1--IMF Cuts U.S. Growth Estimates on Weak Consumer Spending, Bloomberg
Excerpt: The International Monetary Fund lowered its forecast for U.S. growth this year and 2011, predicting a “slow” rebound restrained by a lack of consumer spending.
“The most likely prospect for the U.S. economy is for a continued but slow recovery, with growth far weaker than in previous recoveries,” the IMF said in the report. “Much of the weakness of this recovery is due to sluggish personal consumption.”
Consumer spending, which accounts for about 70 percent of the U.S. economy, will be hampered by unemployment, a desire to save more, tight credit and the deterioration in household wealth following the plunge in home prices, according to the report. In contrast, the report said, business spending on equipment and software has “rebounded strongly.”
2--Matt Taibbi on the Tea Party, Rolling Stone
Excerpt: It's taken three trips to Kentucky, but I'm finally getting my Tea Party epiphany exactly where you'd expect: at a Sarah Palin rally...Scanning the thousands of hopped-up faces in the crowd, I am immediately struck by two things. One is that there isn't a single black person here. The other is the truly awesome quantity of medical hardware: Seemingly every third person in the place is sucking oxygen from a tank or propping their giant atrophied glutes on motorized wheelchair-scooters. As Palin launches into her Ronald Reagan impression — "Government's not the solution! Government's the problem!" — the person sitting next to me leans over and explains.
A hall full of elderly white people in Medicare-paid scooters, railing against government spending and imagining themselves revolutionaries as they cheer on the vice-presidential puppet hand-picked by the GOP establishment. If there exists a better snapshot of everything the Tea Party represents, I can't imagine it. (Good read)
3--Midnight Shopping On The Brink Of Poverty, NPR
Excerpt: Take a trip to one of those 24-hour Walmarts on the last day of every month, and you'll get a glimpse into the lives of low-income families trying to get by. At one location in Fredericksburg, Va., at around 11 p.m., families start to load up on necessities like diapers and groceries....
Last year, 3.7 million Americans joined those already living in poverty, meaning families of four living on just under $22,000. That's 14 percent of the population...."It's definitely an indicator in terms of people who are struggling," says Charles Fishman, journalist and author of The Wal-Mart Effect. "That tells you there's a large swath of America that is still very carefully calculating how much money is available and how they're spending it on even the most basic things like diapers and milk and bread. That's not the sign of an economy that's shaken off the recession."
4--Inside the Flash Crash Report, Pam Martens, counterpunch.org
Excerpt: Of the 104 pages of the report, there is one sentence that is noteworthy:
“Detailed analysis of trade and order data revealed that one large internalizer (as a seller) and one large market maker (as a buyer) were party to over 50 per cent of the share volume of broken trades, and for more than half of this volume they were counterparties to each other (i.e., 25 per cent of the broken trade share volume was between this particular seller and buyer).”
Broken trades or “busts” (as the street refers to them) were only allowed for trades occurring between 2:40 p.m. and 3 p.m. (New York time) and where the stock had moved 60 per cent or more from its 2:40 p.m. value. This was an extremely controversial decision and left small investors with heavy losses of 30 to 59 per cent with nowhere to turn. The busts that were allowed covered 5.5 million shares and two-thirds of these trades had been executed at less than $1.00, some for as little as a penny. We now learn from this one sentence on page 66 of the Flash Crash report that half of the share volume in these bizarre trades came from just two firms and half the time they were exclusively trading with each other. Let me state this another way: two trading firms were predominantly involved in handing investors’ losses of 60 per cent or more in their stocks on May 6 but a staid old mutual fund company trading an S&P futures contract in Chicago has been fingered as the culprit of the Flash Crash. (Another home run by Martens)
5--U.S. bank industry entering new crisis: analyst, Marketwatch
Excerpt: WASHINGTON (MarketWatch) — The U.S. banking industry is entering a new crisis where operating costs are rising dramatically due to foreclosures and defaults, a well-known analyst said Wednesday afternoon.
“We are less than one-quarter of the way through the foreclosure process,” said Christopher Whalen, managing director at Institutional Risk Analytics at an American Enterprise Institute event.
“Rising operating costs in banks will be more significant than in past recessions and could force the U.S. government to restructure some large lenders as expenses overwhelm revenue.”...“Failure by the Obama administration to restructure the largest banks during 2007-2009 period only means that this process is going to occur over next three to five years — whether we like it or not. The issue is recognizing existing losses — not if a loss occurred,” he said.
...UBS Investment Bank managing director Thomas Zimmerman said the U.S. housing market is continuing to struggle. He cited some statistics that predict there could be 11.5 million foreclosures over the next few years.
5--Foreclosure Fraud Reveals Structural & Legal Crisis, Barry Ritholtz, The Big Picture
Excerpt: What is being discussed here is a full blown crisis underlying home titles, foreclosure procedures, and securitized mortgages. The rampant, epidemic and systemic abuse of legal property protections is now reaching a crisis.
Astonishingly, representatives for the trusts have been foreclosing on homes across the country, evicting the families, then auctioning the homes, without a proper paper trail on the mortgage assignments or proof that they had legal standing. In some cases, the courts have allowed the representatives to foreclose and evict despite their admission that the original mortgage note is lost. (This raises the question as to whether these mortgage notes are really lost or might have been fraudulently used in multiple securitizations, a concern raised by some Wall Street veterans.)
...a firm will fabricate whatever documents need for foreclosure, real or otherwise.
6--Foreclosure Furor Rises; Many Call for a Freeze, New York Times
Excerpt: “A notary’s signature is that of a trusted, impartial third party, whose notarization bolsters the integrity of the document,” Ms. Brunner said. “To take away the safeguards of notarization means foreclosure procedures could be more susceptible to fraud.”
As banks’ foreclosure practices have come under the microscope, problems with notarizations on mortgage assignments have emerged. These documents transfer the ownership of the underlying note from one institution to another and are required for foreclosures to proceed.
In some cases, the notarizations predated the preparation of the legal documents, suggesting that signatures were not reviewed by a notary. Other notarizations took place in offices far away from where the documents were signed, indicating that the notaries might not have witnessed the signings as the law required.
Notary practices vary from state to state and the bill, sponsored by Representative Robert B. Aderholt, a Republican from Alabama, would essentially require that one state’s rules be accepted by others. If one state allows its notaries to sign off on electronic signatures, for example, documents carrying such signatures and notarized by officials in that state would have to be recognized and accepted in any state or federal court. (Congress steps in to assist rampant bank fraud. Unbelievable.)
7--Can RICO statutes be used against banks? Peter Henning, New York Times
Excerpt: In a RICO suit, the plaintiffs would probably allege that the banks, mortgage processors, law firms, and any other participants in the foreclosure process formed an informal enterprise known as an “association in fact,” which is really just a group acting together for a particular purpose. The “pattern of racketeering activity” could be alleged quite easily as mail and wire fraud, and as an alternative the plaintiffs could also assert that any faulty foreclosure proceedings constituted the “collection of an unlawful debt.”
The allure of civil RICO is that the potential liability for a violation includes triple damages and – music to any lawyer’s ears – payment of the plaintiff’s attorney’s fees, recoveries that are usually not available in state court actions. In addition, any state law claims, such as fraud, can be brought as part of the federal RICO suit under the doctrine of supplemental jurisdiction, allowing plaintiffs to bring the entire case in a single proceeding.
8--Monetary Versus Fiscal, Paul Krugman, New York Times
Excerpt: I wanted and still want fiscal expansion because it’s relatively certain in its effect: if the government goes and buys a trillion dollars’ worth of stuff, that will create a lot of jobs. On the other hand, if the Fed goes out and buys a trillions dollars’ worth of long-term bonds, the effect is quite uncertain, with many possible slips between the cup and the lip....
I didn’t and don’t think that we can count on monetary policy to do the job; blithely declaring that the Fed should target nominal GDP misses the difficulties. And that means we need fiscal policy. ('nuf said)
9--Pennsylvania Has Been Monitoring You!, BILL QUIGLEY and RACHEL MEEROPOL, counterpunch.org
Excerpt: Just over a month ago, ProPublica broke the story that Pennsylvania’s Office of Homeland Security contracted with the Institute of Terrorism Research and Response (ITRR), a private Israeli-based company, to assess terrorist threats impacting law enforcement priorities in Pennsylvania.
For almost a year, ITTR provided bi-weekly intelligence briefings to Pennsylvania Homeland Security which focused in equal part on “jihadist” communications and trainings throughout the world, and also social justice organizing and protests across the country.
Pennsylvania Homeland Security, in turn, distributed this information to 800 federal, local and state law enforcement agencies, along with “relevant stakeholders” like local businesses. Information provided included the political views and movement building strategies of hundreds of law-abiding groups and individuals.
The targets of ITTR are not just Pennsylvania groups but also a veritable who’s who of left and liberal groups, including MoveON.org, the Ruckus Society, Immokalee Workers, the new SDS, Jobs with Justice, the Brandywine Peace Community, ANSWER, PETA, Stop Huntington Animal Cruelty, MOVE, The Yes Men, Poor People’s Economic Human Rights Campaign, Climate Ground Zero, the Rainforest Action Network, pro-Palestinian Groups, Puerto Rican nationalists, prisoners’ rights organizations, citizen conservation groups, and immigration activists opposing Arizona’s crazy attempts to criminalize all non-citizens. (More evidence of a "vast right wing conspiracy")