The Mortgage Bankers Association (MBA) said that applications for mortgages to purchase new homes dropped 14 percent in August to a seasonally adjusted annual rate of 424,000 units.  On an unadjusted basis there were an estimated 35,000 applications for new home purchases during the month.

9---Most refis go to underwater homeowners, DS News

HARP refinances totaled about 280,000 for the quarter, down from about 290,000 in the first quarter of this year.
“This marks the third straight quarter in which HARP refinances have declined, but refinances through the program remain well above average levels prior to program enhancements last year,” FHFA stated.

Forty-three percent of HARP refinances in the second quarter were for underwater homeowners with loan-to-value ratios of more than 105 percent. Nineteen percent had LTVs greater than 125 percent.
Eighteen percent of HARP refinances in the second quarter were for 15- and 20-year mortgages.
Year-to-date, HARP refinances account for 21 percent of all refinances nationwide. However, HARP made up a greater share of refinances in some key states, including Nevada (59 percent), Florida (50 percent), Georgia (45 percent), and Michigan (40 percent).

Since the initiation of HARP in April 2009, about 2.7 million homeowners have refinanced through the program, according to FHFA.

10---Obama hasn't done Jack to prevent another financial crisis, WA Post

 
The 2008 Lehman Brothers collapse and ensuing financial cataclysm have left a lasting mark on the public and shaken confidence in the country’s ability to avoid another crisis, according to a new Washington Post-ABC News poll.
More than six in 10 Americans say they are not confident that the country will be able to avoid another collapse, with a majority saying Washington and Wall Street have not done enough to thwart one. 

The pessimistic outlook is colored by a dour take on progress: 54 percent of Americans say they sense little or no economic improvement since the worst of the financial crisis, and only one in 10 believe the economy is “a great deal” better. Despite sweeping action by lawmakers and the Federal Reserve to stabilize markets and banks, roughly two-thirds say the federal government has not taken adequate measures to prevent another crisis. Almost as many, 62 percent, say U.S. banks and financial institutions have fallen short in protecting against a repeat of what happened in 2008.

A majority, across the partisan spectrum, say government and banks have not taken necessary steps to
steps to stop a future crisis, though Republicans were far more critical of government’s role than Democrats. Seventy-nine percent of Republicans say the federal government has not taken adequate measures, compared with 55 percent of Democrats and 68 percent of independents. By contrast, roughly six in 10 Democrats and Republicans alike view banks as delinquent in their prevention efforts.

11--The September 2008 Economic Meltdown: Commemorating the Financial Panic, It Ain’t Over Yet, global research

The advocacy organization, Public Citizen, sums up the ongoing damage:
•”Amount the crash cost the U.S. economy: $22 trillion
•How much everyone would get if that $22 trillion were divided equally among the U.S. populace: $69,478.88
•Assets of the four biggest banks in America — JPMorgan Chase, Bank of America, Citigroup and Wachovia/Wells Fargo — when they were “too big to fail” in 2008: $6.4 trillion
 •Assets of those four banks today: $7.8 trillion
•Of the 63 former Lehman Brothers employees identified by a bankruptcy examiner as being aware of an accounting scheme Lehman used to mask its true finances, number who are employed in senior financial services positions today: 47”
Meanwhile, the 1% on the top has done very well. AlterNet interviews Inequality experts Inequality experts Thomas Piketty and Emmanuel Saez who say we are now in the aftermath of a crisis that is being discussed, as if it is over, is facing the biggest gap between rich and poor ever recorded by economists.
 
 They say, “In the aftermath of the Great Recession, the top 1 percent has gobbled up nearly all of the income gains in the first three years of the “recovery” — a stupefying 95 percent. Economic inequality is even worse than it was before the crash. In fact, last year the rich took home the largest share of income since 1917 with the exception of only one year: 1928.”
 President Obama has been so obsessed with the war victims in Syria that he seems to have forgotten the victims of the economic calamity in America. Tell me why he’s marking Wall Street’s penchant for disaster capitalism when he should be identifying with the people who are standing up to Wall Street.
. According to a Pew Research Center poll released Thursday, fewer than 8 percent of respondents thought that, after the recent recession, government policies have helped the poor, the middle class or small business a great deal. About five times as many believe they’ve helped the wealthy, large banks and other financial institutions, and large corporations.
 
 And as the stock market soars for those with enough money to be in it, a Gallup poll released Thursday found that one in five Americans say they have struggled to afford food in the last year and that access to basic needs is near a record low.”
 
 
 
Job growth has not accelerated in response to the flood of money printing.  House prices and stock prices have inflated, thanks to too many dollars chasing too few assets. But job growth has been slow–steady, but slow, growing at slightly above the rate of population growth.
Why economists expect it to grow any faster than that is a mystery to me. Why the Fed thinks that devaluing money and subsidizing bankster gambling, with the Fed guaranteeing the profits with ZIRP, QE, and the abomination of forward guidance blowing moral hazard out to monstrous proportions, is an even bigger mystery.  The only rational explanation I can reach is that they are out of touch with reality, making them clinically insane.

The Fed is blowing massive asset bubbles in housing and stock prices while the economy plods along at a growth rate little different from when it was during a long pause in QE in 2011 and 2012. Money printing works to inflate asset prices, but it does nothing to stimulate job growth.
The actual NSA (not seasonally adjusted) number of persons reported in the CPS as employed in August fell by 604,000 from July. Over the previous 10 years, August was always a down month, averaging a decline of 451,000. The current month’s performance was below average, and the worst since the recovery began. The anomaly here is that the job losses were all part time. Full time jobs gained.
The year over year gain in total employment under the CPS  was 1.4%, up from a revised 1.3% in July (was 1.4%). The annual growth rate has decelerated from 2.3% last October.  The growth rates were actually stronger before the Fed started pumping money into the economy in November, when it settled its first MBS purchases in QE3

13---Fed should use QE to fund jobs program, counterpunch

If the Obama administration had a 21st century Works Progress Administration direct job creation program, it could have the Fed print the $1 trillion QE3 and create 20 million jobs at a fully loaded full time $50,000 a year. That would instantly wipe out every U-6 jobless person in the US. That’s 20 million jobs at $50k vs. the Fed’s current ‘unemployment reduction program’ of 1 million jobs at $33k.
Why should the Fed print money and subsidize the incomes of super-wealthy investors and their banks? Why shouldn’t the Fed use its printing press to instantly finance the creation of 20 million jobs directly by the US government?

The net outcome of QE is the escalating incomes of bankers, investors, wealthy shareholders and high net worth individual households. That means even more income inequality in the US.
It is not coincidental that during the period of QE1-QE3 in the US, income inequality has accelerated at an even faster pace than in the past. As the most recent data on income inequality trends, released by Professor Emmanual Saez of the University of California earlier this month as part of his on-going study of income inequality trends, shows: the wealthiest 1% households accrued 95% of all the income gains in the US economy between 2009-2012.
QEs mean bankers and investors get $967,000 and the worker gets $33,000. That’s the essence of the Fed’s current QE3 job creation/unemployment rate reduction claims!
....
The Fed’s QE policies these past five years have come in four doses. There was the initial QE1 in 2009, amounting to $1.75 trillion in bond purchases. The US economy then stalled out in the summer of 2010. Then came the $600 billion QE2 in the fall of 2010. The economy stalled a second time in 2011, leading to what was called ‘Operation Twist’ (QE 2.5?) that provided another $400 billion in mortgage bond purchases. When that petered out, it was followed by QE3 last September 2012. Unlike its predecessors, QE3 has had no limit. It calls for Fed purchases of $85 billion a month for ‘as long as necessary’. So QE3 has now amounted to about another $1 trillion, and continues to rise by $85 billion every month.

While there is talk that the Fed may start to ‘taper’(reduce) its $85 billion a month, don’t expect much of a change. Maybe $10 billion a month or so reduction. QE will therefore continue for some time. That’s because, as this writer has argued elsewhere, bankers and big investors are now ‘addicted to the free money’ regime that characterizes 21st century finance capital globally today.

Just the mention of a possible ending of QE by the Fed this past June sent bankers-investors globally into financial fits and paroxysms last June. Stocks, bonds and other financial assets fell into a major tailspin in a matter of weeks. The Fed quickly denied it had any such intention of ending QE. The markets quickly recovered and went on their merry financial bubble way once again. That event of possibly reducing QE, and financial markets’ extreme reaction, this past summer has been called the ‘taper tantrum’. What’s coming in the next few weeks, however, is at most a ‘taper tweak’....

the Fed’s QE3 has not really been responsible for reducing even the unemployment rate from 8.1% to 7.3%. That reduction has been the result of millions of unemployed leaving the labor force altogether over the past year, and from jobs ‘churning’ from declined in full time jobs to increases in part time and temporary jobs.
Over the past year, 2012-2013, it is true that the US economy has created 2.3 million jobs. But this has been largely part time and temp jobs, with low pay and essentially no benefits.

QE as 21st Century ‘Trickle Down’
Notwithstanding the foregoing facts, if one still insists on maintaining that the Fed’s QE3 has reduced unemployment, it is clear that QE to date is an incredibly inefficient, costly, and wasteful way to create jobs.

 For example, let’s assume QE3 and Fed monetary policy is responsible for half of all the 2.3 million jobs created over the past year—a generous assumption. But let’s assume it nonetheless. That’s 1,150,000 of the roughly 2.3 million jobs created over the past 12 months. Let’s further assume that about 400,000 of that 1,150,000 represents part time-temp jobs. Next, if two part time jobs roughly equals one full time job, that’s 200,000 full time equivalent jobs created by QE and the Fed the past 12 months. Add that 200,000 to the remaining 715,000 full time jobs assumed created by QE3 over the past year, adds up to a total of 915,000 full time jobs created by QE/Fed over the past year. Let’s round it all up, to an even 1 million jobs created by QE3.
Now let’s take the $1 trillion cost of QE3 over the past year. Divide the $1 trillion by 1 million jobs and the result is a cost of $1 million per job created. That’s an absurdly inefficient and wasteful job creation program!

14----Froth Alert,  Tim Duy

 Former Federal Reserve Vice-Chair Donald Kohn - suspected of being a contender for the top job at his old employer - warned about too loose monetary policy today. From the Wall Street Journal:
“Very easy monetary policy often builds imbalances that may become so large that can’t be countered by regulation,” Mr. Kohn said at an event on financial stability at the Brookings Institution think tank.

15---Yes, we can: Obama waives anti-terrorism provisions to arm Syrian rebels, RT

The Obama administration waived provisions of a federal law which ban the supply of weapons and money to terrorists. The move is opening doors to supplying Syrian opposition with protection from chemical weapons.
The Arms Export Control Act (AECA) allows the US president to waive provisions in Sections 40 and 40A, which forbid providing munitions, credit and licenses to countries supporting acts of terrorism. But those prohibitions can be waived "if the President determines that the transaction is essential to the national security interests of the United States."
President Barrack Obama ordered such a waiver for supplying chemical weapons-related assistance to "select vetted members" of Syrian opposition forces, the administration announced on Monday 
 
 
 
Art is one of the ways we know the world. It makes human beings more flexible, sensitive, compassionate and aware.
The enemies of art are the enemies of the people, the enemies of the working class.
...
 
Access to art and culture is a basic component of a healthy society. Yet, like everything else, it is under relentless attack. American culture—film, television, music—was once a pole of attraction because of its innovation and powerful democratic and humanistic spirit. The subordination of culture to the profit motive has led to an immense degeneration....
The driving force in the present crisis is the effort of the super-rich to retain its wealth, to drain the population of Detroit, to reduce it to a state of pauperism. The bankers have driven the country to the edge of abyss, and they want the working class to pay for that.
 
To the emergency manager and his team, the bondholders and creditors, the artwork in the DIA is simply a pile of cash that happens to take the form of oil and canvas, stone, glass, ceramic, metal and other materials. They believe they have the right to get their hands on the artwork, because they believe they have the right to get their hands on everything.
The US is a democracy in name only. A financial-corporate aristocracy runs this country, including both major parties, the media, every major institution, and organizes every important decision in its favor. The exposures by Edward Snowden about massive global spying by the US government on every phone call, email and communication in general reveal how much of the framework for a police state has already been built in this country.
The billionaires have a veto over every aspect of American life. Nothing can impinge on their wealth. We have government of the rich, by the rich, for the rich.
In this context, we’ve discussed the return of the aristocratic principle: that is, the idea that the people have no basic right to hospitals, schools, museums, that if they are to have such elementary social necessities it will be the result of the generosity of the super-rich.

17---On fifth anniversary of Wall Street crash, Obama tries the Big Lie technique, wsws

Forbes magazine reported that the wealth of the 400 richest Americans had climbed to $2 trillion, a jump from $1.7 trillion in 2012.
With corporate profits at record highs, CEO pay once again hitting the tens and hundreds of millions, and the concentration of wealth the greatest since 1928, Obama boasted of the great success of his economic policies in restoring “security and opportunity for the middle class.”

With breathtaking cynicism—and contempt for the intelligence of the American people—Obama presented himself as single-mindedly focused on “my number one priority since the day I took office”: fighting for the so-called “middle class.” (There is, according to the mythology of the American ruling class, no working class in the United States, even though America is the most economically unequal of all industrialized countries).

Employing the technique of the Big Lie, Obama described his response to the financial crisis as follows: “We put people back to work repairing roads and bridges, to keep teachers in our classrooms, our first responders on the streets. We helped responsible homeowners modify their mortgages so that more of them could keep their homes. We helped jumpstart the flow of credit to help more small businesses keep their doors open. We saved the American auto industry… we took on a broken health care system … We put in place tough new rules on big banks … And what all this means is we’ve cleared away the rubble from the financial crisis and we’ve begun to lay a new foundation for economic growth and prosperity.”

No. The Obama administration categorically rejected any program of public works to hire the unemployed and refused to aid bankrupt state and local governments, resulting in the layoff of hundreds of thousands of teachers, firefighters and other public employees. As a result, mass unemployment is a permanent fixture, and the labor force participation rate is the lowest in 35 years. Moreover, the vast majority of new jobs created under Obama—still 2 million below the total before the crisis—are low-wage and part-time.

The administration refused to halt home foreclosures or force banks to reduce loan principals, allowing the banks to throw millions of families out onto the street.
While continuing and vastly expanding the bank bailout begun under Bush, Obama refused to impose any conditions on the money stolen from taxpayers, allowing the bankers to use government funds to speculate rather than provide loans to small businesses. The result was a wave of small business failures that continues to the present....

Not a single leading bank executive has been criminally prosecuted, let alone jailed, for rampant fraud and criminality both before and after the 2008 crash. Over the past five years, bank scandals have proliferated—Libor-rigging, foreclosure fraud, concealing speculative losses, drug money laundering—with no serious consequences for the criminals. Not only have the biggest banks not been broken up, they have been allowed to grow even bigger and strengthen their grip on all aspects of economic and political life.

As for the “new foundation for growth and prosperity,” the offloading of the bad debts of the banks to the government and the massive money printing by the Federal Reserve to subsidize Wall Street have created the conditions for a financial crash of even greater proportions than the debacle of 2008.
The bankrupting of governments has, meanwhile, been used, in the US and around the world, to justify the launching of an historic assault on social programs and the jobs and living standards of the working class. Obama has spearheaded a social counterrevolution, utilizing the economic crisis to turn the wheel of history back to levels of exploitation and poverty last seen 100 years ago.

The centerpiece of this assault in the US is the bankruptcy of Detroit, backed by the White House, which is being used to destroy the pensions and health benefits of city workers, privatize and slash city services, and sell off public assets, from the water department to the Detroit Institute of Arts. Detroit will set a precedent for cities across the country and internationally.
In his speech, Obama made passing reference to the further growth of social inequality during his tenure, noting that “the top one percent of Americans took home twenty percent of the nation’s income last year, while the average worker isn’t seeing a raise at all.” Typically, however, he spoke as though he was an innocent bystander and the further enrichment of the financial aristocracy had nothing to do with himself or his own policies.

In reality, the single-minded focus of Obama’s domestic agenda from day one has been to enable the ruling class to recover its losses from the crash and exploit the crisis to amass even greater wealth. Even as he sought in his speech to blame congressional Republicans for obstructing his supposed campaign in behalf of the middle class, Obama signaled that he intended to intensify his attack on social programs for workers and grant new windfalls to big business.
Boasting that deficits were falling at the fastest rate since the end of World War II, he said, “there’s not a government agency or program out there that still can’t be streamlined … So I do believe we should cut out programs that we don’t need.”