ad nauseum about ending US roles in wars around the world, bringing back our troops and reversing the "Bush doctrine" on terrorist chasing. Now we see him in the war room, approving 30 billion dollars and 30,000 more troops to Afghanistan. And see, I actually don't take sides either way on the wars right now, my BIG THING is the fraudulent election campaign run by Obama, where he has totally hoodwinked the American people. He was voted in predominantly on anti-war rhetoric against George Bush. But now look, its all a lie. He's gung-ho into the war, oh wait, because other people run this country, its so obvious its NOT the president.
Correct me if I'm wrong, please.

MEDICAL marijuana supply IS A STATE RESPONSIBILITY!

There's only one way the federal govt. will allow continued USE of marijuana, and that is if the States provide ADEQUATE regulation. Right now it is completely inadequate, totally unaccountable and quite frankly, out of control. However, that being said, it is not the responsibility of any municipal government to create regulations over and above State law, which would appear to over-ride State sanctions and intent. It is the responsibility of the State to assess the demand right now, and make changes which reflect the demand, and which control the supply. I'll attach a flow chart right here which explains the easiest way to achieve all the objectives. Number One being the quality control objective, that is, what exactly am I smoking, and how powerful is it?

TIGER WOODS caught in a lie???

Tiger Woods not telling the truth?

There’s something just not right about Tiger Woods, a 2.30a.m car crash at his house and his wife smashing windows in the SUV with a golf club. Supposedly because it was locked and she was trying to get him out. That’s true, she WAS trying to get him out, but I suspect he did NOT want to get out. Then he fails to follow through with appointments to speak to the police. “To protect his family and their privacy” according to Woods.
So naturally it now enters the ‘suspicious’ category because the guy can’t be transparent.
So what exactly is daddy protecting his family from? Dad had to zip down to the mini-mart at 2.15 a.m. to get a soda, and clipped the mailbox on the way out, got knocked unconscious in the crash and had to be rescued? Wow, incredible story, but why not tell it to the police. Here’s another version, purely created out of imagination, but which could also fit the facts, as seen from the outside:
Tiger and the wife go to bed as normal. Tiger can’t sleep because he’s thinking about another woman whom he’s rumored to have had an affair with. He gets up at 2a.m. and goes online to check emails. Ends up chatting online or talking softly on the phone when wife walks in and catches him. It all looks bad for Tiger, wife goes into a rage, as well she should, and Tiger grabs his keys and tries to exit. She’s well enraged at his leaving, grabs a golf club out of the bag and runs down the driveway smashing the windows of the hastily departing SUV. The flying glass and commotion along with getaway speed cause Tiger to lose control and crash the vehicle. Once vehicle crashes wife suddenly realizes the complications of the situation and both wrong doers join forces and collaborate stories to help evade the truth and the possible prosecutions that would be laid.
Until Tiger comes clean and provides something of an explanation, I’ll stick with this version to keep me from further head scratching over that little incident.

Matt Dowd 11/30/09