General Electric Co. – #29 recipient of Fed’s ‘secret liquidity lifelines’

GE Capital, along with several other very large, well-heeled fiduciary entities was charged and convicted in a major municipal bond bid-rigging scandal in 2012. GE Capital had been shaking down municipalities across America, and screwing the pants off hard-working U.S. citizens. On a large scale.

More from the trial… by Matt Taibbi, June 21, 2012                                                                 The Scam Wall Street Learned From the Mafia | Rolling…                                               

“The state’s first witness, confusingly, was a CDR broker named Doug Goldberg… Right off the bat, in fact, Doug Goldberg explained that while at CDR, he had routinely helped the cream of Wall Street rig bids on municipal bonds by letting them take a peek at other bids:
Q: Who were some of the providers you gave last looks to?
A: There was a whole host of them, but GE Capital, FSA, J.P. Morgan, Bank of America, Société Générale, Lehman Brothers, Bear. There were others.
[snip]                                                                                                                           Goldberg went on to testify that he repeatedly rigged auctions with the three defendants. Sometimes he gave them “last looks” so they could shave basis points off their winning bids; other times he asked them to intentionally submit losing offers – called cover bids – to allow other firms to win.                                                                                                  …… The broker went on to detail how he had worked with the GE executives to manipulate a number of auctions.
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And several short years earlier, U.S. taxpayers were helping bail GE Capital out of a financial hole, courtesy of generous Federal Reserve emergency lending initiatives.

Excerpts from Bloomberg report: Bloomberg  Nov 28, 2011 :
General Electric Co.’s GE Capital finance unit was the biggest U.S. issuer of commercial paper in 2008. GE, the world’s largest maker of jet engines and locomotives, turned to the Federal Reserve for emergency liquidity after the market for commercial paper — bonds with maturities of less than 270 days — froze in late 2008.

GE Capital, which had $91.8 billion of CP outstanding at the end of September 2008, borrowed from the Fed’s Commercial Paper Funding Facility from October 2008 through February 2009, with a balance as high as $16.1 billion, data show. Initially, a GE spokesman said the company borrowed from the program “to demonstrate our support for what the Fed is doing.” In December, GE Treasurer Kathryn Cassidy said the company was using the CPFF “primarily as a liquidity backstop.” 

Peak amount of debt on 11/21/2008:  $16.1B

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If the U.S. government and the Federal Reserve can firehose liquidity out to companies like General Electric Co, in its time of need….

…then shouldn’t honest, hard-working U.S. citizens also be granted direct access to liquidity to restore financial health, across the board, at ‘ground level’ in America?

Answer: Yes they should.

The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen                                                   The Leviticus 25 Plan 2015 (758)

 

The ECB’s massive new round of QE: “Another trillion for the banks…..”

Mario Draghi has recently committed the European Central Bank (ECB) to a “quantitative easing program worth at least 1.1 trillion euros ($1.3 trillion) to counter the threat of a deflationary spiral” (Bloomberg Jan 22, 2015).

David Stockman’s Contra Corner (January 25, 2015) has called it; “Europe’s Saddest Day In 50 Years: Another Trillion For The Banks, More Trauma For The People”        the guest article by Raúl Ilargi Meijer called it another liquidity bonanza for the big banks. “Draghi is Goldman,” Meijer said.

And then he said something quite interesting – that the massive ECB quantitative easing program is not “the only option.”

Meijer struck gold:  “Steve Keen’s modern version of a debt jubilee, in which money is given directly to the people, under the condition that they first use it to pay off debt if they have any, would be much more effective. But it would be far less profitable for the banks, and that’s why it’s not considered.”

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Indeed.  And here is the American version of just such a dynamic Plan – granting massive debt relief and restoring financial health at ‘ground level’ in America.

The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen                                                     The Leviticus 25 Plan 2015 (752)

 

Central Bank balance sheet expansion (debt monetization) – “reset” consequences setting in..

Global Central Banks have been on a liquidity-pumping ‘binge’ over the past six.            The  the big dogs of central banking have led the way. The U.S. Federal Reserve,  the Bank of Japan (BOJ), the People’s Bank of China (PBOC), the Bank of England (BOE), and the European Central Bank (ECB) have engaged in QE and other interest rate mutation policies.

Everyone knows that a harsh ‘reset’ lies somewhere ahead, where fiat currencies dramatically weaken in value versus hard assets. That ‘reset’ will likely be triggered by some major geo-political event .

In the meantime, things are happening to set the stage: “The Global Monetary Reset is Under Way.”
Excerpts from ZeroHedge (12/21/2014): Via Zero Hedge comments from AI Tinfoil,

The Global Monetary Reset is under way, but people have not noticed it yet. The key is the move to zero interest rates.

Government debt almost everywhere is too high to ever pay off, let alone pay a traditional rate of interest on. As debts come due, including as bond issues mature, the only option governments have is to roll over the debt and accumulated interest, and the only way they can afford to do that is if money printing is a continued practice and interest rates are at or near zero. QE is the latest name for money-printing, inflating the amount of currency available.

Logically, QE dilutes the value of a currency by inflating the number of currency units in circulation, and, theoretically, should lead to price inflation. However, if all nations engage in monetary expansion, the effects of money printing on exchange rates may be effectively concealed by a balance of expansion.

Or, as in the case of the US dollar, a currency with the status of world reserve currency may be expanded with relative impunity by the nation creating that currency, effectively exporting its inflation to the rest of the world that continues to sell to that nation, or trades in a monetary system based on that currency. Injections of QE into an economy with weak fundamentals is likely to result in speculative bubbles as QE funds show up in investors’ hands and not in the hands of general consumers.

….. Inflation is a key strategy in coping with immense and increasing debts. Debt so large that it cannot be paid must be inflated away or governments must default. Deflation makes current debt increasingly difficult to pay or service out of deflating GDP and tax revenue.
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Again, note this statement, “Debt so large that it cannot be paid must be inflated away or governments must default. Deflation makes current debt increasingly difficult to pay or service out of deflating GDP and tax revenue.”

Not one of our leaders in Washington has a legitimate, comprehensive plan to deal with this looming crisis.

Also note this statement, ”Injections of QE into an economy with weak fundamentals is likely to result in speculative bubbles as QE funds show up in investors’ hands and not in the hands of general consumers.”

The Federal Reserve and U.S. Government have pumped massive rounds of liquidity out through the fire hoses to bail out big banks and various other financial entities, to rescue them when vicious subprime default waves slammed into their leveraged speculation strategies.

Massive Feb pumping also lit up Wall Street for the past four years.

Fed policies have profited banking industry ‘fat cats’ and Wall Street’s ‘high rolling speculators’ and so-called ‘financial innovators,’  but have done little to relieve debt and restore financial health for “general consumers.”

It is time for fundamental change.  It’s time now to light up Main Street America.

The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen                                                   The Leviticus 25 Plan 2015 (742)

Recharging Main Street America…

First of all, here’s how NOT to recharge Main Street America:

– Raise taxes to fund ‘bigger and better’ government programs to stimulate the economy, expand social welfare opportunities, and help the middle class.

– Enact policies to redistribute wealth and create more economic ‘fairness.’

– Expand government control over healthcare, education, housing, and labor market.

– Make America’s massive government-driven healthcare program… ‘better’ … with tighter participation mandates and expanded penalties for all who violate the law’s exotic and complex legal provisions.

Continue moving blindly forward with annual budget deficits that are projected to explode over the coming 10 years, driving the nation’s debt burden continually higher, while expanding the Fed’s balance sheet to maintain targeted interest rates and to cover government funding obligations.

……………………………………….

Recharging Main Street America the right way:

Grant direct liquidity access to U.S. citizens in sufficient measure to:

Provide economically distressed Americans an opportunity to escape poverty and perpetual dependence on government, manage their daily affairs, free of government domination, and benefit directly from positive work incentives.

Provide working Americans an opportunity for massive debt elimination at the family level, and to benefit from positive work and investment incentives, decentralized healthcare options, and less government interference and regulation in their daily lives.

Generate true economic growth through the power of free market dynamics, eliminating government-inspired price and supply distortions.

Generate massive government budget surpluses and set America on course for long term financial stability.

The ‘fix’ is simple.  And the Plan to provide it would restore economic liberty for any country in the world, suffocating under the strains of socialist state control.

The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen                                                    The Leviticus 25 Plan 2015 (740)

Gallup: “For the first time in 35 years, American business deaths now outnumber business births”

American business deaths now outnumber business births.                                 Jim Clifton – Chairman and CEO of Gallup Excerpts:

The U.S. Census Bureau reports that the total number of new business startups and business closures per year — the birth and death rates of American companies — have crossed for the first time since the measurement began. I am referring to employer businesses, those with one or more employees, the real engines of economic growth. Four hundred thousand new businesses are being born annually nationwide, while 470,000 per year are dying.

Business startups outpaced business failures by about 100,000 per year until 2008. But in the past six years, that number suddenly reversed, and the net number of U.S. startups versus closures is minus 70,000.

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There are only 6 million businesses in the United States with one or more employees. Of those, 3.8 million have four or fewer employees — mom and pop shops owned by people who aren’t building a business as much as they are building a life. And God bless them all. That is what America is for. We need every single one of them.

Next, there are about a million companies with five to nine employees, 600,000 businesses with 10 to 19 employees, and 500,000 companies with 20 to 99 employees. There are 90,000 businesses with 100 to 499 employees. And there are just 18,000 with 500 employees or more, and that figure includes about a thousand companies with 10,000 employees or more. Altogether, that is America, Inc.

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Declining Businesses Mean Declining Revenues for Social Spending
Keep in mind that these 6 million businesses, especially small and medium-sized ones, provide jobs for more than 100 million Americans and much of the tax base for everything. These small, medium and big businesses have generated the biggest economy in the world, which has allowed the country to afford lavish military and social spending and entitlements. And we’ve been able to afford all of this because, until now, we’ve dominated the world economy.

When new businesses aren’t being born, the free enterprise system and jobs decline. And without a growing free enterprise system, without a growing entrepreneurial economy, there are no new good jobs. That means declining revenues and smaller salaries to tax, followed by declining aid for the elderly and poor and declining funding for the military, for education, for infrastructure — declining revenues for everything.

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When Gallup asked Americans to rate how much they personally worry about particular problems facing the country, the top three issues that respondents worry about a “great deal” were the economy (59%), federal spending and the budget deficit (58%), and the availability and affordability of healthcare (57%).
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It is time to get America moving again. And it all starts at ‘ground level,” expanding the role of real Americans.

Not expanding the role of government.

The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen                                                   The Leviticus 25 Plan 2015 (733)

 

 

Food stamps, foreclosure filings, and a plunging labor force – and let’s guarantee another $2 billion in foreign debt…

The most recent food stamps report for October 2014 found that currently 46,674,364 Americans are “on” food stamps. This is the 38th consecutive month topping the 46 million level, dating back to September 2011.

RealtyTrac November 2014 report: “There are currently 1,045,885 properties in U.S. that are in some stage of foreclosure (default, auction or bank owned)…”

40% of Americans are now living paycheck to paycheck, according to a recent consumer survey report by Mckinsey & Company December 2014 survey

A recent BLS report showed that employment statistics were not so ‘rosey.’                      A record 92.9 million working-age Americans are no longer ‘in’ the labor force. That’s a “fresh” 35-year low (ZeroHedge 1/9/2015).
“The number of Americans not in the labor forced soared by 451,000 in December, far outpacing the 111,000 jobs added according to the Household Survey.”

Meanwhile, our leaders in Washington have put U.S. taxpayers on the hook for $2 billion in loan guarantees for Ukraine, to help that country’s citizens “stave off bankruptcy” (ZeroHedge 1/13/2015).
……………………………….

A quick recap: Our leaders in Washington can send billions of dollars in bailout money, through the IMF, to foreign nations like Greece, Egypt and Ukraine, AND put taxpayers on the hook for billions more in loan guarantees to foreign nations….

AND our Federal Reserve can create funding facilities to extend hundreds of billions of dollars in “emergency loans” to corrupt financial institutions to help restore them to solvency….

But our own government cannot guarantee across-the-board loans to its own citizens?

The U.S. government can bailout foreign nations and extend credit to cover massive bad gambling debts by big banks and hedge funds, but it cannot grant equal access to liquidity for U.S. citizens – to restore financial health and economic liberty in our own country?

Answer: Yes they can.

The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen                                             The Leviticus 25 Plan 2015 (728)

2015: ‘Bouncing balls’ – watch the one with the Fed’s fingerprints on it…

The one economic ‘bouncing ball’ that has a special glow to it is the one that sports Federal Reserve fingerprints.

That is the one which is imprinted with special insights for understanding what moves and what supports the markets. The Federal Reserve is attentive and active in ‘managing’ and maintaining a healthy stock market.

Be assured of this – the Fed cannot, and will not, chance a major stock market implosion. They have to keep the market riding ‘high in the water,’ as the old saying goes.

The Fed knows that an old-fashioned, gut-wrenching 30% or 40% drop in stock prices in the present debt-laden environment could snowball into a severe deflationary crisis.
The potential fallout: Commercial loan defaults. Housing market defaults. Consumer loan delinquencies / defaults. Bank failures.

Derivative triggers and counterparty defaults. Commercial bank insolvencies. Worker lay-offs. Social welfare strains. Rising government deficits – state and federal.

Pension funds – ‘deep’ underwater.

It could turn into a real mess in short order… and take a long time to dig out from.

The Fed is ‘riding shotgun,’ and will not let that happen.  Many economic pundits are critical, but the Fed is simply playing the cards it has been dealt. They have few choices.

ZeroHedge recently posted evidence: we first exposed proof of the conspiracy fact that global Central Banks are indeed trading US equity futures,

And followed that up with: Congressman Confirms Foreign Central Banks Buying US Stock Futures Is Good For Liquidity

The steady, even-tempered climb in the market over the past 3-4 years shows the Fed’s shepherding ‘influence,’ albeit with brief, healthy, periodic market ‘burn-offs’ to release some of the ‘hot air’…

What next?

Conditions have been ripe in recent weeks for another ‘hot air release.’  We are now seeing that drawdown. If the past 3 years are any indication, then the Fed will likely put the brakes when they believe we are at an ‘inflection point.’  At the bottom end, DOW 16,500 – if the DOW should happen to sputter all the way down to that level..

Whenever the Fed decides to step on the gas pedal, it will be rally time. The Primary Dealers and other astute observers will pick up on the Fed’s discreet telegraphing signals, and they will hop on board quickly to ride the wave back up the charts.

………………………………………….

The Fed does have one good choice at its disposal, however, that it has not exercised.  And this choice would strike at the source for a genuine, comprehensive economic solution, rather than just performing symptom management.

The Fed could move to restore financial health and economic liberty at ‘ground level’ in America. Reignite economic growth. Scale-back government. Generate massive budget surpluses.

The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen                                                   The Leviticus 25 Plan 2015 (715)

 

 

European Central Bank: ready, set….. ‘print’

Pater Tenebrarum recently reported (Money Astronomy – Dec 22, 2014) that the ECB is warming up the printing presses.
Excerpts:

“Reuters reports that the governor of Belgium’s central bank and ECB council member Luc Coene has come out in support of full-fledged quantitative easing by the ECB in the form of sovereign bond purchases.

“The European Central Bank should start buying government bonds to tackle poor investor confidence and low inflation in the euro zone, governing council member Luc Coene said in an interview published on Saturday.

The Belgian central bank chief said the bank had already waited too long, and that this could be one tool to spur economic activity in the 18-country euro zone and fight off deflationary pressures.

Conclusion:
More money printing is very likely on the way in the euro area. The result will likely be another false dawn that will be hailed as an economic recovery, even while prices and with them economic calculation will be falsified and structural distortions in the economy will continue to pile up.
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Citizens of European nations would be better served if Central Bank, instead of buying more debt, would extend credit directly to them – to eliminate debt at ‘ground level’ and reduce the citizenry’s dependence on government assistance programs.

Central Bank debt purchases, in the long run, accomplish little more than propping up a sputtering, exhausted socialist system that strips freedoms and feeds the financial oligarchy.

Grant citizens the same direct access to liquidity that was so generously provided in the form of bailouts for major banks and other credit institutions during the financial crisis (2008-2010).

The Leviticus 25 Plan 2015 – The $70,000 Solution                                                   The Leviticus 25 Plan 2015 (714)

Minimum wage increases for 2015 – feeding the poverty cycle. There is a superior alternative.

For all the feel-good intentions involved, government-mandated minimum wage increases generally usher in unintended consequences and perverse effects for the very people they were intended to help.

A November 2014 UCSD study, The Minimum Wage and the Great Recession: Evidence and Effects on the Employment and Income Trajectories of Low-Skilled Workers, determined that minimum wage hikes have negatively impacted both income growth and employment status for low-skilled workers.

Artificial wage push mandates do indeed lead to higher hourly wages for many workers, but those benefits are more than counter balanced by lay-offs and cuts in hours worked.
Overall, minimum wage increases during the period studied (Dec 2006 – Dec 2012) led to a 0.7 percent decrease in the “national employment-to-population ratio.”

What’s more, government-mandated minimum wage increases do little, if anything, improve “real” (inflation-adjusted) income status for those targeted for benefits.
And minimum wage hikes do nothing to relieve dependence on government by financially distressed American families. These mandates do nothing to help people escape poverty.
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There is a better way.

There is one bold, new, comprehensive economic plan that treats all Americans equally, restores financial health at the family level, reduces dependence on government, and does not involve wage/labor mandates and social engineering incentives.

The Leviticus 25 Plan does what minimum wage increases and massive social welfare programs do not. It offers a fresh, new start for families everywhere.  It offers an opportunity to escape the social welfare dependency treadmill – and government control over their lives.

It is an economic acceleration program that restores positive work incentives and unleashes the power of decentralized, free-market dynamics.

The Leviticus 25 Plan 2015 – $70,000 Solution per U.S. citizen                                       The Leviticus 25 Plan 2015 (710)